Who is to Blame for a Billion Dollars in School Bond Failures?
Our public schools are the backbone of our economy and the foundation of our Democracy.
Our legislature’s failure to meet their Constitutional Duty to adequately fund the construction, operation and repair of our schools is a crime against our State’s one million school children.
On April 26, 2011, there were 12 school bond proposals on the special election ballot in the State of Washington. All 12 went down to defeat – nearly all by very wide margins. As the following table shows, these 12 school bonds represented almost $500 million in school construction projects and their failure will adversely affect the lives of more than 46,000 children.
Results were nearly as disastrous in February 2012 when $512 million in bonds went down to defeat while only $91 million in bonds passed. Over 50,000 children were adversely affected by the February bond failures. Thus nearly $1 billion in bonds have gone down to defeat this year – adversely affecting the futures of 100,000 children. In East King County, two school district bond proposals failed – including a $56 million school bond in the Snoqualmie Valley School District and a $125 million school bond in the Tahoma School District.
Bond proponents are blaming their neighbors for refusing to vote for the bond. Bond opponents are blaming school district officials for putting up high priced bond proposals in the middle of a recession. But instead of blaming each other, both sides should recognize that neither is to blame for this tragic state of events.
The real guilty party is our State legislature which has cut billions of dollars from school operating and construction funding in the past 10 years in order to give billions in tax breaks to wealthy multinational corporations who continue to ship jobs and capital overseas.
This report will examine the history of our State’s School Construction problem and propose three important long term solutions so that school districts can build the schools they need without requiring local homeowners to pay excessively high and unfair property taxes.
How much are local tax payers paying in State taxes compared to the national average?
According to a 2009 national study of the tax systems in all 50 States, Washington State has the most regressive and unfair tax system in the nation. (See Who Pays? A Distributional Analysis of the Tax Systems in all 50 States, Third Edition, November 2009, Institute on Taxation and Economic Policy, itepnet.org
Washington State has the Most Unfair Tax System in the Nation
Our poor and middle class and small businesses are already paying State taxes at rates far above the national average while our super rich and major corporations are paying State taxes at rates far below the national average. Those who can afford to pay the least are paying the most, while those who can afford to pay the most are paying the least.
Asking our poor and middle class to pay higher property taxes when their State and local tax rates are already among the highest in the nation is not a fair or reasonable thing to do. Yet this is exactly what has been going on since the ITEP study was published in 2009.
School Related Property Tax Rates have Skyrocketed in Washington State during the past 10 years
In 2000, the legislature raised the local property tax levy lid from 20% State school funding to 24% of State and federal School Funding. In 2009, after making numerous State budget cuts, the legislature raised the levy lid again by making it 24% of what the State would have paid had the State not actually cut funding for schools. In 2010, the State legislature raised the local property tax levy lid again from 24% to 28% – again not based on what the State is actually paying, but what the State might have paid had they not cut funding for schools by billions of dollars.
All of these levy lid increases in the past 10 years has caused local property tax rates to go through the roof in the past 2 years – further increasing the unfair tax burden on poor and middle class homeowners in our State. As a result of this dramatic rise in the levy lid, local school related property tax rates have gone through the roof. Here is the recent rise in local property taxes in the Snoqualmie Valley School District:
Snoqualmie Valley School Related Property Taxes have Skyrocketed by 72% in the past 2 years! http://www.k12.wa.us/safs/PUB/LEV/1011/lv.asp Report 2010
Note that had the school bond passed, local school related property taxes for homeowners in the Snoqualmie Valley School District would have nearly doubled in just 4 years.
The situation is even worse for homeowners in the Tahoma School District: Their school related property taxes have already skyrocketed to 44% to $5.28 per thousand. This means a homeowner with a $500,000 home in Maple Valley is paying $2,640 per year just in school related property taxes. Their total property tax bill is over $5,000 per year!
The current Tahoma School District Construction bond will not be paid off until 2016 and already adds $420 per year for an average $300,000 home. The proposed new bond would have added another $400 per year. Local homeowners in Maple Valley also just approved an $11 million tech levy and a $73 million operating levy (both passed in 2010). These add another $1,260 per year to an average priced home.
