1. Updated: January 7, 2015

2.  2014 Election Update  WASA 2015 Legislative Platform ◦ Comply with the Paramount Duty  McCleary v. State Implementation ◦ Expand Available State Revenues  2015-17 Budget Outlook ◦ Ensure Competitive Employee Compensation  Compensation Work Group Recommendations  State Underfunding of Salaries 2

3. 3  Pre-election party strength: ◦ House: 55 Democrats, 43 Republicans ◦ Senate: Controlled by Republican-led “Majority Coalition Caucus”  2013: 23 R’s + 2 D’s vs 24 D’s  2014: 24 R’s + 2 D’s vs 23 D’s  Post-election party strength: ◦ House: 51 Democrats, 47 Republicans ◦ Senate: 25 Republicans, 24 Democrats  Majority Coalition: 25 R’s + 1 D vs 23 D’s 3 Legislative Elections

4. 4 Democratic Losses:  Kathy Haigh (Shelton) ◦ Chair, House Appropriations Subcommittee on Education  Dawn Morrell (Puyallup) ◦ Chair, House Appropriations Subcommittee on Health & Human Services  Larry Seaquist (Bremerton) ◦ Chair, House Higher Education Committee  Monica Stonier (Vancouver) ◦ Vice Chair, House Education Committee 4 House Elections

5. 5 Key Seats:  Tracey Eide (D-Federal Way) ◦ Co-Chair, Senate Transportation Committee (did not run for re-election)  Rodney Tom (D-Medina) ◦ Leader, Majority Coalition Caucus (did not run for re-election) 5 Senate Elections

6. Initiative 1351 – K-12 Class Size Reduction

7. 77  New state revenue = $0  New state expenditures: ◦ 2015-17 = $2.0 billion ◦ 2017-19 = $2.7 billion (plus HB 2776 $1.3b) ◦ 2019-21 = $3.8 billion  Local revenues increase by $4.7 billion (5 years)  Local expenditures increase by $6.0 billion (5 years)  Levy capacity increases by $1.9 billion (5 years)  No capital assistance provided I-1351 Implementation

8. Name(All) K-12 Enrollment* 1,024,518.79 Sum of Change Estimated 2014-15 Current Law Additional Staff Units (I-1351) Teachers 45,035.4714,057.87 Teachers Total 45,035.4714,057.87 School Based StaffPrincipals2,929.09161.71 Librarians1,287.44874.22 Counselors2,129.58707.46 Nurses162.511,306.69 Social Workers64.65453.66 Psychologists26.38147.72 Teaching Assistants1,770.701,790.81 Office Support4,859.492,006.32 Custodians4,123.26189.08 Student and Staff Safety196.24582.42 Parent Involvement Coordinator110.802,050.85 Technology587.202,094.49 Facilities, Maintenance, and Grounds1,695.202,135.77 Warehouse, Laborers, and Mechanics310.431,509.29 CTE/Skill Center Classified1,137.54777.46 CTE/Skill Center Certificated Administrative Staff278.1822.23 Small School Bonus Unit Reduction0.00(233.57) School Based Staff Total 21,668.7016,576.62 District/Central StaffCentral Administration - CAS840.15389.39 Central Administration - CLS2,458.401,139.45 District/Central Staff Total 3,298.541,528.84 Grand Total 70,002.7132,163.33 K-12 Enrollment*1,024,518.79 Staffing Unit Comparison Impact of I-1351 plus statewide Full-Day Kindergarten (2018-19) Source: OSPI, 11/14 http://bit.ly/1zaymQL

9. 9  Comply with the Paramount Duty  Expand Available State Revenues  Ensure Competitive Public School Employee Compensation WASA 2015 Legislative Platform

10. Comply with the Paramount Duty

11. 11  2005: The Network for Excellence in Washington Schools (NEWS) is formed ◦ Comprised of many organizations and school districts committed to improving the quality of public education in Washington (430+ members in 2014)  2007: McCleary v. State of Washington filed in King County Superior Court ◦ NEWS filed a lawsuit, asking the courts to order the State of Washington to live up to its paramount constitutional duty to make ample provision for the education of all Washington children 11 McCleary v. State

