Shoreline’s 2022 Proposition 1:
The Levy Lid Lift

The City of Shoreline has placed proposition 1 on the November ballot to implement a Levy Lid Lift. The specifics they decided on will result in a substantial property tax increase for Shoreline residents, along with a substantial budget surplus for the City.

To learn what a Levy Lid Lift measure is, why we need one, and why the City has botched this one, read on!

Please Vote No on Proposition One!

With Proposition 1, on the November 2022 ballot, the City of Shoreline is asking for a nearly 50%, permanent increase in the general tax levy.

The City, itself, predicts that Proposition One will generate a large revenue surplus ($15 million).

The City has not justified the need for such a large increase.

Graph from the City showing large increase in general tax levy if Proposition One passes

This graph is taken from this e-mail from the City Manager to Councilmember Mork, sent prior to the July 18, 2022 City Council meeting. It shows just how large the effect of Proposition 1 will be on the City’s general tax levy. We have added the notes and arrows in red.

What’s in the 2022 Levy Lid Lift?

The Quick Answer

The short answer is that Shoreline’s Proposition 1, if passed, will result in a roughly 48% increase in the total levy in 2023, followed by increases at the rate of inflation in the five years following that (2024-2028).

If that seems like a lot, it is!

The Details

The Text of the Proposition

The ballot measure for the proposition reads:

City of Shoreline
Proposition No. 1
Maintenance and Operations Levy for Public Safety and Community Services

The Shoreline City Council adopted Resolution No. 492 concerning a property tax levy for public safety and community services. If approved, this proposition restores Shoreline’s levy rate to help fund police/neighborhood services, including RADAR and crime prevention; preserves parks, trails, playgrounds/playfields; and provides human services.

This proposition sets Shoreline’s maximum regular property tax rate to $1.39/$1,000 for collection in 2023; sets the limit factor for levy increases in 2024-2028 at 100% plus annual inflation (Seattle CPI-U); uses the 2028 levy amount to calculate subsequent levy limits; and exempts qualifying seniors and persons with disabilities per RCW 84.36.381.

Should this proposition be approved? [yes or no]

Here is a link to the complete text of the measure, in case you’d like to dig into it1.

Notes

On the Levy Rate

The current Levy Rate (for the 2022 tax year) is $1.13/$1,0002 — the proposed rate for 2023 ($1.39) is 23% higher. Housing prices have been skyrocketing, and we can expect roughly a 20% increase in assessed values in Shoreline between 2021 and 20223. (The 2021 assessments are used to compute the 2022 taxes, and the 2022 assessments are used to compute the 2023 taxes.) Should Prop 1 pass, the combination of the large increase in levy rate with the large increase in assessed values will result in about a 48% increase in total levy in 2023.

This is a permanent increase in the property tax levy, not just a one-time “goose”. Going forward, the levy limits in subsequent years are the previous year’s levy multiplied by a “limit factor". (Currently, the limit factor is based on the inflation rate.) This nearly 50% increase will be collected every year going forward.

On the Exemption for Qualifying Seniors and Persons with Disabilities

Note that according to RCW 84.36.381(5)(a) only those qualified senior citizens or veterans whose combined household income is under “threshold 3” are exempted from the Proposition 1 levy increases. “Threshold 3” is the lowest of the various thresholds of eligibility for exemption. As near as I can tell4, for 2021, 2022 and —at this point — 2023, threshold 3 specifies a combined disposable household income5 of $40,447 or less.


  1. Somewhat amusingly the second paragraph of Section 2 of the full text of the measure begins:

    The City Council shall determine the basic public safety programs and to fund a portion of the cost of maintaining and operating community services to be funded as well as the timing, order and manner of funding these programs and services. [...]

    (What does that even mean?)

  2. King County Assessor’s 2022 report on King County Taxing Districts Codes and Levies

  3. For assessment aggregation purposes, Shoreline is divided into three regions: Area 1 is Shoreline West of Aurora Ave, Area 2 runs between Aurora and I-5, and Area 3 is Shoreline East of I-5. The King County Assessor has published his 2022 Annual Report for Areas 2 and 3. From that (and the postcards from the Assessor that many of us have received by now) we know that total assessments have increased by 20.6% in Area 2 and by 22.1% in Area 3.

    Here is a article in the Shoreline Area News about the increases in assessed values in Areas 2 and 3.

    The Assessor's 2022 report for Area 1 has not yet been published, so we have to guess as to how much assessments will rise there. It seems not unreasonable to assume the increase will be similar to that in the other two areas of the City. Note that in 2021, assessments rose by 15.4%, 19.3%, and 14.7% in Areas 1, 2, and 3 respectively. (See the 2021 reports for areas 1 & 3 and area 2.)

  4. There are some apparently stalled bills in the State legislature that would raise the RCW 84.36.381 income thresholds. However, as things currently stand, HB 1438 seems to specify that the thresholds will stay at the previous years’ values until at least August 2024.

  5. Combined Disposable Household Income roughly means “Combined Household Income” minus medical expenses. See RCW 84.36.381 for details.

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Read the City’s Statements Critically!

The Quick Answer

The City has recently sent out a four-page color, glossy brochure on Proposition 1.

To the casual reader, it makes the City's financial situation sound particularly dire. We encourage you to parse the statements the City makes carefully, ask questions, and research the facts.

Proposition 1 Flyer sent recent by the City


On Inflation and “Expiring” Levies

The flyer says:

Washington state law limits most jurisdictions to an increase in property tax revenue of 1% per year unless authorized by a vote of the people. Because inflation often rises more than 1% a year, a structural imbalance exists. [...] The 2016 levy expires December 31, 2022.

