The state Supreme Court’s Hirst decision might diminish property values in rural areas, but that will cause a tax shift to urban property holders, warn two lawmakers.
IF you own undeveloped rural property or you are an urban property owner with access to water, a Washington State Supreme Court ruling is going to cost you money — lots of it — unless the Legislature acts before the session adjourns April 23.
Last October, the high court ruled Whatcom County’s comprehensive plan failed to protect water resources under the Growth Management Act. Known as the Hirst decision, it means landowners with undeveloped properties may never be able to dig a well on their property unless they can prove not a single drop of water would be removed from instream flows. An instream flow is a water right for a river or a stream that protects and preserves instream resources like fish habitat. Without available water, banks won’t issue loans on these properties and counties will not issue building permits. Without water, there is no development, so these lands become worthless, or significantly lose their market value.
A couple in Arlington recently expressed their concerns to us. They want to sell property so they can buy a home and downsize in retirement. They have been good stewards of this land and consider it their life investment. Unless they can have a well drilled, their property value will be greatly reduced, jeopardizing their finances and future. Who wants property that is useless without water? This is happening all across Washington.
You may think, “So what? I have no investment in undeveloped land. That’s their problem!”
No, it will be your problem too! Why? When the value of impacted properties plummets, counties still must collect the same amount of money for services. To do this, they must shift those taxes to every owner whose property retains its undiminished value. If you’re that property owner, you will pay higher property taxes to compensate for those reduced land values as a result of the Hirst decision.
The Whatcom County assessor recently ran numbers to determine the tax shift. The results are eye opening. There would be a $271 million rural-to-urban shift on property taxes. Bellingham property owners would face significant property-tax increases.
This important fact destroys the misconception this is exclusively a rural issue. It is not. Hirst could affect nearly every property owner in Washington state — rural and urban.
Republicans introduced several bills to fix the problem. The Democratic chair of the House Agriculture and Natural Resources Committee, whose district desperately needs a solution, gave our bills public hearings. Unfortunately, none passed.
The good news is the Senate did pass legislation. Senate Bill 5239 advanced on a bipartisan, 28-21 vote in late February. The measure would take our state back to the point prior to the Hirst decision and properly put the onus back on the state Department of Ecology to determine water availability, not property owners. Unfortunately, this solution met resistance in the aforementioned House committee and languishes there as the legislative clock counts down. Meanwhile, Washingtonians’ livelihoods and dreams hang in the balance.
To their credit, House Democrats have been at the negotiating table. However, their proposals would add unnecessary and unfair bureaucratic burdens on property owners — including water meters, increased fees and paperwork.
It may be some of our Democratic friends do not understand the consequences for their own communities. That’s why we have introduced legislation that would help people in a worst-case scenario. House Bill 2195 would ensure tax relief to property owners affected by the Hirst decision, reflecting the true value of that property once the water ruling has taken effect. As the consequential property tax shift begins, the measure would bring greater public awareness to all property owners about the effects of diminished property values.
If the Legislature passes a comprehensive Hirst solution and the governor signs it, House Bill 2195 will be unnecessary. We hope that is the case. However, as the end of the legislative session is approaching and with a lack of urgency from our Democratic friends, we must provide relief for those who would be adversely impacted the most. And we must help every property owner, whether they live in rural Washington or downtown Seattle, to understand they will be impacted unless we act now to fix Hirst.