Tax Levy Explanation Newsletter for School Board Communication

Most property owners pay a school tax levy every year without understanding what it is, how it is calculated, or what portion of their total tax bill it represents. That lack of understanding is a problem for school districts because it creates fertile ground for misinformation and erodes support for school funding. A district that explains the levy clearly and annually is doing something that benefits everyone: it treats taxpayers as informed stakeholders rather than passive sources of revenue, and it creates a better-informed community for the funding conversations that inevitably follow.

What the Levy Is and How It Works

The school tax levy is the total amount of property tax revenue the district is authorized to collect from property owners within the district boundaries. The board adopts a levy amount each year as part of the budget approval process. The levy is then divided by the total equalized assessed value of all taxable property in the district to calculate the tax rate, expressed as dollars per $1,000 of assessed value. A property owner with a home assessed at $200,000 pays twice as much school tax as one with a home assessed at $100,000 at the same rate. The actual dollar amount on any property owner's tax bill depends on their property's assessed value and the tax rate set by the levy.

How the Board Decides the Levy Amount

The levy is not set arbitrarily. It is calculated by starting with the district's total approved budget, subtracting all non-levy revenue (state aid, federal grants, fees, investment income, and other sources), and the remainder is the amount the district must raise through property taxes. Most states cap how much the levy can grow from one year to the next, either limiting the percentage increase or tying increases to an inflation index. [Describe the specific limits that apply in your state.] This means the board does not simply levy whatever spending requires. It must work within a revenue ceiling that state law sets.

What the Levy Funds

The operating levy funds the district's day-to-day operations: teacher and staff salaries and benefits, which account for approximately [percentage] of the budget; instructional materials and technology; utilities and building maintenance; transportation; and student support services. Families can think of this as the cost of running schools every day. [If the district has a separate debt service levy for bond repayment, describe it separately.] The operating levy does not fund major capital construction projects, which are typically financed through bonds approved by voters and repaid through a separate debt service levy that appears on the same tax bill.

This Year's Levy Compared to Last Year

The board adopted a levy of $[amount] for the current year, a [percentage] increase from the prior year's levy of $[amount]. [Describe what drove the increase: salary increases from the collective bargaining agreement, health insurance cost increases, special education costs, or other factors.] The resulting tax rate is $[rate] per $1,000 of assessed value, [higher/lower/the same as] last year's rate of $[rate]. [If the tax rate decreased or held steady despite a levy increase, explain why, such as growth in the total taxable property value.] For a home with an assessed value of $[example], the school portion of the property tax bill is approximately $[dollar amount] per year.

State Aid and the Levy Relationship

Property taxes are not the only source of district revenue. State aid provides a portion of school funding based on formulas that typically account for the district's enrollment, local property wealth, and student population characteristics. [Describe what percentage of the district's revenue comes from state aid versus local property taxes.] When state aid increases, the levy can remain flat or grow more slowly. When state aid is cut or held flat while costs increase, the levy must make up the difference or programs must be cut. [Describe the current state aid situation and how it has affected the local levy in recent years.] Understanding this relationship helps community members see the district's tax requests in the context of the state funding decisions that constrain local options.

Where to Ask Questions

Tax levy questions are common and the district encourages them. If you want to know how your specific property tax bill is calculated, the relevant contacts are your local assessor's office for the assessed value and the county treasurer for the tax bill mechanics. For questions about how the district uses the revenue from the levy, what the budget funds, or why costs have increased, contact the district's finance department at [contact information]. The board also welcomes public comment at its regular meetings. A community that understands school finance is a better partner in school governance, and the district is committed to providing the information that makes that possible.