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    Seattle Public Schools Budget Deficit Facts
    Posted on 11/30/2016

    Seattle Public Schools Budget Deficit Facts

    SPS Budget Deficit Facts PDF icon

    The state's paramount duty is to fully fund public education. It has failed to do so.

    Districts, like Seattle, are forced to make up the financial difference by passing local levies and by asking our community and families to cover the cost of basic services.

    The state only pays 70 cents for every dollar it costs to provide our students with the bare minimum services.

    Each school year, our Seattle community provides an additional $100 million to ensure our educators are compensated, students have the resources and supplies they need, and that the district can provide basic supports including nurses, counselors, assistant principals, arts and music, and physical education.

    Unless the Legislature takes action to address school funding, the district has a projected deficit of $74 million for the 2017-18 school year.

    This is the largest budget deficit we have faced since the late 1970s and has the potential to erode many of the programs, supports and services students are currently receiving.

    SPS will not be the only district affected (e.g. Spokane, Snohomish, Renton, Puyallup). This is a statewide crisis.

    Because of the size of our budget and percentage of our levy used for compensation, our gap is the largest.

    The potential $74 million deficit is the result of two key failures by the state: the Levy Cliff and Underfunding Compensation.

    This is a manufactured crisis.

    The state has been underfunding compensation for school district staff for 30 years.

    Seattle pays $100 million in compensation to make up the gap between the state’s obligation and what it takes to provide basic education supports.

    $41 million of our gap is related in some way to compensation.

    The state’s premature reduction of our local levy authority will result in another $30 milliongap.

    The state has not fully funded education as it is constitutionally required to do. While the Legislature has started to address their obligation regarding all-day kindergarten, class size, Maintenance, Supplies and Operating Costs (MSOC), and transportation, the state has been underfunding compensation for school district staff for more than 30 years.

    We want to thank our Seattle Legislative delegation for their continued support to provide ample and sustainable funding for K-12 education. They have been extremely helpful partners in supporting our next generation of learners.

    The Levy Cliff will take effect unless the legislature acts by April 2017.

    “The legislature will meet its full obligation by April 30, 2017 OR introduce legislation that extends the current state levy policy for one year with the objective of enacting such legislation by April 30, 2017.” – 2016 State Budget Bill

    The Legislature has made it impossible for our community to make up the difference by restricting how much we can collect from our voter approved levies. This has increased our deficit by 30 million dollars and is known as the Levy Cliff. The Levy Cliff will happen, unless State Legislators take action by April 2017 and making adjustments to (House Bill SHB 2893 an act relating to school levies passed in 2010).

    Unless the Legislature takes action by February 28, the worst case scenario must be planned for.

    The potential deficit will affect the entire district including central office supports (maintenance, programs, services, and accountability), support for teaching and learning, educators, school leaders and support staff. We will need to make significant cuts and or leave critical positions unfilled.

    Most of significantly, it will affect our students—the children that we have all committed to serve.

    Initial reduction recommendations have been made that protect school services.

    These reductions, if approved by the School Board, could bring the gap down to an estimated $44 million.

    The budget reductions beyond this point will be challenging for all of us. Eight-five percent of our budget is salaries and much of the remaining budget includes fixed costs like utilities and insurance.

    Forty-four million dollars represents over 440 positions within the district.

    The worst-case scenario budget will be finalized on January 11.

    This budget will be provided to schools for initial planning and staffing in late February. Additional engagement opportunities will be available between December 5 – and January 4 to help shape the School Board’s budget priorities. School staff, community partners and PTSAs may request a presentation from the budget office by emailing budget@seattleschools.org.

    We hope the Legislature will act, but Legislative action in June is too late.

    The Legislative session begins on January 9, 2017.

    Historically, Legislative budget decisions have been delayed and so we don’t anticipate learning of an outcome until June or July 2017.

    This means the school budget allocations that go out at the end of February/beginning of March will represent the worst-case budget scenario.

    In addition, staffing commitments are due by May 15. This state mandated deadline requires the district informs certified staff (e.g. teachers) if they have a job for the following year.

    While we will have typical attrition and it may mitigate loss of some jobs, there will be cuts in specific types of positions and massive disruption to school communities as educators are displaced.

