Analyzing the Math and the Effects of the McCleary Law

Over the last several weeks, Camas Education Association (CEA) union representatives, with assistance from the Washington Education Association (WEA), have met face-to-face with Camas School District (CSD) representatives to negotiate and bargain for new teacher contracts.

At stake is $7.1 million, which is CSD’s share of the $2 billion that is being appropriated from the State of Washington to “amply fund” teacher salaries across 295 school districts in the state. The $2 billion is new money that is being generated from the McCleary law that was passed late in the Washington State 2017 Legislative session. The law is funded by the largest property tax in state history.

That law, according to CEA union lead, Mark Gardner, was passed after the Washington State Supreme Court mandated the State Legislature “amply fund” teacher salaries, citing the state Constitution. The Legislature took years to draft a law to satisfy the court’s judgment (which required a legislative “fix” in 2018) and was done at the end of an unusually long, and often times, bitter, legislative session.

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The CEA is seeking from CSD $5.9 million of those funds — to be used for pay increases for certificated staff, which comprises teachers, counselors, occupational therapists, physical therapists, librarians, choir and band teachers. Principals are not included in these bargaining and salary negotiations.

Union negotiators are asking for 11-12% raises for 432 Full-Time Equivalent (FTE’s) based on 2017-18 staffing, and at this time, CSD is offering a pay increase of 4%. There’s a discrepancy in the FTE , as CSD says this year’s budget plans for 452 FTE’s. CSD staffs more FTEs than allocated by the state through local funding sources. This creates a discrepancy in the total cost of proposed compensation packages.

There are several factors contributing to the current discussions, which include, but aren’t limited to:

• Discrepancies with Full-Time Equivalent (FTE) total compensation cost.
• Near and long-term effects of CSD’s levying capacity, which has been cut by 50 percent.
• Complexities and confusion of the McCleary legislation.

Lacamas Magazine spent considerable time getting the union’s perspective on the matter, which was presented in a YouTube video on August 10. We also spent time on August 10 learning about the CSD perspective on these negotiations, and inquired about pay increase complaints from union members.

According to CSD, Camas teachers have been getting increases since the 2014-15 school year, as well as Time Responsibility Incentive (TRI) increases that are consistently above state average. TRI is compensation for additional responsibilities provided by certificated staff, such as end year closeout and new year preparation time.

Over that period, according to state-audited figures from CSD, starting teachers received annual increases of 3.5%, 4.5% and 7.3%. Average teachers received annual increases of 5.1%, 5.6% and 7.3%, and Top teachers received annual increases of 4.8%, 4.5%, and 7.3%. Overall increases during that three-year period are between 16% and 19%.

“We have the best teachers and a high retention rate,” said CSD Communications Director, Doreen McKercher. “We greatly appreciate them, and want to compensate them as well as we possibly can.”

During their August 9 bargaining session, CSD agreed to increase the raise from 3.1% to 4%.

How Are Teachers Funded?

According to CSD, this is one of the biggest changes in the new funding model. Previously, the state would fund the number of teachers allocated based on student population. If districts decided to go beyond the state allocation, that would require a local levy, which is what Camas does. The amount of money received used to be based on the experience of the teaching staff, and if a district had a larger percentage of experienced teachers they would receive funding through a factor called staff mix. Camas has a veteran staff mix, said McKercher, so CSD has greatly benefited from the previous system. In the new model, the state provides an average teacher salary amount for the state plus any regionalization for each district — and now staff mix has been eliminated. Districts with more veteran teaching staffs receive less proportional funding than they did previously. If compensation is greater than state funding per FTE then additional revenue will be needed in the future to avoid cuts.

This charts shows state funding per FTE.

Both parties had a sixth bargaining session on August 11, in which CEA president Shelley Houle said the following (via Facebook post):

“Today we met with our district’s bargaining team to each propose an offer. Although we feel a significant gap still exists, positive steps were taken to find more common ground. We added three more bargaining dates that will take place after August 21st in anticipation that we can dig into the minutia of what a salary schedule would look like for Camas educators.”

