How has school funding changed since the McCleary decision? | School Funding Series, Part 5 | OSPI

How has school funding changed since the McCleary decision? | School Funding Series, Part 5 | OSPI

Why it matters

Washington school districts are reviving the landmark McCleary legal challenge as chronic funding gaps force an $800 million reliance on local property tax levies to cover basic state-mandated education operations.

By the numbers

The lawsuit represents over 74,000 students across three districts, addresses an $800 million annual statewide operational gap, and comes as 11 districts operate under formal state financial oversight.

School boards for three of Washington state’s major public school systems have formally authorized legal counsel to prepare a constitutional lawsuit against the State of Washington, alleging that the Legislature is violating its paramount constitutional duty by failing to fully fund basic education. The school directors of Lake Washington School District and Tacoma Public Schools approved joint litigation resolutions during simultaneous board sessions on October 22, 2026. The Yakima School District Board of Directors followed on November 2, 2026, enacting a matching measure that commits the Eastern Washington system to the legal coalition. Together, the three districts serve more than 74,000 public school students across urban, suburban, and agricultural communities. School directors contend that chronic state apportionments fall hundreds of millions of dollars short of the actual cost of mandatory educational services. The resulting gap forces local administrators to divert voter-approved property tax enrichment levies and federal dollars into basic daily operating costs. The planned lawsuit directly threatens to reopen the legal and political conflict established in the landmark McCleary school funding litigation, confronting state leaders with systemic fiscal demands.

Simultaneous Board Authorizations in Lake Washington, Tacoma, and Yakima

The decision to pursue coordinated litigation against the state emerged from months of administrative preparation and mounting district deficits. During its October 22 public meeting, the Lake Washington School Board unanimously enacted Resolution 2448, formally directing administrative staff and designated legal counsel to compile discovery documents and draft formal complaints against the state. The Tacoma Public Schools Board of Directors passed an identical authorization during its own October 22 meeting, while the Yakima School District Board of Directors approved its participating measure during an evening session on November 2, as reported by KIRO 7 News.

The tripartite coalition unites geographically and economically diverse communities across the Cascade Mountains. Lake Washington represents a fast-growing King County suburban system of 30,000 students, Tacoma educates 28,000 students in Pierce County’s urban industrial core, and Yakima serves 16,000 students in the agricultural center of Central Washington. Despite regional economic differences, administrators across all three systems report that state funding formulas distribute insufficient capital to sustain standard staffing, student security, and building utility operations.

District superintendents emphasized that local tax bases can no longer subsidize state responsibilities without harming educational quality. Lake Washington Superintendent Dr. Jon Holmen noted to district families that recurring deficits force local districts to cover legally mandated programs with finite community resources. School directors confirmed that while final filing dates remain pending legal review, structural litigation is now inevitable.

Constitutional Mandates Under Article IX and the McCleary Precedent

The legal foundation of the upcoming challenge rests squarely upon Article IX, Section 1 of the Washington State Constitution, which establishes education as the state’s preeminent sovereign responsibility. The constitutional text mandates that it is the paramount duty of the state to make ample provision for the education of all children residing within its borders, without distinction or preference. Washington’s supreme judicial bench has repeatedly interpreted this provision as an absolute, affirmative requirement that takes precedence over all other competing statutory appropriations and general fund expenditures.

The planned complaint directly resurrects the core legal doctrine established in the historic 2012 Supreme Court ruling in McCleary v. State of Washington. In that landmark judgment, the high court determined that the Legislature maintained an unconstitutional reliance on local school levies to fund basic education components, including competitive educator salaries. When legislative leaders subsequently delayed funding implementation, the Supreme Court took the extraordinary step of holding the state in contempt in 2014, eventually levying unprecedented judicial sanctions of $100,000 per day against the state treasury.

Although the high court formally declared the state in constitutional compliance in 2018 after lawmakers poured billions of dollars into statewide property tax adjustments and educator salary schedules, school leaders argue that subsequent inflation and legislative inaction dismantled those gains. The pending action asserts that statutory funding formulas have decayed back into systematic non-compliance, reviving the constitutional violations previously outlawed by the judiciary.

The Eight Hundred Million Dollar Annual Operational Deficit

Statewide educational data indicates that the funding deficit identified by the three districts represents a systemic crisis rather than local mismanagement. According to administrative findings published by the Office of Superintendent of Public Instruction, public school districts across Washington collectively expend approximately $800 million each year in local enrichment levies and federal funds to cover basic education costs that should legally be borne by the state general fund. This structural imbalance leaves districts vulnerable to local voter sentiment and economic downturns.

The statutory mechanism generating this deficit is Washington’s Prototypical School Funding Model, originally adopted through House Bill 2261 in 2009. The model calculates state funding based on rigid ratios of administrative, instructional, and operational personnel allocated per fixed cohorts of students. However, school business officials explain that the state model fails to reflect market costs for school supplies, physical plant heating, electricity rates, student mental health counselors, and custodial maintenance across varying geographic zones.

