Started by John Waugh
Oct 7, 2023
Oct 7, 2023
12
Clarification of Hospital Levy Lid Lift Vote
Oct 7, 2023
First, let me be clear that this note is neither an endorsement nor a criticism of the Lopez Island Hospital District's (LIHD) proposed tax levy lid lift to be voted on this November.
Rather, it is meant to clarify what I believe is a difficult point to understand, in the language surrounding the proposal. I take no opinion here as to the approval or disapproval of the measure itself.
The following statement has been made, with slight variations, in Lopez Rocks, Islands Weekly, LIHD's Health Matters newsletter, and other places:
"When the Hospital District was created, voters approved a levy rate of $.75 per $1,000.00 of assessed property valuation. Since then, although property values have risen, a 2001 state law limits tax revenue increases to just 1% above the prior year. Thus, the levy rate available to the District has dropped to $.48 per $1,000.00 valuation." The LIHD titles this paragraph as, "Why is LIHD asking voters to restore the regular property tax level..."
This seems to imply the "regular" tax level is the initial $.75 per $1000, but "regular" in this case is meaningless, and therefore misleading.
In 2018, when Lopez Island was assessed at $1,111,549,689, the $.75 per $1000 meant $833,662 went to the LIHD for their associated costs. Now, the levy rate is $.48, BECAUSE Lopez is currently assessed higher. BUT the LIHD STILL gets its $833,662 per year (increased by the 1% per year mentioned above). The levy AMOUNT in dollars stays the same even though the levy PERCENT is lower (due to the increase in Lopez Island's property assessment). They still get their full piece of pie, even though the pie is bigger.
So it is not meaningful to ask voters to "restore the regular property tax level," as LIHD is STILL getting the "regular" property tax level in DOLLARS (+1%/year). There is no "regular" tax percentage level. If the .75 per 1000 tax RATE is to be used as "regular" today, this results in levy dollars of $1,243,719 going to LIHD every year (+1% each year) for the next 6 years (based on 2022 assessment figures for Lopez).
Current-year $$ going to LIHD are approximately $833,662, plus those 1%/year increases, and this WILL continue even if the lid lift doesn't pass. New $$ if the levy lid lift passes equal approximately $1,243,719 each year for the next 6 years.
Another way of saying this is, LIHD feels they need an additional $400,000 per year to pay for the factors they list in the news letter. To me, this gives better data with which to evaluate the levy lid lift request, in dollars rather than percentages.
Hope this gives a clearer picture of what LIHD is asking, and helps in voter decision-making. Please, folks, if I've made any errors my logic, let me know!
Rather, it is meant to clarify what I believe is a difficult point to understand, in the language surrounding the proposal. I take no opinion here as to the approval or disapproval of the measure itself.
The following statement has been made, with slight variations, in Lopez Rocks, Islands Weekly, LIHD's Health Matters newsletter, and other places:
"When the Hospital District was created, voters approved a levy rate of $.75 per $1,000.00 of assessed property valuation. Since then, although property values have risen, a 2001 state law limits tax revenue increases to just 1% above the prior year. Thus, the levy rate available to the District has dropped to $.48 per $1,000.00 valuation." The LIHD titles this paragraph as, "Why is LIHD asking voters to restore the regular property tax level..."
This seems to imply the "regular" tax level is the initial $.75 per $1000, but "regular" in this case is meaningless, and therefore misleading.
In 2018, when Lopez Island was assessed at $1,111,549,689, the $.75 per $1000 meant $833,662 went to the LIHD for their associated costs. Now, the levy rate is $.48, BECAUSE Lopez is currently assessed higher. BUT the LIHD STILL gets its $833,662 per year (increased by the 1% per year mentioned above). The levy AMOUNT in dollars stays the same even though the levy PERCENT is lower (due to the increase in Lopez Island's property assessment). They still get their full piece of pie, even though the pie is bigger.
