Some property owners can expect to see changes in their tax bills this year.
Yakima County Assessor Dave Cook said his own annual taxes increased by about $800, due to action taken by the Legislature in 2018 on state and local school levies.
Cook and Yakima County Treasurer Ilene Thomson took the time to answer questions they anticipate the public may have about their tax bills this year. Cook is preparing to send out tax statements around Feb. 7, meaning most property owners will receive them the week of Feb. 10.
The Washington Supreme Court ruled in 2012 that the state was not properly funding public education. The case became known as the McCleary decision. In 2018, local school levies were capped at $1.50 per $1,000 of assessed property value. State school taxes increased to $2.70 per $1,000 of assessed property value to compensate for the lost funds to districts.
Last year, in areas where voters had previously approved a school levy rate above $1.50 per $1,000 of assessed property value, property owners saw a drop in their 2019 property tax rates. But the changes negatively impacted more than 100 school districts statewide. So during the 2019 legislative session, lawmakers raised the local school levy rates to the lesser of either $2.50 per $1,000 of property value or $2,500 per student for school districts in the Yakima area.
Some rates increased for property owners in areas that already approved levies beyond the $1.50 per $1,000 of assessed property value.
With the increase in state schools taxes, the new funds were used predominantly to pay for teacher salaries after schools were barred from using local levies to fund basic education teaching positions with the 2018 local levy changes.
Thomson said she’ll be collecting around $247 million in taxes this year, about a 17% increase from last year. Of the about $35 million more that she’ll collect, about $32 million will be collected from state and local school levies.
The additional money from the state school levy collected will go into the state general fund, which distributes the money back to local school districts, Thompson said. The funding from local school levies stays within the district and helps pay for programs beyond basic education, such as athletics, art and music, technology, advanced placement classes, social-emotional learning, and special education.
What can property owners expect to see this year on their tax bills?
Cook said property owners will see a limited increase in rates for cities and county fire districts, but the biggest increases will be related to state and local school levies. The increases could be in the hundreds of dollars, he said.
Why did these increases happen?
Cook said the vast majority of property owners in Yakima County realized a portion of the $8.3 million property tax reduction in 2019, the result of the local school district levies being capped and state levy rates increasing to $2.70 per $1,000 of value. But in the 2018 session, Cook said the Legislature made sudden changes, without explanation, that reduced the state levy to $2.40 per $1,000 of assessed value for 2019, but then increased it back to $2.70 for tax years 2020 and 2021.
An immediate increase of $0.30 per $1,000 of value property tax increase resulted for the state school levy in 2020, he said. The state school levy also was changed to the rate-based system for four years, so that “any increase in property value generates more money for the state school levy, which is then distributed proportionately back to the local districts,” Cook said.
The 2019 legislative session also undid the $1.50 property tax limit for local school levies, he added.
Cook said most property taxes are capped at a 1% annual increase. Anything beyond that requires voter approval. But the state school levy can be increased by the Legislature, without taking the matter to voters.
Cook said the assessor’s office has no control over the legislative process or decisions, though he did cite a letter that the state association of county assessors sent in opposition to the change.
“People need to call their legislators directly if they are unhappy with the changes,” he said.
What’s this about a rate-based system?
Cook, along with members of the Washington State Association of County Assessors, opposed the Legislature’s change from a budget-based property tax to a rate-based system. The association said in an October 2018 resolution that a budget-based property tax results in stable revenue for taxing districts, while a rate-based system introduces needless volatility in revenue streams as property values change.
Cook said in a budget-based system, a specified amount is collected and then divided by the taxable assessed value of the district to determine distribution to individual parcels. A rate is applied to a value, so if the value goes up, property owners pay more in tax.
A rate-based system captures every dollar of any increase as additional tax, where a budget-based system limits the amount that can be collected, Cook said.
What about the election?
Voters will consider levies for local school funding in Yakima, Sunnyside, Naches Valley, Zillah and Mabton in the Feb. 11 special election. Each measure proposes the renewal of a levy expiring at the end of the year. The new rates would take effect in 2021, if passed.
District officials say the local levies as an opportunity for communities to ensure consistent local funding of schools, even as state school taxes can fluctuate from year to year, based on decisions in Olympia. Yakima School District officials also emphasize that the local funding allows the district to receive state equalization funds. Together, the local and state equalization funds represent 10% of the district’s budget.
What about exemptions?
Cook said property tax exemptions have specific requirements. Exemptions are available for some seniors and people with disabilities. Income limits apply. For more information about the qualifications, call or visit the Assessor’s Office webpage.
Thomson added that people filing for exemptions have to own the property in which they reside. “They can’t be renters,” she said.
What about appealing property value assessments?
Cook said he mailed property value assessment cards in September 2019. Property owners had a 60-day window to appeal assessed values. The office will still address any perceived problems with assessments, but the period for asking for a full appeal has passed, he said.
Property owners who know their property tax parcel ID number can go to the treasurer’s website to find out how much their increases will be, Thomson said. She added that payment plans are available for property owners who are paid up on their current payments.
Those with questions can reach the Yakima County Assessor by calling 509-574-1100 or by visiting the office, located at 128 N. Second St. in Yakima.