Over the past 12 years, Washington has made significant changes to how it funds public education, including adding $7 billion in new annual funding since 2013. A team of researchers at the University of Washington and Vanderbilt University is examining the impact of those investments for school districts and students in Washington. The team’s research findings informed a January 11, 2024 Legislative Work Session for the Washington House Finance Committee.
The work session, titled, “Finance Policy Structure for Basic Education in Washington” included remarks from State Superintendent of Public Instruction Chris Reykdal, Office of Program Research Analysts and Counsel James Mackison, Linda Merdle, and Tracey Taylor, Washington Education Association lobbyist Julie Salvi, Washington State School Directors Association Director of Legislative Affairs Mellissa Beard, and University of Washington Associate Professor of Education Finance and Policy, Dr. David Knight.
Dr. Knight’s testimony includes an overview of research on school finance including his team’s recent findings on Washington’s finance system.
Testimony Summary
During his testimony, Dr. Knight shared several key findings from recent research. In this clip, he describes the impact of funding on student outcomes, and the importance of allocating resources progressively with respect to student income.
The following clip includes questions pertaining to regionalization factors and levy lids.
Questions from Representatives
Rep. Berg: Is the regionalization factor unique to Washington or do other states use something similar?
Geographic cost of labor indices are more common in K-12 school finance formulas than geographic cost of living indices. The reason is that while the two indices are often correlated, a cost of labor index more accurately accounts for differences in the cost to attract and retain a high-quality teacher workforce. A geographic area with high cost of labor is one in which workers outside education tend to earn higher wages than other workers in the state who are employed in the same occupations and with similar levels of training and education. Wages are often higher in urban areas in part due to higher cost of living, or in rural areas where fewer workers might be willing to live and work. In contrast, a geographic area with high cost of living is typically one in which median home values are higher than in other parts of the state. In some areas, high median home values reflect greater neighborhood amenities such as parks and robust government services, features that do not increase the cost of education and instead make it easier for districts to attract and retain high quality teachers. Regionalization factors therefore overstate the true local cost of labor in areas with many neighborhood amenities and high cost of living and underestimate the cost of labor in areas with lower median home values and fewer neighborhood amenities or local attractions. A cost of labor index more closely matches what school districts actually purchase, which is labor, not housing. All states have regional differences in the cost of fuel and other materials, but school spend most of their funding, about 80%, on personnel salary and benefits. In short, funding school districts based on the cost of living is not an effective school finance policy tool, whereas a cost of labor adjustment, used in several states such as Massachusetts, Virginia, Wyoming, and others, more accurately reflects differences in the cost districts face to produce equal educational opportunity to reach common outcome goals.
Rep. Street: What proportion of the income and racial funding gap in Washington is driven by regionalization factors?
We answer this question through multiple methods, acknowledging that it is difficult to identify the true causal impact of regionalization factors on income and racial funding gaps.
Under our most straightforward approach, we examine how funding changed for school districts assigned different initial regionalization factors when they were first implemented in 2018-19, and then consider the student demographics of districts in each regionalization factor. The data show that districts originally assigned with regionalization factors of 1.18 and 1.24 both received an additional $4,500 per pupil in state aid, compared to about $3,250 for districts with no regionalization, a difference of $1,250. Examining the student demographics of districts assigned different regionalization factors (1.00, 1.06, 1.12, 1.18, and 1.24), districts with no regionalization factor (a factor of 1.00), on average, have the lowest household income ($63,139) according to U.S. Census data, and the highest percent of low-income students (59.1%). Differences by race/ethnicity are more nuanced. Districts receiving no regionalization serve higher shares of Latina/o and Indigenous/ American Indian or Alaskan Native students. However, students who identify as Black/ African American and as Asian or Asian American are most heavily represented within regionalization factor 1.18. Students who identify as Pacific Islander/ Hawaiian are most heavily represented in regionalization factor 1.12. White students are most represented in regionalization factor 1.06, and least represented in 1.18. In short, regionalization factors on average benefit districts serving higher-income student populations, but their impact on students of color differs across racial/ethnic groups.
Rep. Orcutt: Why does the graph show a narrowing of the income-based funding gap starting in 2018-19, after the full implementation of EHB 2242?
The difference in funding between the state's highest- and lowest-poverty school districts is largest in 2018-19, the year state funding increased substantially and regionalization factors were first implemented. The difference has narrowed in more recent years for several reasons, including adjustments to regionalization factors, small increases to the Learning Assistance Program, and lower-wealth districts passing more local levies and bonds. However, in the most recent year shown in the graph, 2021-22, schools districts enrolling the highest concentrations of students in poverty received almost $3,000 less state and local revenues per students than districts serving more well off communities.
Next, Dr. Knight describes research on the changes to school finance policies in Washington. In this clip, he describes problems with the local levy system, including the state’s two-pronged levy system.
In this final clip, Dr. Knight address additional questions, including the research team’s policy recommendations, the likelihood that significant increases in funding would produce positive outcomes, and the role of local control.
Moving Forward
The University of Washington College of Education has partnered with a group of Washington superintendents, many of whom are alumni of the College's Leadership for Learning Educational Doctorate program or the Danforth Administrator Preparation Program. That work will establish a five-year vision for improving the state's school finance system. The group, called the Superintendents United in Partnership for Equitable Schools, or UW-SUPES, has held several convenings beginning in July 2024 and produced summary reports. Read more about UW-SUPES.
Learn More
You can watch Dr. Knight's complete testimony and access PowerPoint slides below.
To learn more about the University of Washington research team’s findings, visit their faculty webpages or reach out to them directly.