Bond system, wealth inequity are targets of school-funding suit - Salish Current
March 2, 2023
Bond system, wealth inequity are targets of school-funding suit
Kai Uyehara

School districts locally and around the state await the Supreme Court hearing of a suit filed by one of the state’s smallest districts seeking equity in school construction funding. Wahkiakum School District brought the suit after a bond issue failed to pass, leaving the district unable to address a variety of repairs to its aging buildings. The district is dealing with damage from a failed heating system, leaking patched roof and other disrepair. (Courtesy photo)

March 2, 2023
Bond system, wealth inequity are targets of school-funding suit
Kai Uyehara

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School roofs leak, science lab pipes are broken and the fire-alarm system doesn’t fully work; there’s no sprinkler system, no warm water in the bathrooms and no ADA compliance.

Clearly, the aging buildings in Southwest Washington’s small and rural Wahkiakum School District are falling into disrepair, said superintendent Brent Freeman. After a bond proposal to fund repairs a few years ago failed to win voter approval, the district chose to sue the state for funding needed to maintain a functional, safe environment for students.

The case is scheduled to come before the Washington Supreme Court on March 14 — and locally, schools with similar funding challenges are watching closely.

Wahkiakum’s existing buildings were built in the post-World War II era to accommodate the growing Baby Boom generation, Freeman said. Today, the district’s population is 3,556. As the county’s once-thriving fishing, dairy farming and forestry industries significantly declined, many residents left to live and work elsewhere. Wahkiakum County has a small tax base and a high number of retirees on fixed incomes. Average annual wages were between $39,302 and $44,370 — second lowest of the state’s 39 counties — in 2020, according to Washington’s Office of Financial Management.

These are not ideal conditions to secure funding for school capital projects, in a system that requires property owners to choose to raise their own taxes.

In Washington, longer-term construction bond elections require 60% voter approval, while shorter-term operating levies pass with 50%. Bonds are sold to investors who are repaid with interest, generally over 10 to 25 years, from property tax collections.

In 2020, Wahkiakum’s $28 million construction bond proposal to repair its many-decades-old buildings was rejected by 70% of voters.

At that point, the district asserted that the state should be responsible for funding, instead of leaving it up to voters who may be reluctant to tax themselves. Following the precedent of the McCleary case which was decided in the state Supreme Court in 2012, the district sued the state in late 2021 for failing to properly fund educational capital projects.

The McCleary plaintiffs prevailed when the court ruled that the state must cover “basic education” needs by funding operational costs such as programming, learning tools and staffing.

The court’s decision left the term “basic education” undefined, writing that “the program of basic education is not etched in constitutional stone” and that it is the legislature’s job “to review the basic education program as the needs of students and the demands of society evolve.”

Does the McCleary decision hold the state responsible for funding capital costs like construction and repairs as well? Freeman and the district’s lawyer, Tom Ahearne — lead lawyer for the McCleary case — are suing to seek the answer. 

Environment matters

For educators, the environment of a student’s learning journey matters as much as its operations. Schools continually need repair, maintenance or even new construction, regardless of whether funds are available.

The Mount Vernon School District remodeled the high school’s Old Main building with funding they secured in their last bond, in 2016. (Kai Uyehara / Salish Current photo © 2023)

“We are all impacted by the environments in which we work — lighting, heating, cooling, air flow, sound, appropriately flexible spaces, aesthetics, appropriate tech and electrical systems, safety,” said Mount Vernon school superintendent Ismael Vivanco; a modernized facility puts the focus on teaching and learning.­

Schools need safety and security facilities, ADA compliance, ability to feed students, sports facilities, air filtration, locker rooms, bathrooms and even the ability to assume traditional parental roles, Freeman said. A school can have a great staff and community, but lacking facilities makes it hard to sustain a solid education. 

“New facilities help with sustainability, health, fitness, technology and preparing for jobs,” said Bellingham Public Schools superintendent Greg Baker; it sends a message of care and love to students and staff to have a safe, healthy top-notch facility.

Funding tactics

School districts are funding varying amounts of school construction with different means, for different amounts, supported by different taxes. 

