Impact Aid payments may become more timely

Jan 5, 2012

Whidbey News Times

By Rebecca Olson

January 5, 2012

While no increase in Federal Impact Aid funding is expected for the Oak Harbor School District in 2012, a new bill in Congress will help the district receive its funding in a more timely manner, according to Oak Harbor School District Superintendent Rick Schulte.

The Impact Aid Timely Repayment Act of 2011, introduced by Second District  Rep. Rick Larsen, will require the Department of Education to pay school districts their Impact Aid funds in less than three years instead of the current six years.

The national Impact Aid appropriation for federal fiscal year 2012 will be $1.285 billion.

The appropriation for federal fiscal year 2011 was $1.265 billion.

“I expect there to be no increase at all for Oak Harbor,” Schulte said.

Any increase in national funds will go to school districts on Native American reservations, since they receive a higher percentage of Impact Aid funding, Schulte said.

In most places, property taxes pay more than half the cost of schools. Impact Aid is provided by Congress because families living on federally owned land don’t pay property taxes. Impact Aid is essential in Oak Harbor because a large amount of property is owned by the government at the military base.

Since Impact Aid money goes into the general fund, it’s used to fill holes in the budget not covered by other funding. Impact Aid money affects teacher and staff pay and benefits, transportation, books andequipment. It funds approximately 95 percent of athletic programs, Schulte said.

The national Impact Aid appropriation hasn’t changed significantly since 2003 but Oak Harbor School District’s funding has decreased by 34 percent since 2006, Schulte said.

One reason for the decrease is that there are more students in the system, including military families returning from other countries, and the money doesn’t go as far when there are more students, Schulte said.

“We’ll be lucky if it’s the same as last year,” Schulte said.

The school district has budgeted to receive $4 million in Impact Aid for 2012 but may receive more or less money, Schulte said.

During the 2010 to 2011 school year, Schulte said the school district received $5.4 million. Since that money included overdue payments from 2007 and 2008, Schulte said it’s misleading to compare one year to the next.

“The timing of the payments is very unpredictable,” Schulte said.

If passed, the Impact Aid Timely Repayment Act of 2011 would require the Department of Education to pay school districts their Impact Aid funds in as little as two years.

The proposal to enforce more timely payments of Impact Aid funding came from Oak Harbor. The current law allows the Department of Education six years to pay school districts their Impact Aid funds.

“I’ve been pointing out that that’s not good practice. It shouldn’t cost the federal government any more money to pay on time,” Schulte said. The school district is still waiting to receive Impact Aid funding from 2009.

Three years ago, Oak Harbor started to push for change. As president of the Washington State Impact Aid Association, Schulte brought attention to the issue and Sen. Patty Murray and Rep. Larsen took up the call. Both were able to get senators and representative from Washington and other states to co-sponsor legislation.

“We feel very positive that that’s a move in the right direction,” Schulte said, adding that receiving funding in a more timely manner should be a benefit for the school district when budgeting because it’s difficult to plan when the district doesn’t know when it will receive the money.

“It doesn’t eliminate the uncertainty but it narrows it,” Schulte said.

“We very much appreciate the support of senators Murray and (Maria) Cantwell and Rep. Larsen,” Schulte said, adding that they and the other senators and representatives have been strong advocates of Impact Aid.

“But we’re still expecting cuts in Impact Aid as we go into the future and that’s going to aggravate problems caused by state and federal cuts,” Schulte said.

The combination of the threat of losing Local Effort Assistance funds, the state levy match, and Impact Aid cuts will have a “devastating impact” on Oak Harbor, Schulte said. Oak Harbor depends on LEA and Impact Aid, both of which don’t affect surround districts like Anacortes and Coupeville.

The school board has discussed shifting athletic and other extracurricular support to levy funds, allowing Impact Aid to be used more directly for education. Voters would have to approve the change.