Any intelligent fool can make things bigger and more complex... It takes a touch of genius - and a lot of courage to move in the opposite direction.
-- Albert Einstein
Ever since the State Supreme Court’s initial ruling in the McCleary case, the 2,000-pound gorilla related to any solution was the degree to which many school districts had used local levy funds to supplement salaries. Within that context it’s worth noting that our legislators created the legal framework within which the increase in locally-funded salaries occurred. And the school districts that provided these local enhancements only did so to offer the market rate salaries needed to attract and retain a qualified teaching force.
Table 34b in OSPI’s 2017-18 Preliminary School District Personnel Summary Reports provides a good reference for the current level of this locally-funded salary for Certificated Instructional Staff (i.e., teachers). According to that data, the statewide average of these local salary contributions in 2017-18 is nearly 27% of total salaries, at a total cost of more than $1 billion. Over 72% of that amount is provided by the 56 districts that provide over 25% of salaries with local funds. The districts with the highest local contribution paid nearly half of total teacher salaries with levy funds.
In their McCleary ruling the Court said the State needed to fully fund the cost of basic education, including salaries. Therefore, any solution would need to unwind this well-established practice of local supplements to the state salary allocation. That solution began with HB 2242 in the 2017 legislative session and was refined with the passage of SB 6362 in March. While the fixes in those bills may appear to be a complicated Rube Goldberg creation, we should not lose sight of how challenging it can be to solve complex problems through the legislative process.
With that in mind, it appears that this part of the Legislature’s McCleary solution could correct much of this over-reliance on local dollars to teachers’ salaries. It does so through what appears to be an illogical set of rules. First, in 2018–19 districts must pay first-year teachers a minimum of $40,760, and $44,836 for those with five years of experience. That base salary represents an 11.6% increase over the current year. The complexity is created by a second rule that school districts cannot negotiate a 2018–19 contract that increases average total salary, including supplemental contracts, above 3.1%.
A logical question is how you can provide the mandated increase 11.6%, and yet not increase average total salaries by more than 3.1%. For districts with significant local salary funding, that could be achieved by rolling much of it into the new state salary allocation. That approach would result in a smaller total salary increase. The statutory language that permits these local supplemental salaries specifies it is pay for additional time, responsibility, or incentive (TRI). Over the years, many districts have provided a significant portion of TRI pay to all staff, without requiring any additional time or responsibility. For the purpose of this article, I will refer to that type of supplemental pay as universal TRI because all teachers in a district receive it.
While interpretations of these new laws vary, most authorities seem to agree that under the provisions of HB 2242 and SB 6362, universal TRI will no longer be allowed beginning in 2018-19. Any locally funded salary will have to be for specified individual time and/or responsibilities. The other reality is that beginning in 2019, most districts will experience a significant reduction in the local levy revenue which they use to fund TRI pay. Based on OSPI data, that loss is nearly 40% statewide and totals $1.13 billion in 2019-20. The loss for some districts is significantly higher. Given those two factors, districts with substantial amounts of universal TRI will likely seek to absorb as much of that local pay as possible into the increased state-funded salary amounts.
While that approach may work for some districts, over half of the districts contribute 10% or less of their teachers’ total compensation from local funding. These districts probably don’t have enough universal TRI to stay under the 3.1% cap. Fortunately, the SB 6362 includes an exception that if a district’s average salary is less than the statewide average, they are permitted to exceed the 3.1% cap. OSPI recently announced that the statewide average teacher salary is $71,711. While few if any of these districts could afford to pay that high of an average salary, this exception will provide flexibility in creating a new salary schedule that meets the required starting salary while living within the state allocation.
It should also be noted that even though districts with a high percentage of TRI pay can theoretically stay within the cap by moving their universal TRI into the state-funded salaries, they need to bargain that approach with their local teachers’ association. In case anyone thought that would be easy, the Washington Education Association’s (WEA), position as stated in their Our Voice Political Action blog will quickly dismiss that thought. In a recent blog post, “Time to Negotiate Big Pay Raises For All,” the WEA states:
That's right – double-digit pay raises are possible for all of Washington's K-12 public school employees. But only if WEA members get active and involved in local contract negotiations and fight for the fair pay we all deserve.
While they don’t address the 3.1% cap on total salary increases in the article, our understanding is WEA feels the cap is eliminated by the exception that allows teachers to make experience and/or training steps on their salary schedule. Time will tell whether that interpretation holds up, but either way, it appears that school districts will face an aggressive round of bargaining with their teachers. That will occur as a historic new funding system is rolled out. Districts leaders will have no experience with that system to help guide their decisions during negotiations. In the face of such uncertainty, they will likely take a conservative approach before making any long-term financial commitments.
All of this adds up to what could be one of the most contentious bargaining seasons in recent memory. At a minimum, all 295 school districts will need to implement a new teacher salary schedule. To do so, each district will need to find a workable balance point between the constraints of reduced local funding and new state restrictions while meeting the heightened salary expectations of their teachers.
Wouldn’t it be ironic if in the midst of rolling out billions more in state K-12 funding, we see strikes or near-strikes in a record number of school districts? Such a development would be very confusing to the public, many of whom received a sizable property tax increase to help fund this McCleary plan.
Those who promise by the cart-load generally pay by the spadeful.
-- James Lendall Basford
The recent mass school shooting incident in Parkland, Florida has once again sparked public debates about the best way to avoid similar tragedies in the future. Much of that debate has predictably focused on broad policy discussions such as arming teachers, banning the purchase of assault rifles, or strengthening the requirements for purchasing weapons.
In the meantime, school leaders across the state and the nation are working with the resources at hand to strengthen safety for their students and staff. In Washington, an important part of those resources are the school security, health, and mental health staff that are part of the state allocation through the prototypical funding model. Unfortunately, much of the state funding for those functions is woefully inadequate. A deeper review of the state’s allocation model will highlight that concern.
Last year during the legislative debates that culminated in HB 2242, there was considerable criticism of the prototypical school funding model because of its perceived lack of transparency. The irony of that perspective is that it is the most transparent and research-based school funding model the state has ever implemented. The problem is that is has never been fully funded.
