Mercer Island's Property Tax Rate Up 5.8% in 2012

Despite a continuing slide in property valuations, Mercer Island residents will see another — albeit modest — increase in their property taxes in 2012, according to the King County Assessor's Office.

The property tax bills arriving this week will show a 5.8 percent increase in their tax rate for 2012, or $9.07 per $1,000 of assessed valuation, up from $8.57 per $1,000 of assessed valuation in 2011. It was $7.81 per $1,000 in 2010. 

Meanwhile median assessed value of a Mercer Island property is now pegged at $700,000 in 2012, down 4.4 percent from 2011 when the median was worth $732,000 (Local property tax rates are based on the value of residential, commercial, and personal property).

Combined, the decrease in median value and increase in the tax rate means the median property owner's tax bill in 2012 will rise 1.2 percent — or they must pay $75.76 more than last year. 

“Bank foreclosures and other distressed sales continue to be a drag on property values overall in King County,” said King County Assessor Lloyd Hara. “This is driving property values down through most of King County, and is resulting in property tax reductions for some.”

The increase is based on two local realities on Mercer Island, said assessor's office spokesman John Arthur Wilson:  Real estate on the Island is losing value slower than the rest of the county, and local voters are supportive of school district levies. 

"Part of it is there's limited land on the island, " Wilson said. "Even when there's downward pressure in the market, that means property values tend to hold more stable as opposed to other areas where land is plentiful."

Despite the decline in value, Mercer Island stayed in the top-third of all assessed areas retaining value — ahead of Newport Shores/Kennydale, but behind Kirkland or Hunts Point/Medina — which saw no decline in assessed value. Only two areas actually gained value in the entire county: Seattle's Wallingford (+2.4 percent ) and Phinney Ridge (+0.5 percent) neighborhoods. 

Voters also approved three Mercer Island School District levies in 2010 (a one-year transportation levy has since been fully paid). The combined rate of all local public school financing, including a pre-existing bond authorization dating to the 1990s, amounts to $2.68 per $1,000 of assessed valuation in 2012. 

The state operates under a “budget-based” property tax system in which taxing districts, such as the MISD, submit their annual adopted budgets to the assessor — who has the responsibility to determine the taxing rate that is necessary to meet the adopted budgets. 

County Assessor area reports, which are issued later in the year, focus on single-family homes and commercial property separately. A 2011 report found that the . Based on a 4.4 percent decrease in assessed value, that is now likely to decline to closer to $900,000 this year. 

In 2012, a Mercer Island property assessed at $1 million will pay more than $9,000 in taxes this year — an increase of $500 from a year ago. 

Property taxes must be paid or postmarked by Monday, April 30. Second half taxes are due by Wednesday, Oct. 31.