12. 12 Dollars in Billions

13. 13 Source: NEWS, 6/10

14. Source: OSPI 5/10

15. 15  2009: McCleary v. State of Washington heard in King County Superior Court  2010: Judge John Erlick rules for the plaintiffs, declaring the State’s failure to fully fund public schools is unconstitutional: ◦ “ This court is left with no doubt that under the State’s current financing system, the state is failing in its constitutional duty. “ 15 McCleary v. State

16. 16 “State funding is not ample, it is not stable, and it is not dependable…local school districts continue to rely on local levies and other non-state resources to supplement state funding for a basic education.” “Paramount means preeminent, supreme, and more important than others. Funding K-12 education…is the state’s first and highest priority before any other state programs or operations.” - Judge John Erlick 16 McCleary v. State

17. 17 ESHB 2261 – Program Changes Required

18. 18 SHB 2776 – Funding Changes Required

19. 19 SHB 2776 Resource Phase-in School Year2010-112011-122012-132013-142014-152015-162016-172017-18 1 Full-Day Kindergarten Must be fully funded statewide by 2017-18 Phase-in based on FRPL 219 Schools More funding can begin More funding must begin Continues to ramp up Fully Funded 2 K-3 Class Size Reduction Must be fully funded statewide by 2017-18 Phase-in based on FRPL $0 More funding can begin More funding must begin Continues to ramp up Fully Funded 3 Materials, Supplies, Operation Costs (MSOC) Must be fully funded by 2015-16 $ per student basis More funding can begin More funding must begin Continues to ramp up Funded at new level 4 Basic Transportation Must be fully funded by 2014-15 % of formula funded basis More funding can begin More funding must begin Continues to ramp up Fully Funded Source: OSPI, 5/10

20. 20  Supreme Court rules (January 2012): ◦ The State “has consistently failed” to provide the ample funding required by the Constitution. ◦ “Reliance on levy funding to finance basic education was unconstitutional 30 years ago in Seattle School District, and it is unconstitutional now.”  Supreme Court Orders State to: ◦ “demonstrate steady progress” under ESHB 2261; and ◦ “show real and measurable progress” towards full Article IX, Section 1 compliance by 2018. 20 McCleary v. State

21. 21 2013-15 Operating Budget (as adopted, June 2013) Total Resources$33.54 billion (including transfers of $520 million) Total Spending$33.49 billion Ending Fund Balance$53 million (0.2% of spending) Budget Stabilization Account$578 million Total Reserves$630 million (2.0% of spending) K-12 Education 2011-13$13.65 billion K-12 Education 2013-15$15.21 billion Total K-12 increase$1.56 billion (11.4% increase) Basic Education Enhancement$982.2 million

22. 22 2013-15 Operating Budget (as amended, March 2014) Total Resources$33.95 billion (including transfers of $420 million) Total Spending$33.65 billion Ending Fund Balance$296 million Budget Stabilization Account$583 million Total Reserves$879 million K-12 Education 2011-13$13.65 billion K-12 Education 2013-15$15.27 billion Total K-12 increase$1.62 billion Basic Education Enhancement$1.07 billion

23. 23 Education Funding Task Force Adopted Spending Plan Source: Joint Task Force on Education Funding, Final Report, 12/12

25. 25 Initial McCleary Basic Education Investment 2013-15 Operating Budget $5 $4 $3 $2 $1 $0 Billions

26. 26 2015-17 Operating Budget Proposal

27. 27 Basic Education (HB 2776)$1.3 billion MSOC $751.8 million K-3 Class Size $448.1 million Full-Day Kindergarten $107.6 million Promoting Student Success$40.7 million High School Graduation Rates$18.1 million High-Quality Teaching/Instructional Leadership$30.4 million Compensation$596.6 million K-12 Total$1.99 billion Gov. Inslee 2015-17 Budget Proposal K-12 Education Policy Enhancements

