State Senate OKs schools to raise more levy money

Cash-strapped school districts would be allowed to ask voters for additional money through local property taxes under a measure passed by the Washington state Legislature on Thursday.

On a 29-19 vote, the Senate passed the measure lifting the levy lid that currently limits how much school districts can seek, and how often, from 2011 to 2017. House Bill 2893 passed the House last month, and now heads to Gov. Chris Gregoire for her expected signature.

Gregoire has promised help to struggling school districts, and the bill would help them make up for school budget shortfalls. It would allow districts to ask for more money and would let them go back to the voters for more money in the middle of a levy cycle.

“We must not tie the hands of our school districts,” said Sen. Rosemary McAuliffe, D-Bothell. “We must allow them to make the case to their people, and let the people decide.”

The levy lid law took effect in 1979 and sought to limit levy revenue to 10 percent of a school district’s state basic education allocation. It had a grandfather clause, however, and allowed some districts to exceed the 10 percent limit.

Lawmakers gradually increased the levy lid over the years, and under current law, most districts can now raise up to 24 percent through levies. The bill raises the levy lid by 4 percentage points, from 24 percent to 28 percent. Districts grandfathered in at higher rates also can raise their levies by 4 percent.

The bill also would increase the levy equalization rate from 12 to 14 percent. This is the amount of the property tax that poor districts get from the state in addition to what they can raise locally.

Five Republican amendments were rejected, including one that would have increased the levy lid by only 2 percentage points.

Sen. Jim Honeyford, R-Sunnyside, and other opponents argued during the Senate debate that increasing the levy lid doesn’t mean property-poor districts can get any more money from their voters.

“The property-rich districts get richer, the property-poor districts get poorer,” said Sen. Jim Honeyford, R-Sunnyside. “We should not allow that disparity to continue.”

School districts in Washington state have levies that range from zero to 33.67 percent of the dollars the districts get from the state and federal governments. Most hover near the current levy lid of 24 percent, and the statewide average is 23 percent.

Seattle, Mercer Island, Tacoma, Tukwila and tiny Dixie were the only districts reaching past 30 percent at the end of 2009, although some other districts have the authority to go that high. Fifteen of the state’s smallest school districts — from Inchelium to Stehekin — didn’t have any school levies as of the end of 2009.

Levy percentages do not correlate with local tax dollars brought into a district. That depends on enrollment, local property tax values and various state budget decisions.

For example, Tacoma brings in $72 million through its local levies, plus the district gains another $3.8 million from the levy equalization fund. Kent is similar in size but has a lower levy lid than Tacoma, and brings in $47 million from local levies, plus $2.6 million in levy equalization dollars.

The state’s largest school district, Seattle, which has a similar levy percentage to Tacoma but more students and a more robust tax base, brings in $124 million in local taxes and no levy equalization funds.

McAuliffe acknowledged concerns over disparity, and she noted that a local levy work group would start meeting this summer and would present a final report with recommendations to the Legislature in December 2011.

“We are very serious about addressing this issue,” she said.