# A Critique Of The King County Tax Transparency Tool

Published: 10/23/2023; Updated: 10/29/2023

## Contents

Contents

- Summary
- Highlights
- Enumclaw SD Bond
- Fife SD Bond
- Kent SD Enrichment Levy
- Kent SD Capital Levy
- Skykomish SD Capital Levy
- Conclusion

## Summary

There are 39 counties in WA. The King County Assessor’s office is the only one in the state with a Tax Transparency Tool (TTT). Unfortunately, King County’s implementation is flawed and gives incorrect information. The TTT’s methodology is illogical and usually grossly underestimates the cost impact to property taxpayers. And that is the case for the school district tax measures for the November 7th 2023 election.

## Highlights

- The TTT is a poor financial tool for voters/taxpayers.
- The TTT fails to consider bond interest at all in its simplistic calculations. Bond interest and fees add another 50+% on top of bond principal. Taxpayers are obligated to pay all of it: bond principal, interest and fees.
- For the Enumclaw SD Bond, the true cost to local taxpayers is $103M (bond principal) + $51M (bond interest and fees) = $154M
- For the Fife SD Bond the true cost to local taxpayers is $204.8M (bond principal) + $125M (bond interest and fees) = $329.8M

- The TTT uses the guesstimated future tax rates from school districts but fails to incorporate what the school districts assumed for Total AV growth. The TTT fails to be consistent.
- The TTT does not need any future tax rate guesstimates. The TTT can and should use the proportional obligation methodology that the author uses and describes.
- The TTT underestimates the actual cost impacts to taxpayers which can mislead their decision making.
- The other 38 counties in WA appear to have decided that nothing is better than the TTT for their citizens. King County is the only county in WA with this TTT.
- The TTT’s methodology of trying to compare the last year of the previous multi-year levy with the first year of the new multi-year levy and calling that a cost analysis is nonsensical.
- The TTT is not providing an independent, reliable, logical, accurate analysis.
- A TILA (Truth In Lending Act) type law applicable to school district tax measures is needed.

## Enumclaw SD Bond

For an actual district tax area property with a 2023 AV of $647,000:

### The TTT shows the following cost impact:

For 2024 the TTT shows a cost impact of $423

See the next image with the red border.

### The TTT’s errors:

The TTT reps incorrectly came up with a 2024 tax rate of $0.73851

They calculated that rate themselves by taking only the stated bond principal ($103,000,000), dividing it by the stated bond repayment length of 21 years to obtain the average amount of bond principal per year. Then they used the preliminary 2024 Total AV of all district tax area properties ($6,641,349,380) to calculate the rate.

Total principal: $ 103,000,000

Number of years: 21

Average annual principal: $ 103,000,000 / 21 = $ 4,904,762

Preliminary 2024 Total AV: $ 6,641,349,380

2024 Rate: $ 4,904,762 / $ 6,641,349,380 * 1,000 = 0.73851

The TTT reps made a huge omission. They failed to take into account the large amount of the district’s bond management company’s estimated bond interest and fees. That adds another $51,000,000!

The total to taxpayers is: $103M + $51M = $154M

### The author’s logical calculator gives the following cost info:

2024 tax of $458 that increases to a maximum of $1,826 in 2037

Annual average cost of $889 for 15 years

Total cost of $13,336

Calculator for the Enumclaw SD’s Bond Measure

## Fife SD Bond

For an actual district tax area property with a 2023 AV of $454,000:

### The TTT shows the following cost impact:

The TTT shows a cost impact for 2024 of $610.89

See the next image with the red border.

### The TTT’s errors:

The TTT reps came up with a 2024 tax rate of 1.45105 They calculated that rate themselves by taking only the stated bond principal ($204,800,000), dividing it by the stated 21 years to obtain the average amount of bond principal per year. Then they used the preliminary 2024 Total AV of all district tax area properties ($6,720,872,762) to calculate the rate.

Total principal: $204,800,000

Number of years: 21

Average annual principal: $204,800,000 / 21 = $9,752,381

Preliminary 2024 Total AV: $6,720,872,762

2024 Rate: $9,752,381 / $6,720,872,762 * 1000 = 1.45105

The TTT reps made a huge omission. They failed to take into account the large amount of the district’s bond management company’s estimated bond interest and fees. That adds another $125,000,000!

The total to taxpayers is: $204.8M + $125M = $329.8M

### The author’s logical calculator gives the following cost info:

2024 tax of $598 that increases to a maximum of $2,469 in 2043

Annual average cost of $1,176 for 20 years

Total cost of $23,514

Calculator for the Fife SD’s Bond Measure

## Kent SD Enrichment Levy

For an actual district tax area property with a 2023 AV of $630,000:

### The TTT shows the following cost impact:

The TTT shows a cost impact for 2024 of -$188

See the next image with the red border.

### The TTT’s errors:

The TTT reps just used the 2024 tax rate of 1.72 that the school district listed in their resolution. That district’s rate is just a guesstimated rate. And it doesn’t apply until 2025. The county assessors don’t need any guesstimated rates from school districts. The county assessors have the preliminary 2024 Total AV for all properties. So they can calculate an accurate 2024 rate.

