Fueled by a booming downtown and overall healthy local economy, Bellevue's property tax rate will fall significantly next year.
That is good news for many Bellevue residents, who will pay less in city property taxes in 2008 than this year. Only homeowners whose properties increased in assessed value more than 17 percent in 2007 will experience an increase in property taxes paid to the city.
According to city data, in 2007 the owner of an average Bellevue home with an assessed valuation of $536,000 paid $568 in city property taxes; in 2008, that same owner will pay $539, even though their home is now valued at $580,000.
The drop in the tax rate was the key message delivered by City Manager Steve Sarkozy this week, as he provided the City Council with updates to the 2007-2008 operating budget.
"This budget benefits all segments of our community," Sarkozy said. "It reflects a balance between high-quality public services and strong fiscal stewardship -- hallmarks of our city."
Sarkozy said for 2008, the city's property tax rate per $1,000 of assessed value is estimated at $0.93. The rate in 2007 was $1.09. This is believed to be the largest single year tax rate decrease in Bellevue's history.
The property tax rate has declined every year since 1999, when the rate was $1.83.
"The city's stance has been to hold the line on property tax rate increases when possible," Sarkozy said. "As a result, we presently have one of the lowest tax rates in the state."
Bellevue's property tax levy is applied to both existing and new construction. As the economy expands and Bellevue continues to become a regional business and employment center, the value of residential and commercial properties expands. As a result, the tax rate becomes lower.
In the city's booming downtown, for example, construction was either completed or started on an estimated 5.7 million new square feet of office, retail, multifamily, hotel and institutional space last year -- roughly a third of the total space that existed when the year began.
Also contributing to the lower property tax rate for 2008 is the expiration of a Parks and Recreation Improvement bonds. The last payment on those bonds will be made in 2008.
Sarkozy noted that Bellevue's 2008 tax rate will decrease even though a 2 percent tax increase will go into effect in 2008 to pay for targeted sidewalk and street improvements. The increase, which will cost the average Bellevue homeowner $10.18, was approved by the Council in 2006 following extensive public hearings focused on the city's growing transportation and other needs. Revenues raised by the 2 percent increase will be used to meet those needs.
Sarkozy also noted that while all property tax rates for 2008 are not yet available, the city continues to collect the smallest percentage of the total property taxes from the average homeowner.
According to 2007 figures, he said, the majority of funds collected went to state and local schools, followed by King County. The city in 2007 received 14 percent of the taxes levied on the average home, or $579; King County received 17 percent, or $683.
Among other fiscal highlights noted by Sarkozy:
• The city in 2007 maintained its triple-A bond rating -- the highest rating bestowed by Wall Street’s bond rating services.
• The city has initiated a planning process with the goal of developing sustainable long-range operating and capital financial plans;
• The new budget reflects the city's ongoing commitment to public safety by expanding staff in the city's Emergency Communications Center;
• The new budget also reflects the City Council's mandate to expand environmental stewardship by funding several new initiatives, including a citywide emissions study.
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