May 8, 2009 NHSBA Legislative Bulletin

State Budget
Very little progress/change has occurred regarding the state budget. Senate Finance continues to deliberate and review projected needs and expenditure levels, while Ways and Means reviews data on incoming revenue figures. The Department of Education appeared before the Capital Budget Committee and again reiterated its support for bonding in the capital budget to fund Building Aid for local districts. Over $91 million is needed to fully fund the program.

School Board members can review last week's Bulletin (May 1, 2009) for data/information on various state aids and the potential impact of cuts and losses in aid on local budgets. Specific information is provided on building aid, catastrophic aid, and tuition & transportation aid as well as potential cuts in the state share of retirement costs.

Much has been made over the fact that state aid for an adequate education is fully funded at over $950 million (inclusive of the statewide education property tax) for each year of the biennium. However, the current budget as adopted by the House, and provided for in HB 1 (budget bill), HB 2 (trailer bill), and HB 25 (capital budget bill), leaves significant concerns for local districts regarding the downshifting of state costs to local taxpayers.

ACTION ITEM
Please continue to talk with your senator and explain the impact of downshifting costs to the local level. Budgets have been adopted based on expectations of state aid, not only Adequacy grants, but also all state aid programs. The current shortfalls this year in Cat Aid and Building Aid, 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. The current state budget has no provision for these grants in the next biennium. This aid represents 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.

In conjunction with these losses in state aid is the current proposal for the state to back away from its commitment to local public employers regarding a shared stake in the state retirement system. The retirement system was created with the understanding that a joint pooled system would benefit both employees and employers, and the promise made to political sub-divisions was that the State would be a partner and pay 35% of the employer share for teachers, police and firefighters. NHSBA agrees with the opinion of House Legal Counsel, David Frydman, offered on page 76 of the Final Report of HB 876, Commission to Study the Long Term Viability of the NH Retirement System, that "political subdivisions are protected by Article 28-A from the State reneging on payment of state's 35% share of retirement contributions on behalf of teachers, police and firefighters. Since it was the arrangement that the State provided when municipalities joined NHRS, it would be an unfunded mandate if the State were to cease payments."
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Accountability for an Adequate Education - SB 180
The House approved the recommended changes to this bill as proposed by the House Education Committee. The proposed system provides a little more time for implementation by allowing certain targeted goals to be accomplished "by the end of the year." The bill now also includes a process for legislative oversight and approval. The revised timeline is as follows:
May-June, 2009: Task Force established, with an Interim Report and recommendations due April 1, 2010.
June 30, 2010: Schools demonstrate providing opportunity for Adequate Education by input method, narrative reports.
Nov. 1, 2010: Task Force Report on Performance Based Accountability System, with recommendations for legislation.
July 1, 2011: Initial implementation of Performance Based Accountability System with results by end of school year.
Nov. 1, 2011: Task Force submits any further recommendations based on evaluation and review of Performance System.
Jan. 1, 2012: Commissioner to report to the Legislative Oversight Committee, and biennially thereafter.
June 30, 2012: Both Input Based and Performance Based Reports for each school due by end of this school year.
Sept. 1, 2012: Dept. Education initiates annual school visitations to audit Input Based school accountability reports.
Oct. 1, 2012: Dept. Education submits report on school results for the Performance Based Accountability System.
The bill has been referred to the House Finance Committee and a work session is scheduled for next Tuesday.
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Retirement and "Spiking"
HB 641, which as passed by the House modifies the calculation of the retirement system employer assessment for excess benefits (125% Rule) and phases in the required payments over 4 years, is now proposed to be significantly amended by the Senate ED&A Committee. The proposal requires NHRS to "develop a specific methodology for individuals retiring after July 1, 2010 that determines the amount of the employer assessment for excess benefits charged". A report on the methodology is to be submitted no later than December 1, 2009. Urge your senator to support this revision when the full Senate votes on this proposal next Wednesday. It allows additional time to fully understand the charges/costs associated with "spiking" as well as time needed for the study as provided for in SB 108.

The House adopted SB 108, establishing a committee to study the imposition of assessments to retirement system employers for excess benefits paid to retirees. The bill was slightly amended to include a study of earnable compensation and other relevant issues concerning the NH Retirement System with a Committee report due November 1, 2010. The amended version will need Senate approval.
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Teen Dating Violence Education - HCR 7
Next week the Senate will likely approve HCR 7, a House Concurrent Resolution in support of teen dating violence education. The Resolution endorses the Lindsay Ann Burke Act (Rhode Island 2007 Public Laws), which provides that each public school district implement a curriculum and policy on teen dating violence and abuse. The Resolution encourages the New Hampshire department of education to work with local school districts to devise and implement teen dating violence education policies, recommends that these policies include a mission statement emphasizing that dating violence is unacceptable and will not be tolerated as well as the establishment of guidelines and discipline procedures to respond to incidents taking place at school or on school grounds, and urges school districts to incorporate dating violence education into health education curriculums in middle and or high school.

Concurrent Resolutions are acted on by both the House and Senate, but are not sent to the governor for signature. Therefore, they do not have the effect of a law. Concurrent resolutions are generally used to put the legislature on record as supporting, or opposing, some aspect of national or state policy.
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Renovation and Replacement of School Buildings - SB 59
A House Education sub-committee continues to hold work sessions on this bill that requires school districts to "investigate all feasible options" when deciding to renovate or replace a building. SB 59 also requires school boards to seek input from the public, local planning boards and elected officials, as well as police, fire and public works personnel. Building projects will also be required to conform to community master plans and local zoning regulations. The sub-committee is considering possible language to allow more flexibility in how such prerequisites might be achieved. A committee recommendation on the bill is expected next week.
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Opposition to regulatory restrictions limiting school-based Medicaid reimbursement
The U.S. Department of Health and Human Services (HHS) has proposed to rescind a final rule (CMS-2287) that would have eliminated Medicaid reimbursement for administrative and transportation services provided by schools - - at a potential loss of over $650 million per year to school districts.

This is a significant victory for school districts. NHSBA, NSBA and other state associations have fought for years to protect the interests of school districts and to ensure that they can continue to receive these Medicaid reimbursements. This announcement is a significant step forward.
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