The Plight of the Small, Rural County

“Property taxes are skyrocketing in Washington!” “We need to defuse the property tax time bomb!”

These were the rally cries of Tim Eyman, author of Initiative 747, which passed voter approval back in 2001. I-747 was designed to limit property tax increases to 1% more tax collected than in the previous year.

This sounded great, right? The government has gotten out of control! They’re wasting all of our tax money! This certainly may have been the case in many instances, especially at the Federal and State government levels. But for the most part, Local governments seem to operate quite efficiently. The smaller the government, the more that holds true. But, when people are frustrated when they don’t like how their tax dollars are spent, some tend to not differentiate between the Federal, State and Local governments. It’s just the Government. It is easy to blame the local government when you write the check for your property tax payment, even though the lion’s share of it goes to the State government and the schools.

I believe that this was the rationale behind the passage of I-747. People were tired of the

“Government” growing unchecked and wasting their tax dollars. Well, I-747 must have been a good solution, right? Because here we are, 24 years later and state and local governments are still open for business. Local governments have continued to make cuts and use reserves to balance their budgets all the while struggling to provide adequate essential services such as Public Safety, Public Health and road maintenance. Small counties are masters of “doing more with less”, but the problem with limiting revenue growth to 1% is that it is not tied to inflation, and it is not sustainable in an economic climate where inflation drives the cost of goods and services up at a much faster pace. Even more concerning is the fact that this effect compounds itself over time making recovery virtually impossible, especially if there is also a decline in other revenue sources. But make no mistake, it’s not just small counties who are impacted. The effect is just more pronounced in smaller counties. They are hit especially hard because the smaller amount of levy dollars collected, the smaller the yearly increase is.

Take Lincoln County for instance. By far, the #1 source of revenue is property tax. The amount budgeted for collection in County Current Expense (All services except the County Road District), for 2024 was $2,600,000. This year, that 1% increase will bring in an extra $26,000. (Plus the value of any new construction, which 2024 was a record year, netting an extra $55,000.) That does not even come close to keeping up with the inflated costs of providing basic services. Let alone services mandated by the state constitution, state laws and state rules. Just the average inflation alone has increased almost 5% per year over the last 5 years, yet property taxes can only increase 1%. This compounds itself, making the problem exponentially worse with each passing year. Basically, no matter how efficient local government is, if its revenue is restricted from growing, or at least keeping pace with the economy, eventually, its ability to provide essential public services becomes jeopardized.

This year, the legislature is working on a bill to increase the property tax total collections from 1% to 3%. Many west side counties and cities are in favor of this. I am not. It does not solve the problem for small taxing districts. In Lincoln County, with the state’s 6th smallest General Fund budget, it would barely equate to an additional $50,000. Whereas, in a county like Pierce, 2% extra revenue would generate over 9 million dollars. The proposed law does, however, leave the decision to increase taxes above 1% to the local jurisdiction.

When the latest report from the State Auditor’s Office reveals that the financial health indicator of 25 of our 39 counties is either cautionary or concerning, the legislature should be focusing on providing funding for counties for Indigent Defense Services. You know, after someone commits a crime, if they cannot afford an attorney, one will be appointed for them. If someone is being prosecuted, it’s done on behalf of the State of Washington not Lincoln County.

But if you thought the state was paying for their public defender you would be wrong. Those costs are paid for by your local property tax dollars. Most other states pay for most or all of those costs and I believe it is our state’s obligation to do the same. Not push it off onto the backs of counties.

The Washington State Association of Counties has been trying for years to convince the legislature to fully fund these services. In fact, the counties are battling the state in court over this right now. We shall see. But, at the same time, our state Supreme Court is in the process of modifying the case load standards for public defenders. They are probably going to require even more public defenders in each county as well as demanding staffing level increases to support those extra lawyers. So, even if we are successful in court, any gains may very well be offset by these new standards.

This article was originally published in 2015 and has been modified to reflect today’s conditions.