Title: An act relating to the financial literacy public-private partnership.

Brief Description: Regarding the financial literacy public-private partnership.

Sponsors: By House Committee on Appropriations (originally sponsored by Representatives Kelley, Santos, Ormsby, Roach and Morrell).

Brief History:

Education: 2/15/07, 2/16/07 [DPS];

Appropriations: 2/27/07, 3/1/07 [DP2S(w/o sub ED)].

Floor Activity:

Passed House: 3/13/07, 94-1.
Senate Amended.
Passed Senate: 4/10/07, 45-0.

HOUSE COMMITTEE ON EDUCATION

Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 6 members: Representatives Quall, Chair; Priest, Ranking Minority Member; Anderson, Assistant Ranking Minority Member; Roach, Santos and P. Sullivan.

Staff: Barbara McLain (786-7383).

HOUSE COMMITTEE ON APPROPRIATIONS

Majority Report: The second substitute bill be substituted therefor and the second substitute bill do pass and do not pass the substitute bill by Committee on Education. Signed by 32 members: Representatives Sommers, Chair; Dunshee, Vice Chair; Alexander, Ranking Minority Member; Bailey, Assistant Ranking Minority Member; Haler, Assistant Ranking Minority Member; Anderson, Buri, Chandler, Cody, Conway, Darneille, Dunn, Ericks, Fromhold, Grant, Haigh, Hinkle, Hunt, Hunter, Kagi, Kenney, Kessler, Kretz, Linville, McDermott, McDonald, Morrell, Pettigrew, Priest, Seaquist, P. Sullivan and Walsh.

Minority Report: Without recommendation. Signed by 2 members: Representatives McIntire and Schual-Berke.

Staff: Ben Rarick (786-7349).

Background:

Financial literacy is the achievement of skills and knowledge necessary to make informed judgments and effective decisions regarding earning, spending, and the management of money and credit.

In 2004, the Legislature created the Financial Literacy Public-Private Partnership (Partnership) consisting of legislators, representatives from the Office of the Superintendent of Public Instruction (OSPI) and the Department of Financial Institutions, financial services representatives, and educators. The Partnership is charged with identifying important financial literacy skills and knowledge and considering strategies to increase financial literacy in public school students. Such strategies include instructional materials, assessment measures, and professional development to expand and improve financial literacy instruction.

There is a Partnership account administered by the OSPI which can be used for public funds and private donations. For the first years of its existence, the Partnership did not have state operating funds. However, $50,000 was appropriated to the Partnership account in the 2006 supplemental operating budget. The Partnership is scheduled to issue a final report and expire on June 30, 2007.

Summary of Second Substitute Bill:

The date for the completion of activities by the Partnership is extended from June 30, 2006, to June 30, 2009. The expiration date for the partnership is also extended to June 30, 2009. The Partnership's final report in June of 2007 becomes an interim report, and a new final report date is set for June 30, 2009. New activities are added: creating resource materials on personal finance to guide student culminating projects, developing Essential Academic Learning Requirements for personal finance, and preparing recommendations for including financial literacy principles in the Washington Assessment of Student Learning.

If funds are provided, the OSPI and other members of the Partnership will make financial literacy materials available to school districts. School districts are encouraged to provide students with an opportunity to master financial literacy skills and knowledge.

EFFECT OF SENATE AMENDMENT(S):

The Financial Literacy Public-Private Partnership is no longer directed to develop materials to help districts guide culminating projects on personal finance; develop Essential Academic Learning Requirements for personal finance; or prepare recommendations for including financial literacy principles in the Washington Assessment of Student Learning.

Appropriation: None.

Fiscal Note: Available.

Effective Date: The bill contains an emergency clause and takes effect immediately.

Staff Summary of Public Testimony: (Education)

(In support) This continues the state's efforts to increase financial literacy. Increased credit can be a wonderful thing that allows more people to buy homes, but there needs to be education about the increased responsibilities that come with credit. It's critically important to increase awareness about credit, both positive and negative. Financial literacy is more than informed judgement about money; it is the basis for survival in the adult world and should be taught to students in grades K through 12. We can't test our students in the course called "life" without giving them the skills they need to negotiate in it. Students have an incredibly positive experience that gives them optimism and hope for the future when they learn how to make choices and to prioritize. Students in today's society incur debt before they graduate. Students need to learn about credit, debt, interest, rent, car payments, and taxes. Even very young students can learn the difference between "choice," "want," and "need." There is not a lot out there for teachers to pick up and incorporate into their lesson plans. This is desperately-needed information. Without basic financial literacy principles, we can't help students make wise decisions.

(Opposed) None.

Staff Summary of Public Testimony: (Appropriations)

(In support) I've taught 4th grade for 9 years and have been nominated for teacher of the year twice. I've been working with Russell Financial and the Tacoma News Tribune on this project. This bill is important to develop survival skills for the adult world. Financial literacy should be Kindergarten through 12th grade, particularly in poverty-stricken schools where it's impossible for kids to learn these necessary skills from their parents. The credit unions support this bill. We appreciate the Governor funding this appropriation in her budget. It is important to know that a match is required for the $100,000 from the private sector. In the 2007 fiscal year, the private sector provided $63,500, compared to the $50,000 that the state provided. We expect the private sector to remain an enthusiastic supporter of this initiative.

(Opposed) None.

Persons Testifying: (Education) Representative Kelley, prime sponsor; Holly Winter Weik, Bethel School District; Don Ide, Lynnwood High School; Esther Rich, Nelson Middle School, Renton School District; Randy Wilson, White River High School; Stacy Augustine, Washington Credit Union League; Carol Anderson, Junior Achievement; Linda Jekel, Department of Financial Institutions; and Dana Twight, Jump $tart Coalition.

Persons Testifying: (Appropriations) Terry Kohl, Washington Credit Union League; and Holly Winter-Weik, Bethel School District.

Persons Signed In To Testify But Not Testifying: (Education) None.

Persons Signed In To Testify But Not Testifying: (Appropriations) None.