Education roundup

The AP reports that some are now estimating that the cost of complying with the McCleary decision on education funding could be in the ballpark of $6 billion. That number includes not only K-3 class size reduction, full day kindergarten, and materials, supplies and operating costs, but also takes into account that

. . . the 2012 court ruling also called on the state to quit relying on local school levies to fill holes in the state budget.

The Washington Education Association estimated that statewide districts spent $1.6 billion in levy dollars during the 2013-14 school year on the salaries of teachers and other school employees.

Data provided by the staff of Rep. Ross Hunter, D-Medina, chairman of the House Appropriations Committee, show local levies contributed an average of $60,000 per administrative salary and an average $10,000 per teacher and para-educator salary during the previous school year.

Under the high court ruling, it could be construed as a violation of the state Constitution to continue to pay those salaries out of local levy dollars instead of with money from the state budget.

“You can fix almost all of this by screwing around with property taxes,” Hunter explained.

As Kriss mentioned in the latest episode of our In Focus podcast, state Rep. Reuven Carlyle has a modest proposal to reconsider the state’s paramount duty:

In our state, the romantic image of strong funding from the state government has not been realized. Political impasse over generations has created a system with unconstitutional funding structures, relatively poor student outcomes and great inequality.

A case can be made that Washington’s top-down approach disconnects schools from their natural, strongest base of support—local families and communities.

He compares Washington’s method of funding K-12 with that of some of our global challenge states. We did the same in a report a few years ago: Comparative Analysis of School Funding. Carlyle also writes,

Today, early learning and higher education are more than ancillary, they are core to our desire to educate the whole child and whole person. We cannot have a system where “the paramount duty” is only K-12 and leave the other aspects of education as second class citizens. It doesn’t work for kids, parents, business or an educated civic society.

Speaking of higher education, Steve Mullin of the Washington Roundtable has a good op-ed on the topic:

Fortunately, in the last few years the Legislature has begun to address this problem by increasing higher education funding, especially in high-demand programs, and helping the institutions avoid additional tuition increases.

The next big challenge comes this legislative session.

The Washington Supreme Court’s 2012 McCleary decision requires the legislature to significantly increase its investment in K-12. It will squeeze the state general fund. And, in a difficult budget environment, higher education – which doesn’t have the same constitutional or legal protections as other spending categories – could end up on the chopping block.

(See also our recent brief on higher education.)

Latest In Focus episode

 

Above is the latest episode of our In Focus podcast. Lew and Kriss talk about:

President drops 529 tax proposal; GET program dodges a bullet

This week President Obama decided to drop his State of the Union proposal to tax earnings from 529 plans. These plans are a tax advantaged way to save for college — distributions from the accounts are not taxed when used for educational purposes. (Washington’s GET program is one of them; we wrote about the program as part of our policy brief on the higher education system earlier this week.) The administration had proposed the tax change in order to help pay for its “free” community college proposal.

According to Forbes,

When 529 plans were created in 1996, earnings were tax deferred–taxed to the beneficiary at their tax rate at the time of distribution. In 2001, Congress instituted the current tax advantages and made them “permanent” in the Pension Protection Act of 2006. Savings in 529 plans spiked after those two tax events, says [Betty] Lochner.

529 expert Joseph Hurley says the proposed tax would cause 529 contributions to “dry up.” Yet he notes that in the meantime the proposal could cause another spike in contributions, as parents and grandparent rush to increase their 529 college savings and receive grandfathered tax-free status.

The Seattle Times reported on the potential impact to the GET program:

A proposal by the Obama administration to eliminate the tax benefits of college savings accounts would be “devastating” for Washington’s program, called Guaranteed Education Tuition (GET) as well as those run by other states, the GET program’s director said.

“We want to encourage families to save more for college, not less,” said Betty Lochner. Along with running GET, Lochner is also chair of a national College Savings Plans Network, an industry group. . . .

It’s unclear how a change in the tax law might affect GET’s financial solvency. At one point in 2012, GET’s unfunded liability — the gap between the value of all units sold and the market value of all its assets — was $631 million. GET was underfunded in large part because the state raised state tuition much faster than the fund’s managers had predicted, even as the stock market plunged during the recession. It has since recovered and is now fully funded, with its assets valued at about $2.93 billion.

