The Washington Legislature took giant steps last year to improve state financing of K-12 public schools. But its more than $7 billion promise of new funds over four years fell short.
Even though pending legislative budgets would move closer to fully paying school personnel costs for the fall 2018 school year, some districts are in greater need than others. Some like Olympia and Tumwater face big budget holes to cover salaries and also special education, which could trigger staff layoffs if they are not made whole.
The Olympia shortfall on compensation is $6 million, and Tumwater’s is $2.5 million. These are occurring even though new state money was given to cover teacher pay hikes, according to Jennifer Priddy, a well-regarded school-finance expert and assistant superintendent for Olympia schools.
The ongoing legislative session is scheduled to end Thursday after its allotted 60 days. Before leaving town, lawmakers must act to at least partially fill these unanticipated gaps. Otherwise districts that simply have more experienced teachers, which results in higher than average salaries, are unfairly punished and may need to lay off staff.
All three of the largest South Sound districts – Olympia, Tumwater and North Thurston – have staff with more experience and education. In the past those teachers received higher pay under the traditional state salary grid. Teachers received additional local funds through locally bargained contracts that were paid from taxpayer approved property tax levies.
But the state funding model and levies are both being phased out to answer the Supreme Court’s ruling in the landmark McCleary school funding case. Justices ruled that the state was unconstitutionally relying on local levies to subsidize basic education costs that the state should have been paying.
The new state formula approved in 2017 sends money to districts based on an average salary, which creates the budget shortfalls in Olympia and Tumwater.
North Thurston Public Schools escaped some of this hit because the Legislature last year provided extra money for districts located in or near high-cost urban areas such as Seattle or Tacoma. This qualified the district for 6 percent “regionalization” bonuses.
Olympia and Tumwater didn’t get this extra money, even though those cities have higher housing costs, according to Priddy and finance expert Mitch Thompson for Tumwater schools.
The 2018 Legislature is taking steps to close this oversight or gap, and the House budget proposes to include an extra 4 percent allocation to districts like Olympia to cover part of the salary gap.
The Senate budget also has relief for school districts whose teachers have more longevity. But the Senate plan provides just 2 percent more funding using a grant-style system that districts must apply for.
Special education also needs better financing. In the past local tax levies have been used to help pay actual special education costs, and South Sound districts are likely to continue that in 2018 – even with state aid proposed in the Senate and House budget plans.
In Olympia schools, the special education shortfall is about $6.5 million. Priddy says the district plans to use about $5 million of local levy funding to subsidize special education in the next budget year.
But if the House or Senate proposal is adopted, about $500,000 more would flow to Olympia, reducing the levy subsidy to $4.5 million. Tumwater would receive about $172,000 extra, but that is not expected to cover increased costs.
Clearly the Legislature’s reform of school funding is not done.
So far, the House proposal offers the greatest chance districts can avoid teacher layoffs this fall.
“If the House budget policies are enacted the Olympia School District is facing zero layoffs of teachers,” Priddy predicted.
That is how it should be. The state has a budget surplus that should allow this fuller funding of schools.