 Washington's Property Tax Cap: A Proven Safeguard at Risk Under HB 2049 The Origin of the 1% Property Tax Cap In 2001, Washington voters overwhelmingly approved Initiative 747 (I-747), a measure aimed at limiting the growth of property taxes. Led by tax reform advocate Tim Eyman, the initiative restricted local governments from increasing their regular property tax levies by more than 1% per year, unless a higher rate was approved directly by voters. The intent was to protect homeowners, seniors, and small businesses from unpredictable tax hikes that could threaten housing stability and economic security. For over two decades, this law has provided predictability and accountability in property tax policy, balancing the funding needs of local governments with the financial realities of Washington residents. What HB 2049 Proposes — And Why It Matters In 2025, House Bill 2049 seeks to undo this balance by removing the 1% cap on property tax increases. If passed, HB 2049 would allow local governments to raise property tax levies beyond the 1% limit without voter approval, giving taxing authorities far more leeway without public input or oversight. While the bill is intended to increase funding for K-12 education and public safety, it eliminates a key taxpayer protection that has shielded residents from volatile and unaffordable tax increases. Negative Impacts of House Bill 2049 • Removes voter oversight, allowing tax increases without public approval. • Enables sharp, unpredictable property tax hikes, creating financial instability. • Raises the cost of homeownership, making it harder for families to stay in their homes. • Increases rental housing costs, as property taxes are passed through to tenants. • Discourages housing development, particularly for affordable and entry-level homes. • Raises pre-construction costs, making land banking and project financing more difficult. • Worsens Washington’s housing shortage, especially for low- and moderate-income households. • Undermines 20+ years of tax stability, eroding a proven safeguard against housing insecurity.  
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CALL TO ACTION-PREVENT EXCESSIVE PROPERTY TAX INCREASES WITHOUT VOTER APPROVAL- Oppose SB 57984/1/2025 A Voter-Driven Limit on Property Taxes In 2001, Washington voters approved Initiative 747 (I-747), a measure designed to limit how quickly property taxes could grow. I-747 capped the annual increase in regular property tax levies to 1%—unless voters approved a higher increase . Though the Washington State Supreme Court struck down I-747 in 2007, Governor Christine Gregoire called a special session, and the Legislature reinstated the 1% limit to reflect the will of the voters. This cap is now written into law under RCW 84.55.010 and has been a key piece of Washington’s tax policy ever since. What SB 5798 Proposes in 2025 Fast forward to 2025: Senate Bill 5798 proposes a major shift by removing or significantly changing the 1% cap. If passed, the bill would allow local governments to raise property tax levies beyond the 1% annual limit without a public vote. It could also tie future tax increases to inflation or population growth—metrics that often outpace wage growth and household income. While this might give local governments more flexibility to fund services, it would also strip away a long-standing taxpayer safeguard and shift decision-making power away from voters. Why It Matters: Potential Consequences of SB 5798 The repeal or loosening of the 1% cap could lead to unpredictable and potentially steep property tax increases year after year. With affordability already a top concern in Washington, SB 5798 threatens to undermine housing stability, slow development, and burden communities with higher costs—without requiring voter approval. The 1% cap has served as a guardrail for over two decades. Removing it may create more problems than it solves. Negative Impacts of Senate Bill 5798 • Removes the 1% property tax cap, which currently protects homeowners and small businesses from sharp tax increases. • Leads to financial instability by allowing unpredictable spikes in property tax rates, especially harmful during times of inflation or economic downturn. • Raises the cost of homeownership, making it more difficult for families to stay in their homes or enter the housing market. • Discourages housing development by increasing carrying costs for developers, particularly on undeveloped land or during construction phases. • Could worsen the housing crisis by slowing down new residential construction and limiting supply. • Hurts small businesses that rent or own property, as higher taxes may be passed through in lease agreements or absorbed as increased overhead. • Undermines long-term affordability goals by removing a key safeguard that helps keep housing costs stable across communities.   House Bill # 1764 |
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