The grand total had the bond passed would have been over $2,000 per year ($6.80 per thousand of assessed valuation). This would have driven many homeowners out of their homes in the middle of the worst recession in 70 years.
Huge Local School Levies and School Bonds were ruled unconstitutional by our Supreme Court more than 30 years ago
These huge increases in local property taxes are part of an unconstitutional decades-long transfer of the tax burden on to the backs of local homeowners. In the late 1970’s, our Supreme Court ruled that our legislature could NOT transfer the burden to pay for public schools onto the backs of local homeowners through the use of unfair and undependable local levies.
(Seattle School District No. 1 v. State, 90 Wn.2d 476 (1978). This case may be downloaded from the website: legalwa.org).
As a consequence, the maximum local property tax levy lid was set at 10% of State funding. However, since 1980, the legislature has ignored our State Constitution and our Supreme Court and repeatedly raised the local property tax levy lid. It is currently at 28% and many legislators have submitted bills to raise the levy lid to 30% or even higher.
Source: Washington State Superintendent of Public Instruction, Table 3, Excess General Fund Levy Revenue as a Percent of Total Revenue
As a consequence of the legislature repeatedly raising the local property tax levy lid, local School Related Property Taxes in absolute terms have risen by more than 1000% since 1980 – from $150 million to more than $1.5 billion. Anyone who has owned their home since 1980 knows this, so this information is mainly for those who have not owned their home for an extended period of time.
High Local Levies unfairly punish school children and homeowners living in school districts with low commercial property valuations
One of the many reasons the Drafters of our State Constitution did not want to rely on local property taxes to fund public schools was the recognition that such as method creates a two tier system of rich schools in communities with high property valuations per child and poorer schools in communities with low property valuations per child. Thus our State Constitution requires our legislature to provide our school children with a State wide “uniform” system of public schools so that every child in our State has a fair chance at success in life.
The difference in property valuations per child in our State are dramatic. As the following chart shows, the Seattle and Bellevue School Districts have property valuations per child that are twice as high as valuations per child in Issaquah and Snoqualmie Valley – and three times as high as property valuations per child in the Tahoma School District. Thus, the tax property burden on homeowners in Issaquah and Snoqualmie Valley are twice as high as they are in Bellevue and three times as high in Maple Valley as they are in Bellevue and Seattle.
As a result of much lower commercial property amounts per child in less affluent school districts, property tax rates in less affluent school districts are much higher than property taxes in wealthy school districts:
From King County Assessed Value and Tax Comparison by School District Typical Residence
As a direct result of an unfair and non-uniform property tax system, total property taxes for a $500,000 home in the Issaquah School District was about $2.00 per thousand or 25% higher than an identical home right across the street in the Bellevue School District. Property taxes are another $1.20 to $2.00 higher in the Snoqualmie Valley or Tahoma School Districts, another 10 to 20% increase compared to identical homes right across the street in the Issaquah School District.
Put another way, a family with a median home in Issaquah can be paying one thousand dollars more per year than a family with an identical house living across the street in Bellevue – even though their child in the Issaquah School District receives much LESS in school funding than an identical child living in the Bellevue School District: With such huge tax burdens placed on homeowners in low property valuation school districts, it is amazing that anyone in these communities ever votes for school bonds and levies.
How much funding do our children’s schools receive compared to the national average?
Sadly, very little of this local revenue actually results in increased funding for public schools. Instead, every time the levy lid has been raised, State support for school funding in our State has been cut by hundreds of millions of dollars.
In 1980, our State was 11th in the nation in school funding as a percent of income. Today, our State is 47th in the nation in school funding as a percent of income:
US Census Bureau Public Education Finances Table 12 Column 1. http://www.2.census.gov/govs/school/elsec08_sttables.xls
Ironically, the more local homeowners pay in school related property taxes, the less our children actually receive.
The cut in State support for school funding compared to the national average has gotten much worse in the past 10 years. Our State fell below the national average in school funding in 1998 and has since plunged to 47th in the nation:
Despite the huge increases in local property taxes and local school funding, because the State legislature has ignored their Constitutional requirement to fund our public schools, total school funding in our State is now $2,000 per student or 20% below the national average.