28. Gov. Inslee 2015-17 Budget Proposal Basic Education Enhancement, HB 2776 Source: OFM, 12/14

29. 29 2015-17 Operating Budget Proposal

30. Basic Education (HB 2261/HB 2776)$7.2 billion Basic Education: CTE$169,800,000 High School Graduation Rates($29,360,000) Dropout Prevention/Student Support$31,730,000 Technology Literacy$139,000,000 Professional Learning Support System$10,990,000 WaKIDS Grants$1,492,000 Bus Depreciation$676,604 Seattle Children’s Hospital$931,378 Student Information/Customer Support$410,700 Data Privacy$442,000 CTE Course Equivalency$250,000 Certification Fee Increase$1,787,000 PESB Cut($594,704) 30 Superintendent Dorn 2015-17 Budget Proposal K-12 Education Policy Enhancements

31. Expenditure CategorySchool Year 2015-162016-172017-18 Early Elem. Class Sizes $202,812,515$458,130,044$789,926,548 Later Grade Class Sizes $133,333,329$283,414,747$454,901,508 Support Staff $355,610,606$717,775,681$1,086,485,908 Program Hours $103,507,914$243,698,593$475,794,541 Prof. Development $144,351,361$305,633,637$490,144,289 Compensation $2,489,265,379$2,767,697,512$3,336,149,391 TOTALS $3,428,881,103$4,776,350,213$6,633,402,184 31 Supt. Dorn 2015-17 Budget Proposal Basic Education Enhancement, HB 2261/HB 2776 Source: OSPI, 10/14

32. 32 State’s K-12 Funding Promises Testimony Under Oath During McCleary Trial (Per Pupil State Funding) Source: Network for Excellence in Washington Schools, 9/14

33. 33  $7,279 per pupil funding, as adopted in 2ESSB 5034 (2013-15 budget)  $9,710 per pupil funding by 2017-18, as testified in trial—does not include market rate salaries, inflation after 2007-08 or capital construction needs  $12,701 per pupil funding by 2017-18, promised funding including market rate salaries ($2.9 billion) as recommended by Compensation Technical Working Group (June 2012) ◦ Calculation: $9,710 + $2,991=$12,701 per pupil 33 State’s K-12 Funding Promises

34. 34 Real and Steady Progress Towards Full Funding — State Testimony vs. Actual Funding, 2013— (Per Pupil State Funding) Source: Network for Excellence in Washington Schools, 9/14

35. 35 Real and Steady Progress Towards Full Funding — State Testimony vs. Actual Funding, 2014— (Per Pupil State Funding) Source: Network for Excellence in Washington Schools, 9/14

36. 36 Real and steady progress towards full funding — Investment needed to meet State promises— (Per Pupil State Funding) Source: Network for Excellence in Washington Schools, 9/14

37. 37  September 11, 2014: “The Court cannot stand idly by while its lawful orders are disregarded….Accordingly, the Court unanimously finds the State in contempt.”  Sanctions are postponed, providing the State an opportunity to purge the contempt during the 2015 session. If the contempt is not purged by adjournment of the 2015 session, “the Court will reconvene and impose sanctions or other remedial measures.” Legislature in Contempt!

38. 38  WASA believes the Legislature should be held accountable for complying with its “paramount duty” to provide ample funding for all K–12 children by implementing the new basic education finance system as adopted in ESHB 2261 (2009) and SHB 2776 (2010). To ensure the new system is completely implemented—with full and equitable funding—by 2018, as ordered by the Supreme Court in McCleary v. State, the Legislature must demonstrate steady progress towards compliance with the constitution. Comply with the Paramount Duty

39. Expand Available State Revenues

40. Where will the Legislature find the funds to enhance K-12 Education? Revenue Growth? Spending Reductions? Tax Increases?

41. 41 Preliminary Four-year Budget Outlook (Dollars in Millions) Source: Economic & Revenue Forecast Council, 11/14

42. General Fund-State Revenue Forecasted Growth Source: Economic & Revenue Forecast Council, 11/14

43. Source: Office of Financial Management, 11/14 2015-17 Budget Outlook $4.45B

44. 44 Source: Office of Financial Management, 8/14 Spending Reductions? Two-thirds of the state budget constitutionally or federally protected

45. Source: Office of Financial Management, 9/12

46. 46 General Fund-State Revenues as Percentage of Washington Personal Income Source: Office of Financial Management, 12/13

47. 47 Taxable Sales as Percentage of Personal Income Source: Economic & Revenue Forecast Council, 9/14

