Whose money is it, anyway? State should give some back

By Sen. Steve Hobbs

Taxes. They've been called a necessary evil.

Taxes are at the core of the love/hate relationship we have with government. We all depend on the services that government provides to us, even though we hate parting with our hard-earned dollars to pay for those services.

Given our state's tax structure, revenue sources to pay for government services are limited. Typically, state government is funded by some mix of income, sales and property taxes. Even though Washington is one of only six states without a state income tax, our need for government services still exists.

The property tax is the largest source of revenue for local governments and the third largest source of revenue to the state general fund. It helps to pay for many worthy programs at the local and state levels, but increases have caused distress and uncertainty for many working families and seniors.

And homeowners have been carrying much of the load. The property tax burden has shifted disproportionately over the years. In 1991, the burden for property taxes was evenly split between commercial and residential taxpayers. Today, because of the steady increase in home valuations, residential taxpayers pay more than two-thirds of the burden.

Washington families are already facing considerable economic pressures -- gasoline prices are double what they were four years ago, payments are rising on adjustable mortgages, health care is increasing at three times the cost of inflation -- and, as we enter the holiday season, the real threat of getting taxed out of house and home looms larger than ever for many.

Many are now offering solutions that make tweaks to the system, and we will explore these solutions in a special session on Thursday and during the regular legislative session beginning in January 2008.

I've proposed legislation to provide homeowners with middle-class and lower incomes a one-time refund equal to 10 percent of the property taxes they will pay in 2008. Pay $2,000 in property taxes and you will receive a check for $200. This works much like how we receive our refund checks for overpaying our federal income taxes.

With more than $1.5 billion in the state's surplus, we owe it to the taxpayers to give back. This proposal will be a $170 million hit to the general fund. The property tax rebate doesn't hurt services, doesn't put us in deficit, and will still allow the state to sock money into the rainy day fund.

My proposal will provide relief for working families and seniors with fixed incomes, and provide a shot in the arm for local economies. Taxpayers will turn around and spend the refund on much-needed items for their families. This could actually boost our economy and perhaps curb a potential downturn from the weakening housing market.

I hope my proposal will encourage future tax rebates if our state's surplus is as robust as it is today. I have watched as special interests eye the surplus as their own personal piggy bank. It's not their money; it's the taxpayers. I think it's time we give some of it back.

Sen. Steve Hobbs, D-Lake Stevens, represents Lake Stevens, Mill Creek, Snohomish and parts of Everett and Marysville.

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