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State Budget Update 

The Senate Finance Committee held a very crowded hearing on the budget. Public testimony focused extensively on cuts within HHS. Areas within the education budget that have been highlighted to the Committee are as described below. It is important for you to share with your senator the impact of these lower funding levels on your local budgets. Specific budget areas and their level of funding are as follows:

Adequate Education Aid: Currently funded at $942 million, with $578.2 million in actually 'grants' paid to local districts, this aid remains level funded in the House budget. Both bills on Adequacy, HB 337 and SB 183, level fund district education grants with hold harmless provisions.

HB 337 revises calculations for the base cost of adequacy using lower salary figures, and computes a base cost per pupil of $2,740. Additional money is provided per pupil for Free/Reduced Meal eligible pupils at $1,770, Limited English Proficiency pupils at $693, and Special Education pupils at $1,904. Additional Fiscal Capacity Disparity aid, above and beyond adequacy, is distributed at $3,360/pupil for communities in the lowest 1/8th of property wealth/pupil who also are below average in median family income. The next highest 1/8th receives $2,100/pupil if also below average income wealth. Charter schools receive $5,450/pupil. The total cost of the calculated grants is $424.1 million, with a hold harmless of $154.m million to maintain a grant funding level of $578.2 million.

SB 183 uses the current $3,450 base cost per pupil. Additional money is provided per pupil for Free/Reduced Meal eligible pupils at $1,725, Limited English Proficiency pupils at $675, Special Education pupils at $1,856, and provides new funding of $675 for each third grade pupil testing below proficiency but not already eligible for Free/Reduced, LEP or SpEd funding. Fiscal Capacity Disparity Aid is eliminated. Charter schools receive $5,450/pupil. The total cost of the calculated grants, which all comprise adequacy, is $445.9 million, with a hold harmless of $132.3 million to maintain a grant funding level of $578.2 million.

Both bills continue to use $363 million in SWPT revenue, but eliminate 'donor towns', allowing communities to keep the funds for the use of the district. 

Building Aid: The House budget restored full funding for those projects already approved and receiving funding. The proposed level of funding is $49 million for FY 2012 and $47.2 for FY 2013. The moratorium on funding for new projects is extended for two years to June 30, 2013. Kindergarten construction aid remains unfunded in the House budget. The Dept. Education has indicated that $5.8 million is needed in 2012 for previous commitments to districts, both in funding for temporary facilities and new construction, and another $4 million for new construction in 2013. 

Catastrophic Aid: Currently funded at $25.5 million, estimates from the fall on full entitlements projected $38.2 million needed in 2012. Budgeted at $21.5 million for each of the next two years, this reimbursement program for expenditures already incurred falls far short of entitlements, which don't even begin qualifying until $45,000 is spent on a child. 

Tuition & Transportation and Dropout Prevention: These programs are currently funded at $6.9 and $1.6 million respectively. Projected entitlement for T&T next year is $9.8 million; dropout prevention funds were requested at $1.75 million. Proposed funding eliminates dropout prevention funding, and cuts T&T to $5.9 million for both 2012 and 2013. The additional problem with these funding levels is a potential loss of $12 million in federal Perkins Career & Tech funding due to Maintenance of Effort requirements. The Dept. of Education has indicated that restoring $2 million in Tuition & Transportation aid ($1 million/year) and $1.2 million in dropout prevention aid ($600,000/year) for a total of $3.2 million will meet the minimal Maintenance of Effort requirement to preserve the $12 million ($6 million/year) in federal aid. 

Local Education Improvement: Funded at $460,000 this year, the Dept. originally requested $500,000 next year but the House budget eliminates all funding. These funds support local school improvement programs for districts not covered by federal Title I programs. 

Statewide Special Education: Funded at $275,000 this year, the Dept. requested $300,000 next year but only $100,000/year is in the House budget. The Dept. indicated these funds support alternative assessments for the 1% of students with disabilities unable to take the NECAP, and requested a minimum of $75,000/year ($150,000) to maintain this critical function.

State Share of Retirement Contributions: As noted in previous bulletins, the House budget reduces the current state general fund commitment of $47 million this year for sharing in local govt. retirement contributions on behalf of teachers, police and fire to $4.6 million in 2012 and $2.7 million in 2013. This is based on the assumption that by increasing Group I employee and teacher rates by 2%, police by 2.25% and fire by 2.5%, the additional money raised will off-set by approximately $42 million the amount needed to be raised by local employers. However, the current year state share of $47 million is based on the state paying 2.68% for teachers, 4.88% for police, and 6.17% for fire. This week, the NH Retirement System provided an estimated impact of those new rates, projecting a net member increase of $37.7 million. $11 million of the increased amount raised is from Group I employees, for whom the state has never contributed a share; the increase from teachers is estimated at $20 million, for police it is $3.8 million and $2.7 million from fire.

Repeal of Children in Need of Services Statute - RSA 169-D: The House budget repeals the CHINS statute that addresses certain behaviors occurring within a family or school environment. This repeal will likely result in an increased demand and need for services from school districts and possibly result in more out-of-district referrals for children who would have otherwise benefitted from the CHINS program. 

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Labor Law Update

Right to Work

HB 474, known as the "Right To Work" bill, prohibits collective bargaining agreements that require employees to join a labor union or pay any fee or "fair share". The Senate adopted an amended version of this bill on a 16-8 vote that does not include the House language that changed the bargaining statute, 273-A, to not require a union to represent non-members, and that a negotiated CBA only applies to members of the organization. Without that wording, 273-A gives the local bargaining unit 'exclusive representation' rights, and the contract negotiated with the union would apply to ALL employees. However, those contracts would not be allowed to contain provisions for agency fees that non-union members would have to pay to the union. The bill now goes back to the House for concurrence consideration.

Tenure and Nonrenewal

SB 196 increases from 3 years to 5 years the time required to be entitled to reasons and opportunity for a hearing when given notice of nonrenewal (Failure to be Renominated or Reelected) under 189:14-a. The bill also removes any standard of review for school board hearings in cases of nonrenomination due to unsatisfactory performance. However, it does require that a teacher's performance not be based solely on state or national assessment scores received by pupils in the teacher's class. A public hearing in the House Education Committee is scheduled for April 28, 1:30 pm in room 207 of the LOB.

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Pension Reform Update 

In addition to the action described above in the budget update, both the House and Senate bills on comprehensive pension reform are under review by the other body.

SB 3, Senator Bradley's bill making comprehensive changes to the state retirement system, had a public hearing before the HOUSE SPECIAL COMMITTEE PUBLIC EMPLOYEE PENSIONS REFORM. The bill remains under review, with a committee vote and recommendation expected on April 26.

HB 580, Rep. Kurk's bill making comprehensive changes to the state retirement system and also including changes to collective bargaining, has received a unanimous recommendation for amendment. The proposed change eliminates the entire revision to the retirement statutes, replacing the bill with a committee to study collective bargaining by public employees. The committee would be charged with studying matters it deems necessary related to public employer collective bargaining agreements under 273-A, with a report due on or before December 1, 2011. This committee recommendation goes to the full Senate for a vote next Wednesday.

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Hearings Scheduled for Next Week 

Tuesday, April 26:

Senate EDUCATION, Rooms 305-307, LOB

Thursday, April 28: