Assessor parses a tax bill

When 8-year-old Virginia O’Hanlon wanted to know whether there was a Santa Claus in 1897, she turned to the New York Sun.

“Yes, Virginia, there is a Santa Claus,” reporter Francis Church famously responded.

When Spokane Valley homeowner Jack Mooney got his property tax bill this year, he turned to The Spokesman-Review.

“I would like someone from the government to explain to me why my taxes went up 16 percent when the cost of living was (up) 5.8 percent,” Mooney wrote to the newspaper.

Yes, Mr. Mooney, there may be a Santa Claus, but he’s not Ralph Baker.

On the other hand, Baker, the Spokane County assessor, may not be a Grinch, either.

Baker actually enjoys answering questions like Mooney’s, even though the answers often are no better received than a lump of coal in a Christmas stocking.

He had a lump in hand when The Spokesman-Review put Mooney’s questions to him.

For starters, there is no direct relationship between inflation and property taxes, no matter how righteous the idea may seem. Although government budgets are constrained in a variety of ways, a taxpayer’s share of the total is based on how his property value compares with everyone else’s.

Mooney had a couple of ideas about why his tax bill went up so much this year: too much government in general and the West Valley School District in particular.

“The school district will always claim, if you pass their levy, your taxes will not increase,” Mooney wrote.

Baker confirmed that “a very good portion” of the $317 increase in Mooney’s bill for property taxes and governmental fees (a 15.3 percent increase, not 16 percent) “is due to his neighbors voting yes.”

A $51.80 increase in Jack and Maureen Mooney’s assessment from the Orchard Avenue Irrigation District contributed heavily to the bill, but that was for their water consumption last year. It wasn’t a tax.

Anyway, Baker said the primary reason the Mooneys’ tax bill went up so much is that their home rose more in value than others in their “tax code area.”

The couple’s 1952-vintage, 1,210-square-foot ranch home in the 3300 block of North Ella Road is assessed this year at $142,600, up $19,900 or 16.2 percent from last year’s $122,700.

Many Spokane County residents don’t see why anyone’s assessed value should be up at all, much less up 16.2 percent.

Baker said he fields “probably 10 calls a day” from people who don’t understand why their assessments are going up while plunging real estate prices and foreclosures are crippling the national economy.

“And that’s just me,” he said. “My staff is taking quite a few calls, too.”

Many people don’t realize how much lag time there is in Washington’s property tax system, Baker said. The Mooneys’ current bill is based on an assessment set in January 2008 on the basis of 2007 sales data.

“We were definitely in a booming market back in 2007,” Baker said.

If the Mooneys think their assessed value should be falling, it might, Baker said. “We’re just not there yet.”

But he said Spokane County homes seem to be weathering the recession better than homes elsewhere. Baker said real estate agents tell him sales volume is down, but “they’re not seeing prices dropping dramatically.”

Although volume fell about 30 percent last year, Spokane home values declined less than 3 percent, according to Realtor Melissa George, of Windermere Manito.

“We have been very fortunate in our community that the value of our biggest investment is not declining,” Baker said.

He attributes that to a relative lack of shaky “subprime” mortgages here.

“It just speaks well of the people in our community as well as the bankers,” Baker said.

He expects a flattening of values in 2008, but perhaps not as much as in other parts of the country. And people like the Mooneys, with relatively affordable homes, may not see as much flattening as those with large, expensive homes, Baker said.

His conclusion that the Mooneys’ tax increase was driven by disproportionately rising property values is demonstrated by three graphs on the assessor’s Web site.

The charts show the overall tax rate going down slightly from last year in the Mooneys’ tax area, to approximately $13.68 cents per thousand dollars of assessed value from $13.73. On a graph, that’s a nearly flat line – representing an average for all property owners in the Mooneys’ tax area.

Lines on two other charts, representing the Mooneys’ assessed value and tax bill, go up together like a pair of jetliners climbing away from an airport – indicating the Mooneys are not average. Home prices went up more in their part of the tax area, Baker said.

“It does appear their value is appropriate for sales that were occurring in that (Ella Road) area,” Baker said, pulling sales data from his Web site.

The sales data show that the modest homes along the Mooneys’ section of Ella Road have sold well in recent years.

In 2006, from the 2400 block to the 3000 block, seven homes sold at prices ranging from $111,200 to $158,400, for an average price of $134,285.

In 2007, the year on which 2008 assessments were based, a 1 ½-story home in the 2700 block sold for $167,350. The 1,139-square-foot home was built in 1919 and remodeled in 2006.

“We follow the market, based only on sales,” Baker said. “High-end homes may not have been appreciating that fast.”

Residents of the Mooneys’ taxing area were generous to several taxing districts besides the West Valley School District. Baker cited voter approval of measures to restore statutory-maximum tax rates for the Spokane Valley Fire Department and the Spokane County Library District.

Voters agreed in November 2007 to restore the Fire Department’s basic levy rate from $1.23 per $1,000 of assessed value to the statutory maximum of $1.50 and to allow 6 percent annual increases in the amount levied, for five years. Fire commissioners chose not to exercise that authority this year, and the rate has slipped to $1.44 because of the ordinary 1 percent lid on levy increases.

Voters approved a similar levy lid lift in September 2006 for the Spokane County Library District, allowing the district to keep its statutory maximum rate of 50 cents per $1,000 of assessed value. The rate had been poised to drop to 44 cents, and the three-year levy lid lift allowed the district to improve service.

Library District Director Michael Wirt said the rate now has dropped to 44 cents, but the district is in a better position and won’t need another lid lift this year or, possibly, next year. The district’s levy has risen from about $7.2 million in 2006 to about $9.4 million this year.

In the West Valley School District, a voter-approved special levy for maintenance and operations will generate $6.27 million for the district this year, compared with $5.63 million last year, an increase of 11.4 percent.

The levy rate rose 19 cents per $1,000 of assessed value, which works out to just $28.50 for the owner of a $150,000 home.

Of course, that assumes last year’s $150,000 house is still assessed at $150,000 this year.