On April 4, 2011, Ross Hunter, Chair of the State House Ways and Means Committee announced a proposed budget for the next two years. This analysis will explain why this budget, if enacted would result in the greatest cut in school funding in State history. But this is not apparent from merely reading the House budget. Instead, it requires closely examining the assumptions underlying that budget.
First is a look at Ross’s revenue assumptions. Even though State Revenue for the past two years has been only $14 Billion for fiscal 2009 and $14.5 billion assumed for fiscal 2010 (with 4 months of guess work left to go). (March will be announced on April 10th, April revenue on May 10 and May revenue on June 10. June will be guessed in the middle of the month, Ross claims that revenue will skyrocket to an average of $16.5 billion in the next two years.
Ross admitted that the revenue picture has declined by about $1.2 billion in the past 12 months – a rate of $100 million per month). He had lots of excuses for this – but the reality is he predicted a 16% rate of growth a year ago and actual growth was less than 3%. Even though actual revenue has averaged about $100 million less than projected revenue, Ross asks us to believe that revenue will pick up substantially for the rest of this year and for the next two years.
Ross produced a budget for the rest of this year which cut $253 million from the June payment to schools. But that assumes no more budget shortfalls for the next four months. On April 10th, the next revenue will report will deep six that assumption and by May 10th it will be obvious that Ross is really going to cut the entire $420 million in June Basic Education funding. By June 10th, I am predicting our State will be facing a financial meltdown. Instead of the 14.5 Billion Ross is claiming for the current fiscal year, I predict it will only be about $14.2 Billion - $300 million less than Ross predicts – all of which will be taken out of the hides of our children and leading to the firing of about 5000 teachers this summer.
Fiscal 2011 is claimed to be $16 billion and fiscal 2012 is claimed to be $17 billion – for total revenue of $33 billion and total spending of $32.5 billion leaving a half billion cushion.
That is a 1.5 Billion increase in revenue in FY 2011 – or nearly 10%. If instead, revenue only grows by 3% (or $0.5 billion) to $15 billion in FY 2011, then we will lose another $1 billion in FY 2011 and another $1 billion in FY 2012 (or about $100 million per month just like we have been losing for the past year) . This means another $2 billion in cuts coming in the next two years – meaning school funding is going to be much less than claimed in the budget Ross Hunter released on April 4, 2011.
The next question is much less than what. Shockingly, I read the entire report and no where did Ross actually say in the summary what they will be spending on schools in the next biennium. He only talked about how much more would be cut. Not how much would be left. For this, I had to review the Budget Details – which is a mere 226 pages long. There is a saying that the Devil is in the Details. Well it certainly was in this case. Total State spending will be $32.5 billion with $14.2 billion going to schools. Adding in $2.2 in federal spending brings the total to $16.4 billion – which is $8.2 billion per year. Sadly, this assumes $2 billion more than we will actually have. Therefore actual school funding will be one to two billion less than this – a record cut in school funding. As a percent of income, our State is already 49th in the nation in school funding. With this budget, the percent of income spend on education will fall even further.
The 2011-2013 House proposed budget for the next biennium was released today and is available here:
Click on the House Operating Budget to reach this screen:
Then click on the Budget Summary: It is a PDF and takes a while to load.
Democrats, who control the House, propose a $32.4 billion budget for 2011-13.
This is from the power point presentation available here:
What the above and the following fail to point out is that the State only took in a little over $28 billion in revenue in the past 2 years. The State made one-time raids on other State accounts to come up with $2 billion and got $2.3 billion in a one time grant from the federal government. So to spend $32.4 billion, revenue will have to rise by $4 billion (15%) in the next two years.
The following is a remarkable statement. It is admitting the legislature is not meeting its constitutional obligation to fund public schools:
Note that McLeary is the 2010 Court Ruling that our Legislature was not even coming close to meeting their Constitutional obligation to fully fund our public schools. But instead of increasing funding for schools at least up to the national average, Ross’s inaccurate budget will lead to billions in additional cuts to public schools.
The rest is from the summary PDF
The above is on Page 16 of the Summary
Here is the breakdown on school funding for the next biennium:
The General Apportionment for Basic Education (the part that is not supposed to be cut, but is being cut in June anyway) is $11 billion. Another $2 billion for transportation and special ed (also considered Basic Ed) brings it up to $13 billion. Including $1 billion in federal money for Basic Ed brings it up to $14 billion. There is about $2 billion in non-basic ed and all of this will go when the truth comes out about the next revenue shortfall.
On page 153, Ross gets into a discussion of the General apportionment for the next two years.
But on Page 152, Ross explains what will really happen:
Note that the June 2011 repayment is counted as a credit towards education funding in the next biennium. This table makes it appear that school funding will rise by $62 million in the next biennium. But it only rises if you add in the $253 million. Without this, it drops by 200 million. So the reality is that once you take into account future further budget cuts, the June Payment is simply gone. Schools will never get it back. On page 202, the reconciliation of the current budget admits that the actual cut for the June payment will be almost $264 million.
In June, school funding for the current biennium will be cut by $420 million – not one dime will come in. This summer, 5,000 teachers will be fired – about one in ten teachers.
For the next two years, an additional couple billion will be cut from school funding – above and beyond the current cuts – leading to another 5000 to 10000 teachers losing their jobs.
There is a better alternative. All we need to do is suspend tax exemptions for any corporation making more than one billion in profit per year. This would generate about $4 billion which would allow us to not only save the jobs of thousands of teachers, but actually hire back teachers and restore school funding in our State to the national average. For more information on this option, see our website: realwashingtonstatebudget.info.
Regards, David Spring M.Ed.
Director, Fair School Funding Coalition.org
April 4, 2011