Joint Task Force on Local Effort Assistance
July 16, 2002
Bill Freund, Consultant To The Task Force
Outline of Presentation
• Washington’s K-12 Finance System
• Origin of the levy lid and levy equalization
• Levy lid and levy equalization mechanics
• Other levy equalization topics including
– Number receiving
– Cost and reasons for cost increases
– Review of 1997 Joint Legislative Levy Equalization Study
2
Washington’s K-12 Finance System
Currently Washington’s school districts receive about
70 percent of their general fund revenues from the state
and 15 percent from local taxes.
Federal
9%
Other
6%
Local
15%
2001-02 Budgeted Revenues
Source
$ in 000s*
State
$5,093,394
Local Taxes
1,068,227
Federal
629,915
Other
481,084
Total
$7,272,670
State
70%
4
The situation was different in the 1974-75 school
year when school districts relied on M&O levies for
a large part of their funds.
Local Taxes
32%
1974-75 K-12 Revenues
Source
$ in 000s
State*
$ 522,426
State
51%
Other
8%
Federal
9%
Local Taxes
327,670
Federal
92,609
Other
82,866
Total
$1,025,572
* Includes state Teachers Retirement System
Contributions.
5
In the 1974-75 school year, large differences existed
among districts in levy revenue and property tax rates.
1974-75 Property Tax Profiles Among Selected Districts
School
District
Average
Assessed
Val/Pupil
State Avg.*
Seattle
Highline
Tacoma
Soap Lake
San Juan
Spokane
Kelso
Centralia
Rochester
$56,869
$103,237
40,949
52,550
29,245
214,653
47,960
36,058
100,263
43,236
1975
Levy Rate Per
$1,000 AV
$7.86
$8.19
14.44
11.06
15.88
1.99
6.30
7.80
2.48
1.32
1974-75
Levy $
Per Pupil
$447
$845
$591
$581
$464
$428
$302
$281
$248
$57
* Districts with levies. Some districts had no levies
Source: Miller Report, 1975
6
The state’s main allocation formula (apportionment)
was also very different than today’s formula.
PRE 1978 K-12 FINANCING SYSTEM
WEIGHTED PUPIL GUARANTEE (for school year 1977-78)
@ $600 PER WEIGHTED PUPIL
FORMULA WEIGHING FACTORS
BASE WEIGHT PER FULL TIME EQUIVALENT STUDENT (FTE)
1.00
PLUS ADDITIONAL WEIGHTING PER PUPIL AS FOLLOWS:
1)
2)
3)
4)
5)
6)
7)
8)
FOR EACH VOCATIONAL FTE IN GRADES 9-12
TEACHER EXPERIENCE AND EDUCATION (Based on a table)
DISTRICTS WITH ENROLLMENT <250 9-12 GRADE FTES
NON HIGH DISTRICTS WITH LESS THAN 100 FTES
SMALL SCHOOL PLANTS – DESIGNATED REMOTE & NECESSARY
CONSOLIDATED DISTRICTS (FOR 4 YRS AFTER CONSOL.)
FTEs RESIDING ON TAX EXEMPT PROPERTY
INTERDISTRICT COOP FTEs
1.00
0-1.0
2.00
2.00
2.00
2.00
0.25
0.25
7
This high levy percentage dropped for 1976
collections due to levy failures and resulted in a
lawsuit against the state and the 1977 Doran decision.
• Prior to 1977:
– No limit on amounts school districts could raise from local
levies.
– The Seattle School District levy and those of 64 other districts
failed in 1975 for 1976 collections, prompting a law suit against
the state.
• 1977 Doran Decision:
– State must define and fund basic education through regular and
dependable tax sources and could not rely on local excess
levies for that funding.
8
The School Funding I lawsuit was based on
Article IX of the Washington State Constitution.
 Article IX, Section 1: “It is the paramount duty of the state
to make ample provision for the education of all
students…”
 Article IX, Section 2: “ The Legislature shall provide for a
general and uniform system of schools…”
9
The 1977 and 1983 school funding cases established
a series of funding principles for the state.
1.
Education is the “paramount duty” of the state and takes precedence
over all other state financial obligations.
2.
The Legislature must define basic education and provide adequate
funding for those programs.
3.
Programs considered basic education are:
Regular Apportionment
Special Education
Transitional Bilingual Education
4.
Vocational Education
Most of Pupil Transportation
Learning Assistance
The most important factors in determining adequate funding are staff
compensation and pupil/staff ratios.
10
Funding principles continued
4. It is the Legislature’s obligation to establish a sufficient salary to
attract and retain competent teachers.
5. Once the Legislature has established what is considered to be 100%
funding of basic education needs, it cannot reduce that funding level
due to state revenue problems.
