Pierce County leaders offer Washam $20K in emergency funding

Pierce County leaders, panicked by a proclamation from Assessor-Treasurer Dale Washam, have offered him extra money to follow state law.

It’s an effort to defuse a fiscal time bomb that could blow up in the faces of local governments and leave taxpayers with a bigger bill. The numbers are unclear, but the prospect is plain: existing property owners getting a tax bill as owners of newly constructed properties go tax-free for a year or more.

County leaders were worried enough this week to suggest an emergency infusion of $20,000 to Washam’s budget. State tax collectors at the Department of Revenue, equally concerned, sent a note to Washam on Monday, urging him to follow the law.

The debate, which has raged internally for several weeks, revolves around new construction and associated property taxes. Under state law, county assessors are supposed to inspect all new construction by July 31, and report the associated values by Aug. 31.

Washam has suggested knocking off a month early. In an internal directive to staff members delivered June 13, Washam told appraisers to stop inspecting new construction at the end of June – a month before the state deadline.

The order sent a shock wave that reached the state Department of Revenue.

“It’s unprecedented for an assessor to tell his employees two months before the deadline not to pick up any new construction,” said Mike Gowrylow, agency spokesman. “We’ve never heard of that before.”

Washam wants his appraisers to focus on physical inspection of existing properties – his top priority and signature issue since taking office. He believes past property assessments were tainted by the use of computer models in a previous administration, though state records show the computer-generated values met international standards of accuracy.

Spurred by the county’s decision to add money to his budget, Washam told staffers Wednesday that he would continue inspecting new construction for one more week. In response to a question from The News Tribune, Washam emailed a one-word answer (“Yes”) when asked if he would use the money to continue inspecting new construction – but that still leaves additional weeks of work before the deadline, and Washam’s intentions remain unclear.

The fear among county leaders is that Washam will create a new problem by trying to correct an old one. The number of new properties that would go uninspected and the amount of related money is uncertain; Gary Robinson, who heads the county’s budget and finance department, has asked Washam’s office for those figures. He didn’t have an answer as of Wednesday evening.

New construction means new homes, new improvements and new money – a rare commodity in lean economic times. Local governments count on it every year. New construction also eases the tax burden on existing property owners.

“If you don’t pick new construction up, it’s a double hit on taxpayers,” said John Arthur Wilson, King County’s chief deputy assessor. “It leaves them shouldering more of the burden than they probably rightfully should have. That’s nutty; it’s going to cost them some real money.”

For local government agencies (cities, schools and fire districts, among others), new construction money is a critical factor in budgeting. What’s more, state law requires inspection of new construction – a mandate just as forceful as the requirement to inspect existing properties.

“They’re twin mandates,” said Gowrylow, the Department of Revenue spokesman. “The one thing in favor of picking up new construction is that it adds new revenue to the local tax rolls. There’s also a fairness issue. Some people could have a home that they’ve built and don’t have to pay any taxes on it while everybody else pays taxes.”

Washam’s latest decision stands against the backdrop of a long-running feud with county leaders and his stormy tenure in office, which has led to multiple internal investigations, damage claims, legal fees of $412,000 and settlement payouts of $1.13 million to current and former employees. This spring, county council members passed a resolution declaring no confidence in Washam and urging him to resign.

News of Washam’s June 13 directive reached county budget analysts and set off alarms. Robinson spoke to Washam and Albert Ugas, Washam’s chief deputy, trying to reach an agreement.

In an email to Robinson, Ugas said the assessor’s office would need eight employees working overtime for two months to complete the new-construction inspections.

That prompted the county’s offer to fatten Washam’s budget with $20,000 to pay for overtime or temporary hires to complete the job.

“We want to encourage Mr. Washam to do the right thing,” County Executive Pat McCarthy told county council members Tuesday.

Council members agreed; a subcommittee voted to allocate the $20,000 to Washam’s budget. The full council expects to follow through with a final vote July 10.

“For a smaller district fire district or something, these can be substantial dollars,” said Councilman Rick Talbert. “We need to get the message out there that this is the right thing to do.”

The Department of Revenue chimed in with a letter sent Tuesday.

“Failure to place all new construction on the assessment roll would create inequities among taxpayers and affect local taxing districts’ revenue,” the letter states. “Those property owners with new construction would not pay taxes on their new building value while other property owners pay tax on the full value of their property. Taxing districts, including local fire districts, library districts and others, would not receive funding they are entitled to.”

County Council chairwoman Joyce McDonald followed up Wednesday with another letter to Washam.

“The consequences of not completing the work on (new construction) could be devastating and long-lasting for many taxing districts, especially in light of the continuing drop in the value of existing property,” the letter states.

Though Washam extended new-construction inspections by another week, it’s unclear whether he will go beyond that date. If he tables new-construction inspections, county leaders are prepared to consider legal remedies, including court action, said county Prosecutor Mark Lindquist.

“If the cooperative approach doesn’t work, in the prosecutor’s office we’re prepared to pursue legal means to protect the taxpayers,” Lindquist said.

Staff writer Steve Maynard contributed to this report.

sean.robinson@thenewstribune.com
253-597-8486