Horace Mann Elementary second graders got a hands-on toy-building lesson from “Mr. Toymaker,” Rick Hartman.
The district gets its operating revenue from five primary sources: state apportionment, local levy, state categorical, federal funds and fees for district programs.
State general funds
State apportionment, or state general purpose funding, provides the largest portion, 64.7 percent, of Lake Washington School District’s general fund revenue. The amount is determined by the number of students attending our schools and a series of formula factors. Those factors include legislatively-set base salaries, employee benefits and non-labor allocations.
Educational programs and operations levy
The local property tax levy provides 13.1 percent of general budgeted revenues. These levy amounts are capped by the legislature: the district cannot raise more money than the limit even when your property value rises or even if the community wanted to raise more money for schools. Levies must be approved by Lake Washington School District voters at a special election.
State categorical funds
State dollars that are earmarked for specific categories provide 12.2 percent of budgeted revenues. These funds must be used for specific categories such as special education, pupil transportation, English Language Learner education, learning assistance and education enhancements. Most of these revenues are given for a specific program and are not available for other purposes.
The district generates 4.2 percent of its own revenue by charging fees for programs such as extended day care, athletic participation and preschool. This category includes revenue from sales of school lunches and investment interest earnings.
Money from the federal government comprises 3.9 percent of district revenues. These dollars fund such programs as Head Start and Title I (educational enhancements to improve achievement of low-income children). They also provide supplemental funding for special education programs and support free and reduced price lunches in the nutrition services program. These revenues also may only be used for their specific program purpose.
Other school districts, agencies and financing sources
Payments from other districts for participation in joint programs, grants from other non-state agencies and transfers from Capital Levy for Technology Training & Applications accounts for 1.9 percent of budgeted revenues.
Click on the tabs above to see "Where does the money go?" and "School Funding Basics."
Classroom expenses are Lake Washington School District’s budget priority. That’s where children spend most of their school day and where learning happens. So most of the district's resources go there directly.
Total Teaching - 78.3%
This portion of the district’s budget is spent in and on the classroom, including expenditures for teachers, counselors, librarians, educational assistants, teaching supplies, materials, textbooks, instructional staff development, assessment and curriculum development. Also included are expenditures for pupil management and safety, health-related services, activities/athletics support and supervision, and community services and programs.
Building Administration - 6.0%
This segment covers building administration, including principals, and school support, such as secretaries and office supplies.
Maintenance & Operations - 5.0%
These expenses include costs to maintain the district’s facilities. This segment covers grounds and building maintenance, cleaning services, utilities costs and building and property security.
Central Administration - 4.4%
These expenses include development, coordination and evaluation of instructional programs by the superintendent and central office. Also included are business and human resources, supervision for nutrition services, maintenance and transportation, communications and legal costs.
Transportation - 2.1%
This segment includes the operations, maintenance and insurance for transporting students.
Nutrition Services - 1.9%
This segment includes the costs for food and operations for the district lunch and breakfast program.
Other - 2.3%
These expenses include property and liability insurance, information systems, printing, warehouse and distribution
services. Also included are expenses related to the Extended Day program, which provides fee-based before and after school care for students.
Ever wondered how school funding is decided at the state level? Or why there seems to be money for technology and new buildings but not for supplies or needed staff positions? The answer lies in the state's school funding system.
The Basic Education Act, passed in 1977, defines formulas used to fund basic education for students in Washington state and thus what the state will pay for. Local levies are supposed to pay for extras – enhancements that local taxpayers want above and beyond the basics.
Funding for operations is capped
Basic education funding from the state, otherwise known as state general funding (see "Where does the money Come from?" above), made up 64.7 percent of the 2019-20 budget for the district.
Different elements of the system were put into place so that access to education remained relatively equal across the state: a student in a poor area would not receive an education substantially worse than a student in a rich area. As a result, districts are limited in how much money they can raise through local levies.
Local levy dollars come from property taxes and provide additional money for school operating funds. These funds fill in the gap between state basic education funding and the current educational program and account for 13.1 percent of the district budget. While the state has taken steps to provide additional funding for basic education, many areas remain underfunded. These areas include: Special Education, Highly Capable, English Language Learners, transportation, substitutes, and safety and security. Further, the district will always need local levies to fund local programs and priorities which are not considered to be Basic Education and will never be funded by the state. These programs and priorities include: professional learning, athletics, extracurricular activities, early learning, and additional courses (7-period day).
State dollars are provided through what are called state categorical funds, those earmarked for specific purposes, such as special education, transportation, and English Language Learner education. These dollars are not available for other purposes.
Federal dollars are relatively few: 3.9 percent of the district’s operating budget comes from the federal government. That money is also earmarked for specific purposes, such as Head Start, educational support for low-income students, and support for free and reduced-price lunches.
If state general funds, state earmarked funds, and local levy dollars do not cover the costs of running a school district, there are few legal options for the district to raise more money. It can charge fees for some programs, like extended day, athletics, or school lunches. But the ability to charge money is also limited: students are guaranteed a free education.