The prototypical model came out of the 2005 Washington Learns study implemented by Governor Gregoire. A major component of the study, was a set of research-based recommendations provided in 2006 by Picus and Odden who are national experts on school funding systems. They have named their approach the prototypical model because it’s based on all the supports needed in a typical elementary, middle and high school. Their approach is particularly well-suited in Washington where our State Supreme Court has twice ordered the State to fully fund the actual cost of educating all students.
The Washington Learns Final Report was issued in November of 2006. While they failed to agree on any specific funding model, in 2007 the Legislature followed up by creating the Joint Task Force on Basic Education Finance (JTFBEF) to continue that work. The recommendations provided in their 2009 Final Report largely followed the recommendations of Picus and Odden, including the use of the prototypical model. The work of the JTFBEF culminated in the passage of HB 2261 in 2009. The intent portion of the final bill report for that legislation included the following statement:
For practical and educational reasons, major changes in the program and funding cannot occur instantaneously. The Legislature intends to develop a realistic implementation strategy and establish a formal structure for monitoring the implementation of an evolving Program of Basic Education and the financing necessary to support it. The Legislature intends that the redefined Program of Basic Education and funding be fully implemented by 2018.
In other words, HB 2261 provided very little new funding. It merely restructured existing staffing allocations, moving from three staff funding categories (instructional, administrative, and classified), into the numerous categories set forth in the prototypical model. It also put in place several advisory committees to make recommendations intended to bring our school funding system in line with the stated intent by 2018. The Quality Education Council (QEC) was established in HB 2261 to make recommendations about the final 2018 values within the prototypical model. Those recommendations were provided to the Legislature in 2010, but the legislature still has not implemented many of the QEC proposals.
The values in Table 1 show these developments through the lens of the Counselor, Health and Social Services, and Student and Staff Security allocations. While this is a very small subset of the overall prototypical model, these are the type of staff who could make a positive impact on school safety.
It’s interesting to track the progression from the 2009 JTFBEF proposals to the 2017-18 allocation. The Counselor category is somewhat above the 2009 recommended value, but well below what the QEC's recommended 2018 levels. Funding within the Health and Social Services category is nowhere near either the 2009 JTFBEF or the 2010 QEC recommendations and it is totally inadequate. The Middle School allocation, for example would provide 48 minutes of nursing services per day for a school of 432 students. In light of this formula, it’s worth noting that the National Association of School Nurses recommends a minimum of one full-time nurse per 750 students, and up to one for every 125 students for student populations with complex healthcare needs.
In light of the increasingly frequent school shooting events, the allocation for Student and Staff Security is the most troubling of the three categories in Table 1. In 2009 the JTFBEF proposed one security staff person for each school. Given recent events, that certainly seems reasonable. That proposed level was watered down somewhat by the QEC recommendation, but current allocations are nowhere near either proposal. What are schools supposed to do with security staff for an hour per day per school? Are they to hope that if a shooting incident occurs it happens during that hour?
In addition to being research-based, another advantage of the prototypical model is the transparency it provides in comparing state allocations to actual needs. Our State Office of Superintendent of Public Instruction (OSPI) provides a good tool to track the state allocation as compared to how districts actually staff within each category. The 2015-16 Actuals columns in Table 1 are based on the most recent of those reports. In the Student and Staff Security category, the state funded 189 staff in that year while school districts funded an additional 372 at a local cost of nearly $18 million. The local investment in all three of these staffing categories was nearly $26 million. Overall, including all of the prototypical model staffing categories, in 2015-16 school districts funded nearly 7,700 staff above the state allocation at a cost of over $700 million.
Given the significant reduction in local levy funds that was part of HB 2242, district funding for all of these locally-funded positions is in jeopardy. And despite all of the headlines about billions of dollars in new funding provided by that legislation, nearly all of it was earmarked for other purposes. So, before our Legislature comes up with new ways of enhancing school security, perhaps they should consider keeping the commitments they made in 2009 to fully fund, at a minimum, the health and safety elements of the prototypical model.
It may be said with a degree of assurance that not everything that meets
the eye is as it appears.
-- Rod Serling
In my last article I focused on the provisions of EHB 2242 that eliminated the Staff Mix Formula. With this article I will analyze the provisions in Section 501 of that bill, which limit the use of local funds for “enrichment.” There is probably no aspect of this legislation that is more consistently misstated and misunderstood than the permitted use of local funds.
A recent Seattle Times editorial, titled School-levy confusion, stated:
The Legislature decided that, as of 2019, local school levies will be for “enrichment” only. That is, for expenses not included in basic education, such as athletics and extracurricular activities.
The editorial went on to say that only one of the school levies on the February ballot in King and Snohomish Counties wasn’t “asking voters for local money to support basic education services like special education.” Based on our reading of the bill, the Times editorial staff have misunderstood how EHB 2242 defined basic education and how it limited the use of local funds. What’s troubling is that this misunderstanding was widely distributed as fact within days of these critical levy elections.
Most of the bill language regarding the permitted use of local funding is found in Section 501 of EHB 2242. The supplemental salary restrictions are found in Section 103. For the purposes of this article I will focus on the non-salary restrictions identified in Section 501, which begins with the following statement:
BASIC EDUCATION ACT AMENDED TO LIMIT USE OF SCHOOL DISTRICT LOCAL REVENUES TO ENRICHMENT ONLY. (1)(a) Beginning September 1, 2019, school districts may use local revenues only for documented and demonstrated enrichment of the state's statutory program of basic education as authorized in subsection (2) of this section.
This language seems consistent with the perspective that the legislation significantly restricts a school districts’ use of local revenues. In subsection (2), however, one finds the actual restrictions put in place by the legislation. Interpreting that subsection is complicated by its liberal use of RCW references. To help understand the meaning of that language, I’ve provided a cross-walk summarizing the content of the RCW’s referenced in each of the subsections.
