School finance is one of the most important things we do on behalf of our students. Our first priority is to provide quality education to every student in the Meridian School District. Many of you are aware the last couple of years the Washington State Legislature has changed our financial landscape, creating a challenging puzzle for us to ensure the levels of support desired by our community and needs of our students are met.

For decades, districts have had to rely on local levies to fund programs, staffing, extracurricular activities and safety measures the state has not funded. At the highest point, districts collected up to 28% in local taxes to augment state funding shortfalls. There have been several lawsuits and multiple legislative attempts to address the lack of funding, accountability, class size, compensation, curriculum, support for special populations, vocational programs, transportation needs and more. Most recently, the court case initiated to address state-level school funding shortfalls, the McCleary lawsuit, spurred several changes. Unfortunately, very little of the McCleary decision proved to be equitable, affecting each district differently. To better understand where we are going, we need to examine Meridian School District’s recent funding history.

In 2015, the Meridian community authorized a replacement educational program and operations, or EP&O, levy. At that time, the EP&O levy accounted for 22% of the overall Meridian School District budget. Levies approved in one year authorize collections (of local property taxes) to begin the following calendar year, for a duration up to four years. MSD School Board Resolution 14-15 contained these provisions:

2016 Replacement Educational Maintenance and Operations Levy

Collection Year Estimated Levy Rate per $1000 Assessed Value Approved Levy Amounts
2016 $4.13 {Actual $3.84} $4,150,000
2017 $4.18 {Actual $3.77} $4,200,000
2018 $4.20 {Actual $3.62} $4,225,000
2019 $4.23 {Actual $1.50, Mandated by WA Legislature} $4,250,000 {Actual Collected $1,994,000}

Since the levy rates were estimated at the time of the elections, actual levy rates were adjusted based on the assessed value of the property at the time of collections (April and October of each year), resulting in lower levy rates than what voters authorized in 2015. Actual levied values are shown in brackets above for 2016-2018. The levy value for 2019 is a whole other story.

As a result of the McCleary lawsuit, the Washington State Supreme Court determined the State had not been meeting its constitutional obligation to fully fund basic education. To resolve the McCleary decision, the Legislature created a plan referred to as the “levy swap,” where they introduced a new state education tax and limited the amount available to school districts through local levies – resulting in less local control. This decision, timing, and rate of this new tax was outside the control of school districts. As a result of this “levy swap,” education-related taxes went up in 2018, the transition year. The “new” state tax (State Schools Tax Part 2) was implemented before our authorized levy had been adjusted downward.

The 2019 levy rate was then capped at the much lower rate of $1.50 per $1000 of assessed property value or $1500 per student, resulting in a decrease in overall school-related taxes. While providing tax relief, this plan significantly reduced the ability of many school districts in Washington State to fully fund their obligations to students. For us at Meridian, the new, lower rate resulted in a funding level of $1,994,000 for 2019 – less than half of the $4,250,000 levy funding approved by Meridian voters in the 2015 levy proposition, where the rate was $4.23 per $1000 of assessed value.

Meridian School District has been an excellent steward of funding and operates within our revenue stream. At the heart of this puzzle is the inequitable nature of school funding by the state. We recognized the difficulty the “levy swap” was going to cause last fall. In order to ensure we were protected for the 2019 short-fall, we proactively went into survival mode and cut $800,000 from our 2018-19 budget by holding on hiring, trimming utility expenses, holding on replacing vehicles, and cutting building and department budgets, both in 2018 and 2019. We worked with our unions to ensure our agreements were both sustainable and competitive with our comparable districts so our employees were secure in their positions. We did not signal lay-offs or program cuts this spring because we stuck to our plan.

Many districts issued lay-off notices this spring as they could not balance their budgets without some other funding mechanism. Several large districts lobbied for relief from the Washington State Legislature. Rather than seek methods to address special education funding shortfalls, the new higher-cost health care plan, a delay K3 class size implementation, update the funding model and unfunded training requirements, the Legislature changed the landscape again, raising the levy cap to $2.50 per $1000 of assessed value or $2500 per student. This type of relief impacts smaller, property-poor districts differently than larger, property-rich districts – putting more of the burden on local communities.

District expenditures continue to increase. Our local levy funding today accounts for approximately 13% of our total budget. Our plan last fall helped position us to withstand the shortfall we will experience the first half of this year but was nothing we would have chosen for our students and staff to endure. Given the previously approved levy rate of $4.23 per $1000 of assessed value, the school board approved the 2019-20 budget is at the new levy rate of $2.50 per $1000 of assessed value or $2500 per student. This is lower than the levy rate in 2018 (and every year prior), and significantly lower than the $4.23 levy rate approved by voters in 2015 for 2019.

We will be able to meet the K3 class size initiative requirements and provide additional support for early childhood classrooms, add an additional counselor to Irene Reither Elementary, and an additional nurse to support the health and well-being of our students in the district – to name a few of the very important areas we have needed to address. We are committed to protecting the long term health and well-being of our students. School funding is directly related to this obligation. Thank you for your past and continued support of our students and their education.