Legislative Review2014

WASA 113 Superintendents’ Component GroupTumwater, March 26, 2014

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Background◦ Setting the Stage for the 2014 Session

2014 Supplemental Budget Overview◦ Operating Budget

McCleary Impacts◦ Capital Budget

Key Legislation

2015-17 Biennium

2014 Legislative Review

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Even-year “short” session, limited to 60 days◦ (Convenes: Jan. 13; Sine Die: March 13)

Major focus:◦ 2014 Supplemental Budgets

Tweaks to 2-year Operating & Capital Budgets

◦ Policy issues All un-adopted bills reintroduced

◦ Full Transportation Budget & Revenue Package

Setting the Stage for 2014

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14 new members in Legislature◦ 8 new House members◦ 6 new Senate members (5 from House)

Legislative Control:◦ House: D’s maintain control, 55-43◦ Senate Majority Coalition (23 R’s + 2 D’s) gain 1

new R, control with 26-23 members

Budget Situation: Ending Fund Balance◦ June ’13 - $53 million◦ November ‘13 - $214.9 million◦ February ‘14 - $228.9 million-

Setting the Stage for 2014

The Legislature took “meaningful steps in the 2013 legislative session to address the constitutional imperative of amply providing for basic education.”

The funding provided, however, represents “only a 6.7% increase over the current constitutionally inadequate level of funding” and the state “cannot realistically claim to have made significant progress when its own analysis shows that it is not on target to implement ESHB 2261 and SHB 2776 by the 2017–18 school year.”

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January Supreme Court Order

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The Legislature failed to comply with the Court’s December 2012 Order and the new Order directs the state to “submit, by April 30, 2014, a complete plan for fully implementing its program of basic education for each school year between now and the 2017–18 school year.” The plan must also include “a phase-in schedule for fully funding each of the components of basic education.”

The 2014 session presents “an opportunity to take a significant step forward.”

January Supreme Court Order

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“The need for immediate action could not be more apparent. Conversely, failing to act would send a strong message about the state’s good faith commitment toward fulfilling its constitutional promise.”

The Legislature must “demonstrate, through immediate, concrete action, that it is making real and measurable progress, not simply promises.”

http://1.usa.gov/1evdg54

January Supreme Court Order

2014 SupplementalBudget Proposal

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K-12 Education

Substitutes/Admin Staff Hours 1,200,000

OSPI Support 659,000

Alternative Assessments 665,000

Basic Education Funding 385,595,000

Biology Collection of Evidence 297,000

Collection of Evidence Adjustments (6,698,000)

CTE/Skills Center MSOC Correction 51,800,000

CTE/Skills Center Staffing Correction 20,800,000

Federal Authority Adjustment 37,003,000

Standards Implementation – Regional Support 3,855,000

School Bus Depreciation System 787,300

Spending Authority (Urban School Turnaround) 638,392

Learning Improvement Days – State Directed 45,169,053

Student Outcomes Reduction (237,000)

Transportation Start Up Costs 1,903,521

K-12 Education Total 543,437,266

Superintendent Dorn 2014 Budget ProposalK-12 Education Policy Enhancements

Sales Tax: Adds one cent to the state sales tax

Property Tax: Raises state property tax to $3.60 per $1,000 of assessed valuation

Local Levies: Reduces local levies and prohibits use of local levies for basic education costs, including salaries

Changes would be implemented on January 1, 2018, unless Supreme Court finds Legislature has achieved full funding

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Superintendent DornK-12 Education Funding Plan

2014 SupplementalBudget Proposal

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Gov. Inslee 2014 Budget ProposalK-12 Education Policy Enhancements

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Addresses two key needs:

Making sure classrooms are properly equipped with materials, supplies and curricula; and

Restoring voter-mandated teacher cost-of living salary increases

MSOC enhancement = $130 million($118 per FTE student)

I-732 COLA = $74 million(projected 1.3% adjustment)

TOTAL PACKAGE = $204 million

Gov. Inslee K-12 Funding ProposalResponding to January 9 Supreme Court Order

Proposed Funding Mechanism:

Repeal sales tax exemption for trade-ins valued over $10,000

Repeal public utility tax deduction for in-state portion of interstate transportation

Repeal use tax exemption for extracted fuel Refund state portion of sales tax to nonresidents Repeal sales tax exemption on bottled water Repeal sales tax exemption for janitorial services Repeal preferential business and occupation tax

rate for resellers of prescription drugs

EXPECTED REVENUE = $414 million per biennium

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Gov. Inslee K-12 Funding ProposalResponding to January 9 Supreme Court Order

2014 Supplemental Budget(s)

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Technology MSOC 38,200

CBA Portal 198

Paraeducator Development 129

Youth Suicide Prevention 100

Expanded Learning Opportunity

83

Interactive Gaming 66

Homeless Student Education Outcomes

44

Biliteracy Seal 21

TOTAL $39,872

Senate K-12 Budget(Dollars in Thousands)

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I-732 COLA (1.2%) 47,870

MSOC 60,000

Federal Forest Revenues 2,000

Transportation Funding Adjustment 558

Paraeducator Development 293

CTE Equivalencies 287

Program Compliance 267

Closing Opportunity Gap 245

Washington Achievers 234

Community Engagement 200

ESD 101 Learning Platform 100

Instructional Hours Correction 90

TOTAL $112,341

House K-12 Budget(Dollars in Thousands)

