From Olympia: Voters’ demand: Lower class sizes; school districts’ dilemma: Paying for it

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’Tis the season for school districts statewide to ask constituents to pitch in through local property taxes – whether for levies to support operating costs or bonds to support facility development.

Meanwhile, at the state Capitol, lawmakers are still coming to grips with education financing plans to meet the state Supreme Court’s mandate to fully fund basic education as defined in the state constitution.

Legislators and Gov. Jay Inslee agree education is and should be the dominant issue before them this session. They do not agree, however, on a means and method to resolve the dilemma: finding the dollars to avoid the Supreme Court’s clutches under a contempt order – the result of the Legislature’s failure to meet the court's terms for paying for basic education.

Local school districts are holding levy and bond elections this month in hopes of maintaining current operating levels and updating infrastructure while the Legislature wrestles with how to pay for basic education.

In Jefferson County, Port Townsend voters this month renewed support for their school district in approving a four-year, $14.645 million property tax levy, while Chimacum voters declined their school district's pitch for a $34.8 million facilities construction bond. Chimacum officials have said they plan to try again by putting that bond measure on the April ballot.

Added to the education funding challenge is the voter-approved Class Size Reduction Measure – Initiative 1351 – passed in November 2014. That measure requires the state to lower class sizes in grades K-12, and add additional teachers and support staff in order to do so.

The Office of Financial Management estimates implementing I-1351 could cost the state $4.7 billion through fiscal year 2019 and an additional $1.9 billion each year thereafter.

The initiative did not include a funding source and has a four-year phase-in, with 50 percent implementation in the 2015-2017 biennium and 100 percent implementation in 2018-2019.

Local school districts, however, would have an additional fiscal challenge to meet the I-1351 mandate. Statewide through school year 2018-2019, they would need to come up with $1.3 billion through local levies to implement this initiative due to the difference between what the state allocates for teachers’ pay and what local school districts actually pay their teachers.

McCLEARY CASE

Why has the education funding issue emerged to haunt state legislators?

In its 2012 McCleary case decision, which originated from the parent of two Chimacum School District 49 students, the state Supreme Court ruled the state was in violation of the constitution because of its reliance on local levies and federal money to pay for basic education, rather than direct state-financing programs.

That case, originally filed in 2007, was named for two Chimacum School District 49 students and their mother, the district's personnel director.

In 2014, the court reaffirmed it was the Legislature’s responsibility to figure out how to pay for basic education, but concluded legislators had not done that job.

In the 2009-2011 biennium, two pieces of legislation, ESHB 2261 and SHB 2776, were enacted to expand the definition of basic education and restructure the K-12 funding formulas in response to the McCleary case.

ESHB 2261 created a new K-12 funding model called the “Prototypical School Model,” which allocates a ratio of teachers and support staff based on the number of students in the school. It also expanded the definition of basic education, which must be fully funded by the state.

SHB 2776 took the funding formula created in ESHB 2261 and made it law. It also established a timeline for reducing class sizes and phasing in the expanded definition of basic education based on the funding formula established by the Prototypical School Model.

“We defined what basic education should look like, but we haven’t put the money into sustaining that system,” said Rep. Lillian Ortiz-Self, D-Mukilteo, vice chair of the House Education Committee. “That’s where we lost our [McCleary] case.”

Gov. Inslee’s proposed budget for the 2015-2017 biennium includes a $3.6 billion education package, of which $1.3 billion is dedicated to lowering class sizes in grades K-3, an overlap between the initiative and the state’s McCleary obligation, which mandates class-size reductions in the lower grades.

And though his proposal is championed as the largest increase in basic-education funding in nearly a quarter century, it falls short of the $4.7 billion needed to pay for I-1351.

“They’re not funding 1351,” said Randy Dorn, state superintendent of public instruction, referring to Inslee’s budget proposal. “The governor made no attempt to fix it or give us a plan on how he’s going to get to fully fund education.”

Part of the solution might be some kind of levy transfer in which school-district levies are reduced and the same amount is captured by the state property tax, Dorn said.

“I believe in the end you have to look at some kind of levy exchange to pay for it,” he said. “I don’t think you will have enough money to pay for all of I-1351, but you can do all-day K, K-3 class-size reduction, and then you have to do something about the 25 to 1 ratio in middle school and high schools.”

House Appropriations Committee chair Rep. Ross Hunter, D-Medina, in the past has also proposed a revenue-neutral levy swap, in which the state covers a greater share of school districts' tax levy dependence, as a means to fund the Supreme Court’s mandate. Taxpayers would pay the same amount in taxes but to the state instead of the local districts. However, this time around, he said a levy swap would not be effective because it doesn’t add any new revenue.

