At a public hearing last week, lawmakers had their first look at a bill that would rewrite state tax law and allow park and recreation districts in Washington to collect much-needed tax revenue from a different source of funding than is currently available.
They did not vote on the bill, introduced by Rep. Joe Fitzgibbon, D-Burien, and sponsored by Rep. Eileen Cody, D-West Seattle. But the hearing in the House Finance Committee was open to public comment, and a number of lawmakers questioned Fitzgibbon about some components of the bill and the issue it is intended to solve.
The bill would allow parks and recreation districts to collect money from what is known as the “$.50 cent gap,” a pool of funds maintained for various purposes by the state, including the preservation of open spaces and for help covering emergency services or affordable housing projects, as well as funding for metropolitan parks and ferry services. This reserve belongs to what is referred to as Washington’s $10 constitutional limit, or the overall annual property tax rate that can be imposed on property owners.
The so-called junior taxing districts of the island, such as the Park and Cemetery Districts, share with senior districts, such as state, city and road districts, tax revenue within the $10 constitutional limit reserved for local districts. They together collect that money in a certain order provided it doesn’t exceed the minimum headroom left under the local levy limit of $5.90 per $1,000 assessed value.
Passage of the Fitzgibbon bill, HB1034, is the only remaining alternative for the park district this year to avoid “prorationing,” in which junior tax districts see a reduction in the tax revenue they collect, now that the combined levies of other local tax districts on the island have surpassed $5.90 per $1,000 of assessed property value. Parks is now first in line to help make up the difference, amounting to an 11% budget cut for the district or about $130,000.
With the hearing over, the bill will head into executive session in the finance committee today, Jan. 28, for lawmakers to consider further. Last year, an identical bill, spurred by fears of prorationing after the formation of the Vashon Health Care District, made it to the finance committee as well. But it came late in the legislative session and did not move forward.
Parks has high hopes that the bill will make a splash with lawmakers who will undoubtedly be faced with a number of other urgent problems to focus on due to the pandemic. By spring, commissioners are likely to have an answer as to the bill’s fate one way or another.
“There are some great parks on Vashon Island. There’s some great recreational services for the community there that are in jeopardy now,” Fitzgibbon said when offering his remarks during the hearing. He added that since the island is part of unincorporated King County, it depends heavily on several special-purpose districts to provide government services, including health care and parks and recreation.
Fitzgibbon said the prorationing issue facing Parks will only get worse unless something is done about it, citing the King County Library System, which serves all of the county outside of Seattle, and King County Roads, which covers all of unincorporated King County. Both have recently considered levy lid increases and could pursue them to raise needed funding within the next two years, though KCLS will not seek a tax increase in 2021.
But this could be a much bigger issue for the island down the road. With the island’s local levy limit past the tipping point, the far smaller municipal districts of Vashon could be eliminated by tax increases from the county that would unwittingly take the lion’s share of the tax revenue they rely on, wiping some out entirely in the process.
Crucially, Fitzgibbon’s bill would only cover parks. The Cemetery and Health Care Districts could experience prorationing to some extent if Vashon Parks were to be taken out of the $5.90 limit.
“This is a problem with the $5.90 statutory local levy limit that particularly impacts small, unincorporated communities that are part of much larger governmental entities” such as King County, he said. Fitzgibbon added that, if all else failed, taking into account the interests of the districts that could be affected, it is hoped that senior districts would consider shielding those that may stand to lose if, in the future, they were to pursue levy lid lifts.
One question from Rep. Ed Orcutt, R-Kalama, was asked about whether levy rates may fall somewhat as home values increase on the island, as they do in comparable communities, restoring some capacity below the $5.90 limit and thereby reducing pressure on the island’s park district. But although this was the case for a time in recent years, Fitzgibbon said, the local levy limit on Vashon has now been surpassed to such a degree that it has outpaced any slight levy reduction relative to increasing island home prices.
The median sale price for homes on Vashon rose by 14% in 2020 over the previous year according to Windermere Vashon.
What changed, Fitzgibbon said, were the priorities of the community. Islanders voted to create the Health Care District because the private sector was unable to provide sustainable health care services on Vashon. But after the pandemic threw significant obstacles at the commissioners, requiring a higher levy rate than anticipated to meet their objectives, the $5.90 limit was significantly narrowed, and soon poised to crush Parks, a long-standing government agency, Fitzgibbon said, with broad voter support.
Together with Executive Director Elaine Ott-Rocheford, Hans Van Dusen, chair of the Parks Board, testified in support of Fitzgibbon’s bill. He said that Parks’ services are essential for general wellbeing, even more so in the midst of the pandemic, offering facilities and programs that are as important to islanders as they are to visitors, from off-island county residents to those traveling from further reaches of the state (once it is safe to do so again).
In her remarks, Ott-Rocheford concluded that as a result of current prorationing implemented by island districts, the projected 11% decrease in Parks’ budget would result in reduced services and staff layoffs, as well as leaving the district incapable of addressing mounting asset preservation issues. But she said Parks’ biggest challenge will come from senior island districts seeking levy lid lifts, namely KCLS and Roads.
With no action, the tax increases they may propose someday soon will “proration us out of existence,” she told legislators.
In a follow-up interview, she added that Parks, with sufficient reserves, will still be able to complete many grant-based projects that the board has already committed to this year, such as the renovation of the Ober Park playground and the bathroom at VES Fields, ivy remediation work and urgent repairs at Fern Cove. Ott-Rocheford added that she was applying to another county grant cycle to secure funding to help repair the community swimming pool.
But with minimal resources, event offerings, from the popular Concerts in the Park series, to new programming concepts such as a Robinhood-themed storytelling walk for families around Fisher Pond, may have to be canceled without a fix from Olympia. Going with or without that assistance now could change the way Vashon spends its post-pandemic days.
“We’re just being prudent and evaluating what our other options would be if the bill does not go through,” she said.