Did you know that the State of Washington caps the amount that districts can ask voters to approve for funding beyond what the state provides? For Mercer Island, the amount is based on students enrolled in the district.
MISD is asking for the same amount that is allowed per student across Washington State, not one bit more. All revenue from Mercer Island stays on Mercer Island.
How is the Replacement EP&O Levy calculated?
Washington State allows school districts to calculate an Educational Programs & Operations (EP&O) levy using the lesser of two formulas:
$2.50 per $1,000 of assessed property value, or
A per-student calculation: $2,500 per full-time student
Mercer Island School District (MISD) must use the per-student formula. The state allows inflation adjustments to this cap.
In 2019, the cap was $2,500 per student.
By 2025, the inflation-adjusted cap was $3,247 per student.
The State of Washington limits how much funding districts can request through an EP&O levy. The statewide cap began in 2019 at $2,500 per student and grows with inflation. In 2025, Washington State lawmakers approved the first increase to the base amount: an additional $500 per full-time student. On Mercer Island, that increase can take effect only after voters approve a replacement levy in 2026, and it would begin in 2027.
Replacement EP&O Levy increases
The EP&O levy approved by voters in 2022 allows MISD to collect up to $12 million per year. With 3,805 full-time students, that equals $3,154 per student for the current year.
The proposed replacement EP&O levy establishes an annual “Levy Authority,” which is the maximum amount MISD could collect. Actual collections remain capped by state law based on full-time student enrollment, so MISD’s requested levy authority is higher than what the district expects to collect. Because the state approved a $500 per-student increase which can only be collected on Mercer Island if the replacement levy is approved, taxpayers would see a one-time jump reflected in 2027. For the average Mercer Island home ($2.2MM), the estimated increase is $27.50 per month for 2027. In 2028 - 2030, annual increases are in the range of $3.67 to $5.50 per month for those years.
Taxpayer impact
EP&O levies collect a fixed total amount determined by full time student enrollment, and the amount per student is capped by the state. This affects the tax rate in two ways:
If enrollment declines, the district collects less in EP&O revenue.
If assessed home values rise, the tax rate decreases, because the same total amount is collected across a higher overall tax base.
Let’s look at a conservative case for the taxpayer where enrollment reaches the Levy Authority and the average $2.2MM assessed value for a home on Mercer Island.
2026 under the current EP&O levy
The current EP&O levy has a potential to raise $12MM with a Tax Rate = $.57
That is $1,254 for a $2.2MM home, the average price on Mercer Island, or a total of $104.50 per month. This is part of a property tax bill now.
2027
Predicted $15,683,956 // Tax Rate = $.70
Levy Authority = $16MM @ Tax Rate = $.72
Using the maximum $.72 tax rate, the increase is $150 per million of assessed value or $12.50 a month
The increase from the previous year is projected to be $320 for a $2.2MM home, the average price on Mercer Island, or $27.50 per month
2028
Predicted $16,619,999 // Tax Rate $.72
Levy Authority = $17MM // Tax Rate $.75
Using the maximum $.75 tax rate, the increase is $30 per million of assessed value or $2.50 a month
The increase from the previous year is projected to be $66 for a $2.2MM home, the average price on Mercer Island, or $5.50 per month
2029
Predicted $17,512,027 // Tax Rate $.75
Levy Authority = $18MM // Tax Rate $.77
Using the maximum $.77 tax rate, the increase is $20 per million of assessed value or $1.67 a month
The increase from the previous year is projected to be $44 for a $2.2MM home, the average price on Mercer Island, or $3.67 per month
2030
Predicted $18,451,901 // Tax Rate $.77
Levy Authority = $19MM // Tax Rate $.80
Using the maximum $.80 tax rate, the increase is $30 per million of assessed value or $2.50 a month
The increase from the previous year is projected to be $66 for a $2.2MM home, the average price on Mercer Island, or $5.50 per month
Understanding the Percent Change from 2025 to 2027
Let's look at the predicted percentage increase from 2025 to 2027. Although this is a replacement levy, there is a one time increase of $500 per student permitted across Washington State. From a percentage viewpoint between 2025 and 2027:
Compared to the current EP&O levy amount, the increase is 26% (2025 rate is $0.56976 per thousand. 2027 maximum rate is $0.72 per thousand.)
Compared to all MI local school taxes, the funds which are raised on Mercer Island and stay with MISD, the increase is 15% (2025 rate is $1.39329 per thousand which includes the Cap/Tech levy and the 2014 Bond. 2027 predicted rate of $1.60 per thousand.)
Compared to the entire individual MI tax bill, that is an increase of 3% (2025 rate is 6.54381 per thousand. 2027 predicted rate is $6.74 per thousand.)