R-52: Getting Schooled on School Finance

In researching energy saving school retrofits I have found some common issues affecting K-12 school funding in British Columbia, Washington, and Oregon. Everyone knows that funds are limited. But what’s interesting is that the limitation is aggravated by the complex dynamics between local, state, and provincial politics and economics. There isn’t any one easy fix for the many challenges facing our schools when it comes to paying for education. But there is one thing we can do that, while it won’t solve all the problems, will help: pass R-52. Let’s start with the lessons I’ve learned:

Lesson #1—In both states and the province education is a high priority mandated by provincial and state law. In Washington, basic education is defined as the state’s “paramount duty” in the constitution. Oregon’s constitution mandates “a uniform, and general system of Common schools.” British Columbia’s School Act calls basic education a fundamental ingredient of democracy and promises to “ensure that all its members receive an education that enables them to become literate, personally fulfilled and publicly useful.”

Lesson #2—A second interesting similarity is that, the lofty goals and mandates notwithstanding, the cost of educating children is almost always higher than what is allocated. In British Columbia, Washington, and Oregon, funding from provincial and state government is not enough to cover the actual costs of education. In the case of Washington and Oregon, about a third of local budgets are supplemented by local tax levies and the sale of bonds for school construction. In British Columbia, there are fewer local options for funding and most—about 90 percent—of the funding for the province’s 60 school districts comes from the Provincial government.

Lesson #3—Dependence on local funding creates inequalities. In Oregon and Washington especially, districts can end up with unequal funding. One district with a high property tax base can usually raise money more easily than a district with a shrinking property tax base, for example. Both states have programs to equalize these problems, but these often create squabbles between districts. In Washington this year, the legislature allowed larger, richer districts to raise the percentage of local funding they could ask for from their voters in exchange for the state setting aside more funding for smaller districts. In British Columbia, larger school districts like Vancouver’s struggle with more complex issues than some smaller school districts, and argue they aren’t being funded appropriately. But the Vancouver district doesn’t have the same funding tools American districts have to raise local revenue.

Lesson #4—Ballot measures and lawsuits are constantly changing the landscape of school finance. In Oregon, voters passed Measure 5 in 1990, which drastically reduced what school districts could raise in local property taxes, shifting much of the burden to a shrinking state general fund. Washington voters in 2000 supported Initiative 732 to ensure “cost of living adjustments” for teachers, as well as Initiative 738 to reduce class size. Neither of the initiatives created any new revenue, however, and legislatures in subsequent years have had to make adjustments to both laws. In both Washington and British Columbia, local districts are pursuing legal action, and demanding funding consistent with state and provincial mandates.

Lesson #5—School construction funding is uneven. In Washington, local districts can get state matching dollars for the cost of constructing new schools. But there is a waiting list for the match, meaning that local districts have to fund their own schools and wait for reimbursement. In Oregon, school construction was almost entirely funded locally through bond measures passed by voters, until the passage of Measure 68 earlier this year, which allows the state to sell debt to match local construction dollars for priority projects. In British Columbia, the provincial government funds all construction requests. In each case, local needs for school facilities are dependent on voter-approved debt or else are competing with other districts at the state or provincial level for scarce resources, which often means backlogs in maintenance and overcrowding. In the case of British Columbia, the 60 local school boards must propose projects to the provincial government, which prioritizes the requests.

Lesson #6—There is a long-standing precedent for funding energy-saving retrofits. In both Oregon and Washington, dozens of school districts have participated in performance contracting programs to complete energy-saving retrofits. And, as we’ve pointed out already, these programs are effective. In Oregon, schools can use tax credits provided by the Business Energy Tax Credit (BETC) to generate funds for retrofits or get funding from fees paid by energy consumers to complete retrofits. Both states also have loan programs for retrofits. British Columbia just set aside $25 million for retrofits for schools and other public buildings. In other words, retrofits for energy savings are tried and true strategies for saving schools money.

What do these lessons mean in the short term? I think it’s clear: we should pass Referendum 52 in Washington. Funding for public education in our region isn’t just lacking, it’s far too complicated. Large scale retrofits won’t solve all the problems with school funding in our region. A more sustainable balance needs to be struck between local school autonomy and full funding from states and provincial government. But one thing is for sure, saving more money on energy is a win for schools. As we’ve already pointed out, retrofits s
ave money, help with learning, and improve the health of students and teachers. Washington is taking the lead in the region by considering upping the scale of retrofits to create all these benefits plus much needed jobs. If it passes it will be a lesson that British Columbia and Oregon will certainly follow.

Photo courtesy of cohdra from morguefile.com.