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New health insurance system, other changes in school funding coming soon

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The 2019 legislative session ended April 28, and WEA lobbyists have had time to analyze how the new state budget and related changes in school funding will affect K-12 and higher education students and staff.

Overall state funding for K-12 public schools for 2019-21 is increasing by nearly 20 percent – thanks in part to ongoing funding required by the Supreme Court’s 2012 McCleary decision.

Funding for K-12 public schools is the single largest part of the state’s general fund budget.

One of the most significant funding increases will affect an estimated 300,000 K-12 school employees and their families. Beginning in January 2020, they’ll be switched to a new state-run health care insurance system, called the School Employees Benefits Board (SEBB). Currently, health insurance is negotiated at the school district level.

Under the new plan, the state is increasing funding for educator health benefits by around $543 million. (Negotiations with providers have brought down expected costs compared to previous estimates. Benefit levels are the same.)

Educators who insure their families are expected to pay substantially less for out-of-pocket premiums, and part-time school employees who work more than 630 hours a year will now receive full benefits under the system. Individual employees may pay slightly more than they currently do. Premera, Kaiser Permanente, Providence and Regence are among the companies that will be offering a variety of insurance plans.

Here is the WEA PowerPoint presentation (download) about the change in health insurance, and here is WEA’s background webpage.

WEA members have asked about other aspects of the new state budget and school funding. Here are a few of those questions, along with answers.

Q: Is K-3 class size compliance required this year? 

A: Yes, school districts must reduce their K-3 student-to-teacher ratios to 17:1. There is no waiver process for compliance. A district will only receive funding for their actual teacher-to-student ratios down to 17:1. School districts with space limits can hire additional elementary specialists or create team teaching classrooms.

Q: What are the levy and LEA funding changes for my district? 

A: Non-partisan legislative staff have provided an estimate of the levy and local effort assistance (LEA, or levy equalization) impacts. This chart shows how much additional levy or LEA funding each district is expected to receive because of the new law.

  1. School districts with voter-approved levy capacity above $1.50 per $1,000 of assessed value or $2,500 per pupil (whichever is less) for calendar year 2020 can collect the new levy authority in school year 2019-20. 
  2. School districts not limited by the per pupil cap and with voter-approved levy capacity below $2.50 per $1,000 of assessed value may seek new voter-approval for the new levy capacity approved by the legislature even if they have a current levy approved. This new levy would expire at the same time as the current levy.
  3. The per-pupil rate for LEA was increased by $50. Districts that qualify for LEA will receive the additional LEA funding beginning SY 19-20 for calendar year 2020.
  4. Since calendar years and school years do not align, a portion of the new funding for calendar year 2020 will be paid in school year 2019-20 and the remaining portion will be paid in SY 2020-21.  The typical split for these payments is 55 percent in the first year and 45 percent in the second year.

Q: What is hold-harmless funding? 

A: The Legislature approved “hold-harmless” funding for certain school districts for school years 2019-20 and 2020-21 only. This ensures that all schools see an increase in total school funding in those years. Bills passed in the final moments of the 2019 legislative session, including the levy bill and the state budget affect this calculation, so no current estimates exist for this funding.

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