It would take at least $2 billion in increased State funding just to restore school funding in our State to the national average. This is just the operating budget shortfall. The capital budget shortfall, which we will look at next is even worse.
In the past 20 years, State matching funds for school construction and repair projects have fallen from 60% of actual cost to less than 20% of actual costs.
The current State Match is less than a third of the national average 50-50 State Match:
States which carry the Primary Burden for School Construction
Source: 2008 OPSI School Construction Funding Transparency Study, Berk and Associates, www.berkandassociates.com and 2010 State Capital Spending on PK-12 Schools, National Clearinghouse for Educational Facilities. http://www.ncef.org/pubs/state_capital_spending_on_school_facilities.pdf
This decline in State Matching funds has resulted in a transfer of this funding obligation from the State to local property owners via an increasing dependence on local school construction bonds. Like with operating costs, the State’s failure to help fund school construction has led to a dramatic increase in local school bond and levy costs which in turn have led to a rapid rise in local property taxes. This increase has been particularly harmful to those who are retired and/or living in a fixed income.
How the Lack of State Matching Funds Reduces the Chances of Passing School Bonds
The 2010 Snoqualmie Valley and Tahoma School District Bonds are good examples of how increasing the local property tax burden greatly reduces the chances of passing a school bond.
The Snoqualmie Valley School Bond total cost was $56 million. Because there were ZERO state matching funds, the cost to local homeowners would have been $56 million. Had the State legislature met their constitutional obligation to build schools by providing national average state matching funds of 50% of actual cost of school construction and repair projects, the State match would have been $23 million and the local tax burden would only have been $23 million.
The Tahoma School District bond total was $125 million. There were 20% state matching funds of $25 million – leaving a burden on local homeowners of $100 million. Because of low property valuations in the Tahoma School District, this was the equivalent of trying to pass a $300 million bond in Seattle or Bellevue. Had the State legislature met their constitutional obligation to build and repair schools by providing national average state matching funds of 50% of actual cost of school construction and repair, the State match would have been $62.5 million and the local tax burden would have only been $62.5 million.
Just as important, if local property taxes were rolled back to pre-2000 levels, the State would be paying the entire cost of these Construction bonds to make up for the fact that they have not been paying their fair share for the past 10 years. This unfair tax burden increase on middle class homeowners is as high as $1,000 additional dollars per year on a $500,000 home in King County. In other words, the State legislature owes our communities several schools just to restore fairness and justice to the tax code.
Is this the Beginning of a Tax Payer Rebellion?
Increasingly local homeowners are beginning to rebel against this transfer of the tax burden from wealthy corporations to local homeowners. This was the real message in the defeat of all ten school bonds across the State of Washington in April 2010. The danger for school boards in failing to defend not merely school children, but also local tax payers is that eventually the tax payers will fail to pass not just school bonds, but also school operating levies. Should this happen the school board would be required to fire up to 30% of the teachers in their school district.
Harm to children: More than 100,000 children in our State are now attending school in portable “temporary” classrooms
This failure to build and repair schools during the past 10 years has resulted in a situation where one in ten children in our State – 100,000 children – a forced to spend their school days in poorly ventilated particle board “temporary” classrooms because school districts can not pass bonds to build real schools without State support. The percentage of children in our State being housed in these particle board boxes is twice the national average.
The State Match Formula is unfair to all growing school districts in our State… forcing more than 100,000 school children to spend their school days in poorly ventilated particle board boxes. Growing School Districts from Evergreen near Vancouver, to Puyallup and Federal Way to Kent to Snohomish to Snoqualmie Valley and Maple Valley (Tahoma) have been subjected to similar problems. While the State un-housed students currently stand at 10% or 100,000 un-housed students, in many growing school districts, the rate is over 20%.
The following chart is just one example taken from the Snoqualmie Valley School District.
Determining the long term cost of portable classrooms
compared to building and operating permanent school buildings
In 2005, the voters of Washington State passed Initiative 900 authorizing the State Auditor’s Office to conduct performance audits of state agencies. The purpose of these audits was to promote “cost effective use of public resources” and identify significant areas of cost savings. As public schools account for 42% of State spending, analysis of school spending was one of the highest priorities. The State Auditor therefore conducted an in-depth audit of the 10 largest school districts in our State in 2007 and issued a Performance Audit Report on September 30, 2008. (http://www.sao.wa.gov/AuditReports/AuditReportFiles/ar1000013.pdf).