6. The funding formula is not “cast in concrete”; it is the continuing
obligation of the Legislature to review the formula as the education
system evolves and changes.
7. Local school operations levies may be allowed as long as they enrich
programs outside of the legislative definition of basic education and
are not used to reduce the state’s obligation to fund basic education.
11
The 1977 legislature responded to the K-12 funding
lawsuit by passing three key pieces of legislation.
 The Basic Education Act, which defined basic education in
terms of a minimum staffing ratios to be funded by the state,
and district obligations to provide curriculum offerings and
program hours.
 The Appropriations Act, which explicitly defined the state’s
definition of basic education in terms of staffing ratios and cost
factors.
 The Levy Lid Act, which limited school district M&O levies to 10
percent and set a four year timeline for all districts to get down
to that level.
12
Current state budget architecture: six basic ed
programs account for about 90% of state funds.
2001-03 K-12 State Funds Budget
BASIC EDUCATION PROGRAMS *






GENERAL APPORTIONMENT (RCW 28A.150.260)
$7,498,021
73.2%
SPECIAL EDUCATION (RCW 28A.150.370)
828,926
8.1%
TRANSPORTATION (RCW 28A.160.150)
385,695
3.8%
LEARNING ASSISTANCE PROGRAM (RCW 28A.165)
135,956
1.3%
87,501
0.9%
BILINGUAL (RCW 28A.180)
INSTITUTIONS (RCW 28A.190)
37,730
0.4%
329,146
3.2%
51,667
0.5%
$9,354,642
91.3%
COST-OF-LIVING INCREASES (I-732) (About 98% basic ed)
HEALTH BENEFIT INCREASES (About 98% basic ed)
SUBTOTAL: BASIC EDUCATION PROGRAMS
NON-BASIC EDUCATION PROGRAMS
STUDENT ACHIEVEMENT FUND (I-728)
391,149
3.8%
LEVY EQUALIZATION (LEA)
295,863
2.9%
8,996
0.1%
EDUCATION REFORM
67,030
0.7%
STATE OFFICE & STATEWIDE PROGRAMS
51,481
0.5%
BLOCK GRANTS
23,204
0.2%
STATE FLEXIBLE EDUCATION FUNDS
20,612
0.2%
4,275
0.0%
12,699
0.1%
EDUCATIONAL SERVICE DISTRICTS
9,328
0.1%
FOOD SERVICES
6,200
0.1%
$890,837
8.7%
$10,245,479
100.0%
BETTER SCHOOLS PROGRAM
TRAFFIC SAFETY EDUCATION
HIGHLY CAPABLE
SUBTOTAL: NON-BASIC EDUCATION PROGRAMS
TOTAL- STATE FUNDS
*Note: A large portion of the programs labeled "Basic Education Programs" are within the
Legislature's current definition of basic education. However, there are a few components funded
within several of these programs that are outside of the definition of basic education. The largest
is the lower K-4 staffing ratio in apportionment which amounts to $240 million in the 01-03 Biennium.
13
The main basic ed formula, apportionment, is a staff per
student formula with various formula elements.
STAFFING RATIOS
K-4 Certificated Instructional Staff (49/1000 K-3 req.)
5-12 Certificated Instructional Staff
Certificated Administrative Staff
Classified Staff
Vocational Students per Certificated Staff (incl. Admin.)
Staff Per 1,000
Students
55.4
46
4.00
16.67
Students Per Staff
18.05
21.70
250
60
19.50
WORKLOAD
K-12 FTE Enrollment
K-4 FTE Enrollment
Vocational Education Enrollment (FTE)
956,639
335,849
61,074
NUMBER OF STAFF
Certificated Instructional Staff Units
Certificated Administrative Units
Classified Staff Units
47,698
3,861
16,113
SALARY COSTS PER STAFF (not including benefits)
Certificated Instructional Staff Average Salary
Certificated Administrator Average Salary
Classified Average Salary
$44,340
$50,550
$26,887
NON-SALARY COSTS (Books,Utilities, Equip, Maintenance, Etc)
Regular Non-Employee Related Costs per Certificated Staff
Vocational NERC per Certificated Staff
$8,519
$20,920
2001-02 SCHOOL YEAR TOTAL
AVG. ALLOCATION PER STUDENT
FTEs
FTEs
$3.91 Billion
$4,094
There is a small school factor in the apportionment
formula which allocates “bonus units”.
• This formula recognizes diseconomies of scale by providing
additional staff for districts with:
–
–
–
–
K-6 enrollments of less than 60 students
7-8 enrollment of less than 20 students
Small High Schools of less than 300 students
Remote and necessary schools of less than 25 students
• Of the 138 districts that are receiving a state small school
allocation, 93 also receive levy equalization and 45 do not.
