State's Response on McCleary Question from Supreme Court

This is my summary and I use only partial quotes from the State's response.  Its tone is respectful and I think that is because of our Attorney General Bob Ferguson.  I suspect if they had left it to some members of the legislature that I would not have the same tone.

 What the State says.   

- In ESH13 2261 (Laws of 2009, ch. 548), the State established a framework for comprehensive reform of basic education and its funding methodology. SHB 2776 (Laws of 2010, ch. 236) quantified the policy aspects of those reforms by establishing specific formula enhancements and specific deadlines for implementing them, but SHB 2776 did not address compensation. The plan enacted in E2SSB 6195 (Laws of 2016, ch. 3) fills that gap by establishing specific steps and timelines for determining the compensation allocation levels necessary to implement the State's program of basic education and for taking legislative action to end reliance on local tax levies to fund that program.

Read together, E2SSB 6195 and SHB 2776 constitute a complete plan for implementing the education reforms the State enacted in ESHB 2261. (Editor's note: by my count they say this no less than 3 times in this brief.)

- Because the State has satisfied the requirements in the Court's January 2014 Order, there is no basis for continuing to hold the State in contempt and levying a daily sanction. The Court should dissolve the contempt order and terminate the daily sanction. 

 

Yes, that is the first order of business (at least for the State.)

 

They go on to answer the Court's questions;

 

What remains to be done to timely achieve constitutional compliance?

The State says there are three things:

- implementation of 2017-2018 K-3 class size reductions. 

- adjust state expenditures for basic education under the prototypical school funding model to account for inflation, student enrollment and other variables.

- determine its cost to fully fund salaries needed for school districts to recruit and retain staff to implement the State's statutory program of basic education and provide that funding. 

 

How much is it expected to cost?

The current estimated cost to the state to fully fund the program of basic education identified by ESHB 2261 and the implementation program established by SHB 2776 is approximately $19.7 billion for the 2017-19 biennium.

The estimated cost to the State to fully fund salaries needed for school districts to recruit and retain staff to implement the State's statutory program of basic education is not yet known.

The information necessary to determine that cost is being gathered through the processes established in E2SSB 6195. 

 

How does the State intend to fund it?

 
This is a decision for the 2017 Legislature and cannot be answered at this time. The Legislature committed in E2SSB 6195, § 4 to take legislative action by the end of the 2017 session to fully fund the State's statutory program of basic education and end school district dependence on local levies to implement that program. 

What significance, if any, should the Court attach to E2SSB 6195 in determining compliance with the Court's Order to provide a complete plan?

In E2SSB 6195, the Legislature enacted a plan that (1) established specific steps and timelines for developing evidence-based recommendations as to compensation levels the State should fund to hire and retain staff who implement the State's program of basic education, and (2) committed to legislative action by the end of the 2017 session... 

 

Does the State view the 2018 deadline as referring to the beginning of the 2017-18 school year, to the end of the 2017-18 fiscal year, to the end of 2018, or to some other date?

 

Based on the Court's prior holdings in this case, the State understands "the 2018 deadline" to refer to September 1, 2018.

 

A rather tortured accounting of how they got to this date follows this sentence.  The State claims that the Court is the entity that picked this date.  

Does E2SSB 6195, when read together with ESHB 2261 and SHB 2776, satisfy this Court's January 9, 2014, Order for a plan?

The answer is yes, as explained at pages 6 and 8-11 of the 2016 Report to the Washington State Supreme Court by the Joint Select Committee on Article IX Litigation (May 18, 2016) (2016 Report) and at length in the State's briefs filed on May 18, 2016, and June 17, 2016. 

 

Page 21 explains how 

Since 2012, when the McCleary decision was issued, the Legislature has substantially increased the real dollars in per-pupil spending under the prototypical school funding model for these four components of basic education. 

They go on to flesh this out at length.  And again, I point out that our country (and our state) had a rather severe recession that cause all the district to make cuts.  Some of this "new" money is just replacing dollars that had to be cut so it is not adding money so much as replacing money. 

These are actual increases in state funding of basic education—nearly $1.7 billion per year more in 2016-17, rising to nearly $2.0 billion per year more in 2017-18 than it otherwise would have.24This is real, measurable progress in response to this Court's 2012 decision. In other words, the State kept faith with the plan it enacted in ESHB 2261 and SHB 2776.