“It makes people crazy because it's just moving a lot of money around and everyone is nervous about doing that even though the overall tax burden to the state stays about the same,” Hunter said.

TEACHER SALARIES

A major area of concern raised by I-1351 hinges on how the state pays teachers' salaries. The initiative falls short on adequately paying for teachers’ salaries because the state does not provide adequate funding for school districts, Hunter said.

“The teachers are actually getting paid enough because the local school districts make it up,” Hunter said. “They raise money with local property tax [special levies] and pay the extra cost of hiring teachers.”

In the McCleary decision, the court ruled the state did not provide adequate teacher salaries and needed to bring salaries to the market rate districts are paying to actually hire a teacher, Hunter added.

“The state gives the schools a certain allocation for basic education to fund teachers’ salaries, but the amount is not sufficient to attract teachers in the field, or enough to be able to meet their basic needs,” Ortiz-Self said.

Mary Howes, executive director of Class Size Counts, a statewide coalition of families, educators, students and community leaders, notes all teachers in the state have the same base salaries, based on a 180-day school year, because they’re all on the state's salary schedule. I-1351 does not identify how to cover the cost of its mandates but aims to allocate state money to school districts to hire additional teachers to accommodate the reduction in class sizes.

Many districts, however, give teachers additional compensation in the form of extra paid workdays called TRI – or time, responsibility and incentive days. Those are locally bargained and the number of extra days varies district to district, Howes said.

“The state would provide the salaries for additional teachers,” Howes said. “For locally bargained additional compensation – that doesn’t come from the state, so it wouldn’t be provided by the state.”

BELLEVUE

Melissa deVita, deputy superintendent of financial services and operations for the Bellevue School District, said the district pays its teachers more than what’s allocated by the state’s salary schedule because the district has expectations of their teachers beyond what the state covers.

“The state basically funds teachers a six-hour day and we ask our teachers to work an eight-hour day, so we use local levies to pay for that additional two hours,” deVita said. “We also use those funds to pay those teachers to stay for tutorial after the school day is finished so they can work one-on-one with those students.”

In order for schools to maintain these current expectations of their teachers and programs, money would need to be raised by local levies as actual teacher compensation is more than what I-1351 would cover, deVita said.

“Even if they fund I-1351, they will not fund it from a local district perspective,” she said. “If they do fund it and it moves forward, then we’ll have to look at realigning the use of our local levy dollars.”

State money accounts for 56 percent of her district's general-fund revenue, which in the 2013-2014 school year was roughly $117.1 million out of the district’s $209 million total budget, deVita said.

She also expressed concern with the availability of teachers in the marketplace.

“It’s important that we have quality teachers in our classrooms to support I-1351,” deVita said. “It’s important that we have the classrooms and the space, and we don’t all have that space right now.”

LOCAL DISTRICTS

For 2013-2014 school year, local levy money made up 24 percent of Port Townsend School District 50's general-fund budget. It comprised 21 percent in Chimacum, 10 percent in Quilcene and 31 percent in Brinnon.

“The state may grab its share of funding from property taxes to supplant local levies,” Port Townsend superintendent David Engle said. “But that's a zero-sum game for us in terms of funding.”

Port Townsend pays teachers for an extra 11 eight-hour days, while Chimacum pays for an extra 14 days, Quilcene pays for an extra 5 days and Brinnon an extra 3. All of which are payed for with local levy money.

PORT TOWNSEND

Since space is tight at Grant Street Elementary and getting tighter at the high school, Engle said his district is developing a bond proposal to put in front of voters either in February 2016 or sometime thereafter.

“What we would like to do with any bond issue is make sure we move our kids out of portables and into more permanent spaces,” he said. “Oddly enough, the state sees us as over-housed, meaning we have more space than we need. But a lot of that space is not useful to us because it's not in the right places.”

Blue Heron Middle School has plenty of space, Engle said. That's why students in five grade levels – fourth, fifth, sixth, seventh and eighth – are housed there.

“Frankly that hasn't worked,” said Engle, who would like to see the middle school serve students in two or three grade levels. “We're trying to run two schools in one building.”

That can't be fixed until more space is made available at Grant Street, which also needs space to implement all-day kindergarten.

