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SUBJECTS › FINANCE › Levy Lid Lift
Updated 2/07
Levy Lid Lift

Levy Lid Lift

Contents

Introduction

With the passage of Initiative 747, there only two ways for a jurisdiction to increase property taxes by more than one percent (or the lesser of the IPD and one percent for jurisdictions with a population of 10,000 or more). Some jurisdictions have taken less than the maximum increase they could have in the past and have "banked" capacity that they can use. A jurisdiction that does not know whether it has banked capacity should ask its county assessor.

The other way to increase property taxes by more than this amount is to do a levy lid lift under RCW 84.55.050.

During the 2003 legislative session, that statute was amended (Adobe Acrobat Document19 KB) to allow a lid lift for multiple years. For a discussion of levy lid lifts, including this new legislation, read the article on that subject from Budget Suggestions for 2004 (Adobe Acrobat Document70 KB). Remember, local governments are limited in what they can do to support (and oppose) a ballot measure. We have four articles that address this issue.

The Department of Revenue has recently written an information bulletin (Adobe Acrobat Document198 KB) that will help you craft a ballot title.

Statutory Authority

Ordinances, Propositions and Other Documents

Note: RCW 84.55.050(1) specifies that the dollar rate proposed be stated in the ballot title. If you wish to give the increase in the rate, you may do that also

  • Bellevue WA Ordinance No.5384 (Adobe Acrobat Document76.3 KB), providing for submission to the voters of two propostions: (i) authorizing the City to issue bonds for open space and parks amd (ii) authorizing the city to impose tax levies in excess of the limit established in RCW 84.55.010, 2002. (Note levy lid lift material starts on page 4.)
  • Bellevue, WA Ordinance No. 4393 (Adobe Acrobat Document625 KB), to levy regular property taxes in excess of the levy limitation for the purpose of funding 911 and emergency radio communications, police, fire and emergency medical facilities and operations, 1992.
  • Des Moines, WA Proposition 1 (Adobe Acrobat Document33 KB), to approve an increase in the City's permanent regular property tax levy rate for 2007 in order to to provide funds to restore police department staffing to previous years' levels, 2006.
  • DuPont, WA Resolution No. 03-272 (Adobe Acrobat Document61 KB), requesting that the Pierce County Auditor call a special election in conjunction with the primary election on September 16, 2003, for consideration of a proposition to increase the City of DuPont's regular property tax levy rate, 2003. Includes page from Pierce County primary election voters pamphlet.
  • Enumclaw, WA Ordinance No. 2162 (Adobe Acrobat Document153 KB), providing for the submission at the February 2003 election for authority to increase the permanent regular property tax levies to provide funds for the continued operation of the Forward Thrust Swiming Pool, 2002.
  • King County Hospital District No. 4 (Snoqualmie Valley Hospital) Proposition No. 1 (Adobe Acrobat Document6 KB), to authorize the District to increase its regular property levy rate from its current level to a rate of 50 cents per $1,000 of assessed value for collection in 2004, which amount will be used for computing legal limits on levies in subsequent years, to provide funding for essential health care services for the benefit of District residents, 2003.
  • King County Library District Resolution No. 2001-22 (Adobe Acrobat Document79 KB), to restore its regular lift rate to $0.50 per thousand dollars of assessed value upon all the taxable property within the district.
  • King County Library District Proposition No. 1 (Adobe Acrobat Document275 KB), to increase the regular property tax in order to provide continued funding for normal operation and maintenance of the King County library system, 2001.
  • Kitsap County Proposition No. 1, to authorize the Kitsap County Board of Commissioners to exceed the regular property tax levy limit to restore funding for county services that would otherwise be eliminated in the 2003-04 biennium.
  • Mercer Island Proposition No. 1. Levy for Luther Burbank Park Operations and Maintenance. November 4, 2003. This is a levy for a multiple year lid lift as authorized by 2ESSB 5659, Ch. 24, Laws of 2003 .
  • Pullman, WA Ordinance No. 00-21, to increase the permanent regular tax levy to provide funds to hire police and fire positions, and for other purposes deemed necessary by the city council, 2000.
  • Redmond, WA
  • SeaTac, WA Proposition No. 1. (Adobe Acrobat Document35 KB), to provide funds to operate, equip and construct facilities for fire protection and emergency services, 2006.
  • Seattle, WA Ordinance No. 119522, to levy regular property taxes for up to eight years in excess of the limitation on levies for the purposes of making improvements to the Seattle Center Opera House, replacing the Seattle Center Flag Pavilion with a new Festivals Pavilion and open space, building and remodeling community centers, developing neighborhood civic centers, and funding neighborhood gathering places, 1999.
  • Seattle, WA Proposition No. 1 , Seattle Center/Community Center Levy, 1999.
  • Seattle, WA Ordinance No. 120024, to levy regular property taxes for up to eight years in excess of the limitation on levies for the purposes of improving maintenance and enhancing programming of existing parks, including the Woodland Park Zoo, 2000.
  • Seattle, WA Proposition No. 1 (Adobe Acrobat Document82 KB), Neighborhood Parks, Green Spaces, Trails and Zoo Levy, 2000.
  • Seattle, WA Ordinance No. 120823, authorizing additional regular property taxes for low-income housing, including assistance for home ownership and emergency housing payment assistance, 2002.
  • South Prairie, WA Ordinance No. 428 (Adobe Acrobat Document96 KB), providing for the submission of a proposition to the voters providing for authority to increase the permanent regular property tax, 2002.
    (Note: Section 5 says, in part, "In the event the proposition is passed...there shall be levied...the amount of $2.4492 per $1,000 assessed valuation each year commencing January 1, 2003."