While nothing in that statement is false, it makes it sound as if the City will be desperately short of revenue in 2023 if Proposition 1 is not passed. It leaves out significant parts of the story:

  • The Levy Lid Lifts we've had in place have allowed the City's general levy to increase at about twice the rate of inflation, from $7.6 million in 2012 to $15.2 million in 2022.
  • Those Lid Lift measures were “multi-year permanent lid lifts”. None of the tax increases that they allowed go away in 2023 (or ever).
  • The City is predicting a general fund revenue surplus of $8 million for the current biennium (2021-2022).
  • Proposition 1 includes a permanent 48%, $7 million increase in the general levy for 2023. That's 39% over the current rate of inflation.

The City is not currently short of cash. If Proposition 1 fails, the City’s general levy will still increase in 2023 (just not by as much.)


On Service Cuts and Balancing the Budget

The City writes:

If the proposed levy replacement does not pass, the City will identify services or programs to reduce or eliminate to balance the City's budget.

Of course, that statement is true — whenever the budget is in the red, the City will need to make cuts to balance it — but it gives a false impression that the cuts will be necessary, and soon.

In fact, the City has just released its proposed budget for the next two years. That budget includes funding for the RADAR 24/7 Mobile Crisis Response Team and expands other City programs. There appear to be no real cuts. That budget assumes that Prop 1 does not pass, yet, it is, essentially, balanced.

Any implication that service cuts will be necessary to balance the budget in the next two years is just fear-mongering.


With Proposition 1, the City is proposing a very large, more than 48%, more than $7 million per year permanent increase in the general levy. The City's budget for the next two years is balanced without that money. It is not clear what the City's plans are for that extra revenue.

We understand that a City's costs increase with time, and have no issue with the provision in the Levy Lid Lift measures (including Proposition 1) that allows taxes to increase with inflation.

But, the initial tax increase of 48% (39% above the rate of inflation) that the City chose to write into Proposition 1, at a time when many residents are truly struggling financially due to the effects of inflation and the COVID pandemic, is, simply, too much!

If Proposition 1 fails, the City can place another Levy Lid Lift measure on the ballot next year — one with hopefully a more moderate tax increase written into it.


There are more details (with references) on the subjects mentioned on this page on our Rebuttal to the “Explanatory Statement” page.

Updated

Why such a large increase? Is the City short of funds?

The Quick Answer

The City took in more revenue in 2021 than was expected, resulting in a significant surplus.

City staff predicts, conservatively, that Proposition 1, if it passes, will result in a very large $15 million surplus over the six years that it will be in effect.

We don’t know why they need such a large surplus.

The Details

The City took in more revenue in 2021 than was expected1, and expenditures were lower than predicted2, resulting in a surplus of over $8 million in 2021.

City staff predicts that Proposition 1, if it passes, will result in a $15 million surplus over the six years that it will be in effect. (The staff seemed to underestimate the increase in assessment values for this year, and so their estimate of the surplus is likely to be an under-estimate as well.)

Here is a graph presented by the City at the July 18, 2022 City Council meeting showing just how large the effect of Proposition 1 will be on the property tax levy. We have added the notes and arrows in red; the rest is from the City. (The original, unannotated, graph is available here.)

Graph presented by the City showing predicted effect of Prop 1 on Shoreline’s general tax levy


Staff presentation at the June 13 City Council meeting

Here is a slide from Staff’s presentation3 at the June 13, 2022 City Council meeting on the Levy Lid Lift options. (Keep in mind that at that time this slide was prepared the City was underestimating the size of the levy increase4 and therefore underestimating the projected surplus.) (The red annotations are ours. The rest is by City Staff — here's the original.)

Slide from Staff presentation to City Council on the Levy Lid Lift options. 2022-06-13

The City is Presenting a False Dilemma
  • The City considered Levy Rates of $1.02–$1.08 and found that, over the course of six years, they would result in a significant deficit. (Okay, let’s not do that.)

  • They considered rates of $1.35–$1.49 and found that they would all result in significant surpluses.

  • Why were no Levy Rates in the huge gap between “option 3” ($1.08) and “option 4” ($1.35) considered? Presumably, a rate somewhere in between those two figures (e.g. $1.22) would have still resulted in a six-year surplus, albeit a more moderate one.

$15 Million is a Large Surplus!

To put these values in perspective, the City’s total general property tax levy for 2022 is $15 million. If Proposition 1 passes, the City is predicting surpluses on the order of the entire amount collected from property tax for the general fund in 2022.

It is not at all clear why the City needs such a large tax increase or what plans it has for the extra funds.

Staff presentation at September 19 City Council meeting

Here are a couple more slides from the staff presentation on the 2022 Second Quarter Financial Report for the City.

This slide5 shows the General Fund is projected to have a surplus (more revenue than expenses) of over $8 million for the 2021-2022 biennium. Also, note that this is a staggering $21 million more than the $13 million the City initially projected it would be spending down from the General Fund reserves over that period.

Slide presented by City staff on September 19, 2022 showing large projected surplus for the current biennium

Here's another disturbing slide6 that shows that staff is still low-balling their estimates as to how much Proposition 1 will increase taxes:

  • Staff are still assuming that assessed values (AV) will be rising 17%, when we now know from the reports published by the King County Assessor that assessments in Shoreline are rising, on average by over 20%.
  • Bewilderingly, staff are assuming a Levy Rate, should Proposition 1 pass, of $1.29 per thousand, when Proposition 1 clearly calls for a Levy Rate of $1.39!

Taken together, City staff appear to be underestimating revenue (taxes) from the general levy by roughly 10%!

Slide presented by City staff on September 19, 2022 showing outdated assumptions used to forecast property tax revenue

Staff Has Consistently Underestimated the Size of the Tax/Revenue Increases Written Into Levy Lid Lifts

Staff predicts a $15 million surplus should Proposition 1 pass. There is every reason to believe that that is an underestimate and that Proposition 1 will result in a significantly larger surplus than even that.


