Over the past few months, a lot has been said about Island County’s Proposition 1.
The issue has been the subject of news stories and letters to the editor, it’s been discussed at forums sponsored by both the county and political groups, the matter has even been brought before local chamber’s of commerce by individual county commissioners.
Yet for many, both the measure and exactly how it may impact them continues to be a source of confusion and contention. Here are the nuts and bolts of Proposition 1 and how it may affect property taxes in 2011 and the years ahead.
The first year
On May 25, the Island County board of commissioners unanimously adopted a resolution to seek voter approval for a property tax increase that would generate $2.05 million in 2011. The revenue, according to the resolution language, shall be used for the “limited purposes of retaining public safety and other essential services, and, secondarily, begin replenishing the county’s contingency cash reserves.”
Proposition 1 will work by increasing next year’s current expense levy rate, calculated at 59 cents per $1,000 of assessed value, by an additional 16 cents. While some people have advocated that the increase would take place annually until 2015, that is not the case, Island County Assessor Dave Mattens said. It will occur only in 2011.
“They need to understand, the first year we’re just resetting the bar,” he said.
One of the most common misconceptions about property taxes is that the rising and falling of property values dictate the total amount a person owes. It does not, Mattens said. The tax rate is affected, but not how much is due.
How much the county can collect each year is limited on the prior year’s budget. It’s like filling a bucket, Mattens said. State law limits the increase to just 1 percent each year without a vote of the public. So while property values do fluctuate, the amount of money that fits into the bucket changes very little. The rate per $1,000 of assessed value is just the universal tool that’s used for collection.
Proposition 1, however, will change how much people pay because it proposes to increase the bucket size by about $2 million. But while county officials have advocated the increase will be about $40 for the owner of a $250,000 property, many are crying foul, claiming the example is misrepresentative of what most people will pay.
The county’s chosen example is the median property value in Island County. A median is the middle number in a series. According to figures provided by Mattens, the majority of Island County’s 49,662 properties fall below the $300,000 range: 26.2 percent fall between $1 and $100,000, 21.5 percent fall between $100,000 and $200,000, and 22.5 percent fall between $200,000 and $300,000.
“That means only 30 percent are above $300,000,” Mattens said. “That’s pretty telling.”
More revenue
Others have also argued, however, that people will end up paying much more than county officials are leading on. One of the biggest fears revolves around a provision built into the proposal that would allow the commissioners to increase its budget by more than the state allowed 1 percent between the years 2012 and 2015.
According to the resolution, the board has the option of approving the 1 percent hike or the annual increase in the consumer price index, a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. If the measure passes, the board could choose whichever is greater.
Dave Harrington, an Oak Harbor resident, voiced concern at a recent county-sponsored forum that the proposal gives the board way too much power. If inflation spiked, the public would be at the mercy of the board because it could adopt a levy increase that’s limited only by the new index rate.
“We could face significant inflation,” he said.
According to the federal Bureau of Labor Statistics website, the annual index increase has been larger than 1 percent every year but once since 1992. The greatest fluctuations in that time period has been over the past two years, with a low of .6 percent in 2009 and a high of 4.2 percent in 2008.
Dan Jones, a statistician and levy analyst in the assessor’s office, said Harrington’s concerns are unfounded. If the measure passed and the rate went as high as 5 percent, that would mean a $250,000 property owner would pay an additional $2 on top of the $40 increase under the 2011 rate of 75 cents per $1,000.
Others have argued that county officials are being less than forthright when whining about being hobbled by the state’s 1 percent budget cap. Coupeville resident Gary Wray pointed out at a recent forum that the county can increase its budget, on top of the annual 1 percent hike, with new construction revenue. State law does allow the county to collect additional revenue from new taxable development to accommodate growth.
“The whole in all this is new construction is not being added,” Wray said.
“We’ve been getting more like 4 percent a year,” he said
Mattens claims Wray is using numbers that paint a skewed picture. While the county can take in new construction revenue, the numbers haven’t been addressed because they are “paltry.” In 2010, new construction revenue would add an estimated $51,376 to county coffers, and that sum could only be collected if the measure failed, he said.
But Wray, one of the author’s of the “against” statement that will appear on the August ballot, maintained that even if all the voiced concerns about the index and new construction revenue proved invalid, Proposition 1 is still asking for a levy hike without the identification of priority spending, which will allow the board to fund any departments it choses during a national recession.
If a tax increase is really as unavoidable as the commissioners claim, the board should cut funding for programs and departments not mandated by state first so that any proposed levy amount would be less.
“I’m a realist; we get services from the county and we have to pay for it,” Wray said. “But they (the board) haven’t been creative enough to solve this problem.”
State law requires that ballots be mailed to voters no later than Thursday, July 29. Ballots can be mailed any time up until the election or voters may drop off their ballots at the Island County Elections Office, 400 N. Main St. in Coupeville, between the hours of 9 a.m. and 4 p.m., Monday through Thursday. For additional drop off points open only on election day, visit wei.secstate.wa.gov/island/Elections.
