Our current system of taxation and service delivery wasn’t planned by anyone. It has evolved over time, and it’s breaking down.
A few years ago, my brother-in-law collapsed from a massive heart attack. Thanks to a passing bicyclist and the heroic efforts of the local fire department, he survived. Those first-responder services saved his life.
Our property-tax system is the financial foundation that these very services are built upon. But our overreliance on property taxes is becoming unsustainable and showing signs of potential collapse.
That couldn’t happen here, right? Wrong.
In fact, in 1997 King County voters — yes, including some of us in the Emerald City — actually rejected a property-tax levy to fund Medic 1. The world-famous Medic 1 failed at the ballot box.
Could such a thing happen again? Maybe. For too many homeowners, property taxes trigger a palpable anxiety.
“I think I’m just going to have to sell,” a retired woman told me the other day. For those on fixed incomes or modest means, the property tax is a daunting burden. And while the property tax funds many vital services, I have to report that it is a tax system under tremendous strain that could even threaten things like funding for medic services.
As King County Assessor, I work hard to fairly assess property values. King County collects property taxes for the state, the county, the cities, local school districts and other special-purpose districts within the county. Over half of property-tax revenue goes to our schools.
In fact, your property’s fluctuating value has less to do with changes in your tax bill than voter-approved measures. Almost half of your property-tax bill comes from voter-approved levies regardless of your home’s value.
Each local government can only increase property-tax revenues by 1 percent per year — unless voters approve a special levy. And it is these levies that are increasing property-tax bills for most of us, and creating a tax system that is becoming unsustainable.
Special levies were intended to be just that — a special tax collection used for some extraordinary purpose, approved by voters, added to the regular property-tax levy. By using the property tax as the “go-to” option, consider some of the problems:
• Our schools use special levies to fund basic education — something ruled unconstitutional by our state Supreme Court and now the foremost issue confronting the Legislature.
• The 1 percent cap creates a built-in structural gap between the revenues needed to provide vital services and money available to pay for them. The property tax is finite — by law and by a collective voter threshold.
• The funding impact is already rippling through local services. Last year, Valley Medical Center funding was cut by $1.3 million because of the cap. Some rural park districts haven’t received funding for years.
• Using special levies to pay for basic services like schools, human services, first responders and parks is risky and unstable. What happens when voters say no? The Medic 1 experience proves it can happen.
• Rising property taxes undercut housing affordability. Thanks largely to voter-approved levies, the average King County property-tax bill bumped up 8 percent this year. In Seattle, over the past two years, property taxes have jumped nearly 22 percent.
Make no mistake, these levies pay for vital services that our community needs. I am not saying we should just slash taxes. However, our current system of taxation and service delivery wasn’t planned by anyone, it has evolved over time, and it’s breaking down. We need to talk about how to fix it.
It’s time for a community conversation on how to modernize our revenue and service-delivery systems. I’ve already discussed the modernization concept with University of Washington officials, former governors and legislators. In the months ahead I intend to expand that conversation. I hope you’ll join the discussion. Washington’s future depends on it.