Growth Management Act.
The Growth Management Act (GMA) establishes land-use designation and environmental protection requirements for all Washington counties and cities. The GMA establishes a significantly wider array of planning duties for fast-growing counties, and the cities within those counties, that are obligated to satisfy all planning requirements of the GMA. Other counties have opted to satisfy all planning requirements of the GMA. These jurisdictions are sometimes said to be fully planning.
Eighteen counties, and the cities within those counties, are required to fully plan under the GMA. An additional 10 counties have opted to fully plan: Benton, Columbia, Douglas, Franklin, Garfield, Kittitas, Pacific, Pend Oreille, Stevens, and Walla Walla counties. Cities within the counties that chose to fully plan also must fully plan under the GMA.
State Real Estate Excise Tax.
Real estate excise tax (REET) applies to real estate transactions including the sale of property and the transfer of controlling interest in property. The rate applies to the selling price and is usually paid by the seller. The REET is due and payable to the county treasurer in which the property is located on the date of the sale, regardless of the date of recording, except in a controlling interest transfer. The REET is imposed at the following rates:
Local Real Estate Excise Tax.
Counties and cities are authorized to impose a local REET in addition to the state REET. The two main local REET options are:
Local REET 1 and 2 must be used for capital projects, including a limited amount that may be used for the operation, maintenance, and service support of existing capital projects. Capital projects are local government public works projects for planning, acquisition, construction, reconstruction, repair, replacement, rehabilitation, or improvement of:
Additionally, there are several other local REET options for local governments:
For counties and cities that are required to fully plan under the GMA, REET 2 may be imposed by the legislative body and does not require voter approval. For counties that chose to fully plan under the GMA, and the cities within those counties, REET 2 must be submitted to the voters for approval.
The legislative body of any county choosing to fully plan under the GMA, and the cities within those counties, may impose REET 2 without voter approval.
(In support) Cities and counties planning under the GMA are subject to different standards when implementing real estate excise taxes. There is really no good reason to distinguish between those who opted into the GMA and those who are required to plan under the GMA when it comes to the tools that are available to them. They all have to plan under the same strict GMA requirements. This bill is about funding for infrastructure, which is a constant struggle for cities and counties. Infrastructure is expensive but critical for increasing the housing supply. Locally elected officials are accountable to their communities, and nothing in the bill prevents a city or county from seeking voter approval if the elected officials choose to.
(Opposed) Increasing taxes is not the way to make housing affordable. This bill places additional hardship on property owners and removes their ability to vote on whether higher taxes should be levied for local capital projects. Realtors have a long history of working on infrastructure improvement issues and have offered to assist local communities with ballot measures. Housing affordability is a big issue, especially with the historical increases in taxes. Any property tax is a tax on unrealized gains. Bills like this one are why it is impossible to retire in this state on a fixed income. Removing voters from tax decisions is a disturbing trend this session.
(In support) Representative Larry Springer, prime sponsor; Rick Eskill, City of Walla Walla; Elizabeth Chamberlain, City of Walla Walla; Candice Bock, Association of Washington Cities; and Paul Jewell, Washington State Association of Counties.