Funding issues haunt legislature’s response to court-ordered basic education reforms

By Izumi Hansen

WNPA Olympia News Bureau

Teachers’ compensation, teacher shortage, the educational opportunity gap and school districts’ operating levies are all on Washington state legislators’ agenda this session as the state Supreme Court’s McCleary mandate – along with the court’s $100,000 per day contempt citation – loom over the proceedings.

The 2016 session began Monday in Olympia.

In its January 2012 McCleary v. State of Washington decision, the Washington State Supreme Court determined the state was not fulfilling its constitutional requirement to fund basic education for all students, including compensation for basic education teachers. The court required the state to fulfill its duties and provide annual reports following the legislative session in order to ensure “steady progress” toward a 2017-2018 school year deadline.

Basic education, by law, includes the ability to read; write and communicate successfully with a variety of audiences; know the core concepts of a variety of subjects; be able to think analytically, logically and creatively and use technology to do so; and understand how a decision today can influence opportunities tomorrow.

The court in 2012 required the state to reduce reliance on local school district excess tax levies, particularly for funding teachers’ salaries and benefits, and to meet the requirements of a “prototypical school” defined in HB 2776, a bill passed by the legislature and signed into law in 2010.

The 2010 law required reducing class sizes for K-3 students, funding for all transportation, material and operations costs and providing for all-day kindergarten by 2018. The court found the state in contempt of the McCleary order in September 2014. Legislators responded by passing bills in 2015 that fulfilled these requirements.

But legislators failed to produce plans to fully compensate teachers by the end of the 2015 session, so the court on August 13 imposed a $100,000 per day sanction on the state.

To address that sanction, Governor Jay Inslee in September 2015 created a bipartisan work group with members from both chambers of the legislature to develop a proposal responding to the court’s requirements.

Teacher compensation and teacher shortage

A survey conducted by the Office of the Superintendent of Public Instruction last November found that 24 percent of schools could not find qualified teachers to fulfill their classroom requirements and 69 percent were “struggling” to find qualified teachers.

“We knew about this a year ago. We knew it was serious. We are just now putting numbers to the problem,” said Nathan Olson, communications manager at the Office of the Superintendent of Public Instruction.

Along with a shortage of teachers, many districts fund their teachers with local special tax levies, which is unconstitutional according the Doran decision from 1977 that was upheld by the Supreme Court in its McCleary order. The court ruled that teacher compensation was part of the definition of basic education.

Blaine school district superintendent Ron Spanjer said teacher and staff compensation accounts for 80 percent of expenses at the district.

“There are a lot of moving parts when it comes to teacher compensation, and there has been a strong effort by the legislature to even the playing field,” Spanjer said. “They have the right objective, they’re just taking a long time to get there.”

The legislature’s work group has introduced two bills for consideration by the 2016 Washington legislature: Senate Bill 6195 and House Bill 2366.

Both bills establish a task force to develop a plan to fund staff shortages and instruction in basic education elements proscribed in the Supreme Court’s decision. The task force would create a plan to fix the teacher shortage and teacher compensation problems for consideration by the 2017 legislative session.

“This keeps everybody at the table, keeps us moving in the right direction. It will get us to a solution,” said Sen. Christine Rolfes (D-Bainbridge), a work group member. “This proposal will hopefully say to the court that we are committed.”

Local special tax levies

“There is an adequacy issue and an equity issue” related to school districts’ special tax levies, said Sen. Chad Magendanz (R-Issaquah), another work group member. “This equity issue is complicated. The fact that we’re dependent right now on local levies that may or may not pass depending on where you live is a real problem.”

In the McCleary decision, the court found that local property tax levies have helped pay for basic education, including teacher compensation. To fulfill their constitutional duty, state lawmakers must fund schools using “regular and dependable tax sources.”

The bills proposed by the work group address the issue by requiring the legislature to eliminate school district dependency on local levies by the end of the 2017 legislative session.