“But, our work is far from done and there is no guarantee that the needed common ground will be found. We still must plan for the worst and continue to organize. All actions and events will proceed as planned. We appreciate your support and commitment to seeing this through.”

Specifics of Saturday’s bargaining session have not been made public.

“The status of the negotiations are ongoing, which is a good sign,” said CSD Superintendent, Jeff Snell. “Any time conversation is taking place, there are opportunities to learn more about other perspectives and hopefully find common ground. The change in the way we fund schools has put both our unions and district in a very challenging situation. There’s a lot to work through and figure out. Decisions obviously have implications for this year and the future as well, so we all want to be thoughtful about them.”

Snell also addressed community frustration, and asks for patience in the process. The complexities and effects of the McCleary fix are adversely affecting 270 of the 295 districts across the state. Only 25 districts have settled — and they are generally in smaller, less populated areas.

“I understand there is a lot of frustration about the process this year,” said Snell. “I’m frustrated too. I’m not frustrated with our staff. They deserve to be compensated well and the union’s job is to try to negotiate the best contract possible. I’m frustrated because we’ve advocated side-by-side for so long to increase the funding our students deserve in this state. Now we’ve been given a new system that is creating chaos. The new system is dividing districts instead of bringing them together. It would be easy to blame one side or another, but that’s too simple. That charge would be warranted if this was just happening in Camas, but it is not. I have had the privilege of collaborating with so many amazingly talented teachers, secretaries, custodians, administrators, board members, all of the diverse roles it takes to run a school district, from all over the state. A common theme amongst each of them is their commitment to students and to each other. It’s a gift to serve in public education and to do it well requires all of us working together and supporting each other. My hope is this challenge brings out the best in each of us and we come out of it even stronger.”

Camas School Superintendent Jeff Snell speaks at the 2017 Camas High School Graduation Ceremony.

FTE Count

The union’s proposal is based on a 432 person FTE head count, which is different from the CSD’s 452 person FTE count. That’s a difference of 20 positions, reflecting a financial discrepancy of approximately $2 million, and is a major reason CSD can’t reach the 11% pay increase demand.

“CSD has passed flawlessly state financial audits for the past nine years, so our numbers are reliable,” said McKercher. “We’ve addressed this discrepancy with the union during the August 2 bargaining session.”

The district included this additional $7 million state allocation into their 2018-19 operating budget, which totals $94.43 million. Eighty-one percent of the district budget comes from state funds, while federal and local funds provide the remaining 19 percent to meet operating expenses.

Mark Gardner is one of the CEA bargaining negotiators.

Levy Capacity Diminished by 50%

Because the McCleary law used property taxes to fund the Supreme Court mandate, it changes the way all school districts use levies to fund gaps in operating expenses. The result: CSD’s ability to levy has been reduced by 50% — from $3 for every $1,000 of assessed property value to $1.50.

“Because of McCleary, we are already losing $4.9 million in levy capacity in the next school year,” said McKercher. “They should have let us ride out our levy. McCleary takes away levies that people already voted for. We’re currently in the first year of a four-year levy.”

The McCleary law essentially negated the votes of Camas voters.

“We’ll have to go back out for a levy at only $1.50 instead of $3 in about a year,” said McKercher.

The CEA says “While local levy collection will decrease, it will be more than offset by the increase in state allocation.”

CSD disagrees.

“The district will be exhausting ALL state funding in 2018/2019 and using local levy revenues to continue to employ positions beyond what the state funds. The new legislation is reducing our local levy revenues by 50% in the calendar year 2019, which we use to fund positions and pay beyond the state allocation, 100% of extra-curricular activities, and subsidize underfunded areas of Special Education, Student Transportation, and Food Services.”

