Volume 36, No. 11
April 2, 2010
Education Budget Moves; Short Timeline
The full House approved H.274, a $5.48 billion education budget Tuesday by a 104-0 vote. Final passage could happen as soon as next Thursday in the Senate. The House made no changes to the budget as it was substituted by committee last week.
Chairman Richard Lindsey explained the committee-approved budget on the House floor. The budget next moves to the Senate Finance and Taxation Education Committee Tuesday.
Very little change can be expected in the education budget as it progresses in the Senate. Chairman Hank Sanders briefed the Senate FTE Committee this week and explained the driving forces behind the appropriations bill. Once again, saving jobs and minimizing harm to education programs are the critical items. Because additional revenue was identified for the K-12 Foundation Program, a projected 3,700 state-funded teaching jobs would be saved in this budget. However, there still will likely be job losses because of shortfalls in local funding and cuts in Other Current Expense (OCE) which funds support personnel. Most other education budget items are funded at the prorated-level of the current year, which was 7.5 percent less than originally appropriated for 2010.
A patchwork of fix-its are needed to accomplish the final tally of some $5.48 billion in appropriations. These include a potential Public School Construction Funds bond issue to replace fleet renewal funds shifted to salaries and benefits; revising the timeline for accrued liability rates for the retirement systems from 20 to 30 years; allowing unencumbered Public School Fund monies to be used for operating expenses by school systems; adding potential revenue from the hiring of state auditors to recoup uncollected corporate income taxes; collecting a lawsuit award; and anticipating revenue from legislation dealing with tax preparer fraud.
For the budget materials, visit http://www.alabamaschoolboards.org/Lobbying.htm
Ain’t That a Shame
Proration Worry Remains for 2011
Local school board members are grateful lawmakers are moving quickly on an education budget. The worry remains, however, because whether or not the economy rebounds quickly enough to fulfill budget projections in 2011 remains questionable. It’s always a guessing game. “That’s why I strongly advocate for a rolling reserve budget process,” says Rep. Greg Canfield. “Public school leaders need sustainable, predictable growth built in the budget making process, so they can plan and grow in a methodical, stable and thoughtful way.”
The brisk pace H.274 is taking through the Legislature would ensure local boards have a budget prior to the close of the school year. Alabama’s tenure and fair dismissal laws require school boards to make most employment decisions and give notice to employees by the last day of school. With the fiscal dilemma for a shortage of funding is front and center, and school boards must make very difficult decisions in uncertain times.
Even with the proposed budget that has been called a miracle budget, it took duct tape and positive thinking to piece it together. School board members are crossing their fingers that proration can be avoided next year. As written, the 2011 budget must grow by 1.175 percent to prevent proration. Should the economy show zero or negative growth, as some economists predict, there is no “safety net” in place to protect K-12. Local boards are using reserves to survive current 2010 proration and establishing lines of credit to meet payroll by year’s end. The state no longer has any reserves available in its Rainy Day Fund or Proration Prevention Savings Account.
School Start Date Discussed
Despite Lack of Legislation
During House debate of the education budget, Rep. Jamie Ison asked if local boards would consider a later school start date as a cost-saving measure. Chairman Lindsey responded that there was a study claiming the measure would generate additional tourism revenue should the school year begin later; however, AASB has learned from other states that cost-savings are not realized as advertised and that local parents and communities are urging repeal of the start date legislation.
The only study to date was funded by the tourism industry and is completely devoid of any impact to students, student achievement or education. The study was based on outdated and faulty information as well. Until an objective study about the educational impact, real cost to public education, and valid revenue projections can be secured, the debate is a public relations circus. Expect the discussion and various pieces of legislation to be revived for the 2012 budget year.
Local Match Relief for a Select Few:
Is It Equitable?
H.788, sponsored by members from the Baldwin County Delegation, would cap a local board’s match to the Foundation program at 5 percent of the previous year’s total statewide match to the program. This change would affect only a few local boards but would result in a larger portion of the total Foundation Program being funded by the state, at an estimated $38 million annually.
A board’s local match is based upon the value of 10-mills of district property tax in the school system. That amount is added to the total state funds as a “charge back” to participate in the K-12 Foundation Program funded from the Education Trust Fund budget. The match is the equity component and bases local contributions on the value of 10-mills of local property tax.
The bill would arbitrarily establish a cap without regard to what the current local match calculation would yield to the total Foundation Program. Essentially, a few select local boards would pay less than the 10-mills mandated by current law. Already strapped state revenue sources would be forced to make up the difference created by the cap on the local contribution.
Enacted Education Legislation So Far
Act 2010-210: H.37 was signed into law Wednesday to ensure that a teacher’s certification is revoked upon conviction of major felonies or sex crimes involving children. In recognition that the tenure and fair dismissal process has significant flaws, the law is the first step to address the payroll loophole in the tenure and fair dismissal laws. Until local school boards regain authority to dismiss and stop the pay and benefits of poorly performing, absent or badly behaving employees, local school boards will be forced to pay full salary and benefits to terminated employees (and hire a substitute) until their appeal process is exhausted.
Act 2010-221: S. 292 would allow the accrued liability rates for the Employees’ Retirement System (ERS) and the Teachers’ Retirement System (TRS) to be computed over a maximum period of 30 years rather than the current 20-year maximum period. The bill would reduce the annual amount of employer contributions to fund the TRS by some $54.1 million.
Act 2010-210: H.79 specifies posting notice requirements for the office vacancies of education officials, including local superintendents. The law became effective immediately but does not impact searches currently underway.
Education-Related Legislation Status
With only six legislative days remaining, it would be a Herculean task to pass bills that have not already been approved by committee in their House of Origin. A bill needs a minimum of five legislative days to pass.
Charter Schools – The charter school bills have not moved and therefore have no realistic chance of passage this session. After the education community, including AASB, provided compelling testimony opposing the bills, no action was taken. Interestingly, results of the Race To The Top state scoring demonstrated that even if Alabama had secured all eligible points in the charter category, the state’s rank would have moved from 37 to 30. Only the top two ranked states received funding in Phase 1 of the federal grant process.
PSF Flexibility - H.724: would allow local school boards the authority to use unencumbered Public School Fund dollars for operating expenses in 2011 only. H.724 is pending in the Senate FTE committee.
PSCA Bond Issue - H.743: would authorize a $66.5 million PSCA bond issue. The dollars would flow to fleet renewal to free up those revenues for salaries and benefits. It would be issued only in the event no federal jobs relief comes. The likelihood of Congressional action is waning. H.743 is pending in the Senate FTE committee and travelling with the budget.
Fewer Days - H.714: would address funding shortfalls by giving the Legislature authority in a “financial emergency” to fund fewer employee contract days through the Foundation Program. The projected savings from a five-day cut would be some $94 million. It is highly unlikely that the political climate will allow a true opportunity to address a potential cut in days because of its impact on salaries, despite the reality that jobs would be lost otherwise. H.714 is pending in the House Education Appropriations Committee.
Alternative ADM - S.26/H.43: would permit an alternative method to calculate teacher units in cases of emergencies. Each bill is pending final passage.
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Local school boards work with legislative leaders to accomplish the public’s highest priority -- educating our children.
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6 Days remain in the
Regular Legislative Session
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