Voters' demand: Lower class sizes; school districts' dilemma: Paying for it

OLYMPIA-School districts around Washington are priming their fiscal pumps in the coming weeks, asking local constituents to support special maintenance and operations tax propositions to maintain current programs, as well as bond measures to support facilities development and transportation needs.

Meanwhile, at the state Capitol, lawmakers have yet to come to grips in the early days of the 2015 legislative session with education financing plans to meet the state Supreme Court's mandate that they must fully fund basic education as defined in the state constitution.

Legislators and Gov. Jay Inslee agree that 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 terms the court has set for basic education funding.

Local school districts are holding levy and bond elections in February so they are able to maintain current operating levels while the Legislature continues to struggle with its role and responsibility to support basic-education programs.

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 adds 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 they would need to fund $1.3 billion with local levy dollars through school year 2018-2019 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.

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

In the 2012 McCleary case, the state Supreme Court ruled that the state was in violation of the constitution because of its reliance on local levies and federal funds to fund basic education, rather than direct state-financing programs. The court reaffirmed that it was the Legislature's responsibility to define what basic education would look like in terms of dollar amounts and programs, but concluded legislators had not done that job.

In the 2009-11 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 court case that was filed in 2007.

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 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."

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 still falls short of the $4.7 billion needed to fund I-1351.

"They're not funding (Initiative) 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."

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

"I believe in the end you have to look at some kind of levy exchange to pay for it," Dorn said. "I don't think you will have enough money to pay for all of I-1351, but you can do all day K (kindergarten), 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 Appropriation Committee Chairman Rep. Ross Hunter, D-Medina, in the past has also proposed a revenue-neutral levy swap, where the state takes a greater share of local school tax levies, 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 says a levy swap, where you change out local money for state money, is not effective because it doesn't add any new revenue.

"It makes people crazy because its 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.

A major area of concern raised by I-1351 hinges on the state's funding of teacher salaries. The initiative falls short in adequately funding 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 that the state did not provide adequate teacher salaries and needed to bring salaries to the market rate that 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.

Alice Day is a student reporter for the Washington Newspaper Publisher's Association's Olympia News Bureau. She is senior at the University of Washington pursing degrees in journalism and political science.

The WNPA staffs its Olympia bureau with two UW journalism majors during each legislative session.