EDITOR’S NOTE: This is the second of a two-part series on property assessments and property taxes.
PORT TOWNSEND — The average property owner in Port Townsend can expect to pay more in property taxes next year — depending on how much their property increased in value — as a result of the latest property assessment review, Jefferson County Assessor Jack Westerman said.
But the true extent of the impact won’t be known just yet, Westerman said.
Property values increased by $165 million within the city limit to $1.5 billion — an 11 percent increase — from Jan. 1, 2005, to Jan. 1, 2009.
While property values are based on the assessor office’s determination of taxable fair-market value, the property tax received by local government entities is based on the levy amount approved by the elected commissions and boards who run the myriad tax districts that rely on property taxes to fuel annual spending plans.
Elected officials make the call
Each local government entity’s elected board or commission tells the assessor’s office how much money must be pulled from property tax revenues each year.
They can either remain at the same dollar amount they pulled the year before or increase it by up to 1 percent without going to voters for approval.
For instance, the Jefferson County Library will impose a 1 percent levy increase in 2010, while the Port of Port Townsend is slated to decide on an increase at its meeting at 6:30 p.m. Tuesday in the commission chambers at the Port Administration Office Building, 375 Hudson Street, Point Hudson.
Levies must be funded
Budgeted levy amounts must be funded with property taxes whether property values increase or decrease and are set independently of any property value set by the assessor’s office.
Property owners pay taxes on their parcels in April and October 2010 installments. Those taxes add up to tax levies, which fuel those budgets.
Budgets aren’t approved until December, by which time Port Townsend property owners have had months to digest the news contained in tax assessment notices they received in July.
Senior and disability exemptions — which have not all been applied and which can cut the nonexempt value by half or more — also must be figured into the mix, though the budget remains constant.
Phone Westerman’s office at 360-385-9105 for more information on exemptions.
The budgeted levy amounts must be funded regardless of exemptions.
The more exemptions, the more the tax burden shifts to those without exemptions because the levy amounts remain constant — like a bag that needs to be filled with money regardless of where the money comes from.
Property owners pay property taxes based on a levy rate of dollars and cents per $1,000 of the value of the property.
For example, a fire district levy rate of 20 cents per $1,000 of valuation for a $200,000 home would provide $40 in property taxes for that district’s budget.
Westerman determines the levy rate by dividing property values for the tax district area, including new construction, into the budget approved by the commissions or board.
Sometimes taxes increase regardless of increases or decreases in value.
“If your value goes up in Port Townsend by 10 percent, your taxes will probably go up in the neighborhood of 4 to 6 percent,” Westerman said, because the overall valuation went up 10 percent to 15 percent, he said.
“If your value goes down in Port Townsend, given the fact that the average went up 10 to 15 percent, you’re going to be paying less in taxes in Port Townsend.
“If it’s down by 5 percent, you’ll be paying 5 or 6 percent more. If the assessed value goes down by 10 percent, the levy rate goes up by 10 percent. The levy amount is the constant in this. That’s the driving force.”
The county is divided into four valuation districts, each of which is re-valued once every four years.
Because levies are figured in dollars and cents per $1,000 of valuation, a number that’s determined every four years, the re-valued district sees the bulk of tax increases once every four years.
So property owners in all four districts see less of an increase until it’s their turn to receive a new total value, Westerman said.
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Staff writer Paul Gottlieb can be reached at 360-417-3536 or at paul.gottlieb@peninsuladailynews.com.
