nhsba

New Hampshire School Boards Association

Legislative Bulletin

June 17, 2011 

  

A Brief Summary of Education Issues at the State House  

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Retirement Reform Update

SB 3, the retirement reform package (summarized in last week's Bulletin), was vetoed by the Governor, basing his veto on the premise that further amendments were being considered by the legislature. The Conference Committee on the budget then inserted the entire contents of SB 3 into the budget trailer bill, HB 2. In addition, minor changes amended the section that changes the NHRS Board of Trustees, streamlining the process for transitioning to a new Board comprised of 4 employee members, 4 management representatives, 4 public members with financial expertise, and the state treasurer.

EMPLOYER RATES: Recall that the reform legislation requires NHRS to recertify employer contribution rates for fiscal years 2012 and 2013 to reflect the changes made by new legislation, including increases in employee contributions. The employer rates shall be effective as soon as possible, not to exceed 30 days from the approval by the board of the system actuary's recalculation. A complicating factor is the recent surprise action by the NHRS Board, voting to require any re-calculation to be based on the new lower assumed rate of return that was adopted for the FY 2014 and 2015 rates. Legislators inserted into HB 2 retirement language, a requirement that the re-calculated rates be based on the demographic and economic assumptions used for the original calculation of the FY 2012 and 2013 rates. Until new rates are certified, the current TOTAL rate for teachers of 10.70% will increase to 13.95%. Currently, with the state paying a 25% share, school districts are paying 8.02% for teachers. The budget package adopted by the Conference Committee removes the statutory provision for the state to pay a share of local employer teacher, police and fire contributions. However, conferees did include a provision only for state fiscal year 2012, providing a state total contribution of $3.5 million on behalf of teachers, police and fire. While we look forward to anticipated guidance from NHRS, we anticipate that this July school districts will be paying close to the full 13.95%. Retirement reform measures will lower the local rates once the re-calculation and recertification is completed. Preliminary estimates circulated this week indicate the new teacher rate may be as low as 11.28%. The timing for new rates is critical, but unknown. Beginning in July, a restructured Board of Trustees will replace the current Board, but new appointments will be necessary. Once this Board becomes staffed and assumes responsibilities, it will be possible to take action on recommendations of the actuary regarding changes in employer rates.

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State Budget Update  

HB 1 and HB 2: After exhaustive and lengthy deliberations and compromise, including "stopping the clock" to meet required deadlines, the Committees of Conference on the state budget came to closure. Funding for the categorical education aid programs remains as proposed at the Senate levels, including the additional $3.2 million ($1 million in Tuition & Transportation, $600,000 in Dropout Prevention each year) to meet federal maintenance of effort requirements to maintain $12 million in Perkins funds for the regional Tech centers, as well as the Senate's addition of funding for kindergarten construction. See the table of details in the June 3 Bulletin for a summary of House/Senate budget provisions.


As noted above in the retirement summary, any state share of local employer retirement contribution rates has been eliminated. For FY 2012, the state will make a total contribution of $3.5 million, and beginning with FY 2013 and for each fiscal year thereafter, employers pay the full amount of the total contribution.

 

Agreement was also reached on establishing a legislative committee to study the relationship between the Dept. of Education and local school districts. Included in the committee's assignment is a review of the methodology of determining tuition rates for career and technical education programs and the role of state funding in that process. The committee shall identify and recommend legislation for changes in order to realize savings at both the state and/or local levels. A report and any recommendations for proposed legislation are due on or before November 2011. Unfortunately, a provision addressing an NHSBA priority resolution to identify state special education rules that exceed federal IDEA requirements, and scale those requirements back to IDEA levels, was rejected by the conferees.


In addition, the moratorium on Building Aid for new projects is extended for the next two years. Funding for Children in Need of Services is limited to the most severe cases of the over 400 youth served by CHINS.

Special Meetings: The provisions of HB 650, adopted by both the House and Senate but not yet signed by the governor, was inserted into HB 2, authorizing school districts to hold a special meeting in response to changes in state adequate education funding.

The budget agreement also allows increased funding for enrollments in charter schools to exceed the budgeted amount by 110%, with any subsequent need for additional funds to go before the fiscal committee.

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Teacher Tenure Reform  

SB 196: Conference Committee agreement was reached on SB 196, making changes to NH's 'tenure' laws relative to teacher nonrenewal or nonreelection. The proposal increases from 3 to 5 the number of years for a teacher to be eligible for the increased rights provided in 189:14-a, allowing districts more time to assess a teachers performance. In addition, the bill prohibits any binding resolution for nonrenewal grievances, making any such provision null and void upon the expiration date of that collective bargaining agreement. However, provision for locally negotiated binding resolution terms relative to 189:14-a or b are allowed in subsequent contracts, but must be renegotiated for each CBA since any such provision becomes null and void upon the expiration of the contract. The proposal also prohibits "seniority only" RIF clauses, and makes a petition for review by the state board the exclusive remedy on the issue of nonrenewals, unless a negotiated arbitration provision as described above has been agreed to in the CBA. Finally, the bill requires school boards to "have a teacher performance evaluation policy." 

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Adequate Education  

HB 337: Conference committee members came to agreement on a proposal amending the calculation and distribution of adequate education grants. The Senate version of Adequacy was basically adopted. K-12 Average Daily Membership will be used for student counts, but no kindergarten pupil shall count as more than ½ day attendance. The base cost of adequacy will remain $3,450 as in current law, but with no CPI adjustment until FY 2014. Charter school tuition will remain at the base cost plus $2,000 for a total of $5,450. There is no change in the current allowance of $675/pupil for Limited English Proficient students (no CPI adjustment) and $1,856 for special education pupils (no CPI adjustment). However, Free and Reduced price meal eligible students will now receive $1,725/pupil for each pupil who is eligible, no longer changing the amount based on the Free/Reduced population of the school, nor does any such funding go to any pupils not eligible for Free/Reduced price meals. The CPI adjustment is also suspended until FY 2014. A new grant of $675 will be given for each third grade pupil who has not tested at the proficient level or above in the reading component of the state assessment, and who is not eligible to receive Free/Reduced, LEP, or SpEd aid. Fiscal Capacity Disparity Aid is eliminated as well as "donor" towns. The proposal includes a hold harmless provision. For fiscal year 2012, the department of education shall identify all municipalities in which the fiscal year 2012 total education grant will be less than the fiscal year 2011 total education grant. The department shall distribute a stabilization grant to each of those municipalities equal to 100 percent of the decrease. For fiscal year 2013, and each fiscal year thereafter, the department of education shall distribute a total education grant to each municipality in an amount equal to the total education grant for the fiscal year in which the grant is calculated plus the amount of the fiscal year 2012 stabilization grant, if any, distributed to the municipality. In addition, beginning in FY 2014, any eligible increases in aid grants are limited to 105.5% of the previous year's grant. The current provision for the statewide education property tax to raise $363 million annually is maintained. 

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For the complete text of any bill, go to the general court web site and enter the bill number, e.g. SB1, HB34 or CACR3 (no spaces!), and make sure the Session Year is 2011.

For more information on specific legislation, please call Dean Michener, NHSBA Director of Governmental Affairs at 603-228-2061, or email: deanm@nhsba.org 
Dean Michener
NHSBA Dir. of Governmental Affairs