 

There is something interesting at the bottom of page 22 which is a list of items they are allocating money for for 2017 and 2018.  It includes:

 

- 24 credits/increased hours

- parent engagement coordinator

- middle school guidance counselor

- LAP

- bilingual instruction

 

Interested in their plan for figuring out teachers salaries?  It start mid-page 23 and goes to the bottom of page 24.   

(1) What is the estimated current cost of full state funding of the program of basic education identified by ESHB 2261 (RCW 28A.150.220) and the implementation program established by SHB 2776, including, but not limited to, the costs of materials, supplies, and operating costs; transportation; and reduced class sizes for kindergarten through third grade and all-day kindergarten?

The estimated cost of full state funding of the program of basic education identified by ESHB 2261 and the implementation program established by SHB 2776 is approximately $19,655,157,000 for the next biennium.

That includes the costs of basic ed policies plus K-3 class size reduction.

Therefore, the estimated cost includes, but is not limited to "the costs of materials, supplies, and operating costs; transportation; and reduced class sizes for kindergarten through third grade and all-day kindergarten."

 

What are the estimated capital costs necessary to fully implement reduced class sizes for kindergarten through third grade and all-day kindergarten under ESHB 2261 (RCW 28A.150.220) and SHB 2776?

The Washington Constitution treats capital construction differently from operating costs of education and contemplates a shared responsibility between school districts and the State. The Legislature has not defined capital construction as part of the program of basic education and the contours of the shared responsibility and decision-making concerning school facilities have not been part of this case. Capital construction was not addressed in this Court's 2012 decision nor has the constitutional relationship between state and local decision-making on school facilities been adjudicated in any other case. 

 

They devote about 4 pages to capital needs including this:

The Legislature established a multi-step process for school districts to receive K-3 class size reduction grants. The process includes verifying the need for adding classrooms, verifying school district readiness to proceed with construction, and implementing certain assumptions related to whether additional classrooms or whole new schools are implicated. RCW 28A.525.058. Along with the class size reduction grant program, the Legislature initiated procedures to ensure the State gathers accurate data concerning school facilities inventory.

First, the Legislature appropriated $2.3 million to Washington State University to collect, input, and verify public school facilities data to provide a more comprehensive understanding of school district needs. 37 WSU is conducting on-site school visits to assess inventory and condition of facilities. It will verify school district facility data and the accuracy of the OSPI surveys. WSU is collecting data related to schools and space allocations for various classroom and administrative spaces, entering those data into the State's inventory system, and verifying the number of classrooms available for use. WSU's initial report was submitted in December 2015.  The final report is due December 2016. WSU verification is a prerequisite for schools seeking class size reduction grants.

 

I have to say this kind of excites me because I'll be interested to see what WSU says about the state of SPS facilities especially around space allocations.

 

Second, the Legislature directed OSPI to contract with Educational Service District 112 (ESD 112) to perform an analysis of school construction costs, to try to reconcile variations in construction costs among different projects, districts, and regions. OSPI is to submit a report on the ESD 112 findings to the Legislature and the Office of Financial Management (OFM) on September 1, 2016. 

Third, the Legislature created a school construction technical work group, consisting of legislative and OFM staff, to monitor the K-3 class size reduction grant pilot program and a new STEM capital grant program, along with the work done by WSU and by ESD 112. A final report is due to the Legislature by January 15, 2017. 

 

What is the estimated cost of full state funding of competitive market-rate basic education staff salaries, including the costs of recruiting and retaining competent staff and professional development of instructional staff? 

Prior reports have provided a range of cost estimates, but these estimates generally included new policy proposals that would expand the State's statutory program of basic education.
 

In addition, there are reports that identify actual salaries paid by local school districts to administrators and staff. For example, the total amount of district-by-district compensation paid to education staff is reported yearly by OSPI.43OSPI reports the average base salary per FTE for certificated instructional staff for the 2015-16 school year as $54,135.44

That amount represents the portion currently paid by the State.45OSPI reports the average actual salary per FTE for certificated instructional staff for the 2015-16 school year as $65,541.46That difference, approximately $11,400 per FTE, is paid through annual supplemental contracts negotiated at the local level.

 

State law allows such supplemental contracts to compensate certificated instructional staff for additional time, additional responsibilities, incentives, or educational enhancements, but it prohibits the use of supplemental contracts to provide services that are part of the State's program of basic education.

