Title
Public Hearing and Approval of an Ordinance setting 2027 Regular Ad Valorem Tax - First and Final Reading
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Hold a public hearing and move to approve the Ordinance setting the 2027 Regular Ad Valorem Tax on first and final reading.
Report
Issue:
Whether to hold a public hearing and move to approve the Ordinance setting the 2027 Regular Ad Valorem Tax on first and final reading.
Staff Contact:
Joan Lutz, Senior Finance Manager, 360.753.8760
Presenter(s):
Mike Githens, Finance Director
Background and Analysis:
The City is required to adopt a property tax levy ordinance and file a levy certification with Thurston County by November 30, 2026, for collection in 2027. If no certification is filed, the County Assessor will levy the same amount as 2026. Under state law, property tax revenue increases are limited to the lessor of 1% or the Implicit Price Deflator (IPD) on the highest lawful levy amount.
State law allows for add-ons from new construction, state assessed property, annexations and refunds to be added to property tax revenue above the 1% legal limit. The IPD, which is a measure of the rate of inflation for personal consumption, is 3.88% for property taxes due in 2027. As such, the city is allowed to levy the full 1% increase on the highest lawful levy.
The 2027 regular levy budget is based on a 1% increase over the previous year’s highest lawful levy, plus allowable add-ons above the 1% limitation for collection in 2026. Should the County Assessor’s Office adjust any levy amounts which impact revenue as they finalize their valuation process, the ordinance will be presented with those adjustments.
The regular levy for collection in 2027 totals $21,903,844.54, this includes legally allowed add-ons for new construction, state assessed property, and refunds. Based on the current assessed value from the County Assessor’s Office of $11,866,143,186 and revenue budget of $21,903,844.54, the estimated levy rate per $1,000 assessed valuation is $1.8459.
Climate Analysis:
There are no anticipated climate impacts from setting the 2027 Regular Ad Valorem Tax.
Equity Analysis:
The City of Olympia has a goal of ensuring that city services are provided equitably to our residents and business communities, as well as the greater Olympia community. Setting the 2027 Regular Ad Valorem Tax is not expected to further impact known disparities in our community.
Neighborhood/Community Interests (if known):
Members of the community may have an interest in this agenda item as it deals with City finances and fiscal governance.
Financial Impact:
The financial impact will be on Olympia property owners at approximately $1.85 per $1,000 of assessed value.
Options:
1. Hold a public hearing and move to approve the Ordinance setting the 2027 Regular Ad Valorem on first and final reading.
2. Hold a public hearing and do not approve the Ordinance setting the 2027 Regular Ad Valorem Tax.
3. Take other action.
Attachments:
Ordinance
Presentation