Educational Programs & Operations (EP&O) Replacement Levy

Every four years, Mercer Island voters vote to replace MISD's Educational Programming and Operations (EP&O) Levy. The levy is collected through local property taxes and all funds raised on Mercer Island stay on Mercer Island.

For a replacement levy to be adopted, 50% of voters in the district must approve the levy in an election. The current EP&O levy was approved by 74% of Mercer Island voters in 2022.

The current EP&O levy will expire in 2026 which means Mercer Island voters will vote on February 10, 2026 for a replacement levy that would take effect in 2027. 

The EP&O replacement levy will increase taxes for Mercer Island property owners by $150 annually per million of assessed value, which is $12.50 a month. This is $330 annually for a $2.2 million home, the average price on Mercer Island, or $27.50 per month.

The EP&O levy makes up 16% of the MISD budget. Washington State is required to pay for basic education but the state falls short in several areas, including special education and transportation funding. The Mercer Island voter approved replacement levy funds many excellent learning opportunities for our students. 

The MISD School Board voted on October 23 to put the EP& Replacement Levy on the February 10 ballot. View EP&O Levy slide deck presented to the Board. 

What does the EP&O levy fund?

• Students: 
  • 7-Period Day at MIHS: Most Washington high schools have 6-period days. A 7-period day at MIHS enables students to take advantage of additional classes each day, such as Advanced Placement courses, music, science, math, radio, or other electives, each day to broaden their knowledge and experience to help shape their post-secondary plans.
  • Music Programs: Elementary, middle and high school music classes.
  • Drama Programs: Middle and high school drama classes.
  • Elective Courses: Both MIHS and IMS have a wide range of elective courses.
  • Art Programs: Elementary, middle and high school art classes.
  • Athletics and Activities: More than 50 MIHS athletic teams and 16 IMS athletic teams and numerous extra and co-curricular programs.
  • Special Education and Intervention Services: One psychologist at each school and additional paraeducators at all schools to support students.  
  • Enrichment programs and experiences: Reading specialists in every elementary school.
  • NOTE: Non-renewal of the EP&O Levy would mean the elimination of the seven-period day at MIHS, fine arts classes and programs, numerous elective courses, and significant reductions to athletic teams and enrichment programs.

• a large display screen.

  Staff: 
  • Teachers: Class sizes are reduced across all grade levels from the additional teachers the EP&O levy provides. Note: Class sizes would increase if the levy is not renewed.
  • Support Staff: Paraeducators and other support staff who support and assist student learning.
  • Nursing Staff
  • Academic Counselors
  • MIPD School Resource Officer - Note: This position could be reduced to part time if the levy is not replaced. 
• Operations
  • Covering day-to-day costs, transportation, class size reduction, and building maintenance. Note: Class sizes would increase if the levy is not replaced. 
• Materials:
  •  Purchasing textbooks, instructional materials, and technology. 

How is the EP&O levy amount calculated and what are the tax implications?

The State of Washington allows school districts two methods for determining the amount of an EP&O levy. Districts can set the EP&O levy at the lesser of the following two calculations:

• $2.50 per $1,000 of assessed property value
• $2,500 multiplied by the student FTE in a district ($3,000 for districts with more than 40,000 FTE)

MISD uses the $2,500 per student calculation.

Washington State limits how much funding each school district can collect through its EP&O levy. This limit, called the per-student funding cap, began in 2019 at $2,500 per full-time student and is adjusted over time for inflation.

For Mercer Island School District (MISD), the cap has increased from $2,500 in 2019 to $3,247 per student in 2025. In 2025, the State approved an additional $500 per-student increase, which MISD may request beginning in 2026 for collection starting in 2027, if voters approve the replacement EP&O levy.

Mercer Island voters approved the current EP&O Levy in 2022, authorizing up to $12 million per year to help fund critical programs, staff, and services not fully supported by state funding. 

Even though the replacement levy will ask voters to approve a new maximum annual amount (levy authority), state law still limits the actual amount the district can collect based on full-time student enrollment. This means MISD’s projected collections will remain below that maximum in order to stay within state guidelines.

When the state’s $500 per-student adjustment takes effect in 2027, MISD plans to include that increase as part of the replacement levy voters will consider in 2026. This change accounts for the one-time increase of about $27.50 per month for the average Mercer Island homeowner. Future years are expected to see smaller, steady increases that reflect normal inflation adjustments allowed by the state.

Levy rates are based on a combination of student enrollment, home values, and inflation. Because the EP&O levy is capped on a per-student basis, if student enrollment decreases, total EP&O funding also decreases. Conversely, when home values increase, the tax rate goes down, since the same total amount is spread across a larger property value base.

