Legislators find formula for basic education funds

The stakes were high and so were the doubts. The single most important task of the 65th Legislature was to find the path to solve the McCleary basic education puzzle. Like any good story with a cliff-hanger ending, at the last minute the two chambers flipped the right levers and came up with a workable model.

Rep. Pat Sullivan and Sen. Joe Fain, legislators from the 47th District, were two of the principal negotiators who helped find the final pieces of the McCleary puzzle.

Sullivan said after months of work by the budget teams in the Senate and House, the entire plan nearly unraveled at the last minute.

Wednesday, June 28, Sullivan and Fain worked through the night to resolve the problems and get the votes.

“I worked through the night,” Sullivan said. “There was a big blow up Thursday morning.”

He said at 6:30 a.m. he left the chambers and walked over to his office. It was Thursday morning, June 29, and Sullivan knew the lawmakers were on the cusp finding the final pieces for the plan.

“I drove to McDonald’s to get some breakfast and when I got back (to his office) everyone was coming to work. So I went back at it,” he said.

By the end of the day June 30 the Legislature would step back from the cliff with a bill for the governor’s desk.

Fain said he was still a bit groggy Monday during the phone interview after the marathon of the final week of the third session.

“I knew it would go all the way,” Fain said. “It was brutal, but the results are positive.”

Both Fain, a Republican from Auburn, and Sullivan, a Democrat from Covington, believe the education budget satisfies the McCleary case before the Supreme Court.

Fain said the budget addresses the issue of fairness at the heart of the McCleary ruling. More state money will be directed to the classroom and students.

“State money pays for basic education,” Fain said. “Local levies pay for programs that are not part of basic education.”

The senator said programs the local levies may pay for include after-school sports, zero-hour band or coach salaries. The state money pays for teacher salaries and all costs associated with educating a child in the classroom.

“In the past local levy dollars were used to supplement basic education,” Fain said. “The reason is the state has not been paying the full cost to educate a kid. It’s not the school districts’ fault.”

The adopted budget for education includes the common schools levy, which is a property tax. The common schools levy will be phased in over four years. The local levies will then be capped at $1.50 per $1,000 of assessed value or $2,500 per student. The school districts will be able to decide which formula fits best.

Fain said for many districts this means a drop in property taxes for local levies. He said the Auburn School District is approaching $4 per $1,000 of assessed value, while Seattle is at about $1.21.

“In 1970 the state common schools levy raised more money,” Fain said. “What happened is the Legislature stopped investing as much in schools.”

He said in the early 2000s the state stopped spending as much on higher education and tuition went up. In K-12 public schools, as the state cut funds, local levies had to be used to supplement the shortfall.

The McCleary decision underlined the lack of fairness that had emerged.

“We were paying more than our fair share in South King County,” Fain said.

The cost of educating a child in South King County is the same as in the Seattle or Bellevue school districts, but property values in South King County are lower, which means less revenue to the school districts. To make up the negative numbers school district officials had to keep raising property taxes higher and higher.

It was this financial conundrum, “that led to McCleary in the first place,” Fain said.

Sullivan said the common school levy will not be the only source of revenue. State general fund dollars will be added to the equation to fulfill the constitutional requirement of paying for basic education.

He said a group of eight began working on a plan to solve the puzzle many months earlier.

“We ran so many different numbers,” Sullivan said. “We were trying to get just the right model. It was one step forward and three steps back. It all came together in the last week.”

The representative said each budget item affected the other items and numbers. He said the task was daunting to pull the right levers “and get it just right on a bill of that magnitude.”

When it came down the home stretch, Sullivan and Fain knew the job had to be completed.

“We had to get this done and not because of the court,” Sullivan said. “It was a matter of knowing this was the session. No one wanted to fail…. We knew (in the last week) we had to get this done to avoid a shutdown. That is when Joe and I went to work.”

Fain’s life in the trenches was in the Senate chamber.

“I was more in the backroom on McCleary,” Fain said. “It was so great to have the leadership of Pat Sullivan. He took the bull by the horns to the end by passing it Friday (June 30).”

The senator, who is an attorney, said he has a more nuanced view of the Supreme Court’s decision on McCleary.

“I agreed with their decision in 2012,” Fain said, “Where I start to diverge is when they start to be prescriptive (about the budget)…. the court should not be writing budgets. That said, this (budget) does solve the problem over several years.”

