State school levies

AN ACT Relating to providing property tax relief by reducing both 1
parts of the state school levies based on an amount that approximates 2
the fiscal impact of extraordinary growth in property values that 3
exceeded the valuation growth assumptions of budget writers when part 4
two of the state school levy was enacted; amending RCW 84.52.065 and 5
84.55.010; and creating new sections. 6
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:7
NEW SECTION. Sec. 1. In response to the state supreme court 8
decision in McCleary v. State , the legislature chose to make a 9
dramatic increase in state property tax levies to generate additional 10
revenue to pay for schools. In making that decision, state budget 11
writers were operating with forecasted increases in property values 12
as estimated at the time. Since then, property values across the 13
state have continually increased at a much faster pace than 14
anticipated, resulting in an estimated property tax revenue 15
collection in tax years 2018 through 2025 that is four billion 16
dollars more than was intended to be collected with the McCleary fix. 17
This has resulted in an unnecessary property tax burden on Washington 18
residents. It is the intent of the legislature to reduce this burden 19
and provide critical tax relief by reducing state property tax 20
levies. This act provides that relief by reducing both parts of the 21
H-0875.1
HOUSE BILL 1729
State of Washington 69th Legislature 2025 Regular Session
By Representatives Orcutt, Dufault, Manjarrez, Mendoza, Ley, Barnard,
and Eslick
Read first time 01/30/25. Referred to Committee on Finance.
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state school levies beginning in the 2026 tax year and establishing a 1
new basis for the state levies to ensure that the extra revenues 2
collected in past years are not carried forward in future years' levy 3
calculations. 4
Sec. 2. RCW 84.52.065 and 2022 c 56 s 13 are each amended to 5
read as follows: 6
(1) Except as otherwise provided in this section, subject to the 7
limitations in RCW 84.55.010, in each year the state must levy for 8
collection in the following year for the support of common schools of 9
the state a tax of three dollars and sixty cents per thousand dollars 10
of assessed value upon the assessed valuation of all taxable property 11
within the state adjusted to the state equalized value in accordance 12
with the indicated ratio fixed by the state department of revenue.13
(2)(a) In addition to the tax authorized under subsection (1) of 14
this section, the state must levy an additional property tax for the 15
support of common schools of the state. 16
(i) For taxes levied for collection in calendar years 2018 17
through 2021, the rate of tax is the rate necessary to bring the 18
aggregate rate for state property tax levies levied under this 19
subsection and subsection (1) of this section to a combined rate of 20
two dollars and forty cents per thousand dollars of assessed value in 21
calendar year 2019 and two dollars and seventy cents per thousand 22
dollars of assessed value in calendar years 2018, 2020, and 2021. The 23
state property tax levy rates provided in this subsection (2)(a)(i) 24
are based upon the assessed valuation of all taxable property within 25
the state adjusted to the state equalized value in accordance with 26
the indicated ratio fixed by the state department of revenue.27
(ii) For taxes levied for collection in calendar year 2022 and 28
thereafter, the tax authorized under this subsection (2) is subject 29
to the limitations of chapter 84.55 RCW. 30
(b)(i) Except as otherwise provided in this subsection, all taxes 31
collected under this subsection (2) must be deposited into the state 32
general fund. 33
(ii) For fiscal year 2019, taxes collected under this subsection 34
(2) must be deposited into the education legacy trust account for the 35
support of common schools. 36
(3) For taxes levied for collection in calendar years 2019 37
through 2021, the state property taxes levied under subsections (1) 38
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and (2) of this section are not subject to the limitations in chapter 1
84.55 RCW. 2
(4)(a) For taxes levied for collection in calendar year 2022 and 3
thereafter, the aggregate rate limit for state property taxes levied 4
under subsections (1) and (2) of this section is three dollars and 5
sixty cents per thousand dollars of assessed value upon the assessed 6
valuation of all taxable property within the state adjusted to the 7
state equalized value in accordance with the indicated ratio fixed by 8
the state department of revenue. 9
(b) If the aggregate rate of state property taxes levied under 10
subsections (1) and (2) of this section for collection in any 11
calendar year after 2021 exceeds $3.60 per $1,000 of assessed value, 12
each rate must be reduced on a pro rata basis until the aggregate 13
rate no longer exceeds $3.60 per $1,000 of assessed value.14
(5) For property taxes levied for collection in calendar years 15
2019 through 2021, the rate of tax levied under subsection (1) of 16
