School Districts Alert April 2007 Authors: Grace T. Yuan +1.206.370.7814 grace.yuan@klgates.com Christopher L. Hirst +1.206.370.8336 christopher.hirst@klgates.com K&L Gates comprises approximately 1,400 lawyers in 22 offices located in North America, Europe and Asia and represents capital markets participants, entrepreneurs, growth and middle market companies, leading FORTUNE 100 and FTSE 100 global corporations and public sector entities. For more information, please visit www.klgates.com. www.klgates.com Special Education Funding Increased in 2007-09 State Budget Elected Officials Respond to Alliance’s Efforts: School Districts Benefit Statewide Elected officials have authorized an additional $75 million for improved funding of special education programs in the 2007-09 State Budget. School districts statewide will benefit from the increase. As you may recall, Bellingham, Bethel, Burlington-Edison, Everett, Federal Way, Issaquah, Lake Washington, Mercer Island, Northshore, Puyallup, Riverside, and Spokane School Districts joined together to form the School Districts’ Alliance for Adequate Funding of Special Education. In September 2004, the Alliance filed a lawsuit against the State of Washington for its consistent failure to fully fund special education programs. Currently, districts statewide spend more than $130 million a year in local funding to cover what the State fails to provide. In March 2007, Judge McPhee of the Thurston County Superior Court ruled that the Alliance had failed to establish that the State so inadequately funded special education that it violated the Constitution. However, the Judge found that the State’s cap on the number of funded special education students is unconstitutional. Currently, over fifty percent of the districts statewide are over the cap because districts have more than 12.7 percent special education students in their overall student population. In addition to pursuing the lawsuit, the Alliance has worked hard with elected officials in the 2005, 2006, and 2007 legislative sessions to advise them regarding the severity of the funding gap in special education. We are pleased to report that the legislators and the Governor responded with a 2007-09 Budget that takes an important step toward addressing this funding shortfall. The additional $75 million is allocated through a number of different provisions. They include increasing funding by an average of an additional $73 per special education student per year, funding three-to-four year olds at a higher level, and removing three-to-four year olds from the calculation of the 12.7 percent cap. Furthermore, a new category and more dollars have been added to the Safety Net program that allows districts to apply for State funding if, despite removal of three-to-four year olds from the calculation, districts continue to exceed the cap. Finally, legislators directed the Superintendent of Public Instruction to streamline the Safety Net application process, to provide technical assistance to school districts, and to survey school districts regarding improvements to the process. The $75 million more in funding statewide is on top of the $29 million provided in the last biennium, for a total of a $104 million increase since the time that the Alliance filed the lawsuit. We are pleased that the Governor and the legislators have provided additional funding for special education, most of which will flow directly to school districts. Many elected officials have acknowledged the districts’ growing concerns about special education finance and are taking steps to help us address the funding gap. Because special education remains underfunded, the Alliance continues to work with elected officials on these issues on behalf of districts across the State. School Districts Alert K&L Gates comprises multiple affiliated partnerships: a limited liability partnership with the full name Kirkpatrick & Lockhart Preston Gates Ellis LLP qualified in Delaware and maintaining offices throughout the U.S., in Berlin, and in Beijing (Kirkpatrick & Lockhart Preston Gates Ellis LLP Beijing Representative Office); a limited liability partnership (also named Kirkpatrick & Lockhart Preston Gates Ellis LLP) incorporated in England and maintaining our London office; a Taiwan general partnership (Kirkpatrick & Lockhart Preston Gates Ellis) which practices from our Taipei office; and a Hong Kong general partnership (Kirkpatrick & Lockhart Preston Gates Ellis, Solicitors) which practices from our Hong Kong office. K&L Gates maintains appropriate registrations in the jurisdictions in which its offices are located. A list of the partners in each entity is available for inspection at any K&L Gates office. 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