K-12 funding and taxes: how much is enough?

K-12 funding and taxes: how much is enough?
Billions of dollars have been pumped into basic education since the 2013-15 biennium. Now some education advocates say the current system is still inadequate. Photo: freepik.com

Even though the state legislature has poured billions into the K-12 education system since the 2013-15 biennium following a 2012 State Supreme Court  , advocacy groups for school officials argue that it’s still not enough.

Those groups, including the Washington Association School Administrations (WASA) and Washington Association of School Business Officials are now expected to send recommendations to a state tax structure work group for either new taxes or replacements for the current revenue system – one of which could be eliminating the supermajority requirement to pass a local school bond.

Washington’s K-12 system is funded primarily through the state property tax. The tax represents 9.4 percent of the state’s general fund revenue, and a third of the tax’s money goes toward education. Washington’s constitution states that it is a “paramount duty” to provide a basic education for all students. Additional spending or “enrichments” and school facilities are funded through local levies. However, in 2012 the State Supreme Court ruled in its McCleary   that the legislature was failing to fully fund basic education by relying on local levies to fill those spending gaps.

In 2017, the legislature passed EHB 2242 which shifted the financial burden away from local-based property taxes to the statewide level by increasing the state property tax from $1.76 to $2.70 per $1,000 assessed value (AV); follow-up legislation was enacted in 2018 to lower the new rate by $.30 per AV. Property taxes in Washington must be the same rate throughout the state and no more than one percent of the total property value.

Although new basic education spending includes $1.47 billion (or double) the amount on special education since 2013-15, WASA Assistant Executive Director Dan Steele told the tax structure work group at its Oct. 9 meeting that local levies are still being used to cover portions of those programs.

Steele also argued that the legislature’s McCleary funding package “exacerbated” prior inequities among school districts. “We don’t think that the current budget structure in our state can fully fund the constitutional mandate…and at the same time (fund) the other remaining essential services.”

The state legislature in 2019 replaced maintenance and operations levies with “enrichment” levies capped at $1.50 per AV. However, education official advocates and others noted that some districts in rural or lower-income areas are unable to generate sufficient revenue from local property taxes. One of the issues raised prior to the legislature’s McCleary package was that districts with more people or higher property values could generate more revenue at a lower tax rate than more sparsely populated communities with lower housing prices.

In addition to levies approved by voters, qualifying districts can receive state funding from the Local Effort Assistance (LEA). While the Seattle School District has received no LEA funding in the past three years, West Valley School District in Spokane has received more than $2 million annually, while Aberdeen School District has received over $3 million annually.

In addition to restructuring the state’s education funding system, WASA favors lowering the required supermajority for a local school bond to a simple majority. That issue has become pertinent this year, with the defeat of five failed levies earlier this year and three on the November ballot.

One education official at the meeting described levies as a “relief valve” for school districts and the state. Those levies or bonds also pay for school capital projects.

“School facilities aren’t technically a basic education issue, but if kids are in falling buildings or they’re in buildings that are unsafe or unhealthy, that’s not going to be a good situation,” Steele said.

While Washington State PTA Legislative Director Nancy Chamberlain told work group members the “reliance on property taxes and voter confusion have led to increased failures of school construction and school enrichment levies,” others say it’s due to a lack of accountability within the system regarding how the money is invested.

“Parents no longer have confidence in the school system to effectively educate their children,” Washington Policy Center Education Director Liv Finne told Lens. She added that it’s “out of touch” for anyone to think the education system needs more money when spending is at all-time highs and most students are not physically attending schools. She also noted that in some districts the property tax has doubled in three years.

“The public cannot afford any more taxes,” she said.

Speaking on behalf of the Washington State Association of County Assessors, Thurston County Assessor Steven Drew said at the meeting that “the consequence of the (property) tax going up with property value is that there’s much more stress among the voters. They connect the taxes they’re paying and the growth in taxes to the increase in property values.”

Like Steele, Chamberlain said the current funding system requires changes, calling it “confusing to taxpayers, inequitable, and regressive. We would argue that it is not adequate either.”

However, Drew told the work group that property tax revenue has been unaffected by the economic shutdown in response to the COVID-19 pandemic. “The stability in property tax is what I really want you to focus on. Perhaps the best way to look at the overall tax solution is the way you might look at stability and investment.”

He added that despite any flaws, the property tax has “enough balance so whatever the volatility is, you don’t suffer a deep loss.”

While the various groups offer guidelines on any new revenue sources, no tax recommendations were made at the meeting. However, work group members including Co-Chair Keith Wagoner (R-39) urged them to do so. “If you’re waiting for policy to come forward…you’re going to find that the policy you’re waiting for never comes.”

A preliminary report from the work group is due to the state legislature by the end of December.

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