AGO 1955 No. 120 - Jul 28 1955
SCHOOL DISTRICTS ‑- TAX LEVIES ‑- LIMITS OF BONDED INDEBTEDNESS
Chapter 253, Laws of 1955, (The Ryder Plan) does not affect the limits of bonded indebtedness for school districts.
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July 28, 1955
Honorable H. Dan Bracken, Jr.
Chairman, State Tax Commission
Olympia, Washington Cite as: AGO 55-57 No. 120
We have your request for an opinion on the following question:
Is the bonded indebtedness limit for school districts affected by chapter 253, Laws of 1955?
Our opinion is in the negative.
Chapter 253, Laws of 1955 is entitled
"AN ACT relating to the valuation of property for purposes of school district tax levies; and requiring school district tax levies to be imposed upon property valuations as determined by county assessors and equalized by the state board of equalization; and declaring an emergency."
Section 3 of the act provides:
"All tax levies made by or for any school district shall be based on the assessed valuation of the [[Orig. Op. Page 2]] taxable property within each respective school district, which assessed valuation shall be the value (1) placed upon said property by the county assessor as equalized by the county board of equalization, and by the tax commission in respect to property assessed by it pursuant to chapters 84.12 and 84.16 RCW, (2) and equalized at fifty percent of true and fair value in money by the state board of equalization."
RCW 28.51.010 1953 Supp. authorizes the directors of any school district to borrow money and issue bonds for certain enumerated purposes. This section contains the following language of limitation:
"Neither the amount of money borrowed nor bonds issued therefor shall exceed five percent of the assessed valuation of the taxable property in such district, as shown by the last assessment roll for county and state purposes previous to the incurring of such indebtedness, except that in cities incorporated under special charter the valuation shall be taken from the last assessment for city purposes: Provided, That any school district may become indebted to a larger amount but not exceeding five percent additional for capital outlays."
Amendment 27 of the state constitution (Article VIII, § 6) contains the following limitation upon municipal corporation indebtedness:
"No county, city, town, school district, or other municipal corporation shall for any purpose become indebted in any manner to an amount exceeding one and one‑half percentum of the taxable property in such county, city, town, school district, or other municipal corporation, without the assent of three‑fifths of the voters therein voting at an election to be held for that purpose, nor in cases requiring such assent shall the total indebtedness [[Orig. Op. Page 3]] at any time exceed five percentum on the value of the taxable property therein, to be ascertained by the last assessment for state and county purposes previous to the incurring of such indebtedness, except that in incorporated cities the assessment shall be taken from the last assessment for city purposes: * * *" (Emphasis supplied)
The language of the constitution underscored above is ambiguous. At the time Article VIII, § 6 was first enacted there was no difficulty because the county assessors assessed all property within their respective counties for all tax purposes. The state tax commission has for many years assessed property owned by public utilities and private car companies. Chapters 84.12 and 84.16 RCW. In addition, pursuant to RCW 84.48.090, the state board of equalization is charged with the responsibility of levying and apportioning taxes for state purposes among the several counties.
For purposes of determining the assessed valuation of taxable property within a county, the state board of equalization is not bound by the valuation assessed by the county assessors. Instead, the board makes a determination of the ratio the assessed valuation of the property in the county bears to the actual value of such property based upon sales figures of property which has been sold. This computation supplies the state board with a factor which is used in making the levy for state purposes. The board transmits via the state auditor a transcript of its proceedings to the several county assessors specifying the amount of money to be levied and collected on the assessment books for state purposes for the year. RCW 84.48.110. For purposes of local taxation the assessed valuations fixed by the county assessors are extended on the assessment roll. Thus, there is only one assessment roll which RCW 28.51.010 1953 Supp. contemplates.
Amendment 17 of the state constitution, which is the forty mill limit provision, provides that the assessed valuation "shall be fifty percentum of the true and fair value of such property in money". County assessors have found it impracticable to assess property at that rate. The disparity between counties in the degree of success which the various county assessors have achieved in approaching this goal made the legislature decide that for purposes of state taxes the valuations fixed by county assessors required equalization. As a result a specific item of property has for many years had a higher value for purposes of state taxation than it has had for local taxing district purposes. It is evident then that the language "last [[Orig. Op. Page 4]] assessment for state and county purposes" contained in Amendment 27 of the state constitution is susceptible to more than one interpretation.
RCW 28.51.010 1953 Supp., by referring specifically to the assessment roll, fixes a precise amount from which the limit of bonded indebtedness for taxing districts may readily be computed. We can conceive of no situation in which this amount would be greater than the assessment (or computation of assessed valuation) made for state purposes. InRobb v. Tacoma, 175 Wash. 580, the validity of a statute imposing a further restriction upon the limit of municipal indebtedness than that prescribed by Article VIII, § 6 of the state constitution (now Amendment 27) was upheld by our supreme court.
Manifestly the motivating purpose behind chapter 253, Laws of 1955, was to make available to school districts the higher valuation of property within such districts as equalized by the state board of equalization for state purposes in order to provide more revenue for such districts. We find no reference to limits of bonded indebtedness either in the title or the text of the 1955 act.
Accordingly, we advise that in our opinion chapter 253, Laws of 1955, will have no bearing on bonded indebtedness limits for school district purposes.
We hope the foregoing analysis will prove helpful.
Very truly yours,
ANDY G. ENGEBRETSEN
Assistant Attorney General