School Funding Legislation for 2018 Collection Year: FAQ's
Why am I paying more in property tax?
In 2017, the State Legislature passed Engrossed House Bill 2242 to provide ample funding for K-12 public education. The bill sets a state school levy rate of $2.70 per $1,000 assessed property value for the next four years. That rate is standard statewide.
Is this a new tax?
It is an addition to the existing state property tax of $1.89 per $1,000 of assessed value for K-12 public schools. The state Constitution requires that the state amply fund public schools. The State Legislature, per the State Supreme Court Decision in McCleary v. State of Washington, passed Engrossed House Bill 2242 setting a new statewide school levy rate of $2.70 per $1,000 of assessed value. Engrossed House Bill 2242 also lowered the amount that school districts can collect in local property tax levies. Essentially, this is a property tax shift.
How much more tax am I paying?
It varies by county. In Skagit County, the Assessor estimates that the new state levy will cost the owner of a $300,000 home an additional $258 in 2018 – an estimated increase of 86 cents per $1,000 of assessed value.
So why does the state property tax increase vary?
The state assumes that counties collect tax on 100 percent of the total market value of properties. That rarely happens. Due to the statistical nature of property value assessments, it’s impractical to achieve a ratio of 100 percent. Doing so would result in many properties being assessed higher than their selling price. To minimize artificially high assessments, counties assess at less than 100 percent – usually 90 or 95 percent of the total market value. To make up that shortfall, the state equalizes the state school levy based on the county assessment ratio.
For example: Let’s say that the total market value of properties in Skagit County is estimated at $500 million. The state assumes that the County Assessor will collect $1.35 million for schools because the school levy rate of $2.70 per $1,000 assessed value is applied at a ratio of 100 percent.
If the county assessment ratio is 93 percent of the total market value of properties, the county won’t receive the full $1.35 million. So the state equalizes the levy rate to $2.90 per $1,000 of assessed to make up the amount that would be generated if the county ratio were 100 percent.
So will I now pay for the new state school levy AND local levies?
Yes. Depending on the school district in which you live, you will still pay local school levies that existed prior to the passage of Engrossed House Bill 2242. These levies will remain at similar rates as in the 2017 collection year except for new levies passed in 2017 for the Mount Vernon, Burlington-Edison and La Conner school districts for collection in 2018. Beginning in 2019, school district local property tax levies (currently referred to as maintenance and operations) will be capped at the lesser of $1.50 per $1,000 of assessed value OR $2,500 per student.
Now that there’s a state levy, can local districts pass additional levies?
Yes. Engrossed House Bill 2242 renamed local levies as “enrichment” levies, and set limitations on these enrichment levies beginning in 2019. Enrichment levies are limited to the lesser of $1.50 per $1,000 assessed value OR $2,500 per student. There are no restrictions on previously approved levies for funds collected in 2018.
How much more state funding are school districts receiving?
That varies by district. We recommend contacting your local school district for more information.
Are senior citizens or the disabled exempt from paying this new tax?
Yes. If you or your household receives a senior citizen or disabled property tax exemption, you will not have to pay the new state school levy (part two). You will still pay the original state education levy (part one) of $1.89 per $1,000 of assessed property value.