The Price of Early Statehood
Fresh from statehood, Washington’s auditor warns of a looming floating debt and a chaotic tax system that left farmers and county officials struggling.
The story, cleaned up
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State Auditor Reed has prepared a lengthy report of the conduct of his office from November 18, 1889, to the end of October 1890. The report includes a financial exhibit of the affairs of the state and suggestions for needed legislation. Reed highlights that the state faces a significant floating debt bearing 10 percent interest. He argues that the current tax law is in desperate need of reform, specifically noting that the fiscal year is limited to a nine-month period, which causes administrative chaos. Taxes fall due in December, causing great inconvenience to the farming portion of the population. Furthermore, he points out that county auditors and state boards are caught in a rush that makes errors unavoidable. Auditor Reed proposes extending tax deadlines and establishing a state-level commission to determine property tax rates, rather than leaving the discretion to counties that are currently manipulating property valuations to pay less into the state treasury. He notes that some county authorities have even boasted of reducing values 50 percent below their true cash worth to gain an advantage over neighboring counties.
“It is not infrequently the case that values are reduced 50 per cent, below the true cash or market standard... the overweening desire to 'get ahead of the other fellow,' and the consequent depreciation of values.”
In 1891, Washington was grappling with the fundamental mechanics of local governance and the struggle to fund public services. Today’s debates over the state’s regressive tax structure, property tax caps, and the burden of local versus state funding mirror these exact concerns from the dawn of statehood.
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