TAXES ‑- COMPUTATION OF FORTY MILL LEVY LIMITATION. EFFECT OF EXCESSIVE MILLAGE RESULTING FROM COUNTY ASSESSOR'S COMPUTATION

TAXES ‑- COMPUTATION OF FORTY MILL LEVY LIMITATION -- EFFECT OF EXCESSIVE MILLAGE RESULTING FROM COUNTY ASSESSOR'S COMPUTATION.

In computing the aggregate of property tax levied by the state and the local taxing districts, for the purpose of complying with the constitutional and statutory forty mill aggregate limitations and with the statutes apportioning the rates of levy to the state and the various taxing districts, the rate of the state levy should be determined with reference to the assessed valuation of the property of the county as equalized by the state board of equalization; the rates of levy by the other taxing authorities are determined with reference to the values as equalized by the county board of equalization.

                                                                  - - - - - - - - - - - - -

                                                                   April 16, 1951

Honorable Hugh H. Evans
Prosecuting Attorney
Spokane County
Spokane, Washington                                                                                                 Cite as:  AGO 51-53 No. 19

Dear Sir:

            You have requested our opinion on the following question:

            When the amount of the tax levied by the state board of equalization for state purposes is extended upon the rolls by the county assessor it is computed upon the assessed value of the property of the county as equalized by the county board of equalization, rather than upon the values as equalized by the state board of equalization, with the result that the rate of levy exceeds two mills upon the values equalized by the county board, although it equals two mills upon the values as equalized by the state board.  Should that part of the state levy which exceeds the rate of two mills (on the county-equalized valuation) be included in computing the aggregate of tax levies for the purpose of complying with the forty mill levy limitation?

            Our conclusion may be summarized as follows:

             [[Orig. Op. Page 2]]

            In computing the aggregate of property taxes levied by the state and the local taxing districts, for the purpose of complying with the constitutional and statutory forty mill aggregate limitations and with the statutes apportioning the rates of levy to the state and the various taxing districts, the rate of the state levy should be determined with reference to the assessed valuation of the property of the county as equalized by the state board of equalization; the rates of levy by the other taxing authorities are determined with reference to the values as equalized by the county board of equalization.

                                                                     ANALYSIS

            The right of county authorities to determine the total assessed valuations of property within their respective counties and to levy taxes for local purposes upon such valuations is secured by Article XI, section 12, of our state constitution, which provides as follows:

            "The legislature shall have no power to impose taxes upon counties, cities, towns, or other municipal corporations, or upon the inhabitants or property thereof, for county, city, town or other municipal purposes, but may by general laws vest in the corporate authorities thereof the power to assess and collect taxes for such purposes."

            The state board of equalization, on the other hand, is not only empowered but is required, under section 1, chapter 66, Laws of 1949 (section 11222, Rem. Supp. 1949), to:

            "* * * classify all property real and personal, and raise and lower the valuation of any class of property in any county to a value that shall be equal and uniform, so far as possible, in every part of the state, for the purpose of ascertaining the just amount of tax due from each county for state purposes.  * * *" (Emphasis supplied).

            The Washington Supreme Court has uniformly held that the authority of each board of equalization within its own sphere is supreme.  InState ex rel. Tax Commission v. Redd, 166 Wash. 132, 6 P. (2d) 619, it was held that the state board of equalization could not, in view of Article XI, section 12, of the Constitution,supra, revalue a parcel of property and tax it for local purposes;  [[Orig. Op. Page 3]] that its equalization was "for state purposes."  InState ex rel. Tacoma School District v. Kelly, 176 Wash. 689, 30 P. (2d) 638, it was held that, because of the provisions of Article XI, section 12,supra, a school district could not use the valuation fixed by the state board of equalization in levying taxes for local purposes, but must use the valuation as determined by the county board of equalization.  InState ex rel. Showalter v. Cook, 175 Wash. 364, 27 P. (2d) 1075, the court held that under Rem. Rev. Stat. 11222, supra, the state board of equalization had the power to increase the total assessed valuation of property in the state and to levy,for state purposes, a tax on such increased amounts.

