Burien Council To Review City Budget Tonight – With No Property Tax Increase
There will be no property tax increase in Burien in 2012.
The city earlier posted notice of a public hearing at tonight’s (Monday, Nov. 14) council meeting, soliciting comment on a possible property tax increase of up to 1 percent (read our previous coverage here, including a Poll and numerous Comments).
By law, the council must also review the city’s budget midway through the biennium to address any budgetary items that require adjustment.
A public hearing must be held before adoption of a new budget or budget adjustments, including the next year’s property tax.
The council establishes the city’s property tax levy annually, as required by state law, according to Burien Finance Director Kim Krause.
Local governments are limited by Initiative 747 to annual property tax increases of 1 percent or the rate of inflation, whichever is less.
I-747 was approved by voters statewide in 2001, then reinstated by the Legislature after the law was invalidated on a 5-4 decision by the State Supreme Court.
“This year’s inflation rate was 2.755 percent,” Krause noted. “Therefore, the city is limited to a 1 percent property tax increase, which is approximately $71,135.”
But, she continued, “the city has received notification from the King County Assessor’s Office that the preliminary assessed valuation [of property in Burien] is 9.23 percent lower than 2011.
“Due to this reduction, the city can only collect the statutory limit of $1.60 [per $1,000 of assessed value], which is approximately $467,000 less than 2011. Ordinance 557 adopts the Property Tax Levy.”
“As the values of homes go down, people pay less property taxes,” City Manager Mike Martin said. “As a result, the city will get about half a million dollars in revenue next year.”
Property values and mill rates – a unit of measure used in calculating property taxes – are like a teeter totter, he continued.
When values go up the mill rate goes down, and when values to down, the mill rate goes up. This year, that formula puts the city at the $1.60 per $1,000 cap.
“We can’t tax above that,” Martin said.
In 2010, the city “did have the ability to increase our property tax by 1 percent, but the council chose not to do it. The council felt that because the recession was hard on everybody, they should do something symbolic that recognized times were tough for everyone.”
Martin said for a house valued at $335,000 – the average value of a home in Burien – a 1 percent property tax increase would be 38 cents a month, or $4.56 annually.
Compared to what a 1 percent property tax increase would cost Burien homeowners, Highline School District voters renewed and increased in February a six-year operation and maintenance levy, which costs about $150 a month for an average home.