Implication: The key phrase is “Enrichment activities are permitted…if they provide supplementation beyond the state.” What follows in (i) – (iv) are the permitted areas for such enrichment. Subsection (i) indicates that enrichment dollars may be used to fund additional time for an extended school day or school year beyond the 1027 hours per year required in 28A.150.220. That requirement equals 5.7 hours a day for 180 days.
Implication: Subsection (ii) states that enrichment funds may be used to supplement any of the individual funding formulas that are part of the prototypical allocation model. For example, state funding supports an average high school class size of 28.7. According to this language, school districts that want a smaller class size are permitted to use local funds to hire additional high school teachers, even though the work assignment of those locally-funded teachers would be the same as teachers hired with the state basic education allocation.
Implication: This is the key phrase: “The instructional program of basic education shall be considered fully funded by those amounts of dollars appropriated.” So, state funding levels determine where the line is between state funding and permitted local enhancement. In other words, according to EHB 2242, basic education represents a demarcation in funding responsibility, not the specific functions provided with those dollars. That statement along with subsection (2)(a), means school districts can provide local “enrichment” beyond the state funding levels for any basic education element, including special education.
Implication: Districts are permitted to use local funds to pay the costs of professional learning time beyond what is funded by the state.
Based on this review of bill language, the provisions of EHB 2242 Section 501 are not nearly as restrictive as many, including the Times editorial staff, seem to think they are. With this bill, the Legislature has continued to define basic education as those specific K-12 program funding levels provided by the state, and Section 501(2)(a) authorizes school districts to supplement beyond those levels with local enrichment levies. It is worth noting Section 501(4) states: “The superintendent of public instruction must adopt rules to implement this section.” No such rules have yet been created, and in their absence each school leader must determine on their own what restrictions, if any, are created for local funding by Section 501.
In the midst of this confusing aftermath of EHB 2242, the upcoming levy elections are absolutely critical for sustaining current district programs. According to the most recent OSPI data, in the 2015-16 school year, school districts across the state used local funds to hire 2,242 Certificated Instructional Staff and 3,572 Classified Instructional Staff above state staffing allocations. Other than a slight enhancement in K-3 staffing levels, nothing in EHB 2242 will provide state dollars to fund those locally-added positions.
Even with the permissive language cited above, this legislation has significantly reduced how much school districts can raise through local levies. In order to maintain existing staffing levels and other programs currently funded by local levies, school districts across the state seek to maximize the amount of levy funding allowed under this new law. They do this to sustain vital learning supports for the children they serve. As with any levy election, each local community will determine if that support is warranted, but they will hopefully do so with the best information available.
Subsequent to posting this article, I learned from a school district fiscal officer that there were two errors included in my calculations. The first was the use of Table 19 in the OSPI Personnel Report. That data is just limited to certificate teachers. I should have used Table 34B, which includes all certificated instructional staff. The second error was not accounting for the grandfathered, higher salary allocation which is currently received by twelve school districts. Those higher amounts were removed in my subsequent analysis, so the data only reflects the change from an allocation based on the staff mix formula to one based on a statewide average allocation. Those corrections have been made in the original article below. They do little to change the big picture I addressed, but they make more significant differences for some of the individual school districts highlighted in the article. I apologize for any confusion caused by these errors.
One of the great mistakes is to judge policies and programs by
their intentions rather than their results.
- Milton Friedman
As we enter 2018, a few things seem clear regarding recent changes to Washington’s school funding system. First, based on the Court’s November 15 order, the McCleary lawsuit has ended in all areas except the timing of the state’s increased salary allocations. Second, the lawsuit has resulted in significant increases in the state’s funding of basic education. Even with those increases, however, most school districts will see a big reduction in the discretionary funds available to sustain existing priorities. And finally, EHB 2242 has many flaws that will likely increase, rather than decrease, the funding inequities between school districts across the state.
My first superintendent position began in 1996, and in that role, I became very familiar with the state’s education funding system. Much of that system came about as a result of the 1977 Doran Decision and subsequent State Supreme Court decision that confirmed the lower court ruling. As a new superintendent working through the budgeting process, I quickly became aware of a positive and a negative aspect of the funding system created by the Legislature in response to the Doran Decision.
The negative, and totally inexplicable part of the formula, was the amount each school district received for administrative and classified staff salaries. Those allocations for 2000-01 are provided in LEAP Document 2. In that table, the district with the highest allocation for administrative staff received $69,384. While that likely wouldn’t have covered most district’s administrative costs at the time, it was much closer than the $28,467 received by the lowest funded district. The classified staff allocations exhibited similar disparity with $29,947 at the high end, and $19,795 at the low end.
The most frustrating thing about this formula is that no rationale could be provided for the differences. The formula was merely an artifact of the rush with which the new funding system was created by the Legislature in the wake of the Doran Decision. The only explanation is that it was originally based on district staffing reports from the late 70s. Everyone seemed to agree that it was a mistake, but steps weren’t taken to address it until some three decades later; and while the differences are now smaller, they are still reflected in the current year allocations. Given the Legislature’s apparent inability to fix this obvious problem over the past four decades, one can’t help but wonder if they’ll do any better with the problems created in EHB 2242.
The positive aspect of the funding formula, I discovered as a new superintendent, was the teacher salary allocation which was based on each school district’s average teacher placement on the state salary schedule. This system was put in place following the Doran Decision to meet the Court’s directive that the state fund the actual cost of providing basic education. Given that genesis of the system, it is very ironic that the current Court accepted its elimination in EHB 2242.
That salary allocation formula was based on two schedules developed by the Legislative Evaluation & Accountability Program Committee (LEAP). The salary schedule is referred to as the Table of Total Base Salaries and is found in LEAP Document 1, which is displayed in Figure 1 below. The structure of this salary schedule has been relatively unchanged for four decades except for the increases provided by COLAs.
The staff mix formula is based on the Table of Staff Mix Factors, also found in LEAP Document 1 and shown below in Figure 2. That table expresses as a numerical factor the differences in salary amounts for each cell of the state salary schedule, with 1.00000 representing the starting cell, and 1.88482 the highest salary level in that grid.
