1. Office of Superintendent of Public Instruction Financial Resources and Governmental Relations K-20 on Special Session and Governors FY11 Supplemental and 2011-13 Budget Proposal January 6, 2011

2. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 2 3/1/2014 Questions during the K-20?? ESD sites are interactive and able to ask questions. All other sites: email questions to Jolynn.berge@k12.wa.us

3. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 3 3/1/2014 Agenda Capital Update Transportation Update Early Action and Governors Proposals – Side-by-side comparisons – NBCT – K-4 – Highly Capable – LEA – Ed Jobs/Apportionment backfill – Apportionment delay – New funding formula – John Jenft F-203 Questions

4. Office of Superintendent of Public Instruction Financial Resources and Governmental Relations Capital Update

5. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 5 3/1/2014 2011-13 K-12 Capital Budget Governors Proposal School Construction Assistance Program – Maintenance Level of $486.6 Million Funding Assumptions – SCAP appropriations are not fully funded. Governor estimated 1.3 million square feet less than OSPIs original budget request. (Project requests are on track with OSPIs original budget request). Construction Cost Allocation inflationary increases to: FY 2012 = $183.78 FY 2013 = $188.55

6. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 6 3/1/2014 2011-13 K-12 Capital Budget Governors Proposal School Construction Assistance Program Relies on school district capital expenditures stretching beyond the 2011-13 biennium. » $274 M Bonds; available within the 2011-13 biennium. » $212 M Cash; majority earned after the 2011-13 biennium. Implementation of the priority system would be likely under the Governors proposal.

7. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 7 3/1/2014 2011-13 K-12 Capital Budget Governors Proposal Other Funding proposals: Small Repair Grant Program – $10.0 M. Skills Centers Minor Works for Existing Facilities – $3.0 M. Aviation High School - $2 M.

8. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 8 3/1/2014 2011-13 K-12 Capital Budget Superintendents Priorities – Fully fund the School Construction Assistance Program (SCAP) appropriations; Maintenance and Enhancement Levels. – Provide for basic student health and safety. Small Repair and Energy Grant Programs. New School Facility Safety Net. New School Seismic Needs Assessment. – Expand career and technical education through skill centers. Minor Works and, Major project,s especially Phase 2 projects, at Pierce County and Yakima Valley.

9. 2011-13 K-12 Capital Budget dollars in millions OSPI Request Governor Proposal Fund Source SCAP – Maintenance$660.1$486.6 Bonds/Common School Construction Account (Cash) SCAP – Enhancement$93.0$0.0 Space Study$0.2$0.0 Small Repair$5.0$10.0 Bonds Energy Grants$20.0$0.0 Facility Safety Net$80.0$0.0 Seismic Assessment$0.5$0.0 Skill Centers - Minors$5.7$3.0 Bonds Skill Centers – Majors & Satellites $80.4$0.0 Aviation High School$0.0$2.0 Bonds Administration$3.9 Common School Construction Account TOTAL$948.8$505.5 9

10. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 10 3/1/2014 2011-13 K-12 Capital Budget – OSPI requested SCAP obligations be fully funded. – OSPIs request was heavily reliant on state general obligation bonds, which depend on state debt capacity. Do not expect General Fund-State Transfers to the Common School Construction Account (CSCA). – Lottery redirected to Higher Education in 2010. – No agency savings projected for the 2009-11 biennium.

11. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 11 3/1/2014 2011-13 K-12 Capital Budget State Debt or Bonding Capacity – Current capacity ranges: From low in November 2010 Bond Model = $161 million. To high in Governors Bond Bill = $900 million. – $3.2 billion in bonds requested by all agencies.

12. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 12 3/1/2014 2011-13 K-12 Capital Budget State Bond Capacity

13. Office of Superintendent of Public Instruction Financial Resources and Governmental Relations Transportation Update

14. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 14 3/1/2014 Student Transportation: Overview Governors Budget Proposal. What the numbers mean to you. How the money will be distributed. System Changes.

15. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 15 3/1/2014 Student Transportation: Budget Proposal Funding System. The Good News – Commitment to implement in 2011-12. The Other News – Source of additional funding is a result of a major restructuring of the bus replacement system.

16. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 16 3/1/2014 Student Transportation: How Much? Figures are in the pivot table. Depreciation estimate for next year – Current system. – Governors proposal. Lots of assumptions – Underfunding for current year. – Bus prices.

17. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 17 3/1/2014 Student Transportation: 2011-12 Operations Allocation Pay at 2010-11 amount until February. Adjustment for new calculation process. Adjustment for amount of funding available. No recalculation after the Spring report.

18. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 18 3/1/2014 New Transportation Funding Model: Transition Process Hold harmless – No one gets less than 2010-11. Additional Funding – Estimate based on the amount of funding available from the change in depreciation. – Best guess is districts would receive about 1/3 of their underfunding in 2009-10.

19. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 19 3/1/2014 New Transportation Funding Model: OSPI Rules Status Initial rules hearing was December 8 th. OSPI in process of reviewing language – Reword several sections in response to comments and concerns. – Will schedule another hearing on revisions.

20. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 20 3/1/2014 Student Transportation: System Changes Bus Replacement System – May result in unintended consequences. Maintenance Costs. Fleet Modernization. Regional Coordinator Program Eliminated – Would eliminate training and support for the new funding system. – School bus driver training, Management training, WSP inspection process, etc.

21. Office of Superintendent of Public Instruction Financial Resources and Governmental Relations Early Action and Governors Proposals - Update

22. 2011 FY SUPPLEMENTAL BUDGET – ENACTED & GOVERNORS PROPOSED

23. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 23 3/1/2014 2011 FY Supplemental Budget: Eliminated Programs Proviso Original Funding Enacted Supp. Cut Balance Governors Proposed Project Citizen 25-1312- Support for CTE Student Org. 97-4948- Special Service Pilot 1,329-665664- Building Bridges 337-112225- Dyslexia Pilot Program 75-3837- Teaching as a Profession Pilot75-75-- BEST Program 2,000-1,0001,000- Superintendent/Principal Internship 530-265265-

24. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 24 3/1/2014 2011 FY Supplemental Budget: Eliminated Programs Proviso Original Funding Enacted Supp. Cut Balance Governors Proposed Leadership Academy900-450450- Focused Assistance1,523-762761- STEM Lighthouses300-75225- CTE Startup Grants612-456156- Reading Corps1,056-528528- Summer Voc. Skill Center2,385- -1,785 Readiness to Learn3,594- -1,797 K-4 Class Size Reduction81,512-39,42442,088-42,088 Highly Capable Program8,903- -7,104 Centrum170- -11 WA Imagination Network90- -6

25. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 25 3/1/2014 2011 FY Supplemental Budget: Reduced Programs Proviso Original Funding Enacted Supp. Cut Balance Governors Proposed College Bound Outreach1,000-500500-300 Civil Rights Monitoring133-4489- Achievement Gap Com.100-694- Non-Violence Training50-347- School Nurse Corps2,541-1602,381- Safety Center96-690- School Safety Training100-694- K-20 Network1,745-1101,635- Navigation 1013,120-1962,924- LASER/Pacific Science Cen.395-198-197 Education Technology Supp.1,959-1231,836

26. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 26 3/1/2014 2011 FY Supplemental Budget: Reduced and Added Funding ProvisoOriginal Funding Enacted Supp. Cut Balance Governors Proposed Levy Equalization286,051- -18,038 Extended Day Skill Center485- -30 Transportation Coordinators892- -56 June Payment Delay-253,000 June Contingency Fund13,000 June Contingency Fund15,000

27. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 27 3/1/2014 Governors Supplemental Cut of National Board Bonuses Governors across the board cut of 6% is still in effect. Districts should continue to claim their bonuses. OSPI will allocate funding on a first come first serve basis. When Governor repeals the 6% cut, OSPI will pay out the rest of the bonuses to districts who have submitted claims up to the total appropriation authority.

28. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 28 3/1/2014 K-4 Class Size & Highly Capable Retroactive Elimination Governor Proposals cuts programs starting in September. If adopted by Legislature, OSPI will adjust district apportionment payments to reflect cuts. OSPI will transfer Highly Capable program to General Apportionment in order to then make adjustments to district apportionment.

29. GOVERNORS PROPOSED 2011-13 BUDGET

30. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 30 3/1/2014 2011-13 Proposed Governors Budget: Eliminated Programs Proviso 2011-12 FY Maint. 2012-13 FY Maint. Governors Total Biennial Cut Project Citizen25 -50 Support for CTE Student Org.97 -194 Special Service Pilot1,329 -2,658 Building Bridges337 -674 Dyslexia Pilot Program75 -150 Teaching as a Profession Pilot75 -150 BEST Program2,000 -4,000 Superintendent/Principal Internship 530 -1,060

31. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 31 3/1/2014 2011-13 Proposed Governors Budget: Eliminated Programs Proviso 2011-12 FY Maint. 2012-13 FY Maint. Governors Total Biennial Cut Middle & High Applied Math139 -278 Leadership Academy900 -1,800 Focused Assistance1,523 -3,046 STEM Lighthouses150 -300 CTE Startup Grants912 -1,824 Reading Corps1,056 -2,112 Readiness to Learn3,594 -7,188 Highly Capable Program7,3439,469-16,812 Centrum170 -340 WA Imagination Network90 -180

32. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 32 3/1/2014 2011-13 Proposed Governors Budget: Eliminated Programs Proviso 2011-12 Maint. 2012-13 Maint. Governors Total Biennial Cut Civil Rights Monitoring133 -266 Achievement Gap Com.118 -236 Non-Violence Training50 -100 LASER/Pacific Science Cen.198197-395 Education Technology Supp.979 -1,958 Pre-Apprenticeship Grants175 -350 Summer Voc Skill Center2,385 -4,770 Readiness to Learn3,594 -7188 Transportation Coordinators892 -1,784 Bus Depreciation55,00053,000-95,622

33. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 33 3/1/2014 2011-13 Proposed Governors Budget: Suspended Funding Proviso 2011-12 FY Maint. 2012-13 FY Maint. Governors Total Biennial Cut Dev. Diagnostic Assessments2,200 -4,400 I-732 COLA60,022193,264-253,286 I-728378,628481,596-860,224 National Board Bonuses34,45444,236-78,690 Challenging School Bonus9,37211,454-20,826

34. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 34 3/1/2014 2011-13 Proposed Governors Budget: Reduced Programs Proviso 2011-12 FY Maint. 2012-13 FY Maint. Governors Total Biennial Cut 2011-13 Total w/ Gov. Reduction Full Day Kindergarten48,21050,858-10,568(Case Load Adj.) Freeze Steps on 2011 Salary Schedule **-70,484* College Bound Outreach1,000 -2001,800 K-20 Network1,745 -3493,141 Navigation 1013,120 -3925,848 Mentoring of WA Achievers 750 -1501,350 Math and Science PD1,800 -4223,178 COE Payment**-7,383* Restructure COE**-7,138* * Working on Calculation

35. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 35 3/1/2014 2011-13 Proposed Governors Budget: Adds Proviso2011-12 FY2012-13 FYTotal Implementation of New Transportation Funding Model 40,00050,00090,000 Principal and Teacher Evaluation1,500 3,000 Incentive for Evaluation System-15,000

36. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 36 3/1/2014 Levy Equalization 2010-2011 School Year The Governors supplemental request continues to current levy equalization model but makes a reduction of 6.3% or $18 million. The impacts to local districts are shown on the SAFS 2011 Supplemental Budget website under the across the board 6.287% link. Across the Board Cuts by School District Across the Board Cuts by School District

37. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 37 3/1/2014 Levy Equalization 2011-2013 The Governors 2011-13 biennial request equates to a reduction of 6.3%. New Four Tier Model with property poor districts receiving the smallest reduction in LEA. – Over 300% above state average = 1% cut. – 175% to 300% = 3% cut. – 125% to 175% = 5% cut. – 100% to 125% = 28.75% cut.

38. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 38 3/1/2014

39. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 39 3/1/2014 Levy Equalization 2011-13 No specific changes in levy base calculations were proposed. – Reductions in K-3 this year will not reduce the levy base. Levy Equalization continues to be calculated based on 14%. The Per Pupil Inflator in the Governors budget is 3%.

40. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 40 3/1/2014 Ed Jobs Ed Jobs Funding – $208K Total. Allocation by district is on our website. – The Legislative Special Session directed that these funds will be deducted from General Apportionment.

41. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 41 3/1/2014 Ed Jobs – Deductions will be made over five months - January through May. 20% will be deducted each month. – Amount will be reflected on your 1191 Report on Line C.9 – Adjustment for Prior Year. – Levy Base – Uses the total Guaranteed Entitlement from Line A.14. Levy base would not double count Ed Jobs funds discreetly since it is included in Line A.14.

42. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 42 3/1/2014 Apportionment Delay Governors Supplement proposes that $253,000,000 of the June Apportionment payment will be delayed until July 1 st. $13 million set-aside for financial assistance to cash poor districts to be administered by OSPI.

43. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 43 3/1/2014 Financial Assistance Loans Two discreet amounts in the Governors Supplemental Budget: – $15 million for district-needed assistance due to budget cuts. – $13 million for district due to Apportionment payment delay.

44. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 44 3/1/2014 Financial Assistance Loans Monies provided are an advance on Apportionment to be repaid by June 2012. Process of application is expected to be similar to the apportionment advance process detailed in the ABFR handbook. Actual application process has not yet been developed.

45. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 45 3/1/2014 Financial Assistance Loans Applications for June loans will require a number of assurances including one from the county treasurer that the county is unable to provide a loan or other assistance to the school district to accommodate the proposed one-day delay in June apportionment payment. June applications are tentatively required to be filed with this office by mid-April.

46. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 46 3/1/2014 Financial Assistance Loans OSPI will develop the application process and provide more information in February.

47. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 47 3/1/2014 Prototypical Funding Formula OSPI has provided on-site training on the new SHB 2776 formula at all ESD locations. All biennial budgets are expected to adopt the new prototypical funding formulae. The governors budget has adopted this.

48. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 48 3/1/2014 Prototypical Funding Formula The following materials are available on our website under the SHB2776 link. – Excel Beta models showing calculations and comparison at the district and school level. – OSPIs PowerPoints used during training.

49. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 49 3/1/2014 Prototypical Funding Formula The values used in transitioning to the new prototypical funding formula were intended to be cost neutral. Some breakage occurred; positive and negative. The Governors proposed biennial budget provides funding for districts losing dollars.

50. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 50 3/1/2014 The John Jenft Sheet The change to the new prototypical funding formula provides many-many more variables. The revised John Jenft sheet is on our website and now encompasses 4 pages. The first page covers the typical areas, the remaining three cover the full range of known variables that legislation could address.

51. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 51 3/1/2014 F-203 The system has been completely rewritten to address the prototypical model. The F-203 will be released as an X option next week. We will be providing K-20 training for each ESD region. See our website for the current schedule.

52. Financial Resources and Governmental Relations Office of Superintendent of Public Instruction Slide 52 3/1/2014 Pivot Table Release Thank you for your patience! It was appreciated. The table reflects the new prototypical model calculations. The table does not project a maintenance level but rather a 2011-12 base level that reflects the special session changes and other legal changes that will affect 2011-12. The Pivot Table is now available on our website.

53. Office of Superintendent of Public Instruction Financial Resources and Governmental Relations QUESTIONS?