For example, using a conservative estimate of 3,800 students and an average home value of $2.2 million, the year breakdown below shows projected rates for Mercer Island taxpayers.

2027

• Levy predicted amount $15,683,956 @ Tax Rate = $.70/$1,000

   

• Seeking Levy Authority = $16MM @ Tax Rate = $.72/$1,000
• The increase is $150 annually, or $12.50 a month, per million of assessed value using the maximum $.72 tax rate.
• The increase from the previous year is projected to be $330 annually, or $27.50 a month, for a home valued at $2.2  MM, which is the average price of a home on Mercer Island

2028

• Levy predicted amount $16,619,999 // Tax Rate $.72
• Levy Amount/Authority = $17MM // Tax Rate $.75

• her student is also visible in the background.

  Using the maximum $.75 tax rate, the increase is $30 annually per million of assessed value or $2.50 a month

• The increase from the previous year is projected to be $66 annually, or $5.50 a month, for a $2.2 MM home, which is the average price of a home on Mercer Island

2029

• Levy predicted amount $17,512,027 // Tax Rate $.75
• Levy Amount/Authority = $18MM // Tax Rate $.77
• Using the maximum $.77 tax rate, the increase is $20 annually per million of assessed value or $1.67 a month
• The increase from the previous year is projected to be $44 annually, or $3.67 a month, for a $2.2 MM home, which is the average price of a home on Mercer Island

2030

• Levy predicted amount $18,451,901 // Tax Rate $.77 
• Levy Amount/Authority = $19MM // Tax Rate $.80
• Using the maximum $.80 tax rate, the increase is $30 annually per million of assessed value or $2.50 a month
• The increase from the previous year is projected to be $66 annually, or $5.50 a month, for a $2.2 MM home, which is the average price of a home on Mercer Island

Although this is a replacement levy, there is a one-time increase of $500 per student permitted in Washington.  From a percentage viewpoint between 2025 and 2027:

• Compared to the current EP&O levy amount, the increase is 26%. The 2025 rate is $0.57 per thousand. The 2027 maximum rate is $0.72 per thousand.
• Compared to all MI local school taxes the increase is 15%. The 2025 rate is $1.39 per thousand which includes the Cap/Tech levy and the 2014 Bond. The 2027 predicted rate is $1.60 per thousand.
• Compared to the entire individual MI tax bill, that is an increase of 3%. The 2025 Mercer Island total rate is $6.54 per thousand. The 2027 predicted rate is $6.74 per thousand.

Open Enrollment Impact on Mercer Island Taxpayers and EP&O Levy

(table represents non staff out of district students enrolled in MISD through open enrollment)

There are two types of nonresident students in MISD

Required: RCW 28A.225.225 provides that school districts shall accept applications from nonresident students who are the children of full-time certificated and classified school employees and those children shall be permitted to enroll. Note that MISD has expanded this definition to include part-time staff and eligible coaches, academic advisors, substitutes and contracted employees. These categories do not fall under the statute. The admission of children of eligible City of Mercer Island employees is governed under the Interlocal Agreement accessible here. For the 2025-26 school year, there are 69 students enrolled in K-12 that are children of MISD staff or City of Mercer Island staff. 

teracting with each other in a classroom setting.

Optional: Through school board policy Section VII of BP 3141 open enrollment of nonresident students may be permitted. For the 2025-26 school year this is 69 students in grades 6-12, as indicated in the table above. 

The 69 students enrolled in MISD through open enrollment, out of 3,805 enrolled in 2025-2026, is 1.8% of the student population. If the replacement EP&O levy is approved, it will cost the Mercer Island taxpayers a maximum of $288,000 in 2027 (1.8% of the maximum 16MM), which is $28.33 per year for a $2.2MM home (1.8% of $1,574). The 69 open enrollment students cost the Mercer Island taxpayers a maximum of $28.33 per year for a $2.2MM home. However, note that Washington State provides $11,513 per student in 2025-2026, so those same 69 students bring over $794,397 to the district. These students also even out class sizes in grades 6-12 so that additional educational opportunities can be offered to all students.

2027-30 EP&O Timeline

• October 9th – First Reading – EP&O Resolution No. 747
• October 23rd – Second Reading /Adoption – EP&O Resolution No. 747
• October 23rd - Pro & Con Committee Recruitment - Board Meeting Presentation
• November 13th – Board Appoints Committee to draft the “pro” and “con” statements for the local voters’ pamphlet
• December 12th – King County Filing Deadline for February 10, 2026, Election
• January 9, 2026 - Online voter guide available
• January 21, 2026 - Ballots and voters pamphlets mailed
• February 10, 2026 - Election Day