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January 29, 2016

Budget Update - State Budget Preview

The next few months, as the Legislature is in session, I am planning on sending periodic comments on the Legislature’s efforts related to school funding, as well as some other topics related to school finance in Washington state.

Legislators are back in Olympia for a 60-day session. The main focus of the session will be to make minor adjustments to the 2015-2017 biennium budget.  The state continues to fall short of meeting its obligation under the McCleary decision to fully fund K-12 basic education. The scope of fully funding basic education is broad and includes improved teacher compensation.

Solving the teacher compensation issue requires addressing the differences in teacher pay among districts. That difference in pay largely depends on each district’s ability to generate local levy dollars and then to apply some of those dollars towards additional teacher pay that is above the state teacher salary schedule.  Some districts provide more than 65 additional days of pay for teachers, while others provide none, generally depending on the district’s ability to generate local levy dollars.

Consequently, meeting the requirements of the McCleary decision means that the Legislature must enact some type of tax reform, including levy reform. At this point, the legislators don’t have a firm plan on how to do that, so therefore they don’t have a plan on how to meet the McCleary requirements.

A more pressing issue results from legislation passed in 2010 that limits a district’s ability to collect levy funding and also reduces levy equalization funding to Kennewick and other property poor districts. These changes were set to take effect in the 2017-2018 school year. This would result in the loss of over a half a billion dollars of funding to districts across the state. This funding loss has been referred to as the “Levy Cliff.” When the legislation was passed in 2010, legislators optimistically believed that they would be fully funding public education by 2017-18.  That hasn’t happened yet, and the outlook for 2017-18 doesn’t look good.

There is no expectation that the legislators will be able to pass a plan to fully fund basic education during this 60-day legislative session. Presently, legislators are mostly talking about setting up workgroups and task forces to come up with a plan. Thus, one of the priorities for school districts throughout the state is to convince legislators to delay changes to levy funding and levy equalization funding until 2019 or until a new funding plan is in place.

The legislature has stepped up with increased funding in a number of K-12 education areas over the past few years. Next week, I will discuss some of those areas. 

Vic Roberts
Director of Business Operations

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