CHIMACUM

Chimacum is in its second year offering all-day kindergarten

“When the state added the requirement for all day kindergarten and preschool, our classrooms filled up at the primary,” said business manager Art Clarke, adding that Chimacum Creek Primary had been the district's most spacious building. “So far, we've been able to make it work but the primary is full.”

Both Clarke and superintendent Rich Stewart see the Legislature's challenge this session as having “a lot of negative potential."

“If they meet McCleary and fund it with increased taxes, politically they'll need to lower levy lids,” Stewart said, referring to state-mandated caps on how much of a district's total operating budget can be covered with local levy dollars. “If they lower the levy lid, you're either going to have to cut staff or borrow money to pay bills and paychecks. I'm guessing they will reduce the levy lid and we won't be able to afford it.”

Clarke said the Legislature would likely wait until the last minute to settle on a plan, if it settles at all.

“I still think it'll be June 30 before anything happens because that's their [the Legislature's] history,” he said.

QUILCENE, BRINNON

Both Quilcene and Brinnon schools offer all-day kindergarten thanks to local levy revenues. Brinnon does receive state money for the program but, because that district has so few students, it's not enough money to pay for another teacher, which is where levy money comes in.

Space, however, is not a big concern on Brinnon's 43-student campus, which was built to house 100 students.

In Quilcene, all-day kindergarten and a new computer lab have eaten up what remained of extra space for elementary students.

“We'll have some struggles in Quilcene,” said Quilcene and Brinnon superintendent Wally Lis. “Depending on the [state's funding] formula, we may need another classroom.” Lis is considering bringing in a portable or shuffling students around Quilcene's campus to find a better fit.

“We definitely have some quick fixes available to us,” he said. “Some districts need to have solutions right away and that's not us. We will have two challenges – one to maintain our buildings and the other to look at our campus, all three levels, and come up with a master plan instead of just a Band-Aid plan.”

Lis said both Quilcene and Brinnon voters can expect a local levy on the February 2016 ballot.

LEVY ISSUES

Ben Rarick, executive director at the state Board of Education, says the initiative would impact all 295 school districts differently depending on their use of local levy dollars.

With the money school districts could receive for I-1351, some districts might have an easier time meeting the required class sizes because they've already invested local levy money in hiring more teachers. On the other hand, districts with limited levy capacities may struggle to hire more teachers or find adequate classrooms for them, Rarick said.

“It creates a teacher supply-and-demand situation in our state and it’s not quite clear how it will shape out for each individual factor,” Rarick said.

With regard to levy swaps, Rarick says the board supports that maneuver as long as it adds new money to the system.

“Our goal is to fundamentally strengthen and expand programs and services for kids,” he said. “We don’t want to play a game of musical chairs.”

Rarick says the state salary-allocation model, which sets teacher salaries and pay raises, has become more irrelevant as local pay has become a larger percentage of a teacher’s salary.

“I think it’s necessary to place some new limits on how local levy money can be spent,” Rarick said. “It’s not clear whether or not we will be able to devise a cookie-cutter approach that applies to all 295 districts, but I am convinced, one way or another, that we are going to have to talk about local levy reform.”

Alan Burke, executive director of Washington State School Directors Association, also expressed concern over school districts' ability to add additional classrooms to meet reduced class-size requirements.

Lisa Nelson, superintendent of the Naselle–Grays River Valley School District, said in January that her district had an upcoming special levy election for regular maintenance and operation.

In the 2013-2014 school year, the district’s levy brought in $695,000. This year, the district is hoping the same levy rate will bring in $750,000, a slight increase due to inflation and cost of living adjustments.

“We have small class sizes in most of our grades,” Nelson said. “In our lower grades we have a Mandarin immersion program so we already split up our kids half a day anyway when they go to their Mandarin group.”

Nelson says the district supports smaller class sizes, but if doing so cuts state support for other social services, they would definitely need to think twice.

“If you cut programs that feed, nourish and provide mental health services, then kids supported by those programs aren’t ready to learn when they walk in the door. I don’t know that you’ve necessarily helped anything” in that scenario, Nelson said. “There are other funding mechanisms and ways for districts to achieve smaller class sizes, and I like the idea of local control.”

Nelson says her district would prefer more local control and authority over its levy tax dollars. She said a levy swap might affect the district’s ability to work with local constituents and make it more challenging to have school programs taxpayers want.

“What the citizens of my district want and are willing to fund may not match what communities statewide are willing to do,” Nelson said. “It creates a disconnect between what the school thinks its mission is and what the taxpayers and communities would like to see in the school.”

(Leader reporter Nicholas Johnson contributed to this report.)