The school bond approved by voters Feb. 12 will not affect tax bills until 2020 and will be 3 cents lower per $1,000 of property value than the retiring bond. That’s the easy part.
The Legislature passed the largest property tax increase in Washington history in 2017 to satisfy the requirements of the 2012 state Supreme Court order known as the McCleary decision mandating adequate and equitable state funding for K-12 public education.
The Second State School Levy, as the increase is known, went into effect in 2018 and is a complicated two-part tax rate with a sticker price of $2.70 per $1,000 of assessed property value, according to the Department of Revenue.
But it had a net effect of raising the average tax bill in Pierce County by about $1.03 per $1,000, according to the Pierce County Assessor-Treasurer’s office, since rates vary by county.
Still, that increase brought in more money than expected and hurt more people than anticipated because of increased assessments, so the Legislature later made a one-time adjustment for 2019, decreasing the statewide levy rate by 30 cents per $1,000.
But wait, there’s more.
A new state cap on local school operating levies also goes into effect this year, limiting collection to the lesser of $1.50 per $1,000 or $2,500 per student, even if voters previously approved a higher rate.
“So, there’s a spike in 2018 property taxes because of the new state levy,” wrote Mike Lonergan, the Pierce County Assessor-Treasurer, in a 2018 Tacoma News Tribune editorial. “It’s too early to know for sure, but the school portion of property tax bills should actually go down next year (2019).”
The new Peninsula School District capital bond approved by voters Feb. 12 will not affect tax bills until 2020 and will be 3 cents lower per $1,000 than the existing bond, which will be paid off by then.
The McCleary case began in 2007 when the McCleary family of Chimacum sued the state “for not meeting its constitutional obligation to amply fund a uniform system of education.”
They claimed the use of local property levies to fund local schools created a system that favored wealthy districts over poor districts because of a gap the mechanism created between what the state paid to each district and the real cost of running schools. Districts with high property values could raise large amounts of money with small increases in the levy rate, while districts with low property values would need to raise their levy rates much higher to get the same amount.
In 2012, the state Supreme Court ordered the Legislature to find a solution. Instead, in 2014, the court found the Legislature in contempt for failing to do so and imposed a $100,000 a day fine until it did. The Legislature has added $9 billion to public education since 2012 for a total of nearly $23 billion in the 2017-19 budget—about half the total. The court ruled the McCleary requirements fulfilled in June 2018.
A large part of this expense came in 2009, when the Legislature updated the state constitution definition of “basic education” to include all-day kindergarten and limited class size to 17 students in grades K-3. That meant more teachers, more classrooms and more support.
The Legislature’s goal in creating the Second School Levy was to increase spending on education and eliminate disparities between wealthy and poor districts by shifting some of the tax burden away from local levies and onto the state. Legislators called this the “levy swap,” since it restricts local property taxes in exchange for raising the state property tax rate.
However, while every school district in the state got a one-time infusion of state money, a consequence of the new funding scheme is that districts with higher property values can still use levies to raise more money per student than poorer districts despite the new local levy cap, so the inequity McCleary was meant to fix remains. It also left one-third of Washington’s 295 school districts short of funding.
“We never believed the court mandated a levy reduction,” said Chris Reykdal, state Superintendent of Public Instruction in a February 2019 interview with the Tacoma News Tribune.
“Why in the world would we (put) such restriction on something that is voter-approved and the money stays in the community?” he said.
The Property Tax Exemption for Senior Citizens and Disabled Persons program may help eligible taxpayers defray some of their property taxes. If accepted into the program, the taxpayer’s property value is frozen and exempt from excess and special levies.
For more information, go to www.co.pierce.wa.us/91/Assessor-Treasurer