A closer look into our property tax system

As your state senator, I am not opposed to taxes outright, but I do care greatly about the tax burden placed upon you. Taxes are applied to us at all levels of government (local, state, and federal), and government should always demonstrate a prudent use of tax dollars. As a state legislator, I am involved in “state” level taxes, not local or federal taxes. The primary taxes for Washington state budgeting include sales taxes and business taxes.

Understanding the property tax system

Of all the taxes that exist, the one I receive the most questions about is the property tax. Understanding the property tax system is very challenging. For a full understanding, I encourage you to contact your county assessor. Assessors determine the value of the property and local treasurers collect tax revenues. It is important to note that neither the assessors nor treasurers determine the actual taxes approved. Those decisions are the responsibility of other local governments officials or voters within your jurisdiction.

Property taxes can vary depending on where you live

The property tax bill that you receive is actually a collection of multiple different property taxes and assessments, most of which pertain to the local jurisdiction in which you live. The property tax statement includes an itemized list showing the responsible entity for the property taxes you pay. Think of your overall property tax bill as one round-shaped pie. Various entities receive their revenue from slices of the pie. Since the state relies primarily on sales and business taxes to fund its programs, only a slice of what you pay in property taxes is actually the state portion. Remaining slices are from various local governments for such things as school levies, school bonds, fire response efforts, libraries, and other local services. Some of these property taxes, such as local school district levies and bonds, are subject to the approval of local voters and the amounts are often increased. Residents of one jurisdiction can pay more or less in property taxes than others depending on the measures approved by voters in certain areas.

Payment of property taxes

How you pay your property taxes may also vary based on your personal preferences. Some residents pay their annual property taxes twice a year with half payments by April 30 and October 31. Many property owners have their property taxes included with their monthly mortgage payments as part of their escrow account. While that is certainly a convenient option, it may somewhat disguise what you are paying in property taxes. I often hear from senior citizens over concerns about rising property taxes. Many people believe that seniors on fixed incomes are the most concerned among us about property taxes. While that is possible, I think another possibility is because they are the ones among us who are more likely to have their homes paid off. As a result, their property taxes are no longer included in their monthly payments, requiring a separate payment for property taxes. Those payments are both more noticeable and more painful. In case you are wondering, property owners of a $400,000 home in North Central Washington pay approximately $4,500 in annual property taxes.

Understanding your assessed value and overall community valuation

The assessed value of property in addition to the tax rates is a contributor to what property owners pay. If a tax rate remains the same but a property’s value increases, a property owner likely pays more. When the total value of assets throughout a particular jurisdiction increases, often due to enhanced residential and commercial development, the tax-requesting governmental entity enjoys the benefit of that amount being spread over more paying and valued properties, helping to keep the tax burden manageable.

Most property taxes are determined locally

The Washington state operating budget relies primarily on sales and business taxes for its revenues. Only a portion of our property taxes is collected for state government purposes. Most of our property taxes serve local purposes and are either approved by various local elected officials or subject to a local vote. The city and county taxes, local school levies, school bonds for buildings, fire district levies, port district taxes, library district taxes and others – along with the value of your property and the overall value of your area – all affect what you pay in property taxes.

Thank you for the opportunity to serve as your state senator.

Brad Hawkins serves as the State Senator for North Central Washington.