Property taxes raise questions

EPHRATA — County Assessor Laure Grammer called property taxes the least-understood tax people pay.

The tax is made up of two sections: The amount the property is assessed for and the amount of the levy on the property.

“First of all, everyone hates the assessor and the treasurer when the bottom line is our job is to simply follow the law,” Grammer said. “We don’t write the law.”

The levy is partly determined by how much money a taxing district requests in property taxes. Washington state operates on a “budget-based” system. The system takes the amount of property taxes budgeted by a government and divides it across the various property owners.

“The taxes are based off of the will of other elected officials of all these different taxing districts. That is where the involvement of the people needs to be is with the schools, ports, hospitals. The involvement usually comes way after the fact where our taxpayers input needs to be during the budget process,” Treasurer Darryl Pheasant said.

Once the taxing districts submit their budgets, the budgeted amount of money is divided according to the assessed property value. For example, Grant County budgeted $13 million in property tax revenue in 2010 and the assessed value of the county was $8 billion leading to a county rate of $1.60 per $1,000 of assessed value.

“They all work that way,” Grammer said. “First they give me a document that says, like the City of Moses Lake, ‘We want $10 million.’ You can only get $4.2 (million), sorry, and I run it through it’s checks and balances ... and make sure they can only get what they’re entitled to under the law.”

The levy for local essential governmental services can’t exceed $5.90 per $1,000 assessed value, Grammer said, adding the rest of the levy is determined by voters or goes to the state. The agencies included in the $5.90 cap include the county, the road, cities, fire districts, hospital districts, cemetery districts, libraries and park and recreation districts. The state and local school levies and port districts and special assessment districts, such as weeds, mosquitoes and irrigation districts, are not included in the cap.

“I would love a tax bill on the value of my property that is $5.90 per $1,000, instead you’re playing $12.37 on average per $1,000,” she said.

The process can be further complicated when someone lives in multiple taxing districts. Depending on how many people live in a district, it can affect how much a person pays.

Since the levy amount is determined by how much money the various governments ask for divided across the property owners, if one person pays less taxes, someone else will pay more, Grammer explained.

The average levy rates between 2001 to 2009 have dropped from $15.03 per $1,000 assessed value to $11.40 per $1,000, according to Grant County records.

“So it is dropping,” she said.

Grammer explained property values are determined by using sales from two years prior to when people are paying the tax. For example, she is creating the 2011 tax rolls this year, but the values are determines by property sales from 2009.

“So right now, as you can imagine as the market is starting to come down a little bit in certain types of property, people are going, ‘Wait a minute, here I’m going paying taxes and markets are dropping.’ That was two years ago that I appraised you.”

The property values are determined by area, by dividing the county in neighborhoods, she said, pointing out she isn’t going to use the sales in the Crescent Bar area to determine home values in Nob Hill in Ephrata.

“All sales of the Sunserra are put into a bin and all the properties down in Sunserra are put in that bin and I’m going to say, ‘All right, I have 430 sales and I’m going rank them based on how current they are, the more current the better and I’m going to determine a mean average of value,” she said.

Grammer studies the sales, talking with the seller and buyer, she said. Her questions include how long it was on the market, what features the residence has.

“I’ve now broken that bin into first floor sales, second floor sales, third floor sales, so I will appraise the first floors because they tend to be valued at this much,” she said. “So that’s how I set value.”

Property values can decline depending on its condition, Grammer said. People purchasing more expensive houses tend to expect the value of the home to increase.

“We study the markets,” she said. “I’m not after picking on anybody. I truly have sales to validate why I have valued a piece of property for what it’s valued at ... I’m not after an adversarial relationship with the public, if they have an issue, and if we’re wrong, we’re going to change it.”

Grant County has not seen the same problems with the housing market other areas of the country have, Grammer said. She praised the realtors, appraisers and financial institutions.

“We did not have our financial (institutions) loaning beyond the value of a home here, so we don’t have people with mortgages that are double what their actual market value is and we didn’t get this huge drop in the market value,” she said.