Levy Lid Lift

Contents

• Introduction
• Statutory Authority
• Ordinances, Propositions and Other Documents
• Articles
• MRSC Inquiries

Introduction

With the passage of Initiative 747, there only two ways for a jurisdiction to increase property taxes by more than one percent (or the lesser of the IPD and one percent for jurisdictions with a population of 10,000 or more). Some jurisdictions have taken less than the maximum increase they could have in the past and have "banked" capacity that they can use. A jurisdiction that does not know whether it has banked capacity should ask its county assessor.

The other way to increase property taxes by more than this amount is to do a levy lid lift under RCW 84.55.050.

For a discussion of levy lid lifts, including the new 2008 legislation, that require that a jurisdiction’s intention to make a lid lift "permanent" be stated in the ballot title, read the MRSC article, "Levy Lid Lift." (25 KB). Remember, local governments are limited in what they can do to support (and oppose) a ballot measure. We have four articles that address this issue.

The Department of Revenue has recently written an information bulletin (198 KB) that will help you craft a ballot title.

Statutory Authority

• RCW 84.55.050, as amended by ESB 6641, ch. 319, Laws of 2008

Ordinances, Propositions and Other Documents

Note: RCW 84.55.050(1) specifies that the dollar rate proposed be stated in the ballot title. If you wish to give the increase in the rate, you may do that also.

• Bellevue Proposition No. 1 (file includes copy of Ordinance No. 5828). Provides for submission to the voters of two propositions, authorizing the city to: 1) lift the levy lid for a total of 20 years for park acquisition and development and 2) lift the levy lid permanently for park maintenance. November 2008 election.
• Bremerton Proposition No. 1 (45 KB) . Provides for a lid lift to $2.12 per $1,000 assessed valuation in 2008 for parks and sidewalks, with the lift remaining in effect for the next five years. November 2007 election.
• Eatonville Ordinance No. 2008-10 (337 KB), providing for the submission at a special election for authority to levy regular property taxes to support fire and emergency services, 2008
• King County Fire Protection District No. 2 Proposition No. 1 (file includes Resolution No. 2007-03). Provides for a lid lift to $1.50 per $1,000 dollars assessed valuation in 2008 with increases up to six percent in each of the five subsequent years. August 2007 election.
• King County Fire Protection District No. 37 Proposition No. 1 (file includes Resolution No. 332). Provides for a levy lid lift for fire and emergency services. Lifts lid to $1.50 per $1,000 assessed valuation in the first year with increases in each of the succeeding five years of amount up to the percentage change in the CPI -U in the Seattle-Tacoma-Bremerton area as reported each year in August. August 2007 election.
• King County Public Hospital District No. 4 Proposition No. 1 (includes Resolution No. 311-0523). Provides for a lid lift for health care services and facilities to $0.75 per $1,000 assessed valuation in 2008 with the 2008 levy to used for computing legal limits on levies in subsequent years. August 2007 election.
• Redmond Proposition No. 1 (file includes Resolution No. 1250). Provides for a lid lift for public safety purposes to $1.53 per $1,000 assessed valuation in 2008, with the 2008 levy becoming the base on which levies in subsequent years would be calculated. August 2007 election.
• SeaTac Proposition No. 1. (35 KB). Provides for a lid lift to $3.10 per $1,000 assessed valuation in 2007 for funds to operate, equip and construct facilities for fire protection and emergency services, with increases in the levy by four percent for the next five years. The final levy in 2012 shall be used as the basis for future increases under RCW 84.55.010. September 2006 election.
• Seattle Proposition No. 1 (file includes Ordinance No. 122737). Provides for a lid lift in 2009 for improvements to the Pike Place Market. The lift would last for a total of six years. November 2008 election.
• University Place Proposition 1 (783 KB) providing for levy lid lift in 2007 to $1.60 per $1,000 assessed valuation for capital improvements (sidewalks, streetlights, parks and trails). The 2007 levy would be used as the base to compute future levies. November 2006 election.

Articles

• "Chart of Levy Lid Lift Mechanisms," (183 KB), prepared by Alice Ostdiek, Foster Pepper.
• Guidelines for Local Government Agencies in Election Campaigns, (330 kb) Public Disclosure Commission Interpretation No. 04-02, September 28, 2004, Revised May 31, 2006
• "Levy Lid Lifts," prepared by Judith Cox, MRSC Public Finance Consultant, October 2008.
• Levy Lid Lifts, Property Tax Information, Department of Revenue, September 2004. This document is currently being revised by DOR
• Statutory Limits On the Use of Public Funds/Facilities To Assist of Oppose Campaigns, Particularly Campaigns Involving Ballot Measures or Initiatives," (85 KB) Attorney General Memorandum, September 13, 2001
• Use of Public Facilities to Support or Oppose Ballot Propositions - Prepared by MRSC Legal Staff, July 1999
• What Can and Can't Local Government Officials and Employees Do to Support or Oppose an Initiative Measure - Prepared by MRSC Legal Staff, August 2000

MRSC Inquiries - Levy Lid Lift Q&A

• Q: Is there a statutory limitation on how soon a levy lid lift proposition can be brought before the voters after a previous unsuccessful vote?
  
  A: No, the statute governing levy lid lifts, RCW 84.55.050, does not impose any limitations on how soon a lid lift proposition may be placed on the ballot after an unsuccessful vote. Obviously, there are political considerations.

• Q: We have "banked" capacity, but would rather do a levy lid lift than use that capacity. The council thinks the voters would approve a lid lift for their swimming pool and they want to save their "banked" capacity for the future. Can we do this?
  
  A: According to Kathy Beith of the Department of Revenue, "no."
  
  Taxing jurisdictions must understand that "banked" capacity is not kept separate from their regular levy, i.e., there aren't "green" dollars that are the regular levy and "red" dollars that are banked capacity. There is simply a dollar amount that is the maximum allowable levy. (This number is on the levy worksheet they get each year from their assessor.)
  
  If a city is levying less than that, it has "banked" capacity. As long as the extra amount they want to levy to cover the cost of the pool does not result in their exceeding their maximum allowable levy, it is done with a simple majority vote of the council at the time they set their levy for next year. Only if they want to levy more that (assuming they can do so because they are still below their maximum levy rate) can they do a levy lid lift. Note that there is no separate ordinance to "unbank" capacity. It is simply done by putting the desired dollar amount, which reflects the "unbanking," in their standard levy ordinance.
  
  So, to summarize, you cannot save "banked" capacity by doing a levy lid lift. The banked capacity has to be used first.

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