Local School Enrichment Levies.

Local enrichment levies can be approved by voters within a school district as a property tax for enrichment beyond the state's statutory program of basic education.? Enrichment levy collections are capped for school districts at the lesser of $2.50 per $1,000 of assessed property value in the district, or $2,500 per pupil increased for inflation ($3,149.69 in 2024) for school districts with less than 40,000 students.? School districts with 40,000 or more students subject to a per-pupil limit are allowed to collect up to $3,000 per pupil adjusted for inflation ($3,779.63 in 2024).? The inflation measure used is the consumer price index for all urban consumers, Seattle area (Seattle CPI).

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Local Effort Assistance.

The state provides additional Local Effort Assistance (LEA) funding to school districts that would not generate an enrichment levy of at least $1,550 per student based on prior year enrollment when levying at a rate of $1.50 per $1,000 of assessed value.? An eligible school district's maximum LEA is the difference between the district's per-pupil levy amount based on a rate of $1.50 per $1,000 of assessed value and $1,550 per student multiplied by the district's prior year enrollment.? The $1,550 per student limit, also known as the state LEA threshold, is adjusted annually by the Seattle CPI (estimated at $1,949.11 in 2023).?? State-tribal compact schools receive the LEA equal to the previous year's per-student enrichment levy for the school district in which the school is located up to $1,550 per pupil adjusted by the Seattle CPI.? Charter schools do not receive the LEA.

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Charter Schools.

Charter Schools are public schools that operate separately from the common school system and school districts.? Charter school boards oversee the management and operation of charter schools, under five-year contracts with a charter school authorizer.? There are currently two charter school authorizers, the Washington Charter School Commission and Spokane Public Schools.? Charter schools must provide a program of basic education and adhere to requirements specified in state law and the charter contract, but are exempt from other state rules and laws applicable to common schools for the purpose of allowing flexibility in implementing educational programs.? There are 17 charter schools in Washington for the 2024-25 school year serving approximately 4,700 students.

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Special Education Excess Cost Multipliers and Enrollment.

The state allocates funding for a program of special education for students with disabilities using an excess cost formula.? For eligible students in kindergarten through age 21 (K-21), the formula multiplies a school district's base allocation by an excess cost multiplier up to an enrollment limit of 16 percent of a school district's full-time student enrollment.? School districts receive a tiered excess cost multiplier based on inclusion in a general education setting for K-21 special education students. ?A multiplier of 1.12 is provided for special education students that spend at least 80 percent of the school day in a general education setting.? For students in a general education setting less than 80 percent of the time, districts receive a 1.06 multiplier.? Prior to kindergarten, for students ages 3 to 5 (Pre-K) receiving special education services, districts receive a multiplier of 1.2.? These students are not subject to the 16 percent enrollment funding limit.

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Special Education Safety Net Funding.

Beyond allocations from excess cost multipliers, the Office of Superintendent of Public Instruction (OSPI) may provide safety net funding if a school district has one or more high-need individual (HNI) students or is in a community impacted by large numbers of families with children eligible for special education, such as communities with group homes, regional hospitals, or military bases.? For the HNI awards, the school district's expenditures for the student must exceed an expenditure threshold.? Currently, the threshold for a student in any district to access state safety net funds is 2.2 times the statewide average per-pupil expenditure (APPE) for school districts with more than 1,000 full-time equivalent students, and 2.0 times the APPE for school districts with fewer than 1,000 full-time equivalent students.? Most safety net awards come from state funding and cover the HNI costs, while community impact awards comprise a smaller portion of the safety net.? Safety net awards are distributed annually in August of each school year.

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General Apportionment Funding Used for Special Education.

The K-21 students receiving special education services generate funding through both general apportionment, also referred to as the basic education allocation (BEA), and excess cost formulas.? The OSPI is required to develop an allocation and cost accounting methodology to ensure general apportionment funding is prorated and allocated to a student's special education program and accounted for before calculating special education excess cost when services are provided outside of the general education setting.? A portion of the BEA amount based on the least restrictive environment (LRE) percentage of time a student is outside of a general education setting is redirected from general apportionment and dedicated to special education purposes by the OSPI.

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The formulas for special education also apply to charter schools and tribal schools in state-tribal education compacts.

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Prototypical School Funding Formulas.

To determine funding allocations for the state's statutory program of basic education, the state uses a prototypical school formula and other program-specific formulas defined in statute.? The formulas include statewide salary allocations necessary to hire and retain qualified staff.? To allocate salaries, the Legislature defines salary allocations for Certificated Instructional Staff, Certificated Administrative Staff, and Classified Staff generated by state prototypical school funding formulas.? Minimum salary allocations for school district staff are adjusted for regional differences in the cost of hiring staff.? Based on eligibility, students may generate additional funding through programs such as special education, the transition bilingual instruction program, and the learning assistance program (LAP).

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In addition to statutory formulas, funding for substitutes is included in the operating budget.?? Substitute funding is based on four funded days per classroom teacher generated by state formulas at a daily rate of $151.86.

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Property tax?limit factor.

All real and personal property is subject to a tax each year based on the highest and best use, unless a specific exemption is provided by law.? The annual growth of all regular property tax levy revenue is limited as follows:

• For jurisdictions with a population of less than 10,000, revenue growth is limited to 1 percent.
• For jurisdictions with a population of 10,000 or more, revenue growth is limited to the lesser of inflation or 1 percent.

