001We've got uh I guess the word got out that Dan Steele was joining us for our last in session uh live of the 2025 legislative session. Welcome everyone. Sorry for our delay. Of course today we had technical difficulties. Uh so thank you for your patience. Um because we're having some technical difficulties. We're walking we're working from a laptop uh and we're not we don't have our normal connection. So, uh, we're going to keep working on that so we can get the agenda up with all the relevant links that you might be interested in having access to. Uh, but in the meantime, I will just say welcome uh to all of you. This is the last in session live of the 2025 legislative session. And because it's the last one, we thought it was important to
002bring uh our friend and colleague Dan Steele uh to deliver sort of a a state of the state uh about how the budget is going and what we're looking at in the days ahead. Um and then I uh will commit to you. Leavonne and I are working already now on bill summary documents as well as uh sort of a budget highle budget overview that we'll release next Friday in written format. So that's why this is our last in session live. All of the reporting about what happened will come in written form following this. And um uh with that, I think what we'll do is turn off our screen so we can manage some of the technical issues here and not be distracting and let Dan uh take the screen and uh share some really important
003and relevant content to you. We will field questions. If you have questions at any point, go ahead and just put them in the Q&A and then when Dan's done with his presentation, we'll filter through those and go through them one by one. Thanks for being here, Dan. As always, we appreciate your partnership and your brains. Big brains over here. Felt good. Should I roll then? It's all you. All right, let me uh share my screen. Oh, says Sharon is not turned on. There's another technical issue. Yep. Let me work on that here. Give her a try now. That says good to go. Uh, it's like we've never done this before. That's right. We all up and ready. Uh, we see Dan Ster. Yep. I see your cherry blossoms in front of the Capitol. All right,
004rock and roll. That That was my very optimistic optimistic view of the Capitol today. How's that? That might not get any better, I can imagine. Right. So, appreciate all of you being on board to today. I know you do this on a regular basis, but this is kind of a interesting one with session uh rapidly coming to a close. Today's uh Thursday, what is it? April 23rd and uh or 24th, excuse me, and uh session is set to end uh by midnight on Sunday. Um the last week or so, we've been hearing all kinds of different reports about what may happen or what may not happen, but uh we'll walk you through some of the things that we do know. So want to talk about the operating budget, the big deal for us this session,
005just about every session because so much of the work that we do uh runs through the budget at some point in time. Want to talk to you about where we are with the big three. Appreciate was WASDA being on board with the big three this year. Uh and in just a couple of bills of interest, there's probably more that you're interested in. I'm just going to mention two or three uh key pieces uh and then certainly take questions about anything else that might be on your mind. So, as I mentioned, April 24, day 102 uh set the adjourn uh on Sunday. We've gone through all the various cuto offs and we're actually at the last phase, what I call the reconciliation phase. This is the opportunity for the House and Senate to get together to
006reconcile differences between bills between the houses. I think you're all aware that in order for a bill to actually get to the governor's desk, it has to pass out of the House and the Senate in the exact same form. Uh so there's this process where the bills bounce back and forth be trying to come to agreement. Uh and then if they need to, they'll actually come up with a conference committee made up of the majority minority party uh members uh in both the House and the Senate. In fact, this morning, uh, Senate Bill 5041, which is the unemployment for striking workers bill, uh, actually had a conference committee and they signed the conference report this morning. So, in fact, the entire conference committee took about 15 minutes uh because most of the work was already
007done before they actually got there. But uh, uh, then again, April 27th, Sunday, day 105, scheduled signing die for the regular session. So, the operating budget, again, one of the major things uh that we deal with and what the legislature deals with, there's about 1,800 bills on the table right now. Uh obviously, most of them have already died, but there's about 1,800 that got introduced. Uh and then in in addition to the operating budget, there's a capital bud budget and the transportation budget. But out of all of those things that are on the table, the only thing the legislature is actually required to do is to adopt a new two-year budget. So, we don't have all of the details yet. We're understanding that the there is an agreement that's in place between the negotiators. Um,
