Reform Local Levies: Enable Local Participation Without Statewide Disparity

Summary:

Some of you may have cringed when reading Tenet 2 – shifting local levies to state collection. After all, communities should be able to contribute to their local schools, and maintain local control over enhancing the education offerings that are down the street or across town. After all, it’s their community.

I couldn’t agree more.

But with basic education redefined and amply funded, at somewhere around 140% of the sum of current education funding today, should we really need a lot of local levies? I hope not, frankly. And certainly, there should not be a need for another 28%... a level of local funding, I’ll add, that crept up over the decades since the last major education reform.

So here is my suggestion for reforming local levies: set the maximum local levy at 10%, or $1 per $1,000 of assessed value, whichever is more. I have one other catch, which I’ll explain at the end of this page, just to keep you reading.

The logic for this reform is pretty simple. First, setting it at 10% rather than 28% is a nod toward keeping taxes reasonable. It’s less than half of the previous level, but again, with ample funding for basic education at a level 140% above what we have today, there should be a greatly reduced need.

Second, I’ll explain the $1 per $1,000 of assessed value component. There are a number of districts in our state that have high assessed values, and conversely, high costs of living and perhaps higher costs for goods and services, higher distribution costs, and higher expectations for the sort of enhancement programs their districts should be providing. Just like there are districts in the state for which the 28% rate (without LEA) would be an undue burden, there are districts in the state for which the 28% cap creates an undue constraint on the programs or services their communities demand. I’ve had long conversations with many folks in the latter situation; they don’t want to create disparity by providing these enhancements, they just want to meet the demands of their districts.

Now for the catch. Remember the history lesson I mentioned earlier, where the local levy lid kept creeping up over the years? I’d like to prevent that, specifically because I want to prevent any disparity between districts from creeping up with innocuous incremental increases that, over time, amount to a whole lot of taxes. To avoid that, my plan would include a rider, of sorts, that states the following: any local levy collections that exceed 10% or $1/$1,000 A.V. would require 50% of those above-10%-or$1/$1,000-AV-proceeds to be deposited into the Levy Equalization Fund.

Let me explain that in plain words first, and then in a political scenario.

In plain words, it means that if a district’s levy lid (whether as 10% or $1 per $1,000 Assessed Value) is $1 million, and they somehow became authorized to collect $1,100,000 ($100,000 above that lid), then $50,000 of that additional revenue would go to the Levy Equalization Fund, and not to the district.

I know what you’re thinking. How would they collect more than 10% or $1 per $1,000 of assessed value if those are the limits? Well, that leads me to the political scenario.

Imagine a few years down the line, someone decides that the 10% limit is too low. It probably isn’t going to be everyone in the state; rather, it’s probably going to be a vocal few. Now imagine they talk a legislator into putting forth a bill that would change the 10% lid to 12%. In order for that bill to pass, the legislature as a whole would have to vote to do away with the 50% over 10% clause… which essentially is a vote to take away funding for needy districts; or conversely, a vote to allow wealthy districts to generate more revenue while districts that would never be able to raise that fall further behind. In other words, it becomes a very difficult political sell.

Why have that catch? Because 10% should be enough, especially with ample funding for basic education. Because in wealthy districts, they already have the $1 per $1,000 assessed value trigger, which is elastic enough to provide even more relative revenue over time (unlike the per-pupil funding trigger, which tends to lose elasticity over time).

Reasoning: