Analysis of Proposed Levy Swap Idea to Change the Way Public Education is Funded in Washington State

State lawmakers are debating the merits of an education funding idea called the “levy swap.” The levy swap is a response to the state supreme court’s desire expressed in its ruling in the 2012 McCleary case that the state legislature devote more money to funding public education and to limit local levies.

In general, the levy swap would result in property-wealthy districts paying more and property-poor districts paying less. Specifically, the levy swap proposal would lower tax levy rates in districts with lower property tax bases, mostly in eastern Washington, and would either not affect or only slightly lower local tax levy rates in districts in western Washington, where the property tax bases are larger. Due to the increase in the state property tax, western Washington districts will likely see a net property tax increase from the levy swap.

According to one legislative proposal, the levy swap would represent a significant tax increase, increasing the financial burden of state government by an estimated $400 million by 2018 and $1.36 billion by 2019.

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