008and they're finalizing some of the the nitpicky numbers and that sort of thing. We're expecting to see something Saturday morning. uh and then they're going to move it straight to the floor and adopt it uh before siny die. Um that's the plan. Obviously in in Olympia plans can change, but that's what we've heard thus far. So what this shows you is the original Senate budget, the original House budget, and just a couple of different things uh in the final budget that we're not privy to necessarily. So some of those things we're not aware of yet. Uh but the originally the Senate came out with a $16 billion revenue package or taxes that we say in the normal world. Uh in the House had a $15 billion package. About two weeks ago, the governor came forward
009and said, "Really appreciate all the good work, but uh I can't actually sign a budget that has has that much uh revenue included." Uh so they went back to the drawing board, the negotiators did, and came together with a a combined plan. Both the House and Senate agreed to a 12 billion dollar package. Well, shortly after uh that was released, the governor came back out and said, "Again, appreciate all the good work you've done, but uh I can't sign a bill that has $12 billion in revenue." Uh called it too risky and unsustainable. Um and so that kind of frustrated legislators. They went back to the drawing board. What we understand now is they have uh potentially an $8 billion package. Um that's not yet been confirmed, but we think that's probably where it's going
010to end up. The concern about dropping the the revenue so far down from 16 and 15 billion down to even 12 or potentially 8 billion, uh it means that the legislature can't actually fund the budgets that they have uh on the table right now. So, there were already $6.5 billion dollar in savings or reductions over the 4-year period of time. Uh, as soon as the governor came forward and they realized they had to have less revenue, uh, we were starting to be told that we should expect additional cuts on top of uh, what's already been in place. So, we don't know where those cuts are coming from, but if they actually drop from 16 and 15 all the way to down down to eight, that that is a significant uh change. And so, we're assuming
011that uh K12 is going to have to play in that game of of reductions. The total increase, at least uh what was originally proposed, we'll see what happens in the end. Uh the Senate increased about 6.5 billion, the House just under six billion. And where those numbers came from is a significant level of maintenance level. And step back, I think you know this, but maintenance level is really essentially doing what you've been doing, but making changes for enrollment and case loads, inflation, uh, and other costs. Uh, so these are required things to maintain the current budget. Uh, the Senate was almost 5 billion, the House a little under 4.5. Uh obviously those numbers have to come together. I'm sure it's probably going to be close to the middle of that. Uh and in policy level,
012those are the discretionary items that the legislature can actually choose to either uh start new programs or increase current programs uh on the table. The Senate had uh $1.6 6 billion in discretionary items, just under a billion dollars uh in the House uh for those discretionary policy items for K12 education. Again, these are the original budgets. Uh $3.1 billion in the Senate, $2 billion in the House. Uh you can see the maintenance level are pretty close, but the policy level is significantly different. uh the the Senate would provide a billion dollars in new funding and new programs or expanded programs. The House actually had a net reduction. Um just really disappointing that they want to provide all of that money uh to some place other than K12 education. So off to the side, the final
013number, uh, again, this has not been confirmed, but what we have heard is the size of the the so-called K12 budget box is about $1.2 billion. Again, we'll find out in the next two days whether or not that's true, but we think that that's probably a fairly valid number. Um, specifically talking about K12, uh, again, $3.1 and $2 billion for the Senate and the House. Uh, again, you see the maintenance level, policy level, and what we believe is the final $1.2 billion. The individual items, again, this is part of the big three. We'll talk about in a little bit more, but almost a billion dollars uh in the Senate for special education. the House uh you know really struggled to get where they got was about $190 million. And the bill that was ultimately adopted,
014Senate Bill 5263 provides uh about $270 million. This $250 million uh number has been adjusted a little bit. So that should actually be about $270. Um, obviously a pretty significant increase and we're pleased that we're getting that much, but we're not pleased at all. In fact, fairly disappointed that they didn't even come close to what we actually need. Uh, again, we'll talk about that in just a little bit. Uh, MSOC about $175 million in the Senate. Uh, the House actually provided zero dollars in new investments for MSOC. And so what we're figuring, we haven't seen an actual fiscal note, uh, but the $175 million originally down to where they are now, uh, we think is about $90 million, uh, over the bienium. Um, we'll figure that number out later. Um, transition to kindergarten, both sides
015have actually agreed. Uh in fact uh just this morning or last night Senate Bill 5769 I think it is uh was got final passage uh which actually puts a cap on uh transition to kindergarten uh and the reduction that they're taking because they're actually putting a cap on it uh is about $75 million. Again, we'll find out the final number in a couple of days. Um, I know you've read uh in in session from Marissa or in my Tweo uh or you've heard other places the aortionment shift. We'll talk about this a little bit more later. Uh, but there's a savings quote unquote savings of about $400 million that uh both sides have actually essentially agreed to. Last night, uh, House Bill 2049 was heard in the Senate Ways and Means Committee. Uh and it
