Tight Commercial Property Picture Could Bump up Residential Taxes for Some in King County in 2012

Some residential taxpayers in King County might have to pay more money next year if income attributed to commercial properties dropped in 2010, King County Assessor Lloyd Hara said Wednesday.

But Sammamish homeowners are likely to escape this scenario because the city of 45,780 people has a high percentage of houses and not office towers, warehouses or other commercial property.

Speaking before the Kiwanis Club of Sammamish, Hara explained that this picture is possible in areas that have a large commercial footprint, such as downtown Seattle, Bellevue and the Kent Valley.

The main reason is because the state has a "budget based" or "revenue" property tax system. Under this model, a taxing district - which could be a city, school district, library system or other government entity - submits its adopted budget and the money needed to Hara's office.

"Then we set the tax levy," he said, adding that many states use a fixed tax levy. "In this state, our levy floats."  

The setting of this levy rate needs to meet adopted budgets regardless of assessed property values. Residential and commercial property taxes are two key sources to support government and schools. Income attributed to commercial property can include rent and vacancies.

The 2012 tax year comes into play because his office uses a cutoff date of Jan. 1 of each year - or essentially the past 12 months - as the assessment period. For next year, that would be 2010.

"Commercial values have dropped faster than residential," he said at one point during his talk, referring to recent years.

When asked by Sammamish Patch whether that means residential property taxes could go up in 2012 because of the bumpy commercial property picture, he said: "Probably, yes."

But it also depends on the specific taxing district for a homeowner. The three main taxing entities in Sammamish are the , and .

Some residents in the eastern part of Sammamish live in the Snoqualmie Valley School District.

Still, Sammamish homeowners this year saw an average tax increase of 2.5 percent, or $165.17, compared to 2010. Some increases in recent years for Sammamish homeowners can be attributed to voter-approved school measures.

Sammamish has 15,736 housing units, according to the U.S. Census Bureau.

After talking with the community group, Hara explained that the residential-commercial property scenario is a "mixed bag" and it does not lend itself to making an easy "flat statement" for everyone in the county.

In Seattle, the picture is easier to forecast given the concentration of office buildings in the downtown core and the difficulty owners are having in keeping them occupied.

"Sammamish does not have very much commercial properties. The impact could be almost negligible," he said. "If the commercial in Sammamish is doing well, then it will have no impact."

As of Wednesday, Hara did not think this residential-commercial property scenario would take place for Sammamish residents who live in the Issaquah or Lake Washington school districts.

Redmond is home to and a large Nintendo presence. "But guess what? They're all filled up," he said, referring to occupancy. "They're doing well."

While Issaquah has commercial real estate, the percentage is not as large as Kent Valley, which has warehouses used to store goods in regional and global trade.

Sammamish residents in the Lake Washington School District, though, will see property taxes increase next year because of the $65.4 million voter-approved levy that was passed in February.

District officials have said the owner of a $500,000 home would pay $13 per month over six years, an average of about $0.28 per thousand dollars of assessed value. But the amount slides from $0.31 in 2012 to $0.26 in 2017.

About $20 million of that money is slated to go to for more classroom space and a renovated cafeteria.

By late October, Hara said his office should have a more firm idea which areas in King County might see higher residential taxes in 2012.

Since February, when property tax notices are sent, Hara and his staff have been talking to residents and groups about why taxes for some might have gone up while assessed values dropped.

Tax levies were one of the main reasons for some residential property owners paying more this year. While propertyowners in the Tukwila School District saw a nearly 11 percent tax increase this year, those in the Vashon Island School District had a decrease of 2 percent, according to Hara's office. 

In King County, more than half of all taxes go to support public schools while 18 percent goes to city government. King County government collects 18 percent and the Port of Seattle receives 2 percent, according to Hara's office.

Smaller amounts go to fire and hospital districts, as well as the King County Library System.

Hara encourages residents to contact his office at 206-296-7300 or assessor.info@kingcounty.gov if they have questions about property assessments. "If you have questions about your valuations, call us first," he said.

His office also has posted information on its website.

Residents also can use his office's online eReal property tool to see the information about their property that King County government uses to determine assessed value. Homes are physically inspected once every six years.

There have been cases in which homeowners have called his office and a county staff member has inspected property to get more recent information for its database, he said.

Sammamish resident Steve Johnston, 59, is helping to take care of his parents, who own a house in the city. His mom, he said, remarked that she was surprised that her property tax did not go up as high this year, compared to 2010.

"I don't think private homeowners should pick up the extra amount," he said, when discussing what Hara outlined. "Hopefully, it won't go too much higher."

 Source: King County Department of Assessments