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Property values deserve two-sided debate
Some South Kitsap property owners are still stewing over the revaluation notices received last June from the Kitsap County Assessor, and it’s time for this year’s notices to arrive.
Unfortunately, the arguments being made about assessed property values have sometimes followed the well-beaten path of erroneously claiming that the county is unfairly increasing its levy revenue by jacking up the valuations.
Since the county’s current expense levy amount requires a tax rate that is far below the maximum allowed by statute, these arguments are way off the mark.
It is unfortunate that people would allege the existence of any scheme to increase the county’s levy revenue, since this obscures the issues that ought to be considered.
Instead of debating whether similarly situated taxpayers are being treated essentially the same, and whether the tax burdens placed on commercial and residential property are fairly distributed, we get allegations of nefarious schemes and a useless appeal process.
Take a look at Washington Administrative Code section 458-19-020(3) to see the procedure for determining the levy limit each year.
The calculation is relatively simple: increase the highest prior lawful levy amount by 1 percent, then add the amounts generated by new construction and any increases in state-assessed property (typically utilities and transportation).
Notice that the valuation of property that has not been improved by new construction doesn’t appear at all in that calculation.
Only when checking to see whether the levy limit determined by that procedure can be collected without exceeding the maximum allowable tax rate does the value of property that wasn’t improved by new construction appear.
The tax rate needed to collect the levy limit has to be determined by dividing the levy limit by the total valuation of all taxable property — including property that has not increased in value because of new construction.
For the county’s current expense levy — which is at its maximum allowable amount — the maximum tax rate is $1.80 per $1,000 and this year’s actual tax rate is slightly more than $1.02 per $1,000.
The county’s levy amount would not be capped by the maximum tax rate unless total property valuation fell by more than 40 percent.
Anyone wanting to argue that the county’s levy revenue is being increased by unreasonably high assessed property values would need to show that the total assessed value of all property in the county should really be more than 40 percent lower than it is.
They don’t make that argument even if they do understand the process and the facts.
Public discussions usually center on the people who most recently received revaluation notices that raised their property values by more than the average — which caused some of the tax burden to shift to them from other taxpayers.
This shift in the tax burden is a fair topic of discussion, since the whole purpose of assessing property values and then allocating each person’s share in direct relation to their property values is to distribute the tax burden fairly.
So the question is whether the values assigned by the Assessor fairly represent actual property values and thus fairly distribute the tax burden.
Of course, people whose assessed property values don’t rise more than the average rarely join the argument.
One who complains about this year’s tax bill is often one who said not a word for many years as his property value rose less than the average and his tax bill stayed roughly the same or fell.
When the assessed value of his property rises to catch up with everyone else, his tax bill jumps up — then he speaks.
This understandable tendency to complain when the bill rises makes for a one-sided debate, since people rarely join in by pointing to those years when the complainer was enjoying a shift of the tax burden to their tax bills.
For the system to work well, we have to debate whether the burden is shared fairly, but one-sided arguments and allegations of schemes that would not have the alleged effect even if true don’t help make it work well.
Bob Meadows is a Port Orchard resident.