January 3, 2013 | Vol. 116 -- No. 37

Despite tough times, Cheney school levy passes with ease

A few lines on the February ballot represent nearly a quarter of the Cheney School District’s budget.

If voters approve a three-year levy Feb. 14, the levy rate would rise around 23 cents, but officials are assuring voters that the total tax rate for Cheney schools would remain below $5 per $1,000 in assessed property value.

The district is asking voters to approve a three-year levy to replace the expiring one. The taxpayer dollars help fund extracurricular programs, specialized education programs, teacher training, administration and more. Known as the maintenance and operations levy, the name has been changed to “replacement educational programs and operation levy,” in part, officials say, to reflect a shift in recent years in how levy moneys are used.

The levy doesn’t pay for things like roof replacement and new floors, as the terms “maintenance” and “operations” imply. Superintendent Larry Keller said that the levy funds programs that improve the culture of the school district as well as the education programs.

“We’ve got world-class music programs. We’ve got no-cut policies in athletics at our middle schools,” he said, adding that music and athletics were fully supported by levy funds. “That’s part of our culture. We want every kid to have the opportunity.”

The proposed levy would collect $8.5 million from district taxpayers in 2013, raising the amount to $8.8 million in 2014 and $9.1 million in 2015. The current three-year levy, which expires this year, will collect $7.7 million in 2012.

The total funds collected by the levy were rising to keep up with the growth of the district and, in turn, the growth of its budget. Recent years have brought budget cuts from the state of Washington, and while federal contributions were up the last few years with stimulus dollars, that amount has come back down. The current school year’s budget is comprised of 64.2 percent state funds, 10.6 percent federal funds and 25.2 percent local funds.

The local portion includes the levy and state levy equalization funds, called Local Effort Assistance, or LEA. LEA money is provided to school districts in Washington that are considered property-poor, since the higher a district’s total property value, the less each property owner pays in taxes to fund a levy.

Most school leaders believe LEA funds are currently at risk as the state Legislature grapples with budget cuts, and LEA is a large fund that isn’t protected from cuts as most school funds are. The Cheney School District’s portion of LEA is expected to be $1.3 million for the current school year and $1 million next school year, assuming the fund remains in the state budget.

While some area districts are raising their levies to cover expected LEA cuts, Cheney decided not to follow suit.

“Because we’re a growing district…we could cover some of that LEA cut with our growth,” Keller said. “So ultimately we have chosen to honor the promise we made to our taxpayers to keep our combined taxes and bonding below $5.”

Cheney school leaders are optimistic about commercial development and enrollment growth in the district in the future, but said they wanted to be conservative in projecting growth over the next three years.

District finance director Brian Aiken assumed 3 percent growth in each of the three years 2013-2015, which would keep the levy rate at $3.19 per $1,000 in assessed property value. Taxpayers will also continue to pay for the $79 million construction bond that is funding construction of two new middle schools in the district, but acquisition of interest-free federal bonds have brought the bond rate down. Aiken predicts the total tax rate—both the levy and bond—to be $4.97 per thousand in 2013, $4.95 in 2014 and $4.96 in 2015 if total growth in the district is 3 percent.

“We built our model on 3 percent on the next three years, but I think that’s going to be low,” he said, pointing to new industrial development highlighted by a new Caterpillar distribution center valued at $42 million.

While some district patrons have asked for specific breakdowns of where the levy funds would go, Aiken said it was difficult to do, since the funds are combined in the general fund and distributed to different line items. But if the levy fails, the district would have a roughly $10 million hole to fill in its $39 million budget.

“If you were to go out and say, ‘if we lose 25 percent of our budget, 25 percent of our teachers would go.’ Well, that’s not true,” Aiken said. “You would go through a priority process and the school board and the superintendent in interactions with the community then determines what we value and what we prioritize.”

Leaders hope it doesn’t come to that, relying on a history of community support and the initial success of the 2010 construction bond—the middle school construction is under budget thus far, with bids coming for a new elementary school—to bring “yes” votes on the levy.

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