"Assessor's mistake, I-747 could bust budget"
June 25, 2008 · Updated 2:13 PM
"A series of tax adjustments made by the Island County Assessor's Office could cost the city of Langley $93,000 a year if citizens do not vote to raise their own taxes.If the city does not get the issue onto the November ballot, two statewide initiatives might make it impossible for the city to make up the tax loss, which could force it to cut staff and city services The adjustments stem from the 2000 tax year, the year after Fire District 3 annexed the Langley Fire Department. A deal negotiated between the city and FD 3 was to have lowered the city's levy by 60 percent to compensate city taxpayers for the fire equipment the city turned over to the fire district. But when the Island County Assessor's Office sent out the 2000 tax notices, the deal was overlooked and Langley property taxpayers were mistakenly overcharged. For the 2001 tax year, the Assessor's Office worked to correct the mistake. The agency lowered the city's property tax levy from $1.32 per $1,000 in property valuation to 54 cents. FD 3 made up for the shortfall this caused in the city's budget by writing the city a $93,000 check.Langley admininstrators claim the adjustment should have been made in the form of a credit. That, said Island County Assessor Tom Baenen, was not possible because a credit would have given Langley taxpayers a different fire protection levy than other fire district tax payers. Differing tax rates within the same district is prohibited by law.But now, the city's levy rate could be permanently frozen at the lower level. An initiative approved statewide last November, I-722, makes it impossible for a city to increase taxes without a vote of the people. Further complicating matters, a new initiative, I-747, would prevent taxing districts from increasing their levy rates by more than 1 percent per year.At Wednesday's city council meeting, Eric Lucas, Langley city administrator, said the city must choose one of four options to get its money back. The first option is to put the levy increase on the ballot. The city would ask taxpayers to bump their property tax levy back up to $1.32. Another option would be to hope the state Supreme Court declares I-722 unconstitutional. That would give the city the ability to raise taxes without a vote.A third option would be to ignore the assessor's change in the levy rate. The change for the 2000 tax year was intended to be temporary, Lucas said, and may not have any bearing on the city's ad valorum tax ordinance. That ordinance calls for a $1.32 levy.The fourth option, Lucas said, is to sue Island County for the financial damage the city believes the Assessor's Office caused. No member of the council supported that idea.Furman said going to the voters was the best option and encouraged the council to ready a measure for the ballot.It's the safest solution, he said. The council agreed to consider a resolution at its Sept. 19 meeting that would put the issue to the voters. Furman said Thursday that if the measure does not run in November, the city would be stuck with the 54 cent levy.That would break us, he said.Councilmember Neil Colburn said he is getting frustrated with voter tax initiatives. He joked with Rep. Kelly Barlean, who was at Wednesday's meeting, that some revenge might be in order with I-722 and I-747 author Tim Eyman.On your way back to Olympia, could you stop in Mukilteo and give Mr. Eyman a kick? Colburn said.Furman said the city will not spend beyond its income if it is saddled with the low levy rate.Something will be cut, he said.Baenon said Friday that city should be able to bring its levy rate back up to $1.32. He said even a valid I-722 would allow Langley to bring its levy rate up to the level it set in 2000. "