(1)
Introduction. This rule describes the process used to reduce or eliminate a levy rate when the assessor finds the statutory aggregate dollar rate limit exceeds $5.90. The aggregate of all regular levy rates of junior taxing districts and senior taxing districts, other than the state and other specifically identified districts, cannot exceed $5.90 per $1,000 of assessed value in accordance with RCW
84.52.043. When the county assessor finds that this limit has been exceeded, the assessor recalculates the levy rates and establishes a new consolidated levy rate as described in RCW
84.52.010. The $5.90 statutory aggregate dollar rate limit is reviewed before the constitutional one percent limit.
(2) Levies not subject to statutory aggregate dollar rate limit. The following levies are not subject to the statutory aggregate dollar rate limit of $5.90 per $1,000 of assessed value:
(a) Levies by the state;
(b) Levies by or for port or public utility districts;
(c) Excess property tax levies authorized in Article VII, section 2 of the state Constitution;
(d) Levies by or for county ferry districts under RCW
36.54.130;
(e) Levies for acquiring conservation futures under RCW
84.34.230;
(f) Levies for emergency medical care or emergency medical services under RCW
84.52.069;
(g) Levies for financing affordable housing under RCW
84.52.105;
(h) The portion of metropolitan park district levies protected under RCW
84.52.120;
(i) The portions of levies by fire protection districts and regional fire protection service authorities protected under RCW
84.52.125;
(j) Levies for criminal justice purposes under RCW
84.52.135;
(k) Levies for transit-related purposes by a county under RCW
84.52.140;
(l) The protected portion of the levies imposed under RCW
84.52.816 by flood control zone districts;
(m) Levies imposed by a regional transit authority under RCW
81.104.175; and
(n) Levies imposed under RCW
36.69.145, by a park and recreation district located on an island and within a county with a population exceeding 2,000,000, for collection in calendar years 2022 through 2026.
(3)
Consolidated levy rate limitation. RCW
84.52.010 explains the order in which the regular levies of taxing districts will be reduced or eliminated by the assessor to comply with the statutory aggregate dollar rate limit of $5.90 per $1,000 of assessed value. The order in the statute lists which taxing districts are the first to either reduce or eliminate their levy rate. Taxing districts that are at the same level are grouped together in tiers. Reductions or eliminations in levy rates are made on a pro rata basis within each tier of taxing district levies until the consolidated levy rate no longer exceeds the statutory aggregate dollar rate limit of $5.90.
As opposed to the order in RCW
84.52.010, which lists the taxing districts that are the first to have their levy rates reduced or eliminated, this rule is written in reverse order; that is, it lists the taxing districts that must be first either fully or partially funded. If the statutory aggregate dollar rate is exceeded, then the levy rates for taxing districts within a particular tier must be reduced or eliminated on a pro rata basis. The proration factor, which is multiplied by each levy rate within the tier, is obtained by dividing the dollar rate remaining available to the taxing districts in that tier as a group by the sum of the levy rates originally certified by or for all of the taxing districts within the tier.
(a) Step one: Total the aggregate regular levy rates requested by all affected taxing districts in the tax code area. If this total is less than $5.90 per $1,000 of assessed value, no levy rate reduction or elimination is necessary. If this total levy rate is more than $5.90, the assessor must proceed through the following steps until the aggregate dollar rate is brought within that limit.
(b) Step two: Subtract from $5.90 the levy rates of the county, including the rate of any separate property tax levy as described in RCW
84.55.135, and the county road district if the tax code area includes an unincorporated portion of the county, or the levy rates of the county and the city or town if the tax code area includes an incorporated area, as applicable.
(c) Step three: Subtract from the remaining levy capacity the levy rates, if any, for fire protection districts under RCW
52.16.130, regional fire protection service authorities under RCW
52.26.140 (1)(a), library districts under RCW
27.12.050 and
27.12.150, the first 50 cents per $1,000 of assessed value for metropolitan park districts created before January 1, 2002, under RCW
35.61.210, and the first 50 cents per $1,000 of assessed value for public hospital districts under RCW
70.44.060(6).
(i) If the balance is zero, there is no remaining levy capacity for any other junior taxing district at a lower tier and their levies, if any, must be eliminated.
(ii) If the balance is less than zero, then the levies within this tier must be reduced on a pro rata basis until the balance is zero. After prorationing, there is no remaining levy capacity for any other junior taxing districts at a lower tier and their levies, if any, must be eliminated.
(iii) If the remaining balance is greater than zero, this amount is available to the remaining junior taxing districts at a lower tier and the assessor should proceed on to step four.
(d) Step four: Subtract from the remaining levy capacity the levy rates, if any, for fire protection districts under RCW
52.16.140 and
52.16.160, and regional fire protection service authorities under RCW
52.26.140 (1)(b) and (c). However, under RCW
84.52.125, a fire protection district or regional fire protection service authority may protect up to 25 cents per $1,000 of assessed value of the total levies made under RCW
52.16.140 and
52.16.160, or
52.26.140 (1)(b) and (c) from reduction or elimination.
(i) If the balance is zero, there is no remaining levy capacity for any other junior taxing districts at a lower tier and their levies, if any, must be eliminated.
