Reasons to vote NO on the Washougal SD levy on the February 2023 ballot

As a result of the McCleary Decision, local school district tax area property taxpayers are paying for dramatically increased State School Part 1 and State School Part 2 property tax categories - all of which (100%) gets returned to the local school district. Since those 2 State School property tax categories all go to this school district, those in the combination of the other local school property tax categories on your property tax bill (SD112 Washougal Capital P, SD112 Washougal Enrichment, SD112 Washougal Debt Svc) makes over 60% of your 2023 property taxes already go to this school district. And the sad part is that is not enough. The State needs to send even more (3 times more than what the State receives from area property taxpayers) to this district primarily from State Sales Taxes gathered from State Sales Tax taxpayers. 

School districts all received a large influx of the McCleary funds. Districts just quickly spent it all – on themselves. And now they want even more. 

Note that renters generally pay about 1.5 months of rent to pay just for the property taxes for the year on their rental unit. Property taxes also affect business owners – driving their prices to customers up.

Also, the Federal Reserve is desperately trying to tame inflation and cool the economy down by raising interest rates. Regular citizens are responding by being even more frugal than they were and are curtailing spending. Government entities, including school districts, need to do the same. As of the 2021-2022 school year, the district is spending $19,000 per student per year. There seems to be no upper bound.

The property tax cost impact estimate for an example property for just the Enrichment Levy

Even for the assumption of continued rapid new construction for all 3 years of the new levy (despite high inflation, high interest rates and the possibility of recession) the tax increase in dollars would be significant - on the order of 27% for existing property owners.

This next chart shows the property tax cost impact estimate for an example property for just the Enrichment Levy assuming an annual -1% POF (proportional obligation factor) change.

Per pupil expenditures (PPE) including capital outlays and interest on debt, student academic performance comparisons with districts with similar demographics, and median total compensations (including cash, pension funding, and benefits) for staff can be found at the following link:

Link to summary reports.

An analysis of the district’s cost analysis

See the images with the red border. These snapshots are from the district's public website.

There are many errors in the district’s cost analysis. 

First, the district should make clear that districts do not set any future tax rates. Citizens are voting on amounts – not tax rates. The county assessor, and only the county assessor, calculates the tax rate each February of each year by taking the amount (in dollars) that voters have approved for the year divided by the Total Assessed Values (AVs) of all properties within the school district’s tax area for the year. That is why tax rates change each year.

Second, the district fails to let their example home’s assessed value (AV) of $539,000 to rise and fall at the same pace as their assumption for the Total AV of all properties within the school district’s tax boundary. The district is incorrectly assuming that this example home’s AV stays at the same value ($539,000) for all future years and all past years.  While this one example home magically stays at the same AV for all years, actual property values increased by 19% on average for 2023. And the district is assuming Total AV will keep increasing with an 8% increase for 2024, a 10.5% for 2025, and another 9.5% for 2026. This is illogical. This is their biggest mistake and leads to their faulty mathematics and their underestimation of the property tax cost impact to the property owner.

The district fails to mention what Total AV growth they are assuming for each of the pertinent years.

But we can calculate it - using the district’s stated new Enrichment Levy data and prior actual Enrichment Levy data from the county.

Also note that the district is calling this levy an EP&O Levy when they should be using the term “Enrichment Levy”.  Enrichment Levy is what is shown on property tax bills.

Now, since (Taxes To Collect) divided by (Estimated Total AV) * 1000 = (Estimated Tax Rate), 

rearranging we obtain,

(Taxes To Collect) / (Estimated Tax Rate) * 1000 = (Estimated Total AV)

Year; Equation = Total AV

2024; $9,500,000 / $1.99 * 1000 = $4.52B

2025; $10,500,000 / $1.99 * 1000 = $4.70B

2026; $11,500,000 / $1.99 * 1000 = $4.88B

The district incorrectly states the actual tax rate for the current 2023 tax year.

Instead of what they show ($2.14) it should be $1.95

And the district mentions the 2022 year but shows no data for it.

Using the actual values for years 2022 and 2023 from the county assessor’s website, one obtains:

Year; Total AV

2022; $3.71B

2023; $4.42B

We can now calculate the actual Total AV growth for 2023 and what the district is assuming growth will be for 2024, 2025, and 2026. Note that this “growth” is assumed to be entirely the appreciation of assessed values of exiting properties which is a good, fiscally conservative assumption. Note that the interactive calculator allows for a POF (proportional obligation factor) change parameter (for example -1%)  to model the effects of possible significant continued new construction.

Year; Total AV; Total AV Growth

2022; $3.71B; NA

2023; $4.42B; 19.0%

2024; $4.52B; 8.0%

2025; $4.70B; 10.5%

2026; $4.88B; 9.5%

Therefore, a more accurate example for a home with an AV of $539,000 as of 2023 would show:

Year; Example Home’s AV; Enrichment and Capital Levy Taxes

2022; $452,500; $1,079

2023; $539,000; $1,161

2024; $582,300; $1,275

2025; $643,500; $1,762

2026; $704,800; $1,909

Clearly, just as taxpayers know that their 2023 property taxes did not decrease from 2022, every year of these new levies (Enrichment and Capital) show substantial, increasing taxes (in dollars) that will be due. In fact by 2026, the amounts that taxpayers will have to pay will be approximately double what they paid in 2022.

Using the logical assumption that individual properties generally track the percent changes in Total AV, the values calculated for taxes ($1,079 to $1,909) for this example home will not change if all properties decline by 50% or if all properties double in assessed value. This is an important concept that the district should explain.

The following snapshot shows an actual property tax bill for a parcel in the school district’s tax boundaries. The actual parcel number is not shown.