By averaging this mix factor for all the teachers in a school district, a number is derived that represents the district’s average teacher placement on the state salary schedule. That is the district’s mix factor which is multiplied by the salary amount in the first cell (BA + 0 Years of Service) to calculate the salary amount provided to the district for each allocated teacher.
According to the OSPI 2016-17 Personnel Report, Table 34B, the highest funded district that year had a staff mix of 1.88482 with an allocation of $67,288 per full time equivalent (FTE) teacher. The lowest funded district had a staff mix of 1.04753 with an allocation of $37,397 per FTE. While it may appear that this system incorporates similar inequity as found in the administrative and classified allocations referenced previously, there is a purpose for these differences. They reflect the differences in the actual amount needed to cover each district’s costs based on their teachers’ placement on the state salary schedule.
In EHB 2242, the Legislature did away with the state salary schedule and teacher salary allocations based on the staff mix formula. That system was replaced by a statewide average salary allocation. One ramification of that change is that each school district will be forced to create their own salary schedule. That will throw all 295 school districts into a chaotic bargaining process during the coming year. The most negative impact, though, is that the state’s teacher salary allocation for a majority of districts won’t cover the cost of paying their teachers' salaries.
For districts like Lake Washington, with a relatively low 2016-17 staff mix of 1.44126, that’s not such a challenging task. Their low mix factor that year created an allocation of $51,371 per FTE compared with the state average of $54,757. That difference is due to the fact that their teachers are relatively early in their career compared with the state average. As the state’s average allocation moves to $64,000 in 2019-20, the district will receive an increase per staff person of significantly more than the state average increase of about $10,000.
On the other hand, a district like Everett with a staff mix of 1.59140 has a more tenured teaching staff. As a result, their 2016-17 teacher salary allocation was $55,911 (with grandfathered amount removed) and was well above the state average. So, they are scheduled to receive an increase in 2019-20 that is significantly less than the $10,000 state average increase. As a result, Everett will find it very difficult to fund their salary costs with an allocation based on the statewide average.
The table in Figure 3 shows the range of this difference for thirty-four school districts that represent a cross-section of the state. The amount shown in Column C is what their total 2018-19 teacher allocation would be if the state’s $64,000 average allocation were adjusted based on the 2106-17 staff mix data. Column D shows the total allocation based on a straight $64,000 average allocation. Columns E and F show the total difference and the difference per teacher FTE. Based on this analysis, there are 166 districts that lose and 129 that gain with this change in the allocation formula.
The more senior teaching staff in the losing districts have a reasonable expectation to have their salary increased by the same proportion that the state average increased. To meet that expectation, the leaders of those districts will have very limited options: a) use levy funds which were cut significantly by EHB 2242, b) divert other parts of the state allocation to cover salaries, or c) implement staff reductions. None of these options are what the leaders of those districts anticipated when our State Supreme Court ordered the state to amply fund the actual district cost of providing basic education.
It should be noted that for some districts, these salary allocation shortfalls will be offset by another change, additional funds provided through a regionalization factor. That factor is intended to address the higher cost of housing in some districts. While that added funding might help districts who lose out with an average salary allocation, only 93 school districts receive that additional funding.
Beyond the challenges faced by these districts who lose out in the new allocation system, this change also creates many negative consequences. For the first time in decades, there will be a perverse incentive for districts to hire younger, or less highly educated (e.g., less expensive) staff. That will also make it more difficult for experienced teachers to move from one district to another. And the lack of a consistent statewide schedule for base salaries could create even wider variability in what teachers with similar training and experience are paid from one district to another.
There are other inequities embedded within the details of EHB 2242 that I intend to highlight in upcoming articles. My question, as I highlight these issues, is whether legislators will have any inclination to address the unintended negative consequences of a bill that was drafted behind closed doors and rushed to a vote with no public input or scrutiny. If not, our schools will likely be forced to live with these problems for decades to come, as was the case following the Doran Decision. Only time will tell how long these problems will undermine the amply-funded, general, and uniform system of public schools required by our state constitution.
“For what you see and hear depends a good deal on where you are standing: it also depends on what sort of person you are.”
― C.S. Lewis
Since the passage of Engrossed House Bill 2242 there has been a bewildering range of reactions. Soon after the bill passed, Senator Jon Braun, one of the prime architects of the plan, stated, “Students from every community in our state will now have the same opportunity and support as their peers in high-performing schools. We’re solving a generational problem facing our students and taxpayers, with a generational solution.”
Governor Jay Inslee was similarly enthusiastic in his signing statement for the bill, “This is a historic budget that I believe fully funds our schools for the first time in decades and will meet our constitutional obligations.” State Superintendent Chris Reykdal offered similar support, stating “Our perspective at OSPI is I think the Legislature met their objective.” These initial positive reactions may have softened in the weeks after those statements as more information about the impacts have become known.
Most of that impact knowledge emerged as school districts began raising serious concerns about the damage done to their current programs by the new funding plan. One of the more pointed comments in that regard was provided in the Tacoma School District statement:
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 would have a better financial future if the Legislature had not made any changes in the funding formula for education.
Clearly there is a wide difference of opinion regarding the impact of EHB 2242 and whether it represents the ample funding ordered by our State Supreme Court in the McCleary decision. A deeper dive into the numbers may help shed light on this difference of opinion.
The first issue to clarify about EHB 2242 is that it used a “levy swap” as a major part of the funding mechanism. The state property tax was increased to generate additional state revenue for schools, but the local levies were reduced to help minimize impacts on taxpayers. As a result of that swap, the heralded $7.3 billion in new funding over four years only provides $4.5 billion of net new school funding.
That four-year loss of local funding is what is causing many school districts significant budget challenges. In essence, the state took away $3 billion of the flexible funds school districts have used to offset shortfalls in various aspects of state funding. That flexible money was replaced with dedicated allocations that can only be used for specified programs.
Increases were provided for Bilingual, Highly Capable, Learning Assistance, and Special Education. While the students who are served by those programs will benefit from this new funding, it cannot be used to offset the loss of levy funds. And even though it’s been stated that EHB 2242 “fully funds our schools,” there are still many programs such as Special Education, MSOC, and transportation that remain woefully underfunded for many districts. Based on OSPI’s data for 2015-16, school districts spent over $524 million in local funding on those programs. They also hired 2,243 certificated and 3,572 classified staff above the state allocation at a locally funded cost of over $465 million.
