Bah humbug! Big tax hike on the way

Here’s a lump of coal for the old Christmas stocking: The owners of at least 2,500 parcels in the La Conner area will see their property taxes take a leap in the new year.

With 931 parcels worth around $138 million coming off the 2015 property tax rolls and state laws that allow the bills to automatically shift to the remaining taxpayers when property is made tax exempt, the average La Conner area homeowner will pay around $400 more for civilization next year.

On Monday, the La Conner School District board agonized over what to do about $779,000 in voter-approved tax dollars vanishing as taxpayers in Shelter Bay and in the Pull & Be Damned Road neighborhoods switch from paying county taxes to tribal taxes next year.

During this transition, the Swinomish Indian Senate has announced that it would contribute $400,000 toward the school’s shortfall. But as of Monday, there had been no agreement signed with the school district saying when that money would be coming.

“We’re halfway through our fiscal year,” said board president Brad Smith. The district has already committed to contracts for its teachers, bus drivers, instructional aids, and other employees. Personnel accounts for most of the school’s $9 million budget, which runs through June.

While the board members have no doubt that the tribe will provide the funding, “We don’t have any idea when that payment will arrive,” Smith said. Therefore, he said, “The only option left is to increase taxes on non-tribal lands to make up the shortfall.”

After about an hour of discussion with about a dozen residents in attendance, the school board voted unanimously to put $529,000 of the $779,000 shortfall onto the remaining taxpayers in the school district. They figure that will increase the school taxes on a $240,000 home by around $283 next year.

In July the appeal window ran out on a federal court decision in Thurston County that made all structures built on land held in trust for an Indian tribe tax exempt, regardless of who owns the buildings. Residents of Shelter Bay and Pull & Be Damned live in homes built on leased Swinomish tribal land. While those homeowners have never been taxed on the ground their houses sit on, personal property taxes have been assessed on the structures.

Around 200 parcels within the boundaries of the Swinomish Reservation are owned privately in “fee simple.” Taxes will be increasing on those properties, as well as on properties outside the reservation boundaries.

While the school tax takes the biggest bite of the local taxes, the school district is not the only agency that will be collecting more from the remaining taxpayers.

There are nine taxing entities that were set to collect some $1.8 million in property taxes from the now exempt properties, and almost all of that amount is being shifted over to the remaining taxpayers. Fire District 13, which serves the entire area except the Town of La Conner, will shift over about $104,000 to the remaining taxpayers, and the state, county and other taxing entities will shift over a total close to $800,000.

At Monday’s school board meeting, several residents let it be known that they were not happy with the tribe’s decision to fund less than the $779,000 the school had budgeted for in property tax revenues from Shelter Bay and Pull & Be Damned.

“I think people will buck up and pay the shortfall,” said resident Madeline Roozen. La Conner and Swinomish have been supporting the schools for generations, and every penny of the school levy was approved by voters on and off the reservation.

Yet, “if this decision stands to short the La Conner schools, there are some La Conner Braves who should go home and look in the mirror and be ashamed.”

Board member Rick Thompson said that if the district had known about the federal court ruling, it would not have asked voters to approve the $20 million bond paying for the construction and renovation presently taking place. The school district learned about it in July, long after the levy vote.

The tax shift “is a heck of a hit for every family,” said La Conner resident Brian Hedlund.

Board member Kate Szurek said the district has to meet its contractual obligations with employees and has no choice but to shift the taxes.

“I almost feel like I’m being held hostage,” La Conner resident Jaci Chamness said. “The taxpayers have a contract with the school district, too.”

School Superintendent Tim Bruce said the district has about $684,000 in reserves ― which is not enough to make up the tax shortfall. Also, it is less money than the district is supposed to keep on hand, since the reserves have already been tapped this year.

Even so, in an effort to soften the blow, the board trimmed $250,000 out of its operations and maintenance property tax levy next year in order to keep from shifting the entire shortfall to the taxpayers. In all, the district was to collect about $3.3 million in voter-approved property tax levies, which include the $1.6 operations levy and $1.7 million in special taxes for the school construction and technology improvements.