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MSOC 58,000

Federal Forest Revenues 2,000

New Teacher Mentor Program 2,000

Transportation Funding Adjustment 558

24-Credit Grad & CTE Equivalencies 309

Program Compliance 267

Closing Opportunity Gap 245

Community Engagement 200

Youth Suicide Prevention 148

Paraeducator Development 128

Expanded Learning Opportunity 83

Homeless Student Outcomes 44

Biliteracy Seal 21

TOTAL $63,637

Final K-12 Budget(Dollars in Thousands)

191919

2020

Initial McCleary Investment2013-15 Operating Budget

Initial McCleary Basic Education Investment

2013-15 Operating Budget

2121

Real and steady progress towards full funding-- State Testimony vs. Actual Funding—

(Per Pupil State Funding)

Source: Network for Excellence in Washington Schools response to 2013 Post-Budget Filing, 1/14

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Senate Republicans: SB 5881—“Kids First Act” From July 1, 2015 through June 30, 2025, two-thirds

of new revenue must be expended on education programs (early learning, K-12 and higher education). Subject to public referendum.

House Democrats: HB 2792 Would codify the state’s phased-in funding plan

adopted by Joint Task Force on Education Funding – including teacher/staff salary increases; 24-credit graduation requirement; and pupil transportation funding adjustments

April 30 McCleary “Plan”

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Senate Democrats: SB 6574 Includes: (1) Phase-in plan for HB 2776

components, including 24-credit graduation requirement and salary increases; (2) Provision of immediate basic education enhancements; and (3) Closes a series of tax loopholes as a funding source for education enhancements.

House Republicans: No Action

April 30 McCleary “Plan”

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Senate Proposal(SB 6020/SB 6081/SB 6516)

$121 million “package”

$24 million net reduction in K-12:

School Construction Assistance Program—($78 million) STEM facilities—$25 million, competitive grants All-day kindergarten facilities—$25 million, competitive

grants Skills Centers—$2.9 million Emergency Repair Pool—$1.1 million

Capital Construction Budget

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House Proposal(HB 2224)

$167 million

$87 million net reduction in K-12

School Construction Assistance Program—($90 million)

Nutrition Equipment Grant—$1 million Spokane Valley Tech—$1 million Water bottle filling stations—$750,000 Kione-Benton high school parking lot-$125,000

Capital Construction Budget

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HB 2797 - $700 million

Revenue to immediately provide grants for facilities to implement all-day kindergarten and class size reduction; local “match” not required

Lottery revenues support the bond and the debt service on bonds

Addresses Supreme Court’s Jan. 9 Order

Additional K-12 Facilities

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SB 6483 - $825 million

Revenue to provide competitive grants for facilities for all-day kindergarten, class size reduction and STEM labs

$50 million appropriated for all-day kindergarten and $50 million appropriated for STEM labs

$500,000 to fund an inventory to determine facility need for class size

Bill states “intent” to provide $825 million (total) over three biennia

Additional K-12 Facilities

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NO2014 Supplemental Capital

Budget was adopted

(Related facilities bills also died)

Final Action on Capital

Education Legislation

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Instructional Time/1,080 Hours/24-credit Diploma

Student Growth in Teacher/Principal Evaluations – Federal ESEA Waiver

State-funded Learning Improvement Days/Professional Development

Student Achievement/Opportunity Gap

Major K-12 Issues

Provides for CTE course equivalencies Delays increase in instructional hours Restructures instructional hour requirement Addresses senior graduation week issue Authorizes SBE to implement 24-credit

diploma Reprograms 2013-15 instructional hour

appropriation

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E2SSB 6552Modifying Instructional Hours

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SB 5246 (Litzow)◦ Changed “can” to “must” use student results on relevant

assessments in evaluations◦ Required OSPI to adopt rules dictating that student growth

goals must assume one year of student growth in a given academic year

◦ Required weighting (50%) of student growth data◦ Restricted weighting (10%) of use of seniority

SB 5960 (McAuliffe)◦ Changed “can” to “must” use student results on relevant

assessments in evaluations

SB 6055 (Superintendent Dorn)◦ Changed “can” to “must” use student results on relevant

assessments in evaluations◦ Delayed implementation until 2016-17 school year

Student Growth Data in Evaluations

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HB 2800 (Governor Inslee/Supt Dorn)◦ Changed “can” to “must” use student results on

relevant assessments in evaluations◦ Delayed implementation until 2017-18 school

year◦ Included “contingency clause” which would void

the law if Washington loses its NCLB waiver

SB 5880 (Litzow)◦ Changed “can” to “must” use student results on

relevant assessments in evaluations

Student Growth Data in Evaluations

2015-17

What Does the Future Hold?

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2013-15 & 2015-17 Budget Outlook

(Dollars in Millions)

Source: Senate Ways & Means Cmte, 3/14

36Source: Washington State Budget & Policy Center, 3/14

Real Per Capita General Fund-State Revenues(2009 Dollars)

Source: OFM, 12/13

Source: Washington State Budget & Policy Center, 2/14

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More Than $5 Billion Needed Over Next 2 Bienniato Meet Statutory K-12 Requirements

Source: OFM, 1/14

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Additional Revenue Necessary to Sustain Investments in Education and

Other Priorities

Daniel P. SteeleAssistant Executive Director,

Government Relations825 Fifth Avenue SEOlympia, WA 98501

360.489.3642

dsteele@wasa-oly.org

WASA 113 Superintendents’ Component Group