• The cost of the small school factor was $40.4 million in the
2000-01 school year, not including levy equalization.
15
The small school formula* sets a minimum staffing
floor for districts with low enrollments.
Small School Formula Bonus Unit Examples
K-6 District With Less Than 25 FTE Students
Grade
FTE
Span Students
K-4
5-6
9.02
10.85
Total CIS Staff
Regular
Apportionment
.5 Cert. Inst Staff
.5 Cert. Inst Staff
Small School
Formula
CIS= 1.76+{(FTE-5)/20}
1.0 Cert. Inst Staff
2.5 CIS
Bonus CIS Staff
1.5 CIS
Small High School With Less Than 300 FTE Students
With No Voc or Special Ed Students
Grade
FTE
Span Students
9-12
120
Total CIS Staff
Regular
Apportionment
Small High School
Formula
5.5 Cert. Inst. Staff
CIS= 9.0+{(FTE-60)/43.5*.8732}
5.5 Cert. Inst. Staff
Bonus CIS Staff
10.2 CIS
4.7 CIS
* Organization and Financing of Washington Public Schools published by SPI contains formula detail
on pages 45 and 46.
16
The state allocation for certificated instructional
staff varies by school district.
K-12 Salary Allocation Schedule For Certificated Instructional Staff
2001-02 School Year
Years of
Service
BA
0
27,467
1
27,836
2
28,464
3
29,401
4
30,063
5
30,750
6
31,147
7
32,164
8
33,195
9
10
11
12
13
14
15
16 or more
BA+15
28,209
28,588
29,231
30,192
30,896
31,595
31,974
33,010
34,088
35,205
BA+30
28,977
29,366
30,025
31,009
31,727
32,443
32,850
33,909
35,008
36,169
37,344
BA+45
29,746
30,171
30,900
31,931
32,689
33,468
33,928
35,055
36,248
37,455
38,724
40,029
41,293
BA+90
32,219
32,668
33,414
34,490
35,290
36,085
36,531
37,724
38,954
40,223
41,529
42,895
44,298
45,736
47,181
48,408
49,376
BA+135
33,811
34,252
35,030
36,177
37,007
37,853
38,308
39,569
40,867
42,201
43,572
44,979
46,446
47,947
49,505
50,792
51,808
MA
32,931
33,297
33,995
35,027
35,755
36,503
36,904
38,031
39,225
40,430
41,700
43,005
44,362
45,766
47,212
48,439
49,407
MA+45
MA+90
or PHD
35,403
35,793
36,509
37,585
38,355
39,121
39,508
40,700
41,930
43,200
44,505
45,872
47,275
48,712
50,251
51,557
52,589
36,996
37,377
38,124
39,273
40,072
40,889
41,285
42,546
43,843
45,177
46,549
47,956
49,422
50,923
52,481
53,846
54,923
17
There are 34 districts with state funded salaries
above the state salary allocation schedule.
Certificated Instructional Staff Base Salaries, 2001-02 School Year
Grandfathered Districts Compared to All Other Districts
Total
Base Salaries
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Everett
Orondo
Northshore
Marysville
Puyallup
Vader
Shaw Island
Southside
Lake Chelan
Mukilteo
Lopez Island
Seattle
Oak Harbor
Edmonds
McCleary
Eastmont
Boistfort
29,209
29,153
28,985
28,900
28,389
28,378
28,359
28,249
28,238
28,159
28,129
28,016
28,008
27,800
27,786
27,759
27,718
% Over
"All Other"
6.3%
18
6.1%
19
5.5%
20
5.2%
21
3.4%
22
3.3%
23
3.2%
24
2.8%
25
2.8%
26
2.5%
27
2.4%
28
2.0%
29
2.0%
30
1.2%
31
1.2%
32
1.1%
33
0.9%
34
All Other Districts
Eatonville
Taholah
Green Mountain
Benge
Darrington
Evaline
Loon Lake
Thorp
Wenatchee
Lake Washington
Bellevue
Centerville
Port Townsend
Sumner
Kelso
Toppenish
Cosmopolis
$27,467
Total
Base Salaries
% Over
"All Other"
27,685
27,663
27,657
27,656
27,656
27,649
27,649
27,627
27,621
27,605
27,542
27,534
27,533
27,520
27,510
27,491
27,490
0.8%
0.7%
0.7%
0.7%
0.7%
0.7%
0.7%
0.6%
0.6%
0.5%
0.3%
0.2%
0.2%
0.2%
0.2%
0.1%
0.1%
18
Each school district’s salary allocation by employee
group is specified in the appropriations act using
LEAP Document 12E.
