WARNING: THIS POST INVOLVES MATH >>>
Local government has a problem. Costs are up for asphalt and health care, library books and fire trucks. But revenue is down. There's less revenue from sales tax, from business and occupation tax and from property tax - about 20 percent of the total.
To make things worse, the Pierce County Assessor has been tougher on property value than other assessors in Washington. He pushes values lower so tax revenue is lower.
Is the system working as it should?
(Note: the previous Assessor, Dale Washam, is responsible for the numbers below; the current Assessor, Mike Lonergan, was elected in November 2012.)
Property tax is based on the value of yes, property: houses, commercial buildings and land.
The Assessor inspects one sixth of the county annually. The staff looks at properties, analyzes sale prices and sets values. For the remaining five-sixths of the county the Assessor uses a computer model to set values.
When values are down, the Assessor collects less money.
Sounds all scientific, right? Professional appraisers, computer models. Very objective. Or not.
Let's look at two sets of numbers.
First is the change in housing sales prices from 2010 to 2011 in six counties. (Housing makes up most of the total value, so it's a decent number to use.)
OK? From 2010 to 2011, average sales price of houses in Pierce County went down 13 percent.
Next we'll see what happened to assessed values (ignore the different years; it's an assessment technicality):
Look at Pierce and King counties, for example. Sales prices went down about the same percentage in both counties; but total property values went down five times as much in Pierce (ten percent compared with two percent). Values also went down less dramatically in Clark, Snohomish and Spokane counties, providing more money for local governments.
Speaking numerically, things don't add up.
Some of the difference comes from more value in King County commercial properties but not enough to account for such a big difference. And Clark, Snohomish and Spokane are no more commercial than Pierce.
Maybe Pierce County does things exactly right and the other counties have whacky assessment methods. Or maybe Pierce stands out as a tax cutter because of the libertarian views of the previous assessor. This would mean those computer models and appraisal methods are subject to bias. If this is true, how can we insure political philosophy doesn't influence tax collections in the future?
Ken Miller came to Tacoma as a community organizer in 1970. He's worked in corporate and small business, nonprofits and government.