    The rate would be $2.4492 per thousand dollars assessed valuation in 2003. In future years, however, the rate would be set using the "101 percent levy lid" law (RCW 84.55.010). Under that statute, levies in future years can only increase by an amount up to one percent. If the increase in assessed valuation is more than that, the assessor will lower the rate below $2.4492 to ensure that only the allowable one percent increase is levied.)
  • Snoqualmie, WA Ordinance No. 1001 (Adobe Acrobat Document825 KB), for voter approval of issuance and sale of general obligation bonds to be repaid by an annual excess property tax levy, 2006.
  • University Place, WA Proposition 1 (Adobe Acrobat Document783 KB), to approve levy lid lift for capital improvements, 2006.

Articles

MRSC Inquiries - Levy Lid Lift Q&A

  • Q: Is there a statutory limitation on how soon a levy lid lift proposition can be brought before the voters after a previous unsuccessful vote?

      A: No, the statute governing levy lid lifts, RCW 84.55.050, does not impose any limitations on how soon a lid lift proposition may be placed on the ballot after an unsuccessful vote. Obviously, there are political considerations.
  • Q: We have "banked" capacity, but would rather do a levy lid lift than use that capacity. The council thinks the voters would approve a lid lift for their swimming pool and they want to save their "banked" capacity for the future. Can we do this?

      A: According to Kathy Beith of the Department of Revenue, "no."

      Taxing jurisdictions must understand that "banked" capacity is not kept separate from their regular levy, i.e., there aren't "green" dollars that are the regular levy and "red" dollars that are banked capacity. There is simply a dollar amount that is the maximum allowable levy. (This number is on the levy worksheet they get each year from their assessor.)

      If a city is levying less than that, it has "banked" capacity. As long as the extra amount they want to levy to cover the cost of the pool does not result in their exceeding their maximum allowable levy, it is done with a simple majority vote of the council at the time they set their levy for next year. Only if they want to levy more that (assuming they can do so because they are still below their maximum levy rate) can they do a levy lid lift. Note that there is no separate ordinance to "unbank" capacity. It is simply done by putting the desired dollar amount, which reflects the "unbanking," in their standard levy ordinance.

      So, to summarize, you cannot save "banked" capacity by doing a levy lid lift. The banked capacity has to be used first.