  1. Staff presentation on Item 9(a) 2021-2022 Mid-Biennial Budget Update (p. 3) at the November 1, 2021 City Council meeting.

  2. City of Shoreline, 2021 4th Quarter Financial Report (p. 5).

  3. Staff presentation on Item 8(b) 10 Year Financial Sustainability Strategy #7 - Levy Lid Lift Renewal, (p. 13) at the June 13, 2022 City Council Meeting.

  4. In June, City staff were estimating that total assessed property values in Shoreline would increase 12% from 2021 to 2022. It now appears that the increase will likely be over 20%. This means that staff were underestimating the increase in revenue for the first year of the Levy Lid Lift by roughly $1.5 million. Since the Levy Lid in subsequent years is based on the 2023 Levy, the revenue for those years was similarly underestimated. That extra 8% increase in assessed values leads to perhaps an extra $9 million contribution to the six-year surplus.

  5. Staff presentation on agenda item 9(a), 2022 2nd Quarter Financial Report (p. 68) to City Council on September 29, 2022.

  6. Staff presentation on agenda item 9(a), 2022 2nd Quarter Financial Report (p. 78) to City Council on September 29, 2022.

How do we know how much Proposition 1 will increase taxes?

The Quick Answer

Proposition 1 sets the levy rate (how much residents pay per $1000 of assessed value) for 2023 to $1.39. The levy rate in 2022 is $1.13. That is a 23% increase in the levy rate alone.

total levy = levy rate × total assessed value

Home values have been increasing at a staggering rate recently. We now know that total property assessment in Shoreline will increase by more than 20% in 2023 from 2022.

A 23% increase in rate multiplied by a 20% increase in assessed values results in a 48% increase in total revenue!

If Proposition 1 passes, it is likely that the City will be collecting roughly 48% more in property taxes in 2023 than in 2022.

The Details

Multi-year Levy Lid Lifts, such as this year’s Proposition 1 are structured in a confusing way. In most years, they impose limits on the total levy — the total amount collected — and on how much that may increase from year to year. In the years after 2023, the first year in which it takes effect, Prop 1 limits the total levy increase to be equal to the rate of inflation. This seems reasonable and is easy to understand.

The Crux is the First Year of the Levy Lid Lift

For 2023, however, Proposition 1 — instead of setting a cap on the total levy, as it does in subsequent years — fixes the levy rate (how much residents pay per $1000 of assessed value).

Figuring the increase in the total tax levy for the first year takes a bit of work. One must multiply the change in tax rate by the change in total assessed value of property within the City.

Home Values are Rising Rapidly

We all know that home values have increased at a staggering rate over the past year. The King County Assessor reports that appraisal values have increased by 20.1% in "area 1" of Shoreline (west of Aurora)1, 20.6% in “area 2” (between Aurora and I-5), and by 22.1% in “area 3” (Shoreline, east of I-5)2.

Were levy rates held constant between 2022 and 2023, the total tax levy would still increase proportionally to the increases in assessed values. I.e. were levy rates held constant, the general property tax levy would still increase by over 20%.

Proposition 1 Includes a Large Increase in Levy Rate

The City did not hold levy rates constant. Instead, when it put Proposition 1 on the ballot, the City chose a tax rate for 2023 of $1.393. That is 23% higher than the levy rate in 2022 ($1.134).

To determine the increase in total levy (what we pay and what the City collects) simply multiply that by the increase in assessed values between 2022 and 2023.

A 23% increase in levy rate multiplied by a 20% increase in assessed values results in a 48% increase in total revenue! The math is: 1.23 × 1.20 = 1.48 — the increments compound, just like interest on a bank account or a loan.

It is also, important to note that this is a permanent increase. (Limits on the tax levy going forward are based on the previous year’s levy.)


  1. The King County Assessor’s 2022 Annual Report for Area 1.

  2. The King County Assessor’s 2022 Annual Report for Areas 2 and 3. (Also see this article in the Shoreline Area News.)

  3. The City could easily have chosen a lower levy rate when they voted to put Proposition 1 on the ballot. The rate they chose generates a considerable surplus over budgeted and predicted expenses. It is not at all clear why more moderate rate increases were not considered.

  4. King County Assessor’s 2022 report on King County Taxing Districts Codes and Levies

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Rebuttal to the “Pro” Prop 1 Statement in the Voter’s Guide

The Quick Answer

The Statement in Favor of Proposition 1 in the King County Voter’s Guide is vague and misleading.

Read on for more context on the points raised in the statement.

The Details

What is RADAR? How does it relate to Proposition 1?

The “Statement in Favor” says:

This levy lid lift, Proposition 1, will preserve current services- such as outreach services to at risk youth. It will enhance a new service -- mental health professionals teamed with police to respond to the growing need for mental health interventions (RADAR). RADAR has been proven to be more effective in helping people impacted by drug and mental health crises.

Let's be clear: Proposition 1 is about raising the Levy Lid on the City's general property tax levy. That levy goes into the City’s general fund which pays for the salaries and expenses of the majority of City employees in all departments. Police services account for roughly 30% of the expenditures from the general fund. The City Manager's office and Administrative Services departments account for a similarly sized chunk of the budget — roughly another 30%. Roughly 15% of the general fund budget goes to the Recreation, Cultural & Community Services department (which includes: “Neighborhoods, Emergency Management Planning, Human Services, Diversity Inclusion, Environmental Services, Recreation, Youth & Teen Development, and Cultural Services”).

Here is a graph showing actual and projected general fund expenditures by department for 20211.

Bar graph showing general fund expenditures by department

What is RADAR?