2001-02 LEAP Document 12E Extract
School District
01 109 Washtucna
01 122 Benge
01 147 Othello
01 158 Lind
01 160 Ritzville
02 250 Clarkston
02 420 Asotin-Anatone
03 017 Kennewick
03 050 Paterson
03 052 Kiona-Benton City
03 053 Finley
03 116 Prosser
03 400 Richland
04 019 Manson
04 069 Stehekin
04 127 Entiat
04 129 Lake Chelan
Total CIS
Base
Salaries
27,467
27,656
27,467
27,467
27,467
27,467
27,467
27,467
27,467
27,467
27,467
27,467
27,467
27,467
27,467
27,467
28,238
Certif.
Admin
55,924
34,389
47,712
61,858
53,465
50,359
48,792
46,790
49,040
52,618
51,454
53,577
50,188
55,653
56,977
65,740
46,133
Classified
25,738
27,371
26,801
25,605
26,940
26,873
24,241
26,460
23,368
26,674
26,503
26,427
26,574
26,479
21,611
25,994
27,067
19
The remaining basic education programs have
funding formulas of varying complexity.
Basic Education Programs
Main Allocation Criteria, 2001-02 School Year
MAIN ALLOCATION
CRITERIA
Apportionment
Staffing Ratios
Special Education
Age 0-2, 1.15 x basic ed amount
FUNDING
DRIVER
DRIVER
$ PER
STUDENT
956,639 FTEs
Avg $4,094
2,283 students
Avg $4,448
Age 3-21, .9309 x basic ed amount
116,228 students
Avg $3,601
Bilingual
Students with limited english
proficiency
62,889 students
$711/student
Learning Assistance
Program (LAP)
92% based on bottom quartile on state
test, 8% on poverty factor, for grades
K-11
174,275 funding
units
$423 per LAP
unit
Transportation
(0perating)
Based on distance students live from
school "as the crow flies"
4.6 million miles
$37.07 per mile
20
Origins of The Levy Lid And Levy
Equalization
The 1975 Miller Report which was a K-12 finance
study commissioned by the legislature concluded
the following:
"The present system of financing Washington State's common schools
is the major contributing factor in creating unequal educational
opportunities among students across the state and in creating
inequalities in the relative tax burden borne by property owners.
While the guarantee concept and equalization concepts of the present
system of financing Washington State's .....schools are sound, these
concepts are effectively negated by the large amount of special levy
property tax revenue used to finance schools.
Special levy revenue is not distributed equally across the state on a
per-pupil basis, nor is the special levy property tax burden equalized
among property owners. These two aspects .... and the increased
dependence by schools on special levies create substantial inequities
in the staffing and resources available to students as well as inequities
in taxation among property owners."
SOURCE: MILLER REPORT, 1975
22
Why did the legislature limit levies in 1977?
The 1977 bill report on the levy lid act cited the following rationale:
1. Under the state constitution the legislature has the responsibility to
“provide for a general and uniform system of public schools”.
2. The legislature implemented a four-year phase-in to full state funding
for basic education to eliminate the inequities that exist due to reliance
on excess special levies.
3. Excess tax levies for common schools should therefore have
restrictions placed on them to insure property tax reductions in
relationship to the proposed increases in state funds.
4. After full funding is achieved, special levies would be required only for
enrichment.
23
As a result of the levy lid act, levies as a percent of
total revenue dropped dramatically. But, since
1981, the percent has been increasing.
35%
30%
Percent of Total School District Revenues
Seattle School
District levy fails
25%
20%
First full year of
levy lid.
15%
10%
5%
0%
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
School Year - End
91
92
93
94
95
96
97
98
99
00
01
24
Since 1977 the legislature has made various changes
to the levy lid act increasing district’s levy authority.
Major State Levy and Levy Equalization Policy Changes 1978-2003
Calendar
Year
Levy Lid
Percent
Levy Base
Changes
Levy
Equal. %
Grandfather Districts
Number
Phasedown
Pre-1979
No Limit
--
--
--
-By 1981
1979
10%
State Basic Ed
--
50
1980-85
10%
Added state progs.
--
150 by 1982
--
--
Fed rev. & inflation adj.
--
91
Levy red. funds
10%
91
Max. of 30%
1986-87 Higher of actual,
By 1983,then '90
Less than 150 By 1993
18.18% or ESD avg.
