By Richard Van Winkle, News of Mill Creek.
At their regular November 14, 2017, meeting the Mill Creek City Council voted unanimously to accept City Manager Rebecca Polizzotto’s recommendation to increase 2018 property and EMS (emergency medical services) taxes by the maximum allowable amount, which is 1%.
Polizzotto opened the public hearing by saying, “Clearly tax levies under Washington law are not necessarily intuitive or easy. There is a distinction here that is important. The resolution tonight is not to increase a levy rate, it is to increase a levy amount…”
“In Washington we do not have a rate based tax system, we have a budget based tax system. What that means is we are limited as a local government from generating more income over and above one percent than what we generated last year.”
Polizzotto justified the tax increases by saying that they were included in Mill Creek’s adopted 2017-2018 budget, and were necessary “to keep up with inflation and personnel cost increases.”
She went on to say that although the 2017 Q3 Financial Report did indicate that revenues were ahead of projections to date by $821,000, “This positive financial news only reflects the first nine months of the biennium.”
“Financial performance for the remaining 15 months of the biennium is an unknown and management believes it would be premature to alter the budget tax levy assumptions at this point in the biennium.”
“Revenues exceeding projections are largely comprised of one time revenues (building permits and plan check fees) or fluctuating revenues (sales tax and passport fees). Management believes the more prudent course of action is to: (1) use one time revenues for one time expenditures; and (2) remain conservative with respect to forecasting volatile revenue sources such as sales tax revenue and passport fee revenue.”
Polizzotto noted Mill Creek is incurring known additional personnel expenses “totaling $183,326 for the 2017-2018 biennium” and that only one third of these expenses will be covered by the tax increases.
She said there will be additional personnel expenses in 2018 as open positions such as the Deputy Chief of Police are filled.
The property tax increases the average Mill Creek homeowner should expect depends on the value of their home and how much the home’s assessed value has increased.
In 2017 the City of Mill Creek received $942.04 of property and EMS taxes from a homeowner with a $400,000 house according to Polizzotto’s presentation.
According to the Snohomish County Auditor’s Office, the average Mill Creek home’s assessed value increased 12.7% from 2017 to 2018. This means on average, a house assessed for $400,000 in 2017 is now assessed at $450,800 for 2018.
Based on the figures from Polizzotto’s presentation, a homeowner whose house is assessed for $450,800 will pay the City of Mill Creek $955.31, which is $13.28 more than was paid for a $400,000 house in 2017.
Polizzotto pointed out that in 2017 only 22% of a Mill Creek homeowner’s tax bill went to the city. The Everett School District, Washington State, Snohomish County, Sound Transit, and the Sno-Isle Library also take their share of the pie.