The Washington State property tax is one of the most complicated in the nation
That quote is from an overview provided by MRSC which helps local governments in Washington with legal and policy guidance. I knew it was complicated. I’m digging through the data the King County Assessor’s office provides so I can answer questions like “what is the average property tax paid for single family parcels in Seattle year over year?” To do that, I’m having to dig into various things including looking up the levy rates by year. I tweeted a bunch about it, but that’s not terribly useful to many people so here’s a blog dumping some stuff about it. Total accuracy and coherence not likely. 🙂
First, how does property tax work in Washington? You probably think of a tax as having a “rate” which is multiplied by something of value that you have (like your income or the total at the grocery store). But that is not really how property taxes work. How it goes is basically:
- A jurisdiction (I’ll get to this complexity next) decides how much total money they want from their property tax levy.
- The assessor figures out the total taxable value of property in that jurisdiction.
- They CHANGE the levy rate so that it results in the desired total amount of money. Our property tax levy rates are given in dollars per $1000 of taxable value. So if a levy rate is $5 per $1000, then a $100,000 house would have to pay $500: 100,000 / 1000 = 100, 100 * 5 = $500.
The first link has a good example about half way down that page (look for the heading “Calculating the Property Tax Levy”).
The other complexity here is that each jurisdiction (city, county, state, school board, special levies for fire or water district, etc.) has their own levies. For example, where I’m at in Seattle, I’m subject to these levies (remember these are all per $1000 of assessed value):
- $2.91820 for the state school fund
- $1.32735 for King County
- $0.13518 for the Port of King County
- $0.23940 for Emergency Medical Services
- $0.10708 for King County Flood District
- $0.22745 for Sound Transit
- $2.01161 for the Seattle School District
- $0.23371 for Seattle Municipal Park District
- $2.36209 for the city of Seattle, with $0.97403 of that a “lid lift”
That comes to a total levy for our house of $9.56207 and that’s just one property in Seattle – every house in King County has a slightly different set of levies.
But what is this “lid lift” thing? Before 2001, the total amount a levy could raise could go up as much as 6% a year without talking to voters. An initiative passed in 2001 that limited it to 1%. The State Supreme Court ruled it unconstitutional in 2007 on the grounds that they didn’t think voters really knew what they were voting for, but the state legislature foolishly voted it back in. You’ll note an issue with 1%. That means the county or your local school district only automatically gets 1% more per year. Inflation is typically more than 1% which means county and city government – if it wants to be effective – has to constantly ask voters for more. Many counties failed to and have been starving for money for 15 years and having to cut staff.
So consider King County, which its huge economic boom with rapidly increasing housing prices. Assessments go up (actual sales prices seem wildly higher to me), but property tax doesn’t really go up much because what actually happens is each levy rate is adjusted so the cap doesn’t get violated (and actually technically there are multiple ways that levies are capped because apparently we have to have the most complicated system.) So DESPITE the massive economic boom, county and city government still has to beg and plead with voters for more money. This is why there are constantly property tax levies on the ballot. Most of the time the city and county aren’t even really asking for “more” money. They are just asking for enough money to actually fund programs, adjusted for inflation, and for a rapidly increasing population (population growth is also above 1%).
Anyway, I’m in the middle of importing a bunch of data from the county so I can answer questions (to my own satisfaction) like:
- What is the actual change in tax paid for different properties in the city of Seattle in the last few years? The last 5? The last 10?
- What about properties with different types of zoning?
- What about different parts of Seattle?
- What happens after sub-division for townhomes? (This one will be hard.)
- Is the wonkiness with assessed value for our property common? (Ours went down significantly one year even though the house hadn’t changed and most single family homes nearby get sold for more and turned into town homes.)
- ?? Probably forgetting so many things because this has been stewing a while.