Ad Watch: McKenna and your property taxes

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by ROBERT MAK / KING 5 News

KING5.com

Posted on October 2, 2012 at 6:06 PM

Updated Thursday, Oct 25 at 1:04 PM

A new TV ad from Democratic gubernatorial candidate Jay Inslee charges that Rob McKenna wants to raise your property taxes.

"Nearly a third to half of Washington school districts will see their property taxes go up, hundreds of thousands of taxpayers will pay more," the ad's narrator says of the GOP candidate's education plan.

McKenna said he supports changes to the way Washington property taxes are collected. But this particular idea is not aimed at raising more money from taxpayers. Instead, McKenna's proposal comes in response to a Washington Supreme Court ruling that system for levying and collecting property taxes is unfair.

Currently, public schools are supported by a portion of your property tax, which is sent to the state and then handed over to the schools. In some area of the state, including Seattle and many other school districts in the state, voters have approved additional property tax levies to support schools.

Over the years, school districts have come to rely more and more on local levies. In a ruling this year, however, the state's highest court said this practice needs to stop because it unfairly favors students in wealthier districts (where the property tax base is higher) and districts where voters support added levies.

The state Supreme Court said the state should provide a bigger share of school funding that's more fair to all districts.

One group of lawmakers has been working on a way to do that, proposing a "property tax swap."

Inslee's ad tries to make the swap sound sinister -- "McKenna proposes a property tax swap that will allow Olympia politicians to set your new tax rate," the narrator says.

But in fact one of the idea's biggest advocates is a member of Inslee's party, the Democrats' top budget writer in the state House.

Under the swap proposal, the state would raise the property tax rate across the board. The lawmakers envision that the typical home owner would pay somewhere in the neighborhood of an additional $200 to $400 a year, raising an estimated $1 billion annually. The state would then district the money to school district based on each district's total enrollment.

School districts would then be required to reduce their local levy by the same amount.

The homeowner, therefore, pays more to the state but less to the local school district -- thus, the "swap."

In his education plan, McKenna assumes that the swap has to be made.

"It's a revenue-neutral replacement of local levy dollars with state levy dollars because we have to meet that requirement," McKenna said.

Republicans estimate that under the swap proposal, taxpayers in 156 school districts would actually pay less, while taxpayers in 139 districts would pay more. The homeowners likely to pay more are those living in property-wealthy districts. 

Conclusion

The property tax swap McKenna supports is a bipartisan idea that's not about raising tax revenue. The ironic thing about Inslee attacking McKenna on this plan is that it's the wealthy districts that would pay more -- an idea embraced by many other Democrats.

Our ruling: It's not so simple.

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