Schools, State Vie For Hanford Funds 4 School Districts Say $5.4 Million-Plus From Reservation Land Allocation Is Theirs

Four school districts are at odds with state officials who want to take the districts’ $5.4 million windfall from the Hanford Nuclear Reservation.

Under settlements signed with Benton, Franklin and Grant counties last year, the U.S. Energy Department agreed to pay about $17 million to public taxing districts. The money is intended to make up for tax revenues lost when land was taken off the counties’ tax rolls to create Hanford.

School districts in Richland, Prosser, North Franklin and Wahluke were to receive about $5.4 million of the settlement, plus annual payments ranging from about $65,000 to $311,000 for an undetermined period.

But some officials in Olympia say the school districts’ windfall should go to the state’s general fund to be used for equity funding of districts across the state.

“They’ve got their pro-rated cut, now they want all of what the school districts received,” said Harry Culp, Richland schools director of financial services.

“These are tax monies the districts would have collected over the years if (the land) wasn’t off the tax rolls,” North Franklin Superintendent Otis Falls said.

“Now suddenly, at the eleventh hour, they are saying they want to equalize this money,” he said.

“The question we are wrestling with is, should they turn that money over to the state?” asked Mike Bigelow, executive director of budget and business services in the office of the state superintendent of public instruction.

“The theory with these one-time monies is that these districts get extra support,” Bigelow said. “And the state is responsible by statute for an equitable funding system for schools.”

When the Hanford-area school districts heard the settlement money might be equalized, they halted plans for spending it.

“The tough part for us is that we are developing a budget and we’ve dedicated that money to programs,” Prosser Superintendent Ray Tolcacher said.

“We’ve had to put several programs on hold because we are uncertain whether we’ll have that money down the road.”

Richland and Wahluke planned to use the windfall to repair deteriorating buildings and finance other capital projects.

“In my opinion, it’s not legal for (the state) to take any of the money,” said Wahluke Superintendent Bill Miller.

“The intent of PILT” - payments in lieu of taxes - “was to have a positive result for affected districts,” he said. “It’s supposed to mitigate the impact of lost tax dollars.”

The districts hope they can prove the funds are federal “impact money” that cannot be used for equalization purposes.

They cite letters from the state’s congressional delegation and the Energy Department that say the money is meant to lessen the impact of having the federal nuclear reservation in their districts.

“We’ve basically found that earmarked federal funds should go to the purpose for which they are intended,” Richland interim Superintendent DeWayne Gower said.

“These are impact monies that should legitimately go to the school districts.”

SPI’s Bigelow said such funds are usually put in the state funding pool unless there is a specific intent.

“We’ve asked all of them to give information on what the money has and will be used for,” he said. “We’re trying to look at all the issues here.”