OLYMPIA — State Sen. Kevin Van De Wege is urging property owners to delay paying property tax bills they began receiving this week in anticipation of a 2018 cut in the state school levy.
The 24th District Sequim Democrat on Thursday urged them to wait until the end of the legislative session on March 8 to pay their taxes while state lawmakers struggle to pass tax relief.
That caused tax officials in Clallam and Jefferson counties to scratch their heads over exactly how they would re-bill property owners with newly calculated tax bills.
They said Thursday the plan had set off alarm bells statewide among county assessors and treasurers.
Van De Wege, whose legislative region includes Clallam and Jefferson counties and part of Gray Harbor County, said the plan outlined in Substitute Senate Bill 6614 would leave taxpayers who have already paid their full 2018 tax bill out of luck if tax relief is approved because an outright refund would not be allowed under state law.
“We’re going, what, they’re out of luck?” asked Jefferson County Assessor Jeff Chapman. “How does that work?”
Van De Wege said the tax-reduction plan stems from legislation racing through the Senate to reduce the state school levy by 35 cents per $1,000 of assessed valuation that would affect current 2018 property tax bills — statements that property owners are already receiving that were based on 2017 assessment, Van De Wege said.
It was voted Wednesday night out of the Senate Ways and Means Committee by a party-line vote of 14-10 and sent Thursday to the Rules Committee, prompting Van De Wege to send out a news release late Thursday morning suggesting that Republicans forced the Democrats’ hand.
“It might be in your best interest not to pay your full 2018 property taxes until after the close of the 2018 legislative session in March,” he said in the release.
“That’s because my Democratic colleagues in the Senate and I are working on a plan to protect homeowners from the worst impacts of the Republican property tax of 2017,” he said.
“Since we’ll finish our work in Olympia by March 8, and taxes aren’t due until April 30, it makes sense to wait until you know for sure what your taxes will be.”
Van De Wege said revenue increases from projected state growth would offset the size of the tax hikes approved in 2017 by the Senate, which was controlled by the GOP and pushed the tax hikes to fund basic education as ordered under the McCleary decision.
“This is a fast-moving bill,” he said Thursday in an interview.
“It is a chaotic day down here.”
Van De Wege expects the tax-reduction plan to be voted out of the the Senate Rules Committee before heading to the Senate floor, and then to the House by the March 8 end of the session before being signed by Gov. Jay Inslee.
In Clallam County, property taxes being paid in 2018 are based on a valuation of $8.3 billion in 2017 compared to $7.7 billion in 2016, Assessor Pam Rushton said.
Based on Zillow’s median value of $230,000 for a Port Angeles home, the state school levy in 2017 was $481, will increase this year to $690, and would be reduced to an estimated $600 if the Senate bill passes, Rushton said.
The owner of that home will pay an overall tax bill of $2,639 in 2018 compared to $2,512 in 2017 if the school levy stays the same.
In Jefferson County, the 2017 property valuation is $5.1 billion for 2018 taxes compared to $4.8 billion in 2016 for 2017 taxes, Chapman said.
The assessor said based on the average median home value of $278,000 in Port Townsend, the state school levy in 2017 was $565, will increase this year to $819 and would drop to $724 if the Senate bill passes.
The owner of that $278,000 home will pay an overall tax bill of $3,023 in 2018 if the school levy stays the same compared to $2,677 in 2017.
Van De Wege said county officials “would have to recalculate the amount due” in property owners’ 2018 taxes to reflect the change wrought by the legislation.
The lower amount that property owners would pay “would be seen on their second-half tax bill,” Van De Wege said.
The Legislature would provide $5 million in funding “to help get this done,” he said.
Tax officials in Jefferson and Clallam counties said that property owners can pay their annual tax bill in two installments but receive one tax statement a year, not two.
Acting Clallam County Treasurer Teresa Marchi said Thursday that 24,660 statements were mailed Tuesday to property owners at a cost of $18,600 for postage, mailing services, envelopes and tax-statement paper.
“I can’t even comprehend all it would entail,” she said of sending out new statements.
“It sounds like a nightmare.”
Chapman said changing the state levy amount for 2018 changes the distribution for every tax district in the county.
“[Lawmakers] are trying to get immediate tax relief, and we have no mechanics to do that,” he said.
He said other county assessors are saying, too, that $5 million would not be enough to enact the legislation.
Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 55650, or at [email protected].