Budget cuts hit East Valley School District

The state’s economic downturn hit the East Valley School District Tuesday as a chunk of this year’s budget disappeared without a trace.

Gov. Chris Gregoire announced a 3.4 percent cut in levy equalization money given to property-poor school districts, mostly in Eastern Washington, who have assessed home values below the state average.

“This is going to cost us $57,000,” said Superintendent John Glenewinkel. “The idea of cutting those funds midyear is unprecedented. No one has had the political will to do it.”

School districts are allowed to ask voters for a maintenance and operations levy equal to 24 percent of state and federal money received by the district. Levies can run between one and four years, forcing districts to estimate levy rates in advance based on how much federal and state money they think they will get and whether they think property values will go up or down.

Voters are asked to approve a specific dollar amount on the ballot. Districts can collect less than what voters approve, but not more. As a result, most districts are extremely conservative in their estimates and often end up collecting less than what voters approved, which is known as a tax rollback.

Districts that collected less than the amount voters approved had until 5 p.m. Wednesday to have emergency board meetings to approve new levy rates to offset the cuts, making the governor’s cut more of a tax increase on homeowners. But East Valley was a little too accurate in its estimates and though it will collect the maximum amount approved by voters for 2009, the amount is still slightly less than the 24 percent allowed. The district has no way of replacing the lost levy equalization money.

“We set our levy up so we wouldn’t have a rollback, and we’re taking a hit,” said board member Mitch Finley.

Levy equalization money came about because of several lawsuits, Glenewinkel said, so he doesn’t see how the state can maintain such cuts. “I don’t see how legally this is going to fly,” he said.

The cut is also making the board nervous about a levy that will likely be on the Feb. 3 ballot to replace the current levy expiring in 2009. Glenewinkel had prepared an estimate for the board that called for a levy rate of $2.53 per $1,000 in assessed home value over four years. The new cuts mean that the district would have to raise that amount by 70 cents per thousand to replace the lost levy equalization money.

“That’s an awfully big increase,” Glenewinkel said. “I really don’t want to go to the voters with a $3.23 levy.”

The board also discussed making a new attempt to pass a bond, which failed twice this year. Glenewinkel presented an altered plan that called for significant upgrades at all the elementary and middle schools, including new roofs, floors and HVAC systems. The amount the district planned to spend on new technology has been trimmed.

“A bond is strictly limited to new projects and extensive remodels,” he said. The renovations will put the schools in “comfortable, usable shape for the next 20 years.”

The new estimated cost for the bond is $34.5 million, somewhere between 88 cents and 92 cents per $1,000 in assessed home value. Those numbers are subject to change. “These are a little on the high side,” Glenewinkel said.

The governor’s cuts also made the board wonder whether the $19 million in state matching money for construction would be at risk as well.

“All state funding is at risk,” said finance manager Al Swanson. “What they’re going to hit is anybody’s guess.”