By Carol Sutton and Tom Baldwin
In the Feb. 14 edition, we wrote to alert Orcas Islanders of the unintended consequences coming from passage of HB 2242. That brief report necessarily skipped details required to understand the problem. We will attempt to provide more detailed information here.
Funding of public education in Washington is complicated and is based on a “prototypical model” which endeavors to place all schools and communities on a level playing field. Unfortunately, OISD is vastly different from most, so the prototypical model does not work for us.
We will focus on the General Fund, as it covers all operating costs. General Fund dollars can be used to support other funds, but dollars in other accounts, such as the Capital Fund, which receives funding from the sale of bonds, can be used only for the purpose of that account (construction in the case of the Capital Fund). Revenue for the General Fund comes from State apportionment funds, the Maintenance & Operations (M&O) levy (property taxes), federal and other grants, and donations. The annual General Fund budget is approximately $10 million.
Under current law, the M&O levy provides $2.1 million and is calculated based on a millage rate of approximately $0.98 per $1,000 assessed value. HB 2242 reduces the levy cap in 2019 to $1,057,500, capping the millage rate at approximately $0.48, depending on changes in assessed value. The result is that for the 2018-19 school year, the General Fund Budget will be reduced by approximately $600,000, while for the 2019-20 year, the General Fund budget will see a reduction of over $1 million. This is because HB 2242 was designed to reduce dependence on local property tax levies to pay the cost of K12 education.
How are these dollars resulting from the reduction in the levy to be replaced? In part, this is accomplished by changes in teacher salary allocations. Currently, the state allocates $36,521 per teacher. Then, based on what is called the staff mix factor (based on educational and experience levels of the teachers), that number is multiplied by 1.58 for Orcas Island, because we have well-educated and highly experienced teachers. The result ($36,521 x 1.58) yields $57,703 for the average salary for each teacher generated by the “prototypical model”, mentioned above. Based on that model, OISD should have 24 teachers, but in fact the district employs 28 teachers to cover the basic education for our resident students. The difference has in the past been covered by the M&O levy. HB 2242 requires that education and experience no longer be considered in determining teacher salaries. Rather, salaries are to be determined by local property values. You might think, since San Juan County has the highest property values in the state, that Orcas Island would come out pretty well in that calculation, but rather than consider San Juan County as a single district, HB 2242 lumps us together with Skagit Valley and surrounding areas, which brings the average property values down significantly, resulting in a greatly reduced correction factor. Even though salaries under HB 2242 are increased to $59,334, our correction factor was decreased to 1.12, resulting in a new average salary of $66,454, or an increase of $8,751 for each of the 24 allocated teacher positions, an increase in funding of approximately $210,000, only about 1/5 of what is needed to replace the HB 2242required -reduction in funding from the M&O levy. In addition, HB 2242 allows increases in a number of fringe benefit categories NOT covered by the state.
As of this writing, the Senate has passed SB 6362, and if that bill passes in the House, Orcas will probably be okay. If not, the loss of funds from the M&O levy will require OISD to make some very difficult decisions that will probably have a negative impact on our kids.