School Funding – how it works

• How come schools can afford new computers and new buildings but they can’t afford copy paper?
• If the state of Washington is supposed to pay for basic education, what do my property tax dollars go for?
• If we want smaller class sizes, can we get the money to pay for them?

If you’ve ever wondered about the way schools are funded in Washington and how that affects schools in Lake Washington School District, this background paper outlines the basic structure.

The Basic Education Act, passed in 1977, defines formulas used to fund a basic education for students in Washington state and thus what the state will pay for. Local levies were supposed to pay for extras – enhancements that local taxpayers wanted above and beyond the basics.

Funding for operations is capped
Basic education funding from the state, otherwise known as state general funding, makes up 54.8 percent of the 2008-09 budget for the district.

Different elements of the system were put into place so that access to education remained relatively equal across the state: a student in a poor area would not receive an education substantially worse than a student in a rich area. As a result, districts are limited in how much money they can raise through local levies.

Those local levy dollars come from local property taxes that provide additional money for school operating funds. These dollars are intended to provide for the extras – staffing or programming beyond basic education. In recent years, they have come to be used for things that most people expect schools to offer. For example, the state funds five periods in high school but students need at least six periods to get the mix of core and elective classes that prepare them for college entrance. Local levy dollars pay for that sixth period in Lake Washington schools. The local levy dollars pay for teachers, textbooks and the cost of keeping school buildings open among other items. It’s about 18 percent of the Lake Washington School District general operating budget.

Increasingly, state dollars are provided through what are called state categorical funds, those earmarked for specific purposes such as special education, transportation and English Language Learner education. These dollars are not available for other purposes.

Federal dollars are relatively few: just over five percent of the district’s operating budget comes from the federal government. That money is also earmarked for specific purposes, such as Head Start, educational support for low-income students and support for free and reduced prices lunches.

If state general funds, state earmarked funds and local levy dollars do not cover the costs of running a school district, there are few legal options for the district to raise more money. It can charge fees for some programs, like extended day, athletics or school lunches. But the ability to charge money is also limited: students are guaranteed a free education.

Money for building schools and buying big items (buses, technology) is raised through separate ballot measures such as capital levies and bonds. These dollars can only be spent on that specific purpose. They can’t be transferred to the general operating fund to pay for something else. So we can’t, for example, decide to use the money from the technology levy earmarked for ActivBoards or new computers to pay for more teachers: that would be illegal. We also can’t decide to use the money set aside for modernizing schools to pay for anything in the general operating budget, like staffing, supplies or textbooks.

Since Basic Education was defined in 1979, though, the world has changed and the requirements for education have changed. Schools are held accountable for their performance through state-defined standards. They must adhere to the No Child Left Behind requirements.

At the same time, Washington’s national ranking for per pupil funding has dropped to 34th in the country, or 45th if adjusted for cost of living. Washington also has the nation’s fifth-largest class sizes and is below average on teacher compensation.

The general operating budget in Lake Washington if adjusted for inflation has actually declined over the years, requiring repeated cuts to budget items. So there are few if any areas in the operating budget that could be cut to provide more money for teachers or programs. If parents want smaller class sizes or more services and programs for their children, the additional money needed to pay for them would require action by the legislature.