1. Senate and House Proposed Budget and Legislation for K-12 Education 2009-11 Biennium 2009-10 and 2010-11 SY 2009 Supplemental, 2008-09 SY March 31, 2009 Office of the Superintendent of Public Instruction

2. Big Picture View of Budgets 1 GovernorSenateHouse 2 Budget Deficit $5.8 Billion$9.3 Billion 3 Addt’l Federal Resources $1.1 Billion$3.0 Billion 4 Total K-12 Maintenance Level (not including compensation changes) $15.136 Billion 5 Total K-12 Funding (not including compensation changes) $13.832 Billion 6 Total State Funds Non- Compensation Reduction in K- 12* $(1.656) Billion $(1.303) Billion *Not necessarily an apples-to-apples comparison. 3/30/2009 2 Preliminary OSPI Analysis of Senate and House Budgets

3. Formula or Statewide Allocations: Statement of Change 1SenateHouse 2I-728 93% reduction; funding partially replaced with Federal Stabilization and Integration of Federal Categorical 63% reduction; funding partially replaced with Federal Stabilization 3Levy Equalization 80% reduction; Same as I- 728 No reduction 4K-4 Ratio 1:49 at K-3 funded; must staff to 46/1,000 K-12 1:53.2 at K-4 funded; must staff to 46/1,000 K-12 5 Continue $25 M in Pupil Transportation No 6 Continue 1:58.75 CLS No; Drop back to 1:60 ($38.6 M reduction) Yes 3/30/2009 3 Preliminary OSPI Analysis of Senate and House Budgets

4. Formula or Statewide Allocations: Funding Change from Maintenance 1 $ in Million; State Fiscal Biennium GovernorSenateHouse 2 I-728* $(177.9)$(752.5)$(767.5) 3 Levy Equalization* (125.7)(284.9)0 4 K-4 Staffing Enhancement 0(262.2)2.2 5 Classified @ 1:60 0(34.7)0 6 Transportation* 25.000 7 Salary Equalization 0135.50 8 ARRA Stabilization 0240.0259.9 9 State Stabilization 0224.52.1 10 Subtotal (278.6)(734.3)(503.3) 11 Title I, IDEA, Ed Tech 0359.6 12 Total $(278.6)$(374.7)$(143.7) *Does not include reductions to 2009-10 in supplemental budgets (except House I-728). **2008-09 funding is not defined as “Maintenance” by Governor/Legislature. 3/30/2009 4 Preliminary OSPI Analysis of Senate and House Budgets

5. Senate Use of Federal Resources to Off-Set State Reductions (a) By district, calculate:$ in Millions 1Deduct formula driven cuts for I-728, LEA, and K-4 Ratio ($1,334.3) 2Add ARRA allocations for Title I, IDEA, and Title II D (Education Technology) $359.6 3Compare net of 1 and 2 as percentage of total state funding -6.6% 4If reduction is greater than 3.5%, then allocate stabilization resources (state and federal) to ensure no cut is greater than 3.5% $464.5 5Average reduction (some districts are less than 3.5%) -3.4% 6Use remaining stabilization resources (state/federal) to increase minimum salary allocations for classified/administrators $135.5 7Net reduction ($374.7) 8Final average percentage reduction (range from 1.0% to 3.3% Reduction) -2.5% 3/30/2009 5 Preliminary OSPI Analysis of Senate and House Budgets

6. Senate Use of Federal Resources to Off-Set State Reductions (b) 1 $ in Millions; State Fiscal Year2008-092009-102010-113 Yr Total Next Biennium 2I-728(374.3)(376.3) (1,126.8)(752.5) 3Levy Equaliz.(106.2)(142.5) (391.1)(284.9) 4K-4 Staff/CLS @ 1:600(148.4) (296.9) 5Subtotal (-6.6%)(480.5)(667.1) (1,814.8)(1,334.3) 6Title I, IDEA, Ed Tech0166.0193.6359.6 7ARRA Stabilization480.5240.00720.5 8State Stabilization00224.5 9Subtotal (-3.5%)0(261.2)(249.0)(510.2) 10Sal Equalization $067.7 135.5 11Balance for Fed Use 0(193.4)(181.3)(374.7) 3/30/2009 6 Preliminary OSPI Analysis of Senate and House Budgets

7. House Use of Federal Resources to Off-set State Reductions $ in Millions 2009-10 FY2010-11 FYTotal ARRA Stabilization $260$0$260 Reduction to I- 728 $(467)$(300)$(767) Subtotal Use of Federal $(207)(300)$(507) No reduction in state funds to off-set Title I, IDEA, and Ed Tech increases (20% of resources are appropriated in 2008-09; 80% upcoming 2 years evenly split) 3/30/2009 7 Preliminary OSPI Analysis of Senate and House Budgets

8. Flexibility Provisions 1SenateHouse 2 State/Federal Fiscal Stabilization Account Discussed on slide 5Discussed on slide 7 3K-4 Ratio Eliminated; must staff to 46/1,000 K-12 1:53.2 funded; must staff to 46/1,000 K-12 (costs $2.2 M) 4 Loan Program for Districts (Crosses SY Period) NoYes (HB 1757) 5 Fill-up Reserves of Districts w/ Less than 2% Total No $2.2 M (Budget Language Only) 7 Pilot-program for 4-day per week schedule NoYes (HB 1292) 3/30/2009 8 Preliminary OSPI Analysis of Senate and House Budgets

9. Compensation GovernorSenateHouse (1) COLA No No No Amounts ($352,046)($360,957)($363,227) (2) Health Care $127,904 $43,101 $79,117 Rate in 09-10SY $774 $745 $758 Rate in 10-11SY $831 $768 $793 (3) Math/Science 100% 100% 100% Reduction (4) LIDs Funded 2 1 0 Amounts ($34,778) ($71,807) 3/30/2009Preliminary OSPI Analysis of Senate and House Budgets 9

10. State Pensions Save $411 million statewide by phasing in adoption of new funding method for Plan 1 liabilities; change salary growth assumptions; delaying adoption of new mortality tables until 2011-13 biennium. ▫Governor saves $241.4 mil. in K-12 ▫Senate saves $305.6 mil. in K-12 ▫House saves $294.3 mil. in K-12 3/30/2009Preliminary OSPI Analysis of Senate and House Budgets 10

11. Pensions Rates Gov./Senate&House Employer Contribution Rates 2009-11(Main.) 2009-11(G) 2009-11(S&H) PERS 8.00% 5.60% 5.25% TRS 10.95% 7.44% 6.17% SERS 8.28% 5.78% 5.39% DRS admin fee.16%.16%.16% Employee Contribution Rates, by plan 2009-11(Main.) 2009-11(G) 2009-11(S&H) TRS, plan1 6.00% 6.00% 6.00% TRS, plan2 4.93% 1.59% 3.36% SERS, plan 2 4.00% 1.67% 3.14% PERS, plan 1 6.00% 6.00% 6.00% 3/30/2009Preliminary OSPI Analysis of Senate and House Budgets 11

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17. Process Update Both Senate & House Operating & Capital Budgets introduced this week Conference on budget – after both budgets pass the floors Cut-off for budget bills is April 6 th and off the floor April 17 th. End of Session, April 27 th Final 2009 Session K-20 video, April 30 th, 2:30- 4:30 Preliminary OSPI Analysis of Senate and House Budgets3/30/2009 17