Report from WSSDA/WASA Legislative Conference

WASA/WSSDA/WASBO Legislative Conference

 

Sunday January 31, 2016

 

The annual legislative conference was held in Olympia.  There was a lengthy briefing of key legislation and funding issues related to K-12 education.

 

Below are notes taken at the workshop.

 

Governor Jay Inslee’s Office:   Deb Merle John Ultman

 

They discussed the Governor’s efforts to advocate for K-12 education with the legislature.   The governor has not taken an aggressive position relative to the constitutionally mandated full funding of education.   He has proposed, as an effort toward addressing the teacher shortage crisis, bills that would increase beginning teacher salaries and improve job-embedded support for new teachers. (HB2472/SB6241)

 

NEWS update on McCleary Decision: Nick Brossart and Tom Ahern

 

Tom Ahern, the lead attorney in the McCleary lawsuit gave a fairly comprehensive presentation on the status of the work of the legislature to address the full funding of education as required by the state constitution, and as directed by the state supreme court.

 

He presented data on nationwide spending on K-12 education and compared Washington’s funding to the nationwide trends.

 

With the great recession nationwide spending on K-12 was reduced.  Ahern titled it a “Nationwide drought in school funding.   He lumped states together into three categories: 

 

The Death Valley States, those whose funding is still 10%-25% lower than in 2008: Arizona, Kentucky, Idaho, Minnesota, Mississippi, Oklahoma, and Texas.

 

The Arid Desert States, those whose funding is still 1%-10% lower than 2008:  Alabama, Arkansas, Florida, Georgia, Illinois, Iowa, Louisiana,  Maine, Michigan, Nevada, New Mexico, New Jersey, North Carolina, South Carolina, South Dakota, Utah,  Virginia, and West Virginia.

 

The Signs of Life states, those whose funding has increased 15% or more since 2008: Alaska, North Dakota, and Washington.

 

Ahern clearly articulated that this does not mean we are meeting the constitutional mandate.   He provided data to show that we were already in the cellar in terms of per-student funding (44th place among the 50 states), but the climb has only brought us less than half-way up the ladder.

 

Our states failure to climb out of the cellar

 

Have we climbed out of the cellar.  The state told the court in the McCleary that we would be amply funding education by 17-18.  To do this we would need to increase funding by $12,701 per student. Thus far we are well below. Steady progress would mean that we are at $11,345 next year, but actual is $9024.

 

Many legislators claim that they have funded education in a large way, and they have; but they have a long way to go.

 

Two non-McCleary Distractions

 

LEVY REFORM and UNIFORM FUNDING

 

The Courts McCleary decision states: “Article IX, section 1 confers on children in Washington a positive constitutional right to an amply funded education".

 

The state constitution states “It is the paramount duty of the STATE to make ample provision for the education of all children residing within its borders…” (Article IX, Section 1)  The state has shifted a large share of funding of basic education to the local level through local levies. Efforts toward levy reform are occurring in the legislature: taking a portion of local property tax levies for schools and returning them to the districts as state funding. The court has stated in their August 13, 2015, ruling that “Local levy reform is not part of the court’s January 9, 2014, order”. 

 

There is confusion on the part of the legislature regarding ample funding vs uniform funding. These are actually found in two separate sections of the constitution:

 

Article IX, Section 1 addresses ample funding by the state (all three branches).

 

Article IX, Section 2 states: the Legislature (legislative branch) shall provide for a general and uniform system of public schools.

 

McCleary states that “The State must amply provide for the education of all Washington children as the State’s first and highest priority before any other State programs and operations.”  The court also defined “Ample” as “Considerable more than just adequate”.

 

Bottom line is that uniform funding is not ample funding.

 

Judicial enforcement of constitutional rights

 

The courts duty is to step in when the other branches are not doing their job. The state Supreme Court has fined $100K/day.  Court has said 17-18 is a FIRM Date.  (2012)  the Court has said there must be a PLAN (not a plan to plan.) and there must be adequate progress toward ESHB 2261/SHB 2776 funding levels.

 

Recently the legislature has identified the current cost of meeting those funding levels in 17-18 to be $14,701 per child

 

  1. Will the legislature do it?  It is not expected.  What is the power of the court to make it happen? The Supreme Court has said they will 1) impose monetary or other contempt sanctions:
  2. Prohibit expenditures on certain other matters until the courts constitution ruling is complied with
  3. Order the legislature to pass legislation to fund specific amounts or remedies
  4. Order the sale of state property to fund constitutional compliance
  5. Invalidate education funding cuts budget
  6. Prohibit any funding of an unconstitutional education system
  7. Order other appropriate relief… invalidate tax exemption statutes
  8. Invalidate bills enacted on other matters before school funding

 

Washington is second in the nation on corporate tax loopholes behind New York.  The court could force the closure of these.

 

Ahern’s Slideshow can be found HERE

  

Compensation and Levy Reform

The next presentation was a panel of executive directors from the WSSDA (School Board Assn.), WASA (School Superintendent’s Assn)  and WASBO (Business Officials Assn.)

