School districts in Clark County and across Washington are gearing up to build district budgets in a time of uncertainty fueled by the novel coronavirus pandemic and declining state revenues.
The highly anticipated release of next month’s budget forecast will likely spell bad news for the state budget, with initial projections showing a $7 billion hit to state revenues through 2023.
District officials aren’t anticipating major cuts in the 2020-2021 school year, but they say the increased costs of providing distance learning, coupled with declining revenues, could create gaps in the coming years.
“It may not be practical to put the brakes on for anything in 2021,” said Brett Blechschmidt, Vancouver Public Schools chief financial officer. “It’s the following years. (The Legislature) will be working on the full biennial budget, so that’s where we’ll start to see the lag effect catch up to us.”
Still, experts in the field aren’t optimistic about what the future holds for school funding. Rebecca Sibilia, CEO of school finance policy group EdBuild, said the nation’s schools face an unprecedented financial crisis in the coming years.
“We have a bottoming out of our state economies,” Sibilia said. “It’s going to continue to get worse. We’ve got a period of famine coming.”
Paramount duty
State funding for schools is enshrined in Washington’s constitution, which mandates that it is this state’s “paramount duty … to make ample provision for the education of all children residing within its borders.”
That provision was the foundation of the landmark McCleary lawsuit and subsequent Supreme Court order that the Legislature fully fund education after failing to do so for decades.
Current legislation protects about $26.1 billion in funding for basic education during the 2019-2020 biennium. Of that, $13.3 billion is allocated for the upcoming fiscal year beginning on July 1.
But area district officials worry that, in a funding crisis, the protections for that money could weaken.
“The Legislature can write what the definition of basic education is,” Evergreen Public Schools Superintendent Mike Merlino said.
Levy equalization
Also of concern is the money that isn’t constitutionally protected. About $497.7 million in this upcoming budget year is allocated toward schools for uses that are not considered basic education. That means it isn’t constitutionally protected, and legislators could cut those dollars at will.
In Clark County, school districts disproportionately rely on those dollars in the form of local effort assistance, or levy equalization funding. Districts like Vancouver and Evergreen have a lower property tax base than, for example, Seattle Public Schools. That means there’s less property to draw local tax levies from.
The state allocates additional funding to those so-called “property-poor” districts to make up for the gap. Vancouver Public Schools received $9 million in levy equalization dollars, about 2.6 percent of its $340.2 million in revenue. Evergreen received about $16.9 million in levy equalization, 4.4 percent of its $382.1 million in revenue.
The Seattle school district receives no levy equalization money.
It’s not unusual for areas like Clark County to disproportionately rely on state funding. EdBuild’s Sibilia said it’s often the country’s poorest districts that are most reliant on the state for revenue.
“(This pandemic) is going to expose a fundamental flaw that has always existed in our funding system,” Sibilia said. “The lowest-income areas are the most dependent on the most volatile revenues.”
Blechschmidt acknowledged those state dollars seem like a small portion of the district’s budget, but he noted that levy equalization funds can be used as districts see fit, as opposed to many other funding sources, which must be used on specific programs.
“We typically rely on it to meet emerging needs of our kids, evolving expectations of our community and unfunded mandates of the Legislature,” Blechschmidt said by email.
Growing costs
EdBuild’s Sibilia doesn’t like when people compare the novel coronavirus crisis to the 2008 Great Recession, which saw steep cuts to education budgets across the country. That recession didn’t come with the one-two punch of a pandemic: a hurting economy combined with the costs of preventing the spread of the virus.
“We’re going to be dealing with a school system that needs to be just as conscious as health implications as they are about educating kids in the classroom,” she said.
Area districts have already felt those costs, buying new computer equipment for students, personal protective equipment for staff and proposed programs to help students recover from missing out on classroom time. Costs could be covered by federal funding, but Blechschmidt said that money is likely to be consumed as districts gear up to reopen campuses.
“It’s going to be expensive, and it’s going to be complicated,” he said. “Unless we have a miraculous return to normality, no one is going to be happy.”
