Property taxes in Clark County explained

“Government has plenty of money, and if they need it, they can just take it from the taxpayer” is a refrain Kimsey said he’s heard more than once. But he added that the way residents are taxed is more complex.

Here are some things to keep in mind at tax time.

How is a property tax bill figured?

Clark County Assessor Peter Van Nortwick said that he, like Kimsey, also receives phone calls from residents about taxes.

“One of the big misconceptions people have is that their elected officials are driving property tax increases,” he said.

In 2016, there were about 45 taxing districts in Clark County that collect revenue for services that include county and city governments, schools, emergency services and cemeteries. These districts “levy,” or apply taxes to, the assessed value of taxable property.

Van Nortwick said that determining how much a property is taxed begins with the taxing district adopting a budget. Van Nortwick’s office assesses the value of the taxable property in the district. The budget is then divided by the total assessed value of all property in the district. This produces what’s called the “millage rate.” A home’s assessed value is then divided by 1,000 and then multiplied by the millage rate to produce the dollar figure tax amount.

For instance, in Clark County the median resale value of a home is $279,100, according to one estimate. Under the 2016 millage rate of 1.2 for the county’s general fund, that pencils out to about $335.

“It’s a way of having fairness in the process,” said County Treasurer Doug Lasher. He said that everyone pays the same millage rate regardless if it’s a modest mobile home or a newer, bigger home, which he said may require more government services.

Ups and downs of tax pie

How much a property is taxed fluctuates. It depends on the total value of the taxable property in the taxing government’s jurisdiction. It also depends on how much the property’s assessed value rises.

“When assessed values go up, the levy rate goes down,” said Van Nortwick. “When the assessed value goes down, the levy rate goes up.”

Van Nortwick, and others, liken taxation to a pie. When the total assessed value of a taxing district increases, that means the total tax pie has increased and so the burden can be spread out more evenly among property owners. When the total assessed value drops, there’s less pie and a greater burden for everyone.

According to Washington State Department of Revenue numbers, in 2013 assessed values for property covered by Clark County’s general fund began recovering from the recession. At the time there was $35.6 million in assessed value for the county general fund and the millage rate was 1.63, meaning there was a higher tax burden. By 2016, the total assessed value increased to $46.6 million with a millage rate of 1.32, meaning a lower tax burden.

Van Nortwick said that if the total assessed values continue to rise, a taxing district can increase its budget and still see the levy rate decline.

Indeed, the preliminary levy rate for the county general fund will decline slightly from 1.27 to 1.17, despite an increase in the total budget for the fund.

Under state law, counties and cities can only increase the total amount of taxes collected by 1 percent a year (unless they “bank,” or save up, the increase from previous years). Deputy County Manager Bob Stevens said that doesn’t mean that every property owner in the county will see a corresponding 1 percent increase in their tax bill.

It means that “the total tax pie can’t grow by more than 1 percent,” he said.

Stevens added that new home construction also makes the pie bigger. Between 2014 and 2015, new construction added nearly 6 percent to the county’s assessed value, according to state figures.

Taxes could go down

If the pie grows big enough from new construction and rising property values, it’s possible that burden will be so spread out that some property owners could see their tax bill decrease.

The way the levy rate is applied, if a property’s value increases more rapidly than other properties it’ll be contributing to a greater portion of the pie, meaning that properties that haven’t increased as much (or at all) won’t need to contribute as much.

For example, Lasher said, a mobile home might see a modest rise in assessed value while a newer home with many improvements might see a larger increase. But the newer home would be contributing more to the pie, meaning that the mobile home’s share would decrease.

“If your assessed value rises greater than most people’s you will probably see an increase in your taxes,” Van Nortwick said. “If your assessed value rises less than typical you will see a decrease in your taxes.”

Asking for too much?

Kimsey, the county auditor, said there’s really no typical property taxpayer because taxing districts differ significantly in how much they tax.

“It just depends on where you live,” Kimsey said.

But Van Nortwick said that over half of the typical property bill goes to schools. He pointed out that aside from the state taxes for schools, these taxes have been approved by voters for local schools. He said that voters in school districts, particularly in Camas, are more inclined to pass tax levies that add to their tax bills.

When Vancouver voters approved Proposition 1, they were told it would add about $90 a year to the average homeowner’s property tax bill.

Terry Wollam, a residential real estate broker and government affairs chairman for the Clark County Association of Realtors, said that voter-approved tax hikes such as Vancouver’s Proposition 1 may not add that much to a property tax bill. But he said it’s just part of other fees and regulations that are driving up the cost of housing.

“It’s significant when you put it all together,” Wollam said.

In the meantime, he advises property owners who may get anxious when they hear about an increase to remember it’s relative to other property owners and to look at the millage rate.