Teacher Salaries and Property Taxes
Our children, parents, teachers and tax payers deserve nothing less than a predictable secure stable funded public school system. As your Clark County Assessor, I don’t determine level of taxation. Instead, I am in charge of certifying property tax collection requests are legal, calculated correctly and equitably distributed. Through this work, I am deeply knowledgeable of the impact property taxes have on districts and citizens. With the debate over teacher contracts, I’ve been asked, “How will the new contracts impact the financial sustainability of school districts into the future?”
To answer, we need to turn to the legislature’s methodology for determining property tax collections.
In Washington State, schools are primarily funded through property taxes. An increased expense to our school districts such as teacher salaries necessitates an increase in property tax collection or some other funding mechanism. In 2017, the state legislature passed ESHB 2242, adding a new state property tax to end insufficient state school funding, as determined by the state supreme court in the McCleary Decision. The result was in 2018 most property owners saw a sharp increase in property tax.
Clark County Assessor, Peter Van Nortwick.
In Clark County, the state required collection of $61.5 million in additional taxes. The goal was to increase collections by the state and significantly decrease the reliance on local levies. In 2019, property tax collection for maintenance and operations levies will be limited (capped) to $1.50 per $1,000 of assessed property value. For districts like Evergreen, it is estimated to reduce their local levy collection by $27.6 million in 2019. To complicate matters, school districts with levy equalization which help generate more funds for property poor districts, will continue to receive $1,500 per student. Districts such as Ridgefield that don’t get levy equalization could have their collection limited to the $1.50 per thousand, costing them an estimated $2.2 million in 2019. Therefore, the sustainability of the new teacher contracts is dependent on state funding.
Will state property tax collections be sufficient to cover the increased costs statewide? This is more difficult to predict. The Legislature implemented a fixed rate rather than approving a budgeted dollar amount for property tax collection, like our other taxing districts. The challenge with a fixed rate in a market value assessment system is property value swings are difficult to predict, making property tax collection revenues and property taxes for homeowners difficult to budget. Larger than planned market increases will collect more from tax payers than is needed to properly fund schools. Insufficient increases, or worse yet, decreases in property values would impact the state’s revenue collection necessary to support our school districts.
With insufficient tax collections, the State would either need to find additional sources of new revenue or require districts to cut staff. The other challenge is equity in teacher compensation between districts. With the Edmonds district offering starting teachers a 19% raise is it equitable to ask taxpayers of Battle Ground School District and all our other districts to fund Edmonds’ teacher salaries more than their own districts? The increased compensation is to be paid by the State and puts further pressure on the State retirement system. Inequity in the system was one of the main issues the McCleary decision was asking to address. When teacher salaries were partially funded locally, the district voters had the ultimate decision to levy increases in their taxes for teacher salary. With the state funding basic education, equity in the system between districts is paramount to financial stability, a strong education system and fairness to school district taxpayers. The state introduced regionalized funding factors based on median home values in a County. In Clark County that factor was 6% compared to 18-24% in the Puget Sound region. The same methodology could be utilized to setting teachers’ and administrators ‘salaries off of a base state salary schedule.
The unpredictability of the new state schools tax methodology, coupled with inequity in teacher salary increases sets up the educational system, and our tax payers, with potential for an even bigger school funding crisis down the road. Therefore, it is imperative that we urge and support our State Legislature in creating a multi-year budget for school property tax collections, create equity in teacher pay throughout the State and abandon the volatility and unpredictability of a fixed rate tax system. These changes would help deliver a predictable secure stable funded public school system.
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