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Evergreen Ledger

SHB 1356

In Committee

House

K-12 funding

Concerning K-12 funding.

This status may be delayed. See Action History below for the latest updates.

How does a bill become law?
  1. Introduced: The bill is filed and assigned a number.
  2. Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
  3. Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
  4. Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
  5. Governor: The Governor reviews the bill and decides whether to sign or veto it.
  6. Signed: The bill has been signed into law.
Introduced: February 24, 2025
Last Action: January 12, 2026
Status: H Approps
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AI Analysis

This analysis was generated by AI and may contain errors. It is not legal advice. Always refer to the official bill text for authoritative information.
People & CommunitiesBalancedCorporate & Wealthy Interests

This bill raises per-pupil funding caps for enrichment levies and expands state assistance for districts that levy less than the maximum, updates special education funding formulas and safety net eligibility, revises property tax limits for local governments, and establishes a work group to study equitable K-12 funding reforms. It also funds substitute teacher costs beginning in 2027–28.

  • Raises the maximum enrichment levy limit to $2,500 or $3,000 per student (depending on district size) through 2030, increasing annually by inflation plus 'inflation enhancements' (e.g., $500 in 2026, plus 3.33% annually 2027–2030), and to $5,035 + inflation starting in 2031.
  • Expands state 'local effort assistance' to supplement districts that levy less than $1.50 per $1,000 assessed value, with eligibility and amounts based on local levy rates and student enrollment; extends similar assistance to charter and state-tribal schools starting in 2026 and 2022 respectively.
  • Revises special education funding to increase base allocations for students with disabilities (e.g., 1.2x for preschoolers, 1.12x or 1.06x for K–12 depending on time in general education), and creates a 'safety net' program for districts with unusually high special education costs.
  • Changes how 30% of a district’s base allocation is redirected to special education programs, and requires districts to use that portion before tapping other funds for special education services.
  • Reforms property tax limits for most local taxing districts to a 'limit factor' of 101% or 100% + inflation (capped at 103% for the state), effective for taxes levied in 2026 and later.
  • Creates a K-12 funding equity work group to analyze and propose formula changes by 2027, including student-weighted funding and metrics for equity, with a statutory sunset on December 1, 2027.

Who is affected

  • Public school districts — School districts with fewer than 40,000 full-time equivalent students gain a higher per-pupil enrichment levy limit ($2,500 + inflation + enhancements) through 2030, while larger districts receive $3,000 + inflation + enhancements; starting in 2031, all districts receive $5,035 + inflation per student.
  • Lower-wealth school districts — School districts with lower local property wealth may receive state assistance to supplement their enrichment levies, based on how much they levy relative to the $1.50 per $1,000 assessed value cap and their student enrollment.
  • State-tribal compact schools and charter schools — State-tribal education compact schools and charter schools gain eligibility for state local effort assistance up to $1,550 + inflation + enhancements per student, beginning in 2022 and 2026 respectively.
  • School districts with high special education needs — School districts with high special education costs—especially those serving students with very high-need disabilities or in high-cost regions—may receive additional state 'safety net' funding to cover excess costs beyond standard funding formulas.
  • Local taxing districts and property taxpayers — State and local governments face updated property tax limits: most districts face a 1% cap plus inflation (capped at 3% total for the state), affecting how much they can raise through regular property taxes starting in 2026.
Effective: September 1, 2025Fiscal impact: The bill increases state spending on K-12 education through higher enrichment levy limits, expanded local effort assistance (including for charter and state-tribal schools), special education funding adjustments, and new substitute teacher funding. It also changes how property tax limits are calculated, which may reduce local revenue capacity but is offset by increased state funding. The fiscal impact is tied to inflation and student enrollment, with no fixed dollar amount specified.Sunset: December 1, 2027
Model: Intel/Qwen3-Coder-Next-int4-AutoRoundGenerated: Mar 19, 2026 at 6:52 PM

Pro/Con Analysis

Potential Benefits (5)

  • Expanding state local effort assistance to districts levying below $1.50 per $1,000 AV—and extending it to charter and state-tribal schools—directly benefits lower-wealth districts that cannot raise sufficient local revenue through levies. This reduces inter-district disparities in per-pupil funding capacity and helps close the gap between wealthy and poor districts without requiring new voter-approved taxes.

    FinancialPeopleRef: Sec. 102(2)(a), (b); Sec. 102(2)(d)(i), (iii)

  • Raising special education cost multipliers (e.g., 1.2 for preschool, 1.12/1.06 for K–12) and requiring 30% of base funding to be redirected to special education *before* tapping other funds improves equity for students with disabilities, especially those in high-need categories. Districts serving high-cost students (e.g., autism, severe cognitive disabilities) gain more predictable and adequate funding, reducing the need for safety net applications and administrative burden.

