Big $ at risk . . .

This League of Education blog post does a nice job of sharing what levy equalization is and how it will become a primary focus for the legislators as they grapple with a $2 billion revenue shortfall. This gap could also increase as we were recently told by a key legislator that the November revenue forecast will be even further below projections. In any case, levy equalization is on the table because it is the last of the big dollar items not covered under basic education.


Below is an explanation from the post of what levy equalization does.

The amount a local school district can raise via a local school levy is set as a fixed portion of a school’s operating budget. Currently law allows all districts to collect at least 28% (raised from 24%), with some grandfathered in at higher rates. Local levies are based on property taxes, and thus property values. With the great disparity between property values in different communities, the state established a way to alleviate the fact that well-to-do districts can raise more local money. This program helps school districts with lower property values offer the same level of education as higher-value districts. It is called Local Effort Assistance, or Levy Equalization, and the acronym LEA was born.


There is an equity problem that LEA tries to address. If there was no levy equalization in 2010, a $100,000 home in Republic would have paid over twice the taxes of a $1,000,000 home in Redmond for a 28 percent levy. Why should far poorer taxpayers in a $100,000 house have to pay twice the taxes of a $1,000,000 Bellevue home to get the same local levy for their schools?

I think this brief explanation does a nice job of sharing why levy equalization is so important. It is especially so for small districts that would find it very difficult to pass levies at the percentages that are common in our area. We are one of those that are at the 28% level and we also qualify for levy equalization, projected to be about $930,000 in revenue this year.

Levy equalization has survived the budget cuts of the last few years because of support from republican legislators representing those districts receiving levy equalization and democrats supporting the need. There are 240 districts out of 295 currently receiving revenue so there has been broad support for it in the legislature. There are problems, however, with LEA because the formula creates disincentives for some to raise local dollars and an argument can be made that 240 districts don't need the support. Even with these problems it has survived.  But, given today's budget crisis something has to go and this looks like one large pot at risk. The loss of another $900,000 to us would create problems not easily resolved and even bigger problems for some districts suffering significant budget issues.   If cut, it could lead to some smaller districts being forced to consolidate.