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SB 5770

Providing state and local property tax reform.

2023-2024 Regular Session Introduced by Annette Cleveland and 17 co-sponsors

SB 5770 loosens the 1% property-tax growth cap by linking increases to inflation (with population in some versions) and adds a state-levy primary-residence exemption.

Senate Rules "X" file.
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Bill Summary · SB 5770

Summary — SB 5770 (Property Tax Reform)

Status: Senate Rules "X" file (most recent actions in 2024 and 2025)
Introduced: February 21, 2025 (multiple prior introductions and substitute versions)
Primary sponsors: Senate Ways & Means; multiple Democratic senators across 2023–2025 sessions

Main purpose

SB 5770 is a package of property-tax reforms considered across multiple substitute versions (2023–2025). The bill’s principal goals are to:
- Change the statutory annual limit on growth in property tax collections for state and local taxing districts (relaxing the longstanding 1% cap in some versions); and
- Provide targeted homeowner tax relief by creating a “primary residence” state-levy property tax exemption (in later 2025 versions) and by changing senior exemption treatment in earlier substitutes.

Because the bill was amended multiple times, different substitute versions emphasize different reforms. The summary below highlights the core policy changes contained in the notable substitutes.

Key provisions (by theme/version)

  1. Changing the property tax revenue limit (2023 & 2024 substitute language)
  2. Replaces the flat 1% annual growth cap for taxed revenue with a formula that allows increases tied to inflation and, in some versions, population change.
    • “Inflation” is redefined to use the CPI for All Urban Consumers, Western Region (12‑month change, published by BLS by July 25).
    • Limit factor becomes: 100% + inflation (+ population change in the 2023 version) but capped at a 103% limit factor (i.e., up to 3% growth).
  3. Introduces the concept of a “banked inflation balance” — accumulated inflation growth above 3% from prior years that may be used later.

  4. Responsibility/timing: Dept. of Revenue must publish annual limit factors by September 1 (year specified in each version); county assessors notify taxing districts by October 1.

  5. Primary residence property tax exemption (2025 substitute S-1936.2 / bill S-0805.5)

  6. Creates a state-levy exemption on a portion of assessed value of a taxpayer’s principal residence (does not affect local levies).

  7. For taxes collected in 2028 and thereafter, exemption equals the greater of:

    • $100,000 of assessed valuation; or
    • 60% of the county median residential assessed value (department publishes median by Aug 1).

  8. The exemption cannot reduce a taxpayer’s liability below zero (i.e., benefit limited to the state levy that would otherwise be charged).

  9. Claim process: homeowners must apply to the Department of Revenue by April 1 of the calendar year before first year of exemption; applications require parcel, address, and social security numbers of owners; the department provides lists to county assessors and is to protect privacy (SSNs removed before transmission).

  10. Continuity: exemption continues until sale/transfer or disqualification; only one primary residence per claimant.

  11. Senior exemption adjustment (2024 substitute — Part II; truncated in text)

  12. One substitute includes a provision to reduce “Part 1” of the state levy by 25% for all participants in the senior exemption program (amendment to RCW 84.36.381). (Text in the file is truncated; effect would be a further reduction in state levy for eligible claimants.)

  13. Technical / statutory changes

  14. Amendments to RCW chapters governing property tax definitions, administrative deadlines, and assessor/Dept. of Revenue duties.

  15. Repeals RCW 84.55.0101 in some versions.

Who is affected

  • Homeowners of primary residences (would gain a state-levy exemption if they apply and qualify).
  • Counties, cities, and special districts — potential increased allowable property tax revenue growth (if cap relaxed) impacts local budgets for public safety, fire, public services.
  • State education funding — because state property levy proceeds fund schools, exemptions and caps changes could reduce state levy revenue unless offset or adjusted (the bill requires the department to adjust exemption percentages if the state levy would otherwise exceed statutory maximums).
  • County assessors and the Department of Revenue — added administrative tasks (publishing medians, maintaining claimant lists, verification and privacy protections).

Fiscal and policy implications (high-level)

  • Relaxing the revenue limit permits greater property-tax growth for local governments (up to a capped level), increasing potential local revenue for services but also allowing higher tax bills in growing/inflationary periods.
  • The primary-residence exemption shifts state-levy burden away from qualifying homeowners; absent offsets, this reduces state property-tax revenue available for school funding and may require adjustments elsewhere.
  • Administrative costs for Department of Revenue and assessors to implement application processing, data publication, and verification.

Timeline & procedural posture

  • Multiple substitute bills considered across 2023–2025 sessions. Key committee actions and public hearings occurred in Jan–Feb of 2024 and Feb–Mar of 2025.
  • Department/assessor publication deadlines set in statute (e.g., DoR publishes limit factors by Sept 1; county assessor provides limit factors by Oct 1). Primary-residence exemption, in 2025 substitutes, would apply to taxes levied for collection beginning in 2028; applications due April 1 prior year.

Note: SB 5770 was amended substantially across substitute versions. Readers interested in enacted text or fiscal analyses should consult the most recent official substitute text, the Office of Financial Management and Department of Revenue fiscal notes, and committee reports for revenue estimates and implementation details.

Compiled from official sources — confirm details with the bill’s official record.

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