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Trustee Support Resources

Levy Lid Lifts and Excess Levies

What is the difference? In response to a question regarding excess levies and levy lid lifts, a legal consultant from MRSC provided the following extremely clear explanation of what can be a very confusing topic:

“The difference is that [City A] is doing a LEVY LID LIFT under RCW 84.55.050 and you have been doing an Excess Levy under RCW 84.52.052. Now, the question is, can you do a levy lid lift? And, the answer is, “yes” but in doing so, you would be “borrowing” levy capacity from your fire district, which they could take back at any time by having a vote to do a levy lid lift themselves. In fact, even right now, without your doing a levy lid lift, you are borrowing capacity from the fire department and could lose it. So, let’s make certain you understand your current situation first before I discuss a levy lid lift.

Your Current Situation: Get out your copy of A Revenue Guide for Washington Cities and Towns and look at page 1. You are in a fire district. So your maximum guaranteed levy rate is $2.10 ($3.60 less the maximum possible fire district levy of $1.50). For 2012, your levy rate is $2.698378 according page 13 of your assessor’s report. [The “County Assessor and Treasurer Websites” page provides contact information for county assessors.] And, that of Fire District No. 6 is $0.402768. Added together they equal $3.101146. This is less than $3.60, so everything is “fine.” But, what if your fire district decided that for 2013, it wanted to levy $1.00 and went to the voters with a lid lift under RCW 84.55.050 and was successful? Your levy rate would fall to $2.60 because the two rates together cannot equal more than $3.60. If the fire district had a vote on a levy rate of, say, $1.30, and was successful, then your levy rate would have to fall to $2.30, which is less than your current rate.

Now, it is probably unlikely that the fire district would try to jump from a levy rate of approximately 40 cents to a dollar or more all at once. But, you need to be aware that when your regular property tax rate is anything over $2.60, you are “borrowing” some of your from the fire department’s rate. Think about how you would handle your budget if all of a sudden the fire district raised its rate a lot!

Note that an excess levy such as you now have for your library is outside all these limits. It is outside your maximum guaranteed regular levy rate of $2.60 and the maximum rate for you and the fire district together of $3.60.

Could you do a levy lid lift like [City A]? [City A] has a maximum tax rate limit of $3.60 and it is lower than that now. It doesn’t have to worry about what a fire district does because it is not part of a fire district. It is not “borrowing” any part of its levy rate. So, in that sense, you cannot be like [City A]. However, you can do a levy lid lift as long as you realize that at least some of the levy lift would “go away” if the fire district did one also. Let’s say, for example, that you put a lid lift on the ballot for 50 cents, which is what your excess levy has been. So, assuming your rate is still $2.698378 (it would probably be a little different, but we don’t know what it would be), with a lift of 50 cents, your total would increase to $3.198378. Assume the fire district stays at $0.402768. The two rates added together come to $3.601146, which is more than the allowed $3.60. Your levy lift would have to be a little less than 50 cents.

You could do one and you could put it on the ballot for as many years as you want. But, remember that part or all of the lid lift money could go away if the fire department wanted to raise its rate. You might say, “Well that’s better than having to go out for a vote every year! And it only requires a simple majority vote. If the fire department raises its rate, then we could go back to doing an excess levy.” That’s a good argument. Just realize that every penny the fire department raises its rate would lower your lid lift by a penny. You would not be getting the 50 cents you are currently getting from the excess levy.

So, that is where you are. Since you already have passed an excess levy this past February for collection in 2013, you have a year to think about a lid lift. There is information about a lift on pages 10 and 11 of the city revenue guide referred to above. Also see our web page, Levy Lid Lift.

Does a levy lid lift need to go through the county commissioners first?

The answer depends on how the public library was established.  If the county commissioners established the library district, partial rural library district or intercounty rural library district, then the Board of Trustees must send their levy lid request to the County Commissioners for certification.  Once the County Commissioners certify it, then it can go to the Auditor for the ballot.