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The bill for property tax levies comes due
Our tax bills won’t arrive until mid-February, but the effect of levies on local government revenues and the average impact on homeowners can be found in the newly published County Assessor’s online data.
Individuals will see different impacts on their total tax bills because of differing changes in their assessed values — part of the tax burden shifts to those whose property value declined less than the average.
But government spends what it collects from all of us as a group, so the total change in levy amounts has to be the focus when determining the effect on government revenue.
Once again, declining assessed values illustrate that the levy amounts collected from the group are only reduced by lower values if the tax rate cannot be increased.
Except for the industrial development district (IDD) tax imposed by the Bremerton Port District, tax rates were generally adjusted upward enough to allow increases in levies of 1 percent plus the amounts generated by new construction.
Because the IDD levy was first imposed in 2007 near the peak in assessed values, the recent decline in values forced a small drop in the levy amount (about 1.3 percent, or $62,402).
The port district’s IDD tax rate cannot go above the maximum $0.45 per $1000, so the lower total property valuation causes the amount collected to go down compared to last year.
For other levies collected by local government in South Kitsap, higher levy amounts can be imposed without causing the tax rates to exceed the maximum allowed.
As a result, the average decline in South Kitsap for valuations of existing property is about 9 percent, but the total levy amounts collected by local government generally are higher.
Local governments aren’t required to raise their levies by 1 percent plus new construction — they are merely allowed to do so.
In two cases, the additional 1 percent increase wasn’t imposed. Both the City Council of Port Orchard and the Bremerton Port Commissioners (for their non-IDD levy) did without the extra 1 percent.
For Port Orchard, the effects of new construction and annexations caused the levy to increase by a substantial amount anyway (53.7 percent, or $872,318).
With the annexations comes potentially greater need for city services, so the city’s costs may rise roughly the same as its property tax revenue. The big revenue increase isn’t necessarily a windfall.
The recession’s effect is evident from the relatively small amounts added to levies by new construction. Rather than the 3 percent or so added during the boom years, approximately 1 percent or less is typical for this year.
For example, instead of revenue increases of around 4 percent as before, the levy amount for the county general fund goes up this year by about 1.8 percent.
Our declining property values also had an effect on our share of the state’s school levy. Part of Kitsap County residents’ burden shifted to other counties, much like individual taxpayers’ burdens shift.
For South Kitsap residents, the state levy went down by about 3 percent, so taxpayers whose property value went down near the average of 9 percent will see this part of their total tax bill decrease.
Voters approved two levy increases that take effect this year — the South Kitsap School District maintenance and operations levy and the South Kitsap Fire and Rescue emergency medical service levy.
Both were substantial increases. For SKSD, the levy amount goes up by about $2 million, or 14.6 percent. For SKFR, the increase is about $1 million, or 44.7 percent.
While these are big increases, they are only parts of the total, so the net effect of all changes in levies may be surprising.
The decreases in the port’s IDD levy and the state levy offset a part of the voter-approved increases for SKSD and SKFR — so the net effect on the total tax bill is an increase of about 4 percent for those whose values declined near the average.
Bob Meadows is a Port Orchard resident.