How Yakima County Taxpayers will be impacted - PowerPoint Presentation

Slide1

How Yakima County Taxpayers will be impacted

EHB 2242 Funding Basic Education

Dave CookYakima County AssessorSlide2

McCleary vs. State of Washington2017 Legislative Session – EHB 2242

Impact to Yakima County TaxpayersConclusionQuestions & Discussion

OverviewSlide3

Trial in 2009 –

State of Washington lostState of Washington appealedWashington State Supreme Court upheld lower court ruling in January 2012Supreme Court retained jurisdiction over the case to ensure the Legislature met the court’s mandate for increased funding by 2018

McCleary vs State of Washington Slide4

In the final days of the 3rd

Special Session, the 2017 Legislature passed EHB 2242 to increase funding for education in 2018.Their solution was to increase the State School Levy for all taxable properties in the State.

Legislature’s Solution to McCleary Slide5

2017 Legislative Session – EHB 2242

Statewide school levy rate increased to a Base Rate of $2.70 per $1,000 of assessed value

State school levy becomes rate based for the next four years

$2.70

$2.70

$2.70

$2.70

Tax Year 2018

Tax Year 2019

Tax Year 2020

Tax Year 2021Slide6

State School Levy Part 1 & Part 2

Part 1

TY 2017 Base Rate$1.89Part 2$1.89 + $x.xx $2.70

$2.70 per $1,000 of Assessed Value

Part 1

Establish TY 2018

base rate as always

Part 2

Calculate an additional amount to get to $2.70Slide7

2018

State School Levy Rate $2.70

2017 State School Levy Rate $1.89 State School Levy Base Rate Current & Future State School Levy Rate for each County is determined by the Washington State Department of Revenue.Levy rate is dollars per $1,000 of assessed

value

Difference = $0.81 per 1000 of value - tax increase

for 2018 State School LevySlide8

The increase in the State School Levy to $2.70 per thousand of value is to the new base rate.

That’s Not Quite Accurate!!!

The $2.70 the Legislature is talking about isn’t really $2.70!So the State School Levy is going up to $2.70!Slide9

DOR does an Annual Ratio Study of Sales to Assessment for all 39 Counties

Purpose To equalize each county’s share of the state school levy

What is the base rate and how do Assessment Ratios Enter into This?Slide10

Ratios – Equalization - Why is this even important?

Defined Goal for Assessment is 100% of Market ValueIF every county’s Assessment Ratio was at 100% of Market Value, the new State School Levy Rate would be $2.70 (per $1000) for every county.

To insure uniform taxation of the State School Levy statewide, DOR does an annual study of property sales to assessed values in each of the 39 counties. They measure how closely a particular county’s assessed values compare to market sales prices. The ratio % of assessed value to market sales is then used to adjusted (equalize) the State School Levy Rate from county to county. Slide11

Ratios – Example

Mr. Smith and Mr. Jones both own the exact same 2,000 sq. ft., 3 bedroom, 2.5 bath home on 1 acre of land. The

Market Value for both of these properties is $100,000.

Mr. Smith owns property in Green County, WA

Green County has assessed Mr. Smith’s property at $99,000

Mr. Jones owns property in Blue County, WA

Blue County has assessed Mr. Jones’ property at $80,000

If

BOTH

properties are identical AND the Market Value is

$100,000

, it appears that Green County is a lot closer to being at 100% of Market Value than Blue County.Slide12

Ratios - Without an Equalized Assessment

Assessed Value

State School RateTax DueMr. Smith $99,000 x2.70 (per $1000)= $356.00Mr. Jones $80,000 x2.70 (per $1000)

= $288.00

Without an Equalized Levy Rate, Mr. Smith is paying a larger portion to the State School Levy than Mr. Jones, even though both properties have a Market Value of $100,000.

If the Levy Rate is not equalized throughout the state, Mr. Smith is paying a larger portion even though his county Assessor’s office is more accurate in their valuation.Slide13

Ratios - With an Equalized Assessment

Assessed Value

Equalizing RateEqualized RateTax DueMr. Smith $99,000 x($2.70/99%)= $2.72 (per $1000)= $269Mr. Jones

$80,000 x

($2.70/80%)

= $3.37 (per $1000)

= $269

The rate difference doesn’t mean one owner is getting a break, or that another owner is over charged.

It simply allows for

equal application

of the state school levy throughout the 39 counties of WA.

