Policy Analytics: Tri Creek may need $2M–$4M referendum to avoid deep cuts as SEA 1 reduces local revenue

Barry Gardner of Policy Analytics told the Tri Creek School Board that the district receives “just a little bit over $1,500 per student” from property taxes into its operations fund and sits near the 20th percentile among comparable districts. “That creates challenges around your operations fund and being able to support paying the lights, property casualty, all those kind of costs,” Gardner said.

Gardner framed the district’s options in light of recent state policy changes under SEA 1. He said a change in homestead deductions and an expansion of credits — plus a jump in the business personal property exemption — will reduce net assessed value beginning in 2027 and create what he called “unfunded credits”: revenue the district will not collect. Gardner explained that lower assessed value typically requires higher tax rates to generate the same revenue, a dynamic that shapes referendum strategy.

Using district cash‑flow models, Gardner presented several referendum scenarios, including levies that would generate roughly $2 million, $2.5 million, $3 million and $4 million annually. “We probably would need somewhere in the range of more close to a $4,000,000 referendum to not go through cash,” Gardner said under conservative assumptions that hold salary increases and other costs steady. He also described a fixed‑rate strategy — exemplified by a 20¢ fixed rate on the ballot — that can smooth revenue across years but may fall short as assessed values shift.

Gardner gave a homeowner impact example based on the formula used on ballot language: the district must show impact for a median home value rounded up to the next $50,000. He noted that the required rounding can exaggerate the published median‑homeowner cost. In one of the models he showed, a $3 million levy would add about $221 annually for a homeowner listed at the rounded median; presenters translated that to “approximately $18 a month” as an outreach figure.

Trustees pressed Gardner about outreach and timing. He warned the group that new law limits referendum elections to November of even‑numbered years, creating a two‑year gap between opportunities and prompting many districts to consider running in 2026 rather than waiting until 2028. He also flagged other practical choices — ballot maximum rate vs. levy and whether the district should use a fixed rate or a levy cap — and encouraged use of a tax calculator to show parcel‑level impacts as the board narrows options.

Board members noted that the district has already trimmed staff following a failed referendum in 2023 and that further cuts would be painful. The presentation concluded with goodwill offers from Policy Analytics to run more detailed scenarios and provide tax‑calculator tools as the district considers whether to request voter approval.

The board did not take action on a referendum at the meeting; staff and trustees said they will continue modeling options ahead of the district’s decision deadline.