The Capitol Building is seen Monday, Jan. 8, 2018 in Olympia.
Two years after lawmakers overhauled the state's school funding rules, school districts again are struggling to understand what, exactly, eleventh-hour changes to that system mean for their future finances.
Minutes before their midnight deadline Monday, Washington's lawmakers voted to relax limits on how much school districts can collect from local property-tax levies starting in 2020. The decision came after months of politicking by school districts, whose leaders claimed the controversial 2017 policy that set those collection limits led them to project multimillion-dollar shortfalls.
What they do know is, subject to local voter approval and property values, districts stand to gain up to $419 million in aggregate from the policy change next year alone, according to an early estimate from state Senate staff.
But apart from some clear beneficiaries -- such as Seattle Public Schools (SPS) -- it's unclear which other districts stand to gain from the change. At first blush, it appeared that some districts in more affluent areas still retain a significant advantage, with Seattle being able to collect more than $1,000 more per student than Yakima.
"In 2017 and 2019, the Legislature made it very clear that financial equity and accountability was not the primary concern around budget time," said Sharonne Navas, executive director of the Equity in Education Coalition. "Neither the decisions made around the levy in 2017, nor this past weekend, will do anything positive for levy equity or even levy equalization."
The state education department is just starting the process of understanding how the overall budget will affect each school district, said state schools chief Chris Reykdal. He acknowledged similar guidance arrived too late last summer, when a court-ordered infusion of cash for teacher salaries prompted a particularly chaotic contract-bargaining season. This time, with big districts such as Seattle, Bellevue and Tacoma negotiating their contracts once again, the information will come sooner, he says -- in a matter of weeks.
The debate at the heart of the late-night deal is a mandate for the state to fully fund public schools -- one that was reinforced by a state Supreme Court ruling. The decadelong McCleary case was officially resolved in 2018 after the Supreme Court approved lawmakers' plan to reduce reliance on local property taxes and increase state spending on schools by nearly $5.6 billion.
As part of a political compromise to close the case, lawmakers offset a statewide property-tax hike with a set of two new caps on what districts could collect from their local levies: $1.50 per $1,000 of assessed value or a rate that generated $2,500 per student, whichever was less.
But many districts -- large and small, rural and urban -- argued the so-called levy lids went too far and effectively negated the boost in state revenue. About a third of all districts, including Tacoma, expected to actually lose money as the McCleary deal ran into the 2019-20 school year.
Seattle, the state's largest district, emerged as a clear winner, with a custom-made limit on its levy collections. The bill creates two categories of districts when it comes to calculating levy rates: one includes districts with 40,000 or more students -- which means only Seattle, by a margin of about 10,000 -- and one includes the 294 other districts that teach fewer students.
Senate Bill 5313, which passed mostly along party lines, allows Seattle to collect either $2.50 per $1,000 of assessed value or $3,000 per student, depending on which one of these calculations works out to less. In Seattle's case, that lesser option would be $3,000. The others, meanwhile, can collect $2.50 per $1,000 of assessed value or $2,500 per student, $500 less than Seattle.
Officials in Seattle and in some other districts such as Tacoma and Vancouver say the flexibility will help them stave off planned budget cuts.
Seattle planned for this outcome: As district leaders and School Board members warned of upcoming cuts and staffing displacements, they crafted a "restoration plan" to recover what they would lose to its $40 million shortfall. With the new revenue, the SPS chief financial officer says the district will be able to keep more educators in their schools. With a sizable voting block in the Legislature, they also lobbied hard in Olympia, and proposed a levy higher than the legal limit in 2019.
Dozens of districts, such as Chimacum, won't see any change at all.
As a small waterfront district on the Olympic Peninsula, the area surrounding the Chimacum School District has high property values, which means it has maxed out its $2,500-per-student cap, and isn't eligible for any additional assistance from the state.
Yet 53 percent of the 1,000 students there are low-income, compared to Seattle's 35 percent. The district's steadily declining enrollment has meant less money over the past two decades, compounding the revenue it lost through the 2017 levy limits.
Earlier this year, the district's school board authorized a staff cut through attrition, with no plans for bringing them back.
"It's a levy fix only for specific districts," said Art Clarke, Chimacum's assistant superintendent of finance.
In Yakima schools, where property values are much lower, the district could charge taxpayers the highest allowable rate -- about four times that of Seattle -- and still only collect $1,927 per student.
"We're asking a lot ... more of our low-income communities to get a lot less for their students," said Jacob Vela, senior policy analyst with the nonprofit League of Education Voters.
About 60 miles west of Spokane, the farming community that supports Creston schools likely won't see any change from the Sunday deal.
Chuck Wyborney, superintendent of the 90-student district, said he's waiting for details on everything included in the levy bill to know for sure what happened. But he enters contract negotiations next week with Creston educators.
"Part of me thinks all this really bad," Wyborney said of the changes. "The other part of me says, change is scary."
Still, he added, "It's our job to figure out how to do best for our kids with the resources we have, and I think we'll get better with that over time."
There is one thing all districts agree with: the state's budget doesn't allocate enough money for special education, which many districts say they use their local levies to supplement.
"Will it ever be enough [funding]? I don't know," said State Senate K-12 committee chair Lisa Wellman, D-Mercer Island, who sponsored the levy bill. Gauging the right amount of money for schools is a moving target, she said.
"We could play this game forever."
