Wednesday, December 13, 2017

OPINION: School district tax rate structure and 2018 bond need study

Dr. Traci Pierce, LWSD Superintendent, and Eric Campbell of Main Street Property Group will be featured speakers at the January 4th Education Hill Neighborhood Association meeting.  (7 pm, United Baptist Church)  Mark your calendars!

-- By Paige Norman, Founder, Education Hill Neighborhood Association (EdHNA.)

There has been a lot of conversation about the upcoming Lake Washington School District (LWSD) Bond and Levy proposal in February 2018

  • What is a Levy? A “Levy” is a pay-as-you-go-model; a certain amount of money is collected each year for a limited number of years.
  • What is a Bond? A “Bond” resembles a mortgage; a bond is sold with a promise to pay back the money to the bond buyer with interest. The payments are made with the portion of the property tax devoted to bond measures. Bonds are up to 20-years in maturity dates. Bonds are sold as needed to build schools; so not all bonds are sold at once.>

Over the years I have NOT been a supporter of Bonds because I have felt the District didn’t use the money in valuable ways for the future of the District.
In the past the District has used “leftover” monies from Bonds to build Portable/temporary classrooms (that turn into long-term classrooms) instead of using the funds to build brick-and-mortar buildings that house more students and have a longer life-span (not to mention bathrooms and aesthetics). 

In July of 2013 with a new Bond and Levy vote looming, I asked the District about the cost of Portable (“temporary”) classroom cost vs. the cost of a building called the “B Wing” at Redmond High School.

To recap the post, the cost of 4, two-room portables was $1,520,000 while the cost of the “B Wing” was $728,484 (2013 dollars).  That’s 8 classrooms for $1.5 million vs. 14 classrooms for $728,484.  To further break it down that’s $187,500 per classroom ($7,500 per student at 25 students) for a portable vs. $52,034.57 for classrooms ($2,081.36 per student at 25 students) in a permanent structure.

According to this there are 171 portable classrooms (14% of classrooms) in the District (equivalent of 7 elementary schools). That’s roughly $68.4 million dollars in portable classrooms.

The 2016 Bond approved funds of $398 million and added space for 3,000 students. The upcoming 2018 Bond is asking for $299 million which will add space for an additional 2,100 students. Two future bonds in 2022 and 2026 will ask for additional funds (dollars not listed) for additional projects.

The District has repeatedly promoted the bonds with the phrase “no tax rate increase”. Although this is technically true (I can’t even begin to explain the math but the tax RATE is not increasing), the AMOUNT we are being taxed on increases yearly.

To help with the math, we'll use the assessed value of my home on Education Hill.

My ‘total taxable value’ in 1986 (when my husband purchased the house) was $66,500 for tax year 1987. That total taxable value has jumped to $552,000 for tax year 2018. The District is using a total tax rate of $2.93 per $1,000 for all three measures – a reduction of $0.23 per $1,000 from the expiring bond.

The assessed value of my house has increased 803% in 31 years. Great for selling my house, not so great when paying taxes.

Using my house valuation (not appraisal value) of $552,000 times $2.93 per $1,000 would mean my taxes for these measures ALONE would be $1,617.36. The math is confusing (again), but that rate would be my annual contribution to the 20-year bond. That amount might fluctuate depending on Assessed Value (AV), as bonds mature, and as the bonds in 2022 and 2026 are added into the totals.

According to this pie chart; 32.14% of my taxes go to “local schools”, with another 19.74% going towards “state schools”.

My tax for the 2017 property tax year was $4,608.45.  Of that $1,521.12 is distributed to “Local School” (the percentage here is 33% which is higher than the percentage listed in the pie chart above).

The remaining $3,087.33 is split between:

State                    $977.41        21.2%
County                $665.20        14.4%
City                       $649.62        14.1%
Library                 $217.02        4.7%
Hospital               $172.46        3.7%
EMS                      $126.53        2.7%
Sound Transit    $120.25        2.6%
Port                      $73.75          1.6%
Flood                   $56.47          1.2%
Other                   $15.96          0.3%
Fees/Charges     $12.66          0.3% (Noxious Weed $3.21, Conservation $9.45)
Road                                            0%
Fire                                               0%

Based on these numbers, under the new bond scenario my taxes will increase $96.24 (from $1,521.12 to $1,617.36).  That increase is likely more to do with the increased valuation (AV) of my home, but it’s still an increase.

The annual taxes I’ve paid on my house in the last 3 years have increased by $349.38 – from $4,259.07 in 2015 to $4,608.45.  In that same 3 year period the AV of my home has increased $56,000.

Calculate how your taxes are ‘spent’ by entering your Tax account number here

(If you don’t know your tax account number you can look on your “Official Property Value Notice” or by looking it up here.

So, yes, your tax RATE will not be increasing with the new bond.  It will decrease by $0.23/$1000 of assessed value.  However, as the math above shows this is neither an easy nor sincere representation of our school tax structure. 

And it still doesn’t address how the District uses the funds they raise, or their integrity in planning and building for the future.

I’ll cover that in my next post…

Paige Norman 
Source:  EdNHA website

Thank you Paige for your leadership and passion! Thank you for arranging the meeting with Superintendent Pierce!  Our community needs more organizers like you! 

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