With the passage of Initiative 747 in 2001, state law caps annual increases in total property tax collection to just 1% more dollars than the previous year. As property values continue to rise, the fire levy rate must fall so our revenues increase no more than the 1% limit each year.
The value of new construction does not fall under the same 1% limit for the first year it appears on the tax rolls. New construction value is added to the upcoming year’s levy and calculated at the rate of the year it was completed.
For example, with this same scenario, if construction with an assessed value of $100 million was completed in Year A, it would be taxed at the Year A $1.50 rate. This additional $150,000 would raise Year B tax collections to $4.695 million. Year C’s tax collections would then be limited to 1% of $4.695 million.
These numbers are used as a hypothetical example but are similar to collection rates in 2022 and 2023.
In 2020, the RFA levy rate was $1.50. To comply with the 1% law in the face of increasing property values, our levy rate dropped to $1.33 in 2022, and again to $1.07 in 2023. It is now at $1.04 in 2024.
In years 2021-2024, the average annual consumer price index increased to 5.95% (Apr 12-mo, CPI-U, Seattle area). Annual revenue increases capped at 1% lose more buying power with each passing year. Revenue simply cannot keep pace with inflation and RFA’s costs to support our growing community.