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Education Tax Credits: HB 1607 and SB 372
HB 1607 was adopted on a 173-127 roll call vote. The bill establishes an 85% education tax credit against the business profits tax and/or the business enterprise tax for contributions to scholarship organizations that award scholarships (vouchers) to defray the educational expenses of attending a nonpublic school or for limited home education expenses. A 3-year phase-in was adopted, with a maximum of $3.4 million in tax credits for the first year, $5.1 million in the second year, and $6.8 million subsequently. For students receiving vouchers and identified in the ADM count for adequacy payments, deductions of those aid amounts will be made to the resident district, with notice by Sept. 1. Estimated losses in Adequacy aid payments to school districts are $3.9 million in year one, $5 million in year 2 and $5.5 million in year 3.
SB 372 was adopted on a 17-7 roll call vote after a floor amendment that resembles HB 1607, but with basically a two-year phase-in. The House version also includes a provision to study how to measure and assess student and parental satisfaction with the program as well as the fiscal impact to the state and school districts. Both bills now "crossover" for consideration by the other body.
ACTION ITEM
Please contact your local senator and legislators, expressing your opposition to these bills. Diverting money from the state and local districts for private school purposes is the bottom line of this legislation. Local districts will see little or no reduction in their expenses and fixed costs when small numbers of students leave the public school, yet will still be required to forfeit $4-$7 million in adequacy funds. 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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Defined Contribution Plan and the NHRS
SB 229 was adopted by the Senate. The bill establishes a Study Commission to make recommendations on whether the current NHRS system should be replaced with a defined contribution plan for all new hires. Stripped from the final bill was an appropriation of $100,000. The Commission's report is due on or before December 1, 2013.
HB 1460 was adopted by the House on a 197-104 roll call vote. The bill implements a Defined Contribution Plan, essentially mirroring the original version of SB 229. Despite concerns with the high cost of transition associated with the plan, the House position is that potential future savings and reductions in risk are worth the immediate cost. Estimates associated with the cost of transition are a shortfall of $83 million in the unfunded liability requiring increased employer rates; an estimated increase to employers of $1.2 billion due to closing the "Defined Benefit" group; and an increase of $222 million over the next biennium due to changes in calculating the ARC (Annual Required Contribution). These issues are better addressed in a thorough study as proposed in SB 229.
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Building Aid
SB 383 was adopted by the Senate. The bill makes grants available beginning in FY 2014, at a total amount determined by the legislature, from state funds with no bonding authorized as a source of funds. SAU office facilities, as well as lease-purchase of any temporary space, including modulars or trailers, is not eligible for aid. Aid is only for instructional K-12 facilities, used for at least 20 years; if use of the facility is discontinued, the entire aid must be returned. 50% of the total eligible aid is paid "up front", with the balance paid upon completion of construction. The amount of the grant is governed by a modified version of the current "alternative" building aid formula, using property and income wealth to determine an aid range of 20-80% of eligible costs, based on current maximum square footage per pupil and usable site size. Available aid will be allocated based on a priority ranking system that considers unsafe conditions; obsolete, inefficient, or unsuitable facilities; and overcrowding. The Dept. of Educ. will develop a rating system by November 2013. Applications will be due by December 1 of the fiscal year prior to the biennium in which school building aid is to be disbursed.
HB 533 was adopted by the House. This bill also resumes state aid beginning in FY 2014, capped at an annual amount of $50 million from the state operating budget without bonding to fund the grants. The amount of a grant will be 30% of the cost of construction/renovation, with SAU facilities still eligible. Applications must include the least costly plan that meets minimum state building standards, as well as a 20-year maintenance plan to achieve the design life expectancy of the building. Current maximum square footage per pupil and usable site size standards remain applicable. 100% of the eligible grant will be paid "up front", until the cap/appropriation is exhausted. A similar ranking system to that described above for SB 383 is to be developed by the Dept. of Education. Proposed interim rules are due by November 2012, and final rules no later than April 30, 2013. Applications must be submitted by Sept. 1 of each year, with Dept. Educ. rankings of prioritized projects available by January 15 of each fiscal year.
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Constitutional Amendment
CACR 12,as previously noted, was rejected by the House, but with a request to the Senate for a Committee of Conference. The Speaker appointed Reps L.Ober, Hess, Balboni, and Renzullo to the negotiations, with Rep. Foose named as an alternate. The Senate agreed to the House request, but President Bragdon has yet to name Senators to serve on the committee.
CACR 8, stating that local communities shall make adequate provision at their own expense for their schools, failed to receive the necessary three-fifths vote for passage, and was then laid on the table.
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Average Daily Membership (ADM) Pupil Data and Adequacy Grants
SB 401 was adopted by the Senate. Beginning in FY 2014, ADMA data for determining Adequacy Grants will be based on the school year immediately preceding the fiscal year for which aid is distributed. During the course of the school year, the commissioner may make adjustments in grant payments necessitated by variations in the ADMA data for a school district. The commissioner shall adjust the April adequate education grant disbursement to the extent necessary to ensure that the total education grant for each school district is within 5 percent of the school district's estimated total education grant amount that was provided in November of the prior year.
ACTION ITEM
Please contact your local representative and members of the House Education Committee to express your opposition to this bill. By law, the Dept. Educ. must notify school districts of the amount of adequacy grants by November 15 PRECEDING the fiscal year for which the aid is given. This allows districts to have the information for budgeting and to inform the legislative body for the March vote on a budget. Following budget adoption, contractual obligations can be determined, such as the April 15 deadline for teacher notices. Allowing state revenue to vary during the course of the following school year, especially AFTER tax rates are set in October, puts school boards in a difficult position in terms of managing the budget. An NHSBA continuing resolution in response to such uncertainty states our opposition to unpredictable changes in funding that result in information coming to the school district after budgets are adopted.
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Local Authority over Curriculum Challenged
HB 1403 was adopted by the House. Initially concerned with provisions of the International Baccalaureate program, the adopted bill requires that school curriculum and instruction shall only meet school approval standards if such curriculum and instruction promotes state and national sovereignty and is not subject to the governance of a foreign body or organization. The bill also establishes a committee to study issues relating to the International Baccalaureate program in New Hampshire. NHSBA remains concerned that such a requirement could supersede decisions of local school districts in their choice of curriculum and instructional methodology, and impact districts that may have already adopted such programs and methods.
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Financial Responsibility for Charter School Students Attending Regional Vocational Programs
HB 1202 passed the House. The bill amends the definition of "sending district" as it applies to students attending regional vocational education programs and adds specific language relative to chartered public school students attending such programs. For students attending a chartered public school, the sending district shall be the school district in which the student resides. This places financial responsibility on school districts for placement/attendance decisions over which the district has no authority. The bill has been assigned to the Senate Education Committee, but a public hearing has yet to be scheduled.
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Health Costs and "Status Quo"
HB 1206 was adopted by the House. The bill requires public employers and employees to share equally any cost increase caused by the fulfillment of continuing obligations for employee insurance benefits under an expired contract. When districts are at impasse, the public employer and the employee shall share equally any necessary cost increase.
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