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For purposes of the revenue growth limit factor, inflation means the percentage change in the implicit price deflator (IPD) for personal consumption expenditures for the United States (US), as published for the most recent 12-month period by the US Department of Commerce no later than September 25 of the year before the taxes are payable.? Taxing districts other than the state may adopt a resolution of substantial need to levy up to 101 percent if the IPD is less than 1 percent.?

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The value of the following add-ons are in addition to the limit factor:

• new construction;
• construction of wind turbine, solar, biomass, and geothermal facilities;

• improvements to property;

• increased value of state-assessed property; and

• increased value of real property within a local tax increment financing area.

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The state collects two regular property tax levies.? The revenue growth limit applies to both state levies and all regular local property tax levies. ?Excess levies are not subject to this limit and require voter approval. ?

Enrichment Levies.

Beginning in the 2026 calendar year (CY), a school district's maximum per-pupil limit for enrichment levy purposes is increased as follows:

• The maximum per-pupil limit is increased by an inflation enhancement of $500 above Seattle CPI for all school districts in CY 2026.
• The maximum per-pupil limit is increased for school districts with fewer than 40,000 students by an inflation enhancement of 3.3 percent above Seattle CPI each year from CY 2027 to CY? 2030.
• Beginning CY 2031, the maximum per-pupil limit is $5,035 for all school districts, to be increased by Seattle CPI annually thereafter.

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Local Effort Assistance.

Beginning in CY 2026, the state LEA threshold is increased as follows:

• The state LEA threshold is increased by an inflation enhancement of $200 above Seattle CPI in CY 2026.
• The state LEA threshold is increased further by an inflation enhancement of $300 above Seattle CPI in CY 2027.
• The inflation enhancements are also applied to state tribal compact tribal schools' LEA.

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Charter schools are provided with the LEA funding equal to the actual enrichment levy per student for the previous year, for the school district in which the charter school is located, up to $1,550 per pupil adjusted by the Seattle CPI plus inflation enhancements.? The formula is like the state tribal compact LEA formulas, but with two exceptions:

• Funding for the charter schools LEA must be appropriated from the Washington Opportunity Pathways account.
• Charter schools can only receive the LEA up to a level that, if combined with gifts, donations, and private foundations funding, does not exceed the maximum per-pupil limit for enrichment levy purposes, as increased by the bill, plus gifts, donations, and private foundations funding per pupil for the school district in which the charter school is located.

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Special Education.

Beginning in the 2027-28 school year:

• the 16 percent enrollment limit is removed; and
• awards for communities impacted by large numbers of families with children eligible for special education are removed from the safety net.

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Beginning in the 2025-26 school year, the allocation and cost accounting methodology for special education is changed as follows:

• The methodology must shift 30 percent of the BEA amount for special education students to the school district's special education program for expenditure, instead of a percentage based on the LRE.
• If a school district's special education expenditures exceed state funding provided by excess cost formulas, the special education safety net, and redirected general apportionment revenue, the remaining portion of the BEA amount for special education students must be used prior to other funding sources.
• Language specifies that the methodology does not prohibit other funding and state allocations from being used for special education programs.

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Improving Equity in K-12 Funding.

The Superintendent of Public Instruction (SPI) is required to convene a K-12 funding equity workgroup to analyze options for revising K-12 funding formulas to be responsive to students' needs, including economic, demographic, and geographic differences.? The SPI is authorized to contract with higher education and public, nonpartisan research entities to support the workgroup's analysis.? The SPI may determine the composition and meeting frequency of the work group, provided that it includes representation from education and community partners that are demographically and geographically diverse and groups representing educators, school and district administrators, labor unions, families, students, community partners who support groups disproportionately impacted by inequities, and legislators.

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The workgroup's analysis must address:

• impacts of changes to per-pupil funding formulas and local revenue;
• compensation factors;
• distribution trends from the prototypical funding formulas; and
• formulas that benefit specific populations, like the LAP, the LEA, and small school factors.

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The SPI must use the work group's analysis to consider options for revising school funding formulas.? By November 1, 2025 and annually thereafter, the SPI must report progress and any proposed options to the fiscal and education committees of the Legislature, which must include options that address:

• system and resource inequities;
• state, local, and regional needs;
• potential adoption of student weights; and
• metrics to monitor equitable access to resources.

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Any option or group of options proposed by the SPI must not exceed the amounts provided by the additional state property tax revenues generated under the bill, when combined with the other K-12 funding increases in the bill for special education, the LEA, and substitutes.? The Department of Revenue must provide relevant data and analysis to the SPI to support the requirement.?

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The statute establishing the workgroup expires December 1, 2027.

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Substitute Allocations.

Beginning in the 2027-28 school year, allocations for substitutes are increased as follows:

• Classroom teacher substitute days are increased from four to five.
• The daily classroom teacher substitute rate is increased to $200, adjusted for inflation annually.
• Classified staff are provided allocation for two substitute days at a daily rate of $150, adjusted for inflation annually.?

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State Property Tax for Common Schools.

For the revenue growth limit for state property taxes, the limit factor of 101 percent is replaced with a limit factor of 100 percent plus population change and inflation, with a cap of 103 percent.

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?Population change? means the percent increase in the population of a taxing district between the two most recent years provided in the official population estimates published by the Office of Financial Management in April of the year before the taxes are payable. ?If population decreases, the population change is zero.