Guest columnist
Shun Wal-Mart approach to taxes

By David Goldstein
Special to The Times

	David Goldstein
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If it were up to Tim Eyman, Washington's state motto would paraphrase Wal-Mart:

"Always cut taxes."

Like the TV commercial's energetic, price-chopping smiley-face, Eyman bounces from election to election — capping property taxes here, cutting car tabs there — cheerily slashing billions from state and local tax rolls.

Unfortunately, local government isn't a Wal-Mart, and it can't just cut costs by outsourcing firefighting or road maintenance to sweatshops in Guangdong province. The only way for local governments to substantially cut spending is to substantially cut services.

Yet, even as communities are only just beginning to feel the full impact of Initiative 747's 1-percent growth limit, Eyman is bouncing back with a proposal to knock another 25 percent off local property taxes.

CORRECTION Due to an editing error, the Nazi SS was rendered as Secret Service in a guest commentary by Frank R. Wetzel yesterday ("Priority in Iraq: security, security"). It stands for Schutzstaffel.

Make no mistake, if Eyman's initiative passes, road projects will be canceled, parks and libraries will be closed, and firefighters and police officers will be laid off. This isn't a scare tactic; this is simple math.

Take Eyman's hometown of Mukilteo. After failing to pass a $650,000 emergency medical-services levy with 53 percent of the vote, the City Council was forced to cut two paramedic positions, freeze city hiring, raise business license fees and cancel the popular Lighthouse Festival for the first time in 39 years.

But that's nothing compared to what could come: Eyman's initiative would lop over $1 million off the city's $11 million operating budget. Police and fire comprise over half the city's 85 full-time employees and 45 percent of its general fund expenditures. Layoffs would be inevitable, and public safety would certainly be compromised.

Now Mukilteo is a wealthy community, and while Eyman's neighbors might suffer, they'll suffer less than most. For despite Eyman's penchant for pitting West vs. East, cities vs. rural, and Seattle vs. the state, the impact of his new initiative will be most devastating in the rural and suburban communities where he traditionally courts his votes.

Seattle, like most major cities, has a broad revenue base, and relies on property taxes for only 10 percent of its budget. But the unincorporated areas of counties are almost entirely dependent on local property taxes to pay for local services.

In much of the state, local hospitals, parks, libraries, firefighting and road construction are funded by dedicated taxing districts that would absorb the full 25-percent cut without the possibility of shifting monies from one service to another. Many rural counties and towns rely on property taxes for over 50 percent of their general fund; already on the brink of insolvency, some would surely be shoved right over the edge.

Eyman doesn't like to talk about impact; it's unclear if he even considers it. Announced as a "voter veto" of the 5-cent gas-tax hike, the initiative first targeted the state school levy, then suddenly switched sights to local property taxes. No research, no deliberation, no impact statement. The initiative was never conceived as a thoughtful piece of public policy, but rather as an act of political vengeance.

Eyman understands local government the way a wrecking ball understands architecture. He just plain likes knocking things down, and the only impact that seems to interest him is that of the big iron ball slamming into the political establishment.

Of course, Eyman wouldn't be so successful if there weren't a grain of truth to his rhetoric, and the truth is that state and local taxes are too high on many low- and middle-income households. If you earn $20,000 a year, you live in the highest-taxed state in the union; if you earn $200,000, you live in one of the lowest.

Washington has the most unfair tax system in the nation: The bottom 20 percent pays over 17.6 percent of income in state and local taxes, whereas the top 1 percent pays only 3.3 percent. We balance our budgets on the backs of the poor, and across-the-board tax cuts like Eyman's only make matters worse.

That is why a group of citizen activists proposes a creative alternative: a $30,000 property tax homestead exemption.

Our proposal shields the first $30,000 of a household's primary residence from the entire property tax, both state and local. Since rates on the remaining value would rise to offset lost revenues, the end result would be a modest shift of taxes from less-expensive homes to more-expensive.

In King County, a $100,000 home would save about $290 a year — more than twice that of Eyman's initiative. A $1 million home, which under Eyman's plan would get a $1,500 windfall, would see a modest net increase of only $200 after federal deductions. Owners of a $515,000 home would see no change in their tax bill.

Our proposal targets relief toward low- and middle-income homeowners, whereas Eyman's largely benefits the wealthy. Our proposal maintains revenues at current levels and limits, whereas Eyman's guts local services like fire, parks, libraries and law enforcement. And our proposal takes a small step toward tax fairness, whereas Eyman's takes a leap in the wrong direction.

Tax cuts and spending cuts are two sides of the same equation, and we can't have an honest debate without honest math.

David Goldstein is a writer, software developer, and citizen activist who lives in South Seattle. Contact him at david@eccentricsoftware.com

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