In 2008, the State Auditor issued a study of 10 school districts. The study found that 10% of all the classrooms in these 10 districts were portable classrooms. This is double the national average.
Washington has over 100,000 un-housed children without permanent classrooms
In 2008, the State Auditor issued a study of the ten largest school districts in Washington State. These ten very large school districts include 250,000 children – or one in four school children in our State. The study found that 10% of all the classrooms in these 10 districts were portable classrooms. Two school districts, Puyallup and Evergreen, were above 25%. This is way above the national average. According to the National Center for Education Statistics, the national average rate for portables is 6%.
Put another way, of the one million school children in our State, about 100,000 are attending school in particle board boxes with known health and safety risks and at a much higher long-term cost to State tax payers than if they were housed in real permanent school buildings.
Our State Constitution requires a uniform system of public schools. It is not uniform when two school districts have an unhoused student rate of 26% while another school district, Edmonds, has an unhoused student rate of only 1 percent.
The problem with putting 100,000 kids in particle board boxes is not merely that they are the wrong shape and were never designed for group learning. More important, these buildings suffer from inadequate ventilation and present health problems to students and teachers. In addition, portable buildings have long term costs which are twice as high as simply building real schools. So we are harming both school children and tax payers by housing children in temporary portables instead of providing them with real schools. Thus, portable buildings should never be viewed as anything more than an emergency temporary solution.
According to the National Center for Education Statistics, the national average rate for portables is 6%. To reduce the number of un-housed students in our State down to the national average of 6% would require building permanent schools for 40,000 children. At 500 children per school, this would require building 80 schools. At an average cost of $20 million per school, this would require an investment of $1.6 billion.
Over the long run, portables are a waste of tax payer dollars. The State Auditor noted that this was a complex topic. Nevertheless, they attempted to estimate the annualized costs of portables versus new construction. This was their estimate:
The Auditor concluded that while the initial cost of portables is about 50% less than permanent school buildings, the long term cost is about 50% greater.
This is because permanent schools last at least twice as long as portables and have much lower heating and operating costs. Some studies have found that permanent schools last 3 times longer than portables. Thus, long term costs of portables could be twice the long term cost of permanent school buildings or about $10,000 more per year per classroom. Also the 2008 Auditor’s report did not take into account any of the hidden costs of portable classrooms such as lost teacher and student productivity due to illness or lower learning rates due to excess noise. If all of these hidden costs were taken into account, the true cost of portables is likely to be many times the cost of real schools.
How much would State tax payers save in the long run by replacing all of our portable classrooms with real schools?
Using the conservative estimate in the 2008 State Auditor’s report. each portable classroom costs State tax payers at least $6,763 per year more than a real classroom. Since there are about 5,000 portable classrooms in our State, the total annual cost is at least $30 million dollars per year. Adding in all the hidden costs and using a more realistic ratio for the life of a portable compared to a real school brings the cost up to $100 million dollars per year. Multiple this times the 40 year life of a real school brings the long term tax payer cost for going with portables up to $4 billion dollars. It is simply not a wise policy to waste tax payer dollars on portables instead of building real schools. It is harmful to children, teachers and tax payers.
How can we fix this problem?
The Auditor’s report specifically faults “State construction funding processes and rules” for creating this problem. The report concludes that “changes in construction funding in Washington State could help such districts better manage their facilities inventories.” The Auditor’s report recommended that the State Legislature address several problems in State law which have forced growing school districts into the excess use of portables:
- Grossly unfair school construction funding tax structure. Because assessed property valuations vary significantly across Washington, some school districts (with lower property valuations per student) are at a “gross income disadvantage” compared to other school districts. In particular, rich school districts such as Bellevue and Mercer Island are able to have much better school funding and much lower taxing rates due to their high property valuations. Solutions to this problem include more equitable levy equalization or the formation of regional or State wide school taxing districts.
- Inadequate State school construction matching funds. State matching funds are now so low that they have not been viable for more than a decade. While Washington State used to match more than 50% of local funds to build schools, the State currently matches less than 15% of the actual cost of school construction. In some communities, such as the Snoqualmie School District, the State match is lower than 0% of actual costs. (note that the national average is about 50% State match of actual costs).
