Auburn, Wash. — Just over $318,000 in taxpayer funds has been returned to King County after a KIRO 7 investigation revealed a major error in the state’s property tax exemption system.
More than 100 families in Auburn faced the possibility of foreclosure because of that error.
Now the Washington Department of Revenue is making major changes to ensure it doesn’t happen again.
Brenda Garland is relieved her home at Homewood Terrace is no longer on the line.
“Living there for 28 years, it's very concerning to know that your home could be going into foreclosure,” she said.
If the co-op couldn’t found a way to repay the money, King County could have foreclosed on the properties.
In August, KIRO 7 uncovered how 19-year-old Ruvim Savin, using his position on the housing co-op board, got the Department of Revenue to grant Homewood Terrace an exemption. This resulted in King County refunding Homewood Terrace $318,145 in property taxes.
Savin then cut himself a check for more than $109,000. Investigators are still looking to see if he broke the law.
King County demanded all the money back after KIRO 7 alerted officials about the error.
Despite the money being returned, residents like Liz Cruz-Wallace wonder how the state made such a glaring mistake.
“You would think that there would be safeguards, “ Cruz-Wallace said.
The Department of Revenue is now making changes so that staffers don’t make the same mistake with any of the more than 600 organizations that apply for exempt status every year and the more than 10,000 organizations that renew their status every year.
“When we grant an exemption, that means that organization isn't on the property tax rolls, which means everyone else is helping shoulder the cost that is being borne by that nonprofit,” Department of Revenue spokesperson Kim Schmanke said. “So it does have some bearing on everyone's pocket books.”
Schmanke said the department reviewed the work of the auditor who made the mistake and found it to be an isolated error.
Still, she said, they are planning a review of all staffers’ work.
Approximately 130 applications completed over the past 12 months are expected to be reviewed.
They are also requiring staffers to provide more details on their explanations for approving applications and they are ensuring that two supervisors review cases instead of one. It's also added mandatory checklists for documents.
“If they have new procedures in place now to protect other people from losing this money, I’m all for it and I’m thankful for it,” Garland said.
As for a criminal investigation, King County Sheriff's Office deputies are now seeking help from the Washington State Auditor’s Office, partly because the case involves such complicated financial matters.
KIRO
