School Board Reviews Legislature’s McCleary “Solution”

— by Margie Doyle ––

Orcas Island School District board members, from left: Janet Brownell, Scott Lancaster, Chris Sutton and Tony Ghazel, ponder the impacts of the new education bill in response to the McCleary decision.

Dan Steele, Assistant Executive Director of the Washington Association of School Administrators (WASA) gave a review of the State’s laws, EHB 2242, passed this year in an effort to comply with the 2012 decision McCleary v. State of Washington to “amply” fund public education, identified in our state constitution as the “paramount duty of the state.”

“It is the paramount duty of the state to make ample provision for the education of all children residing within its borders, without distinction or preference on account of race, color, caste, or sex.” Article IX, Section 1 Washington State Constitution

This bill affects 295 school districts statewide, and was passed in the 147-seat State Legislature, to take effect in 2018. It also impacts all state taxpayers as its most notable provision may be the increase in State Property Taxes to fund public education; an increase to $2.79 /$1,000 of assessed valuation.

Engrossed House Bill 2242, passed in 2017 states its purpose is to “realize the promise” of the reforms embodied in ESHB 2261 in 2009 and Senate House Bill 2776 in 2010:

• revise and increase State salary allocations for education staff
• revise State and local education funding contributions
• increase transparency and accountability of education funding

The full school board — Janet Brownell, Tony Ghazel, Scott Lancaster, Chris Sutton and Greg White —  attended the opening session of their all-day retreat, as did Superintendent Eric Webb, incoming school board member Diane Boerstler, and OISD Administrative staff: Cathy Ferran, Keith Whitaker, Kyle Freeman and Becky Bell.

Steele’s presentation was peppered with questions from the board and his disclaimers:

There is “no clarity,” he said, on STEM salary increases which affect union bargaining and teachers’ TRI dates

The administrator salary allocation formulae (“Districts may expend local revenue on [administrators’] salaries, however, the proportion of administrator salaries that are attributable to enrichment program cannot exceed the proportion of salary that local revenue represents as a percent of other revenues”) is “complex and convoluted” and subject to revision, as legislators respond to the formulae interpretations saying ‘That’s not what we meant,'”

“Regionalization enhancements” to the allocations will be based on the single-family residential values of each school district and districts within 15 miles (excluding Puget Sound/Salish Sea waters). Enhancement will be calculated at 6, 12 or 18 percent (with additional adjustments in the Operating Budget to be calculated by the legislatures. Of the 295 state districts, 93 districts are impacted by the regionalization factor; 27 district have enhanced allocations based on “regionalization.” Steele said a snapshot of examples of regionalization “Illustrates the arbitrary nature” of the process, which is meant to account for housing costs and cost of living within specific districts. Orcas Island has enhanced allocation of 12 percent from 2018-19 to 2022-23.

A new grid (model) for salary allocation must be formulated by the Office of the Superintendent of Public Instruction (OSPI) by Dec. 1, 2017, but individual school districts will not be required to use that model. Thus, it is possible that different districts will submit different models of their salary allocation models, combining experience and level of education in setting salaries for their district.

Regarding the property tax increase, Steele said that while our state is ramping up in revenues, legislators are saying the first priority in disbursing “excess” revenue is in decreasing the state property tax. However, since taxpayers don’t vote on property tax increases or decreases, but do vote on levies, Steele predicted that “In 2018, we’ll see levy [proposal] losses across the state.”

Local revenues are further restricted in that, beginning Sept. 1, 2019, local revenues may only be used for “documented and demonstrated enrichment of the State’s statutory program of basic education.” Enrichment program expenditures are defined as those “which provide a supplement beyond State:

• minimum instructional offerings;
• staffing ratios or program components of basic education (including additional staff); or
• professional learning allocations.”

Further, beginning in Fall 2018, Enrichment Levy plans must be submitted to the Office of the State Superintendent of Education and approved before local levies can be placed on local ballots. This reflects the “trust issue” of the state legislature regarding public education, Steele said, while asserting that school districts are already subjected to extensive reporting and auditing.

Additionally, local revenues, such as contributions from the Orcas Island Education Fund (OIEF), must be deposited in a separate “sub-fund” of the district’s General Fund, rather than ear-marked for specific programs, such as the Debate Club or the Theater as Literature classes funded in recent years. Districts must also track expenditures from this sub-fund separately “to account for the expenditure of each stream of revenue by source.”

Superintendent Webb asked that Steele provide him with the written communication that he had received from T.J. Kelly, Director of School Appointment & Financial Services, regarding guidance around the new Enrichment Levies. Superintendent Webb stated that he would follow up with T.J. Kelly this next week to discuss the new language and regulations around Levies and how it might impact Orcas Island.

Legislators claim, “‘We’ve fully funded basic education so [districts can] use enrichment funding for whatever you want — including basic education’ — that’s the debate,” said Steele. “The whole issue of enrichment has not yet been answered.”

Outgoing School Board member Tony Ghazel said, “Our issues here is: can we pay for additional staffing from levy money? Our culture is to provide more staffing than we’re ‘supposed’ to have. If we can’t use levy resources for basic education, that’s the core value of the bill.”

Board members and staff said that they get different answers from everyone they talk to, and Steele said that of the 147 legislators, there were “about 10 people who really understand this;” only OSPI can provide some clarity and that OSPI Director Chris Reykdal has been told that districts need rules, memos and bulletins to clarify the 120-page bill.

But wait, there’s more.

In the interests of transparency, beginning in 2018, districts must develop four-year budget plans, including enrollment projections and estimates of funding necessary to maintain current program levels and supplemental contract obligations. “This will be very complex for most districts, and indicates more oversight by the state auditor’s office,” said Steele.

Health benefits for employees will be removed from local bargaining beginning Jan. 1, 2020. All health benefits will be provided through a new School Employees’ Benefits Board (SEBB), established  Sept. 2017. School districts must provide HCA with specified data by Jan. 1, 2018 to support initial procurement of SEBB plans.

And the McCleary decision is still being adjudicated; the State Supreme Court will hear oral arguments on Oct. 24 from the State and the plaintiff, Network for Excellence in Washington Schools (NEWS), the statewide coalition of 440 community groups, civil rights organizations, school districts and education associations “fighting for full and ample funding of K-12 education.”

While the State claims in its compliance report to McCleary that it has complied with its obligation to “make ample provision for the education of all children residing within the State” and “the Court should find find the State in compliance [that obligation} and release the State from its contempt orders and terminate this appeal.”

The respondent NEWS says in part, that while the State’s 2017-2019 budget makes progress, “it doesn’t achieve the full constitutional compliance long ago ordered in this case.” NEWS concludes that the Court should issue a firm enforcement order to assure compliance with the ample funding for basic education provided in the state Constitution.

Steele said the Basic Education Reform Act of 1993 has been the standard for the last 25 years. “We’ll be talking about this [new act] for the next 10-15 years because it’s our new world.”

Outgoing School Board member Chris Sutton said, “I remember in the 70s when my dad was on the School Board and we were having these discussions. How many generations are we continuing to underfund as we fart around with this?”

(For further information from WASA, go to:  https://wasa-oly.org/wasa/WASA/Government_Relations/Current_Issues/)