The March 2014 Economic and Revenue Forecast
March 13, 2014
Click links for a discussion of major forecasts
The Great Recession and an anemic recovery have taken a major toll on the county's second largest tax revenue source. The retail sales tax in King County is currently 9.5%, however the bulk of this revenue is taken by the state and our regional transit authority (Sound Transit). The remaining portions King County receives go on to fund metro transit, criminal justice programs, mental health programs, children and family service programs and general government operations. Click here for a visual representation of the breakdown.
After years of record growth during the housing bubble, the county's assessed value declined for years. 2014 marks the first year countywide has grown since 2009. A frequently asked question is "if assessments are falling, shouldn't my property taxes fall too?" The King County Assessor's website has a great FAQ for that and similar questions.
Inflation can be a confusing topic because it can measured in a number of ways. Since 2009 we've experienced relatively low annual inflation in most broad indexes which has some benefits and other drawbacks. One benefit is that labor and operating costs can be lessened with lower inflation. Inflation policy makers target for an annual inflation rate of around 2%.
In unincorporated areas, the county levies two identical 0.25% excise taxes on all real estate transactions that go on to fund capital improvements and parks. A collapse of the housing market has drastically lowered REET collections as both demand and prices have fallen precipitously. Also, as more annexations occur in unincorporated King County, REET revenues will be pushed down further.