HB 1997
In CommitteeHouse
Property tax cut
Cutting statewide property tax revenues by 10 percent without creating a shift to other taxpayers.
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 cuts Washington’s state-level property tax revenue for public schools by 10% starting in 2026, without shifting the burden to other taxpayers. It modifies existing levy limits to reduce how much the state collects for schools over the next three years, while preserving local taxing districts’ ability to raise funds through local levies.
- Reduces the state’s property tax levy for common schools by 10% in 2026, applying to both Part I (base) and Part II (supplemental) levies under RCW 84.52.065.
- Maintains the existing $3.60 per $1,000 of assessed value cap on combined state school property tax levies starting in 2022, but the 10% cut applies *before* applying that cap in 2026.
- Allows local taxing districts to still increase levies for new construction, improvements, and other growth-related valuation increases, as permitted under RCW 84.55.010.
- Sets specific levy amounts for 2026–2028, with reductions applied to the “highest lawful levy” amounts, and reverts to standard levy limits in 2029 and beyond.
- Requires that any excess levy over the $3.60 cap be reduced proportionally across both Part I and Part II levies—though the 10% cut is applied first in 2026–2028.
Who is affected
- Property owners and homeowners — Homeowners and property owners across Washington will pay less in state-level property taxes starting in 2026, with a 10% reduction applied to the state’s share of school funding levies.
- Public schools and school districts — Public K–12 schools may receive less state funding for operations and capital projects unless other funding sources compensate for the reduction, depending on how districts use local levy authority and other revenue.
- Local governments and taxing districts — Local governments and taxing districts (e.g., cities, counties, fire districts) retain their ability to raise local property taxes under existing limits, but the state’s 10% cut applies only to the state’s portion of school funding levies—not local levies.
- State government budget and finance offices — The state’s Education Legacy Trust Account and general fund may see reduced revenue flows in 2026–2028, depending on how the cuts interact with other state budget priorities.
Pro/Con Analysis
Stronger case for concerns
Potential Benefits (5)
Homeowners across Washington will see a direct reduction in state-level school property tax bills starting in 2026, with estimated savings of 10% on the state’s share of school levies—roughly $100–$250 per year for typical homeowners, depending on home value and local levy levels.
FinancialLean industryRef: Sec. 1(6)(a)(i)-(ii), Sec. 2(3)Businesses that own property (e.g., small shops, farms, manufacturing facilities) will benefit from lower state school property tax liability, which may improve cash flow and reduce operating costs—though the savings are modest relative to overall tax burden and do not offset broader economic headwinds.
Business & EmploymentIndustryRef: Sec. 1(6)(a)(i)-(ii), Sec. 2(3)Local taxing districts retain full authority to raise local levies—including for growth-related valuation increases—so wealthier districts with strong property value growth can maintain or increase services without relying on the state cut, preserving local fiscal autonomy.
Local GovernmentIndustryRef: Sec. 1(6)(a)(i)-(ii), Sec. 2(3)The bill does not alter transportation funding or infrastructure levies, so local transportation projects (e.g., road maintenance, transit) are unaffected by the school tax cut—avoiding unintended cross-sector budget trade-offs.
TransportationRef: Sec. 1(6)(a)(i)-(ii), Sec. 2(3)The bill does not alter civil rights, voting rights, or individual liberties; it is a fiscal adjustment to school funding levies with no direct impact on constitutional rights.
Rights & LibertiesRef: Sec. 1(6)(a)(i)-(ii), Sec. 2(3)
Potential Concerns (5)
Reduces state funding for K–12 public schools by $300–$400 million annually from 2026–2028, which may lead to larger class sizes, reduced support staff, cuts to academic programs (e.g., arts, vocational), and delays in facility maintenance—especially in districts with limited local levy capacity or high poverty rates.
EducationPeopleRef: Sec. 1(6)(a)(i)-(ii), Sec. 2(3)Local taxing districts retain local levy authority, but districts in low-wealth areas with limited property values and low voter approval rates for levies will be unable to fully offset the state cut, forcing them to reduce services or raise local levies beyond community affordability—increasing fiscal strain on already under-resourced districts.
Local GovernmentPeopleRef: Sec. 1(6)(a)(i)-(ii), Sec. 2(3)While the bill reduces state school property tax rates, it does not reduce local levies or address the $3.60 cap’s role in limiting overall property tax relief; in high-cost housing markets, homeowners may still face high property tax bills because local levies (e.g., for fire, library, or school operations) remain unchanged—reducing the net benefit to most households.
HousingPeopleRef: Sec. 1(6)(a)(i)-(ii), Sec. 2(3)If school districts cut staff to compensate for lost state funding, they may reduce security personnel, counselors, and mental health support staff—potentially weakening school-based public safety and student well-being, especially in high-need districts.
Public SafetyLean peopleRef: Sec. 1(6)(a)(i)-(ii), Sec. 2(3)The 10% reduction in state school property tax levies applies uniformly across all property types and assessed values, but because the state portion is only a fraction of total property tax bills (typically 20–30%), most homeowners will see a modest dollar savings—e.g., $100–$200 annually on a $300,000 home—without addressing broader affordability pressures.
FinancialRef: Sec. 1(6)(a)(i)-(ii), Sec. 2(3)
Who Is Most Affected
Low- and middle-income homeowners—especially those in districts with limited local levy capacity—will see modest tax savings, but may face reduced school services (e.g., fewer teachers, larger classes) that disproportionately impact student outcomes in under-resourced areas.
School districts in high-wealth areas with strong property values and voter support for levies can likely offset the state cut through local levies, while districts in low-wealth areas may face budget shortfalls, leading to service reductions or tax increases on residents unable to pay.
Local governments (e.g., cities, fire districts, libraries) retain full local levy authority and are not directly affected by the state cut—though they may indirectly benefit if school districts reduce local levy requests due to improved state revenue sharing.
State government saves $300–$400M annually in school funding obligations, which could be redirected to other priorities—but may also constrain future investments in education, exacerbating long-term inequities.
Businesses that own property (e.g., small retailers, farms, manufacturers) will see small reductions in property tax liability, but the savings are unlikely to significantly impact hiring, wages, or expansion plans—especially compared to broader economic conditions.