Understanding San Juan County Assessed Values and Taxes

Based on several phone calls made to the assessor’s office and more than one letter to the editor, there is a misconception among some taxpayers about the relationship between assessed values and taxes. San Juan County will not receive more revenue because of higher property values. The assessor’s office could double, triple, and then quadruple assessed values and it would not change the amount of taxes paid to the government by a nickel. It will shift who pays the taxes if certain values increased and others remained the same (as happens under San Juan County’s three-year revaluation cycle), or if others increased at a lesser percentage (as sometimes happens when comparing different neighborhoods), but it would not change the total tax revenue.

Tax revenue in Washington is limited to a one percent increase per year. Some districts receive an additional amount of taxes based on the value of new construction in the district, and that amount is equal to the value of the new construction in the district multiplied by the previous year’s tax rate for the district. The value of new construction increases taxes where the construction occurs, but otherwise the amount of property tax paid to the government can only go up one percent per year.

The large increase in taxes for most taxpayers occurs because of the three-year revaluation cycle adopted in San Juan County. The number of tax parcels (there are over 18,000 tax parcels in San Juan County) makes it impossible for the assessor’s office to inspect each parcel more than once every three years. Only one-third of the properties are revalued any given year while the other two-thirds remain at the value from the previous year. Taxpayers whose values went up will pay more in taxes during the first year following their revaluation.=

Higher values on Orcas compared to Lopez and San Juan will create a shift of the tax burden that will result in higher taxes for Orcas taxpayers in 2009. The burden was shifted to Lopez taxpayers in 2008 and San Juan taxpayers in 2007. A review of your taxes will undoubtedly show that your taxes have gone down in the second and third years following a revaluation. If every property in San Juan County were revalued every year, and the value of each stayed the same relative to the others, everyone’s taxes would only increase one percent because the amount of revenue that can be collected can only increase one percent.

The assessor’s office did not “choose this time to increase . . . property taxes”, as suggested by a recent letter to the editor. This time of year occurs every year for one of three groups of taxpayers. The revaluation process was established to maintain equity among all taxpayers, which means your assessed value is adjusted for fairness relative to all your neighbors every three years.

State law requires the assessor to set the assessed value at 100% of the true and fair market value at the time of the revaluation based on reliable evidence of market value. There has been increased demand for property in San Juan County in recent years. It is a desirable place to live and work. This demand translates to a strong investment position, though that is generally only realized when the property is sold. One burden of property ownership is the payment of taxes, which is the foundation of Washington’s assessment system. The assessor’s office is staffed with compassionate taxpayers who all work very diligently to perform our duties in a responsible and ethical manner. We invite any questions or comments at either assessor@sanjuanco.com or 378-2172.

Charles Zalmanek is the San Juan County Assessor.

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