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NEWASA Member Meeting Spokane, October 15, 2015
Where We’ve Been ◦ McCleary v. State of Washington
◦ Education Finance Reform
Where We Are ◦ 2015-17 Budget Overview
◦ McCleary Impacts
Where We’re Going ◦ 2016 Session
2
Where We’ve Been
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
4
McCleary v. State
0
2
4
6
8
10
12
State Funding Actual District Costs
Statewide Funding – all 295 School Districts
2007-08 School Year
State’s “basic education” funding
Other State funds
School facilities
Classroom teachers
Pupil transportation
Librarians, counselors, safety personnel, health
Principals, etc.
Utilities, insurance, etc.
Extracurricular Food service
Capital Project Fund expenses
ASB Fund expenses
Dollars
in B
illions
Local levy revenue at the same level
as before Doran Decision
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%Percent of State and Local Revenue Sources
(excludes federal and other revenue sources)
State Revenue
Local Revenue
20.5%
Source: OSPI 5/10
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. “
7
McCleary v. State
“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
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McCleary v. State
9 9
ESHB 2261 – Program Changes Required
10 10
SHB 2776 – Funding Changes Required
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SHB 2776 Resource Phase-in
School Year 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
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
Continues
to ramp
up
Continues
to ramp
up
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
Continues
to ramp
up
Continues
to ramp
up
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
Continues
to ramp
up
Funded at
new level
Funded at
new level
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
Fully
Funded
Fully
Funded
Fully
Funded
Source: OSPI, 5/10
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.
12
McCleary v. State
2015-17 Operating
Budget Overview
14
2015-17 Operating Budget (as adopted, June 2015)
Total Spending $38.22 billion
K-12 Education 2013-15 $15.27 billion
K-12 Education 2015-17 $18.16 billion (47.5% share of GF-S)
Total K-12 increase $2.89 billion (18.9% increase)
Basic Education Enhancement $1.27 billion
MSOC 741.5
K-3 Class Size Reduction 350.2
Full-Day Kindergarten 179.8
BASIC EDUCATION (HB 2776) 1,271.5
COLAs 383.3
Health Benefit Rate Adjustment 24.4
I-1351 Class Size (2,042.7)
Staff Mix (35.7)
Levy Equalization (20.5)
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2015-17 K-12 Budget – Major Highlights
(dollars in millions)
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Education Funding Task Force Adopted Spending Plan
Source: Joint Task Force on Education Funding, Final Report, 12/12
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$0.0
$1.4
$3.3
$4.5
$0.0
$1.0
$2.3
$0
$1
$2
$3
$4
$5
2013-15 2015-17 2017-19
Task Force
Proposal
Legislative
Investment
McCleary Basic Education Investments 2013-15 & 2015-17 Operating Budgets
$5
$4
$3
$2
$1
$0
Billions
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
Real and Steady Progress Towards Full Funding
—State Testimony vs. Actual Funding— (Per Pupil State Funding)
Source: Network for Excellence in Washington Schools, 8/15
● $7,279/pupil is at p.6 of the State's 2013-15 Operating Budget Overview for Striking Amendment to 2ESSB 5034 [the adopted 2013-15 biennium budget].
♦
$12,701/pupil is a minimum level based on the State's trial testimony and compensation study. The State testified ESHB 2261’s reforms will increase State funding to $9,710/pupil before market rate salaries, inflation after 2008, or capital construction needs. The June 2012 Final Report of ESHB 2261's Compensation Technical Work Group then determined the cumulative increases needed to cover the market rate salary part is $2.991 billion/year before adding the I-732 COLAs. That equals about $2,991/pupil for 1 million students; $9,710 + $2,991 =$12,701. As noted below, OSPI’s 2015-17 Capital Budget submission confirms this $12,701/pupil figure is at least $2,000/pupil too low, as it acknowledged the expansion to full day and lowering K-3 class sizes require construction of approximately 5,698 more classrooms at a cost of $2 billion (about $2,000/pupil spread over 1 million students).
■
$8,634, $9,990, and $11,345 are 1/4, then 2/4, then 3/4 of the way between the previously-noted $7,279 in 2013-14 and $12,701 in 2017-18.
▲
$7,785, $8,541, and $9,024 are from Chart B in the State’s 2015 Report To The Supreme Court By The Joint Select Committee On Article IX Litigation.
