Washington Has Spent Billions Fixing Schools. Here’s How the Money’s being Spent

After stretching on for more than a decade, the McCleary school funding case finally ended in June 2018, when the Washington state Supreme Court found the state in compliance with its constitutional obligation to amply fund basic education. Getting to compliance took billions in new state spending, funded with higher property taxes and the extraordinary revenue growth the state experienced coming out of the Great Recession. 

In 2012, the Court had ruled that the state was not amply funding basic education (its “paramount duty” under the state constitution), and that such funding must come from the state’s own tax sources rather than local levies. According to the Court, local levies are neither dependable (because “they are subject to the whim of the electorate”) nor equitable (because they depend on local property values).

The Legislature grudgingly increased state spending on public schools by $14 billion or 110% from the 2009–11 biennium to the 2019–21 biennium. (Over that period, all other state spending increased by just 52%.) I estimate that more than $8 billion of that increase in school spending was directly in response to the McCleary decision. The most significant spending enhancements were made to employee salaries and health benefits; materials, supplies, and operating costs; class size reduction for grades K–3; all-day kindergarten; and the Learning Assistance Program, which offers supplemental services to students scoring below grade-level standard in English language arts and mathematics.  

Salaries were predictably the most expensive part of the state’s response, and the last enhancement to be fully implemented in school year [SY] 2018–19. The average base salary for certificated teachers increased from $55,718 in SY 2017–18 to $73,101 in SY 2018–19, an increase of 31.2%. The average total salary (including supplemental contracts, which are typically funded by local levies) for certificated teachers was $84,187 in SY 2018–19, up 13.1% over SY 2017–18. The salary funding formula now includes regionalization factors, which provide more funding to teachers in districts with higher home values (a proxy for differences in cost of living).

In addition to increasing spending, the Legislature increased the state-collected property tax (beginning with calendar year [CY] 2018) and reduced school district levy authority (beginning with CY 2019). Statewide, local enrichment levies as a percent of total district revenues dropped from 17.5% in SY 2017–18 to 12.3% in SY 2018–19. (The 2019 Legislature raised the limit on local levies to give districts a bit more spending capacity beginning with CY 2020.) Even with the reduction in local levy authority, combined school property taxes (the state levy plus local enrichment levies) in CY 2020 are 33% higher than they were in CY 2017, the year before the first McCleary-related tax changes took effect. 

Early results

These changes to school funding led to substantially increased revenues for school districts, even with the new limits to school district levy authority. Total per-pupil revenues to districts increased by 49.7% from SY 2010–11 to SY 2018–19. (Per-pupil revenues from state sources increased by 81.6% while local taxes per pupil decreased by 0.3%.) District expenditures per pupil reached $14,545 in SY 2018–19, an increase of 46.3% from SY 2010–11. 

Washington’s increased spending on schools has boosted the state’s rankings in national school district spending and revenue. In SY 2017–18 (the most recent year with comparable data), Washington schools ranked 18th in spending per pupil, 8th in district per-pupil revenues from state sources, and 32nd in district per-pupil revenues from local sources. These rankings are up from SY 2010–11, when they were, respectively, 29th, 15th, and 35th. And these rankings don’t yet reflect substantial increases in district spending in SY 2018–19.

Initially, the Legislature had planned to fully implement the salary increases in SY 2019–20. The previous year was supposed to be a transitional year, due to the staggered implementation of the state property tax increase and local levy authority decrease. The Court, however, ordered the state to move forward to SY 2018-19 its full funding of salaries. This full state funding emboldened teachers to demand large salary increases in 2018, regardless of many districts’ inability to sustain these increases in subsequent years (given the reduction in local levy authority scheduled for CY 2019). Summer 2018 saw more teacher strikes than any year since at least 1976.

The state Supreme Court blessed the Legislature’s school funding changes. But the influx of billions of dollars, a lack of clear salary limits, and an acceleration of full state funding before limits on local levies were in place led to teacher strikes and double-digit salary increases. Meanwhile, property taxes have increased substantially.

Additionally, with the regionalization (cost-of-living) factors the Legislature added to salaries in districts with higher home values, it has perpetuated unequal funding. And there has already been an erosion of the levy limits that were put in place to help preserve equity and prevent districts from using local revenues to fund basic education. These developments raise the specter of another McCleary-style lawsuit in the future.

Indeed, the McCleary decision itself echoed earlier school-funding cases from the 1970s. Washington has been stuck in a cycle that is effectively prescribed by the “paramount duty” clause. Here’s how this chasing of a tail occurs. When state tax revenues decline during a recession, state funding for schools is reduced and the Legislature allows local levies to make up the difference. When state revenues rebound, state funding for schools is increased, but the higher local levies remain. Eventually courts rule that the state must pay more. Given that the new levy limit lasted only a year, the cycle may still hold sway. 

Read the full Washington Research Council report, where these figures were generated, here.

Emily Makings is Senior Research Analyst at the Washington Research Council, and was assisted in this report by Kriss Sjoblom, the Research Director.