016was actually heard in the Ways and Means Committee after we had started hearing news that the budgets were done. So the hearing they had last night was really kind of prefuncter. Uh it's unfortunate that they're doing this and again we'll talk about this a little bit later. The other pieces uh in to in terms of the meal programs, the community uh eligibility provision, uh both sides have that. So we presume that there's going to be an increase of about $18 million there. Uh and then we get to the cuts and again we presume that the cuts are going to be higher than what's in this uh two two budgets here. Uh but what the house had was about $138 million in savings. Basically taking all of the grant programs and zeroing them all out. Um
017pretty frustrating that that would happen. Uh and then what the Senate did was actually take money actually from uh administration and individual programs uh OSPI which would them in a number of different areas. Uh they also did the same thing to ESDs uh reduce their programs uh at that level. Um, and so what I presume is going to happen is there's probably going to be administrative cuts and there's probably going to be either a wholesale or a large number of eliminations of grant programs. Um, again, we'll find out how bad that's going to be again in a couple of days, but this is where things uh stand today. So, I think all of you have seen this chart from me or or Marissa or other places. This shows the the percentage of the K12 budget
018as a part of the overall budget. And before I mention this, just want to remind you that I think this really is kind of a false metric. What we are concerned about is whether or not basic education is amply funded. Um, if it takes 95% of the operating budget to actually amply fund K12, that's the way it's got to be. If if we can actually be amply funded uh with five or 10% of the operating budget, fair enough. That's all that needs to be there. But I mention this for two reasons. Number one, legislators when they got up to over 50%, they patted themselves on the back and told everybody who would listen to them how great they were in terms of funding K12 education. I guarantee you in 2021 no legislators were actually talking
019about the percentage of the operating budget because we dropped below 50 uh which was where we had been before but um there was a show of how important K12 education was. The second reason for showing this is really just to to recognize that this shows really what the priorities of the legislature are and it's very clearly not the paramount duty not K12 education. Um so once we reached that peak of 52% we immediately started dropping down below and the last bianium we're currently at about 43.4% of the budget. Um, again, the final numbers are going to be different, but the original Senate budget would have increased just a notch to 43.7%. The House would have actually dropped below and gone down to 42.7%. Um, I'm presuming that we're going to be somewhere in the middle
020there, maybe even closer to that 4 43.4 where we currently sit. Uh but again we'll find out the specific details and the reality here in a couple of days. So the big three again appreciate was wazda's uh in in joining uh wasa with the big three you know the big three but want to talk about the dollars and cents we were looking for ample funding for special ed ample funding for uh maintenance material supplies and operating costs and then pupil transportation. This shows you the the increasing deficits over the course of the last several years. Um the individual need for 202425 was just under $1.3 billion. And if you want to look at all these numbers and everything, there's a link down there to the uh AESD dashboard. Uh you can walk through statewide or
021countywide or individual programs or whatever the case may be. A lot of good information there. Um a lot of information that some people are just like, tell me what it says. But it is there for your use. But as we drop down to uh special ed, the bianial need 202527, the gap between what school districts are expending and what state funds are just a little over a billion dollars, $1.1 billion. The original bill that was introduced on our behalf as part of the big three was a phenomenal bill. would have provided almost $1.7 billion dollars in the 202527 bianium. Uh it was even more than what we are asking for. Um but just a phenomenal bill. Uh especially with a a 12 to$16 billion budget shortfall. Um legislators in the Senate stepped up and said
022we need to take care of this problem once and for all. Well, as you know what happens in the legislative session, they go through the process and things get whittleled down. When it got to the got out of the Senate Education Committee, dropped down to just under a billion dollars. Still pretty close to what we needed. We would have been very pleased with that. Uh but then it came through Ways and Means, dropped down another uh $50 million, $100 million. Uh, and then once it got to the House, the House who didn't really want to do special education or any other K12 issues really hacked at it and we ended up with about $273 million. Um, this is a significant increase. It is something that's positive. It is something that's going to help school districts.