It is worth noting that the future comparisons in this article are based on local levy authorizations before the levy cliff occurred, which lowered the levy lid from 28% to 24% of revenue. Some would argue the 24% level should be used as the basis of comparison because that reduction was the law prior to the passage of EHB 2242. While that might make sense from a legalistic perspective, it makes no sense for school districts who assumed the a McCleary solution would improve the funding they received in 2016-17. It’s pretty clear the Court had that expectation as well.
The increased allocation for salaries is the main element of new funding that could help offset the loss of local levy funds. If districts have used their levies to enhance state salary allocations in the past, and if the district can bargain with their local education association that the local contribution is now absorbed within the state salary allocation, the levy dollars that are saved could be used to continue paying for the other levy-funded obligations. Those are some pretty big “ifs” that will play out differently in each school district.
With those limitations in mind, it would be good to explore how school districts’ new salary funding compares with their loss of levy capacity. Since 2019-20 is the first full school year implementing the new funding plan, it provides the best frame for analyzing these impacts and is the basis for the data below. At a statewide level there is an increase of $1.87 billion in salary allocations, which more than offsets the loss of $1.17 billion in local funds that year (levy plus local effort assistance). While this math appears to work at a statewide level, it begins to look much different through the lens of local school district impacts.
Given Tacoma School District’s forceful statement, it would be good to see how they fare in this regard.
So even if Tacoma were successful in bargaining that the new state salary money should offset previous local salary enhancements, the math still doesn’t work for them. This appears to support the alarms Tacoma has sounded that the new funding plan would require cuts to their existing programs.
This type of comparison yields widely different results depending on the district. Lake Washington, for example, appears to be a big winner with this aspect of the new formula.
This kind of difference between district impacts appears to be inherent in the design of the new funding formula. The following list shows how neighboring districts fared with this same comparison in several different regions across the state.
It should be noted that EHB 2242 represents a very complex change in how school districts are funded. The analysis provided above relates to only one aspect of the new formula, the net loss of flexible, non-dedicated funding. Based on this analysis, however, it seems clear that many districts are harmed by the new formula and the disparity of impact between similar, neighboring school districts is especially troubling.
Since the levy swap concept was first introduced, we assumed that it would likely be part of any new school funding formula. We also recognized that such a change could have many negative, unintended consequences. That is why WASA's written testimony to the Education Funding Task Force in June of 2016 stated that any levy reductions “should only occur after the new state funding is fully integrated into school district operating costs.” The reason that kind of sequencing with the levy swap did not occur appears to be largely political, to make the net impact of the plan neutral for most tax payers.
While many have applauded the relatively tax-neutral aspect of the new funding plan, the Court did not order the State to create minimal tax impacts with its solution to the McCleary decision. It ordered the State to amply fund the program of basic education for every student in the state. Unfortunately, political considerations have undermined that constitutional imperative. Those considerations have also undercut Senator Braun’s pronouncement that “Students from every community in our state will now have the same opportunity and support as their peers in high-performing schools.” Given these deficiencies, it will be very interesting to see how the Court responds to this new funding plan.
“A great deal of intelligence can be invested in ignorance
when the need for illusion is deep.”
― Saul Bellow
The most common response to the Legislature’s June 30th McCleary plan seems to be, “Mission Accomplished.” That’s certainly the consistent message from our political leaders. Washington State Attorney General Bob Ferguson said as much this week when he filed a memo to the Court, asking for an end to McCleary. Wrote Ferguson, "it is time for this case to end."
To their credit, the legislature did reach a bipartisan agreement, which seemed like a tall order in the days leading up to their decision. And their funding plan promises some additional future investments in K-12 education. So, as we learned with the Iraq war, “Mission Accomplished” depends on how you define the mission.
Regardless of the opinions expressed by our political leaders, the state Supreme Court will ultimately decide if the legislative plan meets the constitutional mission laid out in their January 2012 McCleary ruling and subsequent orders. Their decision will likely come out somewhere along a continuum between the positions framed by the opposing views of the two parties named in the lawsuit:
Predicting where the Court will fall between those extremes is a difficult proposition at best. If the justices are looking for a way out, as some pundits suggest, the legislative plan may provide the cover they need to back out gracefully. If, on the other hand, the justices have grown weary of the Legislature’s procrastination and empty promises, they may take more forceful action. If the Court does in fact have the will to hold the Legislature accountable, the following three questions may be central to their deliberations:
1. Was the Timeline Met?
In their 2012 McCleary ruling, the Court took the State at its word that the reforms in ESHB 2261 would result in ample funding by 2018. To ensure compliance, however, the Court established 2018 as a firm implementation deadline. In their October 6, 2016 order, the Court provided the following clarification about that deadline:
We conclude, based on the relevant legislation, that the State has until September 1, 2018, to fully implement its program of basic education, and that the remaining details of that program, including funding sources and the necessary appropriations for the 2017-19 biennium, are to be in place by final adjournment of the 2017 legislative session.
In the announcements released after adopting their plan, the Legislature heralded the $7.25 billion in new funding it provides. Given the Court’s relatively recent statement about a firm September 1, 2018 deadline, it’s worth noting that the bulk of the funding, nearly three-fourths, is promised in the next biennium. Only $1.9 billion of that total amount is provided within the Court’s 2017-19 biennial budget deadline. If the justices are looking for a way out, missing the mark by two full years may not be a problem. Otherwise the justices may see this delay as further flagrant disregard for the Court’s rulings and act accordingly.
2. Is the Funding Ample?
The Legislature would have the Court believe that an additional $7.2 billion over four years meets the definition of ample. To buy that assertion, the Court would have to ignore the $6.9 billion annual gap between current funding levels and what the State testified in their initial McCleary defense that ESHB 2261 would provide when fully implemented.
