Property owners in the Lake Washington School District (LWSD) may see the amount they pay in property taxes increase under proposed legislation intended to shift funding for basic education costs away from local levies and back to state property taxes.
Under Republican-backed Senate Bill 6109, the state would lower local school district levy taxes by capping them at $1.25 per $1,000 of assessed value, while increasing the state’s common school levy from $1.98 per $1,000 to $3.60 per $1,000 of assessed value, a $1.62 increase. The current levy rate for LWSD is $1.45 per $1,000 of assessed value, according to LWSD Spokesperson Kathryn Reith.
The median sales price for a home in Kirkland this year is $440,000, according to trulia.com.
Meanwhile, the Democrats have introduced Senate Bill 6102, which would pay for local levy reductions with a yearly 7 percent state tax on capital gains of $250,000 for single taxpayers or $500,000 for couples. The proposal would raise an estimated $1.2 billion in the next two years.
Washington State Treasurer Jim McIntire stepped forward with another option to fund schools through a state income tax, although many are against the idea, including Gov. Jay Inslee.
Reconciling the issue may lead to a Special Session that could begin this weekend.
As for how this will impact LWSD’s budget, Reith said they are examining all the proposals being made in the state legislature, including SB6109, but at the moment, much is unknown.
“At this point, there are a number of proposals,” she said. “We’re trying to analyze them all.”
Concerning SB6109 in particular, she said that “There are some gray areas there, so we are trying to learn more about what the real impacts would be on the district. It’ll be interesting.”
Among the sponsors of Senate Bill 6109 is Sen. Andy Hill, who represents Redmond and Kirkland in the 45th Legislative District.
In a press release, Sen. Bruce Dammeier (R-Puyallup) said the intent of the bill is to correct certain inequalities in education spending throughout the state by having the state reassume the financial responsibility for basic education such as teacher’s salaries, which have been paid for through local school levies, as well as restructure teacher compensation.
This plan would move about $2.3 billion in the 2017-19 biennium, about half the money currently generated by local levies, to the state levy. The bill would also prohibit school districts from using levy funds on basic education spending.
Though SB6109 isn’t intended to bring in new revenue, Democrats claimed in a press release that it would raise property taxes in LWSD by $1.01 per $1,000 of assessed value. Hill stated that the initial draft of the bill would result in increased property taxes for property owners in LWSD, but added that they are working out the exact details, which may reduce any potential increase. The bill is currently in the Ways and Means Committee, which Hill chairs.
“There are a lot of dials within it, and there are ways you can basically mitigate or change the way property taxes are collected between local levy and state property taxes,” Hill said. “There’s a lot of flexibility in there. Part of the legislative process is putting issues out there.”
Hill believes the bill will help fix a 30-year problem of relying on local levies to fund basic education, which is illegal under state law but the state legislature has allowed. In 2012, the State Supreme Court ruled that the state legislature had failed to fulfill its paramount duty under the constitution to “make ample provision for the education of all children residing within its borders.” The court also said that the local levies could not be used to pay for basic education costs that should be funded by the state.
“The Supreme Court was very clear that it was something that had to be fixed,” Hill said. “I signed onto it (SB6109) because I want to have the conversation….This is solving a very long-standing problem. And this is part of governing and part of leading.”
Although he said he doesn’t necessarily agree with everything in the bill, Hill said it’s a step in the right direction and contains provisions that will benefit teachers in the LWSD, such as an increase in teacher compensation to match the local cost of living.
