Gov. Inslee’s operating budget proposal includes three major education funding proposals:

• $64.4 million to increase paraeducator compensation by $3 per hour plus benefits for all paraeducators hired in SY 2022–23;
• $30.2 million for the community eligibility provision program, which provides free school meals; and
• $17.1 million to increase the special education funding cap from 15% to 17.25%.

Additionally, his capital budget proposal would increase the construction cost allocation that is part of the SCAP funding formula from $272 per square foot to $350.

The Legislature is moving several education funding bills but is not exactly following the governor’s lead. For example, bills that would increase access to free school meals (SB 5964 and HB 2058) did not move past cutoff.

That said, SHB 2180, which would increase the special education enrollment cap from 15% to 17.25%, is currently in the Rules Committee. According to the fiscal note, it would increase spending by $28.6 million in 2023–25 and by $76.5 million in 2025–27.

Other areas of focus for the Legislature include increased allocations for paraeducators and operating costs, as well as school construction.

Paraeducators

The Legislature considered legislation that would increase paraeducator salaries by $7 an hour (SB 6082 and HB 2380), but the bills did not move past cutoff. They would have increased spending by $150.5 million in 2023–25 and $397.9 million in 2025–27.

Instead, two bills are moving that would increase state basic education allocations to schools for paraeducators (described in current law as teaching assistance). First, as approved by Ways & Means, 2SSB 5882 would increase the state allocations for paraeducators and for office support and other noninstructional aides beginning with school year 2024–25. Districts would be required to use the additional funding “to support increased staffing, prevent layoffs, or increase salaries.” During the executive session on Monday, Ways & Means staff said that this would increase spending by $49.6 million in 2023–25. (An earlier version of the bill would have provided larger increases in the first year and would have increased allocations still further over the next two years. The fiscal note for that version estimated that it would increase spending by $110.9 million in 2023–25 and $660.6 million in 2025–27.)

Second, as approved by Appropriations, SHB 1960 would also increase the state basic education allocations for paraeducators, but by less than 2SSB 5882. SHB 1960 would not increase the allocations for office support and other noninstructional aides. (The committee rejected an amendment that would have required districts to use the additional allocations to increase salaries for paraeducators.) There is no fiscal note for the bill, but during the executive session in Appropriations on Monday, staff said that it would increase spending by $21.2 million in 2023–25 and $55.5 million in 2025–27.

Materials, Supplies, and Operating Costs

Also on Monday, Appropriations heard and approved HB 2494. The bill would increase state basic education allocations for materials, supplies, and operating costs (MSOC). Currently, statute sets the basic education amount for MSOC as it was in SY 2017–18, but state operating budgets have increased the amount for each school year since then. HB 2494 would effectively reset the required minimum allocation beginning in SY 2024–25 to an amount that is 3.5% higher than what is currently in the budget for that year. (The new amount would be 26.0% higher than the current statutory minimum allocation.) The bill would also increase the minimum additional allocations for high schools.

Since SY 2017–18, the total MSOC allocation has mostly just increased with inflation each year. However, in some years, specific components of MSOC have increased by more than others. For example, in SY 2022–23, the technology component increased by 23.3% while the total MSOC allocation increased by 7.4%. Compared to the current budget for SY 2024–25, HB 2494 would increase the total allocation by 3.5%, but it would increase the allocation for the instructional professional development component by 31.1%. (These figures represent just the minimum allocation for all grades, not the additional allocation for high schools.)

The fiscal note for HB 2494 estimates that it would increase spending by $43.2 million in 2023–25 and $113.9 million in 2025–27.

Capital Spending

Last year, the House and Senate passed different versions of HB 1044 (which would create a school construction grant program for small school districts), but they could not agree with each other, so the bill was not enacted. (I wrote about the differences here.) This year, the House has passed its version of SHB 1044 again. (The Senate has not yet acted on it.) The fiscal note has not been updated; last year’s fiscal note estimated that it would increase capital budget spending by $189.2 million in 2023–25 and $402.3 million in 2025–27.

Meanwhile, on Monday, Ways & Means approved SB 5789. The school construction assistance program provides a state match to local districts, which is based on enrollment, a student space allocation, a construction cost allocation, and the state funding assistance percentage. The match is only applied to certain project costs; under current law, the match applies to state and local sales taxes up to 7% but not to any sales taxes above 7%. SB 5789 would make it so the state is paying all the state and local sales taxes on the project (rather than a partial amount of just the portion up to 7%). The fiscal note estimates that this would increase capital budget spending by $69.8 million in 2023–25 and by $254.3 million in 2025–27.