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Overview of Cheney Publics School District's Tax History

Added Jan 02, 2024 •

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D.A. Davidson's Cory Plager explores the history of tax rates for Cheney Public School District, and how those tax rates have impacted the average homeowner over the last few years.

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Hi! My name is Cory Plager, and I work for D.A. Davidson, a firm here in Spokane that supports Cheney School District with tax rate analysis and projections. In this video, we will share the history of tax rates for Cheney School District and how those rates have impacted the average homeowner over the last few years. Before we get started, let’s revisit the different taxes that voters have supported over the years and they’re currently paying at Cheney School District. The EP&O Levy is flexible revenue that can be spent locally on supporting lower class sizes, athletics, the arts, but it’s also common to fill in where the state falls short. Funding like school nurses, special education. The Capital Levy is a special fund that supports infrastructure and technology, and it protects the education resources for students over here. Schools can use a capital levy to buy one-to-one computers for students. It also supports safety and security, do repairs to roofing or heating and cooling, or other items that keep the buildings functioning. A school bond provides funding for purchasing property, constructing new schools, or modernizing existing schools if that is cost more effective. The most recent bond was approved in 2017, and most of that bond when to renovating an overcrowded Cheney High School. So now that we’ve talked about the three types of levies and bonds at Cheney School District, let’s talk a little more about the details. The landscape has changed dramatically over the last few years as property values have increased in Cheney School District. This chart shows property values within the district. A combination of homes and businesses share the tax responsibility when levies and bonds are approved. In 2023, we saw the biggest increase since 2010, and the average over the last 10 years has been 10 percent growth. But this chart alone doesn’t show the whole picture. On the next slide, you will see how much new development there’s been within Cheney School District boundaries. So here, in the last five years, Cheney’s tax base has grown over 1.1 billion dollars due to new construction. These are new taxpayers that have build homes or businesses that are now Cheney taxpayers. In 2024, over half of all property tax increases were due to new construction. The tax base will grow by almost 4 percent in total in 2024 due to new development. So how do we visualize this? If you’re my age, you remember Clip Art. Please forgive my graphic design skills, but this is an example of how new construction and assessed valuation increases impact school taxes. Here you have four homes, all valued equally, and pay their share of a school levy. Now we see the impact on the next slide if homeowner’s value increased by 20 percent. You’ll noticed on this slide that the levy doesn’t change. Just because property values go up doesn’t mean that the school board or school leaders have the ability to increase taxes. While some governments do adjust each year based on property values, school taxes do not. They are voter-approved at regular intervals. In this case, we see all four homes have increased, yet they’re all still paying the same portion of that levy amount as their homes go from $400,000 to $500,000. So one more slide here, a new piece of Clip Art that you’ll notice here that now we have a new house valued at the same as the other homes. In this example, each home is now paying less for the levy because the new home is paying 200 dollars toward this levy. So this shows the impact of new construction here. And just one new home for example. But what happens when you have a whole new 300 million dollar facility move into the district? It’s hard to really estimate the true impact to each homeowner, but new construction helps offset taxes paid by existing homeowners and existing business owners when tax amounts remain level. On the next slide is the history of tax rates in Cheney School District summarized into one chart. In green, the EP&O Levy, in tan, the Bond, and in brown the Capital Technology Levy. 2024 is an estimate based on the existing voter-approved levy amounts and preliminary values from Spokane County. Voters approved a levy of a dollar sixty-five per thousand in 2022, but due to assessed valuation changes and new construction, the actual tax rate is a dollar thirty-one. While tax rates have dropped more than 54 percent since 2018, that doesn’t necessarily mean property taxes have also declined, and that’s due to increasing assessed valuations. Tax rates are hard to interpret, due to those changes in home values, so we compiled a chart to show the taxpayer impact in dollars on the next slide. This is the average single-family home amount in the table, and in the chart shows the average single-family tax amount. And what you’ll notice is in 2018 is that the homeowners paid $1,108 and in 2023, $1,158. So this means the average homeowner pays $50 more this year than in 2018. If you recall, we discussed the importance of new construction on taxes, and this chart is a representation of that. The amount the average homeowner pays for local school taxes has been very consistent over the last few years and is forecasted to be similar in 2024 as well. One thing this chart does not take into consideration is inflation. Based on U.S. Government CPI data, Consumer Price Index data, $1,108 tax bill would inflate by 22.5 percent in today’s dollars and be worth the equivalent of $1,350. So one thing to consider is the impact of inflation on not only our own budgets but the school budget as well. We hope this overview of Cheney School District local school taxes has been informative and helpful. Thanks for watching until the end of the video.

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Overview of Cheney Publics School District's Tax History

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