The evening of Dec. 13, JoLynn Berge, Seattle Public Schools’ assistant superintendent for business and finance, stood in front of an audience of district parents, staff and students in Ballard High School’s library.
“How many of you have heard of McCleary?” she asked. Several audience members raised their hands. “OK, how many of you know we have a state education budget issue?”
Again, more hands.
“Now, how many of you think you’re experts on education?” Berge asked before letting out a chuckle. “Because I could really use you up here with me.”
Most years, mid-December is when school district staff finish the budget for the next school year. But for school year 2017-2018, staff have delayed that process a month to organize three public hearings for a potential eight-figure deficit.
Seattle Public Schools Superintendent Larry Nyland wrote district families Dec. 1 to inform them the district faces a $74 million budget deficit next school year.
The shortfall could potentially lead to the cut of hundreds of jobs, and the school district is currently working on a “worst-case scenario” budget for 2017-2018, to be released Jan. 11. The district is inviting public input on the creation of this potential budget from Dec. 5 to Jan. 4.
In delivering the news, Nyland didn’t mince words, repeatedly stating that the Washington State Legislature had “failed” to fund education.
“This potential deficit is the result of two key failures by the Legislature,” Nyland wrote. “First, the Legislature has restricted how much we can collect from our already approved local education levies. Second, the Legislature has not fully funded education as they are constitutionally required to do.”
Nyland’s second point refers to the decision in the 2012 State Supreme Court case “McCleary v. State of Washington,” in which the court determined the Legislature had violated the state constitution by failing to fully fund basic education. The state pays 70 cents of every dollar constitutionally owed to Seattle Public Schools, Nyland said. Districts have been required to make up the difference with local property tax levies. Statewide, this means wealthier communities have been better able to fund education, poorer communities less so — and both at the mercy of their voting base.
The court gave the Legislature until 2018 to come up with a solution, with consequences unclear beyond the current $100,000-per-day fine lobbied against the state for being in contempt of court.
Which comes back to Nyland’s first point. 2018 is the same year that Washington state school districts will hit what some have referred to as the “levy cliff.”
Under the Levy Lid Act, originally passed in 1978 in response to another State Supreme Court case on school funding constitutionality, school districts are restricted in the amount of money they can raise from local tax dollars.
At the time of the Act’s passage, that limit was 10 percent of state and federal revenues. But, with repeated amendments to the law, that amount creeped up to 24 percent.
In 2009, the Legislature passed an amendment temporarily raising the lid to 28 percent of revenues until 2018. (Seattle Public Schools’ lid is actually about 10 percent higher than that, Berge noted, but will be lowered with every other district’s when the cliff hits).
Now, if the Legislature doesn’t fully fund basic education or amend the law again, $30 million of the $100 million provided by Seattle’s taxpayers will become off-limits to the school district.
This is where Nyland’s rhetoric about the levy cliff gets complicated: The Seattle School Board has already been presented with potential reductions for the more than $30 million that could be lost to the levy cliff. That leaves $44 million, an amount that translates to 440 jobs, Nyland said.
“Half of the dollars of this deficit are based on local decisions of the district,” state Sen. Reuven Carlyle said at the Dec. 13 meeting.
Carlyle said he and other Seattle lawmakers intended to do everything they could to address the state’s obligation to fund basic education in the 2017 legislative session, but his outlook was cautious. The Legislature’s last attempt to extend the deadline on the levy cliff failed in the Republican-controlled state Senate, and Carlyle said it was possible the Senate would do it again in the next session.
“We live in a time of divided government,” he said.
If the Legislature does pull through, either on a cliff extension or a solution to education funding, the timing could still be problematic for the school district. District staff need to have their proposed budget by spring; The Legislature’s regular session doesn’t end until mid-summer.
“If their session runs late and we don’t know until June 30 what’s going to happen, that’s going to be very disruptive to us,” Berge said.
District staff have already taken a chunk out of the remaining $44 million in the potential deficit, reducing jobs and increasing class sizes.
Approximately $11.5 million in cuts remain.
“Closing the $74 million gap will be the most difficult challenge we’ve faced in decades,” Nyland said.
Seattle Public Schools held a second budget hearing on Dec. 15 at South Shore PreK-8 School, after press time. A third will be held Jan. 3 at Franklin High School.