RADAR is a joint project between five north King County cities formed to “serve people in crisis coming in contact with law enforcement and the crisis system”. You can read more about RADAR on their website.

It appears that the bulk of the funding for the program thus far has come from various grants, and a county-wide special sales-tax levy2. To date, so far as we can tell, Shoreline’s general fund has contributed very little if at all in the way of funding to RADAR.

Going forward there are plans to create a “Regional Mobile Crisis Response Program”. Projected expenses to Shoreline's general fund for that are $811,000 for the 2023-2024 biennium3. Total budgeted general fund expenditures for the 2021-2022 biennium were over $100 million4, so these costs represent a fraction of a percent of the total general fund budget.

The expansion of the RADAR program (at a budgeted cost of just over $400k per year) is hardly enough to justify a nearly 50% (>$7 million per year in new revenue) permanent tax increase.


What About Inflation?

The “Statement in Favor” claims

Recreation programs, community services and city customer services are at risk due to inflation. Revenue to fund city services will dramatically fall without the levy lid lift. Programs we rely upon will have to be reduced. Voting “yes” on Proposition 1 preserves an array of services for everyone, including the homeless, as well as continues maintenance of our excellent park system and recreation areas.

Again, let's be clear: The City's revenue has been more than keeping pace with the rate of inflation.

For the past twelve years, there have been Levy Lid Lift measures in effect that have allowed the Shoreline general property tax levy to rise with the rate of inflation. (In most years the per-year increase has been capped at the rate of inflation. In two of those twelve years, due to the way Levy Lid Lift measures work, the increase was significantly greater than the rate of inflation.)

One can argue as to whether the City needs even more money, but claiming that the City's revenue is losing out to inflation is disingenuous and misleading.

Revenue Will Not “Dramatically Fall” if Prop 1 Fails

The statement “Revenue to fund city services will dramatically fall without the levy lid lift” is just plain false.

If proposition 1 fails, the City’s general property tax levy in 2023 will be capped at 101% of the 2022 levy. That is, revenue from property taxes will still increase by 1%. Revenue from other sources (like sales, B&O, utility, and gambling taxes) will likely increase by more than that. There is no “dramatic fall”.

Also, note that, should Proposition 1 fail, the City can (and, probably, should) come back to the voters next year with another Levy Lid Lift measure, that sets a more reasonable increment in the general levy.


More on Inflation, Social Programs, Growth

The “Statement in Favor” continues:

Our city is already impacted by higher costs due to inflation, significant growth pressure and the need for new program to address serious social problems. We must step up to ensure the quality of services we rely on and to leverage expected growth.

As stated in the previous section, City revenue has more than kept up with inflation over the last twelve years. The City General Fund's revenue exceeded expenses by over $8 million in 2021, and appears to be heading towards finishing the 2021-2022 biennium with $21 million more in the general fund reserves than was initially forecast5.

On the other hand, inflation affects the tax-payer’s budgets, too. A time of high inflation, such as we find ourselves in now, is not the time to impose a 50% tax increase.

As noted above, the anticipated expenses associated with the “new program to address social problems are peanuts compared to the size of the proposed tax increase.

As for growth, the City itself describes (while justifying the property tax exemptions granted to the new high-density developments going in) just how growth leads to increases in revenue6. For more details see our page on how growth affects the City budget.


About the Citizen Advisory Committee

The “Statement in Favor” concludes with:

A citizen advisory committee composed of your neighbors recommended that the City Council ask Shoreline voters to renew the levy lid lift.

Yes, the Financial Sustainability Advisory Committee did recommend that the Council should put a Levy Lid Lift before the voters. However, the committee did not make a recommendation as to what Levy Rate should be set in the Lid Lift measure. In fact, some members of the committee expressed concerns about adding to the tax burden given inflation, the recently passed 2022 school levies, and parks bond and increasing property taxes. See our page on the FSAC for details and references.


  1. From staff presentation on Item 9(a) Year-End Financial Report at the April 11, 2022 City Council meeting.

  2. See the FAQ in RADAR’s about page.

  3. See staff presentation on Item 9(c) Regional Mobile Crisis Response Program at the September 26, 2022 City Council meeting.

  4. See Shoreline’s 2022 SecondQuarter Financial Report, page 4.

  5. See staff report on Item 9(a) Financial Report and Pre-View of 2023 Budget, page 5 from the September 19 City Council Meeting.

  6. See the last question in the City's Proposition 1 FAQ. Part of the answer reads:

    In addition to the ongoing sales taxes generated from the new residents, the City also receives one-time sales taxes from the actual construction, Real Estate Excise Taxes from the sale of project sites and, in most cases, completed projects at prices in the tens of millions as well as permit and inspection fees that offset the development review and inspection. From a revenue perspective, despite the initial exemption, the positive impact is significant immediately as well as in the long term. As for the tax burden, while there is a short-term potential shift to existing property taxpayers, these developments help increase the pool of taxpayers, spreading the long-term tax burden for the benefit all residents.

    (The emphasis is ours.)

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Rebuttal to the "Explanatory Statement" in the Voter’s Guide

The Quick Answer

If you think the “Explanatory Statement” about Proposition 1 in the Voter’s Guide might be corporate marketing-speak, you might be right!

The “Explanatory Statement” in the Voter’s Guide begins:

In 2016, Shoreline voters approved a six-year maintenance and operations levy for basic public safety, parks and recreation, and community services. That levy will expire on December 31, 2022. The proposed maintenance and operations levy would replace the expiring levy.

This makes it sound as if funding for public safety and all those other good things will be cut if Proposition 1 does not pass. The City's proposed budget for the next biennium makes it clear that that is simply not true — at least for two years covered by the budget.

