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Save schools from the levy cliff

Sun., Jan. 22, 2017

If Lewis Carroll were alive today, he could write “Alice in McClearyland.” The protagonist (representing school districts) would navigate a surreal landscape with impossible-to-pin-down characters. Rather than fall down a rabbit hole, Alice would inch closer to the dreaded levy cliff.

“Levy cliff” is the term used to describe the plunge in funding that would take place if the limit on how much local districts can ask from taxpayers is returned to its previous level. In 2010, the Legislature was struggling to plug a budget hole during a recession. Lawmakers knew the state needed to supply more education funding, but they didn’t want to raise taxes. So they allowed school districts to exceed their local taxing limit, if their voters agreed.

Before the levy lid was lifted, districts could raise up to 24 percent of the total they got from state and federal sources. From 2010 to now, this increased to 28 percent, but it was supposed to be temporary. Among other things, districts use this money to supplement teacher pay, which is a state responsibility.

In 2012, the state Supreme Court issued the McCleary ruling, saying the state was not meeting its education funding obligation. Moreover, the court said the state was relying too much on local levies to make up the difference.

Basic education funding has not been resolved, but the latest “lift” of the local levy lid expires next year. School districts will begin budgeting for 2018 in a matter of weeks. Should they plan on receiving the amount expected under the higher or lower limit? Can a basic education solution be reached before districts finish budgeting? Highly unlikely.

Some districts are planning two budgets – best-case and worst-case. Some, such as Spokane Public Schools, would tap reserves to avoid cuts. But this would be a one-time solution. If the limit is restored to 24 percent, SPS stands to lose $16 million to $17 million in local levy and levy equalization money, according to Linda McDermott, the district’s chief financial officer.

Many districts don’t have sufficient reserves, so they face the prospect of issuing layoff notices in the spring with the hope of rehiring people in late summer. The revenue loss across the state’s 295 school districts is estimated to be from $350 million to $500 million.

All of this disruption could have been avoided if the Legislature had finished basic education funding last spring. So this conundrum is no surprise.

Though we aren’t thrilled with another local-levy extension, it looks to be the most practical solution. Democratic legislators have introduced bills to do so.

Republicans are balking, because they say an extension will provide an excuse for lawmakers to delay basic education funding. Fair point, but it’s Republicans who have failed to produce a plan for negotiations. Democrats have already revealed theirs.

Local school districts shouldn’t pay the price for the failure of lawmakers to do their jobs in a timely manner. If it takes a one-year extension, so be it.

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