HB 2746
In CommitteeHouse
State property tax reduction
Reducing state property taxes.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill cuts Washington’s state property tax revenue by $2.1 billion starting in 2028, specifically targeting funds used for public schools and school construction. It does not change the existing $3.60 per $1,000 property tax cap but reduces the actual amount collected below that cap by $2.1 billion.
- Reduces the state’s property tax levy for collection in 2028 and later years by $2.1 billion from the maximum allowed (‘part I highest lawful levy’).
- Maintains the existing $3.60 per $1,000 of assessed value cap on total state property taxes for 2022 and later, but now applies a $2.1 billion reduction on top of that cap starting in 2028.
- Specifies that the $2.1 billion reduction applies only to the portion of property taxes used for ‘support of common schools’ (including bond payments for school buildings).
- Requires any future state property tax levies that would exceed $3.60 per $1,000 to be reduced proportionally—but the $2.1 billion cut is applied *in addition* to this cap.
Who is affected
- Property owners — Homeowners and property owners across Washington will see a reduction in their state property tax bill starting in 2028, as the state reduces its share of property tax revenue by $2.1 billion.
- Public schools and school districts — Public K–12 schools may receive less state funding for operations and capital projects, as the bill reduces state property tax revenue that previously supported schools—though the bill says this reduction still counts as “support of common schools” (including bond payments).
- State government agencies — The state government must adjust its budget planning to account for the $2.1 billion reduction in property tax revenue, which could affect other state programs or require shifts in funding sources.
Pro/Con Analysis
Stronger case for concerns
Potential Benefits (3)
Homeowners with high-valued properties (above median assessed value) will see a direct reduction in their state property tax liability starting in 2028, lowering annual housing costs for those who itemize federal deductions and benefit most from the reduction.
FinancialIndustryRef: Sec. 1(6) (reducing state property tax levy by $2.1B)The bill reinforces the $3.60 per $1,000 cap on state property taxes, providing long-term predictability for property owners and limiting future state overreach—though this benefit is largely symbolic since the cap was already in place and the $2.1B cut operates *in addition* to it.
Local GovernmentLean industryRef: Sec. 1(4)(b) (pro rata reduction if cap exceeded)By limiting the cut to school funding, the bill avoids reducing property tax revenue for other local services (e.g., fire, police, roads), potentially preserving some local government capacity—though this is offset by the broader fiscal strain on school-dependent communities.
Business & EmploymentRef: Sec. 1(6) (reduction applies only to school portion)
Potential Concerns (5)
Public K–12 schools will face a $2.1B reduction in state property tax revenue dedicated to common schools (including school construction bonds), which may force districts to cut programs, increase local levies, delay facility repairs, or lay off staff—especially harming high-need districts with limited local tax capacity.
EducationPeopleRef: Sec. 1(6) (reducing part I highest lawful levy by $2.1B for 2028+)Although homeowners see a nominal reduction in state property tax bills, many will face offsetting increases as school districts compensate by raising local property tax levies—especially in districts with low assessed value growth or high bond obligations—making the net effect regressive and unpredictable for middle- and low-income households.
HousingPeopleRef: Sec. 1(6) and Sec. 1(1) (maintaining $3.60 cap while cutting levy amount)The bill’s narrow focus on school funding means other state services funded partly by property tax (e.g., emergency communications, regional transit, fire districts) may face indirect budget pressure as the state reallocates general fund resources to make up for lost school revenue—potentially weakening local public safety infrastructure.
Public SafetyPeopleRef: Sec. 1(6) (reduction applies only to ‘support of common schools’ portion)School districts and other local governments relying on state property tax revenue will lose a predictable funding stream, increasing budget volatility and forcing difficult trade-offs between core services—particularly burdensome for smaller or fiscally strained jurisdictions without alternative revenue sources.
Local GovernmentLean peopleRef: Sec. 1(6) (reduction applied in addition to $3.60 cap)Businesses—especially those employing teachers, construction workers, and school support staff—may face job losses or reduced hours if school districts cut programs or delay construction projects due to reduced state funding.
Business & EmploymentLean peopleRef: Sec. 1(6) (reduction begins in 2028, no phase-in)
Who Is Most Affected
High-assessed-value homeowners benefit most from the direct tax cut, while low- and middle-income homeowners—especially in districts with high local levy reliance—may see little net benefit or even higher net taxes if districts raise local levies to compensate.
School districts in wealthy areas with strong local tax bases may weather the cut better, while districts in low-wealth areas—reliant on state property tax for core operations—face significant budget shortfalls, potentially worsening educational inequity.
State agencies may face pressure to reallocate general fund dollars to offset school funding losses, potentially reducing support for other public services (e.g., mental health, workforce development).
Construction and maintenance contractors who rely on school bond projects may see reduced demand, while businesses in districts that cut programs may face secondary impacts from reduced local spending.
Families in high-poverty districts may lose access to after-school programs, counseling, or advanced coursework if districts cut programs to balance budgets; low-income families are less able to absorb local levy increases.