Special Purpose District Revenue Sources

Property Tax Based Revenue Sources

Most special purpose districts in Washington derive revenues from real property assessments and are called "taxing districts." However, not all taxing districts are special purpose districts, and to make it more confusing, some special purpose districts are not taxing districts. For example:

• A road district (RCW 36.75.060) is a taxing district which levies a tax for roads, but it is governed by the county commission and has no separate governing authority and therefore is not a special purpose government. It is only a taxing unit used to collect an assessment authorized by statute.
• A television reception improvement district receives its revenue from an annual excise tax on television sets. It does not levy property taxes and as a result is not a taxing district. If its boundaries are less than the county, it is formed with a separate elected board and would be a special purpose government.

Taxing districts are defined in RCW 84.04.120. They have the power to impose tax burdens upon district property in proportion to property value, as opposed to obtaining revenue for public purposes in proportion to the benefits accruing to it. The statutes classify taxing districts into senior taxing districts (the state, the county, city or town, county road, port, and public utility districts) and junior taxing districts (all others).

Regular Tax Levy

• Some special districts are authorized by statute to levy a certain amount each year, subject to maximum rate limits which provides operating expenses for the general fund.
• With a few exceptions, the aggregate regular levy rates of senior and junior taxing districts cannot exceed $5.90 within the boundaries of any city or county (RCW 84.52.043(2)).

Regular Tax Levy Limit

• If the $5.90 limit is exceeded, the levy of at least one junior taxing district must be prorationed until the aggregate rate falls to $5.90.
• The order in which levies are reduced is given in RCW 84.52.010(2).
• Regular property tax levies not subject to this limit include state levies, levies for public utility districts, levies for port districts, levies for acquiring conservation futures, emergency medical service levies, low income housing levies, ferry district levies, county criminal justice levy (up to $.50), fire district levies under RCW 52.16.140 and .160 (up to $.25), levies by counties for transit-related purposes, and, under certain restrictive conditions, the 25-cent metropolitan park district levy under RCW 84.52.120.
• The latter eight levies are, however, subject to statutory and constitutional limits that limit total regular property tax levies to one percent of true and fair value (RCW 84.52.043, Washington State Constitution, Art. VII, Sec. 2.).
• If that limit is exceeded, one or more of the levies must be prorationed in the order given in RCW 84.52.010(1) until the total rate is one percent.

Non-voted regular levies

• Cemetery districts, fire protection districts, hospital districts, library districts, metropolitan park districts, ferry districts, flood control zone districts, and regional fire service authorities.

Voted regular levies

• Airport districts; city transportation authority; cultural arts, stadium and convention districts; emergency medical services districts; park and recreation districts; and park and recreation service areas.

Excess Levy for Operations and Maintenance (RCW 84.52.052)

• Some special districts may also impose a one-year (two for fire districts, four for school districts) levy, commonly known as an "operations and maintenance" levy.
• Nine special purpose districts may impose an excess levy, but not a regular levy.
• The excess levy requires a voter approval of 60 percent of 40 percent of those voting in the last general election (Washington State Constitution, Art. VII, Sec. 2(a)).
• The districts allowed an excess levy are: metropolitan park district, park and recreation service area, park and recreation district, water-sewer district, solid waste disposal district, public facilities district, flood control zone district, county rail district, service district, public hospital district, road district, rural county library district, island library district, rural partial-county library district, intercounty rural library district, cemetery district, city, town, transportation benefit district, emergency medical service district with a population density of less than one thousand per square mile, cultural arts, stadium, and convention district, ferry district, city transportation authority, or regional fire protection service authority.
• The excess levy is not subject to the regular levy's aggregate $5.90 and one percent rate limits.

Benefit Assessment Districts

• The Department of Revenue uses the term benefit assessment district to mean a district formed to provide a specific service or benefit to lands contained within its boundaries.
• A district's charges are based on the benefit to property rather than value of the property.
• Districts that can levy a benefit assessment include diking and drainage districts, horticultural districts, irrigation districts, mosquito districts, river and harbor improvement districts, and weed districts.
  • Fire districts and regional fire service authorities may use benefit assessments in return for giving up some of their taxing authority.

Debt and Debt Limits

Most special districts, but not all, have the authority to issue debt, subject to certain statutory limits. For more information, see our pages on Types of Municipal Debt and General Obligation Debt Limits.

Non Property Tax Based Revenue Sources

A few special purpose districts receive revenues from sources other than property tax levies. These include conservation districts, health districts, the transportation authorities and districts, television reception improvement districts, and shellfish protection districts. Conservation districts may assess a fee up to $5.00 per parcel and up to $10 for counties over 1,500,000 (RCW 89.08.400). A horticultural pest district may assess a uniform rate by class of parcel (RCW 15.09.135). Television reception improvement districts may levy a tax on television sets not to exceed $60 per year (RCW 36.95.100). Air pollution authorities may receive annual contributions from participating political subdivisions.

Fees and Charges

Districts authorized to charge directly for services include airport districts, city transportation authorities, ferry districts, fire protection districts, flood control zones, health districts, housing authorities, irrigation districts, park districts, port districts, public facilities districts, public utility districts, regional transit authority, shellfish protection districts, solid waste collection, transportation benefit districts, and water-sewer districts.

Local Improvement Districts

• A number of special districts have the power to create local improvement districts to finance capital projects that benefit only a portion of the special district's geographic area.
• Assessments are made in proportion to the benefit that the properties receive.
• Special districts that can form local improvement districts:
  • City transportation authority, community renewal area, county roads and bridges service districts, fire protection districts, flood control zone districts, irrigation districts, metropolitan park districts, park and recreation districts, port districts, regional transit authority, transportation benefit districts, and water-sewer districts.
• County road improvement districts and lake management districts are both a type of local improvement district.

Recommended Resources

Washington State Auditor's Office

• Reporting, see BARS Manual Annual Questionnaire for Audit Assessment for special purpose districts with revenues usually less than $300,000 (Schedule 22)
• Find Your Audit Team - Search by name of entity

Washington State Department of Revenue

• Ballot Measure Requirements for Voted Property Tax Levies
• Local Taxing District Levy Detail - Assessed valuation and levy rate
• Property Tax Levies Operations Manual - Reference source for special district property tax levies, also known as Property Tax Levy Manual
• Property Tax Statistics
• Tax Code Area Statement - Lists tax code areas by county including special districts that assess property taxes