023The negative to to it though is there's still going to be about an $800 million gap between what you expend and what you receive. Um and so the problem is um legislators now are going to be running around telling everybody how great they've done for special education. In fact, right after the bill passed, uh there was a headline in the Washington Standard U that was based off a quote from Jerry Plet who is very supportive of the special ed and he's actually been very good for us, but he was talking about the elimination of the special ed enrollment cap and he said it was a historic step. Um, and so the headline in the Washington Standard said, uh, legislature takes historic step to eliminating, uh, gaps in special ed or something to that effect. So,
024we know the legislator is going to be running around talking about how great they've done special ed, and we're going to have to remind them again and again, thank you for what you've done, but you're not there yet, and we need more. So, the actual bill that's been adopted, and there was a little bit of a glitch when this got to the got back to the Senate. There was some technical issues. So, they actually refused to concur and sent it back to the House. I don't think that's going to cause a problem. I think it really was some technical issues. So, that bill should pass uh today or tomorrow probably. Um, again, I mentioned the elimination of the 16% enrollment cap, something we've been looking for for a long time. Uh, and they've finally done
025it. The multipliers for uh early education toddlers uh goes from 1.15 to 1.16. Uh ages 3 through five was at 1.15 goes to 1.16. And then the two different tiers uh dealing with inclusion. There was a tier for students that were less than 80% in the general ed program and a tier for special ed students that were over 80% of their time in general ed. Those two tiers are actually merged now. Uh you can see the 1.06 and 1.112 both of them as a comp combination are now 1.16. Uh pretty significant increase. The original bill had a 1.32. So you can see how far it dropped. Uh but there is an actual increase. Again, that's a positive thing. The safety net currently is calculated at 2.3 times the average FTE expenditure. Um in order to
026actually access the safety net, that threshold is dropped down to two different numbers. 1.8 for a number of different districts. uh given uh certain uh circumstances and in all other districts uh are at 2.0. Um there was a bill on the table that would have dropped this down to 1.5. It then went up to 1.75 and they finally ended up with these two different numbers, either 1.8 or 2.0. Still, it's a it's a reduction which is positive. It's just not where we needed to be. Uh the safety nets also come out one time a year currently. Now they will be distributed quarterly for uh most school districts. Again given certain circumstances are listed in the bill. Um this isn't a major issue but it will actually help cash flow uh for those districts that actually
027uh are able to get it quarterly. Uh the remainder of the bill deals completely with OSPI duties. The first thing is the excess cost allocation that your your district is to receive automatically there's a 6% taken out of that. Uh it's really frustrating that it's it's good for these duties that OSPI has to take care of, but instead of coming from the general fund, the allocation that your district receives is going to be reduced before it even comes to your district because OSPI is going to do this set aside. Um the duties that they're required to do deal with uh reviewing disproportionate data to make sure that school districts aren't over uh emphasizing special ed students and if there is some disproportionate uh allocation uh they provide technical assistance. There's professional development for inclusionary practices.
028Uh and there's also this creation of a statewide system for IEPs. Um there was a a a big um shouting match between OSPI and Waspy, the uh cooperative. Um and in the end, what this bill actually does is it requires OSPI to create the system, but they have to do it in collaboration with either the educational service districts or with CYPI. So it was kind of a compromise, kind of a win-win for both of them hopefully. Um this bill also requires the creation of an inclusionary practices pilot program. Uh 20 districts will get an increase in their multiplier specifically to deal with inclusionary issues. Uh and they have to provide reports and that sort of thing. And so to decide whether or not this is the right way to go uh with inclusionary practices. And
029then the last thing is a little frustrating. Again, it requires OSPI to change their calculation and allocation meth methodology of special ed and requires 25% of the basic ed allocation uh that goes to a special ed student requires it to go to special ed. In a lot of ways, this is already happening. Um but currently there's the the least restrictive environment calculation for individual students. um OSPI thought that this was not the right way to go and so now it will require a straight 25% for all students as opposed to an individualized number based off of their least restrictive environment. Um there's there is you're going to hear concerns from some of your CFOs about this being a really negative situation. I think it's probably not a horrible situation, but it will actually provide legislators
030another method to actually say, "Look, you're getting enough money for special ed because of the requirement to shift these basic education allocations." So, that's where the bill sits. Again, it's uh in the House uh doing some technical changes. Uh should be out of the Senate and off to the governor's office in the next day or two. Um, second thing, um, MSOC, again, a little bit higher need, about $1.2 billion. Again, started out with the bill in the Senate at $300 million. And I didn't even include the House bill, which was really our preferred mechanism, would have provided about $900 million, pretty darn close to what we were asking for and what we needed. Um that bill though when it got to the House Appropriations Committee, they completely gutted it and take took it from about
031$900 million down to about $40 million. Uh as well as amending all of the good pieces as a part of the bill that we wanted. So I'm not including that. I just get bitter when I think about it. Um 5192 though again it got reduced a little bit about $190 million out of ways and means. Uh, and then we don't have an actual fiscal note when it came off the Senate floor and what the the House actually adopted it as, but as I mentioned before, as a part of the budget, it's about $90 million, we think. Um, but what we do know is it increases the per student allocation uh by $3527. You know, last year we were asking for about a $300 per student and we got $21. This year we're asking for about
