Significant changes to education funding model impacts Federal Way Public Schools

After years of lengthy debate, the Washington State Legislature passed two major bills — House Bill 2442 and Senate Bill 6362 — in response to public education funding concerns highlighted in the McCleary case. There are significant changes in how state funding is spent on education which impacts all 295 school districts in Washington state.

Implementation of the new funding formulas continue through the 2020-21 school year.

New revenues are distributed unevenly over the next three years. Revenues in Federal Way will spike in 2018-19; fall by about $10 million in 2019-20 (due to the reduction in the local levy), and stabilize in 2020-21 at about the 2019-20 level. In order to manage these fluctuating revenues over the next three years thoughtful financial management is required during this transition.

These changes will be phased in over the next three school years and can be grouped into four broad categories:

1) Increased state funding earmarked for specific purposes;

2) Increased state funding for staff salaries;

3) Significant tax decrease in the local Educational Programs & Operations (EP&O) levy;

4) Funding inequities still exist.

Funding with restrictions

This state funding comes with significant restrictions. Much of the new state funding is earmarked for specific purposes including Running Start, Career and Technical Education, multi-lingual services, K–3 class size reduction and support for struggling students. The state funding must be spent on these programs or the revenue has to be returned to the state. For context, the Office of the Superintendent of Public Instruction estimates that almost 80 percent of the new funding is dedicated revenue.

Staffing and local levies

Like other districts across the state, Federal Way Public Schools has used local levy dollars to augment the state salary schedule in order to attract and retain quality staff in a competitive environment with other districts in the region.

Beginning in 2019, the FWPS EP&O levy will decrease by $20 million per year, providing much needed property tax relief of a 37 percent decrease to local taxpayers.

Staff salary costs and state funding

FWPS Superintendent Tammy Campbell and the board of directors recognized and supported the need for teachers, administrators’ and support staff salaries to be competitively compensated with other districts in the Federal Way Public Schools region. At the beginning of the 2017-18 school year, staff across the district received increases to varying degrees, with teachers receiving a record increase of 10.25 percent.

The state has provided more funding to cover the cost of salaries, so districts aren’t as reliant on local levies to make up the gap. However, this state funding does not cover all staff that are needed to run our district. In the 2018–19 school year, the state funding formula will equate to 100 percent of a teacher’s 2017–18 salary. Staff hired beyond state funding allocations will still be paid 100 percent by the local levy — this includes additional teachers, counselors, nurses, security staff, school office staff, principals and custodians.

Funding inequities still exist

Historically, the Federal Way community and scholars have been adversely impacted by the original 1977 Basic Education Act; and unfortunately, continue to be adversely impacted by McCleary. From then until now, we continue to experience major funding shortfalls related to salary allocations. Beginning in the 2018-19 school year, salary allocations are adjusted by a “regionalization” factor developed by the state. In King County, 23 of the 25 school districts and charter schools are receiving more money for salary allocations than Federal Way, which translates into an annual shortfall of $10 million for our district. Unfortunately, the Washington State Legislature has left a funding gap of $1,000 a student — or $22 million a year — between districts like Federal Way and those with higher assessed property valuations in surrounding school districts.

As new state funding laws are implemented, you can have two school districts right next to each other receiving different levels of funding which can significantly impact educational opportunities for students. This impacts our ability to attract and retain the best teachers and provide the class size and the resources for them to bring their talent to our scholars, and for our scholars to reach their potential.

While I applaud the Washington State Legislature for the work done so far to realign K-12 funding with the expectations of the 21st Century I leave you to consider if the state has really met its constitutional obligation to fully fund basic education for 23,000 FWPS scholars across 38 school sites when:

• State basic education funds three-and-a-half nurses.

• State basic education funds one-and-a-half social workers and half of a psychologist

• State basic education funds four security officers.

• The full costs of delivering specially designed instruction is still a local levy obligation.

• New funding formulas support inequitable salary allocations for a large district in an urban/suburban district.

• State basic education allows zip codes to perpetuate significant funding gaps between districts.

FWPS’ proven track record of fiscal responsibility

The district has a long track record of investing in our staff, by providing more compensation through local levy dollars, and investing our funding where it matters the most: in our classrooms and in our schools. In fact we spend a larger portion of our budget (74 percent) on teaching and teaching support than almost any other district serving more than 20,000 students and more than the state-wide average (70 percent), or about $9,000 per student compared to $8,400. With continued investments in alignment with the FWPS strategic plan, coupled with prudent financial management, the district will continue to be a leader in providing opportunities for each scholar to have a voice, a dream and a bright future.

On behalf of Dr. Campbell and the Board of Directors, we hope you will join us in reaching out to our local legislators to continue to advocate for equitable funding for the scholars of Federal Way Public Schools.

If you have specific questions or comments, please feel free to contact us at, or by calling 253-945-2043.

Sally McLean is the chief finance and operations officer for Federal Way Public Schools.