On Monday, the Legislative Fiscal Committee adopted unanimously the Governor's recommended cuts for the current fiscal year, FY 2010. Local school budgets will be impacted this year by approximately $1.3 million in cuts to state aid. Specific cuts include the following:
State Aid              FY 10 Appropriation             Reduction        %           Adjusted Appropriation
Catastrophic Aid           $ 30,567,754                  $ 670,000       2.19       $ 29,897,754
Tuit & Transp                 7,329,018                      99,000       1.35           7,230,018
Statewide SpEd                   291,000                        75,000     25.77         216,000
Local Ed Improve              485,000                       25,000       5.15               460,000
Additional cuts in Reading Recovery ($33,000), state testing ($23,000), school nutrition ($52,000) and adult education ($81,000) were also included.
 
For next year in FY 2011, NHSBA opposed almost $10 million in cuts that were proposed to a joint meeting of the House and Senate Finance Committees. The cuts are included in an amendment to SB 450, which already addresses budget issues primarily associated with Health and Human Services. Education cuts in the proposed amendment include:
State Aid               FY 10 Appropriation        Reduction         %           Adjusted Appropriation
Catastrophic Aid    $ 31,430,117                 $ 7,800,000        24.8                   $ 23,630,117
Tuit & Transp            7,555,689                   602,000           7.97                   7,230,018
Dropout Prevention    1,750,000                    139,000           7.94                       1,611,000
Statewide SpEd          300,000                          23,000           7.67                         277,000
Local Ed Improve        500,000                          39,000           7.8                       461,000
Court ordered place  1,500,000                          19,000           7.93                      1,381,000
Additional cuts in career tech student organizations ($9,000), state testing ($239,000), school nutrition ($16,000) and adult education ($102,000) were also included, as well as eliminating funds for Parents as Teachers ($65,000).
 
An additional downshift of costs from the state to local districts is a proposed $9,367,000 reduction in the state contribution for local government retirement costs (pension and medical subsidy), cutting the FY 2011 appropriation from $46,837,853 to $37, 470,853. This corresponds to yet another reduction in the state share from 25% down to 20%. Of the $9+ million downshift to local property taxes, approximately $5 million impacts schools and $4 million municipalities.

ACTION ITEM
Please contact members of the Senate Finance Committee, House Finance Committee, and your local senator and representatives to voice your opposition to this bill and make sure they understand the impact of the timing of these cuts. The Fiscal Committee's FY 2010 cuts impact current year budgets and will be felt before the end of this school year. The FY 2011 proposed cuts impact next year' budgets, most of which were adopted at March annual meetings and based on higher levels of anticipated state revenue. These proposed reductions in state revenue sources were not known or anticipated at the time of budget development, deliberation or adoption.
 
The FY 2011 cut of $7.8 million in Catastrophic Aid is of special concern. Currently this year, Cat Aid is reimbursing approximately 88% of the eligible expenditures that were made last year. With the Fiscal Committee action this week, that level of reimbursement drops closer to approximately 85%. The adjusted FY 2011 appropriation after the proposed cut would represent only 68% of current year entitlements (assuming no increase). These current year expenses cannot be modified or reduced: they are based on required programs that meet the educational needs of these students. Since districts were not aware of these lower estimates of aid during the budget process, such cuts will have far-reaching impact on other areas of local budgets as well as increasing local property tax rates next fall.
 
The House Finance Committee has scheduled a wok session to review the Department of Education budget cuts on Thursday, April 22 at 3:30 pm in room 210 of the Legislative Office Building (LOB).
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