A cliff hanger is always fun, as long the ending is smiley.

31ST DISTRICT LEGISLATORS COMMENTS ON MCCLEARY

• Rep. Drew Stokesbary

I’ve been committed to reversing the state’s unconstitutional underfunding of education since first running for the Legislature in 2014.

While it took longer than it should have, the bill ultimately enacted is a great deal for students: sending schools an additional $7.3 billion over four years, raising new teacher pay dramatically, reducing class sizes, and increasing allocations for textbooks, special education and career/technical education. Overall, our local school districts will receive millions in new funding.

It’s also a great deal for taxpayers: improving transparency and accountability of spending and actually reducing property taxes in most places, including in Enumclaw, White River, Sumner, Auburn, Dieringer, and Carbonado. Median homeowners in those districts will see a net property tax cut of several hundred dollars starting in 2019.

The result is that all students, regardless of zip code, will have an opportunity for a world-class education preparing them for college or career.

• Rep. Morgan Irwin

While I can appreciate the time, effort and good faith that went into the McCleary budget, I voted against the bill (HB 2242). Here are the reasons why. I made a promise to our district and the citizens of Washington state — I would never support a massive tax increase in our state’s spending plan that wasn’t brought forward to the voters. In recent months, both Republicans and Democrats worked tirelessly to make noteworthy investments in K-12 education. This was the goal placed before us this session. HB 2242 provides these major investments. However, it also requires an unprecedented increase in spending, and calls for significant new resources on the backs of the taxpayer in the form of larger property taxes for many. The plan implements a state property tax that may not fully fund the new K-12 investments. Taxpayers of this state should have a say in how their hard-earned money is spent.

I commend my colleagues on both sides of the aisle for their hard-work and due diligence on addressing our goals to put students first. However, an unprecedented increase in state spending, and tax increases, are the reasons I couldn’t support this particular plan.

• Sen. Phil Fortunato

The Supreme Court ruling was half right, school districts were spending local levy money on “basic education,” teacher salaries, books programs etc. Where they went wrong, is determining “how much” should be spent, that is the legislature’s job. The Senate Education Equity Act, which was largely adopted and includes my teacher housing allowance, swapped the “local levy” for a statewide standardized levy, satisfying the court’s provision for a dedicated funding source. The result is an increase in per student spending to a minimum of $12,500 and increases beginning teacher salaries to $40,000, while in the 31st, dropping property taxes after the transition period, about $400-$800. It also prohibits school districts from issuing new levies for “basic education” to prevent the same problem from happening again. Districts can still issue levies of other non-education programs, after the first year. My recommendation for voter approval was dropped in negotiations.

BRIEF SUMMARY OF PORTIONS OF HOUSE BILL 2242

• Increases and revises state allocations for K-12 basic education salaries, beginning in school year 2018-19 and implemented fully in school year 2019-20.

• Replaces the K-12 salary allocation model, increases minimum salary allocations, establishes maximum salaries and other salary limitations, and adjusts state allocations for inflation and regional differences in the cost of hiring staff.

• Adds a state allocation for professional learning days.

• Enhances state basic education funding under the prototypical school model through increases to special education, vocational education, highly capable, and transitional bilingual programs, all beginning in the 2017-18 school year.

• Creates a new learning assistance allocation for high-poverty schools, beginning in the 2017-18 school year.

• Requires the Superintendent of Public Instruction to publish per-pupil funding rates for each school district for general apportionment and specified categorical programs.

• Codifies into the Basic Education Act allocation requirements for services and staffing previously funded in the budget.

• Reestablishes certain increases to class size ratios and other school staffing ratios as enrichments

• Establishes a new state property tax for common schools, beginning in calendar year 2018, for a total rate of $2.70 per $1,000 of assessed value when combined with the existing state property tax.

• Establishes a new school district levy lid capped at the lesser of $2,500 per student or $1.50 per $1,000 of assessed property value, effective calendar year 2019.

• Provides local effort assistance in proportion to a school district’s actual levy compared to the maximum levy, up to a combined total of $1,500 per student, effective calendar year 2019.

• Limits use of school district levies and local effort assistance to enrichment and defines permitted forms of enrichment, beginning with the 2019-20 school year.

• Requires pre-ballot approval of enrichment expenditures from school district levy revenues beginning calendar year 2020.

• Revises school district accounting, auditing and budgeting practices.