New Year likely to bring huge tax shift

 

December 3, 2014



With the 931 parcels coming off the La Conner area county tax rolls, taxpayers for the remaining 2,500 parcels in the La Conner School District and Fire District 13 could be left holding the bill for about $480,000 more in property taxes.

On Tuesday the Swinomish Indian Senate announced the amounts it will contribute to the La Conner School District, Fire District 13, Medic 1 ambulance service and La Conner Regional Library District.

Last month the Senate, which is the governing body of the Swinomish Indian Tribal Community, decided that the tribe will assess property tax on the 931 parcels on tribal land at the same rate the county would have.

Of that tax collected, the Senate has decided Swinomish will contribute $400,000 to the La Conner School District. The voter approved property taxes on the now exempt 931 parcels in Shelter Bay and in the Pull & Be Damned Road neighborhood would have provided closer to $779,000 to the school district.

Still, by the tribe’s reckoning, the school is not losing money, because the tribe expects to continue to employ paraprofessionals (teachers’ aids) to work with students, as it has been doing for years. A press release from Swinomish states that the tribe expects to spend $550,000 next year on its tribal educational paraprofessionals. That would make the tribe’s total school contribution around $950,000, an amount greater than what would be collected in property taxes on the now tax-exempt parcels.

But money the tribe will spend employing paraprofessionals won’t help make the bond payments on the $20 million the district’s voters approved for school construction and renovation last year. The $400,000 contribution would still leave a shortfall of about $379,000 that could be passed along to the taxpayers on the 2,500 remaining parcels in the school district. For 2014 the school district’s total property tax revenue came to about $3.3 million.

The school board will hold a special meeting at 6 p.m. on Monday to decide what the remaining taxpayers should be assessed in 2015.

Meanwhile Fire District 13’s entire property tax burden, $455,646, will be borne by the remaining 2,000 taxpayers in the fire district, which includes Pleasant Ridge and Channel Drive and farmland on the east side of Swinomish Channel, as well as the entire Swinomish Reservation on the west side. The taxpayers on the east side and those who own land in fee simple on the reservation will be absorbing an additional $104,000 or so that would have been generated by the now tax-exempt parcels.

The tribe has been contributing $120,000 per year to the fire district, and has agreed to increase that amount by $30,000 to $150,000 next year. So with tax increases on the 2,000 remaining non-tax exempt parcels and the additional $30,000 from the tribe, Fire District 13’s budget will be intact.

Since the La Conner Regional Library District and Medic 1 ambulance service have reached their legal taxing limits and cannot raise taxes on the remaining taxpayers to make up their shortfalls, the tribe has agreed to contribute what they would have obtained in taxes from the now exempt parcels.

The library will receive $25,734 from the tribe, and Medic 1 will receive $52,957 from the tribe. That will keep the budgets for those two tax-supported entities whole next year.

Using the same levy rates set by the county Assessor, the tribe stands to collect about $1.8 million in property taxes on structures built on leased reservation land, which applies to most of the homes in Shelter Bay.

The tribe’s new taxing authority is the result of a federal court ruling that makes all structures built on land held in trust by the federal government for a tribe exempt from taxation by any entity except by the tribe itself.

According to its press release, the tribe could increase medical and other services to tribal members and perhaps fund salmon habitat restoration and purchase privately owned land within the reservation boundaries when it comes up for sale.

While Swinomish never asked to be tax collectors, and was not part of the so-called Great Wolf Lodge decision, the new taxing authority is not unwelcome.

“For decades we have seen a flood of tax moneys leave the Reservation and flow to other governments,” Tribal Chairman Brian Cladoosby said in a written statement. “Those are funds that we desperately needed when we had so few other sources of government revenue. So we are thankful that we now have the opportunity to receive tax revenues to help pay for the essential governmental services the Tribe provides throughout the Reservation.”

 

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