OLYMPIA — There is disappointing news for a handful of Snohomish County residents surprised to see a Sound Transit levy on their property tax bills this year.
It appears they’ll have to pay, and continue waiting to see if the law will be changed so they won’t have to pay it again in the future.
“It’s frustrating. Absolutely frustrating,” said George Murray who lives in an unincorporated neighborhood outside Everett and is one of roughly 50 property owners entangled in this situation in Snohomish County.
“It feels like it’s a political football,” said Cheryl Carlson, another affected property owner who lives in the Gold Creek neighborhood near Willis Tucker Park.
Their parcels are part inside and part outside the boundaries of the regional transit authority taxing district. It’s the portion inside the boundaries on which Sound Transit is imposing a levy approved by voters in November to help finance a $53.8 billion expansion known as ST3.
Passage of the ballot measure allows collection of 25 cents per $1,000 of assessed value. It also triggered a half-cent rise in sales tax and a 0.8 percent hike in the excise tax rate used in calculating car-tab fees in the district encompassing parts of Snohomish, King and Pierce counties.
The affected Snohomish County property owners did not get to vote on the ballot measure because the portion of the parcel on which they live is outside the Sound Transit boundaries. Those lines generally follow city limits and urban-growth boundaries in unincorporated areas but some neighborhoods, such as where Murray and Carlson live, were built after those lines were drawn in 1996.
Rep. Mark Harmsworth introduced a bill in February to repair the situation. It would bar Sound Transit from levying its property tax on anything less than a whole parcel located entirely in its taxing district.
When Harmsworth introduced House Bill 1958 he made the change retroactive to Nov. 1. He wanted to ensure owners of the roughly 50 parcels in Snohomish County wouldn’t have to pay the tax. And those who did, like Murray and Carlson, would get their money back in the form of a refund.
But last week, the state Department of Revenue advised Harmsworth it is not possible to provide refunds to those who’ve already paid their property tax.
A tax can be repealed retroactively as long as the repeal doesn’t require spending public funds, according to the department.
And the state Constitution prohibits the gifting of public funds that would include a refund of collected taxes as a result of a retroactive repeal as sought by the legislation, according to the department. Hence the agency suggestion to make the law apply starting in 2018.
“It is unfortunate,” Harmsworth said. “I am disappointed.”
He drafted an amendment to remove the retroactive clause and make clear the new rules apply starting next year. It now falls to the state Senate to approve the amended bill in the current special session and send it back to the House for final action.
“There’s no reason that I’m aware of that this will not pass the Senate,” he said.
It’s frustrating knowing he could have achieved his original intent had it not dragged on so long. Revenue officials acknowledge that had the law been in place before any property owners paid their Sound Transit 3 levy then the constitutional concerns would not have been triggered as no one would be owed a refund.
“To think we could have avoided the whole issue if we had passed it out of the Legislature and got it signed by the governor before the property tax statements were issued,” Harmsworth said.