Tax bills are here. See how much more you’re going to pay

An unromantic surprise soon will land in Mid-Columbia mailboxes instead of Valentines.

Local property owners can look forward to owing a lot more during 2018’s property tax season thanks to Washington’s new McCleary-inspired school tax.

Franklin County bills were mailed this week. Benton County bills will go out around the end of the month.

“It’s not really the love note you want,” said Andrew Hicks, chief deputy treasurer for Franklin County.

Local property taxes are rising by 9 percent or more. House Bill 2242 is a big part of the increase.

That’s the 2017 Legislature’s complicated tax swap maneuver to comply with the state Supreme Court’s 2012 McCleary ruling. Among other things, it adds a new line to property tax bills across the state.

The new law shifted the responsibility for funding schools to the state after the court ruled it was failing its “paramount duty” to pay for basic education under the state constitution.

As a result, Washington will double its per-pupil spending to nearly $12,000 by 2020, which is about equal to the 2015 national average, according to the most recent census survey.

Property owners can preview their bills at bit.ly/BentonPropertySearch and bit.ly/FranklinPropertySearch.

Benton County Treasurer Kenneth Spencer said his staff is still finalizing the data.

If an online account seems incorrect or says zero, it hasn’t been updated.

Spencer said people can contact his office for clarity or if they don’t receive a bill by March 15.

He’s also bracing for questions about the McCleary tax.

“People need to be aware it’s state mandated,” he said.

How to read your bill

The new tax appears on 2018 property tax bills as “State School Part 2,” generally toward the bottom of the list of taxing jurisdictions on individual bills.

In Benton County, it is boosting the tax rate by $1.13 per $1,000 of assessed value, or $226 for a home assessed at $200,000.

In Franklin County, it is $1.03, or $206 for a $200,000 property.

The McCleary tax is one of 15 or more individual taxes that make up the typical Mid-Columbia property tax bill.

Local and state school taxes are up to three-fourths of the typical bill.

Taxes are levied to support cities, counties, fire districts, library districts, ports, cemetery districts, mosquito control districts, veterans, hospital districts and other programs.

In the Mid-Columbia, they add up to a tax rate of about $12.50 to $13.50 per $1,000 of assessed value, depending on the series of taxing districts a property is in.

But regardless of location, the McCleary tax is the is the primary driver of 2018’s bigger bills.

One policy analyst notes it could be worse.

“Thankfully, we are not in King County,” said Jason Mercier, director of the Washington Policy Center’s Kennewick-based Center for Government Reform. Seattle-area officials estimate 63 percent of King County property owners will pay an extra $400 or more because of McCleary.

Understanding the 2018-2019 ‘tax swap’

Tax rates will return to something like pre-McCleary levels in 2019, after voter-approved school maintenance and operations levies expire.

The actual amount depends on appreciating values — which can raise taxes — and to new construction, which can lower them.

All things being equal, taxes will drop noticeably next year.

The same law that added the state tax severely reduces the ability of local school districts to collect maintenance levies.

Beginning in 2019, they may collect a maximum of $1.50 per $1,000 to support extras that go beyond basic education.

That’s far less than the current rates of $3.37 per $1,000 in the Kennewick School District, $3.94 in Pasco and $3.45 in Richland.

On Feb. 13, the three districts are asking voters to renew the levies but at the new legal limit of $1.50 per $1,000.

If approved, the new lower rates will hit in 2019, theoretically lowering property taxes back to pre-McCleary levels.

Where the money goes

More than half of all property tax dollars support public education.

Collectively, local and state school levies consume 65 to 74 cents of every property tax dollar, depending on the school district.

County government takes about a dime. City government soaks 14 to 19 cents.

The rest goes to “other” taxing entities, such as fire, library, cemetery, port and hospital districts.

Visiting the Tri-Cities this week to tout an unrelated carbon tax bill, Gov. Jay Inslee said he disagreed with the property tax approach to solving the McCleary challenge.

However, he counseled taxpayers to keep the central importance of schools in mind when they dig into their wallets.

“If you believe that our kids need an education, it’s a way to pay for an education,” he said, adding, “There were better ways.”

Mercier, of the Washington Policy Center, counters that property taxes offer the twin advantages of stability and transparency.

“Nobody likes to pay more taxes, but if you’re going to fund schools, (a property tax) is the most stable way,” he said. “It’s stable. It’s visible. You’re not going to have wild swings.”

Learn more

Both counties outline tax matters in exhaustive detail in annual publications, available at bit.ly/Benton2018TaxBooklet and bit.ly/Franklin2018TaxBooklet.

Franklin County republished Department of Revenue explainer about HB 2242 and its impacts property taxes. It’s available online.

For those who pay their taxes directly rather than through a mortgage, the first half is due in April and the second half is due in October.

This story was originally published February 10, 2018 at 1:50 PM with the headline "Tax bills are here. See how much more you’re going to pay."