GET’s solvency depends on three factors, Lochner said: a predictable increase in tuition, solid investment returns and ongoing purchases by investors. Lochner said she didn’t know how the loss of tax-exempt status might affect the fund, “but I do think it messes with that third assumption” — purchaser behavior.

(Emphasis mine.)

The GET program began in fiscal year 1998. As shown in the charts below, new enrollments and total contributions increased dramatically in FY 2001 (July 1, 2000 to June 30, 2001). The 529 plan tax changes were first enacted in June 2001 and became effective in January 2002, so they don’t account for what’s going on here — except that they probably increased people’s interest in and knowledge of the program and could conceivably have led to some new activity before the end of that June. A 2002 Seattle Times article noted that enrollments had increased due to “a sour stock market combined with the tax-law changes and increased exposure through television ads.”

GET’s enrollments and contributions have been declining; it’s easy to imagine that trend continuing in spades if changes to the tax status of 529 plans were changed.

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New brief: Higher Education Policy and the State Budget

We have a new policy brief today on Washington’s higher education system.

Reframing the education funding debate: Time to move the goalposts?

Give former state Sen. Jim Kastama credit for his op-ed in today’s Seattle Times. Kastama says what few others have said publicly. He takes a look at the legislative history of ESHB 2261, the legislation setting school funding goals that have become the state Supreme Court’s standard for full funding of basic education in the McCleary decision. And he concludes the legislation is not affordable.

The linchpin for the court’s mandate came in 2009, when ESHB 2261 set out to redefine our state’s definition of basic education. The bill was first introduced as a three-page document, but soon ballooned to more than 60 pages, increasingly becoming more prescriptive.

For example, amendments expanded the number of credits necessary to graduate by 20 percent, mandated all-day kindergarten, and increased instructional time from 1,000 to 1,080 hours a year. Even a more prescriptive model for funding schools was adopted.

He notes that lawmakers were assured that the legislation was a goal, not a mandate binding on future legislatures. That is, until the Court set them in place. Mistakenly, he asserts as he urges lawmakers to do what lawmakers can do, amend legislation.

…modifying ESHB 2261 should be an option on the table — keeping those parts that are worthy, while jettisoning those that are not worthy or not cost-effective.

It is predictable that the Supreme Court will take a dim view of this approach. The justices will no doubt see it as a reversal on the state’s promise to adequately fund education. In doing so, however, I would caution them in their zeal to control the legislative process.

Well, the court has shown itself willing to intervene, taking the unprecedented step of holding the Legislature in contempt.

We’ve pointed out before that McCleary is far from the only budget challenge facing legislators. And that was before the class size reduction initiative 1351 passed. House Ways and Means Chair Ross Hunter talks about the 2015-17 budget posing a high degree of difficulty. Others may agree, but see no room for compromise on either McCleary or class size reduction.

It’s early yet, but it’s just possible Kastama’s suggestion will gain currency over time. What do you think?

Seattle Times on education, transportation, and Inslee’s budget proposal

Education and transportation look to be main areas of work for the Legislature in the upcoming session. Over the weekend, the Seattle Times had a few interesting items on these topics, in light of Gov. Inslee’s 2015-17 budget proposal.

First, regarding the governor’s transportation plan, the paper points to a letter from state Treasurer Jim McIntire (written before the governor released his plan) that outlines some principles for transportation funding projects. They include:

  • “No more than 50 percent of MVFT revenues should be pledged to bond finance.”
  • “Maintenance and preservation activities should receive first priority for new funds not obligated to bond finance projects. Credit markets do pay attention to how we maintain existing assets.”
  • “Maximize the use of tolls and other user fees. At a minimum, the Legislature should adopt legislation as soon as possible to toll the I-90 bridge to pay for $1.1 billion of the $1.4 billion cost of the west side of the 520 Corridor Project.”
  • “Any new revenue source should be 18th amendment protected so that it can backstop new MVFT-bonds over time and help finance new projects as MVFT revenues decline.”

The Times article notes that

As of 2016, a full 70 percent of the state’s gas-tax proceeds, or close to $700 million yearly, will be paying off Washington State Department of Transportation’s current projects. Various proposals in Olympia this year have suggested using 80, 90, even 100 percent of the gas tax to finance more construction bonds.

Additionally,

McIntire said gas taxes have become so unreliable that they’re hard to forecast for more than two quarters into the future — so there had better be a big cushion in a 25-year bond term.

