Understanding the MID Assessment Formula

The MID’s assessment formula was updated as part of the 2013 renewal process in an effort to create more transparency and predictability while maintaining previous efforts to ensure different property types are assessed fairly. In addition to a base formula, several “ceilings” come into effect for specific property types. An inflationary factor is applied to most years of the assessments, while property values are updated twice during the ten years using the King County Tax Assessor data.

Annual MID assessments are calculated from a formula prescribed in the MID’s authorizing ordinance that was adopted in May 2013. For the past three years, ratepayers have been assessed according to a property’s 2011 total taxable value (TTV). The ordinance states that in Year 3, the Assessment Formula is to be updated to include a property’s 2015 TTV in the calculation.

In 2016, this adjustment of the formula, combined with new construction and development, led to $9.85m in total MID assessments. Today, total MID assessments represent 0.04 percent of the total taxable value of the Metropolitan Improvement District. Additionally, a growing share of MID ratepayers has reached an assessment ceiling and will likely receive annual adjustments for inflation going forward. New construction and development, which has accounted for a significant share of the MID’s increase in total assessments since 2013/2014, will play an increasingly important role in future MID assessment growth.

To learn more about the 16/17 MID Assessment methodology and analysis, download the MID 16-17 Assessment Summary.

The following also provides a detailed explanation of the Assessment timeline, formula rationale and ceilings.

Timeline


2013

In 2013, the assessments were calculated according to the assessment formula, utilizing 2012 King County assessor values.


2014

In 2014, Ratepayers which existed in 2013 and whose building square footage remained the same or decreased are assessed by increasing their 2013 assessment by the Consumer Price Index for the Seattle region (CPI-U), which was 1.3%, with some exceptions. Other ratepayers were assessed utilizing 2014 King County assessor values multiplied by cumulative CPI-U factor.


2015

In 2015, Ratepayers which existed in 2014 and whose building square footage remained the same or decreased are assessed by increasing their 2014 assessment by the Consumer Price Index for the Seattle region (CPI-U), which was 1.84%, with some exceptions. Other ratepayers were assessed utilizing 2015 King County assessor values multiplied by cumulative CPI-U factor.


2016

In 2016, the assessments were calculated according the assessment formula, utilizing 2016 King County assessor values or the commensurate values from the 2013 assessment, whichever is greater, multiplied by the cumulative Consumer Price Index for the Seattle region (CPI-U) of 1.3% (2013), 1.84% (2014), and the 2015 CPI-U.

2017

In 2017, Ratepayers which existed in 2016 and whose building square footage remained the same or decreased are assessed by increasing their 2016 assessment by the Consumer Price Index for the Seattle region (CPI-U) or 3%, whichever is less, with some exceptions. Other ratepayers were assessed utilizing 2017 King County assessor values multiplied by cumulative CPI-U factor.

Seattle-Tacoma-Bremerton CPI-U and Cumulative CPI-U for Assessment

Assessment Year CPI-U% Cumulative CPI-U Factor
2013 Not Applicable 1
2014 1.3% 1.013
2015 1.84% 1.0316
2016 1.36% 1.0457

* 2017 CPI-U and Cumulative CPI-U will be available in January 2017
If Seattle-Tacoma-Bremerton CPI-U is more than 3% for a specific assessment year, then 3% is used to calculate the cumulative CPI-U Factor for calculation for that year.


Assessment Formula & Rationale

Formula Rationale Rate Notes
Assessment / $1,000 TAV Reflects differential benefit associated with different land uses, investment value of property within land uses, and economic activity. $0.3 $0.37 Total Budget set to 2% over 2012; Ratio set to 45% Value to 55% Land Area
Assessment / Land Sq. Ft. R Reflects common level of services to all benefitting properties. $0.32 Total Budget set to 2% over 2012; Ratio set to 45% Value to 55% Land Area. Multiply by Cumulative CPI-U Factor.

Ceiling Rationale & Factor Calculation

Ceillings Rationale Factor Calculation
TAV Ceiling Assures that properties are not unfairly assessed compared to benefits received. $1.84 per $1,000 total appraised value Cumulative CPI-U Factor * Factor * King County total appraised value / $1000
Building Square Footage Ceiling Limits assessments on small buildings due to limited rent-producing potential. $0.17 per building net square feet If FAR > 0.5, then Cumulative CPI-U Factor * Factor * Building new square feet
Hotel Room Ceiling Limits assessments on hotels. Value received relates to per room occupancy and revenue potential. $80.00 per room Cumulative CPI-U Factor * Factor * Number of rooms
Residential Unit Ceiling Limits assessments on residential units. Value received relates to per unit occupancy. $125.00 per unit Cumulative CPI-U Factor * Factor * Number of units
Surface Parking TAV Ceiling Limits assessments on surface parking to compensate for limited benefits. $0.70 per $1,000 total appraised value Factor * King County total appraised value / $1000
Nonprofit Reduced Rate Limits assessments on properties owned by nonprofits and occupied by charitable uses. Reduced rate requires application and documentation process. 25% of basic formula Factor applied to occupied % of occupied use for charitable purposes