They might not have been the most important issues of the just-finished session of the Washington Legislature, but they were things I followed. Here’s how they ended up.
Condo tax: When the 1995 Legislature – at Tacoma’s urging – created a property tax break to boost multifamily housing in urban areas, then-Gov. Mike Lowry was concerned.
“No provision is included to prevent the erosion of low-income housing as property owners seek the benefit of the special valuation and build new housing or renovate existing housing stock,” Lowry wrote.
Twelve years later, critics of the program still wonder if low-income residents are benefiting from the 10-year exemption from paying property taxes on the value of new construction and renovated housing. There were lots of stories about condo developers using the tax break to sell half-million-dollar units but fewer about creating affordable housing or helping renters.
Supporters insist that all income groups benefit, that formerly derelict parts of cities are being revived and that tax collections will end up higher as a result. But there is not a lot of data and a fair number of doubters.
House Bill 1910 will do two things if signed by Gov. Chris Gregoire. First, it will reduce the length of the property tax abatement for market-rate housing to eight years but offer a 12-year abatement if developers meet affordable housing requirements.
It also would make cities gather and report data so policymakers can find out whether the program contributes to lower rents for tenants or just higher profits for developers.
Rhodes Center: An attempt to stop the sale of the Tacoma Rhodes Center downtown had mixed results. Rep. Dennis Flannigan, D-Tacoma, tried to fix the state office building’s finances in the House capital budget. But the Senate insisted on allowing the Department of General Administration to sell it to private owners.
In the end, there is no money to help fix the building’s problems, but there is a proviso blocking a sale to private interests for two years and allowing the state to force agencies to move into the building. Gregoire vetoed similar provisions two years ago, but Flannigan is optimistic.
Beef tax: There was a lot of bragging when the Legislature created a commission two years ago to suggest which tax loopholes should be closed. Washington exempts more things and activities from taxation than it actually taxes.
But when the very first closure was proposed – a million-dollar-a-year tax break from 2003 to help beef producers weather the mad cow crisis – it was harder to close than it should have been. The industry objected, and House Democratic leaders overrode their own committee chairman to keep an extension of the break alive.
In the end, however, the beef tax break was allowed to expire, giving some hope that the loophole closure commission might actually work.
Minicasinos: The bill hadn’t gotten a negative vote on its way to the House floor. Yet that’s where it died after Speaker Frank Chopp objected.
The bill was a pragmatic – some would say cynical – compromise between local governments and the minicasino industry. Faced with an increasing number of cities and counties that ban the commercial card rooms outright, the industry agreed to give local governments more control over how many casinos could open and where. No new casinos could be created, and existing ones could move only where they were invited to locate.
It passed the Senate and a House committee without a negative vote.
What happened between unanimous support and defeat? First, the Muckleshoot Indian Tribe began to actively oppose the bill. Then Chopp began to actively study the bill. Giving existing casinos a protected monopoly didn’t thrill him. Neither did giving them permission to move to more lucrative markets. And there were odd sections that seemed to help individual casino owners and damage individual cities. So it died.
Peter Callaghan: 253-597-8657
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