A bill that will support the Vashon Park District’s operations by enabling Parks to collect enough tax revenue has advanced in the state Legislature and is now on its way to Gov. Jay Inslee’s desk after the House ratified an amendment made in the Senate.
With the passage of HB1034, the island’s park and recreation district will be able to retain its voter-approved levy rate by drawing on a much-needed reserve known as the “$.50 cent gap,” a pool of funds maintained by the state for various purposes that is part of Washington’s $10 constitutional limit, or the maximum annual property tax rate that can be imposed on property owners.
Elaine Ott-Rocheford, executive director of the park district, expressed relief in an email late last week, noting that the bill’s failure would jeopardize recreation programs, services, staffing and critical maintenance work.
The majority of the park district’s budget is funded by taxes. After two of Vashon’s main taxing authorities, the Health Care District and Vashon Island Fire & Rescue, approved higher-than-expected budgets last year, the combined levies of all local tax districts on the island surpassed the local levy limit of $5.90 per $1,000 of assessed property value.
This triggered “prorationing,” a process in which junior tax districts see their tax revenue reduced, beginning in a certain order. To restore capacity in the $5.90, Parks was obligated to make up the difference and expected a minimum loss of $130,000, or an 11% budget reduction for the district.
But now, Vashon’s Parks will not lose any money.
“With the bill, we are confident our voter-approved levy rate will be safe from prorationing, even with likely rate increases from King County agencies in the near future,” Ott-Rocheford said.
The original bill, introduced by Reps. Joe Fitzgibbon and Eileen Cody, had a much wider reach and would have affected all Washington park and recreation districts, but it would have had the greatest effect on Vashon.
The amendment the House approved limited the scope of the bill to Vashon only, though legislators had good justification for making the change, because the island, like other unincorporated areas, is more vulnerable to prorationing of its tiny tax districts than the rest of King County.
Rep. Fitzgibbon said the amendment suits the bill’s intent in a statement on Monday following its passage through the legislature.
“This will ensure that the Vashon Parks District does not see sudden loss of tax revenue and enable it to keep providing the quality outdoor recreation services and infrastructure that Vashon Island enjoys and of which they are rightfully proud,” he said.
Vashon is reliant on large, or senior, taxing districts that serve the entire county, as well as numerous local taxing districts centered on the island that only serve Vashon’s residents. Senior districts collect tax revenue in the same manner as other local municipal districts do, such as the county library system and road network, both of which considered floating tax increases last year.
If these or other senior taxing districts impose new or expanded levies, junior districts’ voter-approved levies could be reduced to preserve the headroom left under the combined local levy cap of $5.90, putting them at risk of prorationing if higher-ranked junior districts announce major spending plans.
The revised bill to safeguard Parks will lapse in five years.
“[A]t least we are safe for now and will have time to explore other alternatives,” Ott-Rocheford said.
While the news is good for Parks and relieves some of the strain on the island’s local levy cap, it does not rule out the possibility of prorationing for Vashon’s other local districts in the near future. A variety of factors, much like a tax tightrope walk, could push the local levy limit past $5.90 once more, jeopardizing several vital tax-funded island organizations and services in the process.