Office of Superintendent of Public Instruction
K-12 Financial Resources
School Funding Update
Outlook for Next 3 School Years is Bleak but
Legislature Considering Landmark Legislation
as Next Step in Finance Reform
K-12 Financial Resources
Office of Superintendent of Public Instruction
Slide 1
7/29/2017
What impact will state budget deficits and exhausted levy funding have
on schools?
BUDGET DEFICIT IMPACTS
K-12 Financial Resources
Office of Superintendent of Public Instruction
Slide 2
7/29/2017
State Fiscal Outlook for 2009-11 Biennium
* It should be noted that these are estimated budget problems based on available information. In some
cases, information for prior fiscal periods might not be comparable.
K-12 Financial Resources
Office of Superintendent of Public Instruction
Source:
SWM
Slide 3
7/29/2017
New Problems for 2010 Legislature
Revenue Losses ($ millions)
June Revenue Forecast Update
686
September Forecast Update
238
November Forecast Update
760
1,684
New Expenses ($ millions)
Caseload/Enrollment/Other Mandatory Increases
760
Health Insurance Benefit Fund (PEBB) Deficit
103
Other Policy Adds
Total Deficit
36
$2.6 billion
Source:
OFM
 Only 15months left in biennium after session ends
K-12 Financial Resources
Office of Superintendent of Public Instruction
Slide 4
7/29/2017
Governor’s Proposed Cuts for 2010-11 School Year
Change to Underlying Budget
Millions of Dollars
Levy Equalization
K-4 Staff Enhancement
I-728
Full-Day Kindergarten
1 Learning Improvement Day
Gifted Education
Apportionment Delay for 1 Day (June 30 to
July 1)
Transfer School for the Blind to OSPI
Transfer School for the Deaf to OSPI
Eliminate Middle School CTE
Eliminate BEST (New Teacher Mentors)
Career and Technical Ed Grants
Reading Corps
Readiness to Learn
Total (not including Apportionment Delay)
K-12 Financial Resources
Office of Superintendent of Public Instruction
Book 1: 2011 Book 1: 2010- Book 2: 2010Fiscal Year 11 School Year 12 School Year
$(142.9)
$(190.6) $29. 5(approx)
(110.6)
(133.9)
(133.9)
(78.5)
(96.9)
(96.9)
(33.6)
(41.3)
0
(15.0)
(18.6)
(18.6)
(7.4)
(9.0)
0
(379.1)
0
0
(1.9)
(2.4)
(2.8)
(1.1)
(3.6)
$(399.8)
0
0
0
(1.9)
(2.4)
(2.8)
(1.1)
(3.6)
$(502.2)
0
0
0
0
(2.4)
(2.8)
0
(3.6)
$(228.8)
Slide 5
7/29/2017
Cumulative Budget Reductions for 2010-11 School Year
(Governor Proposed Book 1)
$ Millions per School Year
1
I-728
2
K-4 Enhancement
3
Pupil Transportation
4
Full-day Kindergarten
5
Gifted Ed
6
Levy Equalization
7
Subtotal Non Compensation
8
Learning Improvement Day
9
COLA (approx)
10
Total with Compensation
K-12 Financial Resources
Office of Superintendent of Public Instruction
2010-11
Cuts by
2009
Legislature
New 201011 Cuts;
Book 1
Proposed
Cumulative
Cuts for
2010-11
$(355.8)
$(96.9)
$(452.7)
(133.9)
(133.9)
(12.5)
(12.5)
(41.3)
(41.3)
(9.0)
(9.0)
(190.6)
(190.6)
$(368.2)
$(471.8)
($840.0)
(18.6)
(18.6)
(37.2)
(203.2)
$(590.0)
(203.2)
$(490.4)
$(1,080.4)
Slide 6
7/29/2017
Next Steps for 2010 Legislature
• $2.6 billion deficit will be adjusted
• Next revenue forecast is February 12
– Caseload forecast that same week
• No cuts to schools in 2009-10 school year are
proposed by Governor in Book 1 or Book 2
• Complete Guess: Senate budget the week of
February 15
• House budget week following
K-12 Financial Resources
Office of Superintendent of Public Instruction
Slide 7
7/29/2017
Additional 2010-11 Budget Cuts will Cause
Significant Financial Distress
Jobs Lost Due to Budget Cuts/Crunch
Instructional
1
Rough 2009-10 (not final preliminary until 1/22/10)
(1,166)
(876)
(2,042)
2
20010-11 Impacts:
3
Increase in Levy Revenue
861
713
1,574
4
Health/Life/Disability/Utilities/Insurance
(135)
(112)
(247)
5
Estimated Value of $166 M Reserves Used in 200910
(1,190)
(987)
(2,177)
6
Assume Large Districts Drop to 2% ($157.9 M)
1,132
938
2,070
7
Projected Value of Governor’s Proposed (Book 1)
(4,811)
(1,186)
(5,997)
8
Projected Cost of Unemployment Insurance
?
?
?
9
Total Potential Additional Cut for 2010-11
(4,143)
(633)
(4,776)
(5,309)
(1,509)
(6,818)
10 Cumulative Impact for 2010 and 2011
K-12 Financial Resources
Office of Superintendent of Public Instruction
Classified
Total
Slide 8
7/29/2017
2011-13 Biennium Outlook for State
• State economy is on track to rebound but slowly
• State must:
– Replace 1-time federal stimulus and other 1-time funding
used this biennium, not available next biennium (about
$3 billion out of $33.4 billion state budget)
– Restore cuts to I-728 and I-732 over 4 years, beginning in
the 2011-12 SY ($560 million per year once fully
restored)
– Increase employer pension contributions (roughly $350
million per year increase over current biennium
contributions)
• State funding for K-12 will be impacted by all above
hurdles; outlook for 2011-12 is bleak
K-12 Financial Resources
Office of Superintendent of Public Instruction
Slide 9
7/29/2017
TRS Rates Double in 2011-12
Employer Rates for Certificated and Classified Staff Pension Contributions
School Year (*Projected by State Actuary in October 2009)
K-12 Financial Resources
Office of Superintendent of Public Instruction
Slide 10
7/29/2017
All Translates to Terrible Impact for 2011-12
• Levies will increase by about $120 million
• But, if pension rates increase as projected by the
State Actuary, levy funds will incur $83 million cost
• NERC/ Transportation Costs Increase Faster than
State Revenue
– Others also
• ARRA funds for Special Education/Title I are gone
– $178 million reduction from 2010-11
• COLA?
