April 23, 2010 NHSBA Legislative Bulletin

State Budget Update

The House Finance Committee continues to deliberate/review proposed FY 2011 budget reductions in SB 450. Cuts in state aid to local school districts total almost $10 million, with another $9.4 million in reduced state retirement contributions on behalf of school and municipal employees (see last week's Bulletin (April 16) for details of the cuts).
Yesterday, the Department of Education presented its proposed implementation of cuts to the House Finance Committee. Of the $9.923 million reduction in general fund expenditures, a 16% overall cut to the Department, approximately $8.8 million, or 14%, is a downshift to local taxpayers. Cat aid would be cut $7.89 million, reducing next year's reimbursement to approximately 67% of entitlements. Remaining cuts include $607,993 in Tuit & Transp; $128,065 in Dropout Prev; $39,903 in Local Ed Improvement; $23,942 in Statewide Spec Educ; $9,178 in Career Tech Student Orgs; $65,000 to eliminate the Parent as Teacher program; a $15,961 reduction in school nutrition reimbursements for breakfast; and a $102,920 reduction in support of adult education programs.

ACTION ITEM
Please contact your local senator and representatives to make sure they understand the impact of the timing of these cuts. 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. The FY 2011 cut of $7.9 million in Catastrophic Aid is of special concern since Cat Aid is currently only reimbursing approximately 85% of the eligible expenditures that were made last year. The proposed FY 2011 reduction would reimburse only an estimated 67% of current year entitlements. 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.
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Labor Bill Requiring Notice to Education Support Staff and Non-certified Employees
HB 1411, requiring notice to educational support personnel and non-certified school district employees and opposed by NHSBA, remains in the Senate Education Committee. This bill requires the superintendent to notify, in writing, all qualified education support personnel and non-certified school district employees, who have completed their probationary employment period, of the intent to continue or not to continue that employment into the next school year.

ACTION ITEM
Please contact the Senate Education Committee and your local senator to voice your opposition to this important bill. There has been no demonstrated problem indicating the need for this bill. Many districts currently provide notice based on a collective bargaining agreement, local policy or an employee handbook. The bill is not clear as to whether the "notice" is binding, or if part-time employees are included as well as full-time employees. The bill provides for the notification to include "special circumstances as may be defined by the employer", but what happens if "circumstances" change after the notice but prior to the school year (budget, cuts in state/federal funding sources, enrollment and corresponding staffing needs)? The proposed requirement significantly reduces the flexibility that a school district needs to meet ever changing and fluctuating needs.
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Adequacy Aid Update
SB 465, relative to the transition period for implementing the adequacy aid formula, remains under discussion and review by the House Finance Committee. As passed by the Senate, the bill extends the hold harmless/collar provisions for calculating the distribution of education adequacy grants one year, through the 2012 fiscal year. It also creates a committee to study the sustainability of the existing state programs for funding K-12 education, including adequate education grants, fiscal capacity disparity aid, and catastrophic aid. Recall that the House KILLED a similar bill, HB 1677, seeking to extend the current 'transition period' (hold harmless/collar) through the 2012 and 2013 fiscal years. With no legislative action, the current Adequacy formula will increase aid to some communities, decrease aid to other communities, and requires an additional $71 million each year. Various proposals have been made to the committee, including a 'phase in' that changes the "hold harmless/collar" provision. The current transition formula provides that no district receive less than their FY '09 funding amount, nor any more than a 15% increase over the FY '09 amount. One proposal would change that provision to no more than a 5% decrease from the FY '09 funding amount, and no more than a 20% increase in the FY '09 amount. Also part of the discussion is that, without any legislative action, approximately 40 communities will pay approximately $15.7 million in 'excess' statewide property tax payments (donor towns).
Further committee review and discussion has been scheduled for next Monday and a committee vote on a recommendation scheduled for Tuesday.
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House and Senate Hearings This Week
Amidst all the debate and discussion of gambling, legislative action was taken on the following bills:
[OTP means Ought to Pass - OTP/A means Ought to Pass as Amended - ITL means Inexpedient to Legislate]
SB 486, suspending state building aid for new projects approved next year: PASSED on an OTP/A vote. The bill suspends building aid for projects approved on or after June 30, 2010 through June 30, 2011, allowing a waiver based on the state fire marshal or designee recommendation. It also ensures House/Senate Education Committee representation on the committee to study the school building aid grant program established in 2009. The bill now goes to House Finance for further review.
SJR 2, endorsing the establishment of a statewide retiree medical trust: PASSED on an OTP vote. This resolution endorses the creation of a trust to be administered by public employee associations and/or unions, with participation to be elective by option of an employee group, including an employee bargaining unit or other employee classification. Contributions are made during active employment for benefit payments after retirement to cover, in whole or in part, costs of health insurance premiums and other medical expenses. Funding is negotiated and may include employee contributions, transfer of sick or vacation leave, or contributions from employers as negotiated by the parties. As districts re-negotiate collective bargaining agreements, union proposals for employer participation in, and contributions to, the trust can likely be anticipated.
Having passed both the Senate and House, SJR 2 now goes to the governor for signature. Joint Resolutions have the force and effect of law since they must pass both the House and Senate and be signed by the governor. This resolution affirms that the general court endorses the implementation of a retiree medical trust.
SJR 3, in support of the New England secondary school consortium: PASSED on an OTP vote. This joint resolution declares New Hampshire's support for the New England Secondary School Consortium. The resolution now goes to the governor for signature.
HB 1224, relative to school employee and volunteer background investigations: PASSED on an OTP/A vote. The bill adds "charges pending disposition" to background checks that are applicable to employees and designated volunteers. This bill also requires applicants for driver education certificates and school licenses to notify the director of the division of motor vehicles if they have been arrested, indicted, or summonsed to court for certain offenses. Since the bill was amended, it must return to the Senate for concurrence with the House change.
HB 425, clarifying the remedies for violations of the right-to-know law: KILLED on an ITL vote. The bill would have allowed public bodies to be liable for attorney's fees and costs incurred in a lawsuit and provided for courts to impose a $1,000 penalty against a public official.

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House and Senate Hearings Next Week
The Senate Education Committee will be meeting in Executive Session on Tuesday morning to vote on recommendations for several bills remaining in committee, including:
HB 1411, the labor bill opposed by NHSBA that requires written notice to educational support personnel and non-certified school district employees; and
HB 1523, the bill revising the statute on pupil safety and violence prevention to include harassment, intimidation, bullying, and cyberbullying.

The House Finance Committee will be holding work sessions to review financial considerations of many bills, including:
SB 450, relative to proposed budget cuts; and
SB 465, relative to the transition period for Adequate Education grants.

It is important to note the following schedule that has been adopted by the House:
Thursday, May 13: Last day to act on Senate bills.
Thursday, May 20: Last day to form Committees of Conference.
Thursday, May 27: Last day to sign Committee of Conference reports.
Wednesday, June 2: Last day to act on Committee of Conference reports.