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Island County’s tax levy is low, analyst says
No matter how you slice it, the Island County general fund levy is low or the lowest when compared to other counties.
Dan Jones, the levy analyst for the county assessor’s office, recently gave the county commissioners a PowerPoint presentation to address misconceptions about property taxes and rate comparisons. He looked at tax rates, taxes per capita and total levy amounts.
“We’ve had an overwhelming number of phone calls,” Assessor Mary Engle said. “The question has been, ‘Why has my assessment gone down but my tax bill went up?”
But average citizens aren’t the only ones with misconceptions. The commissioners earlier this month had a brief skirmish over tax rates when Commissioner Kelly Emerson handed out a paper that showed the county has the twelfth highest property tax rate, on average, in the state.
But as the other commissioners pointed out, Emerson’s statistics included all the property taxes the other taxing districts, including state and local schools, fire, parks, port and water districts, collect each year. Only about 8 percent of the average property tax bill goes to Island County’s general fund.
The reason the overall property tax rate is the twelfth highest, Jones explained, is largely because county residents voted to increase their own property taxes to fund things like school construction or fire district levies. For property owners in some areas, nearly half of their property taxes go to levies that were approved by voters.
“Historically, Island County voters have been reluctant to vote for levies to boost general government expenses to help sustain police protection or fire districts, but quick to vote for new stadiums and recreational facilities,” Jones said.
But when it comes to just the portion of property taxes that go to the county’s general fund, Jones made it clear that the amount is below average in the state. The general fund is the county’s discretionary fund that pays for law and justice as well as government services like the assessor or treasurer. “The tax rate is the lowest by a large margin,” he said.
The rate dropped from $0.514 per $1,000 of assessed value in 2010 to $0.510 in 2011.
The other side of the equation, however, is assessed value. The county could still collect a lot of general fund dollars if the county’s total assessed value is high, even with a low tax rate. Indeed, Island County’s total assessed value ranks tenth in the state among 39 counties.
So with a mixed bag of low rate but a higher-than-average total assessed value, how can one determine where the county’s general fund taxes really stand? Perhaps the best way is the amount of property taxes that are collected per capita.
On this score, Island County is low, but not the lowest this year. The county ranks 36th, or the fourth from the bottom, in the amount that’s collected per person, on average, under the general fund levy.
On average, an Island County resident pays $93.41 a year in property taxes to support the county’s general fund. Yakima County collects the lowest at $88.69. San Juan County, which has the second lowest property tax rate, collects the most per capita at $261.83 on average.
Yet another way to compare property taxes, Jones said, is to look at total general fund levy amounts collected by Island County as compared to like-sized counties.
Jones found that among the nine counties with populations between 50,000 and 100,000, only one other county collected fewer dollars. But that county has 25 percent fewer people.
Island County’s general fund levy will collect $7.6 million this year. Walla Walla County, with 21,000 fewer people to serve, collected $7.2 million.
Jones pointed out that the two counties with the closest population, Lewis and Grant, collect many millions more. Jones used statistics from 2009, but numbers for 2011 are even more stark. The Lewis County levy is $12 million for 2011 and Grant County will collect $16.3 million in 2011. That’s compared to $7.6 million in Island County.
“To have us with millions of dollars less tells you about how conservative we are,” he said.
Island County commissioners only have control over 16 percent of the average property owner’s tax bill, with the combination of the general fund levy, the road levy and the small Conservation Futures levy. As result, all the budget cutting the county has done over the last couple of years has had only a small impact on people’s overall property tax bills. More than 20 percent of the general fund was chopped away.
Still, Emerson maintained that it’s significant that property owners’ overall tax is relatively high, even if it’s because voters decided to tax themselves. She said she would like to see the county continue to cut spending, nonetheless.
“We saw a little bit of a decrease last year,” she said, referring to tax rates. “I think that we should keep that going.”
But realistically, Jones said the only way to noticeably reduce property taxes in the county is for the voters to allow voted-in levies to expire and stop approving new or replacement levies.
“The impact any individual legislative body, such as yourselves, could have on property taxes is relatively small,” Jones told the commissioners.
Where people go wrong on taxes
Dan Jones, the levy analyst in the Island County Assessor’s Office, tried to correct some misconceptions about property taxes during a presentation to the county commissioners. Here are a few examples:
One of the most familiar misconceptions, he said, is the notion that the county collects more taxes if property values increase. This is simply wrong. The county collects a set amount, regardless of property values. The levy rate is based on how much the county will collect and what property values are. The county is limited to a 1 percent increase a year, by the vote of the commissioners, or up to 6 percent, by the vote of the public. But on top of that, each year a little extra is collected for new construction that occurred just that year. For 2011, it will be $42,500.
While taxing districts won’t collect more if property values increase, this year three junior taxing districts in the county collected less because of plummeting property values. Jones said two EMS levies and a parks district levy came up against a limit on property tax rates. Normally, the rates would be increased to make up for the decrease in value, but the limits on the rates mean the districts won’t collect as much as last year.
If the assessed value of a home decreases, that will not necessarily mean less in property taxes. If everyone’s property decreases at about the same level, then rates will increase and everyone will end up paying about the same amount. But if an individual’s property value decreases more than average when values are declining or increases less than average when values are rising, then that person’s property tax bill will likely decrease. In other words, individual property taxes depends on how they change relative to the whole.
Island County commissioners have no authority to limit property taxes in other taxing districts.