The final days of the Session finally made public both budgets and new ways to pay for them. One component of this was SB 5998, the graduated real estate excise tax (REET).
Conceptually, the bill is very simple: lower the REET on lower-value properties to help lower-income buyers afford to buy property. The rate rises (graduates) on higher-income properties because the presumption is that buyers of more expensive properties can better afford to pay higher tax.
Whatever the merits of this proposal, this policy could result in less revenue for about 17 counties with more lower-value properties. This is because counties collect a state-provided fee for administering REET. This administrative fee collected is based on REET total tax collected.
Thus, some of the more rural counties would collect less revenue from this fee because the overall REET tax is lower on some properties. The “hit” to county budgets is lower than it would have been in earlier drafts of the bill because the lowest-charged REET rate was increased in the final version and therefore the administrative fee would be correspondingly higher, but there will still be some loss in revenue.
WSAC worked to get an amendment to keep the overall collections the same, but this failed in the final days because legislators didn’t want to make changes to the bill at the last minute and risk having the bill, which is politically controversial, repeat steps in the legislative process.
We offered amendments both in committee and on the Floor, and also testified on this issue, and we are thankful to the many legislators who stood with us, in part thanks to WSAC membership working the doors last week.
We will try again to fix this next year.
On brighter notes, our public records assistance bill, HB 1667, has been passed and is expected to be signed by the Governor shortly, and prepaid ballot postage is likewise included in the budgets and likely to be enacted.
Some wins and some losses, but thank you all for a strong showing in the 2019 Session!