            It is manifest from theKelly and Cook decisions, that the equalized valuation for all other than the state's levy is that determined by the county board of equalization, while such valuation for the imposition of the state's levy is that determined by the state board of equalization.

            Amendment 17 (Article II, section 2) of the Washington Constitution provides in part:

            "* * * the aggregate of all tax levies upon real and personal property by the state and all taxing districts now existing or hereafter created, shall not in any year exceed forty mills on the dollar of assessed valuation, * * *"

            Chapter 11, Laws of 1950, Ex. Sess. (formerly section 11238-1(e) Rem. Supp. 1945), provides in part, as here applicable:

            "* * *, the aggregate of all tax levies upon real and personal, property by the state, municipal corporations, taxing districts and governmental agencies now existing or hereafter created, shall not in any year exceed forty mills on the dollar of assessed valuation, which assessed valuation shall be fifty per centum (50%) of the true and fair value of such property in money; and within and subject to the aforesaid limitation the state levy shall not exceed two (2) mills * * *; the levy by any county shall not exceed ten (10) mills * * *, the levy by or for any school district shall not exceed ten (10) mills, the levy  [[Orig. Op. Page 4]] for any road district shall not exceed ten (10) mills, and the levy by any city or town shall not exceed fifteen (15) mills:  * * *"

            Section 1, chapter 270, Laws of 1947 (section 11235, Rem. Supp. 1947) provides for the calculation of the rates of levy "upon the assessed valuation of the property of the county" (for the county and districts coextensive with its boundaries) or "of the taxing districts" (for other districts), and provides for the prorating of the levies of the so-called "junior," or "nonpreferred," districts where the full rates of levy of the several districts in any area exceed the aggregate limitation.

            It will be noted that neither of the above statutes specify whether the valuation used shall be that equalized by the state board or by the county board.  The Redd andKelly cases establish that values as equalized by the county board must be used for all levies except that of the state.  The Showalter case establishes that the value as equalized by the state board must be used for the state's levy, the reason for which should be obvious: a levy over the entire state on property valued by different standards in each of the 39 counties could not meet the constitutional requirement of uniformity:  to be uniform the state's levy must be upon a valuation equalized for the entire state.

            The levies being upon different equalized valuations, the rates of levy will be computed upon the respective valuations.  In determining the rate of levy made by the state, it is necessary to apply the assessed valuation of the property of the county, as equalized by the state board of equalization, against the amount of the state levy.  The rate of levy imposed by the local taxing districts is determined by applying the assessed valuation of the property therein, as equalized by the county board of equalization, against the amount of the local levies.  The addition of the various rates of levy, although measured by different bases, gives the aggregate levy.  There is nothing in any of the three statutes cited to prevent this, and theShowalter case expressly approves and requires this procedure.

            The assessor extends the levies upon the tax rolls in the manner provided in section 79, chapter 130, Laws of 1925, Ex. Sess. (Rem. Rev. Stat. 11240).  However, instead of extending the state's levy against the state‑equalized valuation of an item of property and the remaining levies against the valuation as equalized by the county board, the assessor computes the ratio of the difference in equalized values and applies the same against the state's rate of levy.  The adjusted rate may then be extended against the county-equalized valuation.  The result is that the rate of the state levy extended on the rolls usually  [[Orig. Op. Page 5]] exceeds two mills because the county-equalized valuations are customarily less than those of the state.  Nevertheless, the rate of levy, computed, as it should be, on the basis of the state‑equalized valuations, is only two mills.

            We can see no objection to the assessors' custom in this regard.  In fact, it is an operation which obviously will result in the great administrative saving, for to extend two valuations for each item of real and personal property on his rolls would be a tremendous burden.

            To conclude, in computing the aggregate rate of levy the county assessor should consider the state levy as applied upon the valuation as equalized by the state board of equalization, although for convenience he may extend that levy upon his rolls at a rate adjusted to correspond to the valuations equalized by the county board.  If a two mill state levy when extended on the rolls exceeds two mills, the excess shall not be considered in computing the aggregate of the levies for the forty mill limitation.

Very truly yours,

SMITH TROY
Attorney General