BONDS & LEVIES:
The Seeds of School Funding

How do schools receive the money they need to provide an education for all students? The answer is complex.

The root of the answer lies in state law. Washington is required to fully fund “basic education” based on a funding distribution formula referred to as the “prototypical model.” This model represents the Legislature’s assumptions about the costs associated with providing a “basic education” to student seedlings. Sadly, the money provided by the state for schools does not cover the actual cost of operating, constructing, and maintaining a school district. Local community funding measures, called levies and bonds, fill the gap between state funds and the real cost of providing the structures and services that help students grow and thrive.

Bonds are for Building

Bonds are for building

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Bonds are for building

A bond provides funding for capital projects such as purchasing property for schools, constructing new schools, or modernizing existing schools. Bonds are sold to investors who are repaid with interest over time from property tax collections, generally between 10-25 years.

Bonds require a super majority to pass (60%)

Bonds 60% Super Majority Vote

Levies are for Learning

Levies are for learning

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Levies are for learning

A levy is a short-term, local property tax passed by the voters of a school district that generates revenue for the district to fund programs and services that the state does not fund or fully fund as part of “basic education.”

Levies require a simple majority to pass (50% + 1)

Levies 50% +1 Simple Majority

* The statement “levies are for learning” primarily refers to enrichment levies or EP&O levies.

Bonds are for Building

Bonds are for building

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Bonds are for building

A bond provides funding for capital projects such as purchasing property for schools, constructing new schools, or modernizing existing schools. Bonds are sold to investors who are repaid with interest over time from property tax collections, generally between 10-25 years.

Bonds require a super majority to pass (60%).

Levies are for Learning

Levies are for learning

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Levies are for learning

A levy is a short-term, local property tax passed by the voters of a school district that generates revenue for the district to fund programs and services that the state does not fund or fully fund as part of “basic education.”

Levies require a simple majority to pass (50% + 1).

* The statement “levies are for learning” primarily refers to enrichment levies or EP&O levies.

Grow & thrive with local support

There are three main types of levies. Click on a sign to read more.

A replacement levy is the renewal of an existing enrichment levy that is about to expire. Much like a magazine subscription, levies must be renewed every few years. Typically, if a district is asking for a replacement levy to be approved by voters, it means that it is simply the continuation of an existing tax at the same rate.

Capital/Tech

Capital levies (which includes tech levies) fund things like modern technology, enhanced building security, and renovation projects. Capital levies can be approved for up to six years.

Enrichment
or EP&O

Enrichment levies, also known as Educational Programs and Operations (EP&O) or Maintenance and Operations (M&O levies), fund important school services and positions like teachers, support staff, supplies and materials, or services that the state only partially funds or doesn’t fund at all. State money for schools provided via the prototypical funding model does not fully cover the actual costs of operating a school district, so enrichment or EP&O levies bridge the funding gap. Enrichment levies can be approved for up to four years.

Transportation

Transportation levies fund things like new buses or major repairs to older buses to prolong their useful life. Transportation levies can be approved for up to two years.

Enrichment or EP&O levies

Enrichment levies, also known as Educational Programs and Operations (EP&O) or Maintenance and Operations (M&O levies), fund important school services and positions like teachers, support staff, supplies and materials, or services that the state only partially funds or doesn’t fund at all. State money for schools provided via the prototypical funding model does not fully cover the actual costs of operating a school district, so enrichment or EP&O levies bridge the funding gap. Enrichment levies can be approved for up to four years.

Capital/Tech levies

Capital levies (which includes tech levies) fund things like modern technology, enhanced building security, and renovation projects. Capital levies can be approved for up to six years.

Transportation levies

Transportation levies fund things like new buses or major repairs to older buses to prolong their useful life. Transportation levies can be approved for up to two years.