48. 48 Source: Office of Financial Management, 8/14 In 1995, Washington ranked 11th in State and Local Tax Collections; by 2011, Washington ranked 35th

49.  The current state budget structure cannot accommodate the required—and needed—increases in basic education to comply with the Supreme Court’s McCleary decision, nor allow the state to address educator compensation or capital costs in a comprehensive way. WASA supports the enhancement of state revenues to ensure the Legislature is able to fully comply with the constitutional paramount duty with “regular and dependable” sources of funding and also prevent drastic reductions of other necessary government services—which would have significant direct and indirect impacts on K–12 education. 49

50. Ensure Competitive Public School Employee Compensation

51.  In 2009, ESHB 2261 adopted, establishing a new definition of basic education and a new education funding system.  ESHB 2261 stated the Legislature’s intent to “enhance the current salary allocation model,” with the understanding that “continuing to attract and retain the highest quality educators will require increased investments.” 51

52.  Enacted in 2009, ESHB 2261  Convened in July 2011  Statutory Charge: Recommend the details of an enhanced salary allocation model that aligns state expectations for educator development and certification with the compensation system.  Report submitted in June 2012 52 Compensation Technical Working Group

53. 53 1)Increase the Starting Salary for Teachers and Educational Staff Associates to $48,786 2) Provide Fair Market-based Salary Allocations for all K-12 Staff 3) Maintain Comparable Wage Levels through an Annual Cost of Living Adjustment and Periodic Wage Analysis 4) Align the Salary Allocation Model to the Career Continuum for Educators 5) Invest in 10 Days of Professional Development Compensation Technical Working Group June 2012 Recommendations

54. 54 6) Allocate Mentors and Instructional Coaches in the Basic Education Funding Formula 7) Provide Appropriate Staffing Levels and Increased Program Support for Basic Education 8) Amply Fund State Basic Education Salary Allocations and Limit Locally Funded Salary Enhancements to No More than 10% of the State Allocation 9) Ensure School Districts receive the Same or Higher State Salary Allocations per State-funded Employee Compensation Technical Working Group June 2012 Recommendations Full Report at: http://bit.ly/1qeFvcb

55.  Supreme Court expressed concerns that the 2011-13 salary reduction forced increased reliance on levies to fund salaries.  In its January 2014 order, the Court stated it is “deeply troubling” that the 2013-15 budget does not address “this component [compensation] of ESHB 2261.” 55

56. Note: Salaries are for all programs and do not include benefits Source: OSPI, 9/14 School District Employee Salaries Average Base State Allocation vs. Average Total Salary Paid

57. Note: Salaries are for all programs and do not include benefits Source: OSPI, 9/14 School District Employee Salaries Percentage of Average Salary Paid by State and Local District

58. Key Recommendations:  Fund the full cost of basic education labor first, followed by other improvements as outlined in ESHB 2261 and SHB 2776  Update and implement recommendations of Compensation Technical Working Group  Recognize and mitigate impact of any reduction to local levy authority on districts’ ability to meet financial obligations 58 Local Funding Workgroup

59.  WASA urges the Legislature to fully fund a competitive compensation system to ensure the state not only meets its responsibility to establish an equitable and ample allocation system, but maintains the present benefit and pension offerings. 59

60. 60  Comply with the Paramount Duty  Expand Available State Revenues  Ensure Competitive Public School Employee Compensation WASA 2015 Legislative Platform

61. 61  An educated citizenry is critical to the state’s democracy; a well-educated population is the foundation of our democracy, our economy, and the American dream  Public education plays a critical role in promoting equality, operating as the great equalizer; public education provides unprivileged citizens with the tools they need to compete on a level playing field with citizens born into wealth or privilege 61 WASA’s Message

62. 62  Education plays a critical role in building and maintaining a strong economy; public education builds the well-educated workforce necessary to attract more stable and higher wage jobs to the state’s economy  Washington’s duty to education is constitutionally declared to be its paramount duty  In summary: Public education is a wise “investment” in the future 62 WASA’s Message

63. Daniel P. Steele Assistant Executive Director, Government Relations 825 Fifth Avenue SE Olympia, WA 98501 360.489.3642 dsteele@wasa-oly.org 2015 Legislative Preview Updated: January 7, 2015