• Health benefits inflation, 6-11%
K-12 Financial Resources
Office of Superintendent of Public Instruction
Slide 11
7/29/2017
2011-12 Holds Even More Upheaval
Jobs Lost Due to Budget Cuts/Crunch
1
Cumulative Impact for 2010 and 2011
2
Increase in Levy Revenue
3
Health/Life/Disability/Utilities/Insurance
4
Instructional
Classified
Total
(5,309)
(1,509)
(6,818)
861
713
1,574
(135)
(112)
(247)
IDEA and Title I ARRA Gone
(1,276)
(1,058)
(2,334)
5
Large Districts now cut for 2010-11 Reserve
Spend-down
(1,132)
(938)
(2,070)
6
Pension Contribution Increase on Levy
Compensation
(606)
(502)
(1,108)
7
I-732 COLA (1%)
(123)
(102)
(224)
8
Compensation Above I-732 COLA
(405)
(336)
(741)
9
Cost of Unemployment Insurance
?
?
?
10
Change in State Funding (HB 2356 to Restore I-728)
?
?
?
11
Total for 2011-12 SY
(2,816)
(2,334)
(5,151)
12
Cumulative Impact for 2010, 2011, 2012
(8,125)
(3,844)
(11,969)
(13.1%)
(11.2%)
(12.4%)
13
K-12 Financial Resources
Office of Superintendent of Public Instruction
Slide 12
7/29/2017
What impact with Quality Education Council legislation have on schools?
QUALITY EDUCATION COUNCIL
RECOMMENDATIONS
K-12 Financial Resources
Office of Superintendent of Public Instruction
Slide 13
7/29/2017
QEC January 2010 Recommendations
1.
2.
3.
4.
5.
6.
Do not decrease funding in 2009-10
Specifics of new formula adopted
3-year phase-in of Transportation, beginning 2011-12
3-year phase-in of NERC, beginning 2011-12
7-year phase-in of Full-day Kindergarten
5-year phase-in of K-3 Class Size to 1:15, beginning
2011-12
7. 3-year phase-in of Early Learning for at-risk 3&4 year
olds, beginning 2011-12
8. Other recommendations in report:
http://www.k12.wa.us/QEC/default.aspx
K-12 Financial Resources
Office of Superintendent of Public Instruction
Slide 14
7/29/2017
Recommendation #2: New
Funding Formula
• Fills the funding values into the structure
adopted in 2009
• Cost neutral translation or “Baseline”
• Specifies the amount of funding in commonsense categories for prototype schools
– OSPI will allocate resources to districts, much the
same way as today
– Report enrollment, scale prototype funding up or
down, send the money to the district
K-12 Financial Resources
Office of Superintendent of Public Instruction
Slide 15
7/29/2017
“Baseline” takes Current Law Formula
Below and…
Per 1,000 Students
• 49 Certificated Instructional Staff (CIS) (K-3)
• 46 CIS per 1,000 (4-12)
• 16.67 Classified Staff
• 4 Certificated Administrative Staff
(values above represent the Basic Education Act funding level, some values
are enhanced in the operating budget (K-4 CIS and Classified))
K-12 Financial Resources
Office of Superintendent of Public Instruction
Slide 16
7/29/2017
Translates Old Funding Levels into the New Structure
Current Law Funding (RCW 28A.150.260)
Elementary (400)
Middle (432)
High (600)
28.53
28.74
Class Size
Class Size K-3
25.23
Class Size 4-6; 7-8; 9-12
27.00
Other Staff per Prototypical School
Principal (and Other School Administrators)
1.25
1.353
1.88
Teacher Librarians
.66
.52
.52
Guidance Counselors
.49
1.12
1.91
Nurses/Social Workers
.14
.07
.12
Professional Development Coaches
.00
.00
.00
Instructional Aides
.92
.69
.64
School Office & Non-Instructional Aides
1.97
2.28
3.20
Custodians
1.62
1.90
2.9
Student and Staff Safety
.08
.09
.14
Districtwide Support
Warehouse/Laborer/Mechanics
.33 staff per 1,000 students
Facilities Security, Maintenance, Grounds
1.78staff per 1,000
Technology
.62 staff per 1,000
Central Administration
5.3% of Staff Above
K-12 Financial Resources
Office of Superintendent of Public Instruction
Slide 17
7/29/2017
QEC Recommendations 3-7
$ in Millions
2011-12 SY
2012-13 SY
2013-14 SY
3
Pupil Transportation
$50.2M
$103.9M
$155.8M
4
Materials, Supplies, Operating
(New NERC)
$194.3M
$415.3M
$643.1M
5
Full-day Kindergarten
$21.2M
$60.6M
$103.3M
6
K-3 Class Size Reduction
$149.6M
$312.6M
$488.8M
7
Early Learning for At-Risk 3 and
4 Year Olds
$10.9M
$27.3M
$58.2M
Total
$426.2M
$919.7M
$1,449.2M
K-12 Financial Resources
Office of Superintendent of Public Instruction
Slide 18
7/29/2017