$14,701 is based on OSPI’s 2015-17 Capital Budget submission, which acknowledged the expansion of kindergarten to full day and lowering of K-3 class sizes will require the construction of approximately 5,698 more classrooms at a cost of $2 billion (about $2,000/pupil if evenly spread over 1 million students). Adding that $2,000/pupil to the previously-noted $12,701/pupil equals $14,701/pupil.
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State’s K-12 Funding Promises
Source: Network for Excellence in Washington Schools, 8/15
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.”
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August 13, 2015: The Court has “repeatedly ordered the State to provide its plan to fully comply with” the paramount duty. “The State has repeatedly failed to do so, offering various explanations as to why.”
“Given the gravity of the State’s ongoing violation of its constitutional obligation to amply provide for public education, and in light of the need for expeditious action, the time has come for the Court to impose sanctions.”
“The Court imposes a $100,000 per day penalty on the State for each day it remains in violation of this Court’s order.”
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http://1.usa.gov/1UFwbQI
Where We’re Going:
2016…and Beyond
“Short” non-budget session limited to 60 days; primary focus on policy issues
Necessary actions: ◦ McCleary funding plan
◦ Compensation/Levy reforms
◦ Emergency funding (wildfires, etc.)
25
Obstacles to Action:
Power struggle between Legislature and Supreme Court
Disagreement about what (if anything) needs to be done for McCleary
“Changing of the guard”
2016 is an election year
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Legislators increasingly concerned about Court “overstepping its authority”
SMC letter to colleagues (http://bit.ly/1VTuKC7): ◦ Court action “presents a clear threat to our state
Legislature.” ◦ The Court’s sanction order “directly contravenes
state and federal constitutional provisions, politicizes judiciary, and demonstrates disdain for other co-equal branches of government.”
◦ The constitutional crisis that we and the Court warned about is here....It is now time for us to explore the range of political, legal, and constitutional responses that we have at our disposal.”
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Sen. Hill: “In 2015, the Legislature enacted a budget that fully funds the statutory components of [HB 2776].”
Sen. Hill: “The Legislature has now fully funded a new definition of basic education, ensuring books, buses, voluntary all-day kindergarten and lowering of class sizes in grades K-3 to 17 students will be implemented and paid for by the 2018 deadline.”
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Rep. Kristiansen: “The Legislature has followed through on all McCleary funding commitments. Our state remains on track for full compliance of the 2012 McCleary order by the original 2018 deadline.”
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Sen. Hill: “Salaries are adequate to recruit and retain; they just need to come from the state not local levies....The bottom line is there is adequate and ample money already going into the K-12 system for salaries.”
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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 (Historically through 2012-13)
99.2%
90.8%
85.7%
79.7% 78.9% 77.2%
0.8%
9.2%
14.3%
20.3% 21.1% 22.8%
$(1,400)
$(1,200)
$(1,000)
$(800)
$(600)
$(400)
$(200)
$-0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
1987-88 1992-93 1997-98 2002-03 2007-08 2012-13
Millions
Total $ Underfunded % of Average Salary Paid by State % of Average Salary paid by District
32
Source: OSPI S-275, 9/15
School District Employee Salaries
Average Base State Allocation vs. Average Total Salary Paid (SY 14-15)
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/1wxMg3a Talking Points: http://bit.ly/1GACQ7l
30th Legislative District Race: ◦ Rep. Carol Gregory v. Teri Hickel
Rep. Ross Hunter (D-Medina)
Sen. Brian Hatfield (D-Raymond)
Rep. Zach Hudgins (D-Seattle)
Sen. Jeanne Kohl-Welles (D-Seattle)
Sen. Bruce Dammeier (R-Puyallup)
Sen. Pam Roach (R-Auburn)
Sen. Karen Fraser (D-Lacey)
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All 98 House seats are up for election
Half of Senate seats are up for election
Campaign contribution freeze continues through Regular Session—and any Special Session(s)
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Ensure the state’s new basic education finance system is fully funded and fully implemented by 2018—as directed by the Supreme Court’s McCleary decision
Expand state revenue collections to fully comply with the McCleary decision and maintain other needed government services
Update the school employee compensation system, ensuring the establishment of an equitable and ample allocation system
Enhance school construction funding and advance simple majority bond constitutional amendment
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Daniel P. Steele Assistant Executive Director,
Government Relations 825 Fifth Avenue SE Olympia, WA 98501
360.489.3642
NEWASA Member Meeting
