Levies vs Bonds and Why We Support Them
by Jenn Askew
It’s school levy season in Tahoma again, and if you haven’t voted yet you have until next Tuesday, February 13th to do so. The Tahoma School District is running two levies to replace two expiring levies. These are the Educational Programs and Operations (EP&O) Levy, which covers a long list of essentials and personnel, and the smaller Technology Levy. You can learn all about these levies on the Tahoma website dedicated to them. We won’t be rehashing all of those details here. Tahoma is not running a bond this year.
We Vote Yes on School Levies and Bonds
Before diving into everything else, we want to state up top that we fully support the levies that are currently on the ballot in Tahoma, and will very likely support any upcoming bond in the next couple of years. We’ll explain below what the difference is between those two types of funding, but the gist is that the state and federal governments do not provide enough money for schools to operate in a way that allows every student a quality education and safe school experience. Levies and bonds help fill that gap, along with other funding sources like parent groups, the Tahoma Schools Foundation, and many others.
What are Levies and Bonds?
Levies and bonds are taxes that are based on your property value. Homeowners and businesses that own property pay these directly, and landlords also pass along this cost to their tenants. Everyone who contributes to property taxes within the boundaries of a tax district pays the levies or bonds for that district. Some examples include bonds for new city parks, levies for county mental health services, or state level property taxes. In this case, we’re talking about a school tax district.
Bonds are for Building,
Levies are for Learning
A simple rule to remember for school district levies and bonds is that Bonds are for Building, and Levies are for Learning. It’s not always that cut and dry, but it’s basically true. Levies supplement the state and federal funding to operate schools on an ongoing basis, including for (some) personnel expenses, equipment and supplies, transportation, and much more. (Again, we recommend looking at the info provided by the district on their site, as well as the district’s Budget 101 site.) The state limits what can be spent and how.
Bonds help pay for the building of new schools and other facilities in the district. Bonds are passed just once, and continue to be paid through property taxes until the bond is done. Levies have to be renewed every four years at the least, according to state law. The current Tahoma levies are coming up on four years old, and the new levies will only be for two years. (Yes, that likely means we’ll be voting on TSD levies again two years from now.)
Why Does Washington State Have Local Levies?
The Washington State Constitution requires the state to fund “basic education”. In 2012, the state lost a lawsuit which had been filed in 2007, in which the Washington State Supreme Court found they were not meeting this obligation. This was the McCleary decision, and several years later it resulted in sweeping changes to the public school funding model in Washington state. On the funding issue, the legislature voted to increase the state levy rate while decreasing local levy rates, but they opted not to remove local levies entirely.
What “basic education” means is up for debate, and is indeed something the legislature takes up almost every year. They tweak aspects of funding to better meet federal or state requirements, or to reflect current educational expectations, usually by increasing funding for a particular subset of students or personnel.
Despite this ongoing work, the legislature never fully funds what most people expect a typical school to look like. They also do not provide enough funding to match the mandates handed down by the state and federal governments. The legislature realizes this, and has combined the slight increases in specific funding with large increases in the allowable local levy amount. The original maximum local levy, set in the first McCleary bills at $1.50 per $1000 in valuation, has been almost doubled to $2.50 in the five years since, and the state allows districts to put additional technology and transportation levies on the ballot.
One of the biggest underfunded mandates is special education. Last session (2023) the legislature increased the artificial cap on special education students to 15%. This means that the state provides extra money for every special education student, according to a rigid formula, up to 15% of the district’s enrollment. This does not reflect the reality in every district, where the percentage of special ed students might be higher or their needs may be greater than the formula allows. Many districts, including Tahoma, wind up needing extra funds to meet the federal mandates to serve these students. (They legally are required to meet those mandates, whether they have funding from the state or not.) This means that many districts have to go out for a local levy to fill this funding gap, which is something the legislature realizes and allows.
Levies also pay for other items that the community values, but the state does not fund. Some of the items that are surprisingly not considered “basic education” by the state include all extracurriculars and sports, extra costs for high-cap and AP courses, and additional paraeducators, nurses, counselors, and other professionals. There are dozens of things that Tahoma, specifically, spends their main (EP&O) levy dollars on, which you can view on their website. The tech levy provides necessary equipment for state testing, as well as a plethora of other basic technology needs like internet service, physical security like cameras and key card access, data security, and IT personnel. None of this is considered to be “basic education” by the state.
How do Bonds Work?
Bonds cover roughly 40% of the cost of building new schools. The rest is covered through a combination of school impact fees that are paid by developers, and state matching funds.
First, let’s address the school impact fees. When a new dwelling is built in a tax district, the local government can charge impact fees. There are a couple different types, with a school impact fee being one. The state government limits how high these fees can be, and Tahoma collects the maximum allowable amount of ~$4500 per single family unit and ~$1200 per multi-family unit.
Per the June 2022 demographer’s report (pg 31), the Tahoma school district serves an average of 0.58 students per household. This means if 1000 new houses are built, ~580 new students can be expected to move into the district, with a maximum fee collection of $4.5 million (1000 houses x $4500 each). These 580 students would fill, for example, almost an entire elementary school. Pre-pandemic, the new Lake Wilderness Elementary School cost approximately $41 million to build (pg 14), for an expected enrollment of around 750 students. That’s a cost of over $53,000 per student. As you can see, impact fees don’t come close to addressing the full cost to “house” new students in a school district, which becomes a big problem in a quickly growing district like ours. The impact fees provide maybe 10-15% of the actual cost to build new schools.
The rest of the cost has to be covered by state funding and local bonds. The state funding is dependent on two things: One, a whole set of requirements which you can look through in this document from OSPI, and which limits the state match to the next 3-5 years of expected enrollment growth. Two, the local community approving a bond. In other words, the state will not provide funds to build a new school unless the local community has already approved a bond to cover half of the remaining cost to build, and the state only matches funds for the next 3-5 years of growth. Building for larger expected enrollments would need to be covered fully by additional local bond funds.
These requirements can put a school district and community in a real bind, especially if the local community doesn’t feel they can afford this extra tax. While we would prefer the state provide full funding for new schools, so that we didn’t have to rely on local bonds, we have to live in reality. The reality is that our district is bursting at the seams and we need more classrooms and other facilities, and there are currently no bills in the 2024 legislative session to change the state funding model for school building.
Funding for building new schools is confusing, and we’ll probably address it again if Tahoma does run a bond in the coming years.
What Now?
For now, we only need to vote on the levies. As stated above, we fully support these levies and are voting yes. If you want to learn more about the levies aside from the district-provided information, or get involved with advocating for them, the VOTE Yes! Tahoma Schools committee is another great resource. You can find their Facebook here, Instagram here, and website here.
This article was written by a member of Tahoma Values with help from the rest of the team, and we are always looking for new article submissions! If there’s something you’d like to publish with us, send your submission to tahomavalues@gmail.com