In 2016, Shoreline voters approved a “Six-year Permanent Levy Lid Lift”. This allowed the City to raise the City's general levy by 12.8% in 2017 and then at the rate of inflation for the following five years (2018-2022). Between 2016 and 2022, the general levy increased by 39% (significantly above the rate of inflation: the Seattle-area CPI-U increased by 27% over that period.) All of that increase is permanent.

To state that Proposition 1 “replaces the expiring levy” is very misleading. The tax increases allowed by the previous Levy Lid Lifts do not expire. If Proposition 1 is not passed, the City’s revenue from the general tax levy will not drop — in fact, it will continue to increase.

Proposition 1 would add another 48% permanent increase to the general levy in 2023. This would be in addition to the 39% increase that has been allowed by the 2016 Levy Lid Lift — there is no “replacing” going on here.

The Details

State law limits the amount that the City can increase its regular tax levy — the total amount it collects in property tax for its General Fund — from year to year. Without explicit voter approval for a higher rate, the City may only increase the total levy by 1% each year. Over the long term, growth in revenue of only 1% per year is likely to be insufficient to cover increases in costs for desired services. For that reason, voters have approved two Levy Lid Lift measures that have allowed the City's tax revenue to increase at rates that have more than compensated for the effects of inflation for the past 12 years.

The 2010 Levy Lid Lift increased the 2011 general levy by 30% over 2010, followed by five more years where the levy was allowed to increase at the rate of inflation. (Note that this was passed after several years where levy increases were capped at the default limit factor of 101%, so the large 30% initial bump was somewhat justified by the need to “catch up” with cost increases over the preceding years.)

The 2016 Levy Lid Lift increased the 2017 general levy by 12.8% over 2016, again, followed by five more years of increases at the rate of inflation.

Over those 12 years, the general levy has doubled, from $7.6 million in 2010 to $15.2 million in 2022. Over that same period, the Seattle-area CPI-U (Consumer Price Index - the preferred measure of inflation) has increased by 44%. Over the past twelve years, the general tax levy has increased, on average, at roughly twice the rate of inflation.

None of those tax increases “expire”. The only thing that is “expiring” is the ability to continue to increase taxes at the rate of inflation. Without a Lid Lift measure in place, the 2023 general tax levy will be limited to 101% of the 2022 levy.

We — Shoreline Citizens for a Fair Levy — have no beef about allowing the levy to rise with inflation, however, we do take objection to the initial >48%, more than $7 million per year permanent levy increase that is written into Proposition 1. This is 39% above the (already high) rate of inflation!

The City's budget for the 2021-2022 biennium is turning out to be $21 million rosier for the general fund than was initially predicted1. (The City had forecast a $13 million shortfall, but is now expecting an $8 million surplus over that period.)

The City's proposed budget for the next biennium (2023-2024) demonstrates that it has the funding necessary to increase support for the RADAR and other programs without cuts to other services. The City has provided very little specific information on what its plans are for the extra $7 million per year that Proposition 1 will take in.

If Proposition 1 is defeated, the City will be able to come back to the voters next year with another Lid Lift measure — hopefully, one with a more modest initial tax increase.

On the Implicit Threats of Service Cuts

The Explanatory Statement continues:

Replacing the levy would maintain current levels of police and community safety services, including neighborhood safety patrols; traffic enforcement in school zones and neighborhoods; and community crime prevention programs. It would also enhance the RADAR Program by adding mental health professional teams to provide 24/7 response with police to community members in behavioral health crisis. Proposition 1 would also preserve safe, well-maintained, and accessible parks and trails; playgrounds and play equipment that meet safety standards; playfields and restrooms2; and preserve recreation programs for youth, adults, families, and seniors. Proposition 1 would continue funding for community services for seniors, youth, and individuals and families in need, including homelessness response services. The levy would also sustain the City’s code enforcement and customer response programs.

The implication that there would be cuts to these important services if Proposition 1 fails is just fear-mongering.

The City just released the first draft of its proposed budget for the next biennium (2023-2024). The budget assumes that Proposition 1 does not pass. Still, it includes funding for the RADAR 24/7 Mobile Crisis Response Team, as well as staffing increases in various other City departments. The budget does not appear to call for any significant cuts to existing services. Importantly, the proposed budget is, essentially, balanced3, even without the passage of Proposition 1.

The City has the funding for and the intention of doing these things — at least for the next couple of years — with or without the passage of Proposition 1.

By the City's own estimates, the passage of Proposition 1 would generate a revenue surplus in each of the next five years (followed by a balanced budget in the sixth year.) Surpluses in the first few years of the period would be quite large.

At the October 10 City Council meeting, during the staff presentation on the proposed budget for 2023-2024, the City Manager mentioned a list of “budget amendments” she would recommend should Proposition 1 pass. These were:

  • Hire another IT person for City Hall.
  • Hire more staff in the HR department.
  • A mention that maintaining the after-school “Hang Time” program may require additional funding at some point 2 to 4 years from now.
  • And, finally: “And, obviously, all the needs we have in our capital program4.”

There was no other mention of any increased funding for “basic public safety, parks and recreation, and community services”5.

Let’s be clear: The permanent >48%, >$7 million per year tax increase proposed by Proposition 1 goes to the City's general levy, to be spent in whatever way the City decides. The City has not said in any precise way what its plans are for the bulk of that extra money.


  1. See staff report on Item 9(a) Financial Report and Pre-View of 2023 Budget, page 5 from the September 19 City Council Meeting.

  2. Note that the voters just passed a new Park Bond measure (which, confusingly, was also called “Proposition 1”) specifically to fund improvements and acquisition of City parks. The costs of that will be adding a new levy property taxes beginning in 2023.

