1. Updated: March 2, 2015

2.  Budget(s) Update  McCleary Implementation  Educator Compensation  Revenue Question 2

3.  11 bill package: ◦ Revenue bill; Bond bill; Spending Plan; 8 “reforms”  $15.0 Billion Spending Plan ◦ Funds 6 “megaprojects” & 58 regional projects ◦ $3.5 million – Safe Routes to Schools Grants  11.7 cent gas tax increase  SB 5990-Exempts certain transportation projects from sales tax; diverts other trans sales tax from General Fund to transportation 3

4.  “Early Action” Supplemental, HB 1105  $217.9 million increase over 2013-15  Funds: ◦ Wildfires & Oso landslide ◦ Mental health beds (Supreme Court) ◦ In-home care compensation (Supreme Court) ◦ Extended foster case services  Signed Feb. 19 4

5. Superintendent’s Request K-12 Education - $3.18 billion  School Construction Assistance Program - $1.14 billion  K-3 Class-size Reduction - $1.98 billion  Local Assistance Grants - $50.2 million  Energy Grants - $8.0 million  Skills Centers - $43.7 million 5

6. Governor’s Request K-12 Education - $657.2 million  “Fully Funds” School Construction Assistance Program - $596.1 million  All-day Kindergarten - $10.0 million  Small Repair/Healthiest Next Generation - $5.0 million  Skills Centers - $36.1 million 6

7.  SB 5859 (and HB 2161) ◦ Enhancements to Construction Cost Allowance & Student Space Allocation ◦ Raises minimum funding floor from 20 percent to 30 percent  HB 1941/HJR 4210 ◦ Simple Majority for school district bonds ◦ November election only 7

8. 2015-17 Operating Budget

9. 99 2015-17 Operating Budget Proposal

10. 10 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) 10 Superintendent Dorn 2015-17 Budget Proposal K-12 Education Policy Enhancements

11. 11 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 11 Supt. Dorn 2015-17 Budget Proposal Basic Education Enhancement, HB 2261/HB 2776 Source: OSPI, 10/14

12. 12 2015-17 Operating Budget Proposal

13. 13 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

14. McCleary v. State of Washington — Implementation —

15. 15 Education Funding Task Force Adopted Spending Plan Source: Joint Task Force on Education Funding, Final Report, 12/12

16. 16 Initial McCleary Basic Education Investment 2013-15 Operating Budget $5 $4 $3 $2 $1 $0 Billions

17. 17 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

18. 18  $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 18 State’s K-12 Funding Promises

19. 19 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

20. 20 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

21. 21 Source: Network for Excellence in Washington Schools, 1/15 Real and Steady Progress Towards Full Funding — State Testimony vs. Actual /Proposed Funding— (Per Pupil State Funding)

22. State’s K-12 Funding Promises

23. Competitive Public School Employee Compensation

24. 24 “The McCleary ruling’s statutory components derive from HB 2776 (2010) which required funding enhancements in four areas by the 2017-18 school year: transportation (completed in 13-15), MSOC (required to be done in 15-17), and all-day kindergarten and K-3 class size reduction (required to be done in the 17-19 biennia).” - Sen. Andy Hill Ways & Means Chairman 24 McCleary & Compensation

25. 25  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.” 25 McCleary & Compensation

26. 26 “Substantial evidence at trial also showed that the State consistently underfunded staff salaries and benefits. Testimony revealed that the State allocation for salaries and benefits fell far short of the actual cost of recruiting and retaining competent teachers, administrators, and staff.” - McCleary ruling Jan. 5, 2012 26 The Court & Compensation

27. 27 “Another area in which the State's Report falls short concerns personnel costs. Quality educators and administrators are the heart of Washington's education system. The Report … skims over the fact that state funding of educator and administrative staff salaries remains constitutionally inadequate.” - McCleary Order Jan. 9, 2014 27 The Court & Compensation

28. 28 “Nothing could be more basic than adequate pay. The inescapable fact is that salaries for educators in Washington are no better now than when this case went to trial....It is deeply troubling that the State's Report does not address this component of ESHB 2261 or offer any plan for meeting its goals.” - McCleary Order Jan. 9, 2014 28 Supreme Court & Compensation

29. 29  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 29 Compensation Technical Working Group

30. 30 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

31. 31 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

32. 32 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

33. 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 Local Funding Workgroup White Paper: http://bit.ly/1wxMg3aTalking Points: http://bit.ly/1GACQ7lhttp://bit.ly/1wxMg3ahttp://bit.ly/1GACQ7l

34. 34 Where will the Legislature find the funds to enhance K-12 Education— and other necessary state services? Revenue Growth? Spending Reductions? Tax Increases?

35. 35 Four-year Budget Outlook (Dollars in Millions) Source: Economic & Revenue Forecast Council, 11/14

36. 36 Source: Office of Financial Management, 11/14 2015-17 Budget Outlook $4.45B

37. 37 Source: Office of Financial Management, 8/14 Spending Reductions? Two-thirds of the state budget constitutionally or federally protected

38. 38 General Fund-State Revenues as Percentage of Washington Personal Income Source: Office of Financial Management, 12/13

39. 39 Taxable Sales as Percentage of Personal Income Source: Economic & Revenue Forecast Council, 9/14

40. Daniel P. Steele Assistant Executive Director, Government Relations 825 Fifth Avenue SE Olympia, WA 98501 360.489.3642 dsteele@wasa-oly.org 2015 Mid-session Update Updated: March 2, 2015