New Hampshire School Boards Association

Legislative Bulletin

January 27, 2012 

A Brief Summary of Education Issues at the State House  

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Education Tax Credits: HB 1607 and SB 372

These two bills had hearings this week with numerous people testifying both in opposition and support. HB 1607, in the House Ways & Means Committee, has been assigned to a subcommittee for further review. Work sessions have been scheduled for next week on Monday and Thursday: full Committee action on the bill is expected Feb. 14. The hearing on SB 372 was too crowded to complete, and was recessed to Feb. 14 at 1pm.

ACTION ITEM

Please contact your local legislators as well as members of the House Ways and Means Committee and the Senate Education Committee, expressing your opposition to these bills. Diverting money from the state for private school purposes is the bottom line of this legislation since tax credits reduce the tax liability dollar for dollar. It is hard to understand why the legislature would consider a proposal to reduce revenues while not currently paying the bills it owes. Rather than diverting scarce tax dollars away from our public school classrooms, NHSBA urges the legislature and congress to support improvements in our public schools and meet current funding obligations and promises.

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Authorizing the Retention of Funds by a School District - NHSBA Priority Bill

SB 373 authorizes a school district to retain funds for emergency expenditures or to reduce the tax rate. The bill enables districts to adopt an article authorizing, indefinitely until specific rescission, the retention of any year-end unassigned fund balance up to 2.5 percent of that fiscal year's net assessment. These funds may be used as a revenue source for emergency expenditures and overexpenditures under RSA 32:11, or to be used as a revenue source to reduce the tax rate. This bill reflects a specific resolution adopted by the NHSBA Delegate Assembly last January. A public hearing is scheduled in Senate Education next Tuesday, Jan. 31, at 1pm in room 103 of the Legislative Office Building (LOB).

ACTION ITEM

Please contact your senator as well as members of the Senate Education Committee (Chairman, Senator Nancy Stiles; Vice Chair, Senator James Forsythe; also Senators Sharon Carson, Molly Kelly, and Russell Prescott), expressing your support for this bill. Such a provision, once approved by the local legislative body, will allow a revenue source for emergency expenditures, as well as the ability to smooth out variations in local property taxes due to reductions in state and/or federal revenue.

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Retirement Issues: Spiking

SB 246, revising the method for the calculation of employer assessments for excess retirement system benefits (spiking assessment on public employers), had a hearing before the  Senate ED&A Committee. Recall that HB 462 was adopted last year, attempting to clarify the process and effective date for the determination of NHRS assessments for these so-called 'excess benefits'. Penalty assessments for "spiking" were delayed, not impacting employees retiring prior to July 1, 2012. NHRS was required to implement an interactive estimator for employers to evaluate probable costs, and assessments would be phased in over a four-year period. Problems with the on-line calculator, and continued concerns with how the penalty assessments are calculated, are the focus of SB 246, which makes further revisions to the method of calculating employer assessments and phases in those assessments over a 4-year period beginning January 1, 2013. For Jan. 1, 2013 - June 30, 2013: 25%; for FY 2014: 50%; for FY 2015: 75%; thereafter, 100%.

SB 228, repealing the assessments for excess benefits to be paid by employers in NHRS, also had a hearing before the Senate ED&A Committee. This bill repeals the penalty assessments, based on 1) reforms adopted last year which address this problem by eliminating those "excess severance package provisions" from the calculations on which pension benefits are calculated for non-vested employees, and 2) employers addressing the problem through revisions to contract language in negotiated collective bargaining agreements. Unfortunately, opponents argue that only with the threat of these penalty assessments, will employers change their practice of padding retirement benefits.

Both bills remain in committee for further review and consideration.

Retirement Issues: Defined Contribution Plan

SB 229 establishes a defined contribution retirement plan for public employees and requires the issuance of a request for proposals for plan administration. Beginning November 1, 2012, all new hires participating in NHRS shall be enrolled in the public employee defined contribution plan. A hearing on the bill is scheduled for next Thursday at 10am before the  Senate ED&A Committee. While Defined Contribution plans have certain appeal, NHSBA remains concerned that given our current unfunded liability and concurrent transition costs, including payments on behalf of new hires but dedicated for the "defined benefit plan unfunded liability", the NHRS actuary's analysis shows higher costs associated with the new proposal. School district contributions for teachers are projected to INCREASE by $529,502 in FY 2013; $1,306,653 in FY 2014; $2,532,267 in FY 2015; and $3,538,554 in FY 2016. The analysis also shows that a shortfall in payments to the unfunded liability would require an increase in employer rates needed to cover a projected shortfall of over $237 million over the next 26 years.

Retirement Issues: Rates

Actuaries met in January with the NHRS Board of Trustees and gave a preliminary view of where employer contributions are headed for Fiscal Years 2014 and 2015, assuming no change to current law. New rates will most likely be 'certified' by the Board sometime next fall, but results from the June 2011 Actuarial Valuation provide information on what those rates will be.

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Legislation Considered Next Tuesday, January 31, 2012

HOUSE EDUCATION, 207, LOB

10:00 a.m.             HB 1202: requires the resident district of a chartered public school student attending a regional vocational education center outside of the student's resident district to pay a share of the student's tuition to the regional vocational education center.

1:00 p.m.             HB 1516: requires a revised program of instruction for English and mathematics for pupils in kindergarten through grade 3.

2:00 p.m.             HB 1139: allows a parent, legal guardian, or pupil who is 18 years of age or older to have access to the unique pupil identifier, allows home educated pupils to opt in for inclusion in the unique pupil identification system, and repeals certain provisions relative to access to unique pupil identification data.

HOUSE MUNICIPAL & COUNTY GOVERNMENT, Room 301, LOB

1:30 p.m.             HB 1151: default budget would mean the amount of the appropriations contained in the operating budget authorized for the previous year reduced or increased by the terms of any employment contract previously approved by the voters.

2:00 p.m.             HB 1176: prohibits petitioned warrant articles from being amended at the deliberative session of the town meeting in towns that have adopted official ballot voting procedures.

2:30 p.m.             HB 1292: requires a 2/3 majority for borrowing by official ballot towns and school districts.

3:00 p.m.             HB 1376: prohibits an official ballot referendum town from amending at the deliberative session any warrant representing the operating budget if such town has established a municipal budget committee.

Legislation Considered Next Thursday, February 2, 2012

HOUSE EDUCATION, Room 207, LOB

10:00 a.m.             HB 1382: provides that an alternative learning plan for a child 16 years of age or older may be submitted to the child's parent for approval. The bill also requires that a truant officer obtain a warrant or permission of a parent to return a child to school who is not complying with compulsory school attendance laws.

10:30 a.m.             HB 1713-FN: abolishes the department of education and transfers all functions, duties, and responsibilities to the commissioner of education and the state board of education.

11:30 a.m.             HB 1712: requires the state board of education to establish an elective bible literacy course for pupils in grades 9-12.

HOUSE JUDICIARY, Room 208, LOB

3:30 p.m.             HB 1598: adds to the definition of "meeting" under the right-to-know law to include "meetings called to strategize to overrule a majority vote of a subcommittee of a public body even if there is not a quorum."

4:00 p.m.             HB 1506-FN: removes personnel records from the exemption to the right-to-know law.