The Sedro-Woolley School District last passed a bond in 2010, for $17 million. A bond for $79.5 million failed to pass in February 2018, and one that November for $44.5 million also failed.

The district had hoped to address disrepair and build a new school, said district spokesperson Ruth Richardson. “Over the years, the district has added temporary walls to create classrooms, added portables and a building to house restrooms, and now brings bottled water into the school because of discoloration to the water caused by the building’s old pipes.”

In rural areas like Sedro-Woolley, where the tax base is stretched thin, passing a school replacement bond is extremely difficult, Richardson said. “Our schools have a high number of families who qualify for free and reduced lunches, so we know that every dollar counts.”

Bellingham Public Schools passed its last bond — with 60.1% approval — in late 2022 for $122 million, for funds to build a 15th elementary school on the north side of Bellingham and to plan for future replacement of Roosevelt, Carl Cozier and Columbia elementary schools, said communications director Dana Smith. “It’s likely that another bond will be considered in 2025 or 2026 to take action on the plans for the replacement elementary schools as well as any other projects recommended,” she said.

In Mount Vernon, voters passed a $106.4 million bond in 2016 which allowed the district to build a new elementary school, add shop and classroom space to the high school, remodel buildings and add security features on the high school campus, Vivanco said. The district still has capital, safety and security improvements on its list that they could be pursued with additional funding.

In the San Juan Island School District, things run a little differently. The district’s last bond was passed more than 20 years ago, but the district has been sufficiently funded with smaller capital and technology levies that run every four years, said superintendent Fred Woods. The next levy is coming in 2024, to fund needs such as building siding, a new roof and painting. 

Woods said the community has been very supportive over the years, passing levies to fund a tennis court, carpeting and roofing.

Pursuing levies instead of bonds has proven successful for the Sedro-Woolley district as well. The district passed a capital levy in 2020 to extend the life of all the district’s schools while enhancing safety, technology, energy efficiency and performance of heating, ventilation and air conditioning systems, said Brett Greenwood, the district’s executive director of business, operations and student support.

Outpaced by costs

But relying on levies doesn’t always work. Some projects get bumped out of proposed funding when construction costs outpace what districts estimated they’d need in funding.

“Even though we have passed bonds, we’re not where I would like to be in terms of ensuring every school is at a certain standard,” Baker said, noting that some parents express frustration at what they see as unfair spending as certain projects have to be prioritized, leaving others unfunded. 

Levies have been a functional alternative to bonds for San Juan Island because they’re easier to pass, as they tend to raise taxes at a lower level, and construction can be planned out and completed over four years, Woods said. But when new buildings and major construction projects are on the table, bonds are a necessity.

“Our problem right now is that the inflation has far exceeded what we have asked for in capital levies,” said Woods. “So we’ve had to make some prioritized decisions on what’s most important.”  Some projects must wait indefinitely. 

The difficulty of passing a construction bond to upgrade or expand facilities is that it puts the decision to raise taxes in the hands of property owners, regardless of their ability to pay increased property taxes.

The San Juan Island School District boasts a new tennis court, funded by their last capital levy, passed in 2020. The district relies on levies, which can be passed with only 50% voter approval, to fund capital needs, instead of bonds which require a supermajority 60% approval. (Kathryn Wheeler / Salish Current photo © 2023)

During this past February’s elections, bonds for school replacements, new buildings and stadiums failed in Oak Harbor, Elma and Enumclaw school districts, among others. 

“It’s extremely challenging,” Baker said. “When you think about getting 60% of the public to agree on anything, that’s hard in itself. And then if it’s to tax yourself, that gets even harder.”

‘ZIP code inequity’

The state’s system is set up so that the more affluent a district is, the easier it can be to provide better facilities for the kids that live there, Baker said. Because assessments are calculated as a percentage of property value, in districts where property values are higher, a lower percentage of tax assessment per property is needed to reach a designated amount of funding.

The higher property values on San Juan Island help funding measures pass more easily than districts like Wahkiakum with lower property values, Woods said. But even with a supportive, wealthier community, the district still needs to show sufficient demonstrated need and be as transparent as possible while spending funds, to garner the community’s support. 