  3. The City predicts a shortfall of $358,000 over the two years of the 2023-2024 proposed budget. That is a small fraction of a percent of the total $118 million budget that it is “in the noise” (statistically indistinguishable from zero.) Note also that the City’s general fund balance (“what's in the bank”) is around $35 million.

    In any case, it is hard to see how a predicted shortfall of less than $200 thousand per year justifies a more than $7 million per year permanent tax increase.

  4. As for which capital programs have needs, the accompanying slide called out “sidewalk, transportation, and park priorities”. Note that each of those capital programs gets funding from its own set of taxes (most of which we have recently voted for).

    • A Parks Bond measure was passed in February 2022 to fund park improvements and acquisitions.
    • We pay $40 of our annual car registration fees to the City. $20 of that is slated for sidewalk improvements and $20 for roads. See the City's page on the City's Transportation Benefit District for more on that.
    • In November 2018 we passed a ballot measure adding 0.2% to our sales tax for sidewalk improvements.

  5. You can watch recorded video of the City’s presentation on the proposed budget for the 2023-2024 biennium at the October 10 City Council meeting. See the City’s Council meeting page for a link to the video. The City Manager’s comments on potential budget additions should Proposition 1 pass start at around starts at around 26:50.

Updated

What happens if Proposition 1 is defeated?

The Quick Answer

The City has just released the first draft of its budget for the 2023-2024 biennium. This budget provides funding for the RADAR program and increases staffing in the City’s maintenance and recreation departments. No notable service cuts were mentioned.

The budget was written assuming that Proposition 1 does not pass. Even so, it adds funding for new services (including the RADAR program).

If proposition 1 is defeated, the budget makes clear that the City will still have enough revenue for at least the next two years. The City would then be able to place another Levy Lid Lift initiative on the ballot next year — hopefully, one with a more reasonable tax increase.

The Details

At the October 10 City Council meeting, City staff made their first presentation on the proposed 2023-2024 budget1. (You can watch the presentation for yourself — a video of the meeting is available from the City's council meeting archive page. The budget presentation starts at around 26:30.)

Here are some takeaways.

No Drastic Cuts

The budget (prudently) assumes that Proposition 1 does not pass. Nevertheless, the budget adds funding for2:

  • The much-touted RADAR program and its Mobile Crisis Response Team.
  • A new parking enforcement program.
  • Compensation for City Board & Commission members.
  • Staffing increases in the Recreation, Parks & Maintenance, and IT departments.

There are no service cuts — much less, drastic ones — mentioned.

The City Does Not Expect Red Ink

The City predicts (again, if the Levy Lid Lift is defeated) that expenditures will exceed revenue by $358,0003 for the biennium. That is peanuts compared to:

  • The total general fund budget for the biennium ($118 million).
  • The general fund balance — i.e. “what's in the bank account” ($35 million).
  • The size of the tax increase written into Proposition 1 (more than $15 million for the biennium).

If Proposition 1 is defeated, the City has plenty of resources to make it through the next couple of years, even while funding new services (including RADAR). The City will then have a chance to put another Levy Lid Lift measure — hopefully, one with a more reasonable tax increase — on the ballot next year.

Proposition 1 Creates Large Surpluses

Staff presented this slide, which assumes that actual expenses are 99% of budgeted expenses. Staff characterized this as “probably a fair picture of reality since we do know that, generally, our expenses come in slightly under budget and our revenues slightly higher than budget”4. It shows that, if Proposition 1 passes, it is expected to create, for all practical purposes, a surplus in every one of the six years that the Lid Lift covers.

10-year Operating Budget Forecast showing surpluses for the next six years if Prop 1 passes

Note that the surplus in the first years of the Lid Lift is predicted to be quite large. The graph appears to show surpluses of around $9 million per year in 2023 and 2024.

It's not at all clear why the City needs so much more revenue.


  1. Here are the slides from the budget presentation.

  2. The City Manager lists these new budget items at around 28:45 on the video of the October 10 Council meeting. The City's Administrative Services Director goes into further detail at around 34:55 on the video.

  3. The $358k shortfall is mentioned at around 38:30, and again at around 47:00 in the video of the October 10 Council meeting.

  4. This slide and the quote are from around 39:40 of the video of the October 10 Council meeting.

Why a “Levy Lid Lift”?

The Quick Answer

State law limits the amount that the City can increase its regular tax levy — the total amount it collects in property tax for its General Fund — from year to year. Without explicit voter approval for a higher rate, the City may only increase the total levy by 1% each year.

Since the City’s costs tend to increase faster than 1% per year, this is not particularly sustainable. Levy Lid Lifts are a procedure by which the City can seek voter approval for higher limits on the amount of tax they collect and higher limits on the rate of tax increase from year to year.

The previous Levy Lid Lift was passed in 2016. By statute, the lid lifts can not last longer than six years, so now it’s time for the City to come to the voters for another one.

The Details

The “Levy Lid”

State Initiative 747, passed in 2001, established a “101% levy limit” which limits the amount the City can collect in its regular property tax levy — the total amount collected — to 101% (the “limit factor”) of the previous year’s revenue.

Allowance for Growth

Actually, it's more complicated than that. RCW 84.55.010 includes an additional allowance for growth.

After the limit factor is applied to the previous year’s total levy, the levy limit is further increased by an amount proportional to the increase in total assessments due to new construction and improvements.

The “Levy Lid Lift”

Revenue growth of 1% per year is not much, so a City is not likely to thrive under that limit for very long. Thankfully, the law provides a way by which the City can seek voter approval for higher limits on the tax they collect, and for a higher limit factor governing the increases in levy from year-to-year.

This process is called a Levy Lid Lift.

The Municipal Research and Services Center (MRSC), a nonprofit organization created to help local governments provides a very good explainer page on Levy Lid Lifts and how they work.

