Washington

School districts plan for cuts due to Legislature’s inaction on ‘levy cliff’

The state Legislative Building in Olympia.
The state Legislative Building in Olympia. The Olympian

School district officials aren’t in any mood to trust the Legislature right now.

Yet they’re being asked to do so again this year, after lawmakers failed to extend a deadline that threatens about $500 million per year in funding for the state’s 295 school districts.

On Jan. 1, 2018, a temporary increase in the levy lid for local school districts will expire, reducing the amount of money Washington school districts can collect from local property taxes — and potentially taking away a significant chunk of their budgets.

Earlier this year, school districts asked the Legislature to delay the loss in levy capacity until at least 2019, after the Legislature is supposed to fix the unconstitutional way the state pays for public education.

State lawmakers didn’t grant the extension. Instead, they promised to complete a broad overhaul of how Washington state pays for schools early next year, which they said should address school districts’ budget worries.

For the school districts, I thought we owed them more certainty.

State Sen. Christine Rolfes, D-Bainbridge Island, on the Legislature’s decision not to delay 2018 ‘levy cliff’

They also inserted a backup plan into the state budget: In April 2017, the Legislature will reconsider whether to extend school districts’ levy authority, if it turns out lawmakers aren’t on track to fully fund public schools by then.

Yet school district officials say they can’t be certain the Legislature will follow through with either plan, leaving them budgeting for millions in budget cuts next year anyway. They face the possibility of not being able to collect the full amount of maintenance and operation levies already approved by voters.

“We’re pretty skeptical of the whole thing,” said Alan Burke, executive director of the Washington State School Directors Association, which represents school board members throughout the state.

“It’s difficult to have much confidence that’s going to get done, given their past history.”

SPOTTY TRACK RECORD

The state is in contempt of court in the school-funding case known as McCleary, in which the high court has ordered the Legislature to fully fund the state’s public schools by 2018.

Lawmakers haven’t come up with a plan to meet the 2018 funding deadline, which will involve shifting the burden of paying school employee salaries from local school districts to the state.

Local school district property tax levies are at the center of the school-funding discussion, since the state Supreme Court has said those local taxes can’t be used to pay teacher salaries and other basic education costs.

I think it would show we weren’t going to even try (to solve school funding issues). I don’t think that’s the preferred message.

Senate Majority Leader Mark Schoesler, R-Ritzville, on why Legislature didn’t extend school districts’ current tax authority beyond 2018

Many lawmakers think a McCleary solution will require lowering districts’ levy capacity even further, while replacing those local funds with money supplied by the state.

Senate Majority Leader Mark Schoesler, R-Ritzville, said one reason the Legislature didn’t postpone the 2018 decrease in school districts’ levy authority is it could send a message that lawmakers plan to delay other school-funding fixes. That’s not something the court wants to hear, he said.

“I think it would show we weren’t going to even try,” Schoesler said. “I don’t think that’s the preferred message.”

Schoesler said he thinks the threat of school districts losing local tax revenue in 2018 — commonly referred to as a levy cliff — will help push state lawmakers to come up with an overall school-funding solution before then.

BUDGET GYMNASTICS, HIRING PROBLEMS

What the upcoming levy cliff means for school districts is that each of them will have to create two budgets for the 2017-18 school year: one that involves drastic cuts, and one that doesn’t, officials said.

Most school districts need to start planning their budgets in January or earlier to be ready for the 2017-18 school year, officials said.

“We can't ignore the possibility the levy cliff won't be fixed,” said Jennifer Priddy, an assistant superintendent in the Olympia School District.

“It still forces our district to go through a budget planning process and create a budget for a scenario where the levy cliff is not dealt with, and create a plan for how we would respond if our levy were to precipitously drop.”

The Bethel School District will plan to lose about $10 million in levy money in 2018 — the equivalent about 110 teachers — while Tacoma Public Schools will plan for about $7 million in cuts, according to numbers provided by district officials.

It really puts us in a bad, almost untenable situation, where we’re going to be scaring teachers away.

Tom Seigel, superintendent of the Bethel School District

The Olympia School District, meanwhile, will have to plan to cut about 6 percent of its annual budget of $110 million.

District officials worry that discussing those possible cuts will hurt their ability to recruit and hire new teachers, which are getting harder to find due to a statewide teacher shortage. School districts are simultaneously under pressure to find more teachers to meet state requirements that they lower class sizes in kindergarten through third grade.

“It really puts us in a bad, almost untenable situation, where we’re going to be scaring teachers away,” said Tom Seigel, the superintendent of the Bethel School District.

In Olympia, Priddy said officials may need to hire teachers on a temporary basis next spring, “because we don't know what's going to happen with the budget.”

That's a problem because newly hired teachers might not want stay with the district in a temporary position if they can find a permanent job elsewhere, she said.

Those problems remain despite lawmakers’ decision to let school districts delay sending layoff notices to teachers if the Legislature’s budget process drags on next year, Priddy said.

POINT OF CONTENTION IN BUDGET

Some Democrats opted not to support the state’s supplemental budget plan partly due to its failure to address the levy cliff. State Sen. Christine Rolfes, D-Bainbridge Island, was one of the lawmakers who voted against the budget last month.

“For the school districts, I thought we owed them more certainty,” Rolfes said.

“I don’t think that we have given them any reason to think that by April 1 they will have a definitive answer.”

Schoesler, the Senate majority leader, said school districts have had ample time to plan for the reduction in levy authority, as it has been scheduled in state law for several years.

These are local dollars that the taxpayers said, ‘We want the district to have.’ And we want to be able to spend them.

Karen Vialle, board president for Tacoma Public Schools

But Karen Vialle, the school board president for Tacoma Public Schools, said during that same time period, school districts have also been planning for the Legislature to fix the way public schools are funded. If the Legislature had done that, the districts wouldn’t be facing this problem, she said.

While the Legislature has increased education spending in its two-year budget by about $2.3 billion in the past four years to address the McCleary ruling, some lawmakers estimate billions more might be necessary to end the state’s reliance on local school district levies to pay for teacher salaries.

Vialle said her message to lawmakers is: Don’t take away school districts’ levy money until those problems are solved.

“These are local dollars that the taxpayers said, ‘We want the district to have,’ ” Vialle said. “And we want to be able to spend them.”

Melissa Santos: 360-357-0209, @melissasantos1

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