The Everett City Council met in special session on Monday night to set the tax rate for the coming year, but in doing so had several other decisions to make that affected that tax rate.
As in year’s past, the Council voted unanimously to adopt a minimum residential factor (MRF) of 1.75, which means that a larger share of the city’s tax burden will be borne by commercial, industrial and personal property (CIP) taxes, than by the residential property owners.
This allows the council to help alleviate the tax burden on homeowners and shift some of that burden to the businesses that actually make money by being located in the city.
The 1.75 MRF, means that residential properties, which make up about 64.4 percent of the property value in the city, will actually pay only about 37.8 percent of the tax levy. By contrast, commercial properties which make up 10.45 percent of the taxable property value will pay almost 18.3 percent of the levy and industrial properties which comprise 16 percent of the property value pay 28 percent of the levy.
In an attempt to limit the tax burden on residential property owners, the Council also voted unanimously to use $650,000 in parking ticket receipts to offset the tax levy and adopted a 20-percent residential tax exemption for owner occupied homes in the city.
The 20-percent tax exemption, basically amounts to a $885.96 tax break for residential property owners who live in their homes, or who live in one unit of a multi-family dwelling.
The nearly $886 tax exemption is determined by exempting the first 20-percent of the average residential value, which this year rose to $303,206.
The average residential value (ARV) is determined by dividing the total residential value in the city of more than $2.58 billion by the number of residential properties (8,525). Then 20-percent of the ARV, which this year equals $60,641 is then multiplied by the tax rate, $14.61 per thousand of value, to determine the amount of the exemption. That credit is applied to qualifying residential properties, with the value, or expense of the exemption, shared among the remaining property owners.