The complicated “levy swap” developed by the 2017 Washington State Legislature to comply with the Supreme Court’s basic education funding order (McCleary v. State of Washington) has created considerable confusion among taxpayers. Specifically, as taxpayers see a one-year bump in their combined school-related taxes on their 2018 property tax statements, predictable concerns have been expressed about the tax burden.
Although this difficult transition is basically a statewide reality for 2018, each school district must communicate the longer-term impacts with its local taxpayers. Looking beyond the 2018 one-year spike, most of the 295 school districts, including Vancouver Public Schools, should experience a net tax rate decrease in the following year.
Let’s look at the numbers. The combined state and local school-related tax rate for VPS was $6.45 per $1,000 in assessed value in 2017, the year prior to the state’s initiation of the levy swap.
In 2018, the Legislature increased the statewide school property tax assessed to Clark County taxpayers by $1.03. VPS’ other local tax rates, however, dropped by 19 cents per $1,000 in value, giving VPS taxpayers a net increase of 84 cents in 2018 for all school-related taxes.
Growth of assessed property value in our community drove the local rate drop. The actual combined total schools (local and state) tax rate is $7.29 in 2018.
In 2019, VPS taxpayers will experience a projected drop in total school-related tax rates to $5.82, or $1.47 less than the 2018 spike year and 63 cents less than 2017. Taxpayers then will feel the full effect of the state-legislated levy swap; most districts and taxpayers outside of the Puget Sound area will see relief.
So, why does the Puget Sound area bear a larger burden in 2019 and beyond?
Simply put, communities in and around Seattle benefitted from the prior state school taxing system. This inequity was at the core of the Legislature’s McCleary basic education funding plan.
Fixed statewide rate
Under the old model, districts with extremely large tax bases, or total assessed values, were able to fund their local schools at low local tax rates. For example, to collect a local maintenance and operations levy that provides $2,000 per student, Vancouver Public Schools taxpayers would have been assessed a tax rate of $2.64, while Seattle Public Schools taxpayers would have been required to pay a rate of approximately 50 cents.
The previous system of relying on local levies to fund public schools perpetuated insufficient and vastly inequitable educational resources and programming based on a district’s relative wealth and tax base. Through E2SSB 6362, the Legislature implemented a fixed statewide rate, equalizing rate impacts through state collections. As a result, Seattle taxpayers lost much of the benefit provided by their enormous commercial tax base.
Although the levy swap has an adverse impact on property owners in 2018, I commend the Legislature for taking on this massively complex and controversial overhaul of our public schools funding structures. Taxpayers in districts like Vancouver, which don’t have large tax bases, now can benefit from the state redistributing the financial responsibility for supporting schools across the larger, statewide tax base.
For more than 50 years, our community has supported local funding requests for school operations, educational technology and school construction. We never take that support for granted. We are most grateful to our community, and we act as careful stewards of the public’s resources. Clean audits, budget transparency, timely two-way communication and public engagement are hallmarks of Vancouver Public Schools.
Steve Webb is superintendent of Vancouver Public Schools.