Garden-variety questions

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No! Washington is only legally required to fully fund what they define to be “basic education” based on a funding distribution formula referred to as the “prototypical model.” This model represents the Legislature’s assumptions about the costs associated with providing a “basic education” to students. Because the funding comes by way of a formula, it often supports only part of the staffing or other services required in a school. For example, in a local school district with 10,000 students, the state formula only provides funding for 1.5 school nurses. The district may actually need 4 nurses, which would have to be paid for out of local levy funds and not state funds. Another example is safety and security staff. For every 430 students, the prototypical model funds 1 safety and security staff member.

A levy rate is the amount of property tax collected per $1,000 of assessed property value. The money collected is used to fund a voter-approved total levy collection amount over a series of years.

Example: If a homeowner has a home valued at $200,000 and the levy rate is $1.00 for every $1,000 of assessed property value, the homeowner will pay $200 annually in property taxes.

Districts can have the same levy rate but raise very different total amounts of money for their school districts because the total property value within a district’s boundary varies greatly across the state. Districts with a larger tax base and higher property values will generate more money for the same tax rate when compared to a district with a smaller tax base with lower property values.

Depending on the type of levy (Enrichment or EP&O, Capital (including tech or transportation), voters can approve levies for one to six years. After the allotted number of years, the levy expires. Districts may then go back to their voters and ask for a renewal of the levy, often referred to as a replacement levy.

Voters can approve an Enrichment or EP&O levy for up to four years. After the allotted number of years, the levy expires. Much like a magazine subscription, the levy must be renewed. Districts may then go back to their voters and ask for a renewal of the levy, referred to as a replacement levy.

Yes. There is a maximum dollar amount per $1,000 of assessed property value that can be raised by a local community, known as the “Levy Lid.” As part of the changes the Legislature made to the way the state funds education in Washington, also known as the “McCleary decision,” a local community’s ability to approve a levy rate is capped at $2.50 per $1,000 of assessed property value or no more than $2,500 per student maximum, (whichever is greater) a dollar threshold which is adjusted annually based on inflation.

When a bond is issued, the school district applies for a “credit rating,” based on its financial condition, from one or more nationally recognized credit rating agencies. This “rating” communicates the level of risk to investors who may choose to purchase the district’s bonds. The higher a district’s rating, the lower the risk to investors and the local taxpayer interest rate.

Yes, but the amount of funding that each district receives varies greatly based on a number of factors.
For example: Enrollment, regional cost of living differences, poverty rates, and the number of special needs or non-English speaking students all factor into the amount of state funding a district may receive. Many school districts receive some federal funding, which is mostly determined by indicators such as levels of poverty and special needs populations within a district.

Yes, but the funding does not cover the actual costs of operating a school district. The Washington State Supreme Court decision on the McCleary lawsuit resulted in public school districts seeing a net funding increase in 2018. Even though the state increased the amount of funding it was providing to school districts, it also capped the amount of funding school districts can raise from local levies. The Legislature also applied restrictions to how funding can be used. For local school districts, this means that levies have been significantly impacted, causing widespread confusion in communities across the state.

Many school districts can qualify for additional financial assistance from the state of Washington to help build or modernize facilities (capital construction). The state determines the amount of square footage that each student needs (the amounts are different for elementary, middle, and high schools) and assigns a dollar amount per square foot based on current average construction cost estimates. Both new construction and remodeling projects are eligible for state assistance. While these matching funds are helpful for bond projects, only a limited percentage of actual costs are typically covered using this formula, leaving the rest of the cost to the school district and the local community (via a voter-approved bond or capital levy).

An impact fee is a fee that is imposed by a local government on a new or proposed development project to pay for all or a portion of the costs of providing public services to the new development, such as a school. School district boards and county governments can pass policies requiring developers to pay “impact fees” on all new construction to help pay for new schools. Impact fees are more common in high-growth areas where new homes are creating the need for additional classrooms or schools.

Yes! Washington State law provides two tax benefit programs for senior citizens and individuals who are disabled: property tax exemptions and property tax deferrals. For more information on qualifications, please contact your local county assessor’s office.

This campaign was developed by ESD 112 Communications in partnership with the School Communications Collaborative.