LYNNWOOD, Wash, November 4, 2021 – During the November 1 Work Session, Lynnwood City Council members listened to Finance Director Michelle Meyer go over Mid-Biennium Budget Modifications and the 2022 Property Tax Levy.
In the Mid-Biennium Budget portion of her presentation, Director Meyer explained that the Assessed Valuation (AV) “is the total evaluation of all the real property within the city.” She then presented Lynnwood 2021 AV, which totaled $7,953,751,038, and 2022’s currently projected AV of $8,479,270,508, a 6.6% overall increase from 2021.
Meyer also noted the relationship between AV and levy rates, saying, “as the assessed valuation goes up the levy rate starts falling based on the property tax laws at play in the state and the restrictions that we have, and so the new development you have — it actually starts offsetting the tax burden on the existing properties. So that growth really helps to ease the burden on existing taxpayers.” (Skip to 41:50 in the meeting to listen to her complete statement).
Later in the presentation, Meyer explained how property tax is spent in Lynnwood. Using a clever visual aid, she broke down how every dollar of property tax is allocated. “Like most places, the majority goes to the school district or to the state school fund; 67 cents out of every dollar goes to schools, basically,” she said.
“There’s 10 cents that goes to the regional fire authority. The county gets about 6 cents. We, the city, gets five cents out of every dollar. The RFA EMS levy gets 5 cents, and Sno Isle Library gets four cents. The hospital gets a penny, and then Puget sound regional transit gets about two cents out of that.
“For every dollar of property tax paid, you can see where it goes. Like most places, the majority goes to the school district or to the state school fund; 67 cents out of every dollar goes to schools, basically. There’s 10 cents that goes to the regional fire authority. The county gets about six cents. We, the city, gets five cents out of every dollar. The RFAEMS (Regional Fire Authority Emergency Medical Service) Levy gets five cents, and Snowaisle Library gets four cents. The Hospital gets a penny, and then Puget Sound Regional Transit gets about two cents out of that.”
After Meyer concluded, Council President George Hurst revisited Meyer’s earlier statement regarding development and property tax to ensure he understood the matter correctly. “So for 2022, we’re going to assess $4.5 million in property tax,” he said.
Hurst continued explaining how some assume that, with all the construction going on, much more money will be gained with property tax. “But really, we are setting it at 4.5 million. It doesn’t matter how much construction goes on. In fact, as [Meyer’s] indicated, the rate will go down, actually,” he clarified.
“We are not gaining any new property tax with all this new construction for 2022 because we’re saying it’s 4.5 million — that’s it. And then we all share, whether everything stays stagnant or whether we have lots of building going on, which we do — it’s still $4.5 million.”
“It’s not like we’re getting rich from all the construction that’s happening, correct?” Hurst said whose assertation was confirmed by Meyer.
Meyer then reiterated how the construction eases the burden on taxpayers. “We set the amount we collect; a lot of other places set the rate,” she said, explaining how that rate-based property tax can increase with more development.
“But the way it works in Washington is you set that amount, and so we do not actually take in anything more in the current year. And then next year, when we see whatever new valuation comes on, we still set by that amount, which is why that rate continues to fall as the values go up.”
To view the entire Work Session, click here.