3/16/2012 SCHOOL FINANCE SCHOOL FINANCE SCHOOL FINANCE

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1 SCHOOL FINANCE HB 2200 (formerly SB 450 bi-partisan plan) On Senate General Orders $74 base budget per pupil increase 2013 and Maximum LOB: 31% to 32% in 2013 and 33% in No mandatory election for LOB use over 30% for school year ; reinstated for following years. Base increases do not take effect unless LOB state aid funded at 91.5% in next year and 100% in FY ( Trigger tied to base increase, not LOB increase.) SCHOOL FINANCE $50 million more than Governor recommended in FY 2013 for base increase, same in FY 2014; $25-plus million to equalize LOB aid each year. KASB position: support if state aid provided for new LOB authority at higher rate; oppose election. Increase base funding about 2% per year; first increase since Compromise allows all districts more funding, more local control. Contact Senators; urge support. SCHOOL FINANCE SB 361 (Governor s school finance plan) Senate Education requests interim study. KASB believes major changes should be made if further consideration given. Pending changes for future implementation, HB 2200 as amended provides funding for next two years. KASB supporting elements of Governor s career tech and teacher evaluation proposals to improve education in SB 393 and H Sub HB

2 CAREER AND TECHNICAL EDUCATION SB 393 On House General Orders Vocational/CTE funding remains weighting; 30 mile duplication limit dropped from Governor s plan. Funding to replace school district tuition payments in Governor s higher ed budget. House committee amendments Place one-year sunset on weighting; requires Legislature to revisit next year; encourages State Board to study alternative funding method. CAREER AND TECHNICAL EDUCATION Clarifies that private/home school students may receive state funding for tuition at postsecondary CTE programs, only at public institutions. For high demand programs: districts must pay cost of student fees for assessments leading to industryrecognized credential, up to two tests, maximum $1,000. Districts receive $1,000 payment from state when student graduates with credential. KASB prefers Senate positions; paying fee may become unfunded mandate on districts. CAREER AND TECHNICAL EDUCATION Committee voted against ending concurrent enrollment funding for both district and community or technical college. Could be offered again on House floor. Contact House members; urge them to avoid new unfunded mandates; support concurrent enrollment funding; review impact if funding changes. TEACHER EVALUATION AND LICENSURE HB 2634 Advanced to House Final Action Evaluations must use multiple measures of student achievement and growth. Educators designated in four categories. Growth in student achievement primary evaluation factor. Plan of assistance for progressing or ineffective employees and evaluations each semester. 2

3 TEACHER EVALUATION AND LICENSURE Professional development state aid directed to helping employees, improving evaluation. Mentor program broadened. Districts must adopt evaluation procedures meeting state standards. After standards adopted, negotiations not required. Two years of ineffective evaluation becomes grounds for dismissal. Bill does not change due process law. KASB generally supports all provisions. DISTRICT CARRYOVER FUNDS Background: Total funds in H Sub SB 111 accounts July 1: $400 million. Total authorized by H Sub SB 111 : $150 million. Could make up $232 cut in base budget this year. Only about $27 million used under H Sub SB 111. Districts may plan to spend more by reducing transfers; won t know until July 1, Operating fund balances doubled from $200 million in 2006 to $400 million in DISTRICT CARRYOVER FUNDS HB 2773 On House General Orders (As amended by committee) Concerns district funds authorized for expenditure by last year s H Sub SB 111. Requires districts spend those funds first to pay costs of higher enrollment of at-risk weighted students this year and next year. Next, allows spending those funds up to $232 per pupil next year. DISTRICT CARRYOVER FUNDS Committee removed requirement to spend those funds or use to lower LOB mill levy. Appropriations Committee budget intent: require districts to use H Sub SB 111 balances to self-fund enrollment growth this year. Bill may have to be amended to avoid $41 base cut for all districts to make up with balances. 3

4 DISTRICT CARRYOVER FUNDS Contact your representatives about this bill. What does it mean to your district? Explain why your district has increased cash balances (if it has). Issues of late state aid payments and cash flow for special education, etc. Plans for future use of balances. All spending one-time money, what is the plan for replacing the following year? Some government accounting standards suggest cash balances for two months operating costs. SUITABLE FINANCE HB 2397 Suitable Finance. On House General Orders Directs courts in finance cases to consider that 65% of funding provided by state goes to instruction and courses required by state or for qualified admissions. KASB opposes: many state funds cannot be used for instruction and the bill does not account for the costs of improving student achievement. OTHER SCHOOL FINANCE ISSUES SB 257 LOB authority. For decline in special ed state aid. Hearing held in House Education. KASB supported. SB 260 Special education aid. Repeals maximum and minimums. Hearing held in House Education. HB 2430 Contingency fund. On Senate General Orders. Senate Education made 10% maximum permanent. House bill extends for 3 years. Current law drops to 6%. KASB supported. OTHER SCHOOL FINANCE ISSUES HB 2718 Local Activities Budget. On House General Orders. Local levy with no state aid for districts below average spending. KASB opposed and advocated for increased local option authority on the condition of state equalization aid. HB 2400 At-risk weighting. Changes at-risk funding to non-proficient grades four to 12, reducing funding by over $100 million. In House Appropriations, could be considered. KASB opposed. 4

