deGavre: San Juan County Proposition No.2 - Truth, Obfuscation and Voter Rights Featured

Dear Editor,

I will vote against the levy lift (i) because the explanation of the levy lift in the Voters' Pamphlet is the converse of full and complete disclosure and (ii) because under Proposition No.2 we are openly ceding to the State Legislature our rights as voters to determine our future County taxes.

After pouring through the numbers with County officials - and with honest humility and great trepidation as I venture into a hall of mirrors - , let me try to explain what the County Prosecutor should have done in the Explanatory Statement and utterly failed to do so. The County has two important tax levies. One is for roads and the other for general purposes. Proposition No.2 relates to taxes for general purposes. Currently - for taxes paid in 2019 - the County is levying a rate of 78 cents per $1000 of assessed valuation for general purposes. Assuming the proposed levy passes, the rate will increase in 2020 by 9% to 85 cents. This increase will raise a new revenue of approximately $700,000, not the $1,700,000 as stated in the Voters' Pamphlet.

In years subsequent to 2020, the levy rate becomes a derived number and loses any substantive meaning. Under RCW 84.55 the State of Washington has set a ceiling of 1% per annum that the any county can increase its tax revenues, except for the effect of new construction and except for those years when county voters approve a tax increase - as will be the case for our County in 2120 when as noted above revenues will increase by 9%. Thus for 2021 the County must first determine its tax revenue ceiling under State law by multiplying the prior years actual tax revenues by 1% (adjusting for new construction). The effect of new construction is to allow the County to increase its revenues by very roughly 2% per annum. The County then divides this calculated dollar revenue ceiling by the then-current valuation for all properties in the County to determine the tax rate per $1000 assessed value. For example, if property valuations increase substantially in any year, then mathematically the assessed rate must decline; and vice versa.

In addition to the County's failure to properly explain the proposed levy lift, under Proposition No.2 the County's voters are abdicating their responsibilities. Under Proposition No.2, unlike other recent levy lifts, there will be no sunset provision. Thus the County and the voters will indefinitely cede control over future County taxes to the State Legislature and to RCW 84.55. If RCW 84.55 remains unchanged, then the County is limited to a ceiling of 1% (or 2% with new construction). If however the Legislature changes RCW 84.55 to increase the ceiling, as it has been discussing so doing, then the limit will increase to whatever the Legislature determines. And then our taxes will rise on a much higher trajectory without any vote by County tax payers. In this scenario, those given to conspiracy theories would feel vindicated.

From the taxpayers' perspective, deleting the 6-year sunset provision has both its risks and its benefits. The risks are real - the Legislature may at any time increase the 1% ceiling to something substantially higher. The benefits of 1% p.a. ad infinitum (or 2% with the effect of new construction) however are probably a mirage. Tax payers will innocently expect no sharp jump in taxes at sunset time with a new levy lift, as there will be in 2020 with the impact of Proposition No.2. But this is an hallucination because we all understand the County Council will in due course recognize the trap they have set for themselves and be back to us in five or so years for another levy lift. Thus in practice there will be a sunset date and that date will be when the County Council feels strapped for cash and in need of a sharp increase again in tax rates.

In sum, the County is presenting the proposed "levy lift" brazenly without full and accurate disclosure. Admittedly, the levy lift is a complex story, but that only heightens the importance of transparency and honesty on the part of the County. The County is also asking its voters to cede indefinitely responsibility for County taxes to Olympia. We should expect far higher standards from our County officials.

Robert T. deGavre

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