Property tax increase included in 2014 budget
November 12, 2013
By Peter Clark
Issaquah could hike property taxes for the first time in eight years.
The mayor’s proposed budget includes a 1 percent increase, the maximum allowed under state law. The increase would add just over 1 cent per thousand to the tax rate, which would mean an annual increase of $3.83 on a $440,000 home if passed. The city last pursued an increase in 2006.
“Inflation has been incurring year after year,” Finance Director Diane Marcotte said, giving a rate of 1.9 percent annually. “I think the mayor wanted to include the 1 percent property tax because it helps to offset the increase of inflation.”
It would add an estimated $70,000 in revenue to city coffers.
“It’s a 1 percent increase on the revenue that we collected last year,” Marcotte clarified during the Nov. 4 regular City Council meeting. “A lot of people think it’s an increase on assessed value and as assessed value goes up, people think that’s going to be a very large number, but what it’s saying ‘what you collected last year, you can increase it by 1 percent.’”
Council held an unattended public hearing at the same meeting.
Marcotte said the city would not have needed to raise the 1 percent previously because the economy was at first in such good shape the city did not need to raise taxes for the revenue. Then, the recession hit and the city did not want to further harm the economy with raised taxes.
“For 2014, we continue to have a conservative revenue forecast given some of the continued economic volatility,” Marcotte told the council, where she mentioned the government shutdown as a cause for caution.” As we got into October, things occurring in the federal level were beginning to have impacts down here at the local level.”
Still, she said the increase was ultimately a good thing for continued financial stability, and the council mostly agreed.
“If you don’t make small incremental increases like this, you could end up with large increases because of an emergency,” Councilman Joe Forkner said. “A 1 percent increase like this that amounts to $3.83 for an average home, to me, seems like a small thing. It’s nothing that a council likes to do about raising taxes, but it’s one of those things that if you can give a little increase each year, it allows you the ability to forestall a large increase down the road that you may not be able to say ‘no’ to.”
Councilman Joshua Schaer said he would support this increase, but would bring more skepticism if proposed again next year.
“It’s not a lot, but at the same time, I’m also concerned about the cost of living that’s going up,” he said. “These nickels and dimes add up on a home owner and we want to make sure we’re not pushing too far to further depress the economy and set things back. Nobody spoke tonight at the public hearing, so I don’t know what our constituents think. This year, it looks reasonable, but I’m interested to hear from people and next year, it might seem less reasonable.”
Currently the county’s levy rate is $11.67 per $1,000 of assessed value. Municipalities set 55 percent of that rate.
The budget’s proposed increase will not be the only one homeowners will face. The passed park bond in this last election cycle will also add 10 cents per $1,000 of assessed value to property taxes for the next 20 years. The owner of a $400,000 home would pay $40 more per year.