1988
20%
1989-93
--
Lag adj. (1993)
1994-95
20%+temp. 4%
--
12% Prorated
91
--
1996-97
20%+temp. 4%
--
10%
91
--
1998
22%
--
10%
91
--
1999
24%
--
10%, & 12%
91
--
for lowest quartile
2000-02
24%
--
12%
91
--
2003
24%
--
12% Prorated
91
--
25
Currently 91 districts have levy authority percentages
that exceed 24 percent.
Rank
Highest
=1
59
40
82
12
11
27
87
15
91
5
41
24
25
1
8
53
51
19
43
22
68
75
9
64
75
65
57
28
13
85
School
County
District
Adams
Lind
Adams
Ritzville
Chelan
Cashmere
Clark
Green Mountain
Columbia
Starbuck
Cow litz
Toutle Lake
Cow litz
Kalama
Douglas
Orondo
Douglas
Bridgeport
Douglas
Palisades
Douglas
Mansfield
Douglas
Waterville
Franklin
North Franklin
Franklin
Kahlotus
Grant
Wahluke
Grant
Quincy
Grant
Coulee/Hartline
Grays Harbor Cosmopolis
Jefferson
Brinnon
King
Seattle
King
Federal Way
King
Enumclaw
King
Mercer Island
King
Highline
King
Vashon Island
King
Renton
King
Skykomish
King
Bellevue
King
Tukw ila
King
Riverview
Max
Rank
Levy
Highest
%
=1
County
25.20%
68
King
28.12%
71
King
24.79%
80
King
33.58%
61
King
33.61%
42
King
31.19%
71
King
24.24%
71
King
33.51%
68
King
24.01%
60
Kitsap
33.73%
17
Kittitas
28.00%
6
Klickitat
32.00%
89
Klickitat
31.70%
46
Lew is
33.90%
20
Lew is
33.69%
58
Lew is
26.67%
31
Lew is
26.79%
3
Lincoln
33.40%
55
Lincoln
27.50%
30
Lincoln
32.97%
9
Lincoln
24.90%
21
Lincoln
24.88%
38
Lincoln
33.67%
43
Okanogan
24.95%
56
Pend Oreille
24.88%
65
Pierce
24.93%
78
Pierce
25.43%
26
Pierce
30.66%
14
Pierce
33.54%
36
Pierce
24.72%
79
Pierce
School
District
Auburn
Tahoma
Snoqualmie Valley
Issaquah
Shoreline
Lake Washington
Kent
Northshore
Bainbridge
Damman
Centerville
Roosevelt
Vader
Evaline
Boistfort
White Pass
Sprague
Reardan
Creston
Odessa
Harrington
Davenport
Pateros
Selkirk
Steilacoom Hist.
Puyallup
Tacoma
Carbonado
University Place
Sumner
Max
Rank
Levy Highest
%
=1
County
24.90%
33
Pierce
24.89%
83
Pierce
24.83%
52
Pierce
24.97%
67
Pierce
27.93%
61
Pierce
24.89%
71
Pierce
24.89%
61
Pierce
24.90%
84
Pierce
24.98%
81
Pierce
33.44%
2
San Juan
33.71%
29
Skagit
24.14%
32
Skagit
27.29%
16
Skamania
33.36%
88
Spokane
25.32%
39
Spokane
29.43%
50
Stevens
33.77%
49
Stevens
26.02%
86
Thurston
30.42%
7
Walla Walla
33.67%
18
Walla Walla
33.01%
48
Walla Walla
28.21%
54
Whatcom
27.50%
35
Whatcom
25.47%
34
Whitman
24.93%
75
Whitman
24.87%
89
Whitman
31.47%
47
Whitman
33.52%
37
Whitman
28.29%
4
Whitman
24.86%
23
Whitman
45
Whitman
School
District
Dieringer
Orting
Clover Park
Peninsula
Franklin Pierce
Bethel
Eatonville
White River
Fife
Shaw
Anacortes
Conw ay
Mount Pleasant
Spokane
West Valley (Spo)
Valley
Loon Lake
Olympia
Dixie
College Place
Columbia (Walla)
Bellingham
Blaine
Lacrosse Joint
Lamont
Tekoa
Pullman
Palouse
Garfield
Steptoe
Colton
Max
Levy
%
28.85%
24.78%
26.76%
24.91%
24.97%
24.89%
24.97%
24.77%
24.82%
33.82%
30.54%
29.15%
33.46%
24.18%
28.20%
26.91%
27.01%
24.34%
33.70%
33.43%
27.07%
26.35%
28.51%
28.75%
24.88%
24.14%
27.27%
28.27%
33.76%
32.42%
27.35%
26
Refer to map identifier code sheet
for school district numbers
27
Levy Lid and Levy Equalization Mechanics
The basic levy components:
•
•
•
•
Levy Base
Levy Lid Percent
Assessed Value
Property Tax Rate
28
There are some common factors between levies and
levy equalization.
