It can be very confusing to understand the county budget as it involves different agencies that collect taxes in our community.
This is the first of several guest columns I will be writing to try and clear up some of this confusion as it relates to the county budget. I would encourage other taxing jurisdictions to post similar explanations of their budgets.
2018 has been a great year for Walla Walla County. I am constantly reminded of how lucky we all are to live in such a great community. As a county commissioner, I regularly come in contact with commissioners from other counties and discuss pressing issues, both financial and social.
The Walla Walla County Board of Commissioners has been very conservative over the years when it comes to expenditures, which has allowed us the ability to forgo property tax increases for county taxpayers several times. We are one of very few counties in Washington state that can say this.
Calvin Coolidge (30th president of United States) said it best: “Collecting more taxes than is absolutely necessary is legalized robbery.” Your county commissioners think Calvin Coolidge got it right.
This pie chart illustrates that your property taxes are collected by 10 different taxing categories collecting a total of almost $77 million in 2018. As you can see on the chart, schools collect about 59 percent of all property taxes, EMS/Fire/Port/Cities/misc collect about 23 percent, county roads collects 7 percent and Walla Walla County collects 11 percent (or about $8.7 million) for current expense (general fund).
When the county is considering a property tax increase, we are talking about raising only the county portion of the tax collections. In other words, if we are proposing to increase property taxes by 1 percent, we are talking about an $87,000 increase ($8,700,000 X 1 percent) spread over all landowners in Walla Walla County.
When commissioners do not take the statutorily allowed 1 percent property tax increase in a given year, they are allowed to “bank” that 1 percent increase.
Basically, commissioners have the ability to utilize that 1 percent in the future if needed (not your usual “use-it-or lose-it” mentality with government).
Historically, Walla Walla County commissioners have been able to “bank” property tax increases for several years before utilizing 1 percent or 2 percent in a given year.
In 2017, Walla Walla County had 4 percent banked capacity (four previous years that property taxes were not raised and were not previously utilized).
In 2018, the 1 percent was banked, making banked capacity 5 percent going into the 2019 budget discussions. When the dust settled with the 2019 budget, it was clear that we were going to need to realize a 2 percent property tax increase, generating about $174,000 (1 percent = $87,000, 2 percent = $174,000).
For a homeowner with a property with an assessed value of $200,000, it equates to a $5.70 total tax increase for 2019. I would have much rather banked the 1 percent; however, with health insurance premium increases at almost 10 percent and union contracts dictating a 2.64 percent wage increase, our options were limited.
We were able to cut approximately $500,000 from other expenditure lines to allow us to “only” utilize a 2 percent increase.
Another aspect of property taxes that needs to be addressed is the assessed value of properties in Walla Walla County. As many of you know, the Assessor’s Office values each property based on recent sales of similar properties.
The assessor does not do this for the purpose of raising your property taxes (contrary to popular belief). She must follow Washington state law that requires her to assess property values at current market rates. Current market rate is also misleading. The assessor values property on Jan. 1, 2018, for property tax calculations in 2019 (so valuations are always a year behind).
Due to the escalation in property values in Walla Walla County over the past few years, it has seemed to residents that property valuations are “out of control.”
However, at a recent Economic Development Advisory Council meeting, attendees were informed that the average home sale during the first six months of 2018 was 35 percent above assessed value, which is not good news for homeowners and property valuations moving forward. With the increased attractiveness of Walla Walla as a place to live, comes with it increased demand for housing, which in turn increases home prices.
As a homeowner in Walla Walla County, I empathize with those who cringe when they get their property tax statements each year.
If you have any additional questions related to property taxes, please contact our office at 509-524-2505 or e-mail me directly at email@example.com.
Again, this is my first of several columns attempting to clear up confusion regarding how county government is funded. If you have a particular area of interest you would like me to cover in future columns, do not hesitate to let me know.
Todd Kimball is chairman of the Board of County Commissioners.