TAX SHIFTS

My representative/senator keeps talking about a "tax shift" and says if there is one, he/she will not give me the chance to vote on this issue.

1. Explain how a tax shift works and if there is a tax shift, how does that affect the amount I write on my check for my property tax ?

A tax shift has to do with the distribution of tax dollars.

When your rep/sen argues about the possibility of a tax shift, he or she makes an assumption that areas that aren’t increasing in value are going to pay more than they may have paid under the current ad valorem (according to value) system. This assumption includes the possibility that their particular area is never going to be "discovered". If that were the case, the amount is minute. But, when you compare it to our current system, those property owners are already experiencing a shift: property values of big business and utilities are not going up dramatically which means residential property owners are paying a greater share of the overall tax burden.

Our current system has been a boon to big business and utilities when it comes time to paying their property taxes. Under our current system, it is the homeowners who are the ones getting stuck. With our amendment, even if there is some minute shift between residential areas that increase versus others that do not, it is offset by industrial and utility properties who will now be paying more of their fair share. (And this is why getting our amendment passed is such an uphill battle.)

As you revalue areas that are increasing dramatically, the tax base for the state levy expands. Given that levy amount can only increase by 1% (like all other regular levies), this lowers the levy rate. Where values are increasing, those property owners are paying a greater share of the state levy only - which is about 20% of your property tax bill.

For instance, if your property tax bill is $1000, $200 goes to the state levy. However, without a cap on property values, this amount pales in comparison to what you may pay when revalued in a market such as we are experiencing now.

In areas that are increasing more dramatically, that tax shift will be offset by the fact residential property owners share of the tax burden will be more equitable. The end result: this gives all property owners predictability when and if they are discovered.

Our question then to our representatives and senators who balk at the tax shift issue is: so, you are telling me you would favor big business over helping the individual homeowner?

Our bottom line: Give us the opportunity to vote. We’ll live with these minute tax shifts if you give us predictability!


2. If there’s a tax exemption, how does that affect the amount I write on my check for my property tax?

Every senior signed up for a property tax exemption increases taxes to every other property owner.

Regular levies such as the state levy, can always get their 1% increase in total amount, so if we exempt value and shrink the tax base, the levy rate goes up. Every senior signed up, every piece of property that is in the timber program, every piece of land that goes into the open space agricultural program shrinks the tax base. Levy rates increase as a result and it, therefore, becomes a tax shift to all of us.

Ask your assessor: statistics are clear: there is more value exempt than is subject to 100% valuation tax. This is not necessarily bad, it simply causes a shift. And the vast majority of that shift is to homeowners.

3. What about property tax deferrals?

The current deferral program for seniors is proof, right here in the state of Washington, that this kind of program simply does not work. Property owners have made it clear they do not want to place a lien on their estate. If you ask your local assessor, he/she will tell you the vast majority of property owners who qualify refuse to take advantage of this program.