032$450 per student and we got $35. So I'm thinking next year if we ask for like, you know, I don't know, $2 million per student, we may actually get it up to where we need. Um it's really frustrating. The legislature continues to to say that this is not important. Uh as you all well know, this is money that actually goes to actually operate the district. you know, we kind of talk about, you know, this is what the what we need to actually keep the lights on, keep the heat on, um, and all of the other programmatic issues. So, this is going to be an increase. It's just not nearly what we need. Uh, and so some districts it'll be okay. Other districts, it's not going to provide really any kind of solace. In terms of
033funding, uh I think you're all well aware that right now there's eight different categories for energy and utilities, insurance, for professional development, for libraries, and a few other things. What this bill does is take those eight ISO categories and merges them into one. So there's just going to be one lump sum uh funding for ISOC. For a K12 education, it increases to 1614. Um, again, an increase over the maintenance level. You can see the number in the parenthesis there. Uh, but again, not nearly what we wanted. Um, the 912 high school enhancement goes up to about $214. Again, the maintenance level about 210. Um, so you can see the increased allocation. the next two lines. One of the positive things out of this bill, we asked for a number of different things and one of
034the specific things we asked for was a specific inflationary factor. Right now in the current law, it requires IMOC to increase by inflation every year, but there's no definition of what inflation is. And so for the last seven or eight, nine years, the legislature has actually increased MSOC by whatever they determined was the right number. Um, last year 202425 would have up to 202526 there was or actually, excuse me, it was 2324 to 2425. Um, get my numbers all mixed up. It there was an increase of 2.1%. But in the final bill that was adopted, the supplemental budget, when they provided that that that increase of $21, they actually reduced the inflationary factor to 1.9%. So we got the increase of $21 that actually reduced by the inflationary factor that was just an arbitrary number.
0352.1 and 1.9 didn't uh align to the implicit price deflator. It didn't align to uh the consumer price index. It didn't align to anything other than what the legislature determined to do. So again, inflation now based off IPD. Uh we have a specific number the legislature is going to be required to increase and we'll know what that number is. We don't have to wait for the budget to come out. Reporting. Uh right now you report to your community. Uh this requires you to do an annual report of expenditures to OSPI. The original version of this bill would have actually required you to report using the eight current categories. The final language actually breaks it into 12 new categories. Um that gets into some gory details um as opposed to just a big oversight number. Um
036we don't think this is going to be a horrible burden. Uh but it's unfortunate that there is some additional work that needs to be done. There's also ISOC funding for career and technical education programs. Uh the House bill would have actually increased these numbers pretty dramatically. The Senate bill as it's adopted actually goes back to current law which determines these numbers as a part of the budget. So this is the actual chart showing the individual numbers for MSOC. And let's just walk left to right. The first column is 202425 your current allocation broken down by the individual categories about $1,500 per student. Uh the the high school enhancements about $200. You can see the Senate bill as it would adopted by the Senate uh would have increased a 1656 and again again there's there's no
037line item of funding because again they merge all those numbers together with a lump one lump sum. High school would have been about 225. The House when they actually adopted this bill, I don't even know why they adopted it because they stripped out all of the numbers and said we are going to actually use the maintenance level that's actually a part of the budget. So you can see those last two columns uh the the bill that was adopted by the house and the maintenance level as a part of the budget. They're exactly the same. There have been would have been a zero increase in investments for MSOC. uh it would have just straight been the maintenance level up to 1579. So the final bill again there's no line item categories because it's merged together and
038it goes down to about 1614 and a high school 2014. Um, so again, you can see the maintenance level. There's an increase of about $756 between the maintenance level and and the final. Uh, and then there's uh the $35 on top of that. I just do want to caution you. You're going to hear from legislators the talk about increasing uh MSOC by by 90 or $100. And technically that's true. But the vast majority of that increase again is a required maintenance level number. What they're providing in an additional investment is at $35. So when you hear the $100, remember that it's not really $100, it's actually 35. So just wanted to walk through just a couple of bills of interest uh and then open it up for whatever questions you might have. The first one
039is House Bill 2050. And again, I'm sure you've read about this in in session or heard about it on these calls. Um, but 2050 adjusts the school aortionment schedule. I'll talk about that in a moment. But it also reduced local effort assistance to districts that have quote unquote excessive you, that's a legislative term, uh, alternative learning experience programs. And it basically says if you have 33% uh enrollment for AL programs above your actual overall enrollment, then you get dinged your local effort assistance. Um and it's been confusing to figure out exactly what this means. So that last bullet point is really show shows you an example what's going to happen. If you have a 100 students and 50 of those students are enrolled in the AL or above that 33% threshold, your total enrollment is
