Education funding shift spells lower tax bills in Walla Walla

Your property taxes for Walla Walla’s public schools — the state and local portions — are likely going down by $1.19 per $1,000 of your home’s assessed value in two years.

Well, it has to do with the new way the state will be calculating property taxes.

Although crunching the numbers at this point requires making some assumptions, which isn’t optimal, it seems the legislation approved in Olympia last month to fully fund basic public education as mandated by a 2012 state Supreme Court decision will result in a savings of about $200 a year for an average Walla Walla homeowner starting in 2019.

“It appears (strictly from a taxpayer’s lens) that there is some very good news for us in Walla Walla,” Superintendent Wade Smith said in an email recently.

He said the lack of concrete information from state education and financial offices has been frustrating. However, he reached out to an underwriter consultant he knows in an effort to figure out what is likely to occur for taxpayers in the Valley.

So, let’s take a look at the numbers from the compromise plan approved by the Democrat-controlled House and the Republican-controlled Senate.

What lawmakers did was essentially slightly raise the property tax rate for K-12 education across the entire state while reducing — capping — the amount of money districts could collect from local taxpayers with voter-approved maintenance and operation levies.

Starting in 2018, the state tax rate will increase 82 cents per $1,000 of assessed property valuation. That means those living in the Walla Walla School District will see that assessment rise from $1.97 per $1,000 of their home’s value to $2.79.

But that tax increase will be short lived as the $1.50 per $1,000 cap on the local levy begins in 2019. That means that the current local levy rate of $3.51 rate in Walla Walla will be reduced by just over $2.

The net decrease for taxpayers in 2019 would then be $1.19 per $1,000 or $208 per year on a home valued at $175,000, the average assessed value of a home in the area.

Now, to be clear, exactly what you will pay varies from year to year as property assessments go up and down annually. Rates can also change a bit as those are based on the overall value of property juxtaposed with the amount of money approved for collection.

Adding to possible confusion is the ongoing bond debt for local school construction. Currently that is $1.22 per $1,000 in the Walla Walla School District.

Smith, in an effort to make sure his examples are apples to apples, put the bond debt on the table when looking at calculations for other school districts.

Walla Walla’s bond debt will be paid off at the end of 2018, and as result the School Board members are considering seeking a bond for construction in November 2018. It is a good political opportunity as taxpayers would then not see a drop or rise in their tax payments due to bond approval.

However, at this point, it’s just a concept — hypothetical.

What isn’t hypothetical is that in 2019, when all when all taxes are considered together Walla Walla’s rate should be lower than other districts in the county. Keep in mind that this includes bond payments in other districts, such as College Place where voters approved building a new elementary school and high school a few years back, which might be higher than Walla Walla’s current bond payments.

 “When comparing our total tax rate in 2019 (even when assuming the community approves a ‘continuation’ bond levy in November of 2018), Walla Walla schools’ taxes will be far less than most of its county partners, estimated at $1.51 less than Touchet, $1.41 less than College Place, 16 cents less than Columbia, and 14 cents less than Waitsburg. Only Dixie (total of $4.05) and Prescott ($5.28) would yield smaller tax rates based on provided estimates to me,” Smith said.

So if taxes are going to be reduced in this region, how does this result in $4 billion more for schools?

The parts of the state with the highest land values will be picking up a larger share of the tab. For example, The Seattle Times reports that owners of the average home in Kirkland’s Lake Washington School District will be hit with an annual property tax increase of $790. Of course, it is common for homes in that district to be valued at $1 million or more.

The property owners in those Puget Sound-area school districts aren’t happy with the compromise plan approved to raise more money to fund basic education.

But on this side of the state the approach feels equitable as the cost per $1,000 of assessed value is pretty consistent statewide. Those who can most afford to pay the most will bear the greatest burden while every school in the state would have the funds to pay for basic education costs.

Smith said Washington’s new approach is similar to the education funding plan in Oregon where the wealthier communities along the Interstate 5 corridor from Portland to Salem pay a larger share of education costs.

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