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Understanding the levy swap

If you have watched the Gubernatorial debates or seen Jay Inslee’s recent ad referencing “gimmicks”, you have probably heard the term “levy swap.” Unless you live and breathe education funding policy, there is a good chance that you’re not quite sure what the “levy swap” entails or what the hubbub is about.

At its core, the levy swap is straightforward. To neutralize the over-reliance on local levy dollars, the legislature would increase the state property-tax, which raises money for schools. Simultaneously, local levies would be reduced by the same amount. The idea is not to increase the amount of money that is raised, but instead to stabilize the funding and distribute it more equitably.

We think these two pieces by Robert Mak at King 5 and Peter Callaghan of the Tacoma News Tribune do a good job of explaining the idea.

Here’s the King 5 video:

Callaghan is also weary of Jay Inslee’s criticism of the levy swap plan. After receiving an anti-levy swap mailer from the Washington state Democratic party, Callaghan wrote,

“The substance of the mailer, and I’m being generous to use “substance” in context of this cynical piece of work, is the same oddball issue raised by Democratic candidate for governor Jay Inslee. In Inslee’s world view, a plan known as the levy swap to partially address the flaws in state education funding is a gimmick that equates to a tax increase.

To reduce reliance on local school levies and return the full burden of basic education to the state – both requirements of this year’s state Supreme Court ruling in McCleary v. State – the plan would shift some local levy capacity to the state property tax levy. That would increase the so-called state school levy but reduce local levies. And while some property owners would pay more – mostly in wealthier school districts – others would pay less. The plan is revenue-neutral.

But first Inslee and now the state Democratic party have taken advantage of the fact that some will pay more to argue that McKenna has endorsed a tax increase.

“Does anyone think this Olympia power grab is a good idea?” the mailer asks. They know the answer. House Ways and Means Committee Chairman Ross Hunter, Senate Majority Leader Lisa Brown, Democrats for Education Reform, state Rep. Reuven Carlyle and state Superintendent of Public Instruction Randy Dorn all think it is a good idea. All are Democrats. So does the League of Education Voters…”

Continue reading here.

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2 Comments

  1. Judy Yu October 24, 2012

    Thank you for providing clarification of the so-called gimmick of the tax or levy swap. Sadly, I’m sure many people are now co-opted into the line of thinking that the swap will increase taxes. This will make it more difficult to resolve the issues with the voters in the future. And who suffers? Our children and students. I’m sure you have voiced your displeasure with the Democratic party on this.

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  2. Charlie Mas October 26, 2012

    While the levy swap will not increase the total of all taxes gathered statewide, it will increase taxes in some areas while lowering taxes in others. And while you can say that this is not a tax increase, it sure will look like a tax increase to the people who see their taxes increase as a result of it.

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