Given these recommendations by our State Auditor and given the huge long terms costs that current State policies are inflicting on State tax payers and on the health of children, our State legislature should make addressing this problem one of its highest priorities.
What is really needed is real schools with real classrooms. This requires real funding from the State. The consultants who wrote the most recent report on school construction stated: “Both the area cost allowance (ACA) and the allowable square footage per student are now held artificially low, in order to cap the State’s contribution. The fact that allowances are set at artificially low and unrealistically low levels is a major contributor to the transparency problem.”
The authors of the report recommended that the State Legislature “increase the ACA to be based on the true costs of construction, and that the allowable square footage per student be based on actual educational needs (emphasis added). “ Source: Berk and Associates (2008) K12 School Construction Funding Transparency Study, October 1, 2008, p 6).
In short, the solution to the school construction problem requires using the actual cost of school construction and the actual needs of the school students. Of course, this would require actual funding from the State legislature.
Sadly, our Governor’s 2011 – 2013 budget proposal calls for reducing state funding for public schools by more than $100 million per year – from the current $375 million per year down to a dismal $250 million per year.
The Senate budget proposal is even worse, called for a reduction in the State borrowing cap from 9% to 7% – cutting another $100 million in school construction funding – at a time when our children face a $20 billion school construction and repair backlog due to past two decades of the State legislature’s failure to provide adequate school construction and repair funding.
Superintendent of Public Instruction, Randy Dorn, has vocally opposed the Governor’s budget proposing instead that State School Construction funding be increased to $500 million per year. Superintendent Dorn stated: “ Gregoire’s 2011-13 budget leaves the school construction fund $180 million short of what’s necessary, and that means some projects won’t get finished. And others won’t even get started.”
Where are our precious tax dollars going if they are not going to schools?
At the following chart confirms, during the past 10 years, the legislature has granted billions of dollars in tax breaks to millionaires and major corporations, essentially transferring the tax burden for school operation, school construction and school repair away from the rich and onto the backs of middle class homeowners. During this same 10 years the cost of tax breaks, most of which goes to wealthy corporations, has risen from 250% from $22 billion per year to $50 billion per year.
Out of Control Tax Breaks for Multinational Corporations
State Revenue compared to Tax Exemptions (to nearest Billion)
Washington State Office of Financial Management, 10 Year Financial Trends, Schedule 5: Near General Fund. Annual Tax Breaks extrapolated from DOR Tax Exemption Reports. See also http://leap.leg.wa.gov/leap/Oversight/histongf.pdf
Over 90% of these tax exemptions benefit the richest one percent, with much of this wealth being shipped out of State and even out of the country, creating jobs overseas instead of here in Washington State. In shifting the tax burden to our middle class, and causing the firing of thousands of public servants, these massive tax exemptions for billionaires do not create jobs. Instead, they cost jobs. The way to increase School Funding is not by transferring the tax burden from wealthy corporations to local homeowners. Instead, it is by closing the billions in tax breaks for wealthy corporations.
Sadly, while the House and Senate have cut $3 billion dollars from school funding in the past 3 years, including hundreds of millions in cuts to school repair and construction funding, they have not cut a single penny from tax breaks for wealthy corporations. In fact, they have expanded these tax give aways by hundreds of millions of dollars.
Microsoft Tax Scam Costs our State $1 Billion Per Year
Microsoft Annual Sales Profits and Expenses (in Billions $)
Microsoft will make a record $20 billion in profit this year. If we could just get them to pay their fair share of State taxes, they would still make more than $19 billion in profit. But we would finally be able to begin to address our State’s $10 billion school construction and repair backlog and provide thousands of additional school construction jobs at a time when they are most needed.
For fiscal 2010 (which ended on June 30, 2010 for Microsoft), Microsoft made $19 Billion in profit on $62 Billion in sales. Sales and profits have continued at a record pace for the first two quarters of fiscal 2011. Microsoft has already made over $12 billion in profits in the first 6 months. It therefore will almost certainly go over $20 billion in profits for the fiscal year.
