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01/12/2019 00 Misc Distributed at the Meeting (3) Distributed at Meeting / P th #3 Property Taxes "My assessed valuation goes up every year and so do ==p my taxes. How is it that we can't balance the budget?" 9„g"+.��S & 1��. kyi qP F.h. sr,.,. J g� S 2 ,fi x_ 2 >.qq.{{ pr :e�'2 � b'!•3'. t' if „yi. 4 s {yY + th 6S'f"ri i .+ r.Aal�ASdt �� 5 ? �,r.".7 y.'. �.> wx;' a .S �Y,S ..3 ,.3•,., r.rr�vr.;6 r�1t $ �r t"�"4:'eX 'i'.�Y si °', J FFA ?Nt', Property Tax ®Statutory authority: RCW Title 84 oAt least 30 types of taxing districts with different maximum levies individually and in aggregate °Two main aggregate limits: • Statutory limit applies to most local regular tax levies ($5.90 per $1,000 AV) • Constitution limits the amount of property tax imposed on an individual parcel without voter approval to one percent of its true and fair value o If either limit is reached, the individual levy components are reduced for junior taxing districts first (it's complicated!) }td'ai"3y3k i xrty -1 s zl ""'+ � `L �4 �f '! t# s"u ? i3 Vrerr �Y'�'+•r.w ._'k"n; q.���4A°rt)., .7`5.> 7 .r���� ��Isd,c . .,��"+'.at t rfr° • 3 P # '�` #� � • Money is � � TA 4,' used to 1 better the �_ { ::: community! Appraiser sets value Taxpayer gets statement Taxpayer can appeal value /ti~ t t / 'Piii 1 . tY '_®61 q #2 s', # # z ..,-.. 0't , , iLII -23 . Gavemmer set Values determine your Taxpayer pays their budgets slice of taxes to pay share of taxes Property Tax Truths The city determines its levy (total allowable property tax revenue or the amount needed to balance the budget if less) °Current levy plus allowance for new construction e Plus optional amount up to the lesser of . . . • Implicit Price Deflator O One percent o Banked capacity if available (allowable increase not taken in the past) The Assessor determines home values based on market values The tax rate per $1,000 results from the math The rate is multiplied by the parcel's AV/$1,000 to arrive at the individual tax bill �+C� a r,a �"�rry^" r� Cad F V�, �aaarw l "''"' i y A ,,. 4,1t,r r ' ..r$ "a 7 ilg.�f::; !' =f-Wit d� ° 1.�� i.. ,S 5'?t' .81 '#� „Cb '�, .c, i{i.a ,42+ 3x, .a";':,7 fit. c,, �a5 ,:_.:.' "a ; 4 y+11 ,r`fv J _ e 4 t c y"�,,� {.vFa r .t , r^t' ,r y�,S ^a'i' �`34 x •� . -, > .. :;T f + •€` ,x- ' , - 4 . .i_a,.,,>i cN ri�zw'ag.' _n poK&•,��"F'ar ��'nti°e���' � a'Si 1: Sample Levy Calculation (sorry, some numbers) $15 million Levy and $10 billion Assessed Value Step 1: Divide the Assessed Value by $1,000 $10,000,000,000/$1,000 = $10,000,000 Step 2: Divide the Levy by the Assessed Valuation (per $1,000) $15,000,000/$10,000,000 = $1.50 (the Rate) Step 3: Apply the Rate to every $1,000 of your homes AV $500,000/$1,000 = $500 Step 4: Multiply the AV by the rate $500 * $1.50 = $750 Annual Property Tax f 1 d�F �` .c.. ,•' °yK �. Property Tax Myths eWhen the valuation goes up the city gets more revenue If the city raises property taxes by 1% my entire tax bill will go up 1% ®The city determines the tax rate, the Assessor determines my value and the city gets whatever revenue results ®My taxes go up every year l nei c "b'ro_01 Fr�s � t'li^ �,yf.* a"0jj t� : Ftir�- Nt e �ytrt +v..� i Ls4 b 4 r S k .� w '+ #.b:'!.h' .•*tee* }T,ti p°.'yt 3 j ,[� tt`i''f+g. °'"' ,. .. u%;1. �',�' .I.. . ` 1 °t r 1 Factors Affecting Your Property Taxes Decisions of the City council ®Decisions of other jurisdictions Decisions of voters °County assessor's valuation • Your property • All other properties • Your property compared to all others New construction d^ „to-, �°l i . ham+ `ate t � -** i .v „,4 w , q1 Property Tax — The Good, The Bad and the Ugly Good ®Very Stable (citizen initiatives aside) Relatively Progressive o Everybody pays °Bad • Frequent target of citizen initiatives o Impacts to people on fixed incomes °Complicated and Confusing ®Ugly °Almost everybody hates is on principle �`�� .M>'t�}t � w�" ,�` h a, A'l ;„ :,i a k, L+,�{�E i.a �A' rr� F�� - - e � � . .� ... a tlU t,Via: '''C �' N'4.� ax 4�;M'_• ?�}^ ;&51 1` / #4 Levies "We should do a special levy for public safety staff for six years" Itqfeleti',OZieiVig,IK.r POPO leg .,44. i- s- -''1'''' 14- ''' Al:(4'lierrli'VVP14.'4..'^` 7*-ON''44-...P7:-.'74.1 ,1,,,,„„ . ..„,,I,,,,--vti4,114 4../:.,k,04,4 ii7144-4:F5,-.V.4:,0 ,:,;),-,,,....,;,,,,,,.i.-:'','::'''''',.iit,Vire:‘,474,-,3T:)10`41.Act04 Types of Levies/Lid Lifts Levy Lid Lift Types vary based on: ® Purpose °Annual Increases Allowed ® Election Date °Approval Percentage ®Supplanting Requirements Debt Limitations r i a 5, ;' f `atl ,,„4v ,lr,,,,,,,,, > „..1 .,,4,rO 'r 'r�,ra , V,� t: a ,0' } )> . c',, , 4 i ' •' „ ..b r,if +, �, I� r K ° ¢ 4 ..x Tyr u z;•"�r., :,, r 'F. ray � �,n i'yry�i ix.:.d�w � 3 s ,r " ;�C �c�w.:,�s:r '�' � .:r � 7 �' = � �' � r 5 tl `t tux '^' �',�'' tEw 1 Types of Levies tR' MCI alalaa407:03Z, 7Vorifit6117 414sCh WogiMaV rigaVa% ,ZOTTIVIATSMMIMOM.t.: "Original Flavor" X X 50%+1 After year 1,increases limited to 1% Levy Lid Lift (max 9 yr debt) Multi Year + X X Subject to non-supplanting %50 1 Levy Lid Lift (max 9 yr debt) Can increase by more than 1%for up to 6 years Excess Levy 60% X Can only be used for capital with validation MPD 50%+1 or *subject to 60%w/validation X X* Petition to form Overlapping junior taxing district .-:,:3•4:1V4V4At `TW-Zt;WiAg'qP; ."41'44'tliMikei,,b,414.1,nk. Considerations in Selecting Option Short versus long term need Cost growth pattern Anticipated support of the electorate Use of debt versus pay-as-you-go