A task force may out-do Inslee, McKenna on education money

Our governor candidates want to believe growth will provide enough money to fix schools. The Legislature has set up a group that looks capable of delivering a smarter answer.
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The state Supreme Court is trying to compel lawmakers to comply with its 2012 McCleary mandate to fully fund education.

Our governor candidates want to believe growth will provide enough money to fix schools. The Legislature has set up a group that looks capable of delivering a smarter answer.

It’s not called the super committee, but the legislature’s Joint Task Force on Education Funding has a mandate that would fit that description. 

In response to the state Supreme Court’s decision last January in McCleary v. State of Washington that the state has not met its constitutional “paramount duty” to amply fund basic education for all children, the 2012 legislature established the task force to recommend “a reliable and dependable funding mechanism.” And it is instructed that it be done by Dec. 31 of this year. 

So four senators and four representatives, equally divided between Democrats and Republicans, along with three gubernatorial appointees, have just a few short months to do what numerous other task forces and the Legislature itself have been unable to accomplish in several decades since a Thurston County Superior Court judge in 1978 found the state’s school funding system to be unconstitutional (Doran decision in Seattle School District v. State).

The new funding mechanism must at least support full implementation by 2018 of four educational enhancements identified in legislation passed in 2009 and 2010. These are: full-day kindergarten; reduced K-3 class size; increased allocations for maintenance, supplies including text books, and other operating costs (MSOC); and a new student transportation funding formula. A major unstated goal is to end the over-reliance on local levies.

To meet the court’s deadline, the assignment is to phase in full funding over the next three biennia, starting with $1 billion in the 2013-15 biennium, followed by an increase to $2.5 billion in 2015-17. Total new revenue required in 2017-19 is estimated to be at least $3.3 billion, and includes restoration of K-12 salary reductions enacted in the current budget. Not included in the estimates are increases in instructional time and graduation credit requirements, both of which have been added to the definition of basic education.

The task force must recommend one preferred funding mechanism. However, it was given the flexibility to recommend several options. These could be new dedicated revenue sources. Or education could be funded with no new revenues, which then would require reductions in other areas of the budget. If the latter, the task force must identify current programs and services that would be eliminated or reduced.

Since “mechanism” is not defined in the legislation establishing the task force, it could conceivably encompass an economic growth scenario in which sufficient revenues are generated under the current tax system as the economy continues to recover. Both candidates for governor have indicated a belief that full funding can be accomplished with increased economic activity and without new taxes. That prospect, however, would not seem to meet the Legislature’s intent that the funding mechanism be “permanent.”

The task force used its first meeting on Aug. 3 to get organized. 

It elected as its chair Jeff Vincent, a gubernatorial appointee and chair of the state Board of Education. Vincent also represents the state’s business community as CEO and president of Laird Norton Company LLC, and as a member of the board of directors of the Washington Roundtable. Laird Norton is a private wealth management firm. The Roundtable is comprised of chief executives representing the state’s major private sector employers.

Vice chair is Susan Enfield, Highline School District superintendent and for a brief time the interim superintendent of Seattle Public Schools. The full task force membership can be found here

Several issues were raised at the first meeting that may provide a sense of the direction the discussion will take. Two members asked what education funding levels would look like if the baseline was not the current 2011-13 budget but the budget before major cuts were made. The Supreme Court had broached that question in its McCleary decision:

[O]verall K-12 funding — including funding for basic education — sustained massive cuts in the 2011-13 operating budget. Teacher and staff salaries were reduced by 1.9 percent, and administrator salaries were cut by 3 percent. The budget provided virtually no increase in funding for MSOCs. And the new transportation funding formula provided only $5 million more for student transportation than the legislature allocated during the previous biennium. Nonbasic education funding was likewise reduced in the 2011-13 operating budget. Funding under Initiative 728, for example, sustained cuts of $860 million, and a separate program for reducing K-4 class sizes lost $214 million.

During a presentation by the Department of Revenue on general fund tax revenue forecasted for the next (2013-15) biennium, concerns were voiced about the certainty of the numbers.

Vincent averred that this is a very difficult time to judge the economy going forward, especially given all of the political decisions that are facing the other Washington. And he asked what may be the $3 billion question: “Is it a fair assumption, given the time frame over which we have to make additional funding into education, and given all the other factors in the state’s cost growth, that we aren’t going to grow our way out of this issue (i.e., fund education through economic expansion)?” He might have been referring to the positions of McKenna and Inslee and suggesting that he agrees with Gov. Chris Gregoire that economic growth alone will not solve the problem.

Not available to the task force at its first meeting was the Four-year Outlook of general fund revenues and expenditures produced by the Office of Financial Management. It was released on the following Monday and provides important details regarding budget assumptions through 2015-17. The changes, all adds, would restore cuts made in the current budget including those to K-12, fund programs and services that are expected to see increased demand, and rebuild the rainy day (budget stabilization) account. And they reflect the Gregoire administration’s belief that the social safety net can’t sustain further cuts.

Revenues are predicted to grow by 14.5 percent over the next two biennia compared to an expenditure growth of 15.8 percent. This would leave a negative balance in the general fund at the end of 2015-17 of $1.3 billion.

The outlook mentions other expenditures that are under discussion and not included in the forecast: K-12 employee and teacher health benefit increases and state employee salary adjustments. A footnote also indicates that college financial aid may need to be increased, assuming there is another 2 to 3 percent tuition increase.

In effect, the task force is faced with not only finding significant new revenue for K-12 but also dealing with competing needs for revenue that will bring the full budget into balance.

Near the end of its two-hour discussion, Sen. David Frockt, D-Seattle, suggested the group work toward a political consensus. Task force members seemed to agree. And they also agreed with their chair’s opinion that to get taxpayer support, they can’t simply talk about more money but need to define clearly how revenues will produce better outcomes— that they should indicate how success will be measured. And they should coordinate with other legislative committees that are working the issue.

The education task force has a difficult, multi-faceted challenge, and very little time to deliver. But sometimes what seems impossible becomes reality when smart people set aside their ideologies and find ways to compromise. Stay tuned.


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About the Authors & Contributors

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Dick Nelson

Dick Nelson is a former Washington State legislator. He currently contributes to the public debate on state and local fiscal issues through research and commentary. As when he was in the legislature, he prefers the Democratic Party.