Summary
This measure limits property tax increases to 2% annually, repeals all new taxes or tax increases, not voted by the people, which were enacted after the date I-695 qualified for the ballot, and exempts all vehicles from the property tax. 

Main Provisions:
Section 1: Invalidates any tax or fee increase adopted between 7/2/99 and 12/31/99 that did not have voter approval.

Section 2: Exempts permanently all vehicles from the property tax.

Section 3: Limits assessed valuation increases to 2% or inflation, whichever is less.

(The text of this section has at least two interpretations. One is that it limits valuation increases to 2%. The other that it does not limit valuations, it limits an individual’s obligation to pay more than a 2% increase in property taxes. Therefore a property owner would not have to pay for a school levy or other ballot measures if their effect increases an individual’s property taxes in excess of 2%. The Washington Association of County assessors through the Washington Association of Counties is asking the Washington Association of Prosecuting Attorney’s for an interpretation of this section.)

Section 4: Exempt all real property “maintenance improvements”, and keep new construction or manufactured property to 1/99 values plus 2% or inflation, whichever is less, as long as a retail sales tax is paid on materials.

Section 5 & 6: Reduces the 106% limit on total property tax levies for a taxing district to 102%.

Section 7: Repeals the current law protecting a tax district’s unused future levy taxing capacity. (RCW 84.55.092)

• Would further restrict future growth in property taxes.
• Would prevent sudden increases in taxable property valuation - offering some protection to long term property owners.
  

• This measure would be a tax shift, not a tax cut. Owners of property with stable or falling value would pay more under Initiative 722 than they would pay under the present system, which is based on fair market value. 
• Properties of identical value would end up being taxed differently.  Over time, the relationship between actual property value and taxable property value would become larger and larger - undermining voter confidence in the fairness of the tax.
• Exemption for maintenance that increases market value of property would be unfair to other taxpayers.
• The State Constitution requires that property be taxed uniformly based on fair market value, so the measure is likely to be found unconstitutional.

• It would be unfair, and potentially unconstitutional, to cancel legally approved tax and fee increases retroactively.  Making local governments refund past fees would present both financial and logistical challenges.

• Taxing districts not currently using their maximum tax levy would be penalized by being capped at the present lower levy. This rewards taxing districts that tax to the max.

• The permanent 1999+2% lid on new construction and manufactured property creates a windfall for new construction.
• The legislature has already ensured the vehicles are exempt from property tax, making this provision unnecessary.

The Municipal League Board has taken a position in opposition to Initiative 722, and recommends a "No" vote.

Rationale
Voters in Washington State sent a message last year when they approved Initiative 695, which reduced the tax on auto tabs. But, the impacts are still being sorted out.  It is not time to impose “the Son of 695” until the consequences are fully realized.

I-722 is a piecemeal effort to address complex tax problems. No one likes to pay taxes, but some taxes are necessary. Our tax system should be fair, comprehensive and carefully thought out. Initiative 722 would take further steps to reduce taxes for the wealthy and impose them on the middle class. It is the wrong measure, at the wrong time.