The State Budget process commenced yesterday with the Governor's Address to a Joint Session of the House and Senate.  The 45-minute speech was very direct and included constant references to the "unprecedented fiscal challenge" budget writers face.  He noted that for the current fiscal year 2009, there is a $275 million revenue shortfall in the general and education trust funds.  His proposed budget assumes that revenues will not increase for the next two years and therefore makes significant cuts to programs, staffing and state aid.
 
Financial aid to school districts is recommended at funding levels that in many areas are less than requested by the Department of Education to meet projected needs.  Adequacy and Disparity Aid is fully funded, providing an additional $123 million over the next biennium.  However, Building Aid is recommended at $86.5 million, or 92% funded.  Similarly, Catastrophic Aid is 75% funded at $65 million; Tuition & Transportation Aid is 67% funded at $15 million; Reading Recovery is not funded at all; Dropout Prevention is less than half funded at $3.5 million; Local Education Improvement funds are cut by 25% to $985,000; and Kindergarten Construction is entirely omitted, cutting $20 million out of the Department's request for the biennium.  Finally, reflecting financial concerns with the increasing costs associated with our state's retirement system, the Governor proposed reducing the state's share in paying employer contribution rates for teachers (as well as police and fire) from the current 35% down to 30%.  This will directly impact the costs associated with the new rates that go into effect this coming July, where the teacher rate increased by approximately 20%.
 
The budget now goes to the House Finance Committee, where deliberations begin next week.  The Department of Education will give a budget presentation next Thursday, February 19 at 1:00 pm.  A final budget recommendation must be ready to send to the Senate by April 9.
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Constitutional Amendments
All three Constitutional Amendment proposals (CACRs 2, 3 and 8) seeking to amend the constitution in such a way that it will no longer hold the State to any standard for a level of support in funding an adequate education, will be voted on in the House next Wednesday.  The House Education Committee has recommended Inexpedient to Legislate (ITL) by narrow margins (11-9 on CACR 2) and floor debate is expected by advocates of the minority position that support the change.

ACTION ITEM
Please contact your local representatives and express your opposition to these proposals and the potential losses in state aid to school districts.  Last year, NHSBA adopted a specific resolution addressing this issue:
     The NHSBA opposes any constitutional amendment that vacates the spirit and intent of the Claremont and Londonderry lawsuits and attempts in any way to limit or redirect funding in a manner that is contrary to the New Hampshire Supreme Court's ruling and present interpretation of the New Hampshire Constitution.

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Change to Adequacy Formula

Please contact your local representatives and express your opposition to this bill that simply downshifts the state's financial problem to the local level.  Remind them that school district budgeting has been well underway since last fall, and has relied on official State Dept. of Education estimates for state aid that were announced last November.  Any reductions to FY 2010 state aid will occur AFTER March school district meetings and result in direct cuts to local budgets.

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Targeted Aid for Isolated Small Schools
HB 689 is also scheduled for a vote in the House next Wednesday.  Based on findings of the JOINT LEGISLATIVE COMMITTEE ON FISCAL CAPACITY, TRANSITION AID, AND DISECONOMIES OF SCALE, this bill proposes to allocate an additional $450 to each student in an isolated small school, which is defined by population, geography and demographics.  Eight schools in northern New Hampshire qualify as isolated small schools. The fiscal impact of $350-$400,000 is paid for by reducing three per pupil grant amounts allocated under "Fiscal Disparity Aid".  Low wealth towns receiving $2,000/pupil would receive $1,957, and those receiving $1,250/pupil would receive $1,223.  Charter school per pupil funding would also drop from $2,000 to $1,957.  The House Education Committee recommended passage of the bill on an 18-2 vote.
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Labor Bills
NHSBA opposed two important bills in the House Labor Committee this week.  HB 46 would mandate binding arbitration, requiring public employers to accept a neutral party's findings and resolution of a dispute: the bill states that the determination of the neutral party is final and binding.  HB 305 would give non-emergency public employees the right to strike, including public school teachers.

ACTION ITEM
Please contact members of the House Labor Committee and express your opposition to BOTH these bills.  Binding arbitration allows a third party to mandate provisions of a collective bargaining agreement and unilaterally force an appropriation without legislative body approval.  Strikes by our public school teachers will have a profound impact on the operation of our schools.  It will exacerbate tense relations with staff, destroy public confidence, and disrupt the educational programs of students, especially seniors trying to make college plans.  It would also disrupt our statewide assessment program and AYP determinations.

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Repeal of Evergreen Provision
HB 231 will have a public hearing before the House Labor Committee next week.  The bill repeals the change in statute adopted last year that specifically continues the terms of "any pay plan" in a contract after its expiration when a new contract has not been settled.  With passage of HB 231, school districts would no longer be required to pay salary increases to employees when contracts are at impasse.  The public hearing is scheduled for 2/19/09 at 10:00 am in room 307 of the Legislative Office Building (LOB).

ACTION ITEM
Please contact members of the House Labor Committee and express your support for this bill.  All contracts include an "expiration date", an agreement as to when the terms of the contract cease and are no longer in effect.  The statutory mandate for an evergreen clause has the state mandate an obligation on employers that was not part of the contractual agreement.  This is really a state-imposed unfunded mandate because such a provision unilaterally implements pay raises and bypasses the local voter approval process.  In addition, much of the impasse that occurs is a result of contracts being rejected by the voters at a school district meeting: how do you then justify a state mandated pay raise after such a negative vote?  The repeal this bill seeks is also a specific NHSBA resolution adopted last month at the Delegate Assembly.
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