The second notable item is an editorial: “Inslee’s budget goals are good; approach is risky.” While saying Inslee “shows leadership in not fully funding Initiative 1351,” the editorial board writes that

Inslee’s budget proposal also does not remedy the Supreme Court’s fundamental objection in the McCleary ruling: The state is off-loading its paramount duty to basic education onto local school levies. . . .

New education investments — from birth to post-doctorate level — also must come with strings requiring better outcomes for students. There is not enough of that in Inslee’s budget.

And, on the governor’s cap-and-trade proposal:

But linking revenue from a new cap-and-trade regime to education funding is risky. If it falls apart, or is delayed, education investments would be threatened.

It is also unclear what impact his cap-and-trade plan would have on a still-recovering state economy, one that is humming for citizens who live and work within sight of the Space Needle, but sputtering elsewhere.

Governor proposes $2.3 billion education package, doesn’t fund I-1351 class size reduction

Gov. Jay Inslee launched his extended budget rollout by focusing on education. This is, of course, the fun part of the rollout, talking about what the new spending will buy before having to get to the grit of new taxes. It’s, well, let’s just use the governor’s own characterization,

Inslee proposes boldest new efforts in improving full continuum of education in 2 decades

It is ambitious, going beyond what’s required by McCleary but stopping short of I-1351.

Inslee’s $2.3 billion education package would include the largest-ever state investment in early learning and results in the largest increases in basic education funding in nearly a quarter century. As recently as 2007, public schools accounted for less than 39 percent of Near General Fund spending. Under Inslee’s proposal, public schools’ share of state spending increases to 47 percent.

The two-page summary of the proposal outlines his plans for expanded early learning, accelerating full funding of HB 2776 (the metric by which the state Supreme Court assesses McCleary compliance), funding the I-732 COLAs for teachers, freezing resident undergraduate tuition and boosting postsecondary STEM programs. The governor’s office also provides more context in a six-page overview of the education proposal.

There are few surprises and much to like in the proposal. And as the Associated Press reports, some stuff not everyone likes.

Republican lawmakers are not happy with what they have heard so far of the governor’s education plans.

They want to see the governor’s plan for answering the Supreme Court’s criticism of the state’s overreliance on local levy dollars to pay for education. They think the governor is not showing leadership on what to do with the class size Initiative 1351, a measure that at least a few lawmakers in that caucus say they support suspending for the next budget cycle. And they don’t think new revenue sources are needed for education.

The 1351 omission did not go unnoticed by proponents, as the Seattle Times reports.

Teachers-union leaders were dismayed that Inslee does not want to fund Initiative 1351, which passed in November and requires lawmakers to pay for an estimated 25,000 new employees to work in K-12 public schools across the state, in part to reduce class sizes.

In Inslee’s proposal, there is no money to lower the number of students per class from fourth grade through high school.

The governor, who did not vote for I-1351, says he does not support repealing it.

Inslee said he would continue to work on lowering class sizes — something mandated in Initiative 1351, the measure approved by voters in November. However, he did not say when that might happen.

“I do not support repealing it,” he said, referring to 1351.

Republicans point out that if you can’t afford it, you have to change it. KPLU reports:

But while Sen. Bruce Dammeier, R-Puyallup, praised the Inslee administration’s call to extend a freeze on university tuition rates, he also called for the governor to take a clearer stand on I-1351. It takes two-thirds of House and Senate members to suspend, modify or repeal a voter-approved initiative, and Dammeier said the governor’s leadership is needed to shape the debate in the legislature.

“You either have to fund it or suspend it,” Dammeier said of I-1351, “and we have to understand what [the governor] thinks. It doesn’t appear to me that he’s funding it.”

Senate Republicans speaking to reporters Monday said their caucus would advocate suspending the initiative.

And then there’s the matter of money.

Some Republicans took issue with the governor’s proposal to raise taxes to fund education, or through a climate initiative that he is scheduled to unveil Wednesday.

“Making it contingent upon a tax increase at all, be it a carbon-tax increase or any other tax increase, is fundamentally flawed,” said Sen. Bruce Dammeier, R-Puyallup, one of the spokesmen for the Senate’s Republican caucus.

Much more to come. It’s going to be a long, bumpy road.

