3. Budget, Budget, Budget
2009-11 budget (ending June 30, 2011):
◦ Projected shortfall: $1.4 billion
2011-13 budget:
◦ Projected shortfall before 2011 session: $4.6 billion
◦ Projected shortfall end of 2011 session: $5.1 billion
3
4. Transfer federal ―EduJobs‖ funds to General
Fund ($208 million)
Eliminate K-4 Class Size Enhancement, Feb.
‗11 ($39.4 million)
Reduce education reform ($9.2 million)
OSPI reductions ($3.7 million)
Total Savings = $588 million
K-12 Education Reductions = $257.5 million
4
5. Eliminate K-4 Class Size, Sept. ‗10-Jan. ‗11
($25.4 million)
Safety Net Adjustment ($24.8 million)
Food Service Funding ($3.0 million)
Summer Voc. Skills Centers ($1.8 million)
Schools for Blind/Deaf ($1.0 million)
OSPI admin & program funding ($2.7 million)
Total Savings = $367 million
K-12 Education Reductions = $58.62 million
5
6. Suspend I-728 ($860.7 million)
Plan 1 Uniform COLA ($275.3 million)
Suspend I-732 ($265.7 million)
K-12 Salary Reduction ($179.0 million)
K-4 Class Size Enhancement ($169.6 million)
National Board Bonus ($61.1 million)
Student Assessment System ($50.5 million)
Total Savings = $4.6 billion
K-12 Education Reductions = $1.8 billion
6
7. The K-12 budget was reduced from the Maintenance Level by a net $1.8 billion
REDUCTIONS:
Suspend I-728, Student Achievement Fund $-861
Suspend Plan 1 Retirees‘ COLA -275
Suspend I-732 COLA -266
Eliminate K-4 Class Size Reduction -223
K-12 Salary Reductions -179
National Board Bonus Program Changes -61
Assessment Program Changes & Savings -51
ALE Funding Adjustment -41
Limit Running Start FTEs to 1.2 -6
Reduce Food Service Funding -6
All Other Reductions <$5 Million -37
Total Reductions, Including Compensation: $-2,006
7
8. The K-12 budget was reduced from the Maintenance Level by a net $1.8 billion
INCREASES:
K-3 Class Size in High Poverty Schools $34
New Funding Formula Hold-Harmless 25
Kindergarten Phase-in 5
Transportation Enhancement 5
IT Academy 4
Teacher and Principal Evaluation Pilots 3
PASS Act (Drop-out Prevention) Program 3
2011 Session Bills & Other Increases 3
June 2011 Apportionment (less contingency 115
fund)
Total Increases from Maintenance Level $196
Net Policy Changes: $-1,810
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9. FY 2009-13 Budget Solutions
The Legislature has addressed $18 billion in budget shortfalls since the start of
the ―Great Recession‖—with the largest share being reductions in spending
Source: Office of Financial Management, 11/11
9
12. Slower than expected economic recovery
• June Rev. Forecast: $560 million less revenue
• Sept. Rev. Forecast: Another $1.4 billion down
• Nov. Rev. Forecast: Another $122 million down
Budget adopted with $743 million in reserve.
Following three downward revisions in revenue
projections, projected shortfall is $1.4 billion.
Caseloads continue to rise
Medical Assistance: 3.2% per year
K-12 Enrollment: 1.1% per year
K-12 Special Ed: 1.7% per year
TANF enrollment: 2.0% per year
12
13. State Budget-driver:
K-12 Enrollment
Source: Office of Financial Management, 12/11 13
14. State Budget-driver:
Public Higher Education Enrollment
Source: Office of Financial Management, 12/11 14
15. State Budget-driver:
Medical Assistance Caseload
Source: Office of Financial Management, 12/11 15
16. State Budget-driver:
Prison Inmate Population
Source: Office of Financial Management, 12/11 16
17. State Budget-driver:
Medical Costs
Source: Office of Financial Management, 12/11 17
19. Dr. Arun Raha, Washington‘s Chief Economist:
―The economy is off life-support, but still in intensive
care.‖ (Nov. 2010)
―The national economy remains fragile…and recent
geopolitical developments have cast yet another shadow
over the economic recovery.‖ (March 2011)
―We will see stronger growth in the second half of 2011
as oil prices stabilize, Japanese supply chains are
restored and rebuilding picks up.‖ (June 2011)
―We no longer expect growth to pick up momentum
later this year—instead the most likely scenario is an
extended period of muddle-through.‖ (Sept. 2011)
19
20. Dr. Arun Raha, Washington‘s Chief Economist
―We are in the fragile aftermath of the Great
Recession, where a return to normalcy seems like a
mirage in the desert — the closer we get to it, the
further it moves away.‖ (Oct. 2011)
―Data releases since the September forecast have been
mildly encouraging, but only because expectations were
so low....Our current economic forecast is very similar
to our September forecast, with the same muddle-
through conditions expected for the rest of the
biennium, along with a high degree of downside risk.‖
(Nov. 2011)
20
21. On Aug. 8, Governor Gregoire instructed her
agency directors to submit 5 percent and 10
percent ―reduction options‖
◦ 10% across-the-board = $1.7 billion
2012 Supplemental Budget submittals are
also limited to:
◦ Non-discretionary changes in caseloads;
◦ Necessary technical corrections; and
◦ Additional federal/local funding expected to be
received in the remainder of the biennium
21
