The Centralia City Council voted 5-2 Tuesday to set the 2025 property tax levy with a 1% increase to be collected in 2026.
Councilors Mark Westley and Norm Chapman voted against raising the property tax for the second year of the 2025-2026 fiscal biennium.
According to Centralia Finance Director Bret Brodersen, the current actual levy is $2,295,064.27, which is what Tuesday’s approved ordinance used to determine a 1% increase for consideration. The approved measure adopts the 1% increase, which increases the property tax levy collection by $22,950.64 to a total collection of $2,318,014.91, plus new construction and annexations, etc.
Brodersen told the city council during the Oct. 14 meeting and first discussion of the ordinance that the city’s current collection rate is 90.3 cents per $1,000 of assessed property value, which equates to $203.20 on a $225,000 home. Under the adopted tax increase, that same home would pay $2.03 more for a total of $205.23 per year.
According to the Zillow Home Values Index, the average Centralia home value is $392,318. During the Oct. 14 discussion, Westley used a $450,000 house as an example and said their property tax would go from $406 to $410 with the 1% increase.
Westley said Tuesday that he had initially voted “yes with reservation” but he changed his mind after some conversations with community members about the impact of the property tax increase.
“One percent may seem quite insignificant to a lot of us, but when you’re having conversations at the grocery store with a single mother and multiple children and trying to figure out how much she can spend on groceries and still put gas in her car, it came to like $11 that she was going to be able to put in her car,” Westley said. “It really impacted me that what may seem insignificant to some of us is life-changing and detrimental to others. We live in a community that is really struggling. It does seem to be, or appear to be, a fairly nominal amount of money, but there are quite a few of our constituents out there that it is a significant amount of money, and adding another tax or asking for that one more percent is just going to continue hardship.”
Brodersen said Oct. 14 that Lewis County’s current tax rate is 92.6 cents per $1,000 and an additional road tax of $1.25 per $1,000. Chehalis’s general levy is $1.43 per $1,000, Aberdeen is $1.93, Longview is $1.97, Anacortes is $1.31, Port Angeles is $1.60, and Ellensburg is $1.27.
In Washington, property tax increases are not based on the increasing value of properties. Instead, they are based on the previous year’s property tax levy, which is the amount of the property taxes that were assessed in the prior year for each taxing entity. Each year’s levy may not be increased by more than 1% unless the public votes for a greater increase or the jurisdiction uses “banked capacity.”
In 2024, the Centralia Finance Committee originally recommended that the city address its budget deficit by raising the property tax by 1% along with using $700,000 in banked property tax authority and creating a new business and occupation (B&O) tax. Instead, the city council shot down the B&O tax idea and opted to raise the property tax by 1% and use $1.2 million in banked property tax authority as the city faced an estimated $1.2 million budget deficit.
Brodersen said Tuesday that the city used up "virtually" all of its banked capacity to balance the budget.
“When you bank the capacity or not, you lose the ability in future years for that 1% to continue to grow. When you bank it, when you come to levying the next year, you can’t add that banked authority to the calculation to arrive to the 1%,” Brodersen said. “So the 1% continues to shrink as you go forward.”
Councilor Max Vogt said Oct. 14 that he has voted for the property tax increase many times and that he has seen the “negative repercussions” when the city council opts against the increase.
“It catches up to you, and then you have to have a big tax increase. It’s really important that we just keep doing this,” he said. “It’s worth doing. I know what happens when we don’t, so I strongly suggest that we pass this.”
For jurisdictions with a population of 10,000 residents or more, the property tax increase is limited to the lesser of 1% or the implicit price deflator (IPD) for personal consumption expenditures. The Bureau of Economic Analysis published the IPD on Sept. 25, 2023, and the results are that the rate of inflation to be used for 2026 is 2.44%.
