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Letter to the Editor: The true cost of the new FSD bond

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If you have never studied your property tax bill, you should take a look. Renters too, ask your landlord to show you the details of the property taxes they pass on to you in your rent, or you can look up any property here:

In studying the property tax breakdown for 2018, you will see that the overwhelming majority of the taxes collected already go to support education. In the Ferndale School District, you paid 62% of your property taxes to support schools and education. FSD is on track to spend a record $74 Million this school year, funded almost entirely by your property tax dollars.

For a median price home in Ferndale ($368,600 Zillow), you paid ~$4,475 in total in property taxes (at the average Ferndale consolidated levy rate of $12.15/$1000), and of that, ~$2,768 went into three different education related buckets.

Let’s take a look at the three buckets:

First education bucket
There is the state’s school levy on your property taxes that goes to fund “Basic Education” in WA. The rates vary by county, depending on how close the assessed property values match the market values. If you are the owner of a median price home in Ferndale, in 2018 you paid $1,179.52 at a $3.20/$1000 rate. That is a $357 increase over 2017 when the same house paid $821.98 at a rate of $2.23/$1000. This increase was due to the Levy Swap in 2017 (lookup McClearly Decision), that raised the state’s school levy rate starting in 2018, with the promise of lowering the local levy rate in 2019 to offset. Additional legislation dropped the state’s rate a little to $2.76 in 2019 to soften the blow, but it is back up to $3.20 for 2020 and 2021. After 2022 the state can and likely will raise the rate again, as they are still facing a gap in education funding, expect the savings from the drop in the local levy to be completely eaten up by the state’s levy rate.

Second education bucket
There is the Local Levy for the Ferndale School District, the reauthorized levy of 2016 for “Maintenance and Operations.” That levy rate was $3.47/$1000 in 2018, or $1,279.04 for the median home in Ferndale. In 2017 that rate was $3.60, 2016 it was $3.61. In 2019 it is set to drop to no more than $1.50/$1000 as a result of the Levy Swap, specifically to offset the higher rate being charged by the state.

Again, the state levy rate went up in 2018, the local levy rate is coming down in 2019 to offset. The big idea with the Levy Swap is that local levies shouldn’t be providing the “Basic Education” mandated in the state constitution, the state’s levy should fund that. The implicit promise at the time of the deal in 2017 was that the local levy rate would not be allowed to go above $1.50/$1000, it was “lidded”.

That promise to property tax payers lasted till last week, when SB5313 was introduced in Olympia. The Washington Education Association is lobbying to remove the Levy Lid, and with a complete Democrat majority in both houses and executive branch, it is pretty much guaranteed that this will pass, and our local levy rate will bounce right back up in the next couple years.

Third education bucket
There is the remainder of the current FSD bond from 2006, set to expire in 2022. In 2018, at $.84/$1000, the median home owner paid $309 for the bond. If the new bond is approved on Feb 12th, then starting in 2020 the effective rate charged to property owners will be the widely touted $1.66/$1000, doubling the cost for the median owner to $612. You have likely seen the chart from the pro bond committee, showing the rate over the next 5 years.

It’s likely the ONLY chart you have seen, accompanied with the talking points that the new bond is affordable, BECAUSE the local levy rate is dropping to no more than $1.50. This claim completely ignores the fact that local levy rate was specifically lowered and restricted to less than $1.50 to offset the INCREASE in the state school levy rate, and was not intended to provide relief or room for current or future construction bonds.

If you want to see how those three education buckets are going to add up in your 2019 property tax bill, check out the Whatcom Co Assessor 2019 property tax overview.

The median price home in 2019 will owe $3,475.90 in property taxes at the average consolidated rate for Ferndale of $9.43/$1000, of which 53% $1,839.32 goes to education ($1,017.34 for the state levy at $2.76/$1000, $534.47 for the FSD local levy at $1.45/$1000, and $287.51 for the old FSD bond at $.78/$1000).

In 2020, if the bond is approved, that will increase to an estimated $3,962.45 in property taxes at the estimated average consolidated rate for Ferndale of $10.75/$1000, of which an estimated 59% $2,325.87 will go to education ($1,179.52 for the state levy at $3.20/$1000, $534.47 for the FSD local levy at $1.45/$1000, and $611.88 for the old and new FSD bonds at $1.66/$1000).

Meanwhile, median income in Ferndale in 2018 was ~$65,000. After taxes the take-home was likely ~$49,000/yr, ~$4,100/mon. Mortgage on the median house is ~$1400/mon, $16,500/yr. That leaves $32,500 or $2,700/mon for car payments, insurance, food, gas, clothes, diapers, braces, life.

And then the property tax bill comes due in April and Oct, and it’s not like you can just carve off $4,000 from your property to pay the tax man. You have to pay that first, out of your after-tax take-home pay, dropping your monthly budget down to ~$2,360/mon to pay for everything else for your family.

This median Ferndale income earner living in a median Ferndale house, i.e. you and me,

  • paid ~$3,900 in property taxes in 2017
  • paid ~$4,475 in 2018 due to the state rate going up
  • will pay ~$3,475 in 2019 due to all the Levy Swap horse trading
  • and then will pay ~$3,960 in 2020

WHEN the local levy lid is removed for 2021 or 2022, that property tax bill will likely jump back up above $4,500.

When bills are tight, paying $1,000 LESS this year in property taxes is a huge deal. Paying $500-$1,000 MORE per year in the coming years is also a huge deal.

Over the life of this 20-year bond, the median Ferndale income earner living in a median Ferndale house, i.e. you and me, will pay ~$12,500 for the new and old bonds, will pay over $24,000 for the state school levy, and likely over $25,000 in local FSD levies. We will pay over $61,000 to support the Ferndale School District and public education. We will also pay over $42,000 in all other property taxes, all of which will add up to more than $105,000 paid in property tax by the time the new bond is retired in 2039.

When you are paying the bill for local public education, and the bill will be over $61,000, it’s ok to ask questions.

It’s OK to vote NO.

It’s ok to advocate for lower taxes, it’s ok to challenge the plans of the district, and our government in Olympia, especially when the majority of our property taxes fund education.

It’s ok to ask FSD why they are only spending less than $500k/yr on maintenance, while their budget has ballooned from $56M to $74M in two years; and it’s ok to ask how they plan on dealing with the $3M deficit they will have run up by the end of this school year.

It’s ok to say to FSD, “One bond at a time please.” It’s ok to say, this isn’t the right plan or the right time, rework this plan and lets vote again in 2022.

Andrew Gustafson

Letters to the Editor submitted to My Ferndale News are the opinions of the author(s) and do not necessarily reflect the opinions of the publisher of My Ferndale News.


  1. Brian Jones January 29, 2019

    I would like to take the time to thank Andrew Gustafson for providing a detailed breakdown of what is happening with our property taxes and what will happen over the coming years. This is something the FSD seems to have ignored with their campaigns for this bond measure, which have lacked total transparency.

    Thank you Andrew Gustafson!

    Reject this bond proposal with a NO vote.

  2. Joel Saxman February 1, 2019

    Clearly, some significant thought and effort has gone into this letter, so my question to the author is ‘What was the FSD response to the questions you posed at the end of this?’
    Surely you didn’t just think of these questions now – has the FSD avoided responding to these questions when you asked them? Did they provide a response that was unsatisfactory?

    I do think these are fair questions to ask, but I question the lack of a response provided here – I wonder if those questions had been asked and FSD provided the answers, would they have supported the ‘Vote no on the Ferndale School bond’ narrative?

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