What is an LTIF?
“Local Tax Increment Finance” areas are a new type of tax district that allows a jurisdiction (city, port, county etc.) to create a bond to develop an area. The mayor of Wenatchee wants to implement one to improve an area that suffered a big fire. The area is defined, and property taxes from that specific area are diverted to cover the development bonds—for 25 years. Junior tax districts like a library system are not exempted, which means as property values rise, the base assessment rate will grow for the library system, allowing it to collect the legal lawful levy as a percentage of property taxes.
Library budgets are based on revenue from property taxes, and the district is allowed to increase its levy by 1% a year. Unfortunately the area covered by the LTIF will divert some of those expected tax revenues away from the library, basically creating an EXPENSE for the library district. This may mean that the library system will need to do a levy lid lift to cover the new expense. If the levy lid lift fails, then the library must cut staff and services. Notice that the taxpayers are being taxed twice – once for the increasing property values over time because of the new development (which increases tax revenue) and a second time for the now-necessary levy lid lift to help fully fund the library! But wait, there’s more!
When the library system covers multiple counties, the taxpayers in ALL the counties are impacted. The two Ferry County branches are part of the NCW Libraries system (ncwlibraries.org), which covers five counties. The citizens of little Ferry County will probably see increased library levy rates because of a project for the City of Wenatchee and again for the Chelan Douglas Regional Port Authority and again for—who knows? Every city, port and county in the five counties’ library boundary could set up a LTIF.
This is taxation without representation! Ferry County has no say in how the mayor of Wenatchee runs his town. But his LTIF is going to raise our taxes! These inter-county LTIF-impacted assessments are going to be a huge burden on our county assessors, too. The bottom line is, this makes the tax assessments even less transparent and more frustrating for administrators, taxpayers, and county officials. Talk to your legislators, and ask them to sponsor new legislation this session that will exempt INTER-COUNTY LIBRARY Systems from LOCAL TAX INCREMENT FINANCE areas (LTIFs).
The statutes impacted are RCW 84.55.010 and RCW.84.55.120, and the bill that created this mess was ESHB 1189 (from 2021). If your legislators have questions, they should call the Department of Revenue for a better understanding of these special assessments. The following nineteen counties are in Inter-County Library Districts:
North Central Washington (NCWL): Ferry, Okanogan, Chelan, Douglas, Grant; Timberland: Lewis, Mason, Thurston, Pacific, Grays Harbor;
Fort Vancouver: Skamania, Cowlitz, Klickitat, and Clark;
Mid-Columbia: Benton, Franklin, and Adams (partial);
Sno-Isle: Snohomish and Island. Become an activist for local property owners! Reach out to your Representatives and Senator TODAY! Ask them to help Senator Short and Rep. Kretz to develop a fix to the law to EXEMPT inter-county library systems from LTIF’s. When we work together to solve problems like this one, that’s how we save our democracy.