Two bills that could have a significant impact on county funding drew attention last week. The first, HB 1718, was moved to the House floor calendar, where it will await action by the full House. This bill was introduced last year but has been around in some form for quite some time. Primarily sponsored by Spokane County Chief Deputy Treasurer and Representative Mike Volz, and called “an act relating to providing cities and counties flexibility with existing resources,” the bill:
- Removes prohibitions on supplanting existing local government expenditures with proceeds from a locally imposed 0.1 percent sales and use tax dedicated to mental health and substance abuse;
- Allows all county authorities to seek voter approval for the criminal justice regular levy;
- Allows jurisdictions to use revenue generated with a levy lid lift to supplant existing funds;
- Establishes the Developmental Disability and Mental Health Levy as a separate property tax levy outside of the county general levy;
- Establishes the Veterans’ Assistance Levy as a separate property tax levy outside of the county general levy; and
- Requires the county legislative authority to budget the direct costs of administering the Veterans’ Assistance Levy and prohibits the charging of indirect costs or fees.
WSAC has long supported this type of legislation and is hopeful that the bill will quickly pass the House and receive serious consideration in the Senate.
Additionally, another bill from last year reappeared, but this bill could cost counties over $26 million a year in lost penalties on delinquent property taxes. SB 6314 and its companion HB 2526 would eliminate:
- A penalty of 3 percent assessed on the amount of tax delinquent on June 1 of the year in which the tax is due; and
- An additional 8 percent assessed on the total amount of tax delinquent on December 1st of the year in which the tax is due.
These penalties are designed to ensure that taxpayers pay their taxes when due, which is a necessity for the county and special purpose district budgeting. With only the 12 percent interest rate, some property owners may well make the calculation that they are better off paying their taxes late in order to use those funds in another manner. There are already instances where this has occurred even with the penalties.
What’s more, SB 6314 is unnecessary. Last year’s HB 1105:
- Requires county treasurers to waive all outstanding interest and penalties on delinquent taxes for one time only if certain income or other qualifications are met;
- Requires county treasurers to provide the contact information of delinquent taxpayers to a homeownership resource center;
- Authorizes taxpayers to participate in payment agreements for current or past delinquent taxes;
- Requires that all payments received be applied to the oldest delinquency first;
- Prohibits foreclosures on delinquencies of $100 or less;
- Authorizes assessors to assist taxpayers in applying for deferral or exemption programs and requires assessors to refer them to the statewide foreclosure hotline.
This highly negotiated bill did not include the provisions of HB 2526 or SB 6314, although such an amendment was sought.
SB 6314 was heard in Senate Ways & Means on January 23, and HB 2526 will be heard in Appropriations on January 28. WSAC testified in opposition to the Senate bill and will testify opposed to the House bill as well. Initial conversations with the House bill’s prime sponsor, again Representative Mike Volz, indicate that there may be a way to alleviate the financial hit from this bill. Further discussions are necessary to determine whether the potential solution is a viable one.