If school districts are in compliance with RCW 28A.400.200(4), then the additional salary paid through supplemental contracts is not the State's responsibility, because it is not compensation for implementing the State's program of basic education.

 

I think this rather a key point.   Meaning, districts you can pay higher salaries IF it's for anything beyond "basic education."  

As this Court recognized in 2012, however, some school districts may be using supplemental contracts to pay for basic education responsibilities while claiming to compensate activities and enhancements for which such contracts are authorized. 
 

The extent to which school districts do so is unknown, because the reporting system established by OSPI does not track the purposes for which supplemental contracts are negotiated or how districts use state funds or local levy funds.

 

Consequently, there is no available report or combination of reports that provides the crucial information necessary to determine the State's cost to fully fund salaries needed for school districts to recruit and retain staff to implement the State's statutory program of basic education.

I've always thought that levy spending is not tracked that well and it appears it is not.  They also say this:

Adjustments might be appropriate to reflect different costs of living, challenges in recruiting and retaining staff, or special circumstances in a district or school.

The consultant must provide an interim report to the Education Funding Task Force and the Governor by September 1, 2016. Id., § 3(3). The final data and analysis must be provided to the Education Funding Task Force and the Governor by November 15, 2016. Id., § 3(4). 
 

What components of basic education, including basic education staff salaries, has the State not yet fully funded in light of the costs specified above; what is the cost of achieving full state funding of the components that have not been fully funded by the deadline; and how does the State intend to meet its constitutional obligation to implement its plan of basic education through dependable and regular revenue sources by that deadline?

The State has not yet fully funded the costs of staffing at a class size ratio of 17 full-time equivalent students per teacher as set forth in RCW 28A.150.260(4)(b) for the 2017-18 school year. 

The State also has not yet fully funded basic education staff salaries, and does not yet have a full measure of the cost of doing so.

How does the State intend to meet its constitutional obligation to implement its plan of basic education through dependable and regular revenue sources by that deadline? 

The 2017 Legislature will enact a biennial budget that includes sufficient funds to allocate class size ratios to school districts specified in ESHB 2261 and SHB 2776, and to carry forward the education reforms implemented under those statutes. 

The 2017 Legislature will follow through on the plan enacted in E2SSB 6195 to determine the cost of fully funding competitive salaries for staff implementing the State's program of basic education, and provide that funding. 

The 2017 Legislature will determine the sources of State revenue (new, existing, or a combination) to be used in implementing its plan of basic education. Previous reports and bills have identified a variety of options for the Legislature to consider. The following nonexclusive list, for example, was provided without recommendation by the Joint Task Force on Education Funding

• Draw from the Budget Stabilization Account;
  
• Retain existing taxes set to expire;
  
• Additional budget efficiencies and savings;
  
• Eliminate tax exemptions;
  
• Fund all or part of K-12 transportation using transportation revenue sources;
  
• Enact an excise tax on capital gains;
  
• Lift or amend the current one-percent limit on the growth of
  state property taxes;
  
• Increase the state school levy rate;
  
• Use the state school levy to replace all or some local school
  levies.
  

Am I blind or am I missing seeing an income tax?  The Joint Task Force didn't put that on the list?

Should this Court dismiss the contempt order or continue sanctions? 

And here you go:

The Court imposed a sanction to coerce the submission of a complete plan—not to compel full constitutional compliance in advance of the 2018 deadline.

The State has submitted a plan. It has purged contempt. There is no further plan to compel, and thus no justification for the sanction to continue. The Court should dissolve the contempt order and terminate the imposition of sanctions.

Any additional information that will demonstrate to the Court how the State will fully comply with article IX, section 1 by 2018.

The State agrees that the biennial budget system does not prevent the State from adopting a plan that complies with the Court's Order (like E2SSB 6195), but the State respectfully maintains that this Court's decisions limit the State's ability to adopt a plan committing to specific appropriations for a future biennium. 

They go on to cite cases about appropriations relevant to this point.

In other words, even if a statute says "that the legislature shall appropriate certain funds" going forward, it is up to the Legislature each biennium to decide whether to actually do so. Thus, even if the Legislature had adopted a "plan" stating "that the legislature shall appropriate certain" amounts in future years, that plan could not have bound a future Legislature to actually appropriate that amount. The Court should not require such a provision in a "plan," since it can have no binding effect. 

Then it behooves the members of the legislature to NEVER create a statute with that wording, no?