2017 K-12 Education Funding Changes

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The education funding plan agreed to in June 2017 will make significant state investments over the next four years. The majority of these will be directed to increasing K-12 staff salary with additional investments directed to categorical programs and Career & Technical Education. The levy system was redesigned, including new formulas that guide Local Effort Assistance. The legislature made several changes to how money is directed to districts and how districts report to the state how they spend money.

Projected State & Expected Local Levy Funding, School Year (Billions)

**Source: OSPI Multi-Year Budget Comparison Tool. The chart shows the net increase in education funding over the next four-years including maintenance level increases, enrollment changes, and policy enhancements. Local funding amounts assume passage of local levies not currently in place, per OSPI.

2017 State Education Enhancements from Policy Changes, by Fiscal Year

* Source: 2017-19 Budget Summary. Amounts indicate how much money will be invested each fiscal year above what was provided in fiscal year 2017. Gap Closing includes funding enhancements for Learning Assistance Program, Transitional Bilingual Instructional Program, and Special Education.

Implementation Timeline

The table below shows when the changes made in the 2017 legislative session will go into effect.

School Year	Changes
2017-18	Special Education, TBIP, LAP, Highly Capable, and CTE funding changes go into effect. Elementary school Family Engagement Coordinator positions and middle school counselor positions in the prototypical school model increased by 0.0825 FTE and 0.1 FTE, respectively. Districts must begin reporting supplemental contracts to OSPI. Reducing funded class size to 17 students per teacher for grades K-3, regardless of actual average class size in district.
2018-19	First half of K-12 staff salary increase. First of three days of PD for teachers and other Certificated Instructional Staff (CIS) paid for by the state. New district levy lids and Local Effort Assistance rules begin in January 2019. Funds for K-3 class size reduction will be provided to districts in proportion to their actual average K-3 class size.
2019-20	Second half of K-12 staff salary increase. Second of three days of PD for teachers and other CIS paid for by the state. Districts must identify actual salary paid as part of basic education. Local levies may only be used to enrich basic education. Starting January 2020, levy expenditure plans must be approved by OSPI. Districts must provide separate accounting for state and local revenues to expenditures. OSPI will submit their findings on the review and prioritization on the educational enhancements outlined in Initiative-1351. Starting January 2020 all school employees will move to a statewide health care benefit program, similar to other state employees.
2020-21	Third of three days of PD for teachers and other CIS paid for by the state.

Staff Salary

Increases in K-12 staff salary were the most substantial educational investments made during the 2017 legislative session. At full-implementation, over 75% of the new investments will go towards increasing the salary the state pays for districts to hire teachers, counselors, and other staff in school buildings.
Currently, districts are awarded money to pay for teacher salary based on the average level of experience and education of a district’s teacher workforce, known as staff mix factor. The new formula will award all districts the same base salary level to hire teachers, that is then adjusted by a regionalization factor. These salary enhancements account for the higher cost of housing in some areas. Once fully implemented, districts will either remain at the state base salary or have an enhancement of 6%, 12%, or 18% above the state base salary.

Current & Future State K-12 Staff Salary Funding

Professional Development

Starting in 2018-19 the state will fund one day of professional development for all certificated instructional staff (Teachers, librarians, counselors, nurses, social workers, and others). This allocation will increase by one day in each of the subsequent two years for a total of three days of state funded professional development by 2020-21.

Learning Assistance Program (LAP)

LAP funding increases had previously been temporary and dependent on a line item in the state budget to be sustained each biennium. These increases have now been included in the statute and are therefore part of basic education. Additionally, a ‘concentration factor’ was created to provide increased LAP funding for high-poverty schools. Schools with 50% or more of their students eligible for the Free or Reduced Price Lunch (FRL) Program will get a per-student LAP allocation 45% higher than the base LAP allocation for schools in their district. These funds must be spent at the schools that generated the concentration factor.

Transitional Bilingual Instructional Program

An enhanced funding level equivalent to two hours of additional weekly instructional time will now be generated by TBIP eligible students in grades 7-12. These additional amounts are generated at the district level and will be allocated to TBIP activities at the discretion of the district.

Special Education

Through 2016-17 districts were limited to generating state special education funding for 12.7% of their students. So, if 14% of a district’s students were receiving special education services the district would generate state funding for 12.7% of their student enrollment even though their special education enrollment was more than 12.7% of students. This cap has been increased to 13.5% starting in 2017-18.

Highly Capable

Starting in 2017-18 state support for the Highly Capable program will more than double to provide funding for 5% of students in each district. Districts will also now be required to consider equitable distribution of highly capable programming when allocating the funds to schools.

Career and Technical Education (CTE)

CTE funding formulas were enhanced to provide for lower funded class sizes for CTE courses. Additionally, the allowable uses of CTE funding are now enumerated and part of state law to ensure CTE funding is used on CTE programming. Expanded learning opportunities are included as an allowable use of CTE funds.

Transparency and Accountability

Districts will now have to track and report in detail how they spend their money on a district level using source to expenditure accounting starting in 2019-20. Districts are still not required to report funding data on the individual school level.

Levies

Local levies will continue to be collected at current limits through calendar year 2018. Starting in January 2019, new limits on how money can be raised through local levies will be in place. The new maximum levy rate is $1.50 per $1,000 of assessed value with a cap on per-student levy revenue set at $2,500 for each district. Districts are capped at either a levy rate of $1.50 or levy revenues of$2,500 per-student, whichever comes with a lower levy rate. Districts will be required to submit a plan showing how they plan to spend local levy funds to OSPI for approval to ensure local dollars are not being used for basic education.

Local Effort Assistance (LEA)

LEA will continue with an amended formula. LEA eligible districts must pass a local levy to be eligible to receive LEA and will receive LEA in proportion to how close they came to passing a levy at their levy limit. For LEA eligible districts, combined local levy revenues and LEA are capped at $1,500 per student.

Initiative 1351 Work Group

OSPI will convene a work group to review the enhancements in Initiative 1351 that haven’t been funded. The work group is tasked with making recommendations to the legislature on a phase-in plan for the additional investments that prioritizes investments that are ‘research or evidence-based for reducing the opportunity gap, assisting struggling students, enhancing the educational outcomes for all students, or strengthening support for school and district staff.’