Paying for cost-of-living raises for teachers is a key piece of Gov. Jay Inslee’s budget proposal, but school district officials are worried that his plan will hurt their bottom line.
Many school district leaders are saying the proposed school employee raises would increase salary and benefit costs for local districts, sometimes to the tune of millions of dollars.
Those additional costs also would exacerbate a problem that the state Supreme Court has repeatedly rebuked the Legislature for in the education-funding case known as McCleary: School districts are using too much money from local property tax levies to cover the cost of paying staff. Those costs are largely a basic education expenditure, the court has said, and therefore the state’s constitutional responsibility.
“The way the system works, every time you actually do something like pay for a cost-of-living adjustment, you’re actually increasing the cost on local districts,” said Frank Ordway, lobbyist for the League of Education Voters, a Seattle-based education advocacy group.
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The Office of the Superintendent of Public Instruction estimates the state pays for the equivalent of about 80,000 full-time school employees while school districts use levy money to pay for what amounts to an additional 23,500 full-time employees.
That’s the case both because the state doesn’t fully cover the cost of paying school employees in most districts, and because districts often use levy dollars to hire additional employees the state doesn’t cover.
Inslee’s budget would provide a 3 percent raise for school employees in the 2015-16 school year and a 1.8 percent raise the next year, along with increased pension benefits.
But the $600 million included in the governor’s budget would only cover the cost for state-funded school employees, and it would only apply the raises and benefits to the portion of school employee salaries the state pays for. It wouldn’t pay to extend the raises to the portions of school employee salaries that are paid by school districts, or to school employees whose salaries are paid entirely through local levy dollars.
Extending those raises and benefits to all school employees based on their full salaries would cost roughly an additional $100 million above what Inslee’s budget would provide, according to OSPI.
Local districts would have to pick up those extra costs, state schools chief Randy Dorn said.
“If we went forward with the governor’s budget, you would make school districts more dependent on local levies,” Dorn said.
To avoid assuming those extra costs, some school district officials are asking the Legislature to fix how the state pays for teacher salaries before doling out raises for teachers.
“If they’re saying, ‘These are the positions that we’re funding,’ they’re going to actually have to match what those positions cost,” said Harvey Erickson, the chief financial officer for the Bethel School District in Spanaway.
Bethel officials estimate Inslee’s proposed budget could cost them an additional $3.5 million over two years to pay for increased employee salaries and benefits.
Other Pierce County districts also are fearing the worst. For Tacoma Public Schools, just the first year of Inslee’s two-year budget would push about $2 million in costs onto the district, officials estimated.
Rosalind Medina, chief financial officer for Tacoma Public Schools, said she supports teachers and other school staff getting pay raises – but she wants the state to start paying a higher percentage of employee salary costs, as well as the cost-of-living adjustments.
Medina said for every $100,000 in salaries the Tacoma district is paying for teachers, the state is covering only about $70,000. For administrators, the state is paying only about $50,000 for every $100,000 the district pays in salaries, she said.
“If they can’t pick up the burden of the salaries, then putting the COLA on top of that will be painful and is going to hurt districts,” Medina said.
David Schumacher, Inslee’s budget director, said the governor is committed to increasing school employees’ salaries through the proposed cost-of-living raises. The state hasn’t paid for a cost-of-living adjustment for school employees since 2008.
Before getting the state to pick up a larger share of employee salary costs, though, Schumacher said the governor wants to focus on lowering K-3 class size, expanding all-day kindergarten and increasing money for school materials and operating costs, all of which are part of the Supreme Court’s order in the McCleary case.
Schumacher said that with the $1.3 billion the governor is proposing to put into K-12 education — including $750 million to cover school materials, supplies and operating costs — he thinks districts could find a way to cover expenses associated with giving raises.
“$750 million is a lot of money that will free up (levy) capacity at every school district in the state,” Schumacher said. That money could then be used to cover the added costs of raises and benefits, he said.
But Sen. Andy Hill, R-Redmond, said that plan wouldn’t address school districts’ overreliance on local levies to pay for basic services, which the Supreme Court also has told the Legislature to solve.
“To say, we’re going to give you more so you can free up money and pay salaries from your levies — that’s just perpetuating the problem,” said Hill, the budget writer in the Senate. “I do know there’s a concerted effort here (in the Legislature) to say, ‘Let’s fix it now.’ ”
State Rep. Ross Hunter, a Medina Democrat and Hill’s budget-writing counterpart, agreed that the Legislature needs to do something this year to reduce the reliance on local levies to pay for schools. He said he thinks school districts could most likely cover the costs of the governor’s raises in the short-term, though.
“I think they can probably inch their way through it,” said Hunter, the budget writer in the House. “I still think it’s unconstitutional.”
Hill and Hunter said several proposals to address the levy issue are being discussed behind-the-scenes among lawmakers, but they’re not ready to be released yet.
The Legislature faces a deadline of 2018 to meet all the requirements of the Supreme Court’s decision in McCleary, which includes solving issues surrounding local levies and fully funding basic education programs the Legislature has already approved.
The court held the state in contempt last year over lawmakers’ failure to come up with a detailed plan to meet the deadline. Legislators face unspecified court sanctions if they don’t comply with the court’s order this year.
The Legislature is in the middle of a 105-day session scheduled to last through the end of April.