Funding K-12: solutions to help every child

WASHINGTON state is facing arguably the most challenging crunchtime in its history.

Supreme Court justices’ toe-tapping has become more insistent as they have held the state in contempt for failing to fully fund public education — even now, five years after the court ruled its funding system was unconstitutional.

Meanwhile, too many of the state’s 1.1 million students are languishing in an education system marked by inequity — inequitable funding between districts and even between schools in the same district — and in a system that might not meet the needs of students who are homeless, have special needs, are learning English, or are refugees recovering from trauma.

For decades, the Legislature has shirked its constitutional responsibility to amply fund education for all students. In the vacuum, local taxpayers have stepped up where they could to fill the gaps. The result is more funding in property-rich districts and less elsewhere.

The Legislature and the governor have the opportunity of a generation. Our state’s children need more than a fair and equitable school funding system. They need a system that improves graduation rates and sends more children to college with the background they need to succeed. The color of their skin or the neighborhood where they grow up should not determine their future career path.

The Seattle Times editorial board has examined proposals in the Legislature — which, in their extremes, really are negotiation positions. However, each has some promising ideas that could help our students. And that’s the point.

To be clear, McCleary is not only about money but ensuring the students who fall through the cracks are lifted up. As long as lawmakers focus on what’s best for students, the results will be an improvement.

The policy approach

Senate: The Senate Republican majority passed a bill with a new way of improving and paying for education. In the so-called student-centered approach, school districts get money based on the number of students, their economic status and their academic needs. The money flows in more like a block grant, still leaving most decisions up to local school officials. Local districts will continue to make their own decisions about teacher pay, but the Senate limits how much of state dollars can be spent through contract negotiations.

House: The Democratic majority in the House sticks to the prototypical school model, developed by lawmakers nearly a decade ago. This approach sets a minimum standard of staffing for each school, such as a certain number of nurses, teachers and school counselors. The House also puts money into specific programs designed to help struggling students, such as more tutoring. The House budget also sets aside additional money for school counselors and parent engagement coordinators, but does not put restrictions on staff contract negotiations.

Editorial board take: Five years after the landmark McCleary decision declared the state was failing schoolchildren, state lawmakers have two pretty good proposals that could be smooshed into one credible improvement plan.

Both would provide more money for basic education and try to eliminate the untenable inequity in student experiences across the state. But first, lawmakers need to find middle ground.

Leaders in both the Republican-controlled Senate and the Democratic-controlled House seek to push more money toward struggling kids and the schools they attend to pay for things that are known to improve student outcomes and close the achievement gap. Among them are tutoring for students who haven’t learned to read by the end of second grade, more academic counselors in public schools and people to help engage families in education.

But neither plan makes sure the money actually improves public education for kids with different needs. The Senate’s student-centered approach gives block grants to districts to supply more money for students with special needs, who are just learning English or who are homeless, for instance. The concern with that approach is that school boards might not spend the money as the Legislature intended and continue to keep the best-paid, most gifted teachers in the schools that are already thriving.

The House’s protypical school model has never been fully funded, so until lawmakers fully pay the cost, it’s unclear whether it will make a difference in students learning more, graduating in higher numbers and succeeding in college. The model should be enhanced to include more elements of the student-centered approach.

Here’s the kicker: The Supreme Court’s McCleary decision rests on the prototypical approach, so the Legislature must use that as a framework.

The Supreme Court’s McCleary decision also requires the state to end its overreliance on local levies to pay what is a state responsibility. Disappointingly, the House did not address the levy system in its proposal. That should not stand in the end.

Both approaches take a strong negotiating stance. The final agreement might not look anything like these proposals. The result should be a hybrid of the two, with more guardrails to ensure money is spent on improving outcomes and a nod to the Gov. Inslee’s ideas on social-emotional learning.

The costs

Senate: The Senate budget claims to add about $3.7 billion to the state budget for education in the next biennium, but it also cuts $2.4 billion from local school budgets because it eliminates the existing local levy system. Growth in student population, health insurance premiums and other necessary costs are expected to eat up more than a third of the rest of the new dollars. After taking a one-year break from new local levies, under the Senate proposal, school districts could ask the voters for limited new taxes to pay for things that are not basic education, such as extracurricular activities, so local school budgets could start to increase again after the first year of the new system.

