EDITOR’S NOTE: This is the second of a two-part series on property assessments and property taxes.
PORT ANGELES – After Clallam County taxing districts begin approving their 2010 budgets next month, property owners will get a harsh lesson in the dynamics of the property taxes that fuel those budgets: Taxes don’t go down just because property values go down.
County property owners won’t necessarily see a corresponding drop in their property tax bills despite the $300 million loss in value in the county between 2008 and 2009.
In fact, the tax bills they receive in mid-February – after tax levies and exemptions are figured into the mix — are more likely to stay the same or increase, county Assessor Pam Rushton said.
That’s because while property values are based on her office’s determination of taxable fair-market value, the property taxes received by local government entities — essentially, tax districts — are based on the levy amounts approved by elected commissions and boards who run those entities, which rely on property taxes for survival.
Each local government’s elected board or commission tells the assessor’s office how much money must be pulled from property tax revenues each year.
They can either remain at the same dollar amount they pulled the year before or increase it by up to 1 percent without going to voters for approval.
Those tax district boards that have decided to increase the levy by 1 percent in 2010 include Hospital District 2 (Olympic Medical Center) and the North Olympic Library System.
Those that have decided not to collect a 1 percent increase include the Port Angeles City Council and the Port of Port Angeles.
Budgets fueled by property taxes are approved by December.
Tax amount known in January
Property owners will learn the amount of property taxes they will pay in 2010 in January, Rushton said.
Property taxes are paid on the parcels in April and October 2010 installments.
The total levy amount must be funded with property taxes whether property values increase or decrease and are set independently of any property value set by the assessors offices.
The Assessor’s Office also is assessing 1,250 open space-timber parcels that will help determine how much property owners will pay in taxes.
Senior and disability exemptions — which have not all been applied and which can cut the non-exempt value by half or more — also must be figured into the mix, though the budget remains constant, Rushton said.
The budgeted levy amounts must be funded regardless of exemptions.
The more exemptions, the more the tax burden shifts to those without exemptions because the levy amount remains constant — like a bag that needs to be filled with money regardless of where the money comes from.
“There’s no way of knowing how many of those are going to come in,” Rushton said Thursday.
Call the Assessor’s Office at 360-417-2400 for exemption applications, which are also online at www.clallam.net.
Levy rates
Individual property tax amounts are based on levy rates of dollars and cents per $1,000 of the value of the property.
For example, a fire district levy rate of 20 cents per $1,000 of valuation for a $200,000 home would provide $40 in property taxes for that district’s budget.
A city of Port Angeles resident who owns a $200,000 home paid $1,815 in property taxes in 2009.
It flowed to several coffers: the city general fund, a city bond, the Port Angeles School District maintenance and operation levy, the school district bond, the Port of Port Angeles, the state general fund, the county general fund, the North Peninsula Library System and Hospital District 2, which funds Olympic Medical Center.
But the rate cannot generate a levy amount approved by the tax district board that exceeds a 1 percent increase over each district’s highest lawful levy amount without a vote of the people.
“This is a budget-driven system,” Rushton said.
Rushton determines the levy rate by dividing property values for the tax district area, including new construction, into the budget approved by the commissions or board.
Sometimes taxes increase regardless of increases or decreases in value.
Indeed, despite lower valuations, the rate can go up or down to collect the amount of money required to add up to the total approved budget amount.
The Peninsula Daily News building and land, for example, was valued at $923,300 in 2008 and $784,805 this year.
But Rushton said property taxes will likely increase for the PDN and other entrepreneurs and private property owners in the city of Port Angeles to pay for the newly formed, voter-approved William Shore Memorial Pool District.
The district will impose a new 15-cents-per-$1,000 tax levy in 2010 to run the facility.
But even a static 2010 budget such as the port’s, which commissioners are slated to approve Monday, will not guarantee a zero property tax increase, Rushton said.
________
Staff writer Paul Gottlieb can be reached at 360-417-3536 or at paul.gottlieb@peninsuladailynews.com.