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K-12 Education Needs and Washington’s Fiscal Future: Lawmakers Grapple With Looming Red Ink

Washington’s fiscal future was the subject of two hearings in the same room in the John L. O’Brien Building Wednesday, and neither brought good news to lawmakers.

The first blow from the one-two combo was delivered in the Legislature’s quarterly revenue forecast in the morning, which said the state should finish the current budget cycle next summer with a $400 million surplus. That’s good news — but there’s plenty of red ink to follow.

By mid-year 2016, the predicted shortfall hits almost $1 billion. By that point in 2017, it’s $2.1 billion. 2018? $3 billion. By 2019, the deficit would hit a whopping $4.7 billion, and that’s with steady gains in revenue and no contractions in the economy. Reserve funds would soften the impact, but the Legislature would exhaust them in the process.

The projected deficits are mainly due to the price tags basic education funding needs are carrying, with one tag on the state Supreme Court’s McCleary mandates, and the second on the newly approved student-teacher ratio ballot measure, I-1351.

The news didn’t get any better after lunch during a session of the House Appropriations Committee, when legislative staffers provided a rundown of just how deeply rooted and tangled the McCleary ruling is to funding the state’s public school system.

After an hour-and-a-half long talk of McCleary, the committee shifted focus to I-1351 and the state’s need to come up with $2.7 billion in spending in the next biennium as well as $3.6 billion in funding it requires in 2017-19, according to a budget outlook that uses Office of Financial Management projections.

McCleary calls for the state to fund all-day kindergarten, reduce class sizes in early grades, reconfigure teachers’ compensation to retain them, and fully fund transportation, administrative costs, and benefits and wages for staff. It’s estimated to cost $1 billion to $2 billion in the next biennium, with additional costs through 2019.

There weren’t any shocked looks on lawmakers’ faces during each hearing, and why should there be? None of this was surprising. McCleary has been looming over the state budget for years, and 1351’s costs were well known in the campaign season.

But Wednesday offered a chance for legislators to “reckon” with the situation, as House Appropriations Chairman Ross Hunter, D-Medina, said. If the hearings were any indication, lawmakers, at least publicly, have a lot more questions than solutions at this point.

SUSPENDING 1351?

Neither Hunter nor his budget writing counterpart in the Senate, Sen. Andy Hill, R-Redmond, were willing to say they’d move to suspend the initiative to avoid paying for it, or sending it back to voters with a price tag and a tax measure to pay for it.

The measure moves beyond the Supreme Court’s ruling that Washington decrease its class size in kindergarten through third grade classes, and requires student-to-teacher ratios shrink in all grades in K-12 education, with the ratios varying depending on the school’s poverty level.

It requires the state to hire 25,000 new employees, only about 7,000 of them teachers, with the rest being classified or administrative staff such as more principals, warehouse workers, janitors or nurses, among a litany of other positions.

Rep. Paul Harris, R-Vancouver, asked a question on a topic broached frequently during the campaign, which was where the state was going to get the money to build additional schools needed to house the new employees, and the costs of adding bus routes.

Legislative staffers said the Office of the Superintendent of Public Instruction was doing surveys of districts to see whether their space was appropriate to handle the new staff, and if their busing system was adequate. But, on the cost question, staff couldn’t say.

“There could be a lot of transportation and capital costs,” said Hunter. “But we have no idea how much.”

That led to another question, whether 1351 would count toward McCleary. It could, said Jessica Farrell, a fiscal analyst with the committee, because 1351’s language states that it is under the Basic Education Act, which is the principal law the Supreme Court justices are holding the state to. It would be up to the justices to decide the extent, she said.

TEACHER PAY

Another issue cropped up at the hearing on teacher compensation. Local districts have been using their levy money to increase teacher salaries over the last 20 years, but McCleary wants the state to pick up more of that cost. The increased local share was $3,795 above the state base pay in 1996, but $12,300 last year. It’s almost doubled in the eight years, from $6,679 in 2005, according to state statistics.

But, as Hunter contended, the initiative’s hiring spree could increase the state’s costs even more because of the reconfigured salary levels.

Farrell and Kristen Fraser, an attorney for the committee, walked through how the court will be holding legislators to its ruling. A definition of a “model classroom” codified in a 2009 law now needs to be funded, but the state can’t tweak the definition without the court allowing it, and needs clear reason to do so.

The court was not pleased the current two-year budget didn’t fully address the issue, or pay for the cost-of-living adjustments for teachers, estimated to need $321 million, which is mandated under a ballot initiative but has been suspended for the last six years.

And, the long-anticipated plan on implementing McCleary, which was the basis of the contempt of court ruling handed down in September, is due by the end of the upcoming 105-day session, Farrell said. Lawmakers would need a compelling excuse to miss it, she said.

“We’ll spend a fair amount of time thinking about this and deciding what we’re going to do,” Hunter said.


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