House: The House budget adds $3 billion in new dollars to the state budget for education in the next biennium. The House puts another $900,000 in the budget for regular cost increases and student population growth. The House proposal does not touch local levies, so local taxpayers would continue to pay local property taxes to school districts, and public schools will see about $3 billion more in the next biennium. About 15 percent of the amount of money currently raised by local levies is spent on things that are not basic education.

Editorial board take: For years, the general consensus in Olympia has been that it would take more than $3 billion every two-year budget cycle to cover all the costs of educator salaries in the state budget. The Supreme Court has said the state relies too much on local levies.

How to pay for that investment in public schools has been the crux of the debate in the Legislature for five years.

On paper, the dollars in both of this year’s education budget plans look similar, nearly $4 billion for education from both the Senate and House leadership.

But the similarities disappear in the details.

The Republican-controlled Senate plan to replace local school levies with a flat statewide property tax for education effectively takes about $2.4 billion away from public schools, at least temporarily. The rest of the proposed increase in the education budget is mostly taken up by the regular costs of doing business, explain the policy experts at the League of Education Voters.

So while many of the Senate’s promising policy ideas are aimed at helping kids, its budget just moves dollars around instead of actually increasing the money going to Washington public schools.

The House proposal takes a much more ambitious approach, with a real $3 billion increase for education, by instituting a number of new taxes. The House still must work on how that money is spent and should cut most of the local levy capacity to make up for increases in other taxes.

Finding a compromise in the middle between two extremes is the best approach. In this case, the Legislature needs to add more money to the education budget, spend it in a way that enhances education for struggling kids, and make sure local school districts spend the dollars they are given to do just that.

Who pays

Senate: The Senate uses three basic sources to pay for its education budget increases. It proposes a flat property tax that would increase the amount paid by some districts and decrease property tax rates in other places. The increases, centered in the urban and suburban areas in and around Seattle, would generate about $1.5 billion. The rest of the money comes from higher than expected tax receipts and cuts to other programs, including preschool for the working poor.

House: The House uses more of a smorgasbord approach to new state dollars, including a new 7 percent capital gains tax that would bring in about $715 million in the next biennium from an estimated 48,000 people, an increase in the state business tax that would bring in more than $1 billion in the next biennium, a graduated real estate excise tax that would bring in more money from the sale of houses that cost more than $1 million and add $420 million to the state budget for the next biennium and a new online sales tax that would bring in about $341 million in the next two years.

Editorial board take: Deciding how much more to spend on schools is just the start. Lawmakers must also decide who will pay the additional billions.

There are enough options on the table for them to agree on a fair approach that diversifies revenue sources for schools, so they receive strong and sustained state funding.

The painful truth is that some will end up paying higher taxes. New revenue sources are also needed to minimize property-tax increase and diversify school funding.

Who bears this burden and by how much? A compromise blending elements of both House and Senate plans is the way forward.

The Republican-controlled Senate proposal acknowledges that property taxes paid to the state will be the foundation of school funding going forward. But its revenue falls short, and its new tax formula needs work.

Democrats controlling the House proposed a mix of new funding sources. But their plan fails to end reliance on local levies to pay for basic education, which is the heart of the McCleary ruling.

The House’s largest sources of new revenue are a capital-gains tax, affecting the rich; higher business and occupation taxes; and a new property tax formula. Also proposed are new, and frankly overdue, sales taxes on goods sold via the internet; higher excise taxes on sales of high-end properties and closure of a handful of smaller tax breaks.

No matter what, homeowners, renters and businesses will continue paying most of the education bill through property taxes. But much more of that will go to the state, and much less to school districts through local levies.

The Senate plan to shift school taxes from local districts to the state is essential but needs more work. It would collect more from people in urban areas like Bellevue and Seattle and less from most other areas. Proponents argue this is fair because their formula uses a flat rate, and people with higher house values would pay more, but the formula takes too much from urban property-tax payers.

The House’s new taxes would fall more heavily on the wealthy. House members argue that it’s more fair to have the richest 1 to 2 percent of residents pay a larger share than to overly increase taxes on middle-class homeowners.

A limited capital-gains tax is a reasonable, equitable way to share the burden. The internet sales proposal should add another leg to this stool.

As lawmakers work to end over-reliance on local school levies, they must pursue a truly fair formula. They should consider not just rates but whether formulas are equitable relative to what people can afford to pay.

State revenue is projected to increase with current taxes, but not enough to amply fund education without severely cutting other priorities.