State budget must invest wisely in education: Yes to STEM, No to I-1351 Class Size Measure

This week Gov. Jay Inslee rolls out his 2015-2017 budget proposals. Education funding will take center stage, driven by the state Supreme Court’s McCleary mandate and voter-approved (narrowly) class size reduction Initiative 1351. While I-1351, which adds $4.7 billion in new spending over the next four years, is clearly unaffordable, lawmakers are expected to add $1.0 billion to $1.5 billion for McCleary. K-12 education funding will be increased substantially.

More than dollars are at stake. It’s important that the money be spent wisely. The Boston Consulting Group recently released Opportunity for All: Investing in Washington’s STEM Education Pipeline. The summary:

Creating more STEM jobs would not only boost Washington’s economy, it would also reduce poverty and unemployment, help all Washington families prosper, and create a better-prepared workforce. If Washington can match the practices of high-performing states, such as California and Massachusetts, it could double or triple the number of STEM jobs in the state as well as expand the participation of women and underrepresented minorities in the STEM workforce.

Right now, Washington State can fix the leaks in its STEM employee pipeline and be rewarded with an economic return equal to seven times its investment. The move could generate $4.5 billion in additional tax revenues and social-spending savings per year—a significant return on the $650 million investment needed. Even better, Washingtonians could take home $12.6 billion in additional salaries. What’s more, the state could lift nearly 100,000 people out of poverty and into the middle class.

The Everett Herald lends editorial support, making the important point.

Under current trends, only 9 of 100 children born in the state will end up in STEM-related jobs in the state, jobs that BCG estimates number around 25,000 now and which could double by 2017.

Jobs not won by state residents are instead filled by out-of-state workers, or — worse yet — the jobs themselves could be sent out of state.

The Business Climate blog also takes notice.

The stakes are considerable. The Center on Education and the Workforce at Georgetown University showed 15 states and the District of Columbia have STEM jobs that account for at least 5 percent of their total jobs. At 8 percent, Washington state lags only Washington D.C. and West Virginia in the share of total jobs that are STEM jobs. But as a new Boston Consulting Group study found, the state faces a serious challenge in producing enough STEM graduates to address its job skills shortage, and if not addressed, that the gap will impact lower-income students even harder and impede the state’s ability to create new jobs and reduce poverty.

Contrasting with the documented positive return on STEM investment is I-1351’s sweeping class size reduction mandate. FiveThirtyEight has an excellent analysis of the measure. I encourage you to read the whole thing. The analysis suggests the class size problem here has been overstated.

it’s not clear whether Washington’s class-size problem is as dire as I-1351’s supporters claim. “Even if we slash class sizes across the board, someone has to be 47th in the country,” said Dan Goldhaber, the director of the Center for Education Data and Research at the University of Washington Bothell. “The question we should be asking is, what is the difference between Washington and the state with the smallest class size? And when you look at the data, Washington’s not hugely different.” Washington’s average class size for elementary schools is 23 students — slightly higher than the national average of 21 students.

Money matters.

“I think class-size reduction is a smart and sound policy in lots of cases,” said Diane Whitmore Schanzenbach, an associate professor of human development and social policy at Northwestern University. “But as an economist, I have to think about what would be the best use of the next dollar spent, and for an across-the-board reduction of this magnitude, the evidence just isn’t there.”

FiveThirtyEight writer Amelia Thomson-DeVeaux makes a critical point.

… practically speaking, the state government has only so much money to spend. I-1351’s biggest flaw might be its failure to acknowledge this reality.

The Seattle Times reaches the conclusion lawmakers must soon reach themselves.

Lawmakers should suspend I-1351, and focus education investments that reverse disappointing student outcomes.

The sooner 1351 comes off the table, the sooner the Legislature can shift its focus to more important priorities.

Battle over education waivers continues here; Oklahoma waiver reinstated. Higher education fighting back.

The Associated Press reports that the coming legislative session will likely feature a continuation of the No Child Left Behind battles that cost districts control of some $38 million in federal funding. Here’s the crux:

At issue during the 2014 legislative session was whether to require that student scores on statewide tests be used as one of many factors to evaluate teachers and principals.

State law already says that student test data must be used as part of teacher and principal evaluations, but school districts can choose which tests they will use: school-based, classroom-based, district-based or statewide.

After the Legislature failed to make using state tests mandatory, U.S. Secretary of Education Arne Duncan pulled Washington’s waiver.

The Washington Education Association (WEA) continues to oppose tying teacher and principal evaluations to state standardized test scores.
Meanwhile, Oklahoma, the only other state to lose its waiver, recently celebrated reinstatement.

