1. Governors Proposed K-12 Budget December 6, 2011 Please e-mail questions to T.J. Kelly at Thomas.Kelly@k12.wa.us Thomas.Kelly@k12.wa.us 1

2. Agenda Welcome & Introductions Levy Equalization Proposal General Apportionment Question from the Sites Student Transportation Grants & Special Programs Question from the Sites Adjourn 2

3. LEVY EQUALIZATION PROPOSAL 3

4. Levy Equalization Reduction in 2012-13 = -$116.43 million Levy Equalization TIER Percent Reduction to Levy Equalization Local Property Tax Rate Percentage Above State Average Number of Districts in the Tier TIER 1-10%Over 300%40 TIER 2-25%Between 200% and 300%37 TIER 3-50%Between 150% and 200%56 TIER 4-100%Between 100% and 150%96 4 In addition, 45% of the CY 2013 payment is delayed until July of 2013. Calendar Year 2013 Reduction = -$161.93 million. The LEA monthly payments for 2013 forward are revised to April = 10%, nothing for May and June, and July=45%.

5. The tiered model creates more cutoff points 5

6. Closer Look at Tier 4 Cutoff 6 50% LEA0% LEA

7. GENERAL APPORTIONMENT 7

8. Budget Reduction Summary Policy Change Current Year Funding to Proposed Funding Impact 10 Month Enrollment Count (each SY)$(1,626,000) 4 Day Reduction$(103,533,000) Health Benefits*$(22,646,000) Small Schools-Bonus Units$(7,230,000) Levy Equalization Assistance$(116,429,000) Total$(251,464,000) 8 Transportation Health Benefits not included. Numbers will not reconcile to pivot table, as this slide is by policy change and the pivot table is reduction by line item in apportionment.

9. Budget Reductions 10 Month Enrollment Count*Impact Guaranteed Entitlement$(4,028,000) Special Education$2,349,000 Transitional Bilingual (TBIP)$62,000 Highly Capable$(7,000) Total$(1,626,000) 9 * Impacts both SY11-12 and SY12-13.

10. Budget Reductions 4 Day ReductionImpact Guaranteed Entitlement (includes MSOC) $(92,950,000) Special Education $(6,392,000) Learning Assistance Program (LAP) $(2,615,000) Transitional Bilingual Program (TBIP) $(1,383,000) Highly Capable $(193,000) Total $(103,533,000) 10

11. All Budget Reductions by Program ProgramImpact Guaranteed Entitlement$(118,714,000) Special Education$(11,195,000) Learning Assistance Program (LAP)$(3,148,000) Transitional Bilingual Program (TBIP)$(1,756,000) Highly Capable$(222,000) Total$(135,035,000) 11 Includes 10 month enrollment, 4 day cut, small school bonus unit and all benefit changes.

12. Enrollment Reporting Change 11-12 = -$1.6M and 12-13 = -$1.6M Enrollment count will be based on a 10 – month count: September through June instead of the current 9-month count that does not include June In addition, students with over 5 days of consecutive unexcused absences will not be included in the count, down from the current 20 day absences 12

13. Reduction in School Days in 2012-13 = -$103.5 M State funding in 2012-13 is reduced from 180 to 176 school days Results in a 2.2% reduction to annual salary allocations as well as reductions to transportation, materials, supplies and operating costs 13

14. Health Benefit Rate Change in 2012-13 = -$22.6 M Reduction in monthly state allocation for K-12 employees health benefits from $768 to $745 Impacts categorical program and transportation funding 14

15. Small School Bonus Unit Change in 2012-13 = -$7.2 M Reduction is only for 12-13 Reduces small high school bonus units from 9 to 8 CIS for districts with less than 300 students Reduces remote and necessary CIS units from 4.5 to 4 15

16. MSOC Technical Correction MSOC rate for 11-12 should have been $3 per FTE higher OSPI has asked for this to be adjusted in 11-12 11-12 Current Rate Corrected11-12 Rate ( with $3/FTE) 12-13 Rate (includes inflation and 4 day cut) $542.53$545.30$539.06

17. June 2013 Apportionment Delay -$340 million One-time apportionment delay from June 30 to July 1, 2013 2013-15 biennial budget will have to be increased by $340 million $10 million in contingency funds are available to school districts meeting financial hardship criteria OSPI anticipates using the same process as last year. 17

18. ED Jobs Additional $3 million in federal reallocation of ED Jobs State funding for general state apportionment payments is reduced by the amount of the allocation District level allocations will be small, if districts dont take the reallocation amount, their state funding WILL STILL BE REDUCED 18

19. QUESTIONS FROM THE SITES 19

20. TRANSPORTATION FUNDING 20

21. Pupil Transportation Eliminates the regional transportation coordinator program effective July 1, 2012 Reduces the operations allocation: Pension and Health care costs Proposed reduction in school year These reductions would be made across the board 21

22. Bus Depreciation Changes the payment from the last business day of September 2012 to August 2013 Thereafter, paid in August Does not change the payout process, just the payment date Contingency funds available Please contact Allan.Jones@k12.wa.us if this would create a fiscal crisisAllan.Jones@k12.wa.us 22

23. GRANTS & SPECIAL PROGRAMS 23

24. National Board Bonus Reduction July 2012 payment = -$8.58 million The bonus paid to National Board certified staff is reduced from $5,090 to $4,000 The additional bonus paid to National Board certified staff working in a challenging school is reduced from $5,000 to $4,000 First year National Board certified staff will receive $2,400 24

25. School-Based Medical Services 11-12 = -$1.2m and 12-13 = -$2.4m Effective January 1, 2012, school districts will be required to provide 100% of the funds necessary to match the federal Medicaid reimbursement for school-based medical services, such as speech and occupational therapy The state will no longer provide 40% of the nonfederal matching funds 25

26. Grant Eliminations 2012-13 = -$7.37 million 26 Grant 12-13 Amount Readiness to Learn($3,234,000) Promoting Actual Student Success (PASS)($1,500,000) Beginning Educator Support Team (BEST)($1,000,000) CTE Start-up Grants & Robotics($977,000) Principal & Superintendent Internships($477,000) STEM Lighthouses($135,000) Nonviolence Training($50,000)

27. Grants Reduced 20% 2012-13 = -$1.45 million Grant 12-13 Amount IT Academy($400,000) College Bound Recruiting($200,000) Regional Technology Centers($196,000) Reading Corps($191,000) Leadership Academy($162,000) WA Achievers Scholars Mentoring($135,000) LASER/Pacific Science Center($71,000) Building Bridges($67,000) Jobs for Americas Graduates($27,000) 27

28. Aerospace Proposal +$700,000 in 2012-13 $300,000 for entry-level aerospace assembler training programs in 12 high schools $150,000 for aerospace and manufacturing programs in 2 skills centers $250,000 for advanced project lead the way courses in engineering at 10 high schools 28

29. Governors Revenue Proposal The Governor proposes a temporary half-cent increase in the state sales tax from 6.5% to 7.0% effective July 1, 2012 through July 1, 2015 With the half-cent penny increase, Governor Gregoire proposes to prevent the school day and levy equalization reductions = $251.1 million in State Fiscal Year 2013 29

30. QUESTIONS FROM THE SITES 30

31. Important Links Governors Proposed 2012 Supplemental Budget http://www.ofm.wa.gov/budget12/default.asp http://www.ofm.wa.gov/budget12/default.asp OSPI School Apportionment http://www.k12.wa.us/safs/ Legislative Budget Information http://leap.leg.wa.gov/leap/default.asp 31