Senate proposal linking cap on property taxes to inflation and population

SB 5618 sponsored by Sen. Kuderer (D–Bellevue) revises the property tax cap for local governments to account for inflation and population growth up to three percent. It takes a similar approach to HB 1670 and we hope both bills will be scheduled for hearing soon and encourage city officials to talk to your legislators about the need for this local revenue flexibility.

Changing the cap on property taxes to tie it to inflation and population growth would help cities keep up with the increasing costs of services and was a recommendation of the State Tax Structure Work Group.

This proposal takes a slightly different approach. It would allow local governments under 10,000 population to increase property tax by three percent. For local governments over 10,000 population, the cap would be the lesser of growth in inflation and population or three percent, or three percent with a finding of substantial need. Unlike the house version of the bill, SB 5618 is tied to passage of SB 5495, the homestead property tax exemption.

In a recent public opinion survey commissioned by AWC, 72% of respondents indicated support for a 3% cap on property taxes.