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Spokane Public Schools board looks at levy options in 2021

Students leave Lewis and Clark High School at the end of classes March 13, the day Gov. Jay Inslee announced schools would close. Spokane Public School officials are eyeing a possible levy in February 2021 that would replace some of the cuts made even before the pandemic shuttered schools this spring.  (COLIN MULVANY)

Spokane Public Schools faces a difficult balancing act as it plans to ask taxpayers for as much as $200 million in a levy election early next year.

Two of the district’s major goals – restoring lost programs and rebuilding its fund balance – aren’t mutually exclusive, but attaining both has become problematic amid the economic recession brought on by the COVID-19 pandemic.

That was made clear during Wednesday’s school board meeting, as staff offered a menu of options on how to offer a replacement levy that’s both palatable to taxpayers and able to meet budget projections for the next four years.

No decisions were made Wednesday, but the board must present a budget to the state superintendent’s office by Nov. 1.

“There is some wiggle room there,” chief financial officer Cindy Coleman told the board. However, the resolution must be certified by Nov. 18 in order for the levy proposal to be on the Feb. 9 ballot.

In the meantime, the board must weigh the pros and cons of a lower initial tax rate.

The elephant in the virtual meeting room – possible public dissatisfaction with the district’s distance-learning model – wasn’t mentioned.

Spokane voters have traditionally given overwhelming support to district levies, which require only a simple majority for passage.

Asked by staff to consider four scenarios, board members appeared to favor models that gradually stair-step the cost per $1,000 of assessed value, easing the initial burden for taxpayers.

For example, Scenario 3 would call for a rate of $2.40 per $1,000 of assessed value in 2022, rising to $2.45 the following year and to the legal maximum of $2.50 in 2024.

“I like the idea of phasing in,” board President Jerrall Haynes said. “We can increase with what we’re asking, but also hopefully, as the economy improves, we’re not trying to overburden the taxpayers in our community.”

The first two scenarios start at a lower floor – $2.03 and $2.25 per $1,000, respectively – but would result in a larger shortfall in the four-year projections.

The fourth scenario calls for $2.50 per $1,000 for all 3 years.

For a $300,000 home, that’s $750 per year – an increase over the current $1.59 per thousand dollars (or $477 per year) paid now, just for the levy.

Overall this year, Spokane property owners are paying $7.02 per thousand dollars of assessed value for K-12 public education

While none of the models match projected expenses, the fourth scenario comes closest, falling about $1 million to $2 million short each year.

All scenarios assume receipt of state Local Effort Assistance funds, which are used to aid districts with lower property values. They also assume continued growth in those values – 11% next year, 10% in 2022 and 9% in 2023.

The other scenarios would leave the district with a larger deficit and less chance to restore some of the programs and levels of service lost during cuts last year.

They include personnel such as nurses, counselors, librarians, behavior specialists; and programs such as music, art and athletics.

Revenues from levies are limited to educational programs and operation expenses not funded by the state, such as extracurricular activities, extended school days and school year, additional course offerings and activities associated with early learning programs.

This year’s budget, which is funded by a levy approved in 2018, includes a reserve fund, known as an “unrestricted fund balance,” of $18.6 million.

That represents 4% of the district’s $482 million budget, down from almost 6% last year. The preliminary forecast for 2021-22 sees that reserve fund falling to $1.4 million, or 0.32% – far below the state-required minimum.

Officially known as a Replacement Educational Program and Operations Levy, it is “truly a cornerstone of basic education,” Superintendent Adam Swinyard said.

Another key component, the Legislature, was the focus of another segment of Wednesday’s meeting.

After a short presentation from lobbyist Melissa Gombosky, the board voted unanimously to approve a list of legislative priorities.

At the top is a request to “maintain consistent and predictable funding support for schools to ensure an equitable student experience.”

It continues: “The legislature made significant investments in our schools over the past several years. We urge the legislature to protect those investments as difficult budget decisions are made over the next biennium.”

The district also urged the Legislature to “protect K-12 funding and continue to honor its constitutional commitment” and fully fund district transportation despite decreased ridership during the pandemic.