Residents of Washington state are seeing rising tax rates this year with an increase in the state education tax after the Washington Supreme Court ruled in the McCleary decision that more needed to be done by the state to fund basic education.
But Puyallup residents are catching a break they might not know about.
In November, the Puyallup School Board passed a temporary inter-fund loan meant to even out a spike in taxes for local residents.
How does it work?
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The district loaned $10 million from its capital projects fund to the debt service fund, which reduces the amount of money the district needs to collect from taxpayers from 92 cents to 7 cents per $1,000 assessed value, said chief communications officer Brian Fox.
The inter-fund loan was only possible because of the capital improvements bond passed by voters in 2015.
“We’re one of two district in the state of Washington who are doing that,” Fox said. Shoreline School District also passed an inter-fund loan.
The Puyallup School Board came up with the idea in November after discussing what increases in tax rates meant for Puyallup residents.
2018 is the last year Puyallup residents are paying the 2014 Educational Programs Replacement Levy, which is $3.48 per $1,000 assessed value. And since 2018 is also the first year of increased state taxes for education, Puyallup residents were going to see a lot coming out of their pockets.
“The board said, ‘What can we do to reduce taxes?’” Fox said.
Now, Puyallup residents are paying significantly less than what they could be paying in taxes, Fox said.
Starting in 2019, the 2014 Educational Programs Replacement Levy will be completed, and the district will return $10 million to the capital projects fund.
While the board came up with the strategic move, it was voters who made it possible, Fox said.
“It’s brilliant that our board came up with this, but the bottom line is our community supports schools and because of their support we’re in a financial place where we can reduce taxes for the 2018 calendar year with this loan,” Fox said.
Voters have until 8 p.m. Tuesday to cast their ballots to decide whether or not to approve the district’s Educational Programs and Operations Replacement Levy, which will last through 2022.