22. Sept. 22 – Governor Gregoire announces that
she will call legislators in for a Special
Session, beginning Nov. 28:
―Once again, we are facing a shortfall....My
only option is across-the-board cuts, and that
option is unacceptable. Solving this budget
crisis will require the Legislature to act.‖
Projected shortfall to address, with ―healthy‖
reserves = $2.0 billion
22
23. Total 2011-13 Budget = $32.0 billion
63% of the Budget is constitutionally/legally
protected (includes: Basic
Education, Medicaid and debt service) or is
―difficult to get to‖
―Targetable‖ reductions available = $8.7
billion
A $2.0 billion reduction would be a 23% cut
of unprotected funding
23
24. Over 60% of the Budget is Constitutionally/Legally Protected
24
Source: Office of Financial Management, 10/11
25. K-12 ―Basic Education‖ vs. ―Non-Basic Education‖
93% of the K-12 portion of the biennial operating
budget is ―protected‖ Basic Education funding
25
30. Policy changes/reductions = $226 million
Maintenance level reductions = $97 million
Fund transfers = $106 million
Unclaimed property = $51 million
Total Savings = $479.7 million
K-12 Education Reductions = $74.9 million
◦ ($54 million policy + $20.9 million maintenance)
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31. Short (60-day), ―non-budget‖ session
◦ Main focus = Budget, Budget, Budget
$1.5 billion budget solution needed
Obstacles:
◦ 60% of budget protected from cuts
◦ 2/3 majority necessary for revenue enhancements
◦ McCleary education funding decision
◦ Election year
31
32. No further reductions to K–12 education
No mid-year reductions to the K–12 portion
of the budget
No reduction in LEA funding—and no changes
to LEA formula/structure
Any K-12 reductions must be fair and
equitable
32
36. Education Policy Issues Likely to be Addressed:
Teacher/Principal Evaluation Pilots and statewide
expansion
Modifications to Local Effort Assistance formula
Changes to Alternative Learning Experience
formula
Implementation of a new Transitional Bilingual
Instructional Program (TBIP) funding formula
36
37. 1. Create a revenue-neutral ―swap‖ of local
levies for the state Common School Levy
(aka State Property Tax)—and use the new
BEA model to drive out the new funding to
schools
2. Allow growth greater than the current 1%
restriction on the Common School Levy
3. Reset local levy caps at $2500 per student
4. Make local levies reliable by making them
permanent (with automatic adjustments for
COLAs and enrollment growth)
www.rosshunter.info (Nov19 & Nov 30)
37
38. Rep. Hunter K-12 Funding Plan
Source: Rep. Ross Hunter, 11/11
38
40. It is the paramount duty of the state to make
ample provision for the education of all children
residing within its borders without distinction or
preference on account of race, color, caste, or
sex. (§ 1)
The legislature shall provide for a general and
uniform system of public schools. (§ 2)
Constitution of the State of Washington
Article IX - Education
40
41. Support continued implementation of the
basic education finance system (HB 2261);
support adopted funding phase-in schedule
(HB 2776)—with full and equitable funding by
2018
Oppose further K-12 cuts—including changes
to or reductions of LEA. As economy
recovers, re-investment in K-12 funding
should be first priority
41
42. An educated citizenry is critical to the state‘s
democracy; a well-educated population is the
foundation of our democracy, our economy,
and the American dream
Public education plays a critical role in
promoting equality, operating as the great
equalizer; public education provides
unprivileged citizens with the tools they need
to compete on a level playing field with
citizens born into wealth or privilege
42
43. Education plays a critical role in building and
maintaining a strong economy; public
education builds the well-educated workforce
necessary to attract more stable and higher
wage jobs to the state‘s economy
Washington‘s duty to education is
constitutionally declared to be its paramount
duty
In summary: Public education is a wise
―investment‖ in the future
43
48. Daniel P. Steele
Assistant Executive Director,
Government Relations
825 Fifth Avenue SE
Olympia, WA 98501
360.489.3642
dsteele@wasa-oly.org
WSU Supts‘ Program 2012
Hinweis der Redaktion
Health care, including employee health insurance and medical assistance, is over 20 percent of the general fund budget.The size of the health care budget, combined with rapid growth in per capital health care costs, make this a prime source of pressure on spending.Except for a brief period in the mid-1990s and during the recession in 2008, health care costs have grown much faster than general inflation as measured by the Implicit Price Deflator (IPD) for personal consumption.Beginning in 2002, cost shifts from employers to employees resulted in much of the decrease in growth of employer medical costs.
$3.8 billion PLUS $330 million apportionment shift (and FY11 underexpenditures of $60 million) = $4.2 billion &$2.0 billion
