March 2020 Levy Update


March 2020
Paula Kellerer portrait

How does a district ask for more money and yet save voters $4 million dollars? To answer that, we need to offer a mini tutorial in Idaho School Finance. Here goes. 


Most of a school district’s state allocations go to salaries and benefits for its staff – roughly 75-

80 percent. Some of the state allocation goes to specific areas defined by the Legislature. For example, the Legislature has allocated monies to school districts that specifically must be spent in grades K-3, focused on literacy. State lottery funds help districts pay for repairs and maintenance on student-occupied buildings. The state assists districts in helping with professional development and technology support. The remaining state funds are operational and go to pay for utilities, supplies, and some of the items listed above when the allocated funds do not cover the needs of the district. 


Under current Idaho law, districts can ask their patrons to consider additional, locally based support. The current mechanism for districts to accomplish this is a property tax levy. There are several types of levies available for districts and patrons to consider.  


  • Bond Levy: All funds must go toward supporting facilities, securing land for facilities, the remodel or extension of facilities, or new facilities. This levy only passes with a supermajority vote of 66.7 percent.
  • Tort Levy: This is a levy that pays for insurance premiums for the district. This levy is automatic and does not need voter approval.
  • Supplemental Levy: This is a levy that has grown in popularity since the 2006 property tax repeal under Gov. Risch. School districts lost over $200 million in support that has not been replaced. Currently, 93 of the 115 comprehensive Idaho school districts run supplemental levies. Supplemental levies can support curriculum, activities, programs, special projects, or other district needs. This levy takes a simple majority to pass and must be renewed every two years. As you might have gathered, supplemental levies are really no longer supplemental – they are paying for essential items necessary to provide a quality education.


There are some other levies that schools have access to, but for this math demonstration, these three are sufficient. 


NSD currently levies all three of the types described above. Our current 2019 overall levy rate for all three combined is 3.99, or $399 per $100,000 of assessed value (after the homeowner’s exemption). The new proposed overall levy rate is estimated to be only 3.35, or $335 per $100,000 of assessed value.  Here is how it works. 


Our current overall levy rate (3.99) = tort levy rate + bond levy rate + supplemental levy rate.     


3.99 = 0.05 + 2.47 + 1.47   


Our new proposed overall levy rate (3.35) = tort levy rate + bond levy rate + supplemental levy rate. 


 3.35 = 0.06 + 1.27 + 2.02 

So, while the overall levy rate goes down, the district has had to lower its rate on the bond levy to make the math work. We are able to do this because the district has worked hard to restore our balance of funds available to pay the bond payments. This is like our mortgage – we have to have money in the bank to make our annual payment of approximately $13.5 million.


The state assists districts through a bond equalization fund, we collect some monies from property tax and take some monies from our savings to make this payment each year. Our savings is modest (about half of what state law allows us to collect), but adequate so that we can make this payment. By lowering the bond levy rate, and increasing the supplemental levy rate, we are asking our voters to approve more money in the supplemental levy to address the maintenance and facilities needs outlined in the replacement levy. 


So, to sum up, the tort levy rate remains relatively stable, the bond levy rate decreases, the supplemental levy rate increases, but the overall levy rate declines by just under $65 per $100,000 of assessed value. This means the district actually collects $4 million less than last year and most patrons will see a decline in their overall tax burden for the district.  


That is how less can be more. 


Next week – a reminder of what the current (retiring) and replacement levies provide for the students of the Nampa School District. 


 - Dr. Paula Kellerer