Spokane Public Schools may seek new levy to ease budget woes

The Spokane Public Schools board of directors will hold a special meeting Wednesday night to consider sending a supplemental levy proposal to voters in April.

While the district hasn’t discussed how much money to seek, a supplemental levy of between $10 million and $15 million would raise property taxes enough to alleviate at least some of the district’s budget woes.

The district isn’t alone. This year, 21 school districts across the state have asked voters to approve bonds; 42 have sought capital project levies; and 145 have asked voters for more money through levies to pay for education programs and operations. One district sought extra money to pay for transportation. Some districts asked voters to pass bonds and levies.

The meeting will open with a presentation by the district’s financial team, which will review the current year’s budget and estimates for next year.

After the presentation, board members will discuss the possibility of a supplemental levy and “identify initial budget strategies,” according to the meeting agenda.

“We haven’t had a discussion as a board on the subject of a supplemental levy,” board president Jerrall Haynes said Tuesday.

“We’re going to discuss the overall pros and cons of running one,” Haynes said. “We also want to figure out how we can engage the community and meet our long-term priorities.

The meeting, which will begin at 5 p.m., is open to the public. No action is expected. At its next regular meeting on Feb. 26, however, the board could approve advancing a levy to voters.

If authorized by Spokane city voters, a supplemental levy would allow the district to increase the local levy tax rate to $2.50 per thousand dollars of assessed property value – the maximum tax rate allowed by law.

For Spokane property owners, that would mean an increase of 90 cents per thousand of assessed value – or $270 per year on a home valued at $300,000.

Collection of taxes generated by the supplemental levy would begin Jan. 1, 2021, and would provide additional revenue for the 2020-21 budget year “and help address the estimated budget gap” of about $20 million, according to the district.

Last summer, even as the district approved the current budget, it estimated that deficits would reach $13.1 million for the 2020-21 school year followed by a $34.3 million deficit for the 2021-22 school year.

Like many districts, Spokane is adjusting to limitations imposed by the state in the wake of the landmark McCleary court decision.

In summer 2018, the school board approved raising salaries for teachers and classified staff. A few months later, hoped-for relief from the Legislature didn’t materialize, and on April 12, Superintendent Shelley Redinger announced potential layoffs of 325 employees amid a projected budget deficit of $31 million for the 2019-20 school year.

“This is a difficult time for SPS, one that is playing out statewide following the unprecedented change to the mix of local and state funding,” Redinger said at the time.

As it turned out, only a handful of employees was laid off. However, hundreds were shifted and services were curtailed.

The district also saved about $2 million by shortening the elementary school day by 75 minutes every Friday. Reversing those cuts has been a topic of discussion since – most recently in a series of open houses with the public.

However, it’s unclear how much more aid will be forthcoming from this year’s legislative session.

Bills in the House and Senate would increase appropriations for special education programs, a major source of the district’s current budget shortfall. Other bills, if signed into law, may aid comprehensive school counseling programs.

Regardless of further aid from Olympia, “A sustainable budget and fiscal stability are key priorities of the school district,” the district said in a statement this week.

“Due to the financial emergency declared by the school district in 2019-20, the district has carefully reviewed maintenance level spending and the estimated resources needed to lift the contract workload suspension as well as restore other programs and services cut this year.”

Locally, they’ve met with mixed success.

Earlier this month, Central Valley narrowly passed a one-year, $11.8 million levy, as did two levies at East Valley. Last fall, Cheney and West Valley passed levies. But a $14.6 million levy in Mead was overwhelmingly rejected.

According to Haynes, part of Wednesday’s discussion will be a recap of other districts’ experience – “the outcomes of those, and trying to figure out why they turned out the way they did,” Haynes said.

The district briefly considered a supplemental levy last summer. If approved last November, it might have restored some of the programs and personnel lost in the cuts.

Passage would have allowed the district to use its fund balance to tide it over until the end of 2019, then apply the levy funds to the 2020 portion of the school year.

Ultimately, the board declined to pursue the levy.

“We have to make sure we make payroll. Our budget is so tight, we need to financially make sure that we don’t put ourselves at risk of not being able to pay people,” Redinger said at the time.