What would Microsoft pay if this tax exemption was eliminated and the royalty rate was restored to its historic rate of 1.5%?
Microsoft’s projected sales for the current year is near $70 billion. 1.5% x $70 billion = $1 billion.
The actual cost to Microsoft would be even less – because they could deduct their State taxes from their federal taxes.
Instead of blaming your neighbors for voting against school bonds, it is time to recognize that the real culprit in this tragedy is our State legislature.
Sadly, the Washington State Senate recently passed SJR 8215, a constitutional amendment that would reduce the state’s debt limit from 9% of revenue averaged over 3 years – to 7% of revenue averaged over 10 years. This proposal sounds good on the surface. But in reality, it would cost thousands of jobs, harm hundreds of thousands of children – and not save any money.
House lawmakers have thus far refused to go along with the Senate’s proposed Constitutional amendment because it would lead to more widespread use of costly leases and revenue bonds, which are more expensive than general obligation bonds and are not addressed in the amendment’s proposed limit. Use of these short term funding sources would cost tax payers much more in the long run than the current reliance on long term bonds.
The Senate proposal would not only cost tax payers much more in the long run, but it would also cost thousands of jobs NOW when they are most needed. In addition to the crucial question of how many jobs would it cost is the question of how badly this Senate proposal would harm our public schools. State support for school construction and repair would fall from $350 million per year to less than $250 million per year. This is at a time when our public schools are falling apart and there is a known $10 billion school construction and repair backlog caused by more than 10 years in which our State legislature has refused to honor their Constitutional Duty to repair and construct public schools.
As just one example, It is ironic that the corporate media (which itself is getting hundreds of millions in tax breaks) has claimed that the debt limit needs to be reduced because payments on the debt have grown by 61% during the past 10 years from $600 million per year to $1 billion dollars per year.
This same corporate media ignores the elephant in this room which is that State tax exemptions are 50 TIMES greater per year than the annual payment on the debt!
Which is the bigger problem here in terms of driving our State to bankruptcy – payments on the capital debt or corporate welfare for wealthy corporations? We give away more in tax breaks to one single corporations (Microsoft) than the entire annual payment on debt for school construction and repair!
This terrible Senate bill only adds insult to injury to the harm they are inflicting on our public schools. Thanks to Hans Dunshee, Chair of the House Capital Projects Budget Committee, for pointing out that this bill would cost thousands of jobs while at the same time actually increasing the tax burden local homeowners.
Three Solutions to the School Funding Problem
The first and most obvious solution is to roll back corporate tax breaks to what they were 10 years ago so that we could triple State support for school construction from the current $350 million per year to $1 billion per year. This would allow us to restore State Matching funds for school construction projects to the national average of 50% and at the same time lower property taxes on homeowners by more than 20%. Instead of firing 8,000 construction workers as the Senate is proposing to do, we could hire 20,000 construction workers and thereby help restore our State’s economy by keeping money and jobs in our State instead of permitting wealthy corporations to ship money and jobs overseas. This would also allow us to hire 10,000 teachers instead of firing 10,000 teachers over the next two years.
Sadly, the State legislature has shown no willingness to roll back tax breaks for the wealthy corporations who finance their re-election campaigns. This leads to the second solution which is to vote incumbents out of office. This also may not be a practical or realistic solution given that incumbents have better name recognition than challengers and typically have tens of thousands of dollars more to spend on re-election campaigns thanks to all the tax breaks they give to wealthy multinational corporations.
This leads to the third and most likely way to restore school operating and construction funding to the national average. That is by taking the State legislature to court for failing to honor their constitutional duty to build, repair and operate our public schools.
Recently a group of 128 school districts, called the NEWS COALITION (Network for Excellence in Washington Schools) has done just this. In February, 2010, this coalition won an important victory in King County Superior Court where the judge confirmed the obvious – that our State legislature had failed to adequately provide for the operation of our public schools – requiring local school districts to seek out and spend local levy funds on Basic Education costs. This decision will go before our Supreme Court on June 28, 2011. See the NEWS Coalition website: http://www.waschoolexcellence.org/
However, the NEWS lawsuit does NOT address the even worse failure of the State legislature to meet their constitutional requirement to build and repair public schools. It should be obvious that paying for teachers does little good if there is not an adequate building in which the teacher and students can hold classes.
