In the often-puzzling world of funding government services, property taxes are the Rubik’s Cube. They can be baffling and convoluted, creating a labyrinth for taxpayers. So, as the Clark County council approves a 1 percent increase in county property-tax collections for next year, allow us to provide a quick explanation.
A 1 percent property tax increase means the total collected by the county will go up by 1 percent in 2018, which might or might not increase an individual homeowner’s tax by 1 percent. As Vancouver City Councilor Jack Burkman explained on Columbian.com: “Your property’s assessed value is only used to determine how much of the county you own. You then owe that percentage of the county’s property tax collection.”
A property’s assessed value is used to determine the owner’s tax bill. But if that property’s value has increased at a lower rate than the county’s total value, the bill for that property will increase by less than 1 percent. In theory, the assessed value could increase by, say, 2 percent, but the tax bill could decrease.
See what we mean about it being confusing? Then there is the fact that we have a county property tax; a city tax if a property is in an incorporated area; taxes that go to school districts; and maybe taxes for fire districts, port districts, the library district, and even a cemetery district. On top of all that, the Legislature this year approved vast changes to state property taxes to increase school funding. After all that, it is no wonder that many local residents are feeling a bit of tax fatigue.
But as the county plans for a 1 percent increase next year, it must be noted that the boost does not meet the rising costs faced by local governments. An increase of 1 percent is the maximum allowed under state law, leaving counties in a difficult position. As long as the economy is growing at a reasonable pace, the cost of providing much-needed services annually increases by something closer to 3 percent or 4 percent, automatically decreasing the county’s purchasing power.
Labor costs alone eat up more than a 1 percent property-tax increase provides. And the price of fixing the potholes in front of your house or conducting elections or paying for liability insurance annually increases by more than 1 percent.
A year ago, councilors approved the county budget for 2017-18. Under state law, they were recently required to reapprove next year’s portion of that budget, including the 1 percent increase for property-tax collection. Council member Eileen Quiring, who was not on the council when the budget was initially approved, was the only dissenter, saying, “I don’t want to burden (taxpayers) any more because we will still have a balance left in our general fund even if we go with the 0 percent increase.”
Nobody wants to unduly burden taxpayers, but we do want efficient and reliable services — and those come at a price.
Meanwhile, the general fund balance is getting dangerously low. County policy requires a balance of at least $23 million, and Council Chair Marc Boldt said, “We are going to have to do a lot of soul-searching in this community, even with 1 percent, to figure this out.” Budget Director Adriana Prata estimated that general fund reserves would dip to $21 million during the 2019-20 budget cycle.
That will, indeed, require some soul-searching. But, for now, the council made a reasonable decision to increase next year’s property-tax collection.
