Wenatchee’s Credit Rating Downgraded… again…

Moody's Investor's Service has downgraded Wenatchee's bond rating this week because Wenatchee has declined to loan $1M to the Greater Wenatchee PFD to cover its upcoming interest payments. This downgrade comes despite Wenatchee's recent sales tax increases which were in part meant to raise revenue necessary to refinance the PFD debt and avoid such downgrades.

Hopefully the City of Wenatchee can reign in its spending to match revenues so as to avoid further detrimental credit rating downgrades.

More information can be found at the Wenatchee World.

Central Washington Hospital Bond Rating Downgraded

According to the Wenatchee World, bond rating agencies Moody's and Fitch have downgraded Central Washington Hospital's bond rating. The revised ratings are Moody's Baaa3 and Fitch BBB-. These ratings are the lowest category for "moderate-risk" bonds.

Although Central Washington Hospital says that it doesn't anticipate taking on additional bond debt over the next 5 years, this downgrade is certainly a concern for the future of both Central Washington Hospital and greater north central Washington as a whole.

National Taxpayer Advocate’s Taxpayer Bill of Rights

The National Taxpayer Advocate has compiled the following Taxpayer Bill of Rights (and Obligations) which she has recommended to be adopted by Congress. Good stuff!

TAXPAYER BILL OF RIGHTS

Taxpayer Rights:

1. The right to be informed.
2. The right to be assisted.
3. The right to be heard.
4. The right to pay the correct amount of tax due.
5. The right to an appeal (administrative and judicial).
6. The right to certainty.
7. The right to privacy (to be free from unreasonable searches and seizures).
8. The right to confidentiality.
9. The right to representation.
10. The right to a fair and just tax system.

Taxpayer Obligations:

1. The obligation to be honest.
2. The obligation to be cooperative.
3. The obligation to provide accurate information and documents on time.
4. The obligation to keep records.
5. The obligation to pay taxes on time.

Greater Wenatchee PFD Voters Approve 0.1% Sales Tax Increase

As of now, the city of Wenatchee has imposed a 0.2% sales tax and all nine PFD jurisdictions have also imposed (by vote of the people) an additional 0.1% sales tax. The 0.1% sales tax increase was passed with 64.54% in favor and 35.46% against. Wenatchee's effective sales tax rate is now 8.3% and East Wenatchee's rate is now 8.2%. For those keeping score at home, this is a contrast with Washington State's average rate of 8.80%.

For my previous discussion of the Greater Wenatchee PFD sales tax issues, check here.

Update on Wednesday, April 25, 2012 at 9:54AM by Jess Monnette

Wenatchee is not the only city that is raising sales tax to pay for a local arena.  Currently, Glendale AZ is considering a 0.8% sales tax increase to (in part) cover subsidy payments from the city to their arena where the Phoenix Coyotes hockey team plays.  This increase will rank Glendale AZ as the highest sales tax major American city.  Their total rate will be 10.30%.

Deed in Lieu of Foreclosure: WA Real Estate Excise Tax

In Washington State, Real Estate Excise Tax (REET) applies to most transfers of Real Property. One exception to this general rule is when a purchaser gives the bank a Deed in Lieu of Foreclosure.

WAC 458-61A-208(3) provides that the REET does not apply to the following transfers where no additional consideration passes:

(a) A transfer by deed in lieu of foreclosure to satisfy a mortgage or deed of trust;

(b) A transfer from a contract purchaser to the contract holder in lieu of forfeiture of a contract of sale upon default of the underlying obligation; or

(c) A transfer occurring through the cancellation or forfeiture of a vendee's interest in a contract for the sale of real property, regardless of whether the contract contains a forfeiture clause, such as a declaration of forfeiture made under the provisions of RCW 61.30.070.

Therefore, when a "deed in lieu" of foreclosure is given back to the bank in a deed of trust situation, no REET is owed on the transaction. However, this is only the case when there is no additional money paid or other consideration given. This means that if, as a condition of accepting the "deed in lieu," the Bank requires the homeowner to pay additional money (or sign a new promissory note etc.) REET will apply to the sale.