Unintended consequences of good intentions | Part one

Unintended consequences of good intentions | Part one

by Carol Sutton and Tom Baldwin

Sometimes, the noblest of intentions can have devastating consequences. The case in point is HB 2242, the supposed fix to the McCleary Decision that was intended to (1) fully fund public K12 education in Washington, and (2) reduce dependence on local property taxes for public school funding. While HB 2242 may have achieved its goals for many school districts across the state, for Orcas Island School District, the new legislation promises debilitating cuts rather than the promised increases.

To help navigate the anticipated budget shortfall, OISD has formed a Budget Advisory Committee comprised of two to three members from each of several groups. Diane Boerstler and Greg White represent the school board; Eric Webb (Superintendent), Keith Whitaker (Chief Financial Officer) and Sara Morgan (Human Resources) the administration; Slyn Anderson (certificated employees) and Brian Wright (classified employees) the employees’ unions; and Carol Sutton and Tom Baldwin, the public.

The charge to the BAC was “…to improve transparency in the budgeting process and the annual budget.” We have met three times for a total of six hours. While much uncertainty remains, it is time to begin a dialogue with our friends and neighbors on Orcas Island about the difficulties that will arise if the state does not take corrective action.

HB 2242 results in numerous changes in property taxes and calculations of apportionment funding. To understand the impact without getting too deep into the details, it is useful to look at the effect on per student funding. The current (January) apportionment report shows the average Basic Education Allocation per resident Orcas student is about $7,500. Changes in how teacher salaries are calculated that will take effect in the 2018-19 school year would increase that to roughly $8,050 per student. However, there are also reductions to the maintenance and operations property tax levy that will result in a decrease of $1,600 per student in 2018-19. The per student decrease could become $2,700 (depending on various uncertainties) in the 2019-20 academic year, resulting in a reduction in per-student funding to only $5,350, a 30 percent reduction. It is clear that somehow the state has missed the mark with regard to education funding for the Orcas Island School District.

The state has reduced the M&O levy, voted on and approved by residents of Orcas, in order to satisfy the McCleary decision to reduce dependence on local property taxes to pay the cost of public education. Then, the State increased the property taxes that we pay directly to the state. Some of that increase will come back to the OISD, but not enough to make up for the decrease in the M&O levy, and it is that difference that causes the problem. To be sure, the levy that is being reduced is not the bond issue that was approved in November 2017. That bond was for the Capital Fund, and those dollars can be used only for construction.

The legislature is currently working on fixes to the unintended consequences in HB 2242, but it is unclear whether they have adequate time before the current session ends in early March. We will continue to monitor the situation, and do our best to keep you informed.