As Enumclaw’s city leaders walk through the process of crafting a spending plan for 2020, they will be determining a property tax rate assessed to all land owners in town.
Arriving at a tax rate is something that is done annually, has built-in limitations imposed by the state, and eventually creates something of a math exercise for those on the receiving end of a tax statement. The rate is just one part of the equation; the other factor is an individual property assessment. That can create a situation where rates drop but the tax bill climbs.
Property taxes are one of three primary revenue sources for the city, along with sales taxes and taxes paid on utilities. As might be expected, due to the ongoing boom in home-building, all three have “shown signs of positive economic activity,” according to text found within the city’s preliminary budget.
When the city’s property tax rate is calculated, a starting point is the overall assessed “market value” of the city – a figure determined by the King County Assessor’s Office. For 2020, the preliminary number passed down from Seattle is a bit more than $1.66 billion. That continues an upward trend that mirrors the economic boom being experienced throughout the Puget Sound region.
The city’s assessed value for the coming year is about $94 million more that the value applied in 2019. And that assessment was roughly $152 million greater than the figure for 2018.
As the city conducts the municipal math, other factors come into play before it’s determined what local land owners will pay in 2020. Impacting the city’s allowed assessment are tax rates connected to the local fire district and the King County Library System, along with a state mandate that rates cannot climb beyond a certain point.
There was a time when Washington’s cities and towns could increase property taxes by 6 percent every year, an opportunity many jurisdictions took. But, in November 2001, the state’s voters revolted and approved Initiative 747, which capped the maximum levy increase at either 1 percent or the Implicit Price Deflator, whichever was less.
As a separate part of the process, cities can add the value of new construction to their overall value. In Enumclaw’s case, this amounts to about $82 million this time around, again reflecting the upward swing since the close of the last recession. Levy rates assessed by the local fire department and King County Library System also play a role in the calculations.
SO, WHAT DOES THAT MEAN FOR TAXPAYERS?
Tax rates are figured, and assessed, it terms of dollars per $1,000 of assessed property value.
After calculating everything, the city arrived at a 2020 levy rate of $1.30. That represents a slight decrease from the 2019 rate of $1.33 and a noticeable drop from 2018, when the rate was $1.42.
Putting those numbers into real-world terms shows this: on property (home and land) assessed at $400,000, the tax bill in 2020 will be $520; using the same property value, the bill was $532 this year and $568 in 2018.
But, again, that doesn’t necessarily mean tax bills will decrease. Property values are on the rise, which impacts the math. A lower rate, but increased assessment, can result in a greater tax burden.
CITY’S TAX IS JUST ONE OF MANY
The tax bill paid by property owners – whether shipped off in a lump sum or paid monthly as part of a mortgage payment – includes levies by 10 different taxing jurisdictions within Enumclaw. The levies are authorized by each of the jurisdictions’ governing bodies.
Those overall assessments are much greater that what Enumclaw collects. Like the city, the nine other entities count on property taxes to remain fiscally sound and conduct their public business.
When all are added together, the overall tax rate for the current year is $10.24, amounting to a property tax bill of $4,096 (using an assessed value of $400,000). That was a drop from the 2018 total assessment of $12.32, which brought a tax bill of $4,928.
Who gets a slice of the property-tax pie? Public education is the No. 1 recipient this year, with the Enumclaw School District getting a bit more than 28 percent of the total and the state taking nearly 26 percent for its school funding. After that, it’s the local fire district at 14 percent; the city with a 13 percent share; King County, 12 percent; the county library system at a bit more than 3 percent; and emergency medical services, 2.12 percent. Getting smaller portions of the total are the Port of Seattle and efforts toward flood protection and ferries.