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9611 SE 36th Street
Mercer Island, WA 98040
Phone: 206.275.7783
Fax: 206.275.7787
Email: mifinance@mercergo. . .
Hours: 8:30 am - 5:00 pm (Mon - Fri)
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Property Taxes

Property taxes play an essential role in financing the operations of the City of Mercer Island, accounting for 39% of the General Fundís total budgeted revenues in 2019-2020.  In 2019, Mercer Island property owners will pay $13.68 million in property taxes to the City to help fund the following:
  • 24/7 police services
  • 24/7 fire suppression services
  • 24/7 emergency medical aid services
  • Park, path, trail, and public building maintenance
  • Street, roadside, and median maintenance
  • Recreation program support for youth and seniors
  • Community planning, development code regulations, and code enforcement
  • Televised Council meetings, public communications, and records management
  • Fire apparatus replacement
 

Types of Property Tax

There are two types of property taxes collected by the City:  1) regular levy, and 2) voter approved levy.  The regular levy, which is $12.04 million in 2019, represents the base amount of property tax dedicated to funding the Cityís general government operations, which are noted above.  There are two types of voter approved levies, which represent property tax increases over and above the regular levy:  1) excess levy, and 2) levy lid lift.  An excess levy is dedicated to paying the principal and interest on debt issued for capital projects or purchases.  Currently, the City does not have any excess levies.  A levy lid lift is dedicated to funding specific general government operations and/or capital improvements.  The City has two levy lid lifts currently in effect:  1) Parks Maintenance and Operations levy approved by voters in November 2008 for 15 years ($955,079 levy amount in 2019); and 2) Fire Station and Fire Rescue Truck levy approved by voters in November 2012 for 9 years ($682,059 levy amount in 2019).
 
Each November, the City Council sets the property tax levy for the coming year based on forecasted expenditures, other revenue sources, and state law limitations.  The regular levy is annually limited to a 1% increase or the rate of inflation as measured by the Implicit Price Deflator (IPD), whichever is less.  The IPD is not the same as the Consumer Price Index for Urban Wage and Clerical Workers (CPI-W), to which annual cost of living adjustments for City employees are tied.  Both of the Cityís levy lid lifts are limited to a 1% annual increase as well.  The City is also provided an allowance for new construction, which entitles the City to the property tax revenue generated by newly constructed and improved residential and commercial properties.
 

2019 Levy  

A breakdown of the City's 2019 levy relative to 2018 is provided below:
 

Levy Elements

2018 Levy

2019 Levy

Regular Levy:
    Prior Year Regular Levy
    Plus 1% Optional Increase
    Plus New Construction Levy*
    Plus Refund Levy**

$11,402,764
$114,027
$184,823
$18,653


$11,701,614
$117,016
$193,481
$28,440

Total Regular Levy $11,720,267 $12,040,551
Levy Lid Lifts:
    2008 Parks M&O
    2012 Fire Station & Fire Truck

945,623
675,306


955,079
682,059

Total Levy Lid Lifts $1,620,929 $1,637,138
Total Levy $13,341,196 $13,677,689
% Change over Prior Year*** 1.00% 1.00%

*The new construction levy, which is not subject to the annual 1.0% limitation, relates to the new and improved properties that have been added to the property tax roll.
** The refund levy represents the amount that was refunded to property owners who successfully appealed their property valuations by the King County Assessorís Office.  To make the City whole, the amount of those refunds is re-levied in the following year.
*** The percentage change comparison of the total levy amount excludes the new construction and refund amounts. 

For the owner of a $1.35 million home, which is the median assessed value on Mercer Island for the 2019 tax year, the 2019 levy rate (per $1,000 assessed valuation), the 2019 levy amount, and the 2019 percentage breakdown by taxing jurisdiction are presented below. 

Taxing Jurisdiction

2019 
Levy Rate

2019
Levy Amount

% of Total 
2019 Levy

State School Fund $2.62922 $3,557 35.0%
School District $1.71004 $2,314 22.8%
King County $1.21906 $1,649 16.2%
City of Mercer Island $0.93285 $1,262 12.4%
Library $0.37441 $507 5.0%
EMS $0.21762 $294 2.9%
Sound Transit $0.20700 $280 2.8%
Port $0.12266 $166 1.6%
Flood Zone $0.09660 $131 1.3%
Total $7.50946 $10,106 100.0%

Of the $10,160 total levy amount in 2019, 57.8% relates to education, with 35.0% going to the State School Fund and 22.8% going to the Mercer Island School District.  King County is the next largest taxing jurisdiction, receiving 16.2% of the total property tax bill in 2019.  The City of Mercer Islandís share of the total property tax bill equates to 12.4%.

A common misunderstanding surrounds the property tax levy.  When the assessed value of Island properties increase, there is not a corresponding increase in the amount of property tax received by the City.  Rather, the Cityís levy rate is reduced to ensure that the Cityís levy amount goes up by only 1% plus an allowance for new construction.

Assessed Valuation 

For the tax years 2005-2019, the total assessed value of Mercer Island and the percentage change relative to the prior year is summarized below.

Year Assessed Value % Change
2005 $6,425,909,873 1.2%
2006 $7,059,706,779 9.9%
2007 $7,840,048,891 11.1%
2008 $8,878,236,032 13.2%
2009 $10,310,337,535 16.1%
2010 $8,710,688,041 -15.5%
2011 $8,488,283,042 -2.6%
2012 $8,115,230,704 -4.4%
2013 $8,134,661,713 0.2%
2014 $8,804,213,428 8.2%
2015 $9,858,831,552 12.0%
2016 $10,868,905,593 10.2%
2017 $12,083,477,559 11.2%
2018 $13,299,694,072 10.1%
2019 $14,653,675,301 10.2%

Additional Information

For more detailed information on property taxes, see the Revenue Sources and the Budget Policies sections of the 2017-2018 Budget document.



 

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