April 17, 2009 NHSBA Legislative Bulletin

Legislative Bulletin
April 17, 2009

A Brief Summary of Education Issues at the State House

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Senate Begins Budget Deliberations

The State Senate held lengthy public hearings on the proposed state budget recently adopted by the House. Next week the Senate Finance Committee will begin committee work by hearing from departments. A major problem that must be addressed is the lack of any funding for school building aid. As you recall, the Governor proposed including $83 million in bonding for building aid in the capital budget (HB 25). However, the House chose not to bond such payments, claiming that bonding the full biennial payment would have consumed 2/3 of the general fund bonding capacity for the state and, if left in the capital budget in the future, would eventually entirely eliminate the general fund bonding capacity for other state capital projects. Instead, the House restored $16 million in funding for the renovation of two regional career technical centers. But without being included in the operating budget (HB 1), there is currently no funding for annual school building aid grants to districts. In addition, Catastrophic Special Education Aid, currently funded at approximately $34 million, which is 90% of entitlements, is budgeted for $32 and $33 million annually over the next biennium. This will likely require further pro-ration of this reimbursement program. Finally, the "trailer bill", HB 2, reduces the state share of payments on annual employer retirement contributions for teachers. The current state 35% share of the teacher rate drops to 30% for FY 2010, then down to 25% for FY 2011. Beginning in FY 2012, the state share returns to 35%. The budget proposal also increases the contribution rates for retirement system members just for the coming biennium (employees and teachers, from 5.0 to 7.0%; permanent police and fire from 9.3 to 11.0%). Employee rates would return to 5% and 9.3% respectively in July 2011. Monies from the temporary increase are to be used to reduce the employer contribution rates for fiscal years 2010 and 2011. The employer teacher contribution rate is currently scheduled to increase by 20% on July 1st.

The Senate Ways and Means Committee will be considering the House adopted revenue measures and estimated projections, as well as the remaining shortfall in revenues. This will be an important piece of the final adopted budget that will surely require a Committee of Conference with the House in late June.

ACTION ITEM

Please contact your senator and explain the impact of downshifting costs to the local level. Budgets were adopted last month based on expectations of state aid, not only the Adequacy grants, but Cat Aid and Building Aid as well. Historically, Cat Aid was underfunded in two recent fiscal years: fy 2004 at 92% and fy 2005 at 69%. Since then, 100% of entitlements were funded, but we are now facing a shortfall with current year funding at 90% of entitlements. The shortfall this year, as well as anticipated pro-ration next year, forces unexpected impacts on local budgets. Building aid has historically been fully funded; even when unanticipated shortfalls occurred, the legislature made up the difference in supplemental appropriations. These grants to communities are the basis of a partnership that is created when school districts adopt local construction projects and bond the expense. The state commitment is an important part of this process and is often needed to get the necessary super-majority approval. Loss of this commitment would have a profound impact at the local level.

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Accountability for an Adequate Education - SB 180

SB 180 establishes an accountability system to ensure schools are providing the opportunity for an adequate education. A subcommittee has been established to review the bill, and a work session is scheduled for noon on Tuesday, April 21, in room 207 of the LOB.

The proposal creates a process to establish an accountability system. Beginning next year (2009-2010), schools will be required to demonstrate that they provide the opportunity for an adequate education by an "input methodology": narrative reports of self-assessments based on the school standards established in rules (ED 306). Narrative explanations, certified by the school principal and district superintendent, must be submitted to the Commissioner of Education, who shall review the self-assessments and verify that the standards are being met. Beginning with the 2012-2013 school year, the Department will conduct annual site visits to 10% of the state's schools to assess the validity of these narrative reports.

A Task Force is established to develop a performance-based school accountability system. It will be chaired by the Commissioner of Education, who shall appoint 9-13 members who are either department personnel, school district representatives, educational experts, or any other individual or group with information or expertise of benefit to the task force's duties. The task force will define the system to be used, identifying performance criteria, goals and the basis for determining whether the opportunity for an adequate education exists. The task force may consider one or more of the following criteria: performance on state tests, percentage of pupils in advanced placement courses, attendance rates, cumulative drop-out rates, environment indicators such as safe schools data, subsequent programs/careers of graduates, expulsion and suspension rates, percentages of highly qualified teachers and teacher as well as administrative turnover rates. Their initial recommendations are due November 1, 2009, and the Department of Education will undertake a process to verify and test the system from January through June 2010, using one school in each county. By November 1, 2010, the Department will report on this review and its plans for implementing a performance based system statewide beginning with the 2011-2012 school year. Beginning October 1, 2012, the Department of Education will annually prepare a detailed report documenting the results of each school on the performance-based school accountability system, identifying all schools that can demonstrate they are providing the opportunity for an adequate education.

The bill also implements a Corrective and Technical Assistance process to be implemented by the department for schools that do not demonstrate that they are providing the opportunity for an adequate education. In the first year of failing to meet requirements, an action plan must be submitted explaining a strategy to achieve compliance and showing how the budget reflects the plan. If in a second consecutive year, the action plan must include descriptions of mentoring or coaching, ongoing technical assistance and a liaison from the department, and an accounting of how education funds are being expended. If in the third consecutive year, the commissioner shall assess how the school is expending its education funds and may order that funds be redirected for use in a different manner.

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Retirement and "Spiking"

This week Governor Lynch signed HB 223, changing the effective date for the implementation of the retirement system employer assessments for excess benefits. The bill delays until July 1, 2010 the effective date for the assessment of the retirement system employer assessments for excess benefits under RSA 100-A:16, III-a.

HB 532, which removes extra or special duty pay from the definition of earnable compensation used in the calculation of retirement system benefits, passed the House and awaits scheduling in the Senate for further consideration. This proposal primarily impacts Group II (police & fire) employees, since any overtime pay, holiday and vacation pay, sick pay, longevity or severance pay, cost of living bonus, additional pay for extracurricular and instructional activities, and any military differential pay, remain within the definition of earnable compensation.

HB 641, which modifies the calculation of the retirement system employer assessment for excess benefits and phases in the required payments over 4 years, passed the House in late March, but still awaits assignment in the Senate.

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Economic Stimulus Update
Distribution of ARRA IDEA Funds

This week, the Department of Education released information on grant amounts for IDEA and Pre-school grants. Details are identified for each school district in the state. Fifty percent of the funds are now available, with the remaining balance available in September. Information is available on the Departments Recovery Web Site.

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For the complete text of any bill, go to the general court web site and enter the bill number, e.g. HB114, SB38 or CACR2 (no spaces!), and make sure the Session Year is 2009.

For more information on specific legislation, please call Dean Michener, NHSBA Director of Governmental Affairs at 603-228-2061, or email: deanm@nhsba.org.