040actually calculated using 83 students. Um so it's not necessarily just a reduction of 33%. It's actually calculated uh on a different number of students. Um so we're kind of frustrated about that. We fought hard against this. um have no love from the legislature on it. So, House Bill 2050, the major thing though is it it changes the aortionment. The current level you can see in that first column. Um and then this next column is what they're going to change the aortionment to in the next two school years. They actually reduced a portionment in February, March, and April. And then those reductions are actually added on to August. And legislators will talk about this as being a $400 million savings. It's just not true. The legislature saves no money by doing this. They still have that
041$400 million obligation. The only thing it does is take that $400 million obligation from the current bianium and pushes off to the second bianium. So they they get on on a piece of paper, they get to show that they save $400 million when they really didn't. they just pushed it off to a different year. The problem though is it will have a specific negative impact on school districts. Um especially if you don't have a high ending fund balance. Um you may not be able to meet payroll uh or other expenses when it comes out to July and August. The Senate doesn't have a bill, but they actually adopted this bill or in process of uh we've been working with OSPI to try and get some amendments that would actually allow them to provide the aortionment
042in July. Um not sure if that's going to happen. In fact, there's been uh not much receptivity to that. So, we're probably going to end up with this situation. So, one more thing that you're going to get dinged. The second bill I want to talk about is House Bill 2049. Uh this bill again was heard in ways and means yesterday. It's going to go through uh on Saturday and again we think that this kind of what the deal is. The original bill would have actually increased the state and local property tax the 1% threshold. Um as it came out of the House Finance Committee they amended that uh to 100% plus population change in inflation. Still an increase. Um, actually they also had a piece in there for special ed, the enrollment cap. They deleted
043those provisions, but they did that specifically because 5263 that we just talked about already eliminates the cap. There is also a companion bill 5812 that had a hearing but was never exeact. The major thing of this bill though is it actually deals with levies and local effort assistance. Um, this shows you how was amended coming out of the finance committee and there were no changes to the levy provisions, but the provisions uh are 2 $2.50 per thousand of assessed valuation increased by inflation. That's what the current maximum is. This bill actually provides what they're calling an inflation enhancement about $500 in 2026 and then for the next uh three years that's $3.3% added on to the inflation that's already currently there. The per pupil maximum at $2500 again increased by inflation or $3,000 for Seattle
044and other districts are above 40,000 students. Uh again that's increased by inflation as well. But beginning in 2031 the levy limit is $5,000.35 per pupil. And again that number is also in increased by inflation. So that number will continue to increase graphically. This kind of shows you what's happening. The blue line uh is the increase in the maximum per pupil calculation for districts under 40,000 students. The orange line is then the line for those districts above 40,000 students. And if you kind of walk through, you can see there is an increase just strictly based off of inflation. And then at 2025, it takes a big jump. That's when this bill is actually implemented. And you can see the the large ramp up. One of the positive things the whole glass half full thing is that
045once it turns to 2031, Seattle is not going to have a different inflationary rate than anybody else. It's going to actually be merged for all districts at that point. The other piece is local effort assistance. There was an increase uh via an inflation enhancement. Again, as it came out of the finance committee, they actually made some reductions to that, which was unfortunate. Uh, but we just kind of said, "Okay, fair enough. Let's keep moving on." But then once it got to the floor and it was actually adopted a couple of days ago, um, the property tax revenue growth provisions are completely deleted. The governor's actually come forward and said, "I don't like the increase in the property tax." So, there are three different bills that would have done this. All three bills have actually had
046those provisions deleted. The LEA inflation enhancements that I just showed you in the previous page, those are all deleted, taken completely out. Uh and in the LEA inflationary factor, currently a CPI and they change at the IPD. Uh and then there's also a requirement for a K12 funding equity work group. Uh it changes the language uh requiring the work group to deal with uh those districts that have economic disparities which by the way is why we are asking for LEA. Um so this bill is really frustrating now that it has no provisions for LEA. The entire session we've been assuming there's going to be an increase in the levy lid. But what we said very clearly is if you increase the levy lid, you have to provide a commensurate increase in local effort assistance. Multiple
047bills throughout the process continue to have that linkage and then they broke it last weekend. Um what we've been told is that there is going to be an increase in local effort assistance as a part of the budget. Number one, we don't know what that level is going to be. So, it's concerning that it may not be enough. And number two, the bigger concern is the fact that if it's in the budget, it only rides for two years. The 2-year budget actually expires July 1st or excuse me, June 30th of 2027. So, if this bill actually goes through as it is, it's only dealt with in the budget. We're going to have to fight this fight again. Uh really, really frustrating. And then the last bill I want to mention 5798. Uh again the property
048tax u provisions were deleted as a part of the mccclary solution in 2017. They actually broke apart the state levy and part one and part two. This bill actually consolidates those two parts. But the real issue I want to make sure you're aware of is it requires all county assessors to specifically identify that the state property tax is the quote unquote state school levy. There are some county assessors that that actually do this already. Uh but this would require all 39 county assessors to put this on their tax statements which is going to be really difficult. You get your tax statement. and it says state school levy and then you get your ballot talking about a school levy. Well, voters are going to be confused about, well, wait a minute. I just got my assessment.
