HB 1729
In CommitteeHouse
State school levies
Providing property tax relief by reducing both parts of the state school levies.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill provides property tax relief by reducing state school levies to reflect the fact that property values have grown far faster than expected since 2018—generating about $4 billion more than intended. It resets the levy baseline for 2026–2028 and caps the total state school levy at $3.60 per $1,000 of assessed value going forward.
- Reduces the state school levy cap from previous levels to a combined $3.60 per $1,000 of assessed value starting in 2022, with further reductions built into the 2026–2028 levies.
- Sets fixed dollar amounts for the two parts of the state school levy for 2026: $2.79 billion for Part I and $1.32 billion for Part II, with modest annual increases allowed for new construction and other growth.
- Freezes the levy cap for 2027 and 2028 at 2026 levels (plus allowed growth adjustments), preventing carryover of excess revenues collected in earlier years due to unexpectedly high property values.
- Amends RCW 84.52.065 and RCW 84.55.010 to implement the new levy limits and clarify how property tax increases from new construction or improvements are factored into future levies.
- Ensures that the state’s property tax levies for 2026 and beyond are subject to the $3.60 per $1,000 cap and do not include excess revenue from prior years’ overcollections.
Who is affected
- Property owners and homeowners — Homeowners and property owners across Washington will see lower property tax bills starting in 2026, especially those in areas where home values rose sharply beyond what the state budget expected.
- Public school districts — Local school districts will receive less state funding from property taxes than they would have under previous law, though the state will still meet its constitutional obligation to fund basic education.
- State government (Office of the Superintendent of Public Instruction and Office of the Budget and Financial Management) — The state government will reduce projected revenue from school levies, requiring adjustments to the state budget to ensure education funding remains constitutionally adequate.
- Local governments and real estate developers — Local governments and developers may see less pressure from high property valuations driving school levy caps, as the state resets the baseline for future levies.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
The bill delivers direct property tax relief by reducing the state school levy cap to $3.60 per $1,000 assessed value and fixing levy amounts for 2026–2028, resulting in an estimated $4B reduction in overcollections. This primarily benefits homeowners in high-appreciation areas (e.g., Seattle, Bellevue, Everett) where property values rose far beyond budgeted assumptions—many of whom are middle-class families who were overpaying relative to the McCleary funding formula intent.
FinancialPeopleRef: Sec. 2(1), Sec. 2(4)(a), Sec. 2(6)By freezing levy baselines and prohibiting carryover of excess revenues, the bill prevents future overcollections and stabilizes long-term property tax planning for local governments and assessors, reducing the need for reactive budget adjustments and appeals related to valuation spikes.
Local GovernmentPeopleRef: Sec. 2(6)(b)(i), Sec. 2(6)(c)(i)The bill ensures that state school levies align with the constitutional McCleary funding framework by resetting the baseline and capping levies at $3.60 per $1,000, reducing the risk of court challenges over funding adequacy and overcollection—supporting long-term fiscal sustainability for public education.
EducationPeopleRef: Sec. 2(6)(a)(i), Sec. 2(6)(a)(ii)The bill retains the existing allowance for additional levies on new construction and improvements (per RCW 84.55.010), preserving incentives for development while capping the overall levy rate—balancing growth-friendly policy with fiscal discipline.
Business & EmploymentRef: Sec. 3(1)(b)(v), Sec. 3(3)The bill provides meaningful relief to middle-income homeowners who saw their property assessments rise faster than the legislature intended—especially those in aging neighborhoods where assessed values surged due to market forces, not improvements. This helps stabilize housing costs and reduces displacement pressure.
HousingPeopleRef: Sec. 2(6)(a)(i), Sec. 2(6)(a)(ii)
Potential Concerns (5)
The bill caps the state school levy at $3.60 per $1,000 assessed value and fixes Part II levies at $1.32B in 2026, reducing state revenue by ~$4B over 2026–2028. This constrains future education funding flexibility and may require budget cuts elsewhere or increased reliance on other taxes (e.g., sales, income) if property valuation growth resumes, potentially shifting fiscal burden toward households.
FinancialLean industryRef: Sec. 2(4)(a), Sec. 2(6)(a)(ii)By freezing levy baselines and eliminating carryover of excess revenues, the bill reduces uncertainty for developers and large property owners, who benefit most from predictable, capped levies—especially in high-appreciation counties like King and Snohomish. However, it does not provide targeted relief for low- and middle-income renters or fixed-income seniors who do not directly benefit from assessed-value-based relief.
Business & EmploymentIndustryRef: Sec. 2(2)(b)(i), Sec. 2(6)The bill fixes Part I and Part II levies at $2.79B and $1.32B respectively for 2026, with only growth adjustments allowed in 2027–2028. This may constrain per-pupil funding growth if enrollment increases outpace allowed levy growth, especially in high-growth districts that rely heavily on state levies—potentially undermining the McCleary constitutional funding obligation over time.
EducationPeopleRef: Sec. 2(6)(a)(i), Sec. 2(6)(a)(ii)The bill shifts more fiscal responsibility to local school districts by limiting state-level levy growth, potentially increasing pressure on local levies to make up for shortfalls. This could lead to more frequent and larger local school levy elections, disproportionately burdening property owners in districts with lower assessed values or slower growth.
Local GovernmentLean industryRef: Sec. 3(3), Sec. 2(2)(b)(i)While the bill reduces state levies, it does not address local school levy caps or property tax levies from other districts (e.g., cities, fire, library), meaning many homeowners—especially renters and those in older homes with lower assessed values—may see little or no net relief, as local levies remain unchanged and continue to rise with property values.
HousingLean peopleRef: Sec. 2(6)(a)(i), Sec. 2(6)(a)(ii)
Who Is Most Affected
Homeowners in high-appreciation counties (e.g., King, Snohomish, Pierce) benefit significantly from reduced levies, especially those with homes valued above $600K—many of whom are middle-class families who were overpaying relative to the McCleary intent. Renters and low-income households gain little, as they do not directly benefit from assessed-value-based relief.
Local school districts in fast-growing areas may face pressure to increase local levies to offset reduced state funding, potentially leading to more frequent levy elections and higher local tax burdens—though districts in slower-growth areas may benefit from more predictable state funding.
Developers and real estate investors benefit from capped levies and continued allowance for growth adjustments on new construction, reducing long-term holding costs and supporting development economics—especially in high-value markets where overcollections were most severe.
Low-income households and renters see minimal direct benefit, as the relief is tied to assessed property value—not income or need. In some cases, they may face indirect costs if local districts raise local levies or cut services due to constrained state funding.
The state government avoids future overcollection lawsuits and aligns with the McCleary funding framework, but must absorb $4B in reduced revenue over 2026–2028, requiring budget reallocations that could affect other public services if education funding is not fully protected.