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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Street levy surprises city, some residents with higher tax bills

Chuck Moffitt, 68, saw his property tax bill go up almost $20 this year after his tax-exempt status was stripped in part following last fall’s passage of the street levy. He lives in east Spokane with Oreo, his 13-year-old parrot. (Dan Pelle)

Chuck Moffitt’s house is one large cabinet of curiosities.

With his long hair, big beard and tiny parrot on his shoulder, Moffitt, 68, fits in next to the handmade dragon figurines on the front porch, miniature pirate ship in his yard, and LEGOs displayed in his living room windows. He’s lived in the house since 1976, and has qualified for a disabled senior citizen property tax exemption for a number of years, which cuts his annual property tax bill down from more than $1,000 to less than $100.

“I’m old, I’m disabled and I’m poor,” he said. “I’m all three. That’s no problem for me.”

On Thursday, he got this year’s tax bill and it jumped by about $17, almost a 25 percent increase, thanks to the passage of last fall’s Spokane street levy. Moffitt is one of about 4,700 people who will see their tax bills increase this year as a result of the levy, even though city leaders assured voters that tax rates would not change if voters approved it.

After November’s vote, and to the surprise of city officials, county officials notified the city that, in fact, tax rates would change for some because the long-standing senior citizen exemption didn’t apply to the levy.

As the city, county and the state’s Department of Revenue wrangled over arcane tax rules, tax bills began to be mailed Wednesday. The sides dug in, city officials suggested they’d seek legal action to prevent the county from collecting the tax and the county pointed to the state as the decider of tax rules. Both showed little sign that a solution was near.

“This is a little personal for me because we made a promise and a commitment to our voters,” said Rick Romero, head of the city’s Utilities Division. “We made that commitment based on information and research from the assessor’s office.”

Romero said the city relied on phone conversations with the assessor’s office, and the county’s website, which says that people who qualify for the property tax exemption “are exempt from voted levies.”

Byron Hodgson, the county’s chief deputy assessor, said the city was at fault for the increased tax bills, noting that the assessor’s website was for general purposes.

“It’s not a technical paper on how to calculate levies. If they’re relying on that, it’s extremely weak,” Hodgson said. “To read something on a website and apply it to the complicated language of levies, you probably didn’t do your due diligence.”

Romero dismisses such reasoning. “So they’re saying seniors shouldn’t rely on information they find on that website,” he said.

At issue is the interpretation of whether a levy lid lift is the same thing as an excess levy. The city and its bond attorney, Laura McAloon from K&L Gates, argue that they are the same, allowing the street levy to be eligible for the tax exemption. The state and county disagree. The street levy was a levy lid lift.

In response to the state’s interpretation, last week the city created a local tax exemption, replicating the statewide exemption in an attempt to prevent those who already qualified from paying more. Romero said that before the ordinance was adopted into law, the city shared drafts of the ordinance with and solicited comments from county officials, including the county’s chief civil attorney, Jim Emacio, and County Assessor Vicki Horton.

After its passage, the state disagreed with the city again, telling the county that “we have reviewed the ordinance and believe it exceeds the City’s authority. … Because the City’s ordinance creates an exemption that is not authorized under state law, it should not be implemented.” The county began preparing to mail its tax bills, which are due by April 30.

In total, about $107,000 in property taxes will be collected from senior citizens and disabled people who earn less than $35,000 a year due to the street levy’s passage. The assessor’s office said the average bill from those payers will increase by about $13 per year. City officials reckon the number is closer to $25.

Mike Volz, chief deputy treasurer for the county, said Friday it’s unlikely a solution will emerge from the courts before the April 30 cutoff, and that his office was urging taxpayers to send in their statements to avoid having to pay interest or penalty fees.

Since bills have been mailed out – and county and state officials are strongly recommending people pay their taxes – Romero said, the city is suddenly “in the refund business.”

“This is a 20-year levy,” Romero said. “We don’t want to be in the business of mailing refunds for 20 years. For decades.”

At stake, however, is the city’s promise that was made by Romero, Mayor David Condon, City Council President Ben Stuckart, CFO Gavin Cooley and many others at the city.

“It’s a promise and a principle. I don’t want it to be a broken promise. I don’t think we’re going to take this lightly,” he said. “We’re going to do everything in our power to make sure tax rates don’t change.”

Romero is meeting with the City Council on Monday to discuss the issue.

While the city, county and state butted heads, Moffitt – with Oreo, his green-cheeked conure, on his shoulder – did what he always did and paid his tax. But he wasn’t happy with the uncertainty.

“I think it’s a pain in the ass,” he said.

Staff writer Kip Hill contributed to this report.