    EducationPeopleRef: Sec. 301(2)(a), (b); Sec. 303(2), (3)

  • State funding for substitute teachers beginning in 2027–28 ($200/day for teachers, $150/day for classified staff) reduces a major cost center for districts and stabilizes staffing. This helps districts retain qualified substitutes, reduces last-minute cancellations, and supports continuity of instruction—particularly beneficial for districts with high turnover or in rural areas where substitutes are scarce.

    Business & EmploymentPeopleRef: Sec. 501

  • The property tax limit reform (100% + inflation, capped at 103% for the state) provides predictability and caps runaway tax growth, protecting homeowners and small businesses from unpredictable tax spikes—especially in high-appreciation areas where assessed values rise faster than inflation. This helps middle- and working-class households on fixed incomes avoid displacement.

    Local GovernmentPeopleRef: Sec. 201(2)(c), (d); Sec. 202

  • The K-12 funding equity work group—mandated to analyze student weights, equity metrics, and funding distribution—is a necessary step toward long-term structural reform. While constrained by the “no net cost” rule, it creates a statutory framework for future equity improvements and includes diverse stakeholder input, potentially laying groundwork for future reforms beyond 2027.

    EducationLean peopleRef: Sec. 401
Potential Concerns (5)

  • The enrichment levy cap increases significantly—up to $5,035 + inflation per student by 2031—benefiting districts with high property wealth more than lower-wealth districts, as the full per-pupil increase is only realized if voters approve a levy at or near the new maximum. Wealthier districts are more likely to pass levies at the cap, while lower-wealth districts may still be constrained by voter approval thresholds and local political opposition, limiting actual revenue gains.

    FinancialIndustryRef: Sec. 101(2)(c)(ii), 2027–2030 inflation enhancements + $500 fixed enhancement in 2026

  • The property tax limit reform caps most local taxing districts at 100% + inflation (max 103% for the state), reducing long-term revenue growth capacity for cities, counties, and special districts—especially those with high growth or infrastructure needs—while shifting more of the K-12 funding burden to the state. This constrains local fiscal autonomy and may reduce capacity to fund local services like police, fire, parks, and libraries.

    Local GovernmentIndustryRef: Sec. 102(2)(c), (d)(i); Sec. 201(2)(c), (d)

  • The special education safety net is narrowly defined: only districts with demonstrably high per-student costs (≥2.0–2.2× average per-pupil expenditure) qualify, and the threshold excludes districts with lower-than-average costs—even if they serve high-need subgroups. This disproportionately excludes rural and small districts with fewer students, while larger districts with more economies of scale and better Medicaid billing infrastructure are more likely to meet the threshold and access funds.

    EducationIndustryRef: Sec. 302(2)(e), (f); Sec. 302(6)(b)(ii)

  • Charter and state-tribal schools gain access to local effort assistance, but only up to the per-pupil amount of the *host district*—not the full $1,550 + enhancements—and only if the host district’s revenue per pupil (including private donations) exceeds the cap. This creates a de facto cap tied to local district wealth, meaning charter schools in low-wealth host districts may receive little or no additional support, while those in high-wealth districts benefit disproportionately.

    EducationLean industryRef: Sec. 102(2)(d)(i), (iii); Sec. 102(2)(c)

  • The K-12 funding equity work group is constrained by a statutory “no net cost” requirement: proposed reforms must not exceed the *additional* state revenue generated by the enrichment levy and property tax reforms. This effectively locks in the current regressive structure—since the revenue increases primarily benefit higher-wealth districts—and prevents structural equity reforms that might reduce local levy reliance without increasing overall state spending.

    FinancialLean industryRef: Sec. 401(4); Sec. 201 (property tax cap)

Who Is Most Affected

Lower-wealth school districtsPositive Impact

Lower-wealth school districts benefit significantly from expanded local effort assistance, which offsets their inability to raise full enrichment levies. However, they may still face voter approval barriers and may not reach the full per-pupil cap unless levies pass.

Higher-wealth school districtsMixed Impact

Higher-wealth districts gain the most from the enrichment levy cap increase, as they are more likely to pass levies at or near the new maximum. They also benefit more from property tax predictability, but lose little relative to their overall revenue capacity.

Charter and state-tribal schoolsMixed Impact

Charter and state-tribal schools gain access to state assistance, but only up to the host district’s revenue level—meaning those in low-wealth host districts receive minimal benefit. Larger, well-connected charter networks may benefit more than small, community-based ones.

Districts with high special education needsMixed Impact

School districts with high special education costs—especially those serving students with severe disabilities—gain from higher multipliers and the safety net, but only if they meet the 2.0–2.2× per-pupil expenditure threshold. Small and rural districts may still be excluded due to lower average expenditures.

Property taxpayers and local governmentsMixed Impact

Homeowners and small businesses benefit from property tax predictability and caps, especially in high-appreciation areas. However, local governments (cities, counties, libraries, fire districts) face constrained revenue growth, potentially reducing local services and infrastructure investment.