Superintendent of Public Instruction Chris Reykdal has repeatedly cautioned state budget writers that the widening gap between state statutory allocations and real schoolhouse expenditures would trigger renewed litigation. OSPI Chief Strategy Officer Katy Payne explained to Spokane Public Radio that while court filings are never an agency’s initial preference, education leaders have sounded alarms for years while districts drain local treasuries to fulfill state obligations.

Special Education Shortfalls and Property Insurance Pressures

Among the primary financial pressures cited in district board resolutions is the severe state funding cap imposed on special education services. Under current Washington statutory limits codified in RCW 28A.150.392, the state caps its special education funding multiplier at 16 percent of a district’s total student enrollment. School districts that identify and educate higher proportions of students requiring individualized education programs must pay every dollar above that statutory threshold out of local enrichment levies, generating deep operational deficits in high-needs communities where student service demands consistently outpace the arbitrary state ceiling.

Operational costs outside the classroom have escalated at rates far exceeding state inflation benchmarks. Commercial property and casualty insurance premiums for school districts throughout the Pacific Northwest have surged by double-digit percentages across consecutive renewal cycles, driven by severe regional storm damage, rising building replacement values, and tightening reinsurance markets managed by the Washington Schools Risk Management Pool. Utility costs for municipal water, natural gas heating, and electric power grids have risen simultaneously, requiring millions in unbudgeted funds across aging district facilities.

Student transportation funding presents another chronic shortfall under state accounting formulas. Washington’s Student Transportation Allocation Reporting System reimburses districts using historical regression models that routinely fail to cover rising diesel prices, driver wage competition, and specialized transit routing for students protected under federal disability statutes. The cumulative effect strips flexible funds away from classroom instruction to cover basic logistical utilities.

Eleven Districts Under State Financial Oversight and Local Levy Fatigue

The systemic underfunding of basic operational costs has pushed a historic number of public school systems to the brink of financial insolvency. State regulatory filings show that 11 Washington school districts are currently operating under binding conditions pursuant to RCW 28A.505.110, the formal statutory framework under which OSPI exercises direct administrative oversight over a district that cannot submit a balanced annual budget. This represents the largest contingent of school systems placed under state financial intervention in Washington history, signaling severe structural distress across both urban centers and small rural communities.

Districts attempt to stabilize operations by placing enrichment levies and capital replacement measures before local voters, but property taxpayer resistance is intensifying across Puget Sound communities. Just this week, voters in Kitsap County rejected South Kitsap School District’s $72.6 million Proposition 1 capital levy, extending a funding deficit that has prevented local school modernization since 1988. When local communities reject ballot measures, districts have no alternative funding source to repair aging roofs, upgrade ventilation systems, or preserve support staff.

Reporting broadcast by Oregon Public Broadcasting notes that structural deficits have already forced districts statewide to reduce staff rosters, enlarge class sizes, and evaluate campus closures. Administrators point out that forcing local property owners to carry baseline educational expenses creates severe geographic inequities, penalizing rural and lower-wealth districts that lack large commercial property valuation bases.

Legislative Budget Deficits and the Looming Judicial Showdown

The impending lawsuit arrives as the Washington State Legislature prepares for its 2027 biennial legislative session, facing significant state revenue constraints and multi-billion-dollar general fund shortfalls. In previous budget cycles, legislative leaders managed education demands by adjusting regional cost-of-living factors and expanding local levy authorization lids up to the statutory 28 percent threshold. However, those temporary adjustments shifted fiscal responsibility back to local property taxpayers without solving the underlying discrepancy between the prototypical funding model and actual school operating costs.

Legal analysts anticipate that the plaintiff districts will petition the judicial bench to establish enforceable funding benchmarks for special education, facility insurance, and transportation logistics. If superior court judges or Supreme Court justices determine that the state has relapsed into constitutional default under Article IX, the judiciary could once again issue compliance timelines, appoint special masters, or invalidate statutory levy caps that constrain local district recovery efforts.

With three major districts formally committed and additional school boards reviewing matching litigation resolutions, the legal action creates an urgent political dilemma for incoming state administrators. School directors maintain that court intervention remains the only proven method to compel the Legislature to fund the true cost of public schools. As formal filings proceed toward state court dockets, Washington’s twelve-year peace over educational finance has officially drawn to a close, setting up a decisive constitutional confrontation in Olympia.

The Vyraa Newsroom

Editorial Team

The Vyraa Newsroom is the staff byline of Vyraa, an independent local news outlet covering Bremerton, Kitsap County, and Washington State, published by Nyza Creations LLC. Stories under this byline are researched and written by the Vyraa editorial team from local and regional out…

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