Money for building schools and buying big items (buses, technology) is raised through separate ballot measures, such as capital levies and bonds. These dollars can only be spent on that specific purpose. They can’t be transferred to the general operating fund to pay for something else. So we can’t, for example, decide to use the money from the technology levy earmarked for Smartboards or new computers to pay for more teachers: that would be illegal. We also can’t decide to use the money set aside for building schools to pay for anything in the general operating budget, like staffing, supplies or textbooks.
- What is the McCleary Plan?
- How did the McCleary Plan impact teacher compensation?
- We are hearing about other districts striking. Does the strike affect LWSD?
- What were the main goals for the current negotiated agreement?
- How do we know that this agreement is sustainable?
- How does this change in funding affect other employee groups?
- What is the four-year budget plan?
- How did the McCleary Plan impact local school district levies?
- Didn’t the state fully fund education with the McCleary Plan? Why do you still need an “Educational Programs & Operations Levy?”
Historically, school districts in Washington State have relied heavily on local levies to fund basic education. The Supreme Court ruled that the state was not meeting its constitutional obligation to fully fund basic education. This ruling, known as the McCleary decision, resulted in the state legislature’s “McCleary Plan,” which is intended to provide additional funding for basic education for all 295 districts in Washington State.
The McCleary Plan involves increasing state property taxes for education funding and placing limits on the amount of EP&O (Educational Programs & Operations) levy funding that local school districts can collect.
Under the McCleary Plan the legislature increased state funding for staff salaries to reduce the reliance on local levies, including the following factors:
- Eliminated funding for certificated instructional staff based on education and experience (staff mix)
- Increased funding for the per teacher allocation and regionalization to address regional cost of living differences (LWSD receives 18% regionalization)
- Established new required minimums and non-required maximums for teacher salaries
Lake Washington School District and the Lake Washington Education Association (LWEA) had already settled on a 4-year negotiated agreement that was in effect beginning with the 2017-18 school year. The agreement had a reopener limited to re-negotiating salaries for the 2018-19 school year. The district negotiated with LWEA during the spring and reached agreement this past June (2018). When negotiating with our teacher union (LWEA), we typically reach agreement on our contracts in May or June so that changes are factored into the budget development process in preparation for the next school year.
The main goals for the current agreement include the following:
- Recruit, hire, and retain highly effective personnel
- Be competitive with neighboring districts
- Use the McCleary dollars to increase reliance on state funding for staff salaries and decrease reliance on local levies to fund staff salaries, while at the same time using levy dollars to fund enrichment/TRI (time, responsibility, incentive) beyond the state funded program of basic education to help accomplish strategic goals
The district reduced the percentage of an average teacher’s salary in LWSD that is paid from levy funds from 29% to 11%.
Teacher salaries increased an average of 15%. This includes a 3.1% adjustment and the implementation of the new salary schedule per legislative requirements.
The 2018-19 salary schedule has a total compensation range of $55,699 to $112,957.
All staff received a 3.1% salary adjustment for 2018-19. Some classified groups had additional amounts provided based on their collective bargaining agreement. None of the district’s classified agreements were open to negotiation for 2018-19 school year. We will be negotiating some classified contracts this spring for renewal, effective 2019-20 school year.
As part of the McCleary Plan the legislature required districts to publish a four-year budget plan as part of the annual budget development process. Even though this is a new state requirement, the Lake Washington School District has always looked beyond a one-year view to develop long-term enrollment and financial projections. This ensures that decisions made today are done so with a long-range plan.
The district’s current four-year plan was prepared to account for enrollment growth, costs of opening new schools, and legislative mandates. The plan is also based on current data and reasonable financial projections. While the districts fund balance is increasing in 2018-19, these funds will be needed to cover future expenditure increases and additional revenue losses from the levy. In addition, there are unknown long-term impacts related to health benefits, increased pension obligations and other unforeseen events that could have a negative impact on the long-term outlook.
The four-year budget plan is located in the district’s budget documents, both the Budget Summary and the State format F195 which can be found on our website under Budget and Financial Reports.
The McCleary Plan limited what local school districts can collect through their EP&O levy. Districts can collect either $1.50 per thousand of assessed valuation (AV) or $2500 per student, whichever is less. For Lake Washington, the $2500 per student amount is less. Districts must renew their levies every 4 years. In the February 2018 EP&O renewal, LWSD did not seek the full amount authorized by the legislature due to the additional state funding for basic education. LWSD reduced the local tax rate for the EP&O levy by $0.23 per thousand.
While the state’s McCleary plan does provide additional funding there are many areas that remain underfunded by the state, including:
- Special Education
- Highly Capable
- English language learners
In addition, the district will always need local levies to fund local district programs and priorities which are not considered to be basic education and will never be funded by the state including:
- Professional learning
- Athletics and activities
- Extracurricular activities
- Additional courses (example - 7-period day)
State funding provides a little more than 75 percent of the funding for operations.
Federal funding covers just 3.5 percent.
The district currently depends on the Educational Programs and Operations (EP&O) levy for 14.5 percent of its operating costs. These funds fill the gap between state funding and the cost of today’s education programs and support.