So it is not meaningful to ask voters to "restore the regular property tax level," as LIHD is STILL getting the "regular" property tax level in DOLLARS (+1%/year). There is no "regular" tax percentage level. If the .75 per 1000 tax RATE is to be used as "regular" today, this results in levy dollars of $1,243,719 going to LIHD every year (+1% each year) for the next 6 years (based on 2022 assessment figures for Lopez).
Current-year $$ going to LIHD are approximately $833,662, plus those 1%/year increases, and this WILL continue even if the lid lift doesn't pass. New $$ if the levy lid lift passes equal approximately $1,243,719 each year for the next 6 years.
Another way of saying this is, LIHD feels they need an additional $400,000 per year to pay for the factors they list in the news letter. To me, this gives better data with which to evaluate the levy lid lift request, in dollars rather than percentages.
Hope this gives a clearer picture of what LIHD is asking, and helps in voter decision-making. Please, folks, if I've made any errors my logic, let me know!
Comment by John Waugh
Oct 14, 2023
Oct 14, 2023
0
Transparency. That's all I'm asking for.
Here is a simplified example that may clarify what my issue is. Dollars are wildly reduced, and approximations used, but the principles are the same.
In 2017, the new LIHD commissioners think ... Read All
Here is a simplified example that may clarify what my issue is. Dollars are wildly reduced, and approximations used, but the principles are the same.
In 2017, the new LIHD commissioners think ... Read All
Comment by Steve Snowden
Oct 13, 2023
Oct 13, 2023
1
OK, Dan, I'll bite. It never occurred to me that the Open Space designation on our pasture was at all relevant to my support for our hospital district. First, Open Space designations on parcels are public records freely and easily accessible through the County's Polaris website. Second, the Open Space designation reduces our taxable assessment by only 4.5%. I note in passing that our taxable assessed value went up by 69% over the last two years, at the very high end of assessment increases on Lopez with no improvements to the property, so I’m pretty sure that we are paying our fair share. Third, I would support the levy lid increase independent of the assessed value of our property. A reasonably funded clinic, along with having the pharmacy, fire/EMS, library, and school are vital to maintain our quality of life on Lopez.
But, since you brought it up, let me digress about the Open Space designation. When we bought our place in 1998 it was encumbered by the designation. To take it out of Open Space requires the payment of the previous seven years of the taxes that were reduced, along with 12% interest per year on the amounts. It works out that if you receive a yearly $100 reduction to your taxes it would cost $1,130 to take the property out of the designation. Quite a motivation to leave it in the program.
In a situation like ours, the Open Space designation only reduces the assessed value of the land, and then only the portion of the land that is farmland. The improvements, the land that the improvements are on, and our woodlot are taxed at their full assessed value. The largest contribution to the land value of a parcel comes when it becomes buildable, which is why a 20-acre parcel is not worth 20 times that of a one-acre parcel. For our land, the non-farm homesite is attributed nearly half of the total land value even though it is less than one quarter of the taxable acreage. The open Space Farm Conservation reduction that we receive is 30% on slightly more than one half of the total land value.
The Open Space program is authorized by the Washington State Open Space Taxation Act and administered by the county.
From the document:
https://dor.wa.gov/sites/default/files/2022-02/OpenSpace.pdf
"The Open Space Taxation Act, enacted in 1970, allows property owners to have their open space, farm and agricultural, and timber lands valued at their current use rather than at their highest and best use. The Act states that it is in the best interest of the state to maintain, preserve, conserve, and otherwise continue in existence adequate open space lands for the production of food, fiber, and forest crops and to assure the use and enjoyment of natural resources and scenic beauty for the economic and social well-being of the state and its citizens."
But, since you brought it up, let me digress about the Open Space designation. When we bought our place in 1998 it was encumbered by the designation. To take it out of Open Space requires the payment of the previous seven years of the taxes that were reduced, along with 12% interest per year on the amounts. It works out that if you receive a yearly $100 reduction to your taxes it would cost $1,130 to take the property out of the designation. Quite a motivation to leave it in the program.
