School Board decision will smooth out the tax rate for Puyallup residents
School Board decision will smooth out the tax rate for Puyallup residents
Posted on 12/12/2017
school boardThis year the Legislature passed a bill that begins to address the State Supreme Court’s order requiring basic education be funded by the state, not local taxpayers. An increase in the state education tax will begin in 2018, in theory making up the gap between what the state now pays for basic education and the real cost which districts have been supplementing with local levies.

As a result, school districts will be limited in the amount of funding asked of voters in local levies. For example, the Puyallup School District Board of Directors has approved a resolution to run an Educational Programs and Operations Replacement levy for $22.6 million less than the current levy.

In addition to the new state education tax, the 2018 calendar year is also the final year of the 2014 Educational Programs Replacement Levy for Puyallup. Combined with the new state tax, Puyallup residents would have an “overlap year” with a one year spike in their total tax rate.

This would be followed by a year with a significant drop in the tax rate as new limitations go into place reducing PSD’s local levy rate from $3.48 to $1.50.

In an effort to smooth out the tax rates for residents over the next few years the directors have approved a short term inter-fund loan from the district’s capital projects fund to the debt service fund. 

On November 6 directors approved a resolution to recertify the tax assessment for outstanding bonds by an amount $10 million less than what is needed for principal and interest payments in 2018. This will reduce the amount collected of tax payers, thus reducing what would otherwise be a one year spike in tax rates.

Then in May 2019 the district will repay the capital projects fund $10 million plus interest from the proceeds of the first half tax collection in 2019. 

By doing this during the first year of the state’s new education tax Puyallup residents will experience a gradual smoothing out of tax rates, rather than a one year spike. 

As stewards of the taxpayers’ dollars school board directors consistently consider the most efficient ways to operate the Puyallup School District. The approval of a short term inter-fund loan is yet another example of their interest in representing the best interests of Puyallup parents and community members.