May 14, 2010 NHSBA Legislative Bulletin

Fiscal Year 2011 Budget Reductions: SB 450

After lengthy debate and consideration of various alternatives, the House voted 187-182 to adopt $181.8 million FY 2011 budget reductions contained in SB 450. The Dept. Education general fund appropriation is reduced by $6 million, with approximately $4.8 million impacting specific reductions in state aid to local school districts. These reductions will simply downshift the burden to local taxpayers to make up the loss in revenue that was anticipated during the budget process and recent school district meetings. Catastrophic aid is reduced by $3,946,405, resulting in a distribution of this aid that is expected to be approximately 79% of entitlements. Other state aid 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. Additional proposed education cuts include $65,000 to eliminate the Parent as Teacher program; a $15,961 reduction in school nutrition reimbursements for breakfast; a $102,920 reduction in support of adult education programs; and a $240,420 reduction in expenditures for state assessments. The bill does include a provision for Special School District Meetings next year. For FY 2011, a special meeting of a school district can be held upon the majority vote of the school board for the purpose of addressing changes in catastrophic aid funding.
The House version also includes a further reduction in the state share of teacher, police and fire retirement contribution rates next year; the state share would drop another 5%, down to 20%, downshifting another $9.4 million on local budgets. Efforts to temporarily increase employee rates to help offset the corresponding increase in school and town government retirement costs were defeated.
Another funding change is the $160 million of ARRA money being used for Adequate Education Grants. Originally, $80 million was used for FY 2010 and another $80 million for FY 2011; the bill transfers next year's $80 million appropriation for FY 2011 to be used for the current 2010 fiscal year.
The Senate Nonconcurred with this plan and included most of these budget cuts in a separate bill it amended (HB 1128). The proposed cuts in education state aid are the same, but the bill does not include the reduction in state share of retirement costs. The bill does include video lottery to raise revenue for the state.
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Pooled Rick Management Programs

The Senate changed its recommendation on Pooled Risk Management Programs, which impacts the Local Government Center Health Trust, PRIMEX, and SchoolCare. After lengthy debate on competing proposals, the Senate adopted an amendment to HB 1393, a bill dealing with NH investment trusts. The Senate version, in addition to making changes to the laws regarding investment trusts, provides for: 1) the Secretary of State to have exclusive authority to investigate and impose penalties on pooled risk programs, and 2) requires the Secretary of State, in consultation with the insurance commissioner and an actuary, to submit a report by January 1, 2011, with recommendations concerning any limitation on reserves in pooled risk management programs and limitations on administrative expenses as a percentage of claims.

ACTION ITEM
While making significant cuts in aid to schools and towns, legislators have turned their interest to these pooled risk reserves. Current policies regarding cash reserves of these organizations are set by boards consisting of local municipal and school representatives and based on standard actuarial formulas. Target reserves of these organizations are lower than private industry and lower than the target set by the Blue Cross Blue Shield National Association. The goal of pooled risk programs is to provide high-quality insurance at a cost effective price, as well as stability in the rates. These services are, and have been, provided by the state's pooled risk organizations. It is hoped that changing the original attempt to place arbitrary limits on reserves with a study will allow for input from these organizations and provide more clarity and understanding of how the operations benefit members. Some concern remains as to why all investigatory power, and the study, is placed with the Secretary of State rather than the insurance department. Please contact your local senator and representatives and urge their support of the study alternative, but if regulation/oversight is needed, it should be within the insurance department.
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Labor Bill Requiring Notice to Education Support Staff and Non-certified Employees

The Senate adopted an amended version of HB 1411, requiring notice to educational support personnel and non-certified school district employees. 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. The bill includes a provision stipulating that, "Nothing in this section shall be construed to amend, replace, or otherwise modify a school district's policy on dismissal, collective bargaining agreements, or any employee benefits package." The Senate amendment adds a statement intended to clarify that giving such notice is not a binding commitment of the district.

ACTION ITEM
The House must concur with the change made in the Senate. Please contact your local representatives and voice your opposition to this bill. While the Senate amendment is helpful, there have been no demonstrated problems indicating a need for this bill. Many districts currently provide notice based on a collective bargaining agreement, local policy or an employee handbook. It is not clear whether both part-time and full-time employees are included in the bill. The notification may include special circumstances as 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 requires to meet ever changing and fluctuating needs, and will likely prompt districts to adopt policies defining "special circumstances".
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Adequacy Aid Update
The Senate rejected the House amended version of SB 465, relative to the adequacy aid formula, and requested a Committee of Conference. The Senate version extended the collar/hold harmless transition period one year. The House version does not allow for any extension, or provision that would prevent approximately 40 communities from paying approximately $15.7 million in 'excess' statewide property tax payments (donor towns). The House version allows those districts anticipating less adequacy aid in FY 2012 compared to what is received in FY 2011 to carry forward an unreserved fund balance in fiscal years 2010 and 2011. These funds would then be used to offset the FY 2012 tax rate. Also included is provision for 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.
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Bully Bill
The Senate unanimously adopted an amended version of HB 1523, revising the statute on pupil safety and violence prevention to include intimidation, bullying, and cyberbullying. Senate changes were not extensive and the amended bill is expected to be accepted by the House (Concur). The bill defines bullying and cyberbullying and addresses conduct off of school property if it "substantially disrupts the orderly operations of the school". School boards must adopt policies prohibiting bullying and cyberbullying within six months of the passage of the bill. Within 9 months, annual training on policies must be provided for school employees, volunteers, or employees of a company under contract to the school. Education programs for pupils and parents in preventing, identifying, responding to, and reporting incidents must also be provided. The bill also provides for immunity from civil liability for good faith conduct arising from or pertaining to actions taken to comply with this new law.
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Special Education Liability for Parentally Placed Students
The House adopted an amended version of SB 520, addressing continuing concerns over the financial liability for special education services when a child has been "parentally placed" in a school outside the child's district of residence. The bill clarifies that a child's district of residence remains the legally liable and financially responsible district, and allows for a contractual agreement between the two districts.
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House and Senate Action This Week
The following bills were also acted upon:
[OTP means Ought to Pass - OTP/A means Ought to Pass as Amended - ITL means Inexpedient to Legislate]
SB 373, authorizing the state board of education to approve alternative schools in a school district: INTERIM STUDY.
SB 396, restricting the use of child restraint practices in schools and treatment facilities and establishing certain notification requirements regarding the use of such practices: OTP/A. The amendment clarifies reporting requirements.

SB 504, extending the effective date for the implementation of the retirement system employer assessments for excess benefits (spiking) to July 1, 2011: OTP/A. The amendment corrects a technical statutory reference in the bill.