State Budget Update
Crunch time has arrived for work on the state budget.  Senate Finance Chair Lou D'Allesdandro scheduled all day public work sessions for yesterday, today and tomorrow.  Specific deliberations on funding for the Department of Education will take place Saturday.  Further work on revenue estimates, and committee decisions on recommended amendments to the budget, will begin next Tuesday.  Thursday, June 4, is the last day for the Senate to act on any remaining House bill, and Thursday, June 25, is the deadline for Senate action on a Committee of Conference Report.
 
Unfortunately, in committee deliberations yesterday regarding retirement funding, the House proposals to reduce the state share of public employer retirement contributions were left intact.  The House version of the budget also proposed having employees share in that cost shift by raising their contribution rates 2%.  The Senate discussion yesterday proposed rejecting the increase for employees and instead reduced Group I and II employee rates back to their current levels.  (The Senate proposal would only increase the rate for State Employees hired after July 1, 2009.)  This represents a downshift of $27 million total to local communities ($9 million in 2010 and $18 million in 2011), with $15 million of that amount on school district budgets ($5 million in 2010, $10 million in 2011).
 
The Senate Capital Budget Committee met this week and reviewed proposed projects to be funded by bonds.  The Committee continues to support the funding of two regional Vocational Centers (Governor Wentworth and Littleton), and does not support the funding of Building Aid by bonding for the amount.  (Readers are reminded that specific information on building aid, catastrophic aid, and tuition & transportation aid as well as potential cuts in the state share of retirement costs are outlined in the NHSBA May 1 Legislative Bulletin.)

ACTION ITEM
The pace of budget decisions will quicken and eventually a Senate version of the budget will be sent back to the House, most likely resulting in a Committee of Conference compromise to be voted on by both bodies.  School board members should continue to talk with their senator and local representatives, and explain the impact of downshifting costs to the local level.  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.  While all senators and representatives acknowledge the importance and need of building aid, the current state budget has no provision for these grants in the next biennium.  The state commitment is an important part of the local bond approval process and loss of this commitment would have a profound impact at the local level.
 
Board members are also encouraged to remind their legislators that with respect to district payment of retirement contributions, the State promised to pay 35% of the employer share for teachers, police and firefighters.  House Legal Counsel, David Frydman, has noted, "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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Education Committees: Senate and House
The Senate Education Committee has recommended moving forward HB 688, which separates the charter school statute from the open enrollment statute.  It removes the requirement of an initial district meeting vote prior to submitting a locally developed plan to the school board, requiring instead a public hearing as the school board considers the application.
 
The Senate Education Committee then put off taking action on several bills with important local education impact.  The Committee is recommending re-referral, meaning Senate Education will keep the bills for further review and work next fall.  A committee recommendation must go to the full Senate when the next session convenes in January.  The three bills that will remain within the committee are: HB 143, implementing a procedure to be followed when parents choose to request placement of their child in a school other than their district of residence; HB 154, requiring school board policies on truancy to include provisions which define administratively excused absences and identify a system of intervention steps designed to reduce the number of habitual truants. The policy shall also designate an employee in each school as the person responsible for truancy issues: and HB 509, requiring parental consent for psychological evaluations.
 
The House Education Committee chose to retain SB 59, relative to the renovation and replacement of school buildings, for further study and possible change next year.  Committee members decided more time was needed to review language concerning potential requirements of districts to investigate feasible options when deciding to renovate or replace existing facilities.  There is also concern over language requiring the solicitation of input from various town boards, departments and/or officials, and how any construction would align with principles of "effective statewide planning" and/or "smart growth".
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Economic Stimulus Update and Gentle Reminder
The NH Department of Education has released updated information on Title I, Part A allocations to school districts as well as an explanation of the Department's process to calculate the allocations.  According to the Department's documents, "these allocations will be provided in addition to the regular 2009-2010 Title I, Part A grant awards. The USDOE distributed 50 percent of each state's ARRA funds on April 1, 2009. The remaining 50 percent will be released between July 1 and October 1, 2009. These funds along with the regular 2009-2010 Title I, Part A grant awards will constitute a state's total 2009-2010 Title I, Part A allocation."  In addition, it notes that, "Eligible LEAs will apply for Title I, Part A ARRA funds through the established Title I Application process. One coherent paper-based application has been designed to apply for 2009-2010 Title I, Part A funds to include regular funds and ARRA stimulus funds."
 
The application and further information is available on the NH Department of Education Recovery web site.
 
The "gentle reminder" for districts is that the federal government has stressed the need for transparency and accountability on how funds are expended.  The Stimulus Bill appropriated $184 million for the purpose of 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, including any Adequacy funding that is based on the proposed use of Stimulus funds to help meet the funding requirements of the new Adequacy Formula.  It should be noted that while addressing the U.S. House Education and Labor Committee, Education Secretary Arne Duncan commented, "I will be scrutinizing how states spend their stabilization money to make sure they are focused on education. I have heard that some states plan to use their stabilization money so as to maintain their rainy day fund and that others may rely on their stabilization grants to pay for tax cuts instead of investing in reforms. I will do everything in my power to reject any schemes that would subvert the intended purpose of the Recovery Act, which is to help schools through the economic downturn and push reform, thereby ensuring our economic prosperity in the future. When reviewing applications for the Race to the Top Fund, we plan to consider whether a state used their stabilization money to aggressively push reforms."
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