In a situation like ours, the Open Space designation only reduces the assessed value of the land, and then only the portion of the land that is farmland. The improvements, the land that the improvements are on, and our woodlot are taxed at their full assessed value. The largest contribution to the land value of a parcel comes when it becomes buildable, which is why a 20-acre parcel is not worth 20 times that of a one-acre parcel. For our land, the non-farm homesite is attributed nearly half of the total land value even though it is less than one quarter of the taxable acreage. The open Space Farm Conservation reduction that we receive is 30% on slightly more than one half of the total land value.
The Open Space program is authorized by the Washington State Open Space Taxation Act and administered by the county.
From the document:
https://dor.wa.gov/sites/default/files/2022-02/OpenSpace.pdf
"The Open Space Taxation Act, enacted in 1970, allows property owners to have their open space, farm and agricultural, and timber lands valued at their current use rather than at their highest and best use. The Act states that it is in the best interest of the state to maintain, preserve, conserve, and otherwise continue in existence adequate open space lands for the production of food, fiber, and forest crops and to assure the use and enjoyment of natural resources and scenic beauty for the economic and social well-being of the state and its citizens."
Comment by Dan Post
Oct 12, 2023
Oct 12, 2023
2
Steve, I think that anyone who supports the Levy Lid Lift should have full disclosure and say if they get a property tax break. Do you agree?
Comment by Dan Post
Oct 12, 2023
Oct 12, 2023
1
John, correct that we did not vote on the tax levy amount. The Hospital District was voted on and passed and then the HD board members set the amount. So your statement about us voting on the $.75 is not correct.
Comment by Rob Thesman
Oct 12, 2023
Oct 12, 2023
1
John, my recollection was that we voted on a levy rate of *up to 75¢ per 000*, and that we were being told leading up to the election that they would start collecting the tax at a lower levy rate. Then, shortly *after* the election the new commissioners decided to take the whole 75¢. As documented ... Read All
Comment by John Waugh
Oct 12, 2023
Oct 12, 2023
0
Comment by Steve Snowden
Oct 12, 2023
Oct 12, 2023
1
While I support the levy lid increase, I'm concerned that the levy lid increase is based on 2023 tax year assessments, where it will start to be applied on the 2024 tax year assessments. It is likely that countywide assessments will go up 15% to 20% on average for 2024. This difference isn't as bad as the road levy lid increase of last year but s ... Read All
Comment by Dan Post
Oct 11, 2023
Oct 11, 2023
2
John Waugh, in your posting you say, "When the Hospital District was created, voters approved a levy rate of $.75 per $1,000.00 of assessed property valuation". As I recall (I could be wrong) the voters did not vote to approve a levy rate of $.75 per thousand. If you read the comments of the Hospital District you will see that they are very caref ... Read All
Comment by Lopez Island Hospital District
Oct 9, 2023
Oct 9, 2023
1
The Lopez Island Hospital District Commissioners would like to thank Mr. Waugh for his thoughtful comments on Lopez Rocks. We agree the wording needs to be clarified. What the Hospital District is asking is for the originally approved property tax rate to be restored. He is perfectly correct that taxes received have been stable plus the 1% a year. This ... Read All
Comment by Robert Buchholz
Oct 9, 2023
Oct 9, 2023
1
While your math is correct, it does leave out an important factor. While levy increases have been limited to 1% since the initial levy passage in 2017, healthcare costs have had no such limit.
The levy rate increase proposed is from $0.48 per $1000 valuation to $0.75 per $1000 or a 56% increase. Over ... Read All
The levy rate increase proposed is from $0.48 per $1000 valuation to $0.75 per $1000 or a 56% increase. Over ... Read All
Comment by Diane Dear (T&D Farms)
Oct 8, 2023
Oct 8, 2023
1
Hi John, We think you have this exactly correct. Thank you so much for taking the time to write and post this! Todd Goldsmith and Diane Dear