wa-law.org > bill > 2023-24 > SB 5618 > Original Bill
The legislature acknowledges that the current annual regular property tax revenue growth limit of 101 percent is inadequate in addressing the evolving needs of local governments and counties. As populations continue to grow and the costs of goods and services persistently rise, it becomes increasingly challenging for local governments to maintain a stable financial footing.
The legislature, therefore, aims to rectify this situation by increasing the property tax levy limit to more accurately reflect the economic realities of our communities. This act will equip local governments and counties with the necessary tools to keep pace with the rising cost of living.
Furthermore, an increase in levy capacity would provide local governments and counties with greater flexibility to manage their financial resources and meet the needs of their citizens. This increased flexibility will allow them to fund essential services and infrastructure that promote public safety, access to transportation and education, and other services that are vital to the welfare of the citizens of the state.
Many vital fields, such as law enforcement, health care, and education, are facing challenges in recruiting and retaining essential personnel due to the high cost of living in the communities they serve. By empowering local governments to raise the funds needed to support their communities through the balanced approach outlined in this act, the legislature can help them address local needs with minimal impact on taxpayers and retain the essential personnel who serve their communities.
This act represents a clear demonstration of the legislature's commitment to ensuring that all residents have access to essential services they need to thrive, work, and live in the communities they call home.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
"Inflation" means the annual percentage increase in the consumer price index for all urban consumers in the western region for all items as provided in the most recent 12-month period by the bureau of labor statistics of the United States department of labor by July 25th of the year before the taxes are payable.
"Limit factor" means:
For taxing districts with a population of less than 10,000 in the calendar year prior to the assessment year, 103 percent;
For taxing districts for which a limit factor is authorized under RCW 84.55.0101, the lesser of the limit factor authorized under that section or 103 percent;
Except as provided in (d) of this subsection, for all other districts, the lesser of 103 percent or 100 percent plus population change and inflation; and
For state property taxes under RCW 84.52.065, the lesser of 101 percent or 100 percent plus inflation.
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"Population change" means the annual percent increase in the population of a taxing district between the two most recent years as provided in the official population estimates published by the office of financial management for April 1st of the year before taxes are payable. If the office of financial management estimates a net decrease in a taxing district's population, for the purposes of this section, the population change is zero. For a county, the "population of a taxing district" means the population within the county's incorporated and unincorporated areas, unless the county taxing district boundaries are limited to the unincorporated county areas, in which case the "population of a taxing district" means the population of the unincorporated county areas only. For taxing districts that are not coterminous with one or more cities, towns, counties, or unincorporated county areas, or any combination thereof, as provided in the official population estimates published by the office of financial management in April of the year before the taxes are payable, "population change" means:
The population change for the city or town within which the taxing district is wholly located;
The population change for the county in which the taxing district is wholly located, when the taxing district is not wholly located within a city or town; or
For taxing districts located in more than one county, the county population change for the county in which the greatest total taxable assessed value of the taxing district for the prior assessment year is located.
For the purposes of this subsection (3), the annual percent increase in population is calculated to the nearest tenth of one percent, rounding up to the next tenth of one percent if the second decimal place of the annual percent increase is five or greater.
"Regular property taxes" has the meaning given it in RCW 84.04.140.
Upon a finding of substantial need, the legislative authority of a taxing district other than the state may provide for the use of a limit factor under this chapter of 103 percent or less. In districts with legislative authorities of four members or less, two-thirds of the members must approve an ordinance or resolution under this section. In districts with more than four members, a majority plus one vote must approve an ordinance or resolution under this section. The new limit factor is effective for taxes collected in the following year only.
The property tax limitation contained in this chapter shall be determined by the county assessors of the respective counties in accordance with the provisions of this chapter: PROVIDED, That the limitation for any state levy shall be determined by the department of revenue and the limitation for any intercounty rural library district shall be determined by the library district in consultation with the respective county assessors.
By September 1, 2023, and by September 1st every year thereafter, the department of revenue must provide county assessors the limit factors necessary for the county assessor to comply with subsections (1) and (3) of this section.
By October 1, 2023, and by October 1st every year thereafter, the county assessor must determine the limit factor applicable to each taxing district in their county and notify each taxing district of the determination. However, for a taxing district located in more than one county, the assessor of the county with the most assessed value of the taxing district is subject to the requirements of this subsection (3).
This act applies to taxes levied for collection in 2024 and thereafter.
This act takes effect if chapter . . . (Senate Bill No. 5495 (creating a primary residence property tax exemption and renter's credit)), Laws of 2023, is enacted by August 1, 2023.