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A budget cut by any other name…

Release Date: 

October 10, 2013

When the Legislature doesn’t fund teacher COLAs, does that count as a “budget cut?”

As the Washington State Legislature responds to the Order placed upon it by the state’s Supreme Court to fully fund K-12 education, an interesting issue has presented itself.  While the McCleary decision requires “real and measurable” progress toward ample funding, people can’t seem to agree on how much “progress” has actually been made.  At the heart of this debate is a question that should be a simple one: what is a budget increase, and – more to the point – what is a “budget cut?”

Most recently, the subject of this debate has been the cost-of-living adjustments (COLA) required by law for state-funded educators.  Originally brought about by Initiative 732, these inflation-based salary adjustments are an annual requirement of state law.  Except when they are not – because lawmakers routinely exempt themselves from this requirement by passing special “NTIB” bills very late in each legislative session, often in hastily scheduled public hearings, and after regular legislative deadlines.  These late session special bills make the I-732 statute something resembling a block of statutory swiss cheese; one lofty promise with a ton of holes showing through.  The passage below, from House Bill 2043 (2013), shows the rolling nature of this exemption policy – where it states the years of exception, the legislature simply crosses out one biennium, and inserts the next.

COLA

This issue is important for a number of different reasons.  For one, we all believe teachers need to be adequately paid, and when they don’t receive cost-of-living adjustments, their salary gradually loses purchasing power.   Lawmakers sometimes refer to COLAs as “raises,” but that is not correct.  Keeping pace with inflation is not a raise.  As an example, 50 years ago, the average teacher in the U.S. made about $6,000 per year.  Last year, the average teacher made about $55,000.   So what meaning do we take from that data?  Does it mean that teachers 50 years ago were paid horrendously; a full nine times less than their counterparts today?  No, of course not.  What you are observing, primarily, is the cumulative effects of inflation over time.   When we see the effects over 50 years, the effects are stark and obvious, but the effects in each individual year are somehow easier for policymakers to ignore, or mischaracterize, or both, as the case may be.

But I digress.  Regardless of one’s feelings about the adequacy of teacher salaries, there is a broader point to be made about how the legislature gives itself credit for adding money to the K-12 budget.  The court is requiring “real and measurable progress” but what, exactly, is “progress?”  What counts as a budget enhancement, and what counts as a cut?

In the simplest terms, a budget reduction is exemplified when a statutory commitment is made, but is not fulfilled.  If, for example, the legislature passes a bill that says that by the year 2017, all state parks will have an off-leash dog area, and determines that providing for that will cost $100 million, then that is now a financial commitment for which the legislature must budget.

Now let’s say that 2017 rolls around, and priorities change, the economy stagnates, the legislative leadership changes over, and enthusiasm for dog parks dwindles in relationship to some other state priority.   A decision is made to not provide for the off-leash areas.  Can the legislature do that?  Certainly – it does that all the time for budget items not Constitutionally protected (as basic education is).  But is it a cut?  Yes, it is.  It doesn’t matter whether ground was broken to build the dog parks, or whether they remained a promise in some future year.  In either case, it’s a budget cut.  Keep it simple: a budget cut is a statutory promise not fulfilled.

So, educator COLAs are an interesting test case in what counts as a “cut.”  For many people, it’s counterintuitive to think about a budget cut as something that was never tangibly delivered to begin with (“What do you mean it’s a cut?  They never actually received their cost of living adjustment to begin with?  Their paycheck is not reducing”).  But in budgeting, remember, the threshold question is: Was a commitment made in law to provide this item?  What is important is not the tangible state of the promised item, but the promise itself.  And, this is particularly relevant in biennial budget cycles when the legislature budgets as much as two and a half years ahead, and legislation (like ESHB 2261 (2009)) often makes service commitments spanning three biennia or more.

So, when the legislature does not provide educator COLAs, is that a cut?  The answer is clear: Yes, it is.  But by reviewing the legislative documents summarizing the 2013-15 biennial budget, you wouldn’t know it. It’s not totally clear what counts, and what doesn’t. Below I have excerpted pages from the legislative budget materials which make the following, seemingly divergent, claims:

  1.  “The budget proposal makes $1.03 billion in policy enhancements”
    http://leap.leg.wa.gov/leap/Budget/Detail/2013/hoSummary_0627.pdf
    (PAGE 2)
    Budget1
  2. “K-12 Education Total: $948.5 million”
    http://leap.leg.wa.gov/leap/Budget/Detail/2013/hoSummary_0627.pdf
    (PAGE 9)
    Budget2
  3. “Total Policy Changes for K-12 Public Schools: $648 million”
    http://leap.leg.wa.gov/leap/Budget/Detail/2013/hoAgencyDetail_0627.pdf
    (PAGE 184)
    Budget3

What is a budget observer to believe?   Well, the correct answer is door #3.   The total increase in the K-12 budget was $648 million, and the COLA suspension is indeed a “cut.”  Claims that nearly $1 billion was added to basic education program is technically true, since annual COLAs are not protected by basic education, but salaries adequate to attract and retain high quality educators certainly is part of basic education, and the absence of a COLA probably exacerbates that issue long-term (for the court, I would surmise, the emphasis is on overall adequacy, rather than guaranteed annual changes).  But in any event, using a number other than $648 million to describe the K-12 education enhancement is, in my opinion, confusing the real situation.

So why is this important?  Is this just about COLAs?   No – the broader point is about ESHB 2261 and funding basic education more broadly.   What is ESHB 2261 – the bill redefining basic education – if it is not a series of future promises about increased programs and services for kids?   You can see the parallel.  I would hate for this year’s handling of COLAs to foreshadow how the legislature would handle a failure to live up to the broader commitments of that bill.  Would they say it isn’t really a cut, since they never actually received it to begin with?  I hope not, because that would be wrong. After all, a promise is a promise, and a cut is a cut, particularly when we are dealing with the Paramount Duty of the State.

-Ben Rarick,
Executive Director

Media Contact: 

Alissa Muller, SBE Communications Manager, (360) 725-6501