Total 2024 Enrichment Levy dollars to collect / 2024 Total AV * 1000

The district is assuming an annual 4% increase in Total AV for each of the next 2 years, 2024 and 2025. The TTT reps are using an 8% decrease for 2024. The TTT reps failed to be consistent.

These errors are why the TTT is incorrectly showing a negative cost impact.

### The author’s logical calculator gives the following cost info:

2024 tax of $0 since the district is running the levy a year too early.

Taxes won’t be collected on the measure until 2025.

Annual average cost would be $1,221 for 3 years from 2025 through 2027

Total cost of $3,662

Calculator for the Kent SD’s Enrichment Levy Measure

## Kent SD Capital Levy

For an actual district tax area property with a 2023 AV of $630,000:

### The TTT shows the following cost impact:

The TTT shows a cost impact for 2024 of -$95

See the next image with the red border.

### The TTT’s errors:

The TTT reps just used the 2024 tax rate of 0.66 that the school district listed in their resolution. That district’s rate is just a guesstimated rate. The county assessors don’t need any guesstimated rates from school districts. The county assessors have the preliminary 2024 Total AV for all properties. So they can calculate an accurate 2024 rate.

Total 2024 Enrichment Levy dollars to collect / 2024 Total AV * 1000

The district is assuming an annual 4% increase in Total AV for 2024. The TTT reps are using an 8% decrease for 2024. The TTT reps failed to be consistent.

These errors are why the TTT is incorrectly showing a negative cost impact.

### The author’s logical calculator gives the following cost info:

2024 tax of $431 increasing to $975 in 2027.

Annual average cost would be $811 for 4 years from 2024 through 2027

Total cost of $3,245

Calculator for the Kent SD’s Capital Levy Measure

## Skykomish SD Tech Levy

For an actual district tax area property with a 2023 AV of $263,000:

### The TTT shows the following cost impact:

The TTT shows a cost impact for 2024 of $67.40

See the next image with the red border.

### The TTT’s errors:

The reason the TTT is off by over 10% is that the TTT reps used the guesstimated future tax rate from the school district.

This proposed capital levy is for the same amount each year for the 4 years of the previous levy and the 4 years of the proposed new levy.

$75,000 each year: for years 2020, 2021, 2022, 2023 for the previous levy.

$75,000 each year: for years 2024, 2025, 2026, 2027 for the new proposed levy.

The actual taxes in dollars should be approximately the same for each parcel with perhaps a slight decrease (1-3%) due to new construction.

The district is assuming a 0% growth in Total AV over the life of the levy to help voters/taxpayers make an accurate cost impact in dollars.

The TTT reps are using the guesstimated rate from the district but not the district’s assumed Total AV growth. Again, the TTT reps failed to be consistent.

This is why the TTT is incorrectly showing an increase in cost impact for properties.

### The author’s logical calculator gives the following cost info:

2024 tax of $60. The tax will also be $60 for the other 3 years from 2025 through 2027.

Total cost of $239

Calculator for the Skykomish SD’s Tech Levy Measure

## Conclusion

The King County Assessor’s office at least has tried to provide taxpayers with a property tax cost impact tool. The other county assessors in the other 38 counties in WA have nothing similar to assist voters with their tax measure voting decisions.

The existing King County TTT implementation is, unfortunately, flawed and is not using sound accounting principles. All 39 county assessors in WA should collaborate and devise a Tax Transparency Tool that uses best practices in accounting and finance. It should follow the intent of the Truth In Lending Act (TILA). In fact, WA lawmakers should make a TILA type law to force the issue. Voters/taxpayers deserve a reliable property tax cost impact estimating tool.

School district levy measures are usually from 2 to 6 years. Bond measures are usually from 15 to 25 years. Most school districts design their taxing schedule to be increasing each year - often substantially back loading the payments (taxes to collect). The TTT is only looking at the 1st year of the multi year new levy or bond and trying to compare it to the last year of the previous multi-year levy or bond. See the next chart.

Also, the TTT’s analysis of that 1st year is usually erroneous. For the Kent SD’s Enrichment Levy the TTT is not even looking at the 1st year of the new levy. It is looking at the last year of the previous Enrichment Levy and comparing that to the second to the last year of the previous Enrichment Levy which makes no sense. All of this is woefully inadequate and is a disservice to voters/taxpayers. The TTT itself is not a good use of taxpayer money. And worse, the information that it provides underestimates the true cost to voters/taxpayers for these multi-year tax measures and may lead voters to unwittingly make detrimental financial decisions. The other 38 counties in WA are wise to continue to refuse to use the King County Tax Transparency Tool.

The TTT info for the November 7, 2023 election measures just became available October 20, 2023 – which was after voting started. The TTT should have useful, accurate, trustworthy information and it should be completed several months before voting starts and before the pro/con arguments are due for the voters’ pamphlet. So for the November 7, 2023 election measures, the TTT should have been completed and online before August 1, 2023.

For the next election, February 13, 2024, the pro/con arguments will be due December 15, 2023. The TTT needs to be dramatically improved using simple, common sense accounting principles and should be completed for the applicable parcels with tax measures before the December 15, 2023 deadline.

The TTT implementers need to provide independent analysis. They should ignore the future tax rate guesses by the school districts and other taxing districts. Voters are voting on amounts - not rates.