Opinion ID: 2615891
Heading Depth: 1
Heading Rank: 12

Heading: Special excess levies are unconstitutional insofar as they are used to fund other than enrichment programs. The balance of the statutory and regulatory system of common school financing fails to make ample provision for the education of children residing in respondent district.

Text: In Section XI we declared the special excess levy system of funding unconstitutional insofar as it is used to fund other than enrichment programs. We now consider whether the trial court correctly determined that the State failed to make ample provision for the education of the District's children during school year 1975-76. We agree the State failed to make such provision. Appellants initially challenge the evidence as insufficient to support the trial court's findings of fact and conclusions of law pertaining to the reasonableness of the District's salary scale, staffing ratios, associated nonsalaried costs and consequently the failure of the State to adequately fund those reasonable costs. Appellants assert that even if the judiciary has the power to declare a prescribed level of state funding constitutionally required, it can only declare a specific funding level inadequate if supporting evidence meets the highest burden of proof, citing In re Juvenile Director, 87 Wn.2d 232, 552 P.2d 163 (1976). Appellants contend respondents have failed to meet that strong burden and thus the trial court improperly injected itself into the subject of the District's funding. We do not agree. [19] In re Juvenile Director, supra , is not in point. There, we were concerned with the judiciary's need to set a high standard of proof for itself when exercising its inherent power on its own behalf. In that light, we employed a self-imposed restriction, for dealing with court funding, by requiring the highest burden of proof and the clear, cogent, and convincing test. Here, unlike Juvenile Director, the financial needs of the judiciary vis-a-vis the Legislature are not at issue. Rather, we are concerned with legislative compliance with a specific constitutional mandate. Unlike Juvenile Director, the court has no financial interest. Thus, contrary to appellants' contention, the normal civil burden of proof, i.e., preponderance of the evidence, applies. Further, much of appellants' argument is an assertion that the trial court should have believed its witnesses rather than those of respondents and should have found different facts. In this regard appellants' position is not well taken because we have already noted that there is substantial evidence to support the trial court's findings of fact. We now turn to the level of State funding provided the District in the year 1975-76, independent of special excess levy funds. The trial court held, and we agree, that the funds provided the District through the equalization formula were insufficient to fund a basic program of education. The District receives the bulk of its general fund resources from the State through an apportionment formula which operates on the premise of an equal guaranty in dollars for each weighted student enrolled, based upon one full year of 180 days. RCW 28A.41.130. Weightings are used to increase the State's allocation to a district for costs associated with particular programs, the type of district, training or experience of the staff, or circumstances involving students enrolled. The State guaranty is determined by dividing total state and local revenue available by the total number of weighted pupils. Only the applicable weighting factors apply in each district and then only for the appropriate pupils and staff. A full time equivalent student (FTE) is calculated on the basis of 180 days, i.e., one school year. The weightings are as follows: Basic enrollment  full time equivalents (FTE) 1.0 Approved vocational classes  per annual class hour .2 Staff experience .0 to 1.0 Children from tax exempt homes or institutions .25 Remote and necessary elementary schools or districts .004 to 2.0 Small high schools  less than 250 enrolled .002 to 2.0 Interdistrict cooperation  approved program .25 The staff weighting factor is the most significant of all the weighting factors. It is developed each year for each district and it reflects the placement of appropriate certificated staff for that year. However, the factor developed for each district is delayed 1 year so that the prior year's factor is used in the formula calculations. The factor is based on the composite average levels of the staff's certification, education, and experience. The purpose of the staff weighting factor is twofold: (1) to recognize salary costs where they occur; and (2) to enhance recruitment of appropriately trained and experienced staff by local school districts. This factor thus generates additional funds to districts based upon actual salary requirements. As a consequence of this factor, the District received more dollars per FTE than the state average. The State weighted pupil guaranty does not include the excess cost allocation for special education programs, or funding for traffic safety education, pupil transportation, food services, and other categorical programs. Within these program appropriations, a built-in obligation exists for the expenditures specifically associated with the programs. Since there is no longer a regular local property tax for schools, this revenue is not included in the 1975-77 formula. With the exception of the State and County Forest Funds (included at 75 percent) and In Lieu of Leasehold Excise Tax (at 50 percent), all other applicable local revenues are included at 100 percent of actual receipt for the 1975-76 school year. For the 1976-77 school year all applicable local revenues are included at 100 percent. The 100 percent deductible revenues include: In-Lieu-of Tax Receipts 1 percent Real Estate Excise Tax Federal Forest Funds Public Utility District Funds State and County Forest Funds  Local Timber Excise Tax  Reserve Fund. In 1973 the Legislature eliminated from the formula both assumed money [17] and, on a phased in basis, leeway money. [18] The levying authority of