Senate Bill 1061 — Indefinite levies

Senate Bill 1061 — Indefinite levies

by
Phil Haunschild
February 15, 2019

Bill description: SB 1061 would replace the indefinite levy which school districts can collect with a fixed term levy while making it easier for schools to take advantage of the levy.

Rating: +2

Does it in any way restrict public access to information related to government activity or otherwise compromise government transparency or accountability? Conversely, does it increase public access to information related to government activity or increase government transparency or accountability?

Under the current law, school districts must go before the voters every year to receive approval for a supplemental property tax levy. If, however, a district has collected a supplemental levy for at least seven years, and the levy covers at least 20 percent of its maintenance and operational budget, it can ask voters for a permanent supplemental levy.

As of 2017, five school districts had permanent supplemental levies, the earliest of which was passed by voters in 1982. Today, voters are still paying on the levy passed 36 years ago.

SB 1061 would take away districts’ authority to propose an indefinite levy and instead allow them to propose a levy for a period of 3 to ten years. This would allow voters greater opportunities to approve the taxing and budgeting decisions of their local school districts. Rather than allowing voters from one generation to impose tax obligations on every generation that follows, SB 1061 would give each generation the chance to make its own decision and have greater accountability over their schools and the taxes they assess.

(+1)

This bill would increase accountability regarding the effect of government debt on individual taxpayers. It would achieve this by giving voters increased input on assuming a greater quantity of debt when a new school district is formed.

This bill would use an event that already requires the vote of the people — the creation of a new school district — to get further public input.

If there were a proposal to create a new school district by using land within an existing school district that is in debt, voters of the full district would have to give their approval.

The voters would have to decide two questions: 1) Whether to create the new school district and 2) If the new district is created, whether those who would remain in the existing district would be willing to bear the debt, knowing that when some taxable property goes to the new district, the already-issued debt for the existing district will be spread across fewer taxable landowners.  

Both of these questions would have to be approved by voters for the new school district to be created.

If HB 272 were to become law, the requirement for voter approval would be triggered if the properties that would leave the existing district to form the would-be new district make up at least 15 percent of its market value.

(+1)

Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments?

By eliminating the indefinite levy, SB 1061 would not allow school districts to assess indefinite obligations on property owners.

(+1)

SB 1061 would, however, allow more school districts to go before the voters for the 3-10 year extended supplemental levies. A district seeking an extended levy would have to show that it had assessed a supplemental levy for at least seven years to qualify for the extended levy. It would not face the 20 percent requirement, a change that would enable many more school districts to assess the extended levies.

(-1)

Update: This analysis was updated on 4/1 to reflect all the amendments made to the legislation.

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