1. WASA 113 Superintendents’ Component Group Tumwater, March 26, 2014

2.  Background ◦ Setting the Stage for the 2014 Session  2014 Supplemental Budget Overview ◦ Operating Budget McCleary Impacts ◦ Capital Budget  Key Legislation  2015-17 Biennium 2

3.  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 3

4.  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- 4

5.  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.” 5

6. 6  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.”

7. 7  “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

8. 2014 Supplemental Budget Proposal

9. 9 K-12 Education Substitutes/Admin Staff Hours1,200,000 OSPI Support659,000 Alternative Assessments665,000 Basic Education Funding385,595,000 Biology Collection of Evidence297,000 Collection of Evidence Adjustments(6,698,000) CTE/Skills Center MSOC Correction51,800,000 CTE/Skills Center Staffing Correction20,800,000 Federal Authority Adjustment37,003,000 Standards Implementation – Regional Support3,855,000 School Bus Depreciation System787,300 Spending Authority (Urban School Turnaround)638,392 Learning Improvement Days – State Directed45,169,053 Student Outcomes Reduction(237,000) Transportation Start Up Costs1,903,521 K-12 Education Total 543,437,266 Superintendent Dorn 2014 Budget Proposal K-12 Education Policy Enhancements

10.  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 10 Superintendent Dorn K-12 Education Funding Plan

11. 2014 Supplemental Budget Proposal

12. 12 Gov. Inslee 2014 Budget Proposal K-12 Education Policy Enhancements

13. 13 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) T OTAL PACKAGE = $204 million Gov. Inslee K-12 Funding Proposal Responding to January 9 Supreme Court Order

14. 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 E XPECTED R EVENUE = $414 million per biennium 14 Gov. Inslee K-12 Funding Proposal Responding to January 9 Supreme Court Order

15. 2014 Supplemental Budget(s)

16. Technology MSOC38,200 CBA Portal198 Paraeducator Development129 Youth Suicide Prevention100 Expanded Learning Opportunity 83 Interactive Gaming66 Homeless Student Education Outcomes 44 Biliteracy Seal21 TOTAL$39,872 16 Senate K-12 Budget (Dollars in Thousands)

17. I-732 COLA (1.2%)47,870 MSOC60,000 Federal Forest Revenues2,000 Transportation Funding Adjustment 558 Paraeducator Development293 CTE Equivalencies287 Program Compliance267 Closing Opportunity Gap245 Washington Achievers234 Community Engagement200 ESD 101 Learning Platform100 Instructional Hours Correction 90 TOTAL$112,341 17 House K-12 Budget (Dollars in Thousands)

18. MSOC58,000 Federal Forest Revenues2,000 New Teacher Mentor Program 2,000 Transportation Funding Adjustment 558 24-Credit Grad & CTE Equivalencies 309 Program Compliance267 Closing Opportunity Gap245 Community Engagement200 Youth Suicide Prevention148 Paraeducator Development128 Expanded Learning Opportunity 83 Homeless Student Outcomes44 Biliteracy Seal21 TOTAL$63,637 18 Final K-12 Budget (Dollars in Thousands)

19. 19

20. 20 Initial McCleary Investment 2013-15 Operating Budget Initial McCleary Basic Education Investment 2013-15 Operating Budget

21. 21 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

22. 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 22

23. 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 23

24. 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 24

25. 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 25

26. 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 26

27. 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 27

28. NO 2014 Supplemental Capital Budget was adopted (Related facilities bills also died) 28

29. 29 Education Legislation

30. 30  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

31.  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 31

32.  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 32

33.  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 33

34. 2015-17 What Does the Future Hold?

35. 35 2013-15 & 2015-17 Budget Outlook (Dollars in Millions) Source: Senate Ways & Means Cmte, 3/14

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

37. Real Per Capita General Fund-State Revenues (2009 Dollars) Source: OFM, 12/13

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

39. 39 More Than $5 Billion Needed Over Next 2 Biennia to Meet Statutory K-12 Requirements Source: OFM, 1/14

40. 40 Additional Revenue Necessary to Sustain Investments in Education and Other Priorities

41. Daniel P. Steele Assistant Executive Director, Government Relations 825 Fifth Avenue SE Olympia, WA 98501 360.489.3642 dsteele@wasa-oly.org WASA 113 Superintendents’ Component Group