The district will be using local levy dollars to fund additional positions and pay of approximately $6.3 million districtwide and an estimated $2.2 million to cover the underfunded Special Education programs.

McKercher said that losing 50% of levy capacity is a blow to the district, and is a major repercussion of the McCleary fix. Levies started to become necessary as state funding didn’t keep pace with running a school system. Levies essentially filled in the gaps.

The other issue is that levy money only flows in twice a year, and if homeowners are behind on their property tax payments, that could affect operating revenue.

“All districts have to contend with this,” said McKercher. “We’re in this mess because of a badly written law. This is a state-wide effort, and WEA is focusing on changing the law, but it’s coming at the expense of our relationships.”

The McCleary “Fix”: Bad Legislation

According to Bill Keim, former Executive Director of the Washington Association of School Administrators, the McCleary legislation has fundamental flaws:
• Local levy reduction aren’t equal across the board, and cuts local levy authority by a statewide average of $947 per student.
• Creates a new approach to the Local Effort Assistance (LEA), which aims to help areas with lower property values. He says the new system creates the “haves” who can secure a total of $2,500 per student in local funding and the “have-nots” who can only secure $1,500. This approach is blatantly inequitable.
• A net negative effect on levy and LEA. He says: “The district that fared best with these changes is estimated to gain over $3,800 per student, while the district that did worst will lose over $9,500 per student. Those lost dollars will be hard enough for the districts to accommodate, but these are also the most flexible funds districts receive. Their loss will make it much harder for the districts to accommodate local priorities or to smooth out the anomalies in other state funding allocations.”
• He says: “58 school districts will receive more money than needed to provide their 2017-18 workforce with a 19% increase, and 237 districts won’t receive enough. On one end of that equation, the biggest winner will receive $7,175 more than it needs, and at the other end, the biggest loser receives $15,394 per certificated instructional staff (CIS) less than needed. The legislative message in the face of this problem seems to be just make it work.”
• A major challenge to account for local funds, and clarification on limitations of enrichment funds. He says: “That clarification is very important because, for the first time, school districts must account separately for their use of local funds, the State Auditor will audit that accounting, and there are sanctions for the inappropriate use of those funds. To date, no one in any position of authority has offered a definitive interpretation, much less released WAC rules that generally guide school districts with the implementation of new laws. Given the landmark nature of these laws, the absence of that guidance is very troubling and will require 295 districts leaders to make their own interpretation about this part of the legislation.”
• While some districts like Lake Washington fared well under this law, he says most will not. Keim says: “While that will likely be portrayed as administrative tightfistedness, the reality is that most school districts will have much less new funding to put on the table. That highlights the fact that in the post-McCleary era, student zip codes will still determine the quality of education they receive. And the sad reality is that in many communities, that disparity may be even greater than before.”

McKercher said the impact of McCleary as it currently stands, will force CSD to lay off staff and/or eliminate programming in two to three years.

The other outstanding issue is that legislators in 2018 passed a budget that lowers property taxes by $400 million over the next two years — which is designed to give property owners some relief after the sticker shock of getting tax bills following the McCleary legislation in 2017. While property taxes, which are a primary source of school funding, are reduced, so are the levies. That puts more squeeze on all school districts.

The Effects of a Strike

The CEA is currently organizing a strike vote, which is planned for August 27. According to Gardner, it’s not something they want to do.

“We are planning our curriculum and operating as if everything will be normal on September 4,” Gardner said.

A strike has many repercussions:

1) The state won’t waive walkout days — and will enforce the state mandate that students attend for 180 days.
2) If a strike goes past September 15, CSD employees who do not work will lose their benefits for that month.
3) If a strike goes past September 15, CSD employees who do not work will not get paid.
4) Family schedules will be adversely affected.

McKercher said the district is committed to compensating CSD employees as much as possible, and that she’s worried about how the effects of a strike will affect long-standing relationships in the community.

There are still several bargaining sessions on the August calendar, and we will continue to report news as it becomes available.