The previous Levy Lid Lift was passed in 2016. By statute, the lid lifts can not last longer than six years, so now it’s time for another one.

Past Levy Lid Lifts

The first Shoreline Levy Lid Lift measure appears to have been passed in 2010. It increased the total levy by 25% in 20111 and allowed the lid to increase at the rate of inflation for the next five years. (Prior to that the regular tax levy was limited to 1% annual increases, though, as always, there were excess tax levies to pay for things like the 2006 Parks Bond.)

Shoreline’s last Levy Lid Lift was passed in 2016. That lift created an increase in revenue of 11% in 20172 and allowed the total levy to increase in proportion to the increase in the Seattle-area CPI-U (the inflation rate) for the five years after that.

The previous increases — 11% in 2016 and 25% in 2010 (when there was ground to be made up since the City had been capped at 1% increases for several years) — seem reasonable. This year’s proposed 48% increase does not.


  1. King County Assessor's report: 2010–2011 Comparison for Cities.

  2. King County Assessor's report: 2016–2017 Comparison for Cities.

New

Don’t Be Fooled! Prop 1 Is Not about Park Improvements

The Quick Answer

You may have seen one of the large colorful signs placed at various City parks that state “Proposition 1 includes improvements to this park” and even include a link to the City’s web page on the November Levy Lid Lift Proposition 1.

Let’s be clear: these signs refer to a different “Prop 1”. These signs refer to the Parks Bond measure which passed in last February’s special election. Park improvements and acquisitions funded by that bond issue are underway. (And Shoreline’s residents will be seeing an additional levy on their property tax bill in 2023 to fund those improvements.) It’s a done deal.

These signs are deceptive and confusing. This November’s Proposition 1 does not have anything to do with funding Park improvements or acquisition.

The Details

Here’s a photo of one of the confusing, misleading signs.

Please realize that these signs are referring to a different Proposition 1. The “Proposition 1” they refer to is the $38.5 million Parks Bond measure which was passed in last February’s special election. The City already has the authority to issue bonds to finance the planned Park improvements and acquisitions (and Shoreline residents will begin paying for them through a new property tax levy in 2023.)

Deceptive and confusing sign displayed at several Shoreline Parks which claims "Prop 1 includes improvements to this park".  That was a different Prop 1!

The November Proposition 1 Levy Lid Lift measure has nothing to do with funding park improvements or acquisitions. While the City's regular levy does pay the salaries of most City Park employees (along with the rest of the City staff, City Manager’s office, City Council, etc.) it does not fund park capital improvements or acquisitions.

Updated

What About Inflation?

The Quick Answer

We all know that inflation is up, but the City is proposing what is likely to be a 48% increase in its general tax levy. That is roughly 39% above (or five times) the current (high) rate of inflation.

Inflation cuts both ways. It increases the costs of City services, so one should expect tax increases as a result. But it also squeezes the budgets of all City residents. We all have to deal with increasing expenses. Increasing taxes at rates far above that of inflation is neither fair nor sustainable.

The Details

As of August, the Seattle-area CPI-U — the index used to measure local inflation — is up 9.0% over what it was a year ago1.

Note: Some of the notes and reports from the City reference a higher inflation rate. In June 2022, the 12-month inflation rate hit a peak of 10.1%, but, remember that gas prices were crazy high around then. The price of gas is a significant component of the CPI-U index. As gas prices have moderated since then, so has the inflation rate.

Most forecasters are predicting that the inflation rate will drop considerably from its current peak within the next couple of years2.

The City’s General Levy Has Been Increasing Faster than Inflation for Twelve Years

Once in 2010 and again in 2016, voters approved Levy Lid Lift measures similar to what the current Proposition 1 proposes. These have allowed the City's tax revenue to increase at rates that have more than compensated for the effects of inflation for the past 12 years.

The 2010 Levy Lid Lift increased the 2011 general levy by 30% (over 2010), and allowed the levy to increase at the rate of inflation for the following five years (2012-2016). (Note that this was passed after several years where levy increases were capped at the default limit factor of 101%, so the large 30% initial bump was somewhat justified by the need to “catch up” with cost increases over the preceding years.)

The 2016 Levy Lid Lift increased the 2017 general levy by 12.8% over 2016, and, again, five more years of tax increases to match the rate of inflation.

Over those 12 years, the general levy has doubled — a 100% increase — from $7.6 million in 2010 to $15.2 million in 20223. Over that same period, the Seattle-area CPI-U (Consumer Price Index - the preferred measure of inflation) has increased by 44%4.

Over the past twelve years, the general tax levy has increased, on average, at roughly twice the rate of inflation. It's not like the City has been falling behind.


  1. The US Bureau of Labor Statics page on the Seattle-Area Consumer Price Index.

  2. The St. Louis Federal Reserve: “In August, the consensus from the Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters (SPF) was that the CPI inflation rate will decline from 7.5% in 2022 to 3.2% in 2023 and to 2.5% in 2024”;
    Morningstar: Why We Expect Inflation to Fall in 2023

  3. Data on the total Shoreline general levy is available from the County Assessor’s "Statistical Reports". (Select the year of interest, then look under "Assessed Valuations and Taxes → Cities and Towns → Tax Rate and Levies".) Here are the reports for 2010 and 2022.

  4. Seattle-area CPI-U has increased 44% from August 2010 (CPI-U = 227.6) through August 2022 (CPI-U = 326.8). (Data is available from the US Bureau of Labor Statistics data viewer

Updated

How Will the City Pay for Growth-Related Costs?

The Quick Answer

There are new townhomes and mid-rise apartment complexes going up at a prodigious rate. If tax levies are capped, how will the City pay for the growth?

Presumably, the City budget estimates already include allowances for anticipated growth-related expenses.

