Assessors see trouble in proposed tax break

A Senate proposal would raise the income cap for a property tax exemption for people 61 and up. Small counties anticipate the break would hit other taxpayers hard.

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A Senate proposal to raise the income level at which seniors qualify for property tax exemptions has raised concerns among assessors in Eastern Washington’s rural counties.

The bill, whose sponsors include Sen. Mike Hewitt, R-Walla Walla, would exempt more people over age 61 and disabled veterans from a portion of property taxes.

Columbia County Assessor Christine Miller said that under the proposal, virtually everyone in her county over age 61 would qualify. She estimated this would result in an annual property tax increase of approximately $300 for households who do not have exemptions.

“I don’t feel that anybody can afford it, honestly,” she said.

While intended to benefit seniors, Garfield County Assessor Laura Smith said SB 5108 would hit rural counties especially hard.

“Every time somebody gets an exemption, their tax burden doesn’t go away. It’s shifted on to other taxpayers,” she said.

Larger counties can absorb that burden more easily, but Garfield County has only 2,266 residents, according to the 2010 census. While the number of people over age 61 is not recorded, 23 percent of the county is over 65, compared with just 12 percent statewide. Columbia County faces a similar dilemma, with a population just over 4,000, 24 percent of whom are seniors.

Currently, property tax exemptions have a three-tiered structure, where households earning under $25,000, $30,000 and $35,000 are eligible for different levels of exemption. The bill raises the threshold for each level of exemption by $5,000, meaning that the maximum income to qualify for some exemption would be $40,000.

Hewitt said via email that the bill, SB 5108, fit with his goal of protecting senior citizens. The last change to exemption levels was made in 2004, meaning the proposed adjustment isn’t enough to keep pace with inflation.

The fiscal analysis for the bill estimates the average annual property tax assessment to increase by $1.10. However, assessors in Walla Walla, Columbia and Garfield counties said the burden won’t be felt equally across the state.

Assessors said the exemption structure doesn’t adequately consider conditions in Eastern Washington, where median incomes tend to be lower.

For instance, the median income in Columbia County is just $38,474 per year, compared to $65,383 in King County.

Even in larger Walla Walla County, Assessor Debra Antes said the impacts would be noticeable. The bill would shift some households currently receiving exemptions into a higher level, decreasing their tax burden even further. Antes estimated the tax burden for these shifts at approximately $159,000 annually, and noted this does not include households that would become eligible for exemptions at the increased $40,000 cap.

“It’s a hard one, because I realize that there are people out there who need this,” said Antes. “The median income of the county is just so low.”

All three assessors said that a system which considers median county income, rather than establishing a statewide standard, would be best-suited to Eastern Washington.

Hewitt explained that a uniform tax code is simpler to administer.

“One concern with basing it on county-level income is that some people currently receiving the exemption would be disqualified due to their county’s median income, unless they were somehow grandfathered in,” he said. “That said, it is an idea worth looking into.”

SB 5108 was proposed in the State Senate on Jan. 18, and has been referred to the Ways and Means committee.

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