With property values continuing to climb, Spokane Valley homeowners will likely see a reduction in the rate they pay for city property taxes next year, although the total amount of money the city collects will actually increase.
At its meeting Tuesday, the City Council moved the city’s budget and tax levy to a second and final vote on Oct. 23, said City Clerk Chris Bainbridge.
Spokane Valley plans to levy about $10.4 million in property taxes in 2008, which is roughly an 8 percent increase over this year.
The tax rate applied to property, meanwhile, will likely drop from $1.60 to about $1.55 per $1,000 of assessed value because the city has more property value to tax in order to collect the levy amount.
“The big help we’re getting is that increase in assessed value,” said city Finance Director Ken Thompson.
Like the county as a whole, the total value of all property in the city has risen by 10 percent to 15 percent in each of the last few years, he said. Preliminary estimates show the city’s assessed value increasing in 2008 by roughly 12 percent to $6.4 billion.
Under state law, local governments are only allowed to boost their property tax revenue by one percent more than the total collected during their most revenue-generating tax year. Spokane Valley has been able to increase property tax revenues by more than one percent recently because the year it raised the most property tax revenue included money for the library that the city no longer collects.
In 2008, property taxes will make up about 29 percent of the city’s $36 million general fund, although Thompson said the city has tried in recent years to rely less on property taxes.
The remainder of the city’s $86.9 million budget is divided among funds that account for grants, taxes dedicated to a specific purpose and reserves.