How do we know how much Proposition 1 will increase taxes?
The Quick Answer
Proposition 1 sets the levy rate (how much residents pay per $1000 of assessed value) for 2023 to $1.39. The levy rate in 2022 is $1.13. That is a 23% increase in the levy rate alone.
total levy = levy rate × total assessed value
Home values have been increasing at a staggering rate recently. We now know that total property assessment in Shoreline will increase by more than 20% in 2023 from 2022.
A 23% increase in rate multiplied by a 20% increase in assessed values results in a 48% increase in total revenue!
If Proposition 1 passes, it is likely that the City will be collecting roughly 48% more in property taxes in 2023 than in 2022.
Multi-year Levy Lid Lifts, such as this year’s Proposition 1 are structured in a confusing way. In most years, they impose limits on the total levy — the total amount collected — and on how much that may increase from year to year. In the years after 2023, the first year in which it takes effect, Prop 1 limits the total levy increase to be equal to the rate of inflation. This seems reasonable and is easy to understand.
The Crux is the First Year of the Levy Lid Lift
For 2023, however, Proposition 1 — instead of setting a cap on the total levy, as it does in subsequent years — fixes the levy rate (how much residents pay per $1000 of assessed value).
Figuring the increase in the total tax levy for the first year takes a bit of work. One must multiply the change in tax rate by the change in total assessed value of property within the City.
Home Values are Rising Rapidly
We all know that home values have increased at a staggering rate over the past year. The King County Assessor reports that appraisal values have increased by 20.1% in "area 1" of Shoreline (west of Aurora)1, 20.6% in “area 2” (between Aurora and I-5), and by 22.1% in “area 3” (Shoreline, east of I-5)2.
Were levy rates held constant between 2022 and 2023, the total tax levy would still increase proportionally to the increases in assessed values. I.e. were levy rates held constant, the general property tax levy would still increase by over 20%.
Proposition 1 Includes a Large Increase in Levy Rate
The City did not hold levy rates constant. Instead, when it put Proposition 1 on the ballot, the City chose a tax rate for 2023 of $1.393. That is 23% higher than the levy rate in 2022 ($1.134).
To determine the increase in total levy (what we pay and what the City collects) simply multiply that by the increase in assessed values between 2022 and 2023.
A 23% increase in levy rate multiplied by a 20% increase in assessed values
results in a 48% increase in total revenue! The math is:
1.20 = 1.48 — the increments compound, just like interest on a bank
account or a loan.
It is also, important to note that this is a permanent increase. (Limits on the tax levy going forward are based on the previous year’s levy.)
The King County Assessor’s 2022 Annual Report for Area 1.↩
The King County Assessor’s 2022 Annual Report for Areas 2 and 3. (Also see this article in the Shoreline Area News.)↩
The City could easily have chosen a lower levy rate when they voted to put Proposition 1 on the ballot. The rate they chose generates a considerable surplus over budgeted and predicted expenses. It is not at all clear why more moderate rate increases were not considered.↩
King County Assessor’s 2022 report on King County Taxing Districts Codes and Levies↩