WA State School Funding Issues

Toutle Lake School District continues to innovate to meet the growing needs of our students while balancing the increasing costs associated with these needs. We are not alone in this dilemma, as many school districts around the state find themselves in a similar, difficult financial position – with costs and needs exceeding funding from the state.

Major factors impacting school budgets, including ours, are: salaries for teachers and classified staff, operational costs, and substitute costs. The price for supporting student learning is skyrocketing, yet the state's funding for these necessities has not kept up.

This website, www.waschoolfunding.org from the Washington Association of School Administrators (WASA), helps to put the scope of our state’s K-12 education challenges in context. This resource clearly explains the issues creating financial pressure on K-12 school districts and the need for state funding allocations to reflect these increasing costs. OSPI explains its role in monitoring school districts’ financial health on this page.

Core Funding FAQs

Q: Are there a lot of school districts in Washington that are experiencing financial difficulties?

A: Yes, many school districts across the state are making significant cuts to their staff, programs, and services because funding provided by the state is not enough to cover their basic education expenses. A handful of other school districts are in what is called binding conditions, meaning they cannot balance their budgets. This list of news articles (which is not all-inclusive) shows the vast number of school districts in challenging financial situations.

Q: Why are many school districts across Washington, including ours, facing financial challenges?

A: The funding formula used to provide state money to schools in Washington is inadequate and does not reflect the actual needs and costs associated with running a school district. State leaders use a funding distribution “formula” that’s based on the needs of an “average school.” This one-size-fits-some solution for allocating state money to schools isn’t working because it doesn’t recognize the unique needs and costs of individual school districts with varying circumstances in all corners of the state.

There are three primary factors (along with many more) that have created budget challenges for Washington’s public schools. They include:

Student needs have grown. Even before the start of the pandemic, Washington students experienced mental health disorders at a higher rate than national averages. The disruption and social isolation of the pandemic only made the problem more intense. Teachers also report that they are seeing more challenging behaviors, especially in younger students. School districts used temporary federal relief funding to fill the gap between actual student needs and what the state funds for counselors, school nurses and psychologists, academic recovery and prevention programs, and more. The temporary federal funding ends in the 23-24 school year. School districts can no longer rely on these funds to offer the academic, social, and behavioral supports our students still require. SOURCE 2021 State Performance Audit of K-12 Student Behavioral Health in Washington
Special Education funding from the state is insufficient. Special Education is an important and necessary support and a state and federal requirement. However, the state puts a cap on the percentage of students in a district covered by state and federal special education funding. This cap means that some districts with a high percentage of students who qualify for special education have to use local levy funds. Although the Legislature raised the funding cap to 16% this year, that increase amounts to an investment of only $19.6 million for 2024-25. In the 2022-23 school year alone, special education expenses that were unfunded amounted to $529.8 million. SOURCES: WASA SOURCE | FISCAL SOURCE | WASHINGTON STATE STANDARD
Higher operating costs mean actual expenses exceed state funding. The price of the things that schools need to support students has skyrocketed, but the money schools get from the state isn’t even close to catching up.
- Food Service: The prices of food have increased dramatically in recent years. For example, milk has gone up more than 33% in the Western United States since 2018. This adds up to a big impact on school budgets across the state of Washington. SOURCE: U.S. Bureau of Labor Statistics
- Transportation: The price of fuel has gone up 39% in the Western United States since 2018. State funding doesn’t come close to covering these costs, even before record inflation. In the 2022-23 school year alone, $80.7 million in state-wide school transportation expenses were left unfunded by the state. SOURCES: U.S. Bureau of Labor Statistics; OSPI
- Utilities: Since 2018, the average cost of electricity in the Western United States increased by 37%. The price of natural gas for heating increased by 62%. SOURCE: U.S. Bureau of Labor Statistics
- Insurance: Just like a homeowner or a business, local school districts must carry insurance. Since 2020, the cost of insurance for Washington’s school districts has increased by nearly 60% (through 23-24). Costs continue to increase. The state only pays for a portion of the total cost, leaving the school district to foot the bill for more than $73.7 million in 2023-24 alone. SOURCE: Insurance company invoices from all school districts across the state

Q: Is K-12 education less of a state priority than it has been in the past?

A: Yes, as Washington State’s operating budget has increased, the percentage dedicated to funding K-12 education has not kept up. Five years ago (immediately following changes to the way schools are funded by the state), about 52.4% of the state’s general fund budget was dedicated to K-12 education. Now, it’s down to about 43.1%, even though it is the state’s constitutional responsibility to provide adequate funding to support basic education services. Further, Washington ranks well below the national average for investment in K-12 education as a percentage of Gross State Product (the state’s output) at 3.11%. SOURCE: OSPI

Q: How do we fix the core issues with school funding in Washington?

A: Both short-term help and long-term solutions are needed to fix school funding challenges in Washington State.

In the short term, schools need lawmakers to:

Fully fund student support programs and staff
Fully fund the actual costs of special education
Increase funding allocations for transportation, supplies, insurance, and other school operating expenses to match actual and rising costs.

In the long-term:

The McCleary “Solution” must be reexamined to fix some of the structural issues and develop a school funding mechanism that recognizes the unique needs and differences of Washington’s 295 school districts. One size does not fit all.