this section is the actual rate that was levied for collection in 17
calendar year 2018 under subsection (1) of this section.18
(6) The amount of state taxes levied under this section for 19
collection in calendar years 2026, 2027, and 2028 are as provided in 20
this subsection.21
(a) For calendar year 2026:22
(i) The amount levied under subsection (1) of this section is the 23
part I highest lawful levy for calendar year 2026. For purposes of 24
this subsection (6), "part I highest lawful levy for calendar year 25
2026" means the sum of $2,789,400,000 plus any increase allowed under 26
RCW 84.55.010.27
(ii) The amount levied under subsection (2) of this section is 28
the part II highest lawful levy for calendar year 2026. For purposes 29
of this subsection (6), "part II highest lawful levy for calendar 30
year 2026" means the sum of $1,315,500,000 plus any increase allowed 31
under RCW 84.55.010.32
(b) For calendar year 2027:33
(i) The amount levied under subsection (1) of this section is the 34
part I highest lawful levy for calendar year 2027. For purposes of 35
this subsection (6), "part I highest lawful levy for calendar year 36
2027" means the part I highest lawful levy for calendar year 2026, 37
plus any increase allowed under RCW 84.55.010.38
(ii) The amount levied under subsection (2) of this section is 39
the part II highest lawful levy for calendar year 2027. For purposes 40
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of this subsection (6), "part II highest lawful levy for calendar 1
year 2027" means the part II highest lawful levy for calendar year 2
2026, plus any increase allowed under RCW 84.55.010.3
(c) For calendar year 2028:4
(i) The amount levied under subsection (1) of this section is the 5
part I highest lawful levy for calendar year 2027, plus any increase 6
allowed under RCW 84.55.010.7
(ii) The amount levied under subsection (2) of this section is 8
the part II highest lawful levy for calendar year 2027, plus any 9
increase allowed under RCW 84.55.010.10
(7) The amounts levied under subsections (1) and (2) of this 11
section for collection in calendar year 2029 and thereafter are 12
governed by the levy limits in chapter 84.55 RCW and the aggregate 13
rate limit in subsection (4) of this section.14
(8) As used in this section, "the support of common schools" 15
includes the payment of the principal and interest on bonds issued 16
for capital construction projects for the common schools.17
Sec. 3. RCW 84.55.010 and 2021 c 207 s 10 are each amended to 18
read as follows: 19
(1) Except as provided in this chapter, the levy for a taxing 20
district in any year must be set so that the regular property taxes 21
payable in the following year do not exceed the sum of:22
(a) The limit factor multiplied by the amount of regular property 23
taxes lawfully levied for such district in the highest of the three 24
most recent years in which such taxes were levied for such district, 25
excluding any increase due to (((e))) (b)(v) of this subsection, 26
unless the highest levy was the statutory maximum rate amount ((, plus 27
an)); and28
(b) An additional dollar amount calculated by multiplying the 29
regular property tax levy rate of that district for the preceding 30
year by the increase in assessed value in that district resulting 31
from: 32
(((a))) (i) New construction; 33
(((b))) (ii) Increases in assessed value due to construction of 34
wind turbine, solar, biomass, and geothermal facilities, if such 35
facilities generate electricity and the property is not included 36
elsewhere under this section for purposes of providing an additional 37
dollar amount. The property may be classified as real or personal 38
property; 39
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(((c))) (iii) Improvements to property; 1
(((d))) (iv) Any increase in the assessed value of state-assessed 2
property; and 3
(((e))) (v) Any increase in the assessed value of real property, 4
as that term is defined in RCW 39.114.010, within an increment area 5
as designated by any local government in RCW 39.114.020 provided that 6
such increase is not included elsewhere under this section. This 7
subsection (1)(((e))) (b)(v) does not apply to levies by the state or 8
by port districts and public utility districts for the purpose of 9
making required payments of principal and interest on general 10
indebtedness. 11
(2) The requirements of this section do not apply to:12
(a) State property taxes levied under RCW 84.52.065(1) for 13
collection in calendar years 2019 through 2021; and14
(b) State property taxes levied under RCW 84.52.065(2) for 15
collection in calendar years 2018 through 2021. 16
(3) For state property taxes levied for collection in 2026 17
through 2028, the levy must be set so that the regular property taxes 18
payable in the following year equal the limit factor multiplied by 19
the applicable part I or part II highest lawful levy amount as 20
provided in RCW 84.52.065(6), plus an additional dollar amount 21
calculated as provided in subsection (1)(b) of this section.22
NEW SECTION. Sec. 4. This act applies for collection in 2026 23
and thereafter.24
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