5 OTHER SCHOOL FINANCE ISSUES HB 2777 Schools For the Blind and Deaf. On House General Orders. Allows State Board to charge districts for cost of special teachers to provide services to students attending the state Schools For the Blind and Deaf. Districts could count those teachers for their special education state aid. (Identical bill SB 448 in Senate Education.) STATE AND EDUCATION BUDGET Current year supplemental appropriations SB 311 on Senate General Orders. Adds $24.8 million for increased regular and at-risk enrollment to keep base state aid per pupil at $3,780. H Sub SB 294 on House General Orders. Does not add $24.8 million for at-risk enrollment. Separate bill, HB 2773, may be amended to require districts use cash balances in certain funds to pay for increases; if not, base will drop approximately $41. STATE AND EDUCATION BUDGET Funding for next year (FY 2013) H Sub SB 294 (House plan) on House General Orders. Follows Governor s recs: no change in base state aid or LOB aid $500,000 for mentoring; cuts in early childhood from CIF shortfall. SB 433 (Senate plan) in Senate Ways and Means. Governor s recs but adds $1 million special education; $500,000 for mentoring; restores early childhood cuts if CIF funding is available. H Sub SB 177 Passed House; Senate motion pending. Phase down income tax when revenues exceed 3%. 3% just above average inflation rate, half the average personal income growth. Eliminates sales tax on food next year. No extension of 0.6% sales tax, no highway transfer. Fiscal note not yet available. Could force shift in school funding to property tax, especially harmful to low valuation and rural areas. 5

6 S Sub HB 2117 On Senate General Orders Major elements of Governor s income tax reduction proposal; eliminates most deductions and credits but maintains Earned Income Tax Credit. 2% state spending limit removed. Makes 0.6% sales tax rate for state general fund permanent. Fiscal note not yet available. HB 2609 Passed House, in Senate Assessment & Tax $45 million for non-school property tax relief next two years; requires mill levy roll back if valuations rise; unclear wording on ability to increase mill levies with vote. Vote in House. KASB opposes. Unclear if bill is a tax cap or only requires board vote. School district levies already limited by school finance law; shouldn t be in this section. Combined with H Sub SB 177 could make it much harder to raise revenue for education. HB 2501 and SB 317 In tax committees Exclude trade fixtures from assessed valuation of real property. KASB opposes the revenue loss this change would create. KASB is working with a group of local government representatives and other parties in negotiations over this issue. Proposed amendment would place moratorium on reclassification, allow further study and judicial review. SB 421 On Senate General Orders Apply 20 mill school levy to motor vehicles, reduce all property tax funds, including LOB, bond and interest, capital outlay. On Senate general orders. KASB testified as neutral, supporting the higher state revenue for base aid, but urging more study of the impact on other funds and local units. 6

7 KPERS H Sub SB 259 Recommended by House Pensions Shifts new state, school districts and local employees to cash balance plan with guaranteed cash benefit, but not guaranteed pension based on earnings and years of service. KASB neutral. Includes original Senate bill extending current law on school district employees working after retirement for three additional years. KASB supports. KAN-ED S Sub HB 2390 (amended to contain concepts in SB 398) On Senate General Orders Repeals KAN-ED network and programs, but allows some continued funding to support high speed connectivity for schools, libraries and hospitals. (Original House bill repeals KAN-ED entirely.) KASB supports as an alternative to complete elimination. Interim committee study and critical Legislative Post Audit report make changes likely. DISTRICT PROGRAMS AND MANDATES HB 2444 Seclusion and restraint. Tabled by Senate Education pending State Board action in April. Imposes new restrictions and requirements on the use of seclusion and restraint for K-12 students. KASB opposes; believes current guidelines are working effectively; parents have options through special education due process; and putting in statute would increase litigation and cost. State Board to have Special Ed Advisory Committee review, consider regulations rather than law. DISTRICT PROGRAMS AND MANDATES SB 410 Dyslexia. Tabled by Senate Education Imposes new requirements on school districts for students identified with dyslexia. KASB opposes; reading disorders are already covered by special education laws and regulations; Kansas reading scores have improved dramatically since more interventions have been put in place; bill would increase district testing and training costs. 7

8 DISTRICT PROGRAMS AND MANDATES HB 2645 Financial literacy. No action by House Education Budget or House Education. Would require course in personal financial literacy for high school graduation. KASB opposed the bill as introduced, but recommended a comprehensive study of the cost and benefit of such a requirement. No data presented on actual cost to districts, possible alternatives, or benefits where implemented. VIRTUAL, CHARTER, PRIVATE SCHOOLS HB 2767 On House General Orders Provides state income tax credits for contributions for private school scholarships. Only to students in districts with high at-risk but not low enrollment weighting, and income guidelines. Schools must be accredited by State Board or certain private accrediting agencies. KASB opposes as inappropriately providing public support for private schools that do not have to meet the requirements of public schools. ELECTIONS HB 2425 moves school board elections and question submitted elections under state campaign finance act. Recommended by House Elections. KASB supported the bill with qualifications. Possible amendment would move school board and other local spring elections to the November general elections in even-numbered years. KASB opposes the change in election date. OTHER ISSUES HB 2749 School Bus Regulations. Passed by House. Exempt bus from new requirements after manufacture date. (Current law 25 year). KASB supports. HB 2745 Remedial Courses. On House General Orders. Prohibit state funding for remedial courses at state universities, cuts exceptions window from 10% to 5%. KASB neutral. 8