the local school districts for regular property taxes was also eliminated. The regular property tax for schools was placed at the state level, with the revenue distributed under the apportionment formula rather than, as with the two mill shift, [19] dollar-for-dollar back to the district from which it was derived. The effect of assumed money upon school districts was alleviated in whole or in part, by the two mill shift. In order to alleviate the possible adverse impact of these changes on certain school districts, the Legislature enacted a grandfather clause providing that the per pupil guaranty (under the new formula) would not be less than 95 percent of the average amount received per enrolled student, excluding excess levies, by any district during the preceding 3 school years. RCW 28A.41.130. During school year 1974-75, the District actually received $28,268,185 in state funds for its regular K-12 program. In school year 1975-76, it was estimated that the District would receive $43,592,494 in state funds for its regular K-12 program. Generally, the difference between the two figures may be attributed to the fact that in previous years the regular local property tax which was collected in the District accrued to the District itself. Legislative changes (equalization of general real property taxes) resulted in reassignment of those regular property taxes to the State for collection and redistribution to the districts throughout the state on an equalized basis. The 1975-76 figure reflects the complete change following a partial phasing in of the program. Using the State average real property valuation per FTE student as a base for comparison, the District has about two-thirds more real property valuation per FTE student than the statewide average. However, because of the equalization of regular levy taxes on real property, the regular real property taxes levied on property within the District are only partially retained by the District for the benefit of its students. Despite the grandfather clause, the conversion to the state equalization formula represents a loss of approximately $2 to $4 million to the District. Beginning with the 1973-74 school year, the present system for computing the staff weighting factor was adopted. Consequently, state appropriations for salary improvements which had previously been distributed outside the formula could now be distributed within the formula, by simply increasing the amount of funds to be distributed under the formula. Under the apportionment formula, the State distributes money to school districts on the basis of FTE weighted students. However, the actual dollar amount per FTE enrolled pupil in the District does not include categorical funding for such programs as handicapped, special education, pupil transportation, food service, traffic safety education, the gifted program, drug abuse or URRD (Urban, rural and racially disadvantaged). The number of weighted students in the District during school year 1975-76 was 102,553.08. The State guaranty per weighted pupil for school year 1975-76 was $480. Thus, the total state funds available to the District for 1975-76 after deducting revenues from the real estate transaction tax, the in-lieu-of taxes, 50 percent of the leasehold in-lieu-of excess tax and federal forest funds, was $45,105,478. For school year 1975-76, the anticipated revenue to the District in guaranteed support through the State apportionment formula would not change if the FTE pupil to FTE certificated staff ratio were reduced from 30:1 to 20:1. A reduction in this ratio would, however, increase significantly the District's expenditures. With the foregoing factors in mind, we next consider whether the trial court correctly determined that the funds provided the District by the State were insufficient to fund a basic program of education during school year 1975-76. Initially, it must be recognized that the trial court was confronted with the dilemma. At the time of trial the Legislature had defined neither basic education nor the requisites of a basic program of education. In the absence of such a definition, the trial court considered three suggested definitions of basic education and costed out each to determine whether the State funding thereof was sufficient. The three definitions utilized were: (1) the May 14, 1976, definition provided by the State Board of Education/Superintendent of Public Instruction; (2) application of State Board of Education accreditation standards, as if they applied to kindergarten through high school; and (3) the collective wisdom approach. The trial court concluded that irrespective of the educational definition used, the State's provision of funds to the District was insufficient. Having specifically considered each approach employed by the trial court, we agree that State funding was insufficient to provide for any of the suggested definitions of basic education or a basic program of education. It is also clear that respondents sustained the burden of proving that the State failed to make ample provision for education as required by Const. art. 9, § 1. At this point it is important to note an important factor in terms of operating the District. In terms of quantitative input, staffing ratios and salaries are the most significant factors in determining the cost of education within a district. In this regard, we again note that there is substantial evidence in the record to support the trial court's finding of fact that in 1975-76 the average salaries paid in the District to both certificated and classified employees were reasonable. We now refer more specifically to the three approaches employed by the trial court, in the absence of a legislative definition of basic education or a basic program of education. The first definition pertains primarily to the present requirements of state statutes and the regulations of the Board and the SPI. Although this definition was not intended to be a funding mechanism, its use is appropriate when considering the most significant impact on costs, i.e., staff ratios, salary expenses, teacher qualifications, instructional requirements, hours, and