Sequim Schools looks at impacts of state budget

The new two-year state operating budget approved by Washington Legislature in late June aims to fully fund public education with possible changes to teacher pay coming in the near future.

On June 30, Washington Legislature passed a two-year, $43.7 billion state budget that includes an education funding plan adding $7.3 billion in state funds during the next four years.

This new budget addresses the state Supreme Court’s requirement that the state of Washington fund basic education after the McCleary v. Washington ruling.

Sequim schools could see an increase of $3,215,724 in school funding starting the 2018-2019 school year based on a preliminary estimate of net state and local school district funding changes.

“They’re still interpreting what the language means and how it will all roll out,” Heidi Hietpas, Sequim School District Executive Director of Finances and Operations, said. “It’s very complex.”

Funding projections estimate a $6,079,258 increase for Sequim schools in the 2019-2020 school year and a $6,314,811 increase in 2020-2021.

Hietpas said these funding projections are tentative and could change, based on what the Office of the Superintendent of Public Instruction decides in terms of a funding model for local school districts and how these changes will apply.

“There (are) still some questions as to how that will all be rolled out and what flexibility school districts will still have,” she said. “If it reduces flexibility, we may still not have money for certain activities or other things.”

Hietpas said a big portion of this new budget addresses the McCleary decision that provides additional funding to teachers.

“How funding is being distributed to teachers will potentially change,” Hietpas said.

Hietpas said the legislature mandated that the state come up with working models for school district funding. Depending on what those models look like — in addition to local negotiations with teacher unions — the district will be able to have an understanding of how the new budget will impact Sequim schools.

“This is just one-half of the piece of the pie,” Hietpas said.

While funding models are still in progress, certified teachers and classified staff could see increases in salary allocations as soon as the this coming 2017-2018 school year, with a 2.3 percent Cost of Living Adjustment (COLA) increase.

The starting base salary for certified teachers at Sequim School District as of the 2016-2017 school year was $35,700 and, with the 2.3 percent COLA increase, Hietpas said the base salary for certified teachers could rise to $36,521 starting the 2017-2018 school year.

With the potential changes in funding distribution for teacher salaries, the base salary for certified teachers statewide could start at $40,000 starting the 2018-2019 school year. State allocation for salaries is based on a statewide average allocation per staffing unit, then adjusted for regional differences based on how much a district’s residential values exceed state averages.

The previous teacher salary model based teachers’ salaries on their degree, credits and years of service.

“The bottom line is there is a lot that’s changing, but a lot is changing in the 2018-2019 school year,” Hietpas said. “Some of those models change as (legislators) come up with the language.”

Levy impacts

The new state budget also calls for a new K-12 funding policy that will tax property owners a minimum of $1.50 per $1,000 of assessed property value, boasting statewide education speding to $2,500 per pupil.

Heitpas said legislators are, “estimating a significant increase in assessed value of property, which drives the cost per acre down.”

This also generates a tentative change in estimated funding per pupil. Preliminary numbers for the Sequim School District indicate per-student spending increases to $1,119 for the 2018-2019 school year, $2,105 for the 2019-2020 school year and $2,167 in 2020-2021.

Hietpas added that starting in 2019 any new levies will be called “enrichment levies” for maintenance and operations and requires districts to submit a plan to state officials.

“Right now the levy doesn’t have to go to OSPI for approval as far as a spending plan, but in the future it will,” Hietpas said.

Hietpas also said there may be more scrutiny as to how school districts are spending levy dollars. The intent, she said, is to support teacher salary and benefits and take away funding expectations from local levies.

“It’s one of the many reasons why they are changing the practice,” she said.

Hietpas said as far as existing local levies passed by voters, such as the EP&O Levy passed in February, legislators did not provide a clear answer as to how the new state budget would affect local levies in school districts.

She said there could be a roll back of existing local levies but there has not been clear guidance on the issue yet.

Neal gets extension

Sequim School Board directors unanimously approved extending Sequim schools superintendent Gary Neal’s contract through 2019 at the school board meeting on Monday, July 17.

“He’s been a fabulous addition to the Sequim School District,” board president Heather Short said. “He’s really pushed forward and finally developed a strategic plan in district which has been a long time coming.”

The board also approved a Capital Projects Budget Extension that allows the district to acquire $3.5 million in non-voted debt to start the work on the district’s central kitchen and deconstruction of portions of the Sequim Community School.

“It’s the current year budget and we are in the process of acquiring non-voted debt to begin the work on the Central Kitchen and the Sequim Community School so the district can have budget capacity now in the 2016-2017 school year,” Hietpas said.

The district will take out a loan from Zion Bank in California as the lowest bidder for the non-voted debt with an interest rate of 1.7 percent. The non-voted debt will be backed by the revenue generated from the property tax obligation set by the Capital Projects Levy passed by voters in February.

“Basically this debt is backed by that committed revenue stream from the taxpayers and allows us to move forward and get the project done now,” Hietpas said.

Delivery date for the non-voted debt funds is Aug. 24, 2017. Hietpas said the district will save $50,000 from the initial projected interest rate at 2.25 percent.

At the next board meeting on Aug. 7, board directors will be presented with two resolutions with that debt issuance.

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