The Washington Supreme Court ruled unanimously against the Federal Way School District in a fair-funding dispute Thursday, saying that variations in the way Washington teachers and school staff are paid does not pose a constitutional problem.

Tony Moore, vice president of the Federal Way School Board, called the decision “a great tragedy.”

“It’s a sad day for education,” Moore said. “It’s a heartbreaking decision that will have impact for generations.”

The high court overturned a King County Superior Court ruling in a case brought three years ago by the Federal Way district.

Federal Way had asked the courts to rule that the state’s funding formulas for all school employees violate the state constitution, which requires the Legislature to “provide for a general and uniform system of public schools.”

King County Judge Michael Heavey ruled in November 2007 that funding levels based on salaries established 30 years ago are arbitrary and must change.

In its reversal, the Supreme Court said Thursday that cost-of-living increases account for most of the uneven distribution of state money to school districts.

While Federal Way receives the lowest school salary money from the state, the court said the Legislature has been steadily closing the gap.

State voters, however, worked against the plan when they passed Initiative 732 in 2000, mandating uniform yearly cost-of-living increases without regard to salary difference. Those uniform increases widened salary gaps between school districts, the court noted in its ruling written by Justice James M. Johnson.

The biggest disparity among salaries is for administrators. While four school districts were given enough money to pay administrators a base salary of $84,362, the state gave Federal Way and 88 other districts $57,986 per administrator.

Most districts, including Federal Way, use levy money to make up for the difference between state allocations and the amount required to attract quality administrators. The average Federal Way administrator earns $94,486.

The court quoted a newspaper editorial from 120 years ago, around the time of the state’s constitutional convention, to explain what citizens expected from their state school system.

“A general and uniform system, we think, is, at the present time, one in which every child in the state has free access to certain minimum and reasonably standardized educational and instructional facilities and opportunities to at least the 12th grade,” the Tacoma Daily Ledger wrote on July 3, 1889.

The court wrote that the lawyers representing Federal Way schools shouldn’t have relied on a 1970s-era decision by the Supreme Court in Seattle School District No. 1 because that case focused on the local levy system.

In that case, the Supreme Court ruled that sections 1 and 2 of the state constitution “require the State to amply provide for the education guaranteed through the medium of ‘a general and uniform system of public schools’. ”

Johnson wrote, “Our cases have never held that the provision requires uniform funding.”

Johnson concluded, “There is no showing that the Legislature’s funding allocations, including those for Federal Way School District, do not constitute ‘ample provision for the education of all children’ as required under article IX, section 1.”

State Rep. Skip Priest, a Republican from Federal Way who served on the state’s Basic Education Funding Task Force, said he was more than surprised by the ruling.

“I’m not sure that surprised sums up my feelings,” Priest said. “Unbelievable disappointment would be closer.”

Priest said the court’s ruling is “superficial and appears to me to miss the point of the lower court ruling” – that if there are differences in funding between school districts, there needs to be a rational basis laid out by the Legislature for those differences.

Priest took special issue with the Supreme Court’s assertion that because Federal Way students do relatively well on statewide tests, they cannot claim unequal funding adversely affects them.

Federal Way schools Superintendent Tom Murphy said the Supreme Court essentially decided that treating children unequally through disparities in school funding is OK.

“I find that hard to believe,” he said.

“I’m extremely disappointed with their decision,” Murphy said. “I’m disappointed because apparently the Supreme Court does not believe that the constitution of the state provides equal protection for the children of the state.”

Federal Way is the state’s eighth-largest school district with 22,440 students.

Murphy, who is retiring at the end of June, said the district will continue to work with Federal Way-area legislators to gain more state funding.

“And we’ll rely on the ability of the Legislature in general to understand the unethical existence of this unequal funding and continue to take steps to correct it, even if the Supreme Court says the unequal treatment is constitutional,” Murphy said.

Another school funding lawsuit recently heard in King County Superior Court focuses on the same issues as the Seattle School District case from three decades ago.

Judge John Erlick is expected to rule sometime in the next two months on the case brought by a coalition of school districts, parents, teachers and community groups.

The Federal Way School District and teachers association are part of the coalition.

Associated Press writer Donna Gordon Blankinship and News Tribune staff writers Steve Maynard and Peter Callaghan contributed to this report.