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Published on Friday, July 7, 2017

Where to get more information on the McCleary education funding agreement

HB 2242 provided the majority of the framework for the McCleary fix that has been the primary issue of the 2017 session. While not directly impacting cities, this significant legislation has a number of provisions of interest. Under the court order, the state will provide a report on its funding progress after the special session ends, and the court will evaluate whether this solution meets the constitutional requirement for funding basic education.

Overall, the budget directed $7.3 billion in funding over four years from 2017-21 to education. Of that, approximately $4.1 billion is funded with a new state property tax levy, which in conjunction with the current state levy will increase the total levy by about $0.82 per thousand assessed value to a set rate of $2.70 per thousand assessed value. The rate is set at that amount for the next four years, and exempt from the one-percent property tax levy limit for those four years. Thereafter, both state levies will be subject to the one percent levy limit.

Following are some other key provisions:

Teacher compensation

Of the $7.3 billion funding over four years 2017-21, $6 billion is compensation-related. With this funding are a number of new statewide provisions for compensation:

  • New salary ranges for three categories of school employees with maximum amounts and defined adjustments by factors for regional differences and specialized or in demand categories such as special education. Salary ranges will be adjusted for inflation, limited to increases based on the implicit price deflator (IPD) instead of the consumer price index (CPI) beginning in 2020.
  • Additional hold harmless provisions for districts with salaries above the new ranges, with a phase down through 2023.
  • A new employee allocation for healthcare, based on the current rate for state employees in the public employees benefits board (PEBB). A new school employees benefit board (SEBB) is established within the PEBB to offer a single pooled health benefits to all school employees, and health benefits are removed from the scope of school employee collective bargaining.

Basic education funding formula

  • The funding formula for school district funding is adjusted to a new per student allocation, plus additional allocations for high poverty school instruction hours, special education, and a new learning assistance program funding.
  • I-1351, which provided for additional class size reductions beyond the K-3 changes already mandated by legislation in place before the McCleary decision, is redefined as staffing enrichments outside of the definition of basic education. A task force is established to review class size needs.

Changes to local levies

  • In addition to the state levy described above, new limitations are put in place for local levies to further limit future reliance on local levies for basic education services. Beginning in 2019, local levies are capped at $1.50 per thousand assessed value or $2,500 per pupil beginning in 2019.
  • Local levies must be approved by the Office of the Superintendent of Public Instruction (OSPI) to ensure they are for enrichment purposes and supplement basic education.

For more information, see the K-12 statewide summary or additional materials on the K-12 proposal on the LEAP budget page.

Categories: Budget & finance