Since the State testimony in multiple hearings has proven unreliable, the Court might choose to rely instead on legislative committee estimates of ample funding costs. The Joint Task Force on Education Funding, (JTFEF), was convened after the McCleary decision to determine the cost of complying with that ruling. In their Final Report of December 2012, the Joint Task Force provided the following estimate of costs with $4.48 billion called for in the 2017-19 biennium:
A few points are worth noting regarding that plan. First, one must keep in mind that these are legislative estimates, and if there’s one thing that’s well established in the legal record related to the McCleary trial, the Legislature has a decades-long history of underestimating those costs. Especially, when they know any basic education cost would ultimately need to be supported by revenue.
Also, by the end of the 2015-17 biennium the Legislature had already fallen behind these cost estimates by $1.4 billion. With that deficit added to the Legislature’s 2017-19 estimate, the new total allocation for the coming biennium should be over $5.88 billion. Clearly, their $1.9 billion investment falls well short of that amount.
Finally, these Joint Task Force estimates didn’t include any amount for fully funding teacher salaries. Those costs only became a legislative priority after subsequent orders made it clear the Court viewed them as an essential element of ample funding. According to Third Sector Intelligence (3Si), the consultant selected as part of E2SSB 6195, over $546 million of locally-funded salaries were paid in 2014 to state-allocated teachers. Adding that amount to the revised JTFEF cost estimate above, the total cost for the 2017-19 biennium comes to $6.43 billion.
So instead of $6.43 billion of new funding in the 2017-19 biennium, the Legislature provided $1.9 billion and called it ample. But the net amount of new funding is even lower because of the local revenue school districts will lose as part of the levy swap incorporated in the new plan. With that loss included, the net 2017-19 biennial increase totals $1.5 billion, or nearly $5 billion short of the Legislature’s own estimated costs for the biennium.
Another funding change within the Legislature’s new plan takes our schools farther away from a key premise of the ample funding called for in the McCleary decision. That principle is that the State must fully fund the full cost of providing the program of basic education. Judge Doran’s used the same principal in his school funding decision nearly four decades ago. The staff mix formula was one of the key funding mechanisms put in place after the Doran ruling to ensure the state funded school districts for the actual mix of teachers they hire. The staff mix formula and related state salary schedule were both eliminated by the Legislature in HB 2242.
In a recent Seattle Times editorial I wrote at some length about the importance of the staff mix formula within the McCleary context. Along with the statewide salary schedule, it created greater salary consistency across the State while also linking state salary allocations to a district’s actual average teacher placement on the state salary schedule.
This formula wasn’t identified as a problem by the Court, and by replacing it with a statewide average allocation, the Legislature has ensured actual salary costs won’t be covered for districts whose teachers are more experienced and highly trained than average. Just because the state salary schedule goes away doesn’t mean teachers at the upper end of that scale should or would accept a lower salary. Now with HB 2242 the State isn’t fully funding those added costs, negatively impacting roughly half of the districts in the State. The Court may well ask how that change meets their stated criteria of fully funding districts’ actual costs.
3. Does the State’s Definition of Basic Education Comply with the Court’s Ruling?
There are two interrelated issues at the core of the McCleary decision. The first relates to the State’s definition for the Program of Basic Education. The second is whether the State is amply funding the actual school district costs of providing that program to each student. Prior to the McCleary decision, the State maintained that Basic Education was defined by their allocation formulas. In the Court’s 2012 decision the justices chastised the State for that definition:
The State points to the Basic Education Act, which declared from its inception that “[b]asic education shall be considered to be fully funded by those amounts of dollars appropriated by the legislature pursuant to” the funding formulas… As the trial court found, this would mean that “full funding is whatever the Legislature says it is,” CP at 2805 (FF 180), thus allowing the State to maintain the appearance of fully funding the basic education program even though appropriations bear little resemblance to the actual level of resources needed to provide a “basic education.” We agree with the trial court’s conclusion that the legislature’s definition of full funding amounts to little more than a tautology. If the State’s funding formulas provide only a portion of what it actually costs a school to pay its teachers, get kids to school, and keep the lights on, then the legislature cannot maintain that it is fully funding basic education through its funding formulas. (pg. 60)
That statement represents a critical lens the Court may use in evaluating the State’s progress in addressing the ruling. Applying that lens to the description of enrichment activities permitted in Section 501 of HB 2242, it’s difficult to avoid the déjà vu feeling that nothing has changed.
The language in subsections (1) and (2) basically says local enrichment is allowed for anything beyond the state’s allocation for the prototypical model and the other statutory funding formulas which they define as basic education. Has anything changed in this legislative definition? They again seem to be saying the school funding formulas represent the State’s total basic education obligation, and school districts can enrich any part of that program with local funds. Salaries appear to be the only area with new local funding limitations, and it remains to be seen how much this new language will limit locally-bargained salary enhancements. Isn’t this the scenario that created the McCleary decision in the first place?
So, after years of litigation and countless additional time devoted to study and deliberation, do we just find ourselves back where we started, where the State can “maintain the appearance of fully funding basic education even though appropriations bear little resemblance to the actual level of resources needed”?
It’s now up to the Court to decide if HB 2242 is an appropriate, constitutionally valid response to the McCleary ruling. The justices must decide whether that plan represents mission accomplished, or merely the appearance of full funding. The future of public education in Washington State hangs in the balance.
The following editorial was originally published in The Seattle Times on June 11, 2017.
FIVE years after the state Supreme Court issued its ruling in the McCleary case, we face the 2018 deadline they established for ample school funding. In that decision, the court upheld all elements of the lower court’s ruling with one exception. The Superior Court ordered the Legislature to first determine the actual cost of basic education and then provide that funding. However, the Supreme Court didn’t feel more study was needed since the Basic Education Finance Task Force had conducted a thorough review leading in 2009 to a proposed new allocation model which was adopted by the Legislature.
