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9611 SE 36th Street
Mercer Island, WA 98040
Phone: 206.275.7783
Fax: 206.275.7787
Email: mifinance@mercergo. . .
Hours: 8:30 AM to 5:00 PM
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Property Taxes

Property taxes play an essential role in financing the operations of the City of Mercer Island, accounting for 45.0% of the City's total budgeted resources in the General Fund.  In 2011, Mercer Island property owners will pay $10.56 million in property taxes to the City to help fund the following: 

  • 24/7 police protection services
  • 24/7 fire suppression services
  • 24/7 emergency medical aid services
  • Park maintenance services
  • Fire apparatus replacement

Types of Property Tax

There are two general types of property tax levies collected by the City:  1) regular levy, and 2) voter approved levy.  The regular levy, which is $9.68 million in 2011, represents the base amount of property tax dedicated to funding the City’s general government operations.  Each year the amount of revenue to be raised from property taxes is determined based on forecasted expenditures, other revenue sources, and state law limitations.  Washington State law, which changed in 1997, limits the coming year’s regular levy to 101% of the current year's regular levy or to the rate of inflation, whichever is less. This is a big change from the original law which allowed taxing districts to levy 106% of the prior year’s regular levy.

 There are two types of voter approved levies, which represent property tax increases over and above the regular levy:  1) excess levy, and 2) levy lid lift.  An excess levy is dedicated to paying the principal and interest on debt issued for capital purchases or improvements.  Currently, the City doesn’t have any excess levies.  A levy lid lift is dedicated to funding specific general government operations and/or capital improvements.  Voter approved levies in the past have included land for parks and open space, new fire trucks, the remodeling of City Hall, and the maintenance and operation of Luther Burbank Park.  In November 2008, Mercer Island voters approved a Parks Maintenance and Operations Levy lid lift for 15 years.  The levy lid lift amount in 2011 is $882,000. 

2013 Levy  

A breakdown of the City's 2013 total levy relative to the prior year is provided below:
 

Levy Elements

2012 Total Levy

2013 Total Levy

Regular Levy:
    Prior Year Regular Levy
    Plus 1% Optional Increase

$9,734,845
$96,820

$9,906,215
$99,062
Subtotal $9,831,665 $10,005,277
    Plus New Construction Levy*
    Plus Refund Levy**
50,680
23,870
61,660
45,686
Total Regular Levy $9,906,215 $10,112,623
Levy Lid Lifts:
    2008 Parks M&o

890,820
 

899,728
662,000
Total Levy Lid Lifts $890,820 $1,561,728
Total Levy $10,797,035 $11,674,351
% Change over Prior Year*** 1.5% 7.1%

*The new construction levy, which is not subject to the annual 1.0% limitation, relates o the new and improved properties that have been added to the property tax roll.
** The refund levy represents the amount that was refunded to property owners who successfully appealed their property valuations by the King County Assessor’s Office.  To make the City whole, the amount of those refunds is re-levied in the following year.
*** The percentage change comparison of the total levy amount excludes the new construction and refund levies 
 

The following is a breakdown of the 2013 levy rates (per $1,000 assessed value) and the corresponding dollar amounts due to each of the nine taxing jurisdictions on Mercer Island based on a home with a $700,000 assessed value (King County median assesed value in 2012): 
 

Taxing Jurisdiction 2013 Levy Rate 2013 Levy Amount % of Total in 2013
School District $2.66197 $1,863 28.2%
State School Fund $2.56720 $1,797 27.2%
King County $1.54051 $1,078 16.3%
City of Mercer Island $1.43513 $1,005 15.2%
Library $0.56743 $397 6.0%
EMS $0.30000 $210 3.2%
Port $0.23324 $163 2.5%
Flood Zone $0.13210 $92 1.4%
Ferry District $0.00378 $3 0.0%
Total $9.44136 $6,609 100.0%


Of the $6,609 evy amount in 2013 only $1,005, or 15.2%, will go to the City.  Over half of the total levy amount is dedicated to education, with 28.2% going to the Mercer Island School District and 27.2% going to the State School Fund.  It is interesting to note that Island residents pay more property tax to King County than the City.
 
A common misunderstanding surrounds the property tax levy.  When the assessed value of Island properties increases significantly, there is not a corresponding increase in the amount of property tax received by the City.  Instead, the City’s levy rate actually decreases to ensure that the City’s regular levy amount (which is calculated by multiplying the Island’s total assessed valuation by the City’s levy rate) does not exceed the 101% annual limitation noted above.
 

Assessed Valuation 

For the period 2002-2012, the total assessed value of Mercer Island and the percentage change relative to the prior year is summarized below:
 

Year Assessed Value % Change
2002 $5,704,064,921 13.8%
2003 $6,277,164,020 10.0%
2004 $6,346,989,537 1.1%
2005 $6,425,909,873 1.2%
2006 $7,059,706,779 9.9%
2007 $7,840,048,891 11.1%
2008 $8,878,236,032 13.2%
2009 $10,310,337,535 16.1%
2010 $8,710,688,041 -15.5%
2011 $8,488,283,042 -2.6%
2012 $8,115,230,704 -4.4%
2013 $8,135,661,713 0.2%

 

Additional Information

For more detailed information on property taxes, see the 2011-2012 Budget Policy.



 

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