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IDD levy amendments a tricky business
For taxpayers who have experienced the unpleasant surprise of seeing an “industrial development district levy” on a tax bill, merely hearing the words “port district” gets their attention.
The old saying “once bitten, twice shy” pretty well describes the behavior of such taxpayers.
Residents of South Kitsap who reside in the Bremerton Port District have had this experience, but not those in the Manchester or Waterman Port Districts.
Now that the Bremerton Port District has used its two allowable “IDD” levies, its taxpayers have to watch for any hint that state law will be changed to allow another such levy.
Residents of port districts that have not yet used their IDD levy authority also should pay attention to any proposal that may cause them to suffer an even more unpleasant experience.
Two such bills are pending, having been introduced Jan. 18 and referred to committees: House Bill 1308 and its companion, Senate Bill 5222.
These bills don’t seem to make it possible for the Bremerton Port District to impose another IDD levy, but their effect ought to interest people in other districts.
From their description, they appear to be innocuous efforts to do as stated in the bill digests — increase “flexibility.”
But the actual language in the bills increases the amount of the property tax that could be collected by IDD levies.
Instead of limiting each IDD levy to a duration of 6 years, the bills would allow them to be collected for 20 years; but this isn’t the source of the increased taxing authority.
In place of the current limit on annual levy increases — usually described as “one percent plus new construction” — there would be a limit based on the total value of all taxable property in the year before the first levy in the 20-year period.
This new limit on the tax that could be collected during the 20-year period is defined as the amount resulting from multiplying $2.70 by the total assessed value of taxable property in the port district in the year prior to the first year’s levy.
Anyone who is “twice shy” would probably notice that the bill does not contain the words “per thousand dollars of assessed value” when it says to multiply $2.70 by the total assessed value.
Without those words, the purported limit on the total tax is really no limit at all, since it allows the aggregate tax to be 270 percent of assessed value.
In other words, this supposed limit is about a thousand times higher than the limit in current law, so it could not be reached without exceeding the maximum tax rate.
The maximum tax rate in any year would remain the same as it is under current law, that is, 45 cents per $1000 of assessed value.
The effect of these bills as they are now worded would be to authorize IDD levies for a period of 20 years at the maximum tax rate in each year.
It may be the case that the proponents of these bills never intended such a thing to be enacted into law. They may see “per thousand dollars of assessed value” even though the words don’t appear on the page.
The analyst who did the fiscal note apparently saw those words even though they don’t appear in the bill, since they appear in the narrative explanation of the fiscal impact.
The analysis done by the legislative staff to describe the bill for the benefit of legislators doesn’t indicate that these words were seen by the mind of the analyst, but the effect of their absence isn’t mentioned.
People in favor of the bills who are associated with the Washington Public Ports Association have not indicated in their public statements that they have noticed the impact of the bill either.
They appear to believe that the bill merely allows port districts to collect the same total tax over 20 years rather than the current 6-year duration.
It seems that an insufficient number of people involved in the legislative process have been “once bitten,” so they are not yet careful enough in their reading of the words in bills pertaining to port district levies.
Bob Meadows is a Port Orchard resident.