specific substantive requirements. But, we note with interest that even the minimum ratio contained in the SPI definition when costed out against the definition's minimum programs, produces an apparent deficit of $933,045. Moreover this deficit would be increased by $8,315,830 had the Legislature not provided that amount to the District through the Special Levy Relief Act following the District's double levy failure. We also note that the definition used by the Board excludes kindergarten notwithstanding its inclusion within the definition of common schools in RCW 28A.01.060. Kindergarten is an integral part of the District's program. Had kindergarten been included in the costing out, even more State funding would have been required. Finally, if the handicapped programs are included, as the definition suggests, an additional deficit of $275,640 would have existed. Consequently, it is clear that the State funding would be insufficient to permit the District to operate if costed out pursuant to the Board/SPI definition of state program of education. Turning next to the costs associated with the second suggested definition (accreditation  K-12), we find State financing equally deficient. We are aware that accreditation standards are not actually funding mechanisms. Further, they ordinarily apply only to grades 7-12. However, accreditation standards are intended to assure a quality program to help graduates prepare for higher education and/or occupational opportunities. The standards provide evidence of accountability that a school district is making judicious use of the resources at its command. Thus, in the absence of a legislative definition of basic education and considering the nature of these standards, the accreditation standards may be appropriately treated as if they applied to the K-12 program. By so doing, it is clear that State funding would again be insufficient but for the State's reliance upon funds unconstitutionally generated by special excess levies. Under the accreditation approach, the District's education requirements for 1975-76 (including kindergarten) would be $75,905,575 whereas the State guaranty ($47,266,694.40) plus other funds available including the excess levy relief funds provided by the Legislature would amount only to $57,640,788. The evidence clearly demonstrates that the funding level for such education under existing law is insufficient. Finally, a somewhat less exacting approach to defining basic education may be found by using what has been called the collective wisdom approach. In the absence of scientific proof to conclusively demonstrate a relationship between educational quantitative inputs and qualitative outputs, this approach seeks to provide standards for needed educational resources by focusing upon the theoretical normal range ability student as determined by the collective experience of local educators, school boards, and parents. The approach concentrates upon the statewide aggregate average per pupil deployment of certificated and classified staff and nonsalary related costs for the maintenance and operation of a school program for the normal range student. This approach is not entirely wide of the mark insofar as the Legislature delegates the responsibility to local districts to ultimately determine program, services, staffing ratios and salaries necessary to provide an educational program. Having delegated this responsibility, it would seem only reasonable that the districts be provided with sufficient funding to operate the system. Under the collective wisdom approach, deployment of staff is established at a level of 20 to 1 (pupil per certified employee), or 25 to 1 (pupil to classroom teacher). Clearly, such a ratio is not being funded. As the foregoing figures demonstrate, and despite the definition used for education, under existing law the State has not made ample provision therefor as required by Const. art. 9, § 1.
Appellants contend that an $8 million surplus existed in the District for the 1975-76 school year. It is urged that since this surplus could have been used for any purpose, the District actually had sufficient funds. We disagree. The alleged surplus came from two sources: (1) underexpenditure on budgeted items ($6.5 million) and (2) underestimation of total revenues ($1.5 million). Given the instability of the special excess levy system, it is entirely understandable that a school district may be unable to accurately project exact revenues and exact expenditures for the future year. Our review of the findings of fact also reveals that the District's underexpenditure arose from several sources: an unused emergency reserve, warrant interest, lower cost of food services, lower cost of facility operation, and lower transportation costs. It is true these funds could have been used elsewhere. However, it must be remembered that both then and for several years prior thereto, the District was operating on a deferred maintenance basis resulting in reduced cleaning standards, use of emergency maintenance, and a delay in repair of instructional equipment, building maintenance, interior and exterior painting, floor replacement and many other items. In short, the so-called surplus cannot be considered money in the bank when considered in light of what had remained undone both in the area of maintenance and the foregoing of salary raises in the school year 1975-76. Further, had the District granted salary increases based upon the consumer price index increase, this factor alone would have cost an additional $11,157,749. Thus, we can only conclude that the so-called $8 million surplus would not have placed the District in a full funding position insofar as the State is concerned. Accordingly, we hold that in the absence of unconstitutional special excess levy funds, the State system of school funding during school year 1975-76 did not comply with Const. art. 9, § 1 in making ample provision for the education of the children residing within the District. Insofar as Northshore School Dist. 417 v. Kinnear, 84 Wn.2d 685, 530 P.2d 178 (1974) is inconsistent with Section XII of this opinion, it is overruled.