Rates Down, Bills Up, Levies Mostly Steady

It’s that time of the year again. While the rate is lower on the KP, the price is higher.

Pierce County has the highest property taxes in Washington State, with an average effective rate of 1.28%, according to the Pierce County Assessor-Treasurer’s Office. The average rate in the state is around 0.9%. The national average is 1.1%.

“Overall, the average residential 2024 tax bill countywide is $5,579, a 5.1% increase over last year,” according to the assessor’s office.

The state Constitution limits the total of all non-voter approved property tax rates to 1% of assessed value per year on a given property, plus tax resulting from any new construction on that property.

But there is no limit on voter-approved ballot levy taxes.

“The significant tax increases are in areas where voters approved new levies,” Assessor-Treasurer Mike Lonergan stated on his office website. “This year, we see moderate tax increases in the Gig Harbor Peninsula, Fircrest and Key Peninsula.”

The KP tax rate is lower than in recent years but is of little help to taxpayers whose assessed property value may have climbed anywhere from 30% to 50% over the last decade. The total county property value in 2014 was $69 billion; in 2024 it’s $190 billion, according to the assessor’s office.

The state and local levies for schools make up 58% of all property taxes in the county. The KP tax bill consists of about 25% of voter-approved levies, the total cost of which fluctuates about one percent up or down each year. The Peninsula School District and KP Fire District each get about 22% of the KP tax bill, while the state gets 26%. The rest is divided among the county to pay for roads, the port and libraries, with nominal fees for conservation, noxious weed control and surface water management added on top.

Property tax is a real estate ad valorem tax (“according to the value”) considered to be regressive by many economists. It is determined by multiplying property value by the combined rate of all taxing districts where the property is located.

The amount of tax payable is expressed as a dollar amount of tax per $1,000 of assessed value. That is called the mill rate or millage, a word that derives from the Latin word “millesimal,” meaning “thousandth part” (1/1,000). One mill is $0.001 of the amount to which it is applied.

Millage rates are listed as tax code area rates for individual properties on the assessor’s website. To convert millage to dollars, divide the mill rate by 1,000 and multiply by the property’s taxable value.

For example, a KP house assessed at $500,000 has a 2024 mill rate of 8.816647 for taxes payable in 2024. This is the total of all government taxes and voter-approved levies per $1,000 of taxable value. Divide the mill rate by 1,000 to get 0.008816647. Multiply that by $500,000 to get $4,408.33. Add to that perhaps $135 in fees for weed control, etc., and the result is an approximate effective tax rate of 0.9%.

The same can be done to find the cost of individual charges.

In 2023, taxpayers renewed a maintenance levy and approved a new security and technology levy for the Peninsula School District in addition to an existing $198.5 million construction bond approved in 2019. The total 2024 school tax rate is $1.82 per $1,000 of assessed value, according to an estimate by PSD. For the hypothetical $500,000 home, that would be 1.82 divided by 1,000 and multiplied by 500,000 for an annual cost of $910, or $75.84 per month.

Anyone can appeal their property tax assessment but an important change in 2024 is that homeowners over age 61, and those who are fully disabled at any age, may qualify for a significant property tax reduction if their household gross income is under $64,000. For more information, go to www.co.pierce. wa.us.