Therefore what is needed is for school districts who have suffered school construction bond failures due to lack of adequate State Matching funds to join forces and launch a parallel law suit based on the successful NEWS school operating funds lawsuit. In order to encourage such a solution, I have drafted a Petition to the Court asking the Court to order the legislature to provide adequate national average school construction and repair matching funds. This is the most likely solution which will lead to fair treatment for our tax payers and for our school children.
Successful School Construction Court Challenges in Other States
The OSPI 2008 School Construction Transparency Study reported on six States which in which the State legislature accepted the primary burden of paying for 50% or more of school construction actual costs. In all six States, the legislature accepted this burden only after successful State Supreme court challenges. Source: 2008 OPSI School Construction Funding Transparency Study, Berk and Associates, Page 30. www.berkandassociates.com
These 6 States mandated Court changes included:
Kentucky: In 1990, the Kentucky Supreme Court declared that the State’s statutory structure for funding public schools was inadequate and inequitable and thus in violation of their State Constitution. The 1990 Kentucky Education Reform Act increased State funding for School Construction to 66% of actual cost.
Arizona: In 1994, the Arizona Supreme Court declared that Arizona’s system of school construction funding was unconstitutional because it failed to conform to the State Constitution’s “general and uniform public schools” clause (note that the Washington State Constitution has a nearly identical clause). In 1998, the Arizona State legislature enacted the Students First (Fair and Immediate Resources for Students Today) Act which committed the State to pay for 100% of the cost of new school construction.
Ohio: In 1997, the Ohio State Supreme Court declared their school construction funding system unconstitutional and ordered a significant increase in State funding because existing State funding was insufficient and too dependent on approval of unreliable local property tax bond elections. This led to the creation of an independent Ohio School Facilities Commission. The State Match in Ohio is now 50% of actual school construction costs.
New Jersey: In 1998, the New Jersey Supreme Court ruled in Abbott v. Burke that the State must provide 100% of school construction funding in 31 “special needs” school districts so that children could receive an adequate education as required by the New Jersey State Constitution. The State Match in New Jersey is now averages 57% of actual school construction costs.
California: In 2004, the State of California settled the Williams Class Action case by agreeing to provide 50% of actual school construction funding among many other changes.
New York: In 2005, the New York Appellate Court affirmed the State Supreme Court decision in favor of the Campaign for Fiscal Equity and ordered the New York State legislature to provide $9.2 billion in school construction funding so that students would be assured of their right to a sound basic education. The State Match in New York is now 52% of actual cost.
A 2010 national study of all 50 States added 8 more “Court Case” States to the above list.
Wyoming now has a 100% State Match.
Alaska now has a 85% State Match
West Virginia has a 45% State Match.
Four State Cases did not turn out very well. Arkansas only won a 19% Match, Connecticut an 18% match, Montana a 12% Match, and Colorado only got a 1% State Match.
However, even including the poor outcome in Colorado, when comparing the 14 States with Court Cases to the 36 States without court cases reveals that the average State Match in States with Court Cases is 44% while the average State Match in States without Court cases is a dismal 10%.
36 States without court cases Average State Match was 10%: Alabama, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, North Caroline, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin.
State School Construction Matching Funds in the 14 States with Mandated Court orders to provide children with an adequate education is more than 4 times greater than in States where the Court has not weighed in on the question of whether States are required to provide schools as well as provide teachers.
Because the Washington State Constitution has stronger provisions than any other State guaranteeing our children the right to a basic education, and because our State Supreme Court has already clarified that this right includes funding from stable and dependable sources, which exclude a reliance on undependable local property tax bond elections, and because the State legislature used to actually provide the primary burden for school funding in our State, it is highly likely that a school construction lawsuit would succeed in our State. It is also likely that a School Construction Lawsuit will be the only way to restore school construction funding in our State to the national average of a 50-50 State- local match.
For more information on the harm inflicted on our economy by tax breaks to wealthy corporations, and the petition to sue the State legislature for fair national average State School Construction Matching funds, please visit our website: realwashingtonstatebudget.info.
Regards, David Spring M. Ed.
Director Fair School Funding Coalition