049You're actually increasing my taxes. Why would I actually support schools? So, we're really frustrated. The legislature felt it was necessary to do this, but they did it. Um, we're going to have to deal with it. So, I went longer than I was planning on, but uh that's what I've got. Um, take any questions you might have. Thanks so much, Dan. Um, appreciate that thorough uh explanation. And we did have just one question. Uh, does the Senate budget include 800 million transferred out of the general fund over to the transportation budget, thus prioritizing transportation over education? Yeah, I'm honestly I'm not sure what the number is now. Senate Bill 5802 actually had a provision to to move I think it was.3% of the state sales tax from the general fund over to transportation. As the bill
050was moving forward they actually reduced that to.1% and that's where the $800 million number came from. I honestly don't know. They just moved the the bill out of the appropriations committee, I think it was. I'd have to go look, but but they just moved it out of the house yesterday. And I'm not sure what that bill says yet, but but very clear it is concerning that they want to take the sales tax money that goes to the general fund, which we get our money from, and they want to shift it to transportation. Um, I will tell you, I wouldn't be surprised if that actually is going to happen. There's also some money from the operating budget, the general fund going to capital construction as well. Um, it sets a horrible precedent. Uh, but they have
051done it before, so they're just going to continue. So, who's on the conference committee? Well, let me just tell you there's not a conference committee, first of all. Second of all, the the Senate has actually appointed uh June Robinson, uh Derek Stanford, and uh Gilden as the two Democrats and the one Republican. The conference committee request from the Senate has not yet been uh responded to by the House. Um, I'm guessing uh tomorrow or Saturday before they release the budget, they will actually form that conference committee with the House members. But they're not meeting as a conference committee because you have to understand the conference committee is a part of the Senate and House joint rules requires all conference committees to be open to the public and on TVW. And the budget negotiators do not
052want to do air their dirty laundry and do their horse trading in public. So they are meeting behind the scenes, just Democrats, House and the Senate, and once they come to a deal, they will actually form the conference committee and then say, "Here's the conference report." Um I I I don't know how else to say it other than it's a sham. It's just a show to follow the rules. Uh, and they'll they're certainly following this the the in bottom line black and white rule, but they're not following the spirit of the rule, which is to have open dialogue. Um, they just aren't doing that. Uh, did the scap square foot number change? It did not. We weren't anticipating it would. There is no specific request for it. Um, it didn't happen. And and so I
053didn't answer the second part of the conference committee question. says, "Uh, is are there different people for different bills?" Yes. When they form a conference committee, they actually form uh three senators, two two Democrats, one Republican. On the House side, two Democrats, one Republican, and technically they are supposed to meet together, have conversations. I will give you an example similar to the operating budget. Uh today uh as I mentioned Senate Bill 5041, the striking workers uh unemployment for striking workers, they held that conference committee today and the Republicans on the committee said, you know, I'm really disappointed we didn't get an opportunity to actually engage with you on this bill, but now we're having this conference committee. And so they actually met behind the scenes uh for those six members that were different than the
054conference committee for the budget and others. Um, and they did the same kind of thing they're doing for the the budget. They they really held the show. Um, and it and there is a way for the public to find out when they actually appoint conference committees. Uh, if you actually go to a particular bill, the last thing it will say is that one of the houses actually requests a conference committee and our conference appointments are. So if you go to for example 5041 or 5167 which is the budget the last line will say um Senate has asked for a conference committee and it'll list out those members. Uh do I anticipate another education funding court case? Well I got to tell you this has been kind of a conversation behind the scenes for the last
