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April 1, 2016

Budget Update - State Budget Overview

Earlier this week, the legislature passed a 2016-17 supplemental budget that increases the 2015-17 state biennium budget by $191M. Because the biennium budget is $38.2B, an increase of $191M represents only minor adjustments, with the K-12 budget being increased by just over $11.0M.

Major budget issues in K-12 education that did not get addressed in this session included teacher compensation reform and the levy cliff. The House budget had proposed an increase to teacher compensation. However, the proposal was problematic since it was not a plan to address teacher compensation reform and school district overreliance on local levy funds currently used to provide additional pay to teachers. Under the McCleary ruling, some of the additional teacher pay should be considered basic education and funded by the state.

With regard to the levy cliff, no action was taken to delay changes to the levy lid and levy equalization formula. The original timeline was for the state to have a plan implemented by 2017-18 that would pay for locally funded teacher compensation and offset the lost funding from changes to the levy lid and levy equalization formula. Since the legislature has not yet developed a plan to pay for locally funded teacher compensation, school districts would begin to see a loss of funding, termed “levy cliff,” in the 2017-18 school year.

The legislature did include the language below as a commitment to address the levy cliff problem through the work of an Education Task Force.

     By April 1, 2017 the Education Task Force will either:

  1. Determine that the legislature will meet its obligation to provide for compensation reform and eliminate school districts’ overreliance on local levies by April 30, 2017; or
  2. Introduce legislation to address the levy cliff by extending current state levy policy for at least one calendar year, with the objective of enacting such legislation by April 30, 2017.

     The $11.0M increase to the state K-12 budget included:

  • $3.5M to expand the Beginning Educator Support Team (BEST) program
  • $1.75M professional development for classroom paraeducators
  • $3.9M for Charter Schools
  • $1.8M for various grants to address teacher shortage and promote teaching in our state

Vic Roberts
Director of Business Operations

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