Levy talk is not, for most people, very interesting. That may be about to change. With the upcoming special session focused on filling a nearly $2 billion shortfall, you will start to hear a lot about "LEA." Typically a fund with broad bipartisan support , it is the largest single item remaining in the state budget that is not protected and will be the center of the upcoming debates about how to close the budget gap.
What is LEA?
When the state's current approach to paying for our schools was put in place in 1978, the idea was that the state would pay for everything included in the definition of basic education and local levies would be for "enhancements." The state was to provide an ample and equitable education for all kids, and local levies would be allowed for extras.
The amount a local school district can raise via a local school levy is set as a fixed portion of a school's operating budget. Currently law allows all districts to collect at least 28% (raised from 24%), with some grandfathered in at higher rates. Local levies are based on property taxes, and thus property values. With the great disparity between property values in different communities, the state established a way to alleviate the fact that well-to-do districts can raise more local money. This program helps school districts with lower property values offer the same level of education as higher-value districts. It is called Local Effort Assistance, or Levy Equalization, and the acronym LEA was born.
There is an equity problem that LEA tries to address. If there was no levy equalization in 2010, a $100,000 home in Republic would have paid over twice the taxes of a $1,000,000 home in Redmond for a 28 percent levy. Why should far poorer taxpayers in a $100,000 house have to pay twice the taxes of a $1,000,000 Bellevue home to get the same local levy for their schools?
Over the years the state has consistently reduced funding for basic education, and local districts have come to rely on local levy dollars to pay for what anyone would consider basic education. The state shirking its responsibility to fund basic education, the disparity between districts and the education they can provide, grows. As the financial crisis hit, the state allowed local districts to raise up to 28% of their operating budget through local levies and base that percentage the budgets they would have had the state fully funded basic education. This put additional pressure on, and raised the importance of, levies and LEA to local districts.
Currently, 240 of the 295 school districts receive some amount of LEA support. This distribution means that virtually every legislative district has a school district that receives LEA money. This reality has protected LEA from any reforms over the years. The result has been that some LEA funds have been inequitably distributed to districts that do not really need it, and in some cases, is more about property tax relief than paying for education.
Some thoughts to consider as the state prepares to reform, and probably cut, LEA.
• The formulas in LEA, for some districts, provides a disincentive to raise local dollars, so LEA is used as property tax relief not just to fund education.
• Washington has the most regressive tax system in the country, where the poorest pay the highest percent of their personal incomes in state and local taxes; levy equalization returns to the poorest areas a portion of the higher tax effort they make.
• Most of the truly property-poor districts have the highest percentages of poor and minority students. These schools have larger class sizes, fewer specialists, counselors, teacher assistants, secretaries and administrators to assist teachers in the classroom.
• Higher teacher turnover is endemic in the poorest school districts. Teachers leave for greater chance at professional success in districts with more funds. This turnover is crippling to school district efforts to provide consistency to their students.
When levies break, someone is going to end up underwater
LEA plays a vital role in leveling the playing field. It also is a political hot potato that has hindered debates and progress on fully funding our schools. The conventional wisdom is that Republican districts receive most of the LEA money. Republicans, in recent times at least, have opposed new money for schools, but fiercely opposed reductions to LEA and have been joined in support for LEA by Democrats. And by allowing the local levy lid to rise, the legislature has driven increases in funding via LEA while pursuing deep cuts everywhere else. The regions, primarily in the Puget Sound, that are willing and able to pay more for schools send a large portion of their property tax dollars to areas of the state that are not supportive of increased revenue for schools. You have legislators who oppose revenue gladly taking LEA dollars and the same time they fight against revenue for all students and the full funding of basic education that our Constitution requires. This creates animosity that will be evident to anyone following the debate on budget cuts that is about to begin. LEA is the largest single source of existing dollars to fill our budget gap; it will be central to the debate.
While the debate will rage over a fund that is supposed to be for the extras, the basics continue to be radically underfunded. Students should not pay the price for the political ineptness of adults. All students in Washington are constitutionally guaranteed an ample and equitable education. While we nibble around the edges of our levy problem, our students are going deeper underwater.
Here is a quick primer from the state on LEA. The percentages mentioned are not up-to-date, but the basics are still accurate:
https://www.ofm.wa.gov/levy/20100827/Levy_Equalization_Primer.pdf
Frank Ordway is Director of Government Relations at the League of Education Voters.