Given this looming deadline, one might assume this legislative session would be all about providing funding for the new allocation model, but significant changes are being considered. One major change proposed by the House and Senate is elimination of the “Salary Allocation Model” or SAM, which has worked well for decades. That system has two key elements:
The state salary schedule includes two formats. One includes the salary for each cell in the grid, and the other provides a factor representing the numerical difference between each cell. A new teacher with a bachelor’s degree and no experience, for example, is assigned a factor of 1.000. An experienced teacher at the highest salary has a factor of 1.885. The state allocation system averages that factor for all teachers within a district to derive its staff-mix factor. The salary corresponding to that staff mix factor is multiplied by the number of allocated teachers to calculate the state’s salary payment to the district.
Elimination of the current SAM is widely opposed by the state’s educational leaders. In the short term, the change would create statewide bargaining chaos since the state salary schedule is part of most district’s collective bargaining agreements. The change would create even more significant long-term impacts. With our current system, hiring decisions are based on selecting the best possible candidate. If the allocation is based on a state average salary, hiring will be more driven by budget considerations.
In a May 28 Seattle Times’ news story [“In fight over Washington’s school funding, some want big change in who gets how much — but is it too late?”], staff reporter Neal Morton provided a great overview of the concerns that led to this proposed change, as well as the opposition to it. The primary criticism of the current model is a perception that it’s unfair to high poverty districts since they tend to receive a lower salary allocation than more affluent school districts. That difference reflects the recruitment and retention challenge in these districts resulting in staff lower on the salary scale. That’s an important problem for legislators to solve, but the solution shouldn’t be funded on the backs of other districts. That approach dismantles an important element of the current system that meets the court’s directive.
A core principle of the McCleary decision is that the state must fund districts for the actual cost of providing basic education. One only need look at the first-year implications of this proposed change to see a violation of that principle. By replacing the current SAM with a state average salary allocation, half of the districts in the state would lose funding — and for many, it would be a significant loss. That takes them farther from the state funding their actual costs.
As House and Senate negotiators work to iron out the differences in their plans, we encourage adherence to the adage, “If it ain’t broke, don’t fix it.” After all, the only thing the court is requiring is for the state to amply fund our schools. Most of the other proposed changes represent a distraction from that prime directive, and in the case of salary allocation, they do considerable harm.
The greater danger for most of us lies not in setting our aim too high
and falling short; but in setting our aim too low, and achieving our mark.
The budget game in Olympia has become very predictable in recent years. The governor releases a budget that represents the high bar in terms of total budget capacity. The Senate Republicans stake out the low end of the continuum with their proposal, and the House Democrats come in somewhere in the middle. That pattern has repeated itself this year, but with the added pressure of meeting our State Supreme Court-ordered deadline for a McCleary funding plan.
After the initial proposals are on the table, budget negotiators then work toward a compromise somewhere between the Senate and House proposals. The political process of negotiating toward the middle is part of what’s caused our current school funding crisis, so it doesn’t seem likely that it will address the Court’s ruling. That is due to the anti-tax sentiment that has been a primary driver for political decisions within our state for several decades.
That anti-tax sentiment has likely been created, or at least exacerbated, by our state’s upside-down tax structure. According to the 2015 report by the Institute on Taxation and Economic Policy, Washington has the most regressive tax system in the nation. As a national average, the top 1% of wage earners paid 5.4% of their income in taxes, compared with 2.4% in Washington. At the other end of the income continuum, the national rate among the bottom fifth was 10.9% compared with 16.8% in Washington.
Given this comparison with other states, the majority of Washington voters have a legitimate complaint about paying more than their fair share. But while that sentiment seems to be translated into a general anti-tax sentiment by many voters, the real problem is that our state’s affluent citizens pay much less than they would in most other states. This undercurrent of taxpayer frustration has resulted in countless initiatives and other steps to oppose new taxes, even taxes that would result in a fairer distribution of the tax burden in our state.
This anti-tax sentiment has also undermined the state’s ability to respond to the Court’s 1978 ruling which stated that our constitution required the state to fully fund basic education. While that ruling didn’t prohibit the use of local levy revenue by our schools, such funding was supposed to be for enhancements such as extracurricular activities. Since our constitution and that ruling made Washington fairly unique regarding the state’s burden to fully fund education, one might assume we would be at the top in the share of education funding provided by the state.
Yet, according to U.S. Census data, in 2014, 61% of our K-12 revenue was provided by the state. While that was enough for a 10th place position overall, its far short of the contribution provided by the states that contribute most. Vermont, the top state, provides 89% of school funding, and in number two, Hawaii contributes 87%. One might assume the gap between Washington and those states reflects a relative lack of capacity, but according to the U.S. Bureau of Economic Analysis, Washington ranked 12th in its 2015 per capita personal income, while Vermont was 19th and Hawaii 20th.
Viewed through a different lens, according to the U.S. Census data, Vermont devotes $53 for every $1,000 of personal income to support its public schools, which is the highest rate in the nation. Hawaii is third, spending $37.71 per $1,000. Washington, the state with two court rulings directing it to fully fund K-12 education, comes in at 16th with $23.66 per $1,000 of income supporting our schools. It appears from these comparisons that our problem is one of will rather than capacity.
Which brings us back to how Washington’s anti-tax sentiment has hamstrung efforts to comply with our Supreme Court rulings. That sentiment impacts every step of the budget development process. The governor’s proposal is tempered by a need to get re-elected, so even in setting the high budget bar s/he backs off from what ample school funding would require. The Republicans, who currently control the Senate, offer proposals that don’t violate their “no-new-taxes” ideology. The Democrats, who control the House, fear voter backlash that could jeopardize their majority and offer less than they know an ample system would require. So, the dealing down occurs with all three of the initial proposals.
Once the negotiations begin, the process of compromise drives the Democratic proposal toward the Republicans, which represents further downward pressure on funding for Washington’s students. The trend caused by this dealing down is quite striking. Figure 1 is based on data provided in the 2015 Digest of Education Statistics. In the 1969-70 school year, a decade before to the Supreme Court’s first ruling on education funding, Washington was 8th in the nation in its average expenditure per student. In the decades following the Doran decision, Washington’s education spending rank plummeted to a low of 31st in 2009-10. That is the year the year Superior Court Judge John Erlick first ruled against the state in the McCleary case.