• The levy base for both is most state and federal allocations to the
district.
• The amount a district can raise in local levies is decreased by the
amount of levy equalization it receives.
• A school district’s maximum levy lid is equal to the following:
(Levy Base x Levy Authority Percentage) minus State Levy Equalization Allocation
•
The levy authority percentage is 24% for 205 districts, and higher for 91
“grandfathered” districts.
29
Purpose of levy equalization – as added to the law
in 1999.
“ The purpose of these funds is to mitigate the effect that above average
property tax rates might have on the ability of a school district to raise
local revenues to supplement the state’s basic program of education.
These funds serve to equalize the property tax rates that individual
taxpayers would pay for such levies and to provide tax relief to tax
payers in high tax rate school districts. These funds are not part of the
district’s basic education allocation.”
RCW 28A.500.010
Note: The language up to the last sentence was added to the levy
equalization statute in 1999.
30
Mechanics of Levy Equalization -- Definitions
•
Adjusted Levy Base = Most state and federal revenues from the previous school
year, with various adjustments.
– One adjustment is the per pupil inflator which is specified in the appropriations
act. It serves to take account of the lag in the levy calculation due to the use of
the prior school year as the base.
– Another is for students served by one district that are resident in another.
•
12% Levy = 12% of a district’s adjusted levy base.
•
12% Levy Rate = the property tax rate needed to raise a 12% levy.
12% Levy Rate = 12% levy amount divided by assessed value times $1000
31
Mechanics of Levy Equalization
•
A district is eligible for state levy equalization if its property tax rate for a 12
percent levy is higher than the state average property tax rate for a 12 percent
levy.
•
A district’s maximum levy equalization amount is based on the difference
between the district’s 12% levy rate and the state average 12% levy rate,
divided by the state average levy rate, times the district’s 12% levy amount.
•
To receive levy equalization, a district must have passed a local M&O levy.
•
A district’s maximum levy equalization allocation is reduced proportionately if the
district has not passed a levy with a levy rate that reaches the state average rate
for a 12% levy.
32
While levy authority is capped at 24%* of a district’s
adjusted levy base, the levy equalization formula equalizes
the tax rate necessary to raise a 12 percent levy.
Average District
District "A"
12 percent of adjusted levy base = $2.2
million
12 percent of adjusted levy base = $2.2
million
Assessed Value: $1.7 Billion
Assessed Value: $850 million
Tax rate needed to raise $2.2 million:
$1.33 per $1,000
Tax rate needed to raise $2.2 million:
$2.66 per $1,000
Tax rate needed for a 12% levy:
$2.66 per $1,000
Tax rate needed for a 12% levy:
$1.33 per $1,000
$1.1 million in Levy Equalization
Equalization
$2.2 million
*Ninety-one
grandfathered districts
have higher levy lids.
Amount that can be
collected with a levy
rate of $1.33 per $1000:
$1.1 million
33
The adjusted levy base and district assessed value
determine eligibility and amount of levy equalization.
Average District
District "B"
District "C"
12 percent of adjusted levy base = $2.2
million
12 percent of adjusted levy base = $2.2
million
12 percent of adjusted levy base =
$900,000
Assessed Value: $1.7 Billion
Assessed Value: $1.1 Billion
Assessed Value: $440 million
Tax rate needed to raise $2.2 million:
$1.33 per $1,000
Tax rate needed to raise $2.2 million:
$2.07 per $1,000
Tax rate needed to raise $900,000:
$2.07 per $1,000
Tax rate needed for a 12% levy:
$2.07 per $1,000
Tax rate needed for a 12% levy:
$1.33 per $1,000
$800,000 in Levy Equalization
Equalization
$2.2 million
Amount that can be
collected with a levy
rate of $1.33 per $1000:
$1.4 million
Tax rate needed for a 12% levy:
$2.07 per $1,000
$300,000 in Levy Equalization
Amount that can be
collected with a levy
rate of $1.33 per $1000:
$600,000
Appendixes B and B1 contain this data for all school districts.
34
Levy base per student differences are one reason for
differing property tax rates and differences in levy
equalization per student.
Examples Of Groups Of Districts With Similar Assessed Values Per Student
And Effect Of Differing Levy Bases Per Student
Levy Base
Per
Student
Assessed
Value Per
Student
12% Levy
Amount
Per
Student
State Average
$5,712
$515,031
$685
$1.33
$160
Walla Walla
Clallam
Columbia
Crescent
$5,660
$9,011
$669,120
$670,352
$679
$1,081
$1.02
$1.61
$0
$189
King
Whitman
Highline
Endicott
$5,567
$12,485
$546,113
$546,430
$668
$1,498
$1.22
$2.74
$0
$771
Snohomish
Pacific
Snohomish
Willapa Valley
$5,269
$6,696
$483,524
$482,774
$632
$804
$1.31
$1.66
$0
$161
King
Yakima
Federal Way
Union Gap
$5,217
$6,143
$385,061
$385,227
$626
$737
$1.63
$1.91
$114
$225
County
School
District
Appendix A1 ranks school district levy bases from high to low.
