King County and its respective government service providers, such as cities, libraries, hospitals and fire districts, are facing tax levy rate suppression for the first time in many years and maybe the first time in history.
Now, before you yawn and start to doze off, think “taxes!” This is about your money, how the different governments get it and how they spend it.
Unfortunately, it’s also about the economy and how it has forced governments into possible competition for shrinking resources.
To government administrators and political leaders, this is serious business. In our state, where the primary source of government revenue is the property tax and sales tax, the economy’s ups and downs can play havoc with their goal of providing services to citizens.
As we approach the primary and general election season, tax levy rate suppression has become the “hottest” topic around and engulfed districts like South King Fire and Rescue in the tax debate. Sorry about the pun, I couldn’t resist.
SKFR is proposing a benefit change in the August primary to replace sagging property tax revenue. Their fiscal needs, along with competing interests county-wide was recently a major topic of discussion before the King County Council as they debated their own needs to put a tax package before the voters and protect their current options.
Tax rate suppression is a complicated issue and can affect most governments. The county is struggling with how to fund courts, prosecutors and the sheriff. But they also are worried about the potential for flood control, which lays on the horizon as potentially the biggest issue of all.
Levy suppression occurs when local taxing districts’ “rates” in any given area in the county exceed the limit of $5.90 per $1,000 of assessed property value. There are over 400 separate levy codes county-wide which overlap each other and are added together to establish your individual tax bill. Some, such as EMS, are excluded.
There is also a hierarchy which could allow some junior, or lower ranking, districts to be “bumped off” by higher ranking districts, causing some service providers to lose critical revenue.
The various taxing authorities, not surprisingly, each develop their own tax measures independently without regard to other jurisdictions’ tax needs or the overall tax burden. Into this cauldron of competing needs, that only a bookkeeper could love, steps SKFR Proposition 1.
Approximately 95 percent of their funding comes from property taxes. The assessed value in their service area has dropped 14.6 percent due to the poor economy and decreased their revenue by $3.7 million.
While the proposal would lower your property taxes, they would be replaced by a voter approved benefit charge that would be paid by all of the same tax payers.
SKFR points to part of the problem as overlapping with Valley Medical Center in a small portion of their district. But since the law requires all parts of the district to be treated equally, SKFR must spread the charge throughout their jurisdiction equally and cannot adjust the rate separately for the area overlapping with Valley Medical.
Faced with the same dilemma, King County has raised the issue of “buying off” some smaller jurisdictions to ensure competing interests don’t exceed the legal limit or hamper the county’s need to protect its flood control district.
Behind the scenes, some community leaders worry about SKFR’s plan and how it will affect Lakehaven Ulitity District or city government. Business leaders who are trying to save or grow their business to protect or provide jobs, worry that another tax could hamper economic recovery.
And no one really knows what the actual impact will be.
Everyone expects the proposal to pass because voters always vote for public safety measures. But it has raised bigger public policy questions.
Is it time to develop a clearinghouse to ensure prioritization of regional and local issues? Could county government become the arbitrator of competing interests or could a new group be established? Or should separate districts such as Lakehaven or SKFR merge with city government? And do we need hundreds of separate and competing tax authorities?