Herbold: Where do your property taxes go? Why are they increasing in 2018?
District 1 City Councilmember Lisa Herbold provided details on where tax revenues are spent in the City of Seattle in her newsletter to constituents.
Property taxes have been in the news recently, and for good reason. King County Assessor Wilson announced earlier this year that property taxes are increasing 16.9% on average in King County in 2018. The increase in Seattle will also be 16.9%, or $825 for the average home. How is this happening?
The short answer is that 81% of the increase, or $669 for the average Seattle homeowner, comes from increased state funding for education adopted in 2017 by the State Legislature. The funding was approved in response to the 2012 State Supreme Court McLeary decision, which held that the state did not adequately fund education. As a result, state property taxes for education increased by 62% from 2017 to 2018.
Below is a primer on property taxes, with charts showing what property taxes fund, details about the sources of the 2018 increase, and how Seattle property taxes compares to other local cities.
Property taxes are set by multiplying the assessed value by the property tax rate. The Seattle rate for 2018 is 9.56207 per $1,000 in assessed value.
Here’s where your property taxes go; only 25% go to the City of Seattle:
Property taxes form 24.5% of Seattle’s General Fund, as shown in the chart below from the City’s 2018 Adopted Budget:
Here’s where the 2018 increases come from:
Several of the increases are related to voter-approved measures. 4.7% of the King County 7.5% increase comes from the 2017 Veterans, Families and Seniors levy. The increase for the School District comes from the 3-year funding measure passed in 2016, which included $229 million in funding in 2017, and $250 million in 2018. The Emergency Medical Services levy was passed in 2013; the most recent Sound Transit measure was passed in 2016.
So how does Seattle compare to other cities in King County? Below is a chart showing the median property tax bill in King County. Seattle’s average rate of $5,709 is $1,359 lower than the average King County city property tax of $7,068:
Another way of looking at property taxes is the rate per $1,000 of assessed value. For each $1,000 of value, Seattle’s property tax rate is $9.56. Among King County’s 39 cities, only Bellevue, Mercer Island and 5 other small Eastside communities have a lower rate than Seattle:
The 2018 increase for an individual home depends on the increase in the assessed value as determined by the King County Assessor. The median assessed home value in Seattle increased 13% from $528,000 in 2017 to $597,000 in 2018. Depending how much a home increased in value, the increase may be lower or higher than 16.9%.
The King County Assessor has webpages about how they assess the value of residential properties; exemptions for senior citizens and disabled persons, and legal limitations on property taxes.
The Municipal Research Service Center has a primer on how the Property Tax in Washington State work.
I co-sponsored legislation last year to tax high incomes in Seattle. One of the uses for potential revenues is “(1) lowering the property tax burden and the impact of other regressive taxes.”
The City’s 2018 State Legislative Agenda states support for “comprehensive tax reform that leads to a more equitable and progressive tax structure and decreases reliance on flat tax sources like sale and property tax.” I worked with County Assessor Wilson to include a provision in Seattle’s 2018 State Legislative agenda in support of an exemption “to promote increased participation by seniors and disabled veterans through a simplified application process and eligibility criteria tied to varying property tax values across the state.”
Note: the 2018 Median Property Tax Bill chart omits the 5 highest and lowest figures, as high figures for the Eastside points communities skew the chart (Hunts Point is over $27,000); if you’re interested you can view a complete chart of King County cities that goes up to $30,000 here).