- Granite Falls School District 332
- School Funding
Budgeting & Finance
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FUNDINGHow are schools funded?
The funding of schools is a complicated and frequently misunderstood process. School districts get the bulk of their operating revenue from three sources: the state, the federal government, and from local property tax levies. The state provides about two-thirds of the school district's revenue. The state pays for the cost of basic education because the Washington state constitution identifies education as the state's "paramount duty." The federal government provides another 10 percent of the revenue and helps pay for activities such as special education and programs that support disadvantaged students.
The rest of the school district's operating revenue, about 24 percent of the total, comes from local property taxes through the Educational Maintenance/Programs and Operations Levy. There are other voter-approved levies, too. Money from a Facilities and Technology Levy and from a Capital Projects Fund Levy is used in the school district's capital budget to maintain, modernize and renovate buildings and technology, and money from a Transportation Vehicle Fund levy pays for new school buses.
SCHOOL LEVIES
How does a school levy work?
When a school district places a levy measure before voters, it is asking for the authority to collect a specific amount of money from local property taxes for a set period of time, usually four years in the case of Educational Maintenance and Operations levies or six years in the case of capital levies. Levies are approved if the ballot measure receives support from a majority of voters.
What happens when a levy expires?
When a levy expires, the school district can no longer collect the money through taxes, which means the programs and activities funded by that levy will no longer have that money. Levies work something like a magazine subscription, which is why school districts go back to voters every so often to ask that levies be renewed. As a levy is about to expire, the school district will typically go back to voters and ask to have the expiring levy replaced by a new levy.
If property values go up, does that mean the school district will collect more money than it expected?
No. A levy is for a specific dollar amount. The school district cannot collect more money than what was approved by voters.
**To review an information flyer about the levy that was passed by voters on February 13, 2018, visit: 2018 Levy Flyer Information.
BONDS
What is the difference between levy money and bond money?
Voter approved bond money can only be used to build schools, buy property, or for major modernization projects to schools. The most recent bond issued approved by voters in 2005 built the new high school that opened in December 2007. Voters have also passed bond issues in the past to build Mountain Way and Monte Cristo Elementary schools and remodel the old high school and current Middle School. Bond money cannot be used for daily operations such as employee salaries, transportation, co-curricular activities, or textbooks.
How is a Construction Bond different from a Capital Projects Levy?
While a levy authorizes the school district to collect a set amount of money through taxes for a set number of years, a Construction Bond provides a way for the school district to borrow money for capital improvements. Bonds are typically used for much larger projects, such as the building or modernization of a school. When voters approve a bond, they are essentially giving the school district the authority to borrow money through the municipal bond market and then repay that money to investors, plus interest, using money collected from property taxes. The payments to the investors, called debt service, are paid for a period of between 12 and 20 years, depending upon the terms of the bond agreement. Also, while approving a levy takes a simple majority of voters, it takes a super majority of 60 percent of voters to approve a construction bond ballot measure.
What does the difference mean to taxpayers?
The bond issue spreads the cost of the project over a greater number of years than a capital levy. Building a new elementary school can cost more than $30 million, for example, which would have a large impact on property taxes if it were collected over the six-year period of a capital levy. Instead, with the passage of a construction bond, that cost can be spread over 20 years and will keep property taxes much lower.
TAXES
What is the tax rate?
A tax rate is a number that is used to calculate how much a person will pay in property taxes. The tax rate is expressed in the number of dollars one will pay for each $1,000 of their property's value. For more information on how the tax rate works, review this .pdf which includes an illustrated example, or watch a short Youtube Video, Tax Rate Video for a more detailed explanation.
Check out what you know about property taxes for bonds and levies and take this brief True or False School Quiz.
To learn more, visit the Snohomish County Assessor's Website.