Gregoire to seek 1 percent property tax cap

OLYMPIA, Wash. -- Gov. Chris Gregoire pledged Friday to push the Legislature for a 1 percent yearly cap on property tax increases, to reinstate a voter-approved initiative that was just thrown out by the state Supreme Court.

Bowing to voters who rejected billions in new taxes at the polls Tuesday, Gregoire said she would work with Democratic legislative leaders to ensure the property tax cap gets passed.

"The voters approved Initiative 747, it has been in place for five years and I think we need to leave it in place," Gregoire said.

Gregoire, a Democrat, did not rule out a special session to make the change, a step called for earlier Friday by Dino Rossi, her Republican opponent for re-election in 2008.

Gregoire also reiterated her call to local officials not to raise taxes above the 1 percent cap, saying the Legislature must have time to act.

If that directive is ignored, Gregoire told The Associated Press she would consider calling a special session.

If no special session is called, lawmakers would begin working on the measure just after the new year. It figures to be at the top of the Democratic majority's agenda, and likely will be on a fast track for approval.

Gregoire's public support of the 1 percent cap follows Tuesday's election, in which Washingtonians displayed a penny-pinching mood.

Voters favored I-747 sponsor Tim Eyman's newest anti-tax initiative, endorsed a "rainy day" fund to head off future tax increases and rejected an $18 billion transportation package in the Puget Sound region.

Gregoire said cost-conscious voters in Washington mirrored their counterparts across the country, who defeated tax and spending measures from Oregon to New Jersey.

"I think the voters around the country on Tuesday said 'We're a little bit anxious about our pocketbooks, and we're a little bit anxious in general.' And I respect that," she said.

Washington voters approved I-747 in 2001 to prevent various levels of government from bumping up property taxes more than 1 percent per year. On Thursday, the Supreme Court ruled I-747 was unconstitutional, largely on technical grounds.

Before I-747 and a predecessor tax-cap initiative, the limit on annual property tax hikes was 6 percent.

Gregoire hadn't previously committed to a 1 percent cap, but said last year that a return to a 6 percent cap could tax people out of their homes.

House Democrats are committed to the 1 percent cap with Gregoire, and also would support a special session if local governments don't hold the line on property taxes in the meantime, said Majority Leader Lynn Kessler, D-Hoquiam.

"It seems that's appropriate given not just the election, but the whole economy," she said. "We've lived with it this long, so we can certainly reinstate it."

Senate Ways and Means Chairwoman Margarita Prentice, D-Renton, said Senate Democrats have been working on the issue already and are close to the governor's position.

Eyman said he was pleased by Gregoire's announcement, but found it ironic that Democratic leaders were suddenly pledging quick action.

"Olympia is never more representative than when facing the voters," he said. "They found religion. That's nice."

Eyman also credited Rossi with forcing Gregoire's hand, and Rossi quickly followed suit, calling Gregoire a flip-flopper.

"Despite her new position, this still cannot wait until January," Rossi spokeswoman Jill Strait said, pushing again for an immediate special session.