Pending a vote from the Federal Way Public Schools board of education next Tuesday to approve an adjusted budget, the school district could start collecting $9.6 million more in property taxes throughout the next two school years.
But these taxes aren’t new — voters approved a $53 million Educational Program and Operations levy in 2014.
“One of the things I would stress is we’re not increasing taxes, we’re merely collecting the full authorized amount,” Superintendent Tammy Campbell said. “We haven’t collected that in the past so I think that’s really important. Although [citizens will be] paying more, it’s an amount they authorized, we just didn’t collect it in previous years but this COLA is requiring that.”
The funds will go toward paying a gap in the 3 percent Cost of Living Adjustment (COLA) raise and to the pension fund Washington state legislators wrote into the state budget this summer.
While the state is paying the raise, there is a $4.8 million annual gap that the Federal Way school district will need to fund and are able to do so for the next two years by collecting the full legal limit of the current levy, which expires in 2018.
In the last three years, the district collected about $9 million less of their voter authorized amount. This resulted in a $5 million savings for 2015.
“We were just being as prudent as we could and if there were opportunities to save voters money, we did that,” Campbell said. “We’re not in a position to do that anymore.”
The good news? Teachers, principals and staff haven’t received a cost of living raise since 2008.
The bad news? Because the Washington state Legislature has failed to create an adequate plan to fund K-12 education required by the McCleary decision, they’re being fined $100,000 a day because of it, Campbell said.
While state education received additional funding for specific uses from the state budget, districts are still forced to use local levies, a model of funding Campbell says isn’t sustainable.
Assistant Superintendent Sally McLean said since Initiative 732 passed in 2001, a law that gave the cost of living adjustment for K-12 employees, former superintendent Tom Murphy and the school board decided the Educational Programs and Operations levy would need to increase over time.
This is because the state, on average, funds about 70 percent of the Federal Way school district’s salaries while local levies pick up the other 30 percent.
“So, with the McCleary decision, one of the components of the McCleary decision is the fact that it’s unconstitutional to cost shift this impact, the basic education impact, to the local levy but unfortunately, that’s still where we’re at,” McLean said. “When you think about it from the legislator’s perspective, paying people is the biggest part of the K-12 budget, so finding a way to make the state solely responsible for that has been a challenge for them.”
The district will collect a property tax increase of $70 per year, or about $5.80 a month for every $100,000 a property is valued at.
For a home of average value in Federal Way, about $236,000, the cost will be $168 a year or about $14 a month for homeowners.
“We fully expect the whole levy mechanism for school districts will change as the Legislature struggles to comply with McCleary,” McLean said when asked what would happen after the next two years of levy collection. “We don’t know exactly what that will look like, there are lots of different proposals.”
After the current levy expires in 2018, the school district’s legal limit for collection will drop substantially, per state law, McLean said.
McLean’s early guesstimate is that the district’s legal limit will drop to $38 million at that time.
“We’re not really expecting that to happen, but we never actually know our legal authority until September of any given school year so we make educated assumptions about what that legal authority will be,” McLean said.
Although the district didn’t collect the full levy limit last year, spokeswoman Ann Cook said teachers did receive a 2.25 percent mid-point market adjustment, step increases and increases associated with the amount of education a teacher had.
The district had a budget forum to explain the budget impact to some community members at the end of July and will hold a public hearing at the next school board meeting at 6 p.m. on Aug. 25 at City Hall, where the board will also vote to adopt the budget as well.