As a result of an ambitious plan to better fund the state’s education system, Yakima County property owners will pay an average of nearly $200 more in state property taxes annually, according to the latest estimates from the state Office of Financial Management.
But there is good news for some property owners: For those living in some local school districts, such as East Valley and Yakima, that pinch could be lessened by a drop in the amount they pay in local property taxes.
That’s because while the $7.3 billion plan adopted by the Legislature late last month to address school funding will increase the amount of property taxes the state collects to fund education, it also puts a cap — to take effect in 2019 — on how much local school districts can levy from property owners.
That cap left many lawmakers optimistic that rural areas similar to Yakima County wouldn’t see as much of an increase as property-rich areas such as Bellevue or Seattle because local levies could decrease as state taxes grow. But some legislators, including Rep. David Taylor, who was one of the lead negotiators on the education bill, weren’t convinced.
Taylor, a Republican from Moxee, said he ultimately couldn’t vote for the measure because it had the potential to increase property taxes in some of his lower-income districts.
“It was districts like Mabton, Wapato and Toppenish that I had to consider,” he said. “For me, it was like, ‘Are these people in a situation where they can actually afford (the affects of) a property tax increase?’ At the end of the day, even though there was so much good policy in the plan, I couldn’t vote for tax increases to the lower-income residents in my district.”
And, there’s evidence that Taylor may be right.
The latest figures released by the Office of Financial Management show that for an average home in Yakima County the estimated increase in state property taxes for education would be about $189 annually. That translates to an increase of about 97 cents per $1,000 of assessed property value across the board in Yakima County.
The office also determined that East Valley, Naches Valley, West Valley and Yakima school districts likely would see their levies — and the resulted revenue — reduced in 2019. Other districts in Yakima County likely would not.
The move to increase funding for education was mandated by the state Supreme Court’s 2012 McCleary decision, which said the state’s system, in which essential school expenses such as teacher pay are funded in part by local property tax levies, was unconstitutional.
Rep. Gina McCabe, R-Goldendale, in voting for the plan, determined that the chance some property owners would see an overall increase in their property taxes was worth the potential results. The levy cap would even out a significant portion of the increase and ultimately improve the education students in smaller districts receive, she said.
Over the years, school districts have been funded largely by local levies, and more affluent districts tend to have higher levies, McCabe said.
For instance, the highest levies in King County can reach up to $6.74 per $1,000 of assessed property value in the Auburn school district, while the highest total school levy in Yakima County is $5.71 per $1,000 of assessed property value for the East Valley School District.
“The biggest thing for me was, make sure that kids that were in Harrah or other more rural districts at big or small schools had access to equal education,” she said. “I felt like children in Bellevue were getting better education than children in my district, and that needed to change.”
In addition to potential savings realized through the plan’s levy cap, the total amount property owners pay in taxes for schools — to state and local agencies — also could be reduced if school districts decide the additional money they receive from the state decreases or eliminates the need to rely on their own levies for funding.
County Assessor Dave Cook is putting together a summary to assess the actual impacts property owners can expect. Numbers from the Office of Financial Management don’t take into account any changes the school districts will make to their levies in the coming year, and there are other factors to consider.
“Another issue is that if property owners have their mortgage company collecting and paying their taxes, which a lot of people do, the mortgage company is going to have to collect more money to raise their reserves,” he said. “That’s something I don’t know if lawmakers thought of. Then I have to see if it’s the school district’s intention to take the same money as last year. Without that, my numbers could overstate the problem.”