Douglas County to Lose Over $500 Million in Value After Error Discovered, Property Owners to Shoulder Burden

The State Department of Revenue reported earlier this month a major error in the valuation of a data center outside of East Wenatchee, which is likely to result in an estimated 8.6% drop in Douglas County's value.

An unidentified telecommunications company has been paying too much in property taxes in Douglas County and not enough in others the last 7 years, so the correction will shift about $500 million in property value to other counties in the state. The error involved the company reporting amounts which included the costs of exempt custom software that are being stored on servers at the data center.

State Senator Brad Hawkins said, "If you think about it, it's almost like a reverse stimulus. Instead of a bunch of money being pushed into our local economy, it's taxpayers paying more and a lot of those dollars being extracted from our economy."

The extra property tax collected from the company in error lowered the need for Douglas County to collect additional property taxes from other property owners, thus shifting the tax burden and lowering property tax bills. Correcting the error in 2021 will shift the tax burden back to the remaining property tax owners, meaning an estimated increase of about $400 in property taxes for a $500,000 home. That does not include increases to other property-based obligations, such as levies.

"This could even have impacts beyond the property owners in a sense." explained Hawkins, "If someone is renting, they may experience rent increases from their landlords who need to cover their own property costs that may be increasing."

Residents will not be required to pay back any of the savings that they benefited from over the last several years. Based on the state's Property Tax Division's initial analysis, Eastmont School District funding for the 2021 tax year should not be impacted.

The county assessor is expected to be able to provide a clearer picture of the situation in mid-November.