 

The primary focus of this discussion was on the topic of the shift that has occurred whereby local school districts have taken on significant responsibility for funding of local basic education costs through their local levy.  A recent legislative study showed an average of 54% of local levy supports compensation and additional staffing.

 

A history of funding in Washington State shows that in 1979-80 the state of Washington was 12th in the nation in terms of education funding.    Over time we have dropped to the lowest tier of state funding.  Simultaneously the M&O levy burden on local communities has steadily increased.  (In 1978 the levy lid was 10% of general fund revenues. Today, most districts’ lid is at 28%).

 

We are facing a “Levy Cliff” in 2018 if fixes are not made. The legislation that increased our levy lid to the current 28% sunsets in 2018, along with “Phantom revenues that artificially inflate the 28%. There needs to be a fix.

 

There is a slide show that shows various bills that did not move that would address some of these issues. It is important that we advocate for a fix to compensation (to reduce the local burden) and for the levy cliff.

 

State of the State of Education:  Randy Dorn

 

Randy named this the “in and out” session. He iterated that the legislature has stated they are not interested in doing any heavy lifting because it is an election year. He continues to push hard for change and is hopeful that the courts will act in a way that creates a level of chaos in the legislature so as to force change. 

 

Jim McIntire, State Treasurer, State of the budget

 

Treasurer McIntire stated Legislature does not want to do much to fund McCleary… all they want is a  plan to come up with a plan to plan and a study to study.

 

The treasurer wants the legislature to reconsider their thinking this year.

 

We must improve business climate while investing in education.

 

The legislature under normal circumstances would be considered to be doing a good job.  When you look at the work of the legislature in funding of education it was, when adjusted for inflation, flat… in the last two years it has significantly increased.. but they have yet to address the biggest, and most fundamental task unresolved…. Local levies.

 

Currently School districts in Washington collect $3.5 billion in local levies this is equal to 10% of the state GF Budget.

 

McIntire posited that we must fundamentally change the tax structure of the state. He demonstrated that in a state funded like Washington tax revenue slows when income inequality changes.  

 

Increasingly smaller shares of income are spent on sales taxable items…. The revenues do not keep up with overall growth of economy.  The local burden has doubled in fifteen years.

 

All of the options considered are not large enough or will shrink over time.

 

Capital gains, internet sales tax, carbon tax, property tax levy swap…  none will raise enough money. Property tax is the poorest producer of state revenue. 1% growth in economy = .4% of increase in state property tax revenue.

 

A new tax system should be fair, less regressive, and match demand for increase predictability.

 

He proposed that the legislature adopt a constitutional amendment to lower property tax at state and local level, reduce sales tax, reduce B&O and have a 5% flat income tax. This would be a constitutional amendment  requiring 2/3 legislative and 50%+1 vote of people.

 

It would require that 75% of all personal income tax goes to K-12.

 

He believes it should occur now.  Why 2016?  It is only able to pass in presidential election year.  If we wait to 2020 we will have two new gubernatorial candidates both running away from the idea of an income tax.

 

He presented a “Chart of Doom”

 

Contrary to what many say about Washington’s tax burden we have the 35th highest burden (only 15 states with a lower burden). This is down from 1995’s level of 11th highest burden. McIntire’s proposal would raise us to the 25th place. Right in the middle.

 

McIntire acknowledge that the bills that would make this happen, SJR 8207  SB 6114  are getting zero traction.

 

Hot Topics

 

Lobbyists Jessica Vavaris (WSSDA) & Dan Steele (WASA) did a hot topics briefing.

 

Jessica and Dan aligned the legislative platforms of the three organizations and pulled out the key topics.  

 

Hot topics document….

 

Supplemental operating budget.

The legislature does not have a lot of money to play with.  This year we have only $359 million for the legislature to access.   $150million is going to ’15 wild fires.  Additionally, some lawsuits, etc. is claiming some of it.  We are looking for $3-$5 billion to fund McCleary. Legislators have said that they are not planning to go there in this session.

 

In the last two years $2.3 billion has been budgeted for McCleary related investments. Progress has been good, but we are still way behind court mandate.

 

COMPENSATION is the first and highest priority of WASA/WSSDA/WASBO.  We are asking the legislature to do something to protect districts at the bargaining table. Limits on what can be offered at the local bargain table.

 

Levy Cliff:  December 31, 2018, is the sunset of the Levy Cliff. This was tied to the 2018 deadline for funding 2116 levels.   When this happens, many will not be able to pay all of our costs…There are several bills before the legislature that would address the levy cliff issue. $500 million funding loss in 2018 if nothing happens.  

 

 

Capital Budget

We are asking for full funding of school construction…. Last year $200 million for schools to build K-3… shy of the needed $2billion.  

 

Formulas that drive capital funding are outdated… enhancement formulas for Area Cost Allowance and the square footage allocation are requested.

 

Simple Majority for bonds… is this the right time to ask for that?

 

Teacher and Sub Shortage

Issues with supply and demand. 

 

Science Assessment Graduation Requirement

All organizations do not agree on the assessment system… we all agree on the class of ’17 biology assessment.  HB 2214 is still in play… comprehensive look at 12th year.