    This deadline may be pushed back by the State if a decision on funding hasn’t been determined, but the latest possible date is June 15.

    Reversing cuts based on Legislative action in late June or July will cause significant disruption to our students, our classrooms and schools.

    The district values our staff. We pay appropriate and competitive salaries. SPS is a great place to work.

    SPS provides fair and competitive salaries to attract and retain teachers.

    There is a teacher shortage. Right now we have 66 open teaching positions.

    The contract we negotiated with SEA is fair and reflective of neighboring districts.

    We don’t pay the most and we don’t pay the least. Our teacher salaries are in line with two state reports on salary compensation.

    Quality teaching matters – it is the most important factor in ensuring all students are thriving.

    SPS is committed to our students and educators.

    This crisis was not our doing – nor is it our choice. We are doing everything we can to address it.

    We are committed to our students, our staff, and families.

    We are committed to educational excellence for every student.

    In the last decade we have made significant progress and are now recognized as a high performing urban district.

    Closing the $74 million gap will be the most difficult budget challenge we have faced in decades and may erode the great work of our schools and educators.

    We will be working closely with our labor leaders, the Seattle Council PTSA, and community partners to ensure our full community is kept up to date and have opportunities for input.

    This budget crisis was manufactured by the state and can be avoided; we are going to get through this together.

    While we have a legislative agenda, and are actively lobbying the state, we can’t ask families and partners to advocate on our behalf.

    We need our partners and families to support us in ensuring stability for our students.

    These next few months may be painful.

    It is critical we remain committed to our goal – excellence in education for Each and Every student.

    We will get through this together.

    Thank you to the Seattle delegation for their support.

    Key Budget Facts

    Our projected gap is $74.2 million, 9.4 percent of our budget.

    The $74 million gap can be bucketed in the following way:

    • $41 million, Compensation – a state responsibility.
    • $30 million, Levy Cliff -reduction in our local levy authority (reduces by 4 percent to 33 percent in 2018)
    • $3 million, SPS Typical Functions (e.g., opening new schools, new option school). This component of our budget gap, in any other year, could be addressed through normal cost saving measures. But because of state inaction, we don’t have the budget flexibility to address.

    More on Compensation

    Seattle pays $100 million in compensation to make up the gap between the state’s obligation and what it takes to provide basic education supports. Our total in local levy funding annually is $195 million. More than half goes to compensation.

    One third of all compensation is paid for by local levies. We pay for three of 10 educators.

    It is the state responsibility to fund COLAs, but since 2002 the state has only funded cost of living 7 out of 14 years. If the state simply caught up on all the missed COLAs, Seattle Public Schools would be receiving $31 million in additional state revenue. $31 million is almost half of our budget deficit.

    More on the Levy Cliff

    The state’s premature reduction of our local levy authority will result in another $30 million gap.

    The levy reduction is focused in three areas: four percent reduction in levy lid (37 percent to 33 percent); ghost factor (see definition below) related to initiatives 728/732 - funding that the state should be providing; per pupil inflator.

    • Our current levy authority allows us to tax ourselves up to 37 percent of our state and federal revenue. So, if our revenues are $100, we can raise an additional $37 giving us $137 for serving our students.
    • In 2017-18 the state, despite not addressing full funding of education, is reducing this to 33 percent. Because our budget is so large, this is a significant cut to the district.
    • The ghost factor reflects that state’s ongoing practice of letting us pay their bills. For example, for voter approved initiatives (728 and 732) because the state didn’t have the funds, they adjusted the local levy formula so we could ask voters to backfill state obligations with local dollars. They haven’t addressed the initiatives or taken back the bills but they are reducing our ability to raise the money. This also contributes to the $30 million gap.
    • Finally, each year it costs more to educate students. The state isn’t paying for the expected difference from year to year. And again, they are restricting our ability to raise these funds locally.

    The 2016-17 operating budget is $789.7 million

    • Teaching, teaching support and school leaders account for 77.9 percent (approx. $615 million)
    • Student support activities account for 16.1 percent (approx. $127 million)
    • Central administration accounted for 5.9 percent (approx. $46 million).