Green County Ratio: 99% - therefore equalized rate is lower (2.72)

Blue County Ratio: 80% - therefore equalized rate is higher (3.37)Slide14

Yakima County Equalized Rate for 2017

2017 State School Levy Rate per DOR

$1.89 per $1,000 of assessed value

2017 Yakima

County Ratio

92.1% or .921

$1.89

92.1%

$2.05

(Yakima County’s Equalized Rate)

Formula: State School Levy Rate / County Ratio = Equalized County Rate for State School LevySlide15

Ratios – impact to 2018 State School Levy

2018 State School Levy Base Rate – Equalized per DOR

Base Rate of $2.70 per $1,000 of assessed value

$2.70

.921 or 92.1%

$2.93

Ratio is an

estimate

only and has not yet been determined by the DOR for 2018Slide16

Current State & Local School Levies - 2017

How much do you pay for Schools now?

(not including Bonds)Taxpayer in Yakima County with a home valued at $350,000Formula: (AV / 1000 x total levy rate*) Lowest – ($350,000/1000 = 350 x $3.06 = $1,071.00 Highest - ($350,000/1000 = 350 x $5.58

=

$1,953.00

*State School Levy + Local School M&O Levy = total levy rate.

For the purposes of this example we did not include any bonds/capital projects or any other excess levies.Slide17

Comparison of 2017 State School/M&O – Estimated 2018 – State School/M&O

As well as Estimated 2019 State School/Enrichment Levy Cap of $1.50

State School Levy Estimated at $2.95 for 2018 and $2.98 for 2019School District2017 State/M&O

2018 State/M&O

2019 State/Enrichment

2017 to 2019 Difference

East Valley

$5.30

$6.07

$4.48

$0.82

Grandview

$3.96 $5.04

$4.48

$0.52 Granger $4.17

$4.92 $4.48

$0.31 Highland

$4.97 $5.77

$4.48 $0.49 Mt. Adams

$3.06 $3.84

$4.48 $ Mabton

$3.74 $4.60

$4.48 $0.74

Naches $5.58 $6.42

$4.48

$1.10 Selah

$5.71 $6.51

$4.48

$1.23

Sunnyside

$4.02

$4.85

$4.48

$0.46

Toppenish

$4.14

$4.82

$4.48

$0.34

Union Gap

$4.13

$4.91

$4.48

$0.35

Wapato

$3.79

$4.59

$4.48

$0.69

West Valley

$4.73

$5.73

$4.48

$0.25

Yakima

$5.07

$5.86

$4.48

$0.59

Zillah

$3.92

$4.85

$4.48

$0.56Slide18

M&O levies remain in place for 2018

“Enrichment Levies” replace M&O for 2019 and forward“Enrichment Levies” are capped at $1.50 per $1,000 of assessed value **

**Enrichment levy rates are limited to the lesser of $1.50 per thousand dollars assessed value or $2,500 per student.2018 M&O Levy vs 2019 “Enrichment Levy”Slide19

Example: taxpayer with a home

valued at $350,000Formula: (AV / 1000 x total levy rate*)

($350,000 x 4.48) / 1000 = $1,568Compared to a 2017 high of $1953.00Impact of the enrichment levy cap in 2019*Total Estimated Levy Rate: 2.70 +0.28+1.50 = 4.48Slide20

Example: Selah SD 2017 – 2018 – 2019

2017

20182019Assessed Value350,000350,000350,000Total Levy Rate(State School + Local School M&O)

5.71

(2.05 +

3.66)

6.51

(2.95* + 3.56)

4.48

(2.98*

+ 1.50*)

Total Amount

Due

$1,998.50$2,278.50$1,568.00

*Assumes State School Levy of 2.95 in 2018 2.98 in 2019 and an Enrichment Levy at maximum of 1.50 in 2019Slide21

Levy Information on your Tax Statement

Property Tax Levy Information is available online at:

Individual Property Tax Information is available online at: Click on Tax Information – Enter the parcel numberhttp://www.yakimacounty.us/609/Tax-Bookletshttp://www.yakimacounty.us/218/Assessors-OfficeSlide22

Tax Year 2018 – approximate $0.85 to $0.95 increase per $1,000 of assessed value directly attributable to the increase in the State School Levy.

Tax Year 2019 – Truth be Told – We Don’t Know for sure. Other than the State School Levy will be up and the local “Enrichment Levies” (if passed) will be capped at $1.50 per 1000 of value.Depending on the School District, there is the potential to decrease back down to 2017 taxes or lower – But – as I said - no one can tell you that for sure -

ConclusionSlide23

Questions & Discussion

Dave Cook

Yakima County Assessor