Funding Schools for Washington’s Kids Can’t Be Done through Property Tax Gimmicks

Related Posts

Federal American Rescue Plan dollars can help Washington state invest in people, not policing

The numbers are in: State investments and federal stimulus put Washington on a real path toward recovery

New reforms bring balance and equity to state’s tax code and economy

Lawmakers act to balance state tax code by passing capital gains tax

Final budget proposal gets Washington state closer to an inclusive economy

Funding Schools for Washington’s Kids Can’t Be Done through Property Tax Gimmicks

By - September 7, 2016

This is the first in a series of schmudget blog posts about property taxes in Washington state and the role they play in funding basic K-12 education.

In the upcoming 2017 legislative session, Washington state lawmakers have an important opportunity to help all schoolchildren. In order to provide Washington’s kids with the opportunity for a future that includes better jobs, more civic engagement, and greater economic security, legislators must provide the resources needed to improve basic public education, as defined in the State Supreme Court’s McCleary decision – while also making other key investments that support thriving communities.

Yes, it’s a tall order, requiring billions of dollars annually in additional resources. But it can and must be done for the sake of Washington’s future. And it must be done in a way that protects investments in priorities that help Washingtonians who are struggling to make ends meet – especially those investments that help ameliorate the effects of systemic racism and other structural barriers to opportunity.

State and local property tax levies supply a foundation of funding for K-12 education in Washington state. A number of proposals involving changes to property tax levies have been introduced by state policymakers in the last few years. Few of these proposals would tackle the real challenges involved in ensuring we have adequate funding for schools, however.

So-called “revenue-neutral levy swaps” – shell games involving increases to the state property tax levy accompanied by decreases to local school districts’ levies – would generate no additional overall resources for schools. And though some lawmakers argue that a levy swap is necessary for the legislature to fulfill the mandate of the Supreme Court, the reality is that replacing local levies with the state levy won’t provide the funding to address the court’s primary concern – helping every kid in Washington state to get a top-quality education.

Lawmakers must address the real barrier to creating the education system our kids deserve: a deeply inequitable state and local tax system that not only overly relies on the people least able to pay taxes, but that also doesn’t provide adequate revenue to support schools and other public priorities.

Before upending the current balance between the state and local levies, lawmakers should adopt more comprehensive solutions and work to make the overall property tax system a more equitable and reliable source of funds for schools and other priorities. The legislature should enact the following common-sense reforms to benefit all schoolchildren:

  • Enact property tax credits specifically designed to reduce taxes for lower-income and middle-income homeowners as well as renters who can’t afford higher property tax bills that get passed down to them through higher rents.
  • Eliminate the damaging law that restricts property tax revenue growth to 1 percent per year (or the rate of inflation, whichever is lower), which saps billions of dollars from schools.
  • Remove the rigid “ten-dollar limit,” which makes it difficult for some cities and counties to meet needs for emergency services, public safety, parks, and other priorities by arbitrarily limiting the sum of all regular levies (those that do not have to be reauthorized by voters on an ongoing basis) to $10 per $1,000 of assessed property value.
  • Raise the state property tax levy, which at $2 per $1,000 of assessed value, is near record lows. This would equitably generate additional revenue for schools throughout Washington state.

Making these changes would be a key step toward fixing our state’s broken and inequitable tax system. And it would provide significant additional funding to help the legislature give Washington’s kids the high-quality schools they deserve.

Future posts in this series will explain these important property tax reforms in more detail. They will also examine the strengths and weaknesses of Washington state’s property tax system as an instrument for funding basic K-12 education. Our analysis of each proposal will take into account the need for racial and gender equity. 

About Andy Nicholas, Senior Fellow

Andy specializes in state budget and tax policy. Since joining the Budget & Policy Center in 2009, he has served on a Legislative Task Force on Tax Preference Reform and has conducted numerous analyses of Washington state’s tax code.

Read more about Andy