Politics & Government

Balance of power in Olympia hinges on one race. That could have big implications for your taxes

Manka Dhingra, left, is the Democratic candidate for state Senate in the 45th District, while Jinyoung Lee Englund, right, is running as a Republican. The special election will decide which party controls the Legislature.
Manka Dhingra, left, is the Democratic candidate for state Senate in the 45th District, while Jinyoung Lee Englund, right, is running as a Republican. The special election will decide which party controls the Legislature.

Democrats have been complaining for months that the Legislature’s plan to solve Washington’s school-funding crisis relies too much on raising the statewide property tax.

Now, a top GOP leader who pushed for that solution seems worried about those tax increases, too, and wants state lawmakers to act quickly to reduce the planned tax hike in 2018.

It’s all part of a series of tax-related promises leading up to a November special election that will decide which party — Democrats or Republicans — controls the Legislature in Olympia next year.

If Democrat Manka Dhingra wins the state Senate race in the 45th Legislative District, Democrats will take over the Senate. They already control the state House and the Governor’s Mansion.

If Republican Jinyoung Lee Englund wins, divided government in Olympia is expected to continue, with Republicans continuing to control the Senate with the help of one conservative Democrat.

Several communities in the 45th Legislative District — including those within the Lake Washington School District — are projected to be hit particularly hard by the tax increases coming their way in the next few years, upping the stakes for both parties to promise tax relief should they win the race.

The 45th District covers a swath of suburbs east of Seattle that includes Redmond, Woodinville, Sammamish, Kirkland and Duvall. About $3.6 million has been spent in the race so far, a number sure to increase closer to the election.

Already, Democratic Gov. Jay Inslee has said that if Dhingra wins, he would try to curtail the planned statewide property-tax increase, instead enacting new taxes on capital gains and carbon emissions.

Those ideas have been considered dead-on-arrival recently in the Republican-led Senate, though Democrats in the House also have declined to vote on them the past few years.

Then this past week, state Sen. John Braun, R-Centralia and the lead Senate budget writer, said he, too, wants to reduce the severity of the upcoming property-tax increase, using a windfall of about $500 million that came from a better-than-expected state revenue forecast.

Under the plan lawmakers approved earlier this year, property owners throughout the state will see their taxes go up by about 81 cents per $1,000 in assessed value in 2018.

Braun said lawmakers could instead use the added money from the revenue forecast to buy down that increase, so that the 2018 tax hike would be less than 50 cents per $1,000 in assessed value.

Braun, who also chairs the Senate Republican Campaign Committee, said his plan to soften the blow of next year’s tax increase has zero connection to the all-important November special election in the 45th District.

Rather, he said, his plan to lower the tax rate is based on the timing of the new state revenue forecast, which came out Wednesday.

“This has nothing to do with the election,” Braun said Thursday. “This has to do with ... staking a claim that what we ought to be thinking about is addressing this issue in 2018.”

Others say it’s unlikely that Braun’s proposal and its timing aren’t tied in some way to the upcoming election, just like Inslee’s was.

“I will say, generally speaking, the sun rises and the sun sets in the 45th District right now,” said Chad Minnick, a Republican campaign consultant who added he isn’t familiar with the specifics of Braun’s plan. “There’s nothing that’s not about the 45th District in one way or another.”

An earlier version of Braun’s plan would have raised the statewide property tax by about twice as much, but also included language would have allowed the rate to be reduced slightly over time. That language didn’t make it into the final version of the plan the Legislature approved in June, however.

John Wyble, a Democratic political consultant, said Braun’s insistence that his latest tax-plan announcement isn’t partly about upping Republican chances in the 45th District “strains credibility.” In the Aug. 1 primary election, Dhingra, the Democratic candidate, led Englund by 10 percentage points.

“Republicans odds are already low in the 45th,” Wyble wrote in an email. “Supporting higher property taxes on the Eastside makes their chances even slimmer. I see why they are trying to walk it back, but it’s going to be hard at this point to put the toothpaste back in the tube.”

Alex Hays, a Republican political consultant, said he thinks Braun’s new plan would be very difficult to explain in a 30-second TV ad or political mailer, making it more likely that it’s really more about fiscal policy and less about the politics of the November election.

“Translating these comments into an effective ad is really hard to do, therefore proving it’s just what he really thinks about the budget,” Hays said.

This year, Washington lawmakers were struggling to comply with a court order to fix how the state pays for schools.

They passed the overhaul of state and local property taxes to comply with the state Supreme Court’s McCleary decision, which said the state needs to stop relying on local school district property-tax levies to pay for basic education costs, like teacher salaries.

The plan lawmakers eventually approved means that property owners across all of the state’s 295 school districts will get hit with a property tax increase in 2018. Then, starting in 2019, most districts will see their property taxes go down, as new limits on local school district property-tax levies go into effect.

Still, about one-third of Washington residents live in school districts where tax rates will ultimately be higher than they are today, even after the plan is fully phased in, according to an analysis The News Tribune and The Olympian completed in July.

While Democrats had proposed other tax measures to try to comply with the McCleary order, Republicans had favored a rival property-tax swap plan, a version of which ultimately passed into law.

State Sen. Reuven Carlyle, D-Seattle, said after Republicans won that policy battle, “it is beyond amazing to see the GOP’s newly discovered awareness of their middle-class property-tax hike.”

He said Republican leaders mocked Democrats at the time for trying to find ways to reduce the impact of the statewide property tax increase.

“The GOP wrote this plan, shoved it through when they were governing as the majority,” Carlyle said. “Now that their majority is endangered, they are retreating to pretend like this desperate move will help their struggling candidate in the 45th District who can’t defend the tax hike crippling her part of King County.”

Senate Majority Leader Mark Schoesler, R-Ritzville, brushed off those criticisms, saying Braun’s plan is aimed only at helping taxpayers throughout the state’s 39 counties.

“This is simply the right thing to do with additional resources for people across our state,” Schoesler said.

Not surprisingly, Inslee’s office has a different take on where the newfound money should go.

Tara Lee, a spokeswoman for the governor, said the extra money from last week’s revenue forecast will be needed to patch other holes in the two-year state budget the Legislature approved over the course of a few hours in June. Lawmakers passed the budget in the nick of time to prevent a partial shutdown of state government.

“The increased revenue projections will be needed to cover miscalculations and errors that resulted from the hasty passage of the biennial budget,” Lee wrote in an email, noting that lawmakers “rushed it through with very little time for review.”

She added: “We are glad to see Sen. Braun agrees with the governor that it is worth looking at ways to reduce property tax, even though he's mistaken that this provides a way to do that.”