March 13, 2009 NHSBA Legislative Bulletin

The House Labor Committee has voted by margins of 11-7 to recommend killing two bills that were supported by NHSBA. HB 231 reflects a specific NHSBA resolution that seeks to repeal the "evergreen provision" adopted last year that 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. HB 500 calls for repealing the provision allowing "union authorization cards" to replace elections when choosing an exclusive representative of an employee organization. A minority report and floor debate is expected when the full House considers these recommendations next week.

ACTION ITEM
Please contact your local representative and express support for these bills, especially HB 231. All contracts include an "expiration date", an agreement as to when the terms of the contract cease and are no longer in effect.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 creates an obligation on employers that was not part of the contractual agreement. This state-imposed mandate unilaterally implements pay raises while bypassing the local voter approval process. In addition, it tips the balance of power in negotiations by reducing the incentive for parties to come to agreement since pay raises are mandated. The repeal this bill seeks is a specific NHSBA resolution adopted at the January Delegate Assembly.
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Accountability for an Adequate Education - SB 180

The Senate Finance Committee has approved this bill, recommending OTP (Ought to Pass) for next Wednesday when the Senate meets in session. This is the bill that establishes an accountability system to ensure schools are providing the opportunity for an adequate education (see last week's Bulletin for details). If adopted by the Senate, the bill will likely be assigned to the House Education Committee for review and consideration.

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Retirement Update: HB 223 - HB 532 - HB 591 - HB 641 - HB 673
HB 223, the bill that delays the effective date for the implementation of employer assessments for "spiking" (excess retirement benefits due to severance packages), has been recommended for passage by the Senate Executive Departments and Administration Committee. The bill has already passed the House and now goes before the full Senate next week.

The House Executive Departments & Administration Committee has made recommendations on several important retirement bills. Unfortunately, the recommendations do not reflect all that had been hoped for by NHSBA.

HB 532 was intended to address some of the "spiking" issue by excluding extra or special duty pay from a Group II (Police/Fire) member's earnable compensation, thereby excluding these payments from their annuity, or pension, benefit. The bill as now proposed no longer excludes such payments, but requires the public employer (municipality) to charge back all costs, including retirement costs, to the entity for whom the extra or special duty is being provided. In addition, the state would no longer be required to pay their 35% share of the town's contribution rate for the police or fireman, making the employer responsible for the full amount of contributions, which would be charged back to the entity contracting for the special duty. School boards should be aware that this change will result in districts being charged additional costs to have police and/or fire presence at any school function. The vote of OTP/A (Ought to Pass as Amended) was 12-7; a minority report will be filed for the full House vote next week.

HB 591 proposed limiting a new retiree's initial pension benefit to no more than 100% of their highest salary. Despite testimony addressing how ill-advised it would be to pay an employee more not to work than they were paid to be on the job, the committee has recommended killing the bill, voting 10-8 for ITL (Inexpedient to Legislate). A minority report will be filed for the full House vote next week.

HB 641 is another bill that addresses the "spiking" issue by modifying the calculation of employer assessments and recognizing those stipends that have already been subject to employee/employer contributions. The proposal phases in required payments over a four-year period with employers responsible for 25% of the actual spiking cost in 2010, 50% in 2011, 75% in 2012 and the entire costs of spiking in 2013 and beyond.

HB 673, allowing political subdivisions to withdraw employees from the retirement system, has been retained for further work by the committee. Committee Chair Rep. Anne-Marie Irwin spoke passionately regarding the need to provide local political subdivisions a "choice" and promised to have the committee address options to the current system.
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State Budget Update - HB 1, HB 2, HB 25
The House Finance Committee continues to work on the state budget, and NHSBA remains concerned over funding levels for many categorical state aid programs as well as the proposed 5% reduction in the state share of teacher retirement contributions (see NHSBA comments to Finance Committee - March 17, 2009). The Department of Education has indicated that building and catastrophic special education aids will need to be prorated next year at funding levels proposed by the Governor. (Eligible building aid entitlements are in excess of $4 million over budgeted amounts.)

The House Public Works Committee reviewed the education portion of the capital budget this week. HB 25 currently contains $400,000 for pre-engineering technology match grants and $83.3 million for school building aid. But funding for renovations at Vocational Technical Centers was cut from the budget. The need to upgrade these facilities and equipment has been recognized by the State. Historically, funding for Tech Centers has progressed on a schedule developed by the Department of Education: Littleton and Governor Wentworth were both scheduled for funding in the 2010-2011 biennium. Representatives of both Governor Wentworth and Littleton, as well as the Department of Education, provided excellent testimony in advocating for the restoration of those funds. The absence of funding these two Technical Centers also raises questions as to the timing of funding for the remaining districts scheduled for renovations in subsequent years.
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Economic Stimulus Update
Web sites for both NH's Office of Economic Stimulus and the U.S. Department of Education (see US DoE recent information) provide the most current information regarding Stimulus funding. State Deputy Attorney General Orville "Bud" Fitch, the Director of NH's Office of Economic Stimulus, and Education Commissioner Lyonel Tracey, met with the NHSBA Board of Directors this week and explained that actual school district allocations of funding amounts are not yet available. However, based on recent information from the US Dept. Education, it is anticipated that two major sources of additional funds for districts, approximately $30.9 million in Title I Grants to LEAs and approximately $47.4 million in IDEA Part B grants to states, will be distributed in two equal amounts; half this spring, and another half next fall. These will likely be additional monies distributed through existing formulas or procedures that have a dedicated purpose and will generally supplement, not supplant, local funding. Guidelines for acceptable uses of these Title I and IDEA funds can be found at Title I Stimulus and IDEA Stimulus.

It is important to reiterate the need for transparency and accountability on how funds are expended. The Stimulus Bill appropriates significant money for auditing and ensuring compliance with program provisions. It will be important for school districts to fully understand the need for careful accounting of any funds received through the Stimulus Program. As an example, there are existing requirements for accounting of Title I funds, but any additional Title I money received through the Stimulus will require additional separate accounting for how those monies are spent. It is also likely that, assuming $120 million of State Fiscal Stabilization Fund money is used to meet the additional requirement for Adequate Education funding ($60 million annually) next year, that separate/additional accounting will be required of districts for that piece of their adequate education grant.

While there is still more information to come on the "How" and "When" of Stimulus funding, we know that there will be less money for education construction/modernization than what was once originally hoped. Title I and IDEA funding will certainly benefit, but an increased level of accountability requirements will come with those funds. The government has made it clear that our reporting on the use of this money will require tangible evidence of student success.

Questions remain regarding issues associated with "Maintenance of Effort", and supplementing vs. supplanting current funds. As both the federal and state departments of education release more information, further clarity should be forthcoming along with details of funding levels. NHSBA will continue to monitor the situation and work to keep school boards informed.
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