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Legislative action on levy critical to schools
Legislative action on levy critical to schools
Posted on 01/09/2017
Legislative action on levy critical to schools

When the legislature convenes in January 2017 the clock will be ticking towards the April 1, deadline to address an existing law which is set to reduce the amount of money school districts can collect through local property tax levies starting in 2018.

Known as the “levy cliff,” the current law would reduce the maximum amount a district can collect in local property taxes for maintenance and operations levies from 28 to 24 percent of the revenue received the previous year from state and federal sources.

This would have a major financial impact on school districts throughout the state.

In 2011, lawmakers allowed a temporary levy lid lift allowing districts to use local levies to generate up to 28 percent of the revenue received the previous year from state and federal sources. This temporary levy lid ends in 2018 and will result in what is being called a levy cliff. It was intended to be a temporary fix until the state could pass legislation to fully fund basic education in accordance with the Supreme Court ruling in the McCleary Lawsuit.

According to Chief Financial Officer Corine Pennington, the levy cliff will equate to 7 million dollars less revenue for the Puyallup School District in the 2017-18 school year. The Educational Programs and Operations Levy, approved by Puyallup voters in February 2014, is primarily used to cover basic education costs that are not fully funded by the state.

Puyallup School District, with the support of the Board of Directors, has been preparing for the possible budget reduction of $7 million.

With cautious spending and an awareness of the potential levy cliff, the district strategically ended the 2015-16 year with an increase in the fund balance. The fund balance is maintained for specific purposes as approved by the Board of Directors.

“The good news is that we have support from Superintendent Yeomans and our
Puyallup School Board. They know it is critical that our operations continue to
 run smoothly and we all take that responsibility very seriously. We have to be in position 
and be prepared for a financial disruption—and we have done that. With an eye
towards the future we’ve prepared ourselves to make it through this.”
~ Chief Financial Officer Corine Pennington

The most significant cost covered by our Educational Programs and Operations Levy is staffing and compensation. Competitive salaries are critical because they allow Puyallup to compete for and hire highly qualified teachers and support staff.

This year the fund balance includes $4.5 million that may be used to secure employee contracts for current staff rather than having to do a Reduction in Force (RIF).

A major issue pending for Puyallup and other districts is the need to prepare for the 2017-18 school year budget before the legislature has made a decision on the levy cliff. School districts are required by law to notify staff by May 15 each year if their contracts are not being renewed. In order to make such decisions the planning must begin in well in advance of that date.

Local levies have played a vital role for the district to fill the gap between state and federal funding and the actual costs of providing critical services to students. Part of that gap is due to state funding allocations that are inadequate for most all districts. Another part of the gap is due to staffing allocation formulas that may work for some districts, but underfund actual costs for others.

“The other good news is we’ve done amazing things and want to keep them intact,” said Pennington. She cited ongoing progress towards smaller class sizes in grades K-3 and changes in the hiring practices to identify and hire highly qualified teachers in a competitive market.

“I feel really proud about our financial planning and forward-thinking that allows us
 to retain the highly qualified work force we have worked so hard to build. There are
many districts that would consider that an enviable place to be. It takes so much
effort to get people and programs in the right place and we have done that.

~ Chief Financial Officer Corine Pennington

Nancy French