Along with levies funding parts of basic education, a 2010 amendment to the Levy Lid Act expires in 2017.

The state legislature passed the 1977 Levy Lid Act following a decision by the state Supreme Court in the 1970s. The decision came from a lawsuit against the state by the Seattle school district following two levy failures. Levies in the 1970s comprised more than 30 percent of districts’ funding resources. The decision limited the levy rate and established that funding basic education with levies is unconstitutional.

In 2017, the levy lid will drop from 28 percent to 24 percent of districts’ state and federal revenues, resulting in a “levy cliff” for levies used for maintenance and operation of schools.

One solution, proposed by Senate Republicans in Senate Bill 6109 last year, is a “levy swap.” A levy swap would lower the levy tax rates in districts with lower tax bases and increase the levy tax rates in districts with higher tax bases. This results in areas with higher property values paying more for education than areas with lower valued property. Currently, it is easier for areas with higher property values to fund education levies than areas with lesser values. The bill did not pass during the 2015 session, but was reintroduced for the 2016 session.

The Washington Policy Center, an independent nonprofit think tank, determined the state Supreme Court does not require a levy swap to address the state education problems. The center also found the levy swap would reduce local funding along with the state property tax for schools.

Spanjer said most school districts, including Blaine, are operating under the assumption that the state will either find a solution by 2017 or extend the deadline for reducing the levy lid. If it doesn’t, “It would be pretty dramatic,” Spanjer said. “Our annual operating budget is around $25 million, so if there were a 4 percent drop in the levy lid we would be looking at a funding reduction of about $1 million. We would have to compensate for that through program reductions. We don’t consider that to be acceptable.”

Educational opportunity gap

Part of the McCleary case requires the state to provide all eligible students – no matter their finances, race, location or ability – a basic education.

Senate Bill 6192 and House Bill 1541, under consideration this session, would reduce the educational opportunity gap by increasing cultural competency of educators and classified staff such as bus drivers, retaining more school staff of color and limiting disciplinary actions.

The actions proposed in the bills are based on recommendations from the Educational Opportunity Gap Oversight and Accountability Committee, created by law in 2009. The committee creates annual reports for legislators and the governor.

“These objectives make an effort to ensure that education is equal access for all kids, and I believe they are quality objectives that will have a positive impact in reducing the opportunity gaps,” Spanjer said. “We’re a relatively small district, and our program offerings are available to all our students, but looking at the big picture I suspect that these bills will increase equity.”

Inslee addresses teacher compensation in his supplemental 2015-17 budget, but state superintendent of public instruction Randy Dorn says it is an inadequate response to fully fund education as mandated by the Supreme Court’s McCleary decision.

“This budget makes local school districts more dependent on local levies,” Dorn told the Senate Ways and Means Committee January 11. “It would be the opposite of what the McCleary mandate requires.”

The state currently faces a teacher shortage and under the Supreme Court’s McCleary mandate, must pay for all basic education teacher compensation. Some districts are paying teachers using local property tax levy funds, which the court says is an unreliable means of funding basic education.

Inslee’s plan would increase compensation for starting teachers with a bachelor’s degree and give all others at least a 1 percent increase in pay.

The plan would also fund the Beginning Educator Support Team mentor program. The program began in 2013 to support teacher-mentorship programs with grants to school districts. The Office of the Superintendent of Public Instruction administers the grants.

Legislators would need to eliminate or modify four tax exemptions to pay the $83 million price tag for the governor’s teacher-compensation proposal. Dorn believes it would cost $173 million to fully implement the governor’s proposal.

“Our state currently relies on local districts to shoulder a large portion of teachers’ salaries,” Dorn said in a statement. “He digs a deeper financial hole for districts because they will have to make up the difference.”

Under Washington’s constitution it is the state’s “paramount duty” to provide “education for all children residing within its borders.”

Dorn walked out of the governor’s state-of-the-state address January 12. He is not running for re-election this year.

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