Some Hows, Whys Of Property Taxes

The property tax is by far the most complex tax in the state. Here are some key questions and answers about the tax.

How does Washington’s property tax burden compare with other states?

Washington ranks 22nd in the country for the amount of state and local property tax charged. Residents paid $739.13 per capita in fiscal year 1993, the most current statistic available.

Property taxes have been going up steadily as a portion of personal income. Since 1980, the tax burden has climbed from $23 per $1,000 of personal income to $31 in 1995. Meanwhile, wages for many remained stagnant.

Who imposes property taxes?

Just about every level of government. In addition to the state, Washington is blanketed with more than 1,700 separate districts that can levy property taxes. These districts include 39 counties, 270 cities and towns, 296 school districts, 413 fire districts, 16 library districts, 76 ports, and 128 emergency medical districts.

How much money does the property tax generate?

In 1996, state taxpayers forked over $4.3 billion in property taxes. Property taxes are the third largest source of money for the state general fund, after the general sales tax and state business and occupation tax. Property taxes are the single largest source of money for local governments, generating 44 percent of local tax revenues statewide in 1996.

Are public schools funded from the property tax?

Yes. But the state property tax is paid directly into the general fund, not into a dedicated public school account. Only about one quarter of the state spending on public schools is from state property taxes. The rest comes from other sources, such as the sales tax and business and occupation tax. Local school districts also impose their own property taxes, with voter approval.

How are property taxes computed?

Assessors determine the value of property, then multiply that value by the tax rate to compute the tax bill.

Are there any limits on how much property can be taxed?

The state constitution limits the total property tax charged to no more than 1 percent of the value of the property being taxed.

Are there exceptions?

Lots. First, the 1 percent limit does not apply to levies by ports and public utility districts. Second, the limit may be exceeded if 60 percent of a district’s voters approve. Most excess, or special levies, are approved by voters for school programs and construction.

What is the 106 percent limit?

It’s a lid imposed by the Legislature on local property tax revenues that limits annual increases for any taxing district to 106 percent of the highest amount of revenue from any regular levy in the past three years.

So why are my property taxes going up so fast?

Because the assessed value of your property has jumped.

What about property tax exemptions?

Dozens of property tax exemptions are in the tax code and more are under consideration in Olympia. Major exemptions already are provided for churches, federal property, business inventories, motor vehicles, and private schools and colleges.

, DataTimes