Property-tax bills fall for most in King County

After watching the value of their houses drop dramatically for more than two years, King County homeowners are finally seeing something they might have thought would never happen.

Their property taxes are going down.

Tax bills that began arriving in mailboxes Tuesday reflect lower taxes for the average homeowner in 17 of 20 school districts.

The biggest drop on a dollar basis is on Mercer Island, where the owner of an average-valued $1.1 million home will pay $8,249, a $532 drop from last year's tax bill, according to the King County Department of Assessments.

Tukwila property owners' $528 drop for a bill of $2,552 on an average $228,500 home represents a 17 percent decline in taxes, the largest on a percentage basis.

In Seattle, taxes for the typical homeowner will go down $177 to $4,053 this year on a $448,300 home, compared with increases of $184 in 2008 and $70 last year.

Lower assessments are driving taxes down everywhere except in the Enumclaw, Vashon Island and Snoqualmie Valley school districts.

Within school districts, tax rates vary because 160 taxing jurisdictions, from fire districts to cities, levy taxes at varying rates.

Debra Prins, director of the county assessor's residential division, said she hasn't seen the real-estate market — or taxes — drop this way during her 14 years of appraising property for the county.

"It's my impression you haven't seen a drop [in taxes] like this since the Great Depression," said Chief Deputy Assessor John Arthur Wilson. "Even in past economic downturns you didn't see anything as sweeping as this. The closest may be in the late '60s and early '70s with the Boeing bust."

Effect of home prices

The sharp reduction in assessed property values follows more than two years of grumbling by many property owners who couldn't understand why the assessed values and taxes didn't go down after home prices began to tumble in late 2007.

Home prices began to rise again in Seattle in January but have continued to drop in most of the county.

During the years of rising real-estate prices, the assessor's office based its appraisals on property sales from the previous two to three years, a method intended to insulate official valuations from speculative price increases.

That method didn't succeed in reflecting the market's sharp drop-off. Early last year, the assessor's office, following advice from the International Association of Assessing Officers, began taking into account some types of home sales that were previously dismissed as anomalies that didn't reflect the market.

Because there were so few traditional home sales, the assessor for the first time in years factored in prices from foreclosure sales, purchases by one bank from another, and sales made by homeowners for a price smaller than their mortgage balance. That dropped assessed valuations 15 percent below what they otherwise would have been, Prins said.

The assessment model was changed during a time of turmoil in the assessor's office. Assessor Scott Noble resigned in June after pleading guilty to causing a head-on collision while driving the wrong way on Interstate 5, under the influence of alcohol.

Noble was replaced on an acting basis by his chief deputy, Rich Medved, who then suffered a stroke and died. Chief Appraiser Lynn Gering was appointed to the post, and voters elected Lloyd Hara assessor in November.

Hara was out of town Tuesday and could not be reached for comment on the reduced assessed valuations and taxes.

Total collected to rise

Total property-tax collections this year will be about 1 percent more than last year, with nearly half the increase resulting from taxes on new construction. State law also allows tax districts to raise the amount they collect for their regular levies by 1 percent a year regardless of assessed valuation.

Tax collections rose 6.2 percent in 2009 and 8.2 percent in 2008.

Taxes in some jurisdictions are either rising or going down less than they otherwise would have because of voter-approved levies and bonds.

Voters in the Snoqualmie, Auburn and Vashon school districts approved capital bonds or levies; Seattle voters renewed a levy for low-income housing; a Vashon Park and Recreation District levy was renewed; and the new Fall City Metropolitan Park District has begun collecting taxes.

Keith Ervin: 206-464-2105 or kervin@seattletimes.com