Orcas Island School District is taking a proactive approach toward answering questions related to the recent state budget changes that will fully fund education. Gov. Jay Inslee signed a two-year operating budget this on Friday, June 30 that addresses a court order for the state to fully fund basic education.

The new $43.7-billion budget was pushed through the Legislature by Washington lawmakers in less than a day to avoid a partial government shutdown that would have occurred at midnight on Friday. The budget increases spending for public schools, mental health and state worker contracts, but also raises statewide property taxes.

“This budget, at long last, meets our constitutional obligations to fully fund basic education, and addresses the responsibilities we have under the McCleary decision to equitably fund our schools,” Inslee said.

Spending on K–12 public schools will be increased by $1.8 billion in the next two years. The increases abides by the state supreme court’s 2012 court ruling, the McCleary Decision, which found the state was failing to fully fund the state’s school system.

Orcas Island School District is still waiting for the Office of Superintendent of Public Instruction to process the changes in the state budget and generate the revised F-203 application that will give it the official version of what revenue it will receive.

Local levy

The local maintenance and operations levy has been capped and will have an impact on our revenue immediately. Legislature chose to limit local levies to the lesser of $1.50 per $1,000 in millage rate, or $2,500 per student enrolled full-time. It is the latter that will be the limiting factor for the school district. Levies are calculated using prior year average enrollment. The school district has approximately 780 students which generate approximately $1.95 million, or about $150,000 less than the existing levy authority. In 2018, the difference between the approved levy and the new levy amount will be approximately $275,000.

This rule is not a gradual adjustment, but an immediate and permanent change.

The increase in salaries was lower than expected, at 2.3 percent, but was paired with no change in the prototypical formula that might have generated more staff units. The district is still allocated (and funded for) only 75 percent of the certificated staff needed, and less than half the classified staff that are required to run the district. The legislature also decided to stick with the Salary Allocation Module (SAM) for one more year. This leaves the district in the position of having more new spending required on salaries, than the new revenue will cover. Over the course of the next three school years, this loss could increase to as much as $300,000, even without local increases.

Another major impact is the elimination of the staff mix factor, which is being replaced by a regionalization factor. This does not work in OISD’s favor, as the staff mix factor, which has averaged over 1.50 in the district, serves as a direct multiplier of apportionment. For a base salary of $50,000, it has been apportioned $75,000. The regionalization factor will work the same way, but the district was set at only 12 percent, meaning that the same $50,000 base salary will only generate $56,000 in funding. The responsibility for closing this gap has been left to the individual districts and their negotiations with staff, with the abandonment of the state salary matrix in 2018-19.

There are also new limitations on levy use, along with a host of new accounting and reporting requirements for levy funds. This will have an impact, but not a directly financial one, since there won’t be enough of the levy to go around anyhow.

Long term concern about the ability to pass local levies – for example, new capital projects or technology levies – due to the sharp increase in the state’s education property tax, raise the specter of further reductions to general fund capacity, as those costs have to be reabsorbed.

The changes in the levy lid will increase our dependence on OASIS to provide funding to our other schools and will make it more difficult and expensive to reduce that enrollment. In addition to the demonstrated “excess” funding that OASIS provides, each full-time enrollee will now be tied to $2,500 in levy capacity.

For now, the district is waiting for OSPI to generate its application to estimate the exact impacts of these changes in the funding mechanism, but according to the district, it is clear that the legislature’s version of basic education translates into, “less than we are used to.”