Whether it’s a coincidence or not, the state’s funding trend has reversed since Washington’s courts involved themselves for a second time in this education funding issue. While it isn’t yet clear if the court pressure will result in an ample school funding system for our state, that step just represents the first phase of what will be a long process.
Unless the pressure from anti-tax forces in our state are reversed after the Court relinquishes jurisdiction in the McCleary case, it’s doubtful that we will avoid the kind of decline in relative support the state experienced after Judge Doran first found our funding system unconstitutional. The only way to address that voter frustration seems to be the creation of a much more equitable tax system for Washington’s citizens. Unfortunately, one of our state’s political parties and many of the most wealthy and influential citizens have a vested interest in preventing such change from occurring.
Reliance on levy funding to finance basic education was unconstitutional 30 years ago in Seattle School District, and it is unconstitutional now.
- McCleary Decision
One of the theories I studied as part of my graduate work was the notion of satisfycing, which was introduced by the economist Herbert Simon. The term combines the words satisfy and suffice and is based on the notion that humans often accept what’s good enough, rather than pushing for the optimal. The theory as we studied it was applied to school leadership. It suggested that leaders often do the minimal necessary to solve problems with expedient solutions rather than pushing for more ideal answers.
The same theory can certainly be applied to the public policy arena. It seems particularly well-suited to our state’s current struggle to meet the paramount duty and ample school funding provisions of the Washington State Constitution. Our state Supreme Court has ruled twice in the past four decades that our funding system doesn’t meet that constitutional standard. In their 2012 McCleary ruling and subsequent orders, the Court was quite specific about elements of the current system that were inconsistent with our constitution. Given those opinions, an optimal funding system that meets the constitutional standard laid out by the Court should be relatively easy to develop.
Almost by definition, though, the political process is designed for expediency rather than optimal results. That’s the reality with the kind of horse trading and intransient positions that often characterize political discourse. And that is what we’re currently witnessing in Olympia. In the past few months, three different proposals have been put forward to address the McCleary decision. It could be argued that none of the three fully addresses the elements of that decision. In terms of funding, the plan from the Governor sets the highest bar, the Senate plan represents the low end, and the House is somewhere in the middle. There is such a wide gap between the Senate and House plans that the only prediction one can make with any confidence is that at least one Special Session will be needed to reach an agreement.
One of the problems with this impasse is that educators tend to hold on tighter to what’s known when the post-McCleary future is so uncertain. The use of local levies is a good example of that dilemma. The Court was clear that it is the state’s responsibility to fully fund basic education and that there has been an over-reliance on local levies to backfill what the state had failed to adequately, much less amply fund. Most of the school leaders I know agree with that aspect of the ruling and are willing to let go of some levy capacity if the state provides ample funding for our schools. It’s difficult, though, for those leaders to trust a legislature whose actions over the years have demonstrated that our schools are not their paramount duty.
The biggest McCleary issue yet to be resolved, is how to unravel the complicated blending of local and state funding for basic education compensation. The position of the teachers’ association is that these local salary enhancements should continue even after the state provides full funding of salaries. The mental gymnastics required to promote that position in light of two State Supreme Court rulings is truly baffling, but it probably stems from a lack of confidence in our Legislature to create and then sustain the ample funding system ordered by the Court.
Next to salaries, the allocation of staffing is the other big issue left to tackle. In 2009, the Legislature adopted the prototypical school funding model as its definition of basic education. The model is a research-based approach that provides staffing allocations for all of the key positions required to run our schools. The problem with this model isn’t, as the Senate contends, a lack of transparency. The problem is that the Legislature has never funded the levels proposed by either the researchers who presented the model, or as recommended by their own Quality Education Council. As a result, most districts backfill the allocation with additional staff hired with local levy funds. The open questions related to such staffing is whether the state will more amply fund the model they adopted, and whether school districts will be allowed to continue funding any deficiencies in those allocations.
Language included in the levy cliff bill SB 5023, which the Governor signed on March 15, may provide some indication of how the Legislature intends to address this issue:
Enrichment beyond the state-provided funding in the omnibus appropriations act for the basic education program components under RCW 28A.150.260 is a permitted use of maintenance and operation levies. (p. 6)
RCW 28A.150.260 is the statute that specifies the funding levels for each component of the prototypical model. So, with the passage of SB 5023, the state is saying that basic education is defined as the allocation levels funded by the state. And, therefore, school districts are permitted to “enhance” those allocations with additional staff funded by local levies.
As one who is concerned about the Legislature’s ongoing commitment to ample school funding, I was somewhat relieved by the flexibility provided in this language. From the perspective of equity, however, this provision continues the problems that led to the McCleary decision. With significant local funding permitted, property rich school districts can offer their students better educational support than property poor districts can afford. As an example of that disparity, in 2016 Bellevue School District’s local levy raised $3,191 per student with a rate of $1.20 per $1,000 of property value. By comparison, even with levy equalization, Yakima raised only $2,008 per student at a local taxpayer cost of $3.10 per $1,000.
As with many aspects of the Legislative efforts to address the McCleary ruling, the unanswered question is how the Court will respond to this legislative position regarding basic education. The following language in their 2012 ruling would seem to indicate that the Court would be concerned about that definition:
We agree with the trial court’s conclusion that the legislature’s definition of full funding amounts to little more than a tautology. If the State’s funding formulas provide only a portion of what it actually costs a school to pay its teachers, get kids to school, and keep the lights on, then the legislature cannot maintain that it is fully funding basic education through its funding formulas. (p. 60)
As we talk with both legislators and school district leaders, it seems that many are becoming weary with the whole McCleary question. The danger inherent in that weariness is a satisfycing solution that may leave our schools with better funding in the near term, but with little long-term resolution of the State’s paramount duty to amply fund our schools. Even if the Legislature falls into that trap, the Court may well push it to more fully address the funding problems that have plagued Washington’s public schools for several decades. Or perhaps the Court grown weary of the discussion as well.
As we rapidly approach the Court’s McCleary resolution deadline, now is not the time for any of the parties involved to accept less than the best we can offer every student in Washington State.
Bill Keim was the Executive Director of the Washington Association of School Administrators from 2013 to 2018.