Read the headline on the front page of the print edition of this morning's Seattle Times, and you might get angry. "FALLING HOME VALUES, RISING TAX BILLS" the bold typeface screams. And the text of the online headline, in its specificity, is possibly even more inflammatory: "King County property tax going up as home prices fall."
Government hiking our property tax bills? In the middle of a real estate bust? Damn you tax-and-spend Democrats!!! Why can't you live within your means, and get off our backs?!
But read just a little bit further—like say, the first few paragraphs—and you get an entirely different story:
Declining property values will bring tax relief to some King County homeowners this year, but voter-approved levies and bonds will mean higher taxes for others.
Oh. So contrary to the headline, many homeowners whose property fell in value will see their property taxes go down. Huh.
In Seattle, where voters last year approved two school levies and construction bonds and home values rose a tad, the tax bill on a typical $453,300 house will rise by $324, or 8 percent, to $4,379.
And here in Seattle, where property taxes will rise on average, it's only due to widely popular, voter approved school levies, and a recovering real estate market. Okay. I guess that's no so bad then. Sorry, government, for jumping to conclusions. Have a nice day.
Problem is, a lot of readers won't get much past the headline, so they'll never learn that the article itself pretty much says the opposite. And for those who do, their impression of the article will be unavoidably shaped by the intentionally provocative headline that precedes it.
I've been repeatedly told by folks at the Seattle Times that there is a firewall between editorial and news, but you certainly wouldn't know it from the headlines. For example, compare their fit of very intentional framing with the dare I say unbiased headline in the Issaquah Press on their article covering the exact same subject: "Issaquah school levies buoy property tax bills as values decline."
Admittedly dry, but informative. And accurate.
The most frustrating thing about all this is that there actually is a pretty good story to tell here, but it's not the story the Seattle Times' editors presumably want to tell. The real story is not about whether property taxes are rising or falling relative to the fluctuating price of housing, but rather that most taxpayers are under the mistaken impression that the two are closely related at all.
The majority of homeowners expected, and understandably so, that if their property values fell, their property taxes would fall with them. And it is this assumption on which the Seattle Times headline is predicated. (See... it's the opposite of what you expect! Outrageous!) But the fact is, outside the passage or expiration of voter approved levies, your property taxes only generally rise or fall if your property value rises or falls relative to the average property value within the rest of the taxing district.
The Seattle Times article makes a passing reference to this, by explaining that Washington state uses a "budget-based" taxing system. Unfortunately, they don't actually explain the budget-based system correctly. The Issaquah Press, on the other hand, well, they actually make a pretty good start:
Washington operates under a budget-based property tax system, meaning local taxing districts — including fire, library and school districts — submit annual adopted budgets to the county assessor.
The assessor then has the responsibility to determine the necessary taxing [rate] to meet the adopted budgets.
So, let's say a school levy is for $10 million a year. The county assessor adds up all the value within the taxing district, and then sets a rate that would generate $10 million. If the average property value falls, the rate goes up. If the average property value rises, the rate falls. Either way, your school district gets $10 million.
And since everybody in the same taxing district is charged the same rate, if your own home values falls, your property tax only falls if your value has fallen further, on average, than the rest of the district. That's why, all other things being equal, it is very possible for your property tax to rise even as your home value falls. And if it does, you should be thrilled: it means your home is retaining its value better than your neighbors'.
Complicated, tedious, mathematical stuff, I know. And I don't really expect your typical daily newspaper to take the time to explain it, year after year, every time the property tax bills come due.
But what I do expect is for our paper of record to resist the urge to exploit the public's lack of understanding of budget-based taxation, in the cynical service of inflaming passions against local government.