In Washington, most K–12 funding is tied to enrollment. Because K–12 caseloads decreased in the current school year (due to the pandemic and remote learning), maintenance level spending (the cost of continuing current services, adjusted for enrollment and inflation) is expected to decrease as well. Gov. Inslee proposes booking those savings. But Representatives Dolan and Sullivan have now introduced HB 1476, which would provide hold harmless funding for school districts that are experiencing enrollment declines.

Under HB 1476, state and federal funding would be used to ensure that districts do not lose funding if school year (SY) 2020–21 or SY 2021–22 enrollment is less than funded annual average enrollment in SY 2019–20. (The programs included in the calculation are general apportionment, special education, transitional bilingual instruction, institutional education, highly capable, dropout reengagement, and career and technical education.)

To determine the amount of hold harmless funding for each district for SY 2020–21, the bill would take the amount needed to fund the included programs at the SY 2019–20 enrollment level and subtract the district’s ESSER II funds (from the Dec. 2020 federal relief bill) and any future federal funds provided to districts for COVID-19 response. If the amount after subtracting federal funds is greater than zero, the excess would be provided to the district.

The same calculation would be made for SY 2021–22—except that federal funding would not be included. Thus, if enrollment hasn’t bounced back by next school year, the state would be on the hook for the full amount.

Additionally, for calendar years 2022 and 2023, the maximum per-pupil limit for local levies and local effort assistance would be based on SY 2019–20 enrollment (if it is greater than SY 2020–21 or SY 2021–22 enrollment).

The bill specifies that the “enrollment stabilization amounts” are not part of basic education. There is no requirement in the bill that schools have re-opened or have any plans to do so in order to get the additional state money.

There isn’t a fiscal note for the bill yet. However, in January, the Office of Superintendent of Public Instruction (OSPI) estimated how much a stabilization bill could cost. It looks like this analysis describes the policy in HB 1476, but it also includes transportation stabilization funds (as proposed in SB 5128). HB 1476 does not include additional transportation allocations.

If the OSPI analysis accurately depicts what would happen under HB 1476, federal funds would do most of the work in SY 2020–21. Statewide, ESSER II allocations total $742.4 million. (HB 1368, the early action relief bill, would allocate just $668.1 million of that to districts.) Enrollment stabilization (as under HB 1476) would total $633.5 million. But many districts will receive more in ESSER II funds than their enrollment stabilization amount would be (and they wouldn’t have to return those excess ESSER funds). When you remove those districts, it looks like 106 districts would receive enrollment stabilization funds under HB 1476. The total paid by the state for SY 2020–21 would be $181.6 million.

Because federal dollars wouldn’t factor into the calculation for SY 2021–22, the state would have to pay an amount closer to the $633.5 million total enrollment stabilization amount next year.

OSPI’s analysis calls on the Legislature to “clearly establish conditions for the use of those funds to support reopening of schools (transportation and enrollment funding stabilization, health and safety equipment) and a focus on learning recovery for those students most impacted by remote learning (universal assessment of academic and social-emotional needs, individualized planning, summer learning opportunities).”

Although Gov. Inslee’s budget proposal does not include hold harmless funding for districts, it would appropriate $400 million for one-time funding for school districts “to expand learning opportunities and implement additional instruction, enrichment and student supports based on an evaluation of student needs.”

Some things for the Legislature to consider:

• It appears that the state costs of HB 1476 could increase significantly after this year.
• How would HB 1476 interact with SB 5128? (To address pupil transportation funding losses from lower enrollment, SB 5128 would provide an alternative transportation formula based on full in-person instruction. A district would receive 70% of the allocation if it is providing remote instruction and 80% of the allocation if it is providing full in-person instruction to at least 50% of students.)
• Should any enrollment stabilization funding be tied to re-opening schools?
• Should enrollment stabilization or enhanced learning opportunities for students be prioritized?