Politics & Government

Washington state House votes to delay ‘levy cliff’ that threatens school district budgets

The chambers of the state House of Representatives in Olympia.
The chambers of the state House of Representatives in Olympia. Staff file, 2013

As its first vote of 2017, the state House approved a measure extending local school districts’ current taxing authority for one more year.

House Bill 1059, which passed the House on a 62-35 vote Monday, would delay a planned reduction in what school districts can collect through local property tax levies.

Under current law, school districts’ taxation authority is set to go down in January 2018.

School districts have said the “levy cliff” will force to them to plan for dramatic budget cuts in the coming months.

Legislative staff have estimated the state’s 295 school districts collectively stand to lose about $358 million annually if the law isn’t changed. School district leaders have said the impact would be closer to $500 million per year.

Democratic leaders in the state House have urged their colleagues to save school districts from those budgeting difficulties by extending school districts’ current levy lid through January 2019.

“Without the passage of this bill, they’re going to have to count on less money next year than they’re getting now,” said House Majority Leader Pat Sullivan, D-Covington, during Monday’s floor debate.

But hanging over the debate Monday was the larger task facing lawmakers this year: Fixing the way the state pays for public schools.

In the McCleary case, the state is under a court order to fully fund basic education by September 2018.

Complying with the order from the state Supreme Court will require the state to take on the full cost of paying teachers and other school employees. Right now, school districts use local property tax levies to pay some of their employee salary costs — an arrangement the court has ruled unconstitutional because it can lead to funding disparities between districts.

Many lawmakers think solving the McCleary problem will involve substantially reforming the use of local school district levies.

Because of that, some Republican lawmakers argued Monday that extending current levy levels as proposed under House Bill 1059 would only delay larger school-funding fixes.

Removing the levy cliff deadline would reduce the urgency to fix the state’s school-funding system before the Legislature is scheduled to adjourn in April, several Republicans said.

“Doing this today would maintain the status quo, and the status quo isn’t working,” said state Rep. Drew MacEwen, R-Union.

Right now, most school districts’ local levy authority is capped at 28 percent of the money they receive from state and federal sources. In January 2018, that cap is set to go down to 24 percent.

Without legislative action, select school districts that are grandfathered in with higher levy lids will also see their levy authority decline by four percentage points next year.

The 50 Democrats who make up the majority in the state House all voted Monday to delay the levy-cliff deadline. Most Republican House members opposed it, but 12 voted in favor, including several Republicans who represent legislative districts in the South Sound.

Those included state Reps. Michelle Caldier, R-Port Orchard; Dan Griffey, R-Allyn; Dick Muri, R-Steilacoom; Melanie Stambaugh, R-Puyallup; and Jesse Young, R-Gig Harbor.

The bill now heads to the Senate, where Republican leaders have expressed reservations about delaying the levy cliff and said they want to focus on solving larger school-funding issues first.

“That’s what we are working toward and I don’t plan to fail,” Senate Majority Leader Mark Schoesler, R-Ritzville, reiterated Monday in a prepared statement.

Melissa Santos: 360-357-0209, @melissasantos1