The U.S. Department of Education on Monday reinstated Oklahoma’s No Child Left Behind flexibility waiver for the remainder of the 2014-15 school year, a move that frees school districts from significant spending restrictions.

The federal government pulled the waiver in August after the state Legislature repealed Common Core academic standards for English and math. Without the waiver, schools across the state stood to lose control of how to spend up to $30 million in federal aid.

State schools Superintendent Janet Barresi expressed her gratitude to the federal agency during a news conference Monday at Education Department headquarters at the state Capitol complex.

The WEA-backed class size reduction initiative, I-1351) will also be the subject of controversy in the next legislative session. We’ve written about it before. Recently The News Tribune added its editorial voice to criticism of the measure, calling it a “smart bomb aimed squarely at Washington higher education and social welfare systems.”

Unless the Legislature musters the gumption to override the initiative, Washington’s colleges, early learning programs, child protective agencies, and other essential welfare and education services will be lucky to wind up with table scraps — assuming they don’t have previous servings scooped off their plates.

Anticipating the challenge, Stan Barer and Hugh Spitzer write in an op-ed for the Seattle Times that higher education does enjoy constitutional protection.

Many assume that the state’s constitutional funding obligation is solely to K-12 education. But that assumption is wrong. A careful review of two intertwined state constitutional provisions, Articles 9 and 13, reveals that the state has a companion financial obligation to its universities. What this means, from a practical standpoint, is that the Legislature cannot lawfully throw our public universities under the bus in meeting its duty to finance K-12 education.

Read the whole thing. The writers appear to be setting the stage for possible lawsuit. Consider the last graf.

The Washington Supreme Court is fully engaged in pushing legislators to honor the state’s obligation to amply fund K-12. But if the Legislature robs the universities in its quest to pay for pre-college programs, the court might, in an appropriate case, use the “foster and support” standard to define a minimum level of constitutional support for higher education and other Article 13 institutions. A continuation of the recent trend of legislative cuts to higher education might invite such a case.

Not too subtle, that.

Making the most of education investment: maintain standards, target early learning, scrap 1351

The headline summarizes some recent editorial observations. And nicely comports with budget realities.

The News Tribune takes a strong editorial stand in support of academic accountability.

At a time when the world is demanding more of high school graduates, Washington’s public schools shouldn’t be demanding less.

Washington and many other states are phasing in the rigorous learning goals of Common Core along with tests to determine whether students are meeting those goals. This will raise the bar for high school graduation.

The editorial disagrees with Superintendent of Public Instruction Randy Dorn call to back away from high school graduation exams (paywall). The key point:

But the idea isn’t to torture or shame students – it’s to prepare them to succeed in a world that imposes its own high stakes tests and tends to be cruel to adults who couldn’t be bothered to do their schoolwork. Insisting that kids meet serious standards can look brutal at times, but it’s tough love. The real brutality is to leave the bar too low – to give students the illusion that they are preparing for trades or college without requiring them to master the necessary skills.

While reasonable arguments can be had over the effectiveness of No Child Left Behind or the Common Core standards, the solution clearly does not lie in a reduction of demands placed upon students. Those students will face high-stakes tests throughout their lives, be it in college or at a job interview or in a challenging part of their chosen profession, and it is the school system’s obligation to prepare them for such tests. Accepting mediocrity guarantees mediocrity, and Dorn’s proposal is an example of the educational system lowering its standards for misguided reasons.
In addition to staying the course with respect to academic standards, it’s important to make sure money is spent wisely. The Everett Herald editorial board believes that includes investing in early learning. Few would disagree with providing pre-K support to children most at risk of entering the public schools unprepared for classroom success.
Tight money requires lawmakers to set priorities. Which has led to more calls to suspend Initiative 1351.
The Seattle Times notes the negative effects of the initiative on homeless students. And the Everett Herald lists other pressures on the budget, include early learning programs and higher education, concluding,
It’s likely that many voted for Initiative 1351 thinking, as the state Supreme Court did, that they could show their own contempt for a legislative body that has dragged its feet in meeting its obligations to fully fund education. But we don’t believe they wanted their vote to complicate that process and possibly jeopardize other important work and needs in the state.


With that message sent and — we hope — taken to heart, the initiative should be suspended.

It may take a while, but it will be done.