The West Valley School District is on track to bring in roughly $1 million less in levy funds from local taxpayers this year than last in an effort to compensate for overshooting the tax rate promised to voters in 2019 ahead of a new bond measure vote.
Taxpayer contributions to the district in 2020 were $915,362 more than what was anticipated when voters approved a bond measure to replace two outdated and overcrowded schools in late 2019.
The disparity was the result of the district promising voters a certain rate rather than a tax budget, which is the system Washington state uses, said County Assessor Dave Cook. Rates fluctuate based on assessed property value and the total budget approved by voters. They cannot be guaranteed at the time of an election, and are instead certified at the start of each year.
The circumstances were unusual, since the Legislature made changes to a local levy rate cap during that time. The district told people it planned to compensate for the mix-up.
Angela Von Essen, assistant superintendent of business and finance for the district, said the levy amount submitted to the assessor’s office to be collected this year was roughly $4.9 million, compared to about $6 million last year.
The rate per $1,000 in property value is yet to be calculated, but will be submitted to the Treasurer’s Office on or before Jan. 15 and distributed to taxpayers soon after, Cook said.
How it happened
In 2018, West Valley property owners paid $2.54 per $1,000 assessed property value toward an existing school levy.
With the levy set to expire at the end of the year, voters approved a new four-year levy at $5.96 million annually in February 2018. But the district was unable to bring in the full amount, since the Legislature put a cap on local levy rates in an attempt to shift the tax burden to the state to ensure it was fulfilling its responsibility to fully fund basic education. Districts were limited to collecting $1.50 per $1,000 assessed property value for levies. State school taxes increased at the same time the cap was implemented.
In February 2019, West Valley went to voters with a 20-year, $59 million bond measure that would be matched with $12 million in state funding to cover the construction of new schools to replace Apple Valley and Summitview elementary schools, which officials said were overcrowded and outdated.
The district estimated at the time that the bond would cost taxpayers 95 cents per $1,000 assessed value. Combined with the capped levy amount of $1.50, the district and board members pitched, taxpayers would be paying an estimated $2.45 per $1,000 assessed value if they approved the bond. They told voters this would still be less than the $2.54 levy rate paid in 2018.
The bond passed by a slim margin: It garnered 60.8% of voter approval, just above the 60% threshold required to pass.
But by the end of the 2019 legislative session in late April, state lawmakers lifted the local school levy cap to $2.50 in response to budgetary concerns in districts statewide. This meant that where levy amounts were approved that exceeded a $1.50 rate, tax collection would automatically roll up in 2020.
West Valley was one of those places. That’s because the $5.96 million voter-approved levy amount broke down to a rate of $1.77 per 1,000 assessed value across the district.
The district failed to adjust the tax amount to be collected in 2020 to account for the change in levy caps. When Von Essen realized the mistake in late January, tax amounts for the year had already been solidified.
Combined, the full levy rate and the bond rate for the year were closer to $2.72 per $1,000, rather than the advertised $2.45 as a result. For a property valued at $250,000, that’s a difference of paying $680 in local school taxes versus $612.50 for the year.
Districtwide, Von Essen said Wednesday that $915,362 more in local school taxes than anticipated were collected in 2020.
Shortly after the district became aware of the tax issue early last year, the school board approved a plan to reduce the 2021 levy amount by the excess brought in that year. In 2022, the district would determine the taxable amount based on what a $1.50 levy rate would be and submit it to the County Assessor in an effort to maintain its commitment.
Von Essen said that the district had reduced its levy amount this year to about $4.9 million, from roughly $6 million last year. The exact levy rate is yet to be determined.
“This is something that’s important to us, you know, following our commitment,” she said. “We’re committed to our community and needed to honor it.”
Von Essen warned that local school taxes are separate from state school taxes.
“Those are things we don’t have control over,” she added.