12% Levy
Rate per
$1,000 AV
Per
Student
LEA
35
Statewide, two state education programs account for
almost 82 percent of the levy base for 2002 levies.
State and Federal Revenues Included in the 2002* Levy Base
% of
Total
Major State Revenues to Districts
Apportionment
Special Ed
Transportation
LAP
Better Schools
Bilingual
3,829,628,832
428,249,311
191,564,147
74,348,286
59,694,038
42,317,344
4,664,985,346
73.7%
8.2%
3.7%
1.4%
1.1%
0.8%
89.8%
Remediation (Title 1)
Special Purpose & Direct Fed Grants
Food Services & USDA Commodities
Special Education
Total Federal $
121,835,844
121,490,242
116,766,504
104,012,331
532,058,746
2.3%
2.3%
2.2%
2.0%
10.2%
Total State and Federal $
5,197,044,093
100.0%
Total State $
Major Federal Revenues to Districts
*Revenues to districts used to calculate CY 2002 levy equalization are from the 2001-02
school year. SPI calculates most of these revenues, but some are from district budgets.
36
Factors in the levy base with the greatest per
student variation are: small schools, transportation
and federal programs.
Program
Formula Factor
Apportionment
Dollars per FTE Student
Staff Mix Factor
Cert. Instruct. Staff Salary
Small Schools Per Student
Average
Lowest
Highest
$4,024
$2,190
$20,955
1.60528
$42,519
1.29034
$34,177
1.91461
$50,712
$42
$0
$16,445
Special Education
Avg. $ Per FTE Student
Percent of Enrollment
$450
12.1%
0
0.0%
Transportation
Avg. $ Per FTE Student
$183
$7
$3,855
Learning Assist.
Avg. $ Per FTE Student
$78
$14
$269
FTEs In Lowest Quartile
Poverty Rate
19%
31%
4%
5%
60%
98%
Bilingual
Avg. $ Per FTE Student
Percent of Enrollment
$45
6%
$0
0
$424
60%
Federal
Avg. $ Per FTE Student
$559
0
$780
12.7%
$11,376
37
A Comparison of Two School Districts and State Average: Per
Student State and Federal Revenues Used in Levy Calculations
Per Student
Funding
$10,000
$5,000
$0
State Avg.
Colum bia (Walla)
Crescent
Sm all Sch Factor
$44
$68
$2,343
Other Fed
$443
$364
$393
Title 1
$142
$97
$849
Other State
$237
$225
$201
State Transp.
$211
$245
$502
$4,635
$4,660
$4,723
Apportm nt & SpecEd
38
Differences in assessed value per student are another
reason for differences in levy rates for equivalent
percent levies.
Examples Of Groups Of Districts With Similar Levy Bases Per Student
And The Effect Of Differing Assessed Values Per Student
Levy Base
Per
Student
Assessed
Value Per
Student
12% Levy
Amount
Per
Student
State Average
$5,712
$515,031
$685
$1.33
$160
Snohomish
Cowlitz
$5,044
$5,045
$419,893
$697,365
$605
$605
$1.44
$0.87
$47
$0
Franklin
Pasco
Grays Harbor North Beach
$6,367
$6,372
$216,282
$1,231,647
$764
$765
$3.53
$0.62
$476
$0
Walla Walla
Kittitas
$9,359
$9,360
$868,839
$383,892
$1,123
$1,123
$1.29
$2.93
$0
$612
County
School
District
Lakewood
Kalama
Prescott
Kittitas
Appendix E compares assessed value per student and eligibility for levy equalization.
12% Levy
Rate per
$1,000 AV
Per
Student
LEA
39
Of the 228 districts eligible for LEA, about 70% have
above average levy bases per student, and about 87%
have below average assessed value per student.
Assessed Value and Levy Base Per Student
And Eligibility For Levy Equalization
Levy Base Per Student
# of Districts
# of Districts
Above Avg.
Below Avg.
Eligible For Levy Equal.
Not Eligible For Levy Equal.
162
26
66
42
Assessed Value Per Student
# of Districts
# of Districts
Below Avg.
Above Avg.
Eligible For Levy Equal.
Not Eligible For Levy Equal.
