Initiative promoter Tim Eyman is at it again. The populist tax reformer has garnered the 197,734 valid signatures needed to place Initiative 747 on the November ballot. The measure seeks to limit the annual rise in regular property tax collections to 1%, unless voters approve a higher increase.

That Mr. Eyman senses the widespread appeal of another tax limitation measure is not surprising. The people of Washington are frustrated with rising property taxes. In recent years, whenever a proposal to control spending, reduce taxes or slow the rate of tax increase has come before the voters, it has passed, as attested by the electoral success of Initiative 601, Referendum 47, Initiative 695 and Initiative 722. The action of the courts in overturning some of these measures accounts for much of the ongoing discontent over the growing property tax burden.

All residents are affected by property taxes, as owners, renters or consumers. Property ownership forms the basis of our free economy and taxes on property are passed on to consumers in the form of higher prices on goods and services. The result is to create significant upward pressure on the cost of living. In high-tax areas like Seattle and other cities, levies on property contribute to the lack of affordable housing and make it harder for low-income families to make ends meet.

Although property owners feel the effects of the property tax most directly, non-owners sometimes see the tax as well. For example, the owner of one four-unit apartment building in Seattle mails copies of his yearly property tax bill to tenants. Attached is a statement showing their increased monthly rent, each tenant being assigned one quarter of the tax increase. While this building owner openly explains higher taxes to his customers, all businesses must accommodate property tax increases in their pricing structure or go under.

The property tax is the oldest in Washington, older even than statehood. In a state without an income tax, it is a major source of funding for counties, cities and some 1,740 smaller tax districts around the state. All citizens rely on local government to provide police, firefighters, social safety-net programs and a host of other basic services. Any decision by the voters to implement further tax limitation will have a profound effect on local government finances in the near term and for years to come.

Read the full Policy Brief here