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Legislative inaction causing major concerns for District budget planning - Superintendent Rick Schulte

In this memo dated June 27, Richland School District Superintendent Rick Schulte explains to the Richland School Board that unresolved issues in the state budget are having serious and significant implications for RSD budget planning.

“As you know, the legislature is still in special session, without having adopted a biennial budget for 2017 – 2019. The Supreme Court’s mandate that the legislature must comply with its McCleary decision during this legislative session remains unfulfilled. Early in this legislative session, the Governor, the House, and the Senate each released different budget proposals with few commonalities. During the two special sessions, committees have been working behind the scenes trying to reach some sort of compromise budget that will satisfy the Court, both Houses, the Governor, and both parties. To the best of our knowledge, there is no timeline for completing this work. The Governor has directed agencies to prepare for a possible shutdown of state government as of July 1, 2017, when the state’s next fiscal year should start. When such preparations have been attempted in the past, they have had some impact on the timing of state payments to school districts.

“Unresolved issues in the state budget have serious and significant implications for school district budgets. The Richland School District cannot proceed further with 2017-18 budget development, or complete a budget, until the legislature acts. The unresolved issues impact all elements of district operations. Fundamental issues of staff compensation, collective bargaining, apportionment formulas, staffing models, and levy authority remain to be decided. If the legislature fails to act, or fails to meet Court-ordered mandates under the McCleary decision, it is unknown whether there might be further Court sanctions of some kind.

This presents us with a severe time crunch. If the legislature completes its budget the first week of July, it will take OSPI two to three weeks to prepare the necessary budget worksheets for each school district. It will then take each school district three to four weeks to complete these worksheets and prepare a draft budget. This could take us into the third or fourth week of August, with a requirement to adopt a budget no later than August 31. This timeline will make it impractical to prepare a fully considered school district budget with adequate input. If that happens, we will likely suggest that the district adopt a working budget in August, with the expectation that we will do a budget “extension” (a budget revision) after the school year begins, probably in January or February.

“The next replacement school levy election has been planned for February, 2018. Legislative action may change levy authority or put other constraints on use of local levies. The bill already passed to delay the levy cliff includes provisions for levy expenditure account codes and OSPI approval of school district levy proposals. One purpose of this is to assure that local levies are not used for basic education purposes. We have been told that OSPI is unable to develop the required account codes any faster than a year from now, and OSPI does not have the capacity or the desire to evaluate local levy proposals.

“Accordingly, we will have to prepare a levy proposal in September and October with no knowledge of how to comply with the account code requirement or whether OSPI will have a system for approval of levies. If the requirement to not use levies for basic education purposes is enforced in a rigorous manner, it could dramatically change the scope, size, and nature of any levy proposal. It could also result in widespread confusion among voters unsure about what these changes mean. The levy approved in 2016 will be collected in calendar years 2017 and 2018, extending into the middle of the 2018 – 2019 school year. However, if we know levy authority will change, we will have to take that into account both when preparing a levy proposal and when developing a budget.

“I will inform the school board as soon as I have more information about legislative action and its implications for our timelines and planning.”