199
6
29
62
Total
Number
Of Districts
228
68
Total
Number
Of Districts
228
68
40
Other Levy Equalization Topics
1. Number of districts receiving levy equalization, 1990-2002.
2. State average levy rates for a 12% levy 1995-2003.
3. Cost of levy equalization 1995-2005.
4. Reasons for cost increases in levy equalization.
5. 1997 joint legislative levy equalization study – findings and
recommendations.
41
Over 70% of school districts are receiving levy
equalization funding this year.
• 210 districts are receiving levy equalization in CY 2002.
• 68 percent of the students are in districts receiving levy
equalization funding.
• Of the 86 districts that do not receive levy equalization, 18 are
eligible but do not qualify because they did not pass a levy.
220
200
180
160
140
120
100
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
Number of Districts
Number of School Districts Receiving Levy
Equalization Funding
Calendar Year
42
Refer to map identifier code sheet
for school district numbers.
43
The levy rate per $1,000 of Assessed Value for a 12
percent levy has been dropping.
State Average Levy Rate For A 12 Percent Levy (1995-2005)
Levy Rate Per $1,000 Assessed Value
$1.600
$1.566
$1.556
$1.543
$1.506
$1.472
$1.500
$1.471
Estimated
$1.389
$1.400
$1.331
$1.302
$1.300
$1.234
$1.200
$1.169
$1.100
$1.000
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Calendar Years
44
The cost of the levy equalization program has
increased substantially since 1995.
Levy Equalization Program Fiscal Year Costs 1995-2005
Estimated
$200.0
$184.2
$180.0
$170.3
$154.9
$160.0
$140.9
$140.0
$s in Millions
$124.1
$120.0
$102.6
$100.0
$80.0
$82.8
$82.0
$83.2
1997
1998
1999
$76.9
$71.0
$60.0
$40.0
$20.0
$0.0
1995
1996
2000
2001
2002
2003
2004
2005
State Fiscal Year
45
Increases in the levy base account for almost half of
the increase in the cost of levy equalization from FY
1995 to FY 2003.
Factors Accounting For Increases In The Cost Of Levy Equalization
1995-2003
Legislative Policy
23%
Levy Base
45%
Voter Approved Levies
23%
Assessed Valuation
9%
46
King County assessed values have been growing
faster than the rest of the state.
Change in Assessed Value For School Levies, 1995-2003
King County's Share Of State Total Assessed Value
Assessed
Value CY 1995
Percent
of Total
Assessed
Value CY 2003
Percent
of Total
State Total
$308,341,526,731
100.0%
$529,115,913,379
100.0%
King County
$127,023,635,923
41.2%
$232,675,024,666
44.0%
All Other Counties
$181,317,890,808
58.8%
$296,440,888,713
56.0%
47
The 1997 legislation that provided levy equalization
at 12% for certain districts also required a joint
House and Senate study of levy equalization.
GENERAL FINDINGS FROM THE REVIEW OF LEVY
EQUALIZATION RELATED DATA
Two-thirds of all school districts receive levy equalization funding. 73 percent are eligible.
In many instances the highest equalization payments per pupil go to districts with the
highest revenue per pupil.
Almost half of the equalization districts receive state small school bonus payments.
Large districts consume most of the equalization funding. (87 percent goes to school
districts with enrollment over 1000 students).
43 districts (20%) with above average assessed value are eligible for levy equalization.
Of districts with the highest free and reduced lunch participation, 29 districts (17%) are not
eligible for levy equalization.
There is no specific statewide data on the nature of equalization expenditures.
48
1997 Levy Study Recommendations
RECOMMENDATIONS TO THE LEGISLATURE
No change to the current statute for Levy Equalization is recommended at this time for reasons
detailed below. The Legislature should continue to study the data and issues relevant to Levy
Equalization in preparation for the 1999 Legislative Session and as part of its continuing need
to review education funding.
The current study has been unable to review important information. Some reasons for
continuing the review of Levy Equalization are as follows:
The committee could not identify reliable objective data specifying the use of levy
equalization and levy revenues. The 1998 Legislature should consider approaches to
gathering this information including a thorough field review of district data on a sampling
basis to determine the specifics of this spending.
As part of the need to provide basic information about Levy Equalization expenditures, the
accuracy of the reported data needs scrutiny to ensure the integrity of what the data is
supposed to represent. A focused audit of a sample of districts could accomplish this.
The consideration of some financial and property tax data as context for analyzing Levy
Equalization issues was not available for committee review. Examples include the
relationship of ending fund balances to program expenditures and the reasons for below
average assessed values in levy equalization districts.
The complexity of the issue and need for more public hearings to consider the extensive
data produced in the study effort so far.
49