Furthermore, RCW 84.55, the law that imposes the Levy Lid and specifies how it works, already allows for additional increases in the total tax levy to cover growth.

The Details

First off, the City budget estimates presumably already include allowances for anticipated growth-related expenses. So the City’s predictions of large budget surpluses should Proposition 1 pass already (we would hope) include accounting for project growth.

RCW 84.55 Allows for Extra Levy Increases to Cover Growth

It doesn't often get mentioned, because it makes a complicated process even more confusing, but it’s important to note that RCW 84.55.010 allows for an additional increase in the total levy proportional to the increases in assessed values within the City that are due to new construction or improvements.

That is, if, say, 1.5% of the year-to-year increase in total assessed values in the City is due to the value of new construction, then the total levy limit is increased by an additional 1.5% above whatever the limit would have been without the new construction.

This additional increase is allowed whether or not there is a Levy Lid Lift measure in place — so it applies even if Proposition 1 should be defeated.

Growth Leads to Increases in Other Revenue Streams

As the City itself (in response to a question about the property tax exemptions given to new developers) points out, growth leads to greater sales tax and utility tax collections as well as increases in other revenue streams that contribute to the City's general fund.

See the last question, on page 6 of the City's Proposition 1 FAQ. Part of their answer reads (the emphasis is ours):

We estimate that each new resident of a multi-family housing unit adds the following to the City’s revenue each year :

  • Sales & Use Tax: As new residents occupy the multi-family units, they buy goods in Shoreline that generate sales tax. On average, staff estimates that each resident of a multi-family unit generates approximately $166.85 per year of sales taxes in Shoreline.
  • Utility Taxes: Residents of multi-family housing use a variety of utilities, which are subject to utility taxes and franchise fees. This includes water, wastewater, solid waste, electricity, natural gas, cable, telecommunications, and surface water. On average, staff estimates that each resident of a multi-family unit generates more than $100 per year in utility taxes.
  • State Shared Revenues: Many of the state shared revenues distributed to the City are based on a per capita basis. Assuming that the average multi-family unit occupancy is two people per unit, each resident of a unit generates approximately $36.15 per year of state shared revenues

[...]

In addition to the ongoing sales taxes generated from the new residents, the City also receives one-time sales taxes from the actual construction, Real Estate Excise Taxes from the sale of project sites and, in most cases, completed projects at prices in the tens of millions as well as permit and inspection fees that offset the development review and inspection. From a revenue perspective, despite the initial exemption, the positive impact is significant immediately as well as in the long term. As for the tax burden, while there is a short-term potential shift to existing property taxpayers, these developments help increase the pool of taxpayers, spreading the long-term tax burden for the benefit all residents.

What Is the 2022 Financial Sustainability Advisory Committee? What Was Its Recommendation Regarding Proposition One?

The Quick Answer

The 2022 FSAC was a small volunteer committee of Shoreline residents (13 people) that considered information provided by City Staff about a proposed Levy Lid Lift for the November 2022 ballot.

Notably, the committee did not come to an agreement on what Levy Rate to recommend for Proposition One. Committee members expressed concerns about affordability and encouraged the City to set the Levy Rate as low as possible while still supporting City services.

The Details

Background of FSAC

  • The City of Shoreline requested volunteers to serve on a 2022 Financial Sustainability Advisory Committee (FSAC) about a levy lid lift. The City Manager then selected 13 Shoreline residents, from those who applied, to be on this committee.

  • The City Staff presented information to the FSAC members during six meetings held in March-May 2022 about City services and the City Staff’s desire to place a Levy Lid Lift on the ballot in November 2022. The FSAC volunteers were then asked for their recommendations about a Levy Lid Lift.

  • The City Staff drafted a report entitled “May 25, 2022 City of Shoreline/Levy Lid Lift Committee Report”. The City Staff asked the FSAC members to review the drafted report and suggest edits and/or concur with its content.

  • The final FSAC report was submitted to the City Manager and was also included as an attachment at the Shoreline City Council meeting on June 13, 2022.

Some points from the FSAC report dated May 25, 2022:

  • The FSAC (volunteer citizens) recommended a Levy Lid Lift but did not make a group recommendation as to what Shoreline’s dollar rate for a 2022 Levy Lid Lift should be.

  • FSAC members expressed concerns about the City Staff’s desire for expanding services and increasing Shoreline city taxes because:

    • Shoreline residents are facing higher property assessments and inflation.

    • Shoreline residents may struggle to afford to stay in Shoreline with higher city property taxes, including renters as well as homeowners.

    • The waiver/deferral programs for taxes for certain seniors, persons with disabilities, and disabled veterans are limited and may only delay the requirement to pay taxes when the home is sold.

  • FSAC members recommended that the City should use the surplus of $8.491 million dollars that it had at the end of 2021 towards its budget to set a low Levy Rate.

  • The FSAC report1 notes:

    The Committee expressed concern about homeowners with fixed incomes or others who may struggle to afford to stay in (or move to) Shoreline. For example, if property owners pass the cost onto renters and rents increase, it could lessen affordability. While programs exist to support certain property owners with either tax relief or deferral (waiver with lien on property), lack of awareness of the programs could lead some voters to reject a levy lid lift initiative. It was also noted that increases in assessed value often trail increases in property values and an economic downturn and/or continued impacts from the pandemic could make a levy lid lift feel less affordable to many residents.

    and

    Committee members also shared concerns about adding to the tax burden given inflation, the recently passed 2022 school levies and parks bond, and increasing property taxes. Concerns are related to levy fatigue and a household’s ability to pay.


  1. The full report of the FSAC is available as an attachment to Agenda Item 8(b) on the Levy Lid Lift for the June 13, 2022 City Council meeting. The FSAC recommendations start on page 20.