From the Director: The AWC Board Adopts AWC’s 2008 Legislative Priorities

AWC’s 2008 legislative package includes priorities recently identified as well as items carried over from 2007. The following are the six "Major Priorities" which the Board directed staff to aggressively pursue in the 2008 session:

• Annexation and City/County Governance Transition: Advocate for changes to annexation statutes that will better facilitate annexations, and explore legislative ideas to encourage cities and counties to better coordinate boundary, finance and governance transition issues.
• Infrastructure Funding – Increase Existing Grant and Loan Programs: Seek increased funding for infrastructure and economic development programs.
• LEOFF 1 Medical and Long-Term Care Costs: Seek legislation that provides financial assistance for cities in paying for these liabilities.
• Community Economic Revitalization Board (CERB) and Job Development Fund: Seek permanent funding for the CERB and the Job Development Fund.
• Property Tax: While we acknowledge that the Legislature re-instated the 1% cap on property taxes, we will continue to work with them to make improvements to the property tax system that benefits cities.
• Gang Task Force Recommendations: AWC will support local option tools and funding for use by cities.

A complete listing our legislative priorities can be found on our website at www.awcnet.org/legpriorities. In addition, our pre-session Bulletin, which will be sent out the first week of January, will include more details on all of our legislative priorities.

Special Session Update

The Legislature convened on November 29 for a one-day Special Session to reinstate the provisions of I-747, which had been declared unconstitutional by the Washington State Supreme Court earlier in the month. HB 2416 reinstated the one percent cap and eliminated any banked capacity as a result of the court decision.

AWC testified against the bill in the hearings, along with county representatives, requesting instead that the Legislature consider placing the limit at a rate of inflation, the implicit price deflator (IPD), which has been a legislative priority of the association for several years. We recognize the decisions regarding the bill's provisions were agreed to by the time the Legislature had returned to Olympia, our intent was to remind them of the impact on cities.

While banked capacity from previous years was also discussed during the hearings on the bill, the bill did allow jurisdictions to keep banked capacity (either capacity existing prior to the 2001 implementation of I-747 or banked capacity accrued under the one percent rules of I-747). Without the banking authority allowing a jurisdiction to take less than the one percent limit in a year and reserve or bank the remainder for future use, a jurisdiction would have incentive to approve the full amount every year for fear it would be needed in the future.

Another bill, SSB 6178 passed during the special session to provide an option for a property tax deferral for homeowners with incomes less than $57,000 per year, the median income for the state. The program is similar to the existing program for low income seniors. The taxes could be deferred if the homeowner had been in the house at least five years and the deferral was not more than 40% of the equity in the property.

In addition, while we recognized the limited ability of the Legislature to consider other property tax options during the special session, we will continue to advocate for several proposals related to property taxes during the 2008 regular session:

• Legislation to simplify the process for levy lid lifts;
• Legislation to provide clarity regarding permanent and temporary levy lid lifts;
• Ensuring that new construction is placed on the tax rolls as soon as possible;
• Additional funding for jurisdictions that have low tax bases and are heavily reliant on property tax revenues; and
• A thorough review of the property tax system.

As you talk with your legislators before the 2008 legislative session starts, remind them that property taxes are an important revenue source for cities. As the economy slows and service costs continue to increase, cities will become more dependent on property taxes to maintain city services.

In Closing

The 2007 Legislative session was very successful for cities. This success was a result of your hard work and contacts with your legislators. While we don’t expect 2008 to be as active given the short session, a very condensed agenda, and the upcoming elections; we encourage you to continue to remind your legislators of your issues and needs. We look forward to working with you again this session to advance the city agenda.

Happy Holidays!

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