(ii) If the balance is less than zero, then the levies within this tier must be reduced on a pro rata basis until the balance is zero. It is at this point that the provisions of RCW
84.52.125 come into play; that is, a fire protection district or regional fire protection service authority may protect up to 25 cents per $1,000 of assessed value of the total levies made under RCW
52.16.140 and
52.16.160, or
52.26.140 (1)(b) and (c) from reduction or elimination under RCW
84.52.043(2), if the total levies would otherwise be reduced or eliminated under RCW
84.52.010 (3)(a)(iii) with respect to the $5.90 per $1,000 of assessed value limit. After prorationing, there is no remaining levy capacity for any other junior taxing district at a lower tier and their levies, if any, must be eliminated.
(iii) If the remaining balance is greater than zero, this amount is available to the remaining junior taxing districts at a lower tier and the assessor should proceed on to step five.
(e) Step five: Subtract from the remaining levy capacity the levy rate, if any, for the first 50 cents per $1,000 of assessed value of metropolitan park districts created on or after January 1, 2002, under RCW
35.61.210.
(i) If the balance is zero, there is no remaining levy capacity for any other junior taxing districts at a lower tier and their levies, if any, must be eliminated.
(ii) If the balance is less than zero, then the levies within this tier must be reduced on a pro rata basis until the balance is zero. After prorationing, there is no remaining levy capacity for any other junior taxing district at a lower tier and their levies, if any, must be eliminated.
(iii) If the remaining balance is greater than zero, this amount is available to the remaining junior taxing districts at a lower tier and the assessor should proceed on to step six.
(f) Step six: Subtract from the remaining levy capacity the 25 cent per $1,000 of assessed value levy rate for metropolitan park districts if it is not protected under RCW
84.52.120, the 25 cent per $1,000 of assessed value levy rate for public hospital districts under RCW
70.44.060(6), and the levy rates, if any, for cemetery districts under RCW
68.52.310 and all other junior taxing districts if those levies are not listed in steps three through five or seven or eight of this subsection.
(i) If the balance is zero, there is no remaining levy capacity for any other junior taxing districts at a lower tier and their levies, if any, must be eliminated.
(ii) If the balance is less than zero, then the levies within this tier must be reduced on a pro rata basis until the balance is zero. After prorationing, there is no remaining levy capacity for any other junior taxing district at a lower tier and their levies, if any, must be eliminated.
(iii) If the remaining balance is greater than zero, this amount is available to the remaining junior taxing districts at a lower tier and the assessor should proceed on to step seven.
(g) Step seven: Subtract from the remaining levy capacity the levy rate, if any, for flood control zone districts other than the portion of a levy protected under RCW
84.52.816.
(i) If the balance is zero, there is no remaining levy capacity for any other junior taxing districts at a lower tier and their levies, if any, must be eliminated.
(ii) If the balance is less than zero, then the levies within this tier must be reduced on a pro rata basis until the balance is zero. After prorationing, there is no remaining levy capacity for any other junior taxing district at a lower tier and their levies, if any, must be eliminated.
(iii) If the remaining balance is greater than zero, this amount is available to the remaining junior taxing districts at a lower tier and the assessor should proceed on to step eight.
(h) Step eight: Subtract from the remaining levy capacity the levy rates, if any, for city transportation authorities under RCW
35.95A.100, park and recreation service areas under RCW
36.68.525, park and recreation districts under RCW
36.69.145, except a park and recreation district described in subsection (2)(n) of this rule, and cultural arts, stadium, and convention districts under RCW
67.38.130.
(i) If the balance is zero, there is no remaining levy capacity for other junior taxing districts at a lower tier and their levies, if any, must be eliminated.
(ii) If the balance is less than zero, then the levies within this tier must be reduced on a pro rata basis until the balance is zero. After prorationing, there is no remaining levy capacity for any other junior taxing district at a lower tier and their levies, if any, must be eliminated.
(iii) If the remaining balance is greater than zero, this amount is available to the remaining junior taxing districts at a lower tier and the assessor should proceed on to step nine.
(i) Step nine: Subtract from the remaining levy capacity the levy imposed, if any, for cultural access programs under RCW
36.160.080 until the remaining levy capacity equals zero.
(4) Example.
DISTRICT | ORIGINAL LEVY RATE | PRORATION FACTOR | FINAL LEVY RATE | REMAINING LEVY CAPACITY |
County County Road | 1.8000 2.2500 | NONE NONE | 1.8000 2.2500 | 1.850 |
Library Fire Hospital | .5000 .5000 .5000 | NONE NONE NONE | .5000 .5000 .5000 | .350 |
Fire | .2000 | NONE | .2000 | .150 |
Cemetery Hospital | .1125 .2500 | .4138 .4138 | .0466 .1034 | |
Totals | 6.1125 | | 5.90 | |
(a) Beginning with the limit of $5.90, subtract the original certified levy rates for the county and county road taxing districts leaving $1.85 available for the remaining districts.
(b) Subtract the total of the levy rates for each district within the next tier: The library's $.50, the fire district's $.50 and the hospital's $.50 = $1.50, which leaves $.35 available for the remaining districts.
(c) Subtract the fire district's additional $.20 levy rate, which leaves $.15 available for the remaining districts.
(d) The remaining $.15 must be shared by the cemetery and the hospital districts within the next tier of levies. The cemetery district originally sought to levy $.1125 and the hospital district sought to levy $.25. The proration factor is arrived at by dividing the amount available ($.15) by the original levy rates ($.3625) requested within that tier resulting in a proration factor of .4138. Finally, the original levy rates in this tier of $.1125 and $.25 for the cemetery and hospital, respectively, are multiplied by the proration factor.