Communities are more likely to pledge support for a bond again when they “see the completion of advertised projects that are more healthy, safe, and secure for students, staff, and families,” Vivanco said. But, he noted, “it is not a reliable way to address capital needs” as there can be any number of reasons a community might reach a ceiling on the amount of property tax increase they’d be willing to support.

Support for children’s education is common and well-intentioned, but conceptual support for school funding might only go as far as money stretches. 

“The problem with the bond is the general assumption that individual taxpayers are going to invest in education because that’s in their best interest, but unfortunately, that’s not true,” Freeman said. Whether voters support school education or not, “you’re forcing voters to decide with their pocketbooks about what they can afford and then what the outcomes are for education.” 

The resulting “ZIP code inequity” of a school district’s facilities that corresponds with their taxpayers’ ability to support bonds is the target of the Wahkiakum lawsuit, Freeman said. 

Wahkiakum has a poor history of passing bonds. After past failures, the district reduced its bond amount each time to garner votes, until it finally succeeded in 2001, Freeman said. But the final funding secured only covered 20% of the district’s needs to address plumbing, asbestos, HVAC systems, a leaking roof and more repairs. 

The state’s bond-reliance model proved a vicious cycle for Wahkiakum as the district hoped to show off their successes with minimal funding to secure more support for their next bond campaign. Voters, however, saw minimal return on investment as some repairs, like a new roof, didn’t stand up to expectations, Freeman said, and didn’t support a second bond. 

The state can give out grants for building improvements and can match money districts raise — after a bond measure passes.

“The problem with the system is you’re really relying on voters with economic needs to be generous,” Freeman said. “And when you don’t have either generous people or any kind of an economic base to subsidize your school, you’re hurting.”

Leveling the playing field or moving the goal posts?

If Wahkiakum were to win the case, the state would be responsible for capital funding along with operational funding — a clearer definition of basic education. The inequities of taxpayer-reliant funding could be neutralized, but other obstacles could arise. 

“If the state paid for construction, we would have theoretically equitable facilities across our state,” Baker said. “If you lived in a community that didn’t have a high tax base, you could have a nice facility. It would level the playing field.”

Expectations for school facilities would be equalized as well, Freeman said, just as they are for state-funded structures like bridges and roads. 

“There’s a potential for a much better product out there at a much better price point when you go out and standardize,” Freeman said. “You’re stabilizing the costs of what money goes into education across all stakeholders in the state of Washington.”

But if the state is held responsible for covering capital needs, that doesn’t mean funding won’t be gathered from taxation.

“That would still be tax funded, subject to economic situation of the state, subject to legislation,” Vivanco said, and that could be a downside. 

“Wahkiakum has a demonstrated need to have a facility where they can provide an education that is as good as somewhere else, like Bellevue or something like that, but what would that mean to the rest of the districts in this state and where does the money come from to fund capital projects like that,” wondered Woods.

Freeman said that, even if the state were to fund school capital projects as part of basic education, it would not eliminate a district’s option to raise funds through a bond measure.

But where there’s state funding, there could also be state influence.

“It seems that you lose a little bit of local control once you give the state the control, but I don’t know if that’s a downside or not,” Woods said. “They might control what your designs are. It could be uncertain if the state is funding it instead, if they get to dictate a little bit how you address your needs.”

The standard of need that districts have to prove in order to access state funds would be unknown as well, Woods hypothesized, and the amount granted could be limited. 

If the district loses the case, Vivanco wonders if there could be increases to state funding that currently matches the amounts districts raise, and eased eligibility requirements for state money.

“If they don’t win the case and the court says this is the best way to finance construction through your local taxpayers only, then that’s just the way you do it,” Woods said.

“We’re not asking them for marble schools and gold palaces,” Freeman said. “We’re asking for a basic facility that supports a modern education.”

— Reported by Kai Uyehara

Read more: “San Juan school districts face big budget shortfalls due to levy cap,” Salish Current, Jan. 7, 2021

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