Innovative Finance Case Study: Tax Levies for Children’s Services

Finish this sentence: “Read my lips, ‘No new _______.’”

photo of coinsWhile few would ever admit to liking them, taxes provide a stable and substantial source of revenue to essential public services. Taxation can include excise taxes (like on sugary drinks or tobacco), dedicated levies based on property values or income, or one-time assessments on a particular group, like health care providers. Tax revenue may be held in a specific fund or augment an existing budget.

Voters in many communities across the U.S. have approved special tax assessments for investments dedicated exclusively to children’s health, wellbeing, and academic success–including school-based health centers (SBHCs). Seattle’s levy generates an estimated $235 Million over seven years for a range of prevention and early intervention investments.

How Seattle does it

Seattle opened its first SBHC at Rainer Beach High School in 1988 following a city-wide education summit where citizens called for students to be “safe, healthy, and ready to learn.”

The SBHC was funded for just two years by a limited allocation from an existing city agency budget line. In 1990, with significant support from the mayor and the city council, a community vote passed the Families and Education Levy, allowing the Rainer Beach SBHC to remain open, and for six new SBHCs to join it in the city. Fast forward 25 years, the fund has helped to build SBHCs in 25 of the city’s public schools. For school year 2016-17, the levy allocation totaled $5.6 Million, accounting for a majority of the centers’ revenue.

The levy, a millage rate on property, must be re-approved every seven years—something voters have done repeatedly in the last three ballot measures. But despite the levy’s history of success, its septennial re-approval is not necessarily assured. Washington has no state income tax; many city programs are funded by levies similar to the Families and Education Levy (the city currently administers 6 different voter-approved levies covering parks, transportation, libraries, pre-school, and housing).  With so many competing priorities for publicly supported services, advocates must continually promote the levy’s value to voters. Although the next vote isn’t until 2018, planning and advocacy efforts are already underway.

Making a connection for tax payers

Connecting the levy to measurable achievements gives advocates a powerful tool to argue in its favor. In 2003, Seattle’s levy supporters conducted outreach, particularly to minority communities, to identify the kinds of outcomes citizens expected from their investment. The resounding response: close the widening academic gap among underperforming students. Taking the feedback to heart, an advisory committee to the mayor recommended that the next generation of levy-supported programs (non-academic investments included) demonstrate measurable impact on education success, specifically calling out graduation rates, grade trends, and standardized test data.

For Seattle’s SBHCs, the heightened accountability around school performance was a game-changer. Sara Rigel, who oversees the school-based partnerships at the county, admitted that drawing an explicit link between health interventions and academic success has not been without its challenges. And it’s required a lot more intention on the part of SBHCs. “It pretty much dominates how we talk about, operationalize, and measure our programs,” said Rigel. One happy outcome of this synergy between health and education has been the sharing of data between agencies. A joint agreement now gives SBHCs access to student academic performance so they can more easily identify where academic supports are needed most. For example, SBHC mental health providers receive weekly updates on the academics indicators of their patients.  The mental health providers are able to work more holistically with the students with this added information, improving better care coordination and overall outcomes.

With rigorous research documenting impressive results (increases in both attendance and grades among SBHC users) that reflect the desired improvements in the community, advocates of the levy are able to ‘tell the story’ even more persuasively.1  So persuasive, in fact, that the city has paved the way for a recent King County-wide Levy (Best Starts for Kids) that will also support investments in prevention and early intervention focused on outcomes and programs—like SBHCs—that make a difference in the lives of children and youth.

Check with your local government to determine if your community has a special tax district for children and families—and how it prioritizes its spending.

SBHC Census fact: Nearly one in three SBHC reports financial support from local government.

Read more about Seattle’s Family and Education Levy

1. SC Walker, SEU Kerns, AR Lyon, EJ Bruns, TJ Cosgrove. Impact of School-Based Health Center Use on Academic Outcomes. Journal of Adolescent Health, 2010:46(3);251–257.

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