Fact Check: Projecting property taxes an inexact science for levy elections

YAKIMA, Wash. -- "Your tax rate won't go up," is a common claim made when school district maintenance and operations levies are on the ballot.

But sitting behind a desk covered with spreadsheet printouts, Yakima County Assessor Dave Cook says it isn't necessarily true.

"What people need to understand is that they're not voting on a rate. They're voting on the amount to be collected."

No one can guarantee what a levy's tax rate will be in two or four years, because the rate is calculated each year based on factors that can -- and do -- change.

School officials admit it is imperfect, but they say they present projected tax rates because it gives voters some idea of what the financial effect will be on them as individuals.

Usually, taxpayers don't see a large difference between the projected rate they saw on the election ballot and the actual rate on their tax bill.

But even a small change could be very significant to a homeowner who is just barely scraping by, Cook said.

Without fail, his office gets angry calls about rate changes after tax bills are sent out, he said.

So does Mary Beth Wright, spokeswoman for Yakima School District, from time to time.

Given the complicated method for distributing the tax burden across property owners, it is hard for voters to evaluate how a levy proposal could affect their individual tax bills.

Projected rates offer some context for voters, Wright said. "It's an easy number for people to focus on."

In the Feb. 14 special election, the Yakima School District wants voter approval to collect $54.18 million over four years: $13 million in 2013, $13.36 million in 2014, $13.72 million in 2015 and $14.1 million in 2016.

The district hired a consultant to calculate the projected rate appearing on ballots.

But what is projected on ballots and what property owners are charged can vary greatly.

In 2008, Yakima School District officials asked voters to approve a four-year levy with projected rates of $2.80 in 2009 and 2010, and $2.81 in 2011 and 2012.

This year the rate was up to nearly $3.07 per $1,000 of assessed value.

The projected rates were best estimates when the ballot proposal was written, Wright said.

The district didn't anticipate stagnant property values, and collected between $300,000 to $400,000 more each year to account for inflation.

It isn't in school district officials' interest to have the levy rates rise that much, Cook said. "The reason their rate went up is because they asked for more money and the taxable assessed value went down."

Two things determine the actual rate used in tax bills: the levy amount and the total assessed value of a district's taxable property.

First, there is the annual levy amount that appears on the ballot. That is a fixed amount of money to be collected for the school district in a particular year.

Cook then divides that by the total assessed value of all property that can be taxed to get the rate.

But that second value changes from year to year, as well. It shifts based on two factors -- the assessed value and number of properties that can be taxed. Cook's staff figures out which properties can be taxed and how much they are worth.

Property values are assessed by Cook and his staff each year, and are based on sales data of comparable properties.

The number of properties that can be taxed can change from year to year. In Washington, the Legislature has created 107 exemptions for property taxes. For example, nonprofit hospitals don't have to pay property taxes. People 61 and older living on less than $35,000 a year don't have to pay for voted levies, including school maintenance and operations levies.

With so many moving parts, Cook is wary of predicting future rates.

"You, me, anybody who tries to estimate what it is will be in trouble."

* Dan Catchpole can be reached at 509-577-7684 or dcatchpole@yakimaherald.com.

The property assessment process

* The Yakima County assessor's offices completes property assessments by August each year. Assessed values are based on sales of comparable properties and in-person assessments conducted every six years for each property.

* The assessor's office uses the information to determine the total taxable assessed value for each taxing district.

* School districts and other taxing agencies submit requests to the county by Nov. 30 of each year, detailing how much money should be collected on their behalf from property taxes.

* The assessor's office takes the requests and divides them by the total taxable assessed value for each district to set levy rates.

* Rates are sent to the county treasurer by Jan. 15 of the next year.

* The treasurer's office then calculates and mails a tax bill for each property.

* Source: Yakima County Assessor's and Treasurer's offices

Yakima School District 2008 M&O levy

Year 2009 2010 2011 2012

Levy Amount* $11.99M $12.39M $12.72M $13.1M

Assessed value** $4.29B $4.27B $4.4B $4.27B

Proposed rate*** $2.80 $2.80 $2.81 $2.81

Actual rate*** $2.79 $2.90 $2.89 $3.07

* Voters approved the levy in 2008. Values in millions of dollars.

** Values in billions of dollars.

*** Rate per $1,000 of assessed property value.