055two years or so. Um, this year it kind of ramped up and I would have said I'm not sure what's going to happen, but in the last 3 weeks the conversation has uh jumped up tremendously and there are a handful of districts that are basically saying enough is enough. We got to pull the trigger and do this. The other thing that's really important to know is that it costs a ton of dough. And so who's who's going to actually front this thing? Well, in the last week or so, we have heard that the WA, if there's a lawsuit, may actually come forward and be willing to to fund it. The McLaren lawsuit, uh, about 95% of the costs were covered by WA. So, in order to go forward, we need to do this. So, I
056also have to tell you there are some negatives. Um, first off, it's it's uh be careful what you ask for. the McCclary lawsuit didn't do what it needed to do and you it actually made some things actually worse. Um so what are we going to get out of another lawsuit? The other thing is timing. Network for Excellence in Washington Schools that fronted the lawsuit actually formed in 2005 and they met for a couple of years and said what are we going to do in 2007? They flipped the switch and said we're going to actually sue. They filed the case in 2007. It was heard in 2009 in the Superior Court. Decision came out in 2010 from the Superior Court. 2012 it went to the Supreme Court and that's when the McCclary decision came forward. And
057then there wasn't the McCclary solution again quotes around that until 2017. They did a mccclary fix in 2018. So, you look at the 10-year period of time that it actually will take to start to finish. Um, most of your kids are going to be all the way through the system and they're never going to see the benefits. Um, so not to say that we shouldn't sue. Um, in fact, some people are saying the only thing that's going to get the legislature to move is a lawsuit. Um, so be be watchful in the next month or so. Um, there's going to be serious conversations about whether or not we want to do this or not. And I've heard uh the the early conversation around that was for special education, but emerging has been on unfunded mandates,
058correct? Yeah. Um that fields all the questions that were in the Q&A. Uh I imagine many folks are just dumbfounded like we are about how on earth uh did we get here? Um there uh and um uh how do we reinspire ourselves to keep fighting in the interim? Um it it's it's weird to even start thinking about the 2026 legislative session, but it's not unusual for us to start doing that. Um any any reflections about where we go from here and um absent a a legal battle, where do we put our energy in the interim? Yeah. So, I appreciate you asking that because I was going to mention I just forgot, but uh WASA who kind of kind of led the charge in the big three this year. Um we have already started with our
059legislation and finance committee. We're going to actually on Monday adopt a draft platform and then we're going to move it forward in a couple of weeks to the board. Um and we've decided that big three didn't get dealt with and we're going to stay stay with that. We also have some long-term issues on the agenda, but but we're going to focus in our energies again on the big three and we hope that WASDA will join with us again. Uh we actually had including uh WASA there were 11 different organizations that came forward and somewhere on their legislative platform they included the big three. Um I I know for example you know WASDA I think you had three or four or five priorities but one of them was big three principles had three priorities um one
060of them was big three and so doesn't have to be your your sole focus like WASA but we hopefully will have you um join with us. Yeah. And on that, just to sort of name the elephant in the room, right? In case folks don't know, uh Dan Steele is retiring from his long and exhausting tenure as an education advocate uh effective June 30th. And uh my last day with WASDA will be at the end of May. And I will uh work to try to fill the shoes of uh Mr. Steel over there at WASA. And then you all also may know that Logan Noel Endrris will be returning to Wazda to step into my role. So quite a bit of a dance. Dan used to be where I'm sitting now. Now I'm moving over there
061and Logan's coming back. And uh I don't know why we have this cycle of insanity where we keep doing this work. Um but I think it has something to do uh with the uh well-being of students and their potential for success. and our our continued hope to help them get there. So, I just want to close by um thanking you, Dan, for all of your tireless work uh in this field. Uh we are all as advocates trying to keep Dan in the fray somehow. Uh so, I never know how he um might show up on future webinars or reports um because his knowledge is unprecedented within our education advocate space. And so, um, we we have needed you and will continue to need you and we will all keep fighting the good fight and are
062so grateful for everything you've done for us. Dan, appreciate the thoughts and the partnership. It's it's been good. Uh, this is our last in session of the 2025 legislative session. You'll be hearing from Dan and WASA and Marissa, uh, myself and Leavonne, from WADA and many other education partners about what happened and then what we do together next. uh we can't give up because our students are relying on us.