State officials say they fixed school funding. Tacoma, Olympia area districts say that's not true

State lawmakers took a victory lap earlier this summer after passing a school-funding plan they said finally meets the state’s education obligations.

Now, some local school districts have a message for the Legislature: The numbers aren’t adding up.

District officials in Tacoma, Olympia and Seattle say they'll face budget deficits under the state's new school funding plan, with some saying they'll be worse off than if lawmakers had done nothing.

"Despite rhetoric that the Legislature's action had improved education funding for our state's children, our analysis clearly shows the opposite," Tacoma Public Schools said in a statement.

“Tacoma Public Schools would have a better financial future if the Legislature had not made any changes in the funding formula for education.”

The district, which expects to have a budget of about $431 million next year, estimates it will get about $4 million less from the state in the 2018-19 school year under the new plan than it would have under the old formula. Tacoma officials expect that gap to be about $3.4 million in 2019-20, and about $4.4 million in 2020-21.

Other districts' projections are less dire, but still rife with uncertainty about how much new money they'll receive. Some district officials say they aren't sure they'll get enough to cover the costs of inflation, let alone some of the new educational requirements the Legislature has adopted.

“From my perspective over those next few years, we will not even meet the rate of inflation — that is most likely,” said Tom Seigel, superintendent of the Bethel School District.

The K-12 schools overhaul, which lawmakers quickly introduced and passed in about a day in June, was years in the making. It was designed to comply with the Washington State Supreme Court's 2012 McCleary decision, which found the state was failing to fully fund its public schools.

To fix the problem by 2018, the high court said the state must take on the full cost of paying teachers and other school employees, whose salaries in recent years have been covered partly using local school district property tax levies.

The plan lawmakers approved is supposed to inject $7.3 billion in new state money into public schools over the next four years.

At the same time, it limits how much money school districts can raise through their local levies, capping local tax collections at $1.50 per $1,000 in assessed property value or $2,500 per student, whichever is lower. The plan specifies that local levy money can’t be used to pay for basic education costs, such as teacher salaries.

That reduction in local levy money is a large part of what has district officials worried.

Seigel, the Bethel superintendent, said much of what the state did merely replaces local levy money with state money, without providing substantial new dollars. That might help address part of the McCleary ruling, he said, but it “doesn’t fix the adequacy of the funding.”

“They’re kind of changing the name of the money, but the dollar amount doesn’t really change,” Seigel said.

The state Office of the Superintendent of Public Instruction (OSPI) estimates that, factoring in the reduction in local levy dollars, the net influx of new money to school districts will be about $5.5 billion over the next four years. That’s the amount of money above and beyond the cost of maintaining existing programs, according to the agency.

Yet some districts are taking issue with OSPI’s calculations.

For instance, the Olympia School District says the state agency vastly underestimated how much the district will collect in local levy dollars in 2018-19, creating the impression the district will get $9.2 million in net new funding that school year.

In reality, Olympia officials say, they’ll get $4.5 million in new money that year — and all of those dollars are already spoken for, said Jennifer Priddy, the school district’s assistant superintendent for accounting.

She said the district needs to spend about $2 million that year lowering class sizes in career and technical education courses, enhancing programs for English language learners and boosting programs for gifted and struggling students.

Another $5.6 million needs to be spent to lower class sizes in kindergarten through third grade, along with an additional $3 million to boost teacher pay, the district estimates.

On top of that, the district expects to lose an additional $3.3 million that year because the state no longer will provide extra money for districts that have more experienced teachers. That part of the old allocation formula, called staff mix, was eliminated in the new funding plan.

All told, that means the Olympia School District is looking at a $9.4 million deficit in 2018-19, rather than a funding increase, Priddy said.

“The amount of money we will get will be overshadowed by the new expenditure requirements the Legislature has imposed,” Priddy said.

Officials with nearby North Thurston Public Schools say they expect to get more money in the coming school year, but they’re worried and unsure about the years after that.

“They rushed to this decision so they could meet this deadline, but there is so much uncertainty right now, and that’s something all the school districts are dealing with,” said Teena Barnes, North Thurston Public Schools’ executive director of financial services.

Chris Reykdal, the state superintendent of public instruction, said he isn’t sure yet why some districts’ analyses of the school funding plan don’t match the ones put out by his office. He said the agency is getting more information from districts such as Tacoma and Olympia to see how they’re getting different calculations.

State Sen. Christine Rolfes, one of the key lawmakers who worked on the new school policy, said it was her understanding that all districts “were going to be getting significantly more money.” But after hearing districts’ concerns, she thinks the dramatic drop in local levy rates that is scheduled to start in 2019 might be causing problems for some districts.

“It may be that we need to look at the $1.50 (per $1,000) levy limit that the Legislature imposed,” said Rolfes, D-Bainbridge Island. “That was more of a political decision than a school-based policy decision, and it might be something that needs to be revisited — if there is political support to revisit it.”

State Sen. John Braun, the lead GOP budget writer, said he’s happy to talk with districts about their concerns, but he remains confident the Legislature adopted a plan that benefits the state’s 295 school districts.

“To respond thoughtfully, we need to dig in and see how they arrived at their conclusions,” said Braun, R-Centralia. “By making different assumptions, you can get broadly different results.”

He said that if there are problems, the Legislature can address them when it reconvenes in January.

Rosalind Medina, the chief financial officer for Tacoma Public Schools, said that based on her analysis of the K-12 schools plan, she questions whether the state Supreme Court will be satisfied with it.

The court is expected to decide later this year whether lawmakers’ work is enough to get them out of contempt of court, or whether the court needs to increase sanctions against the state.

“This isn’t some massive increase in funding,” Medina said. “The Supreme Court has come back and said, ‘What you are doing isn’t enough already.’”

“I don’t see how this is meeting the burden of the whole McCleary situation.”

Cox Media Group