LEGISLATIVE NEWSLETTER

May 6, 2009

Legislators Complete Their Work!

For the first time in memory, the education bills were not among the last to be passed. Legislators funded education before several other major budget bills. When the issue of federal stimulus dollars was settled, it was clear sailing. The Governor’s office in concert with Education Conference Committees crafted a plan to utilize all the federal stimulus money and state budget recommendations to fund the formula, provide sustainable operational grants, and send one-time grants to schools with the least amount of “red tape” for districts.

Before highlighting major sections of HB1400, we need to summarize considerations for negotiations.

NEGOTIATIONS ALERT

Do not make final determinations on compensation until you have reviewed a 2009-10 and 2010-11 DPI printout for your district. Those printouts should be available on the DPI website later this week.

When computing 70% of new state money for teacher compensation, Section 51 of HB1400 provides the following directives:

Whose compensation counts in the 70%?

• Teachers

• Counselors

• Career Advisors

Included in the 70% is increased compensation for current employees in these categories and compensation for those hired on or after July 1, 2009. Committee members were clear that counselors and career advisors were included because of the new counselor ratio requirements. Including career counselors in the 70% does not give them employment rights (such as negotiations and nonrenewal rights) enumerated specifically for teachers whose positions require a license.

Included in the definition of “new money”: Per student payments distributed through the foundation aid formula and State Supplemental Operations Grants—explained in HB1400 highlights below.

Not included in the definition of “new money” are State One-Time Grants

Subtract the following from your “new money” total:

• Equity payments

• Payments to school districts participating in REAs

• Administrative grants to REAs

• Reorganization grants

• $11.58 per weighted student unit ($4.58 for ACT exams and $7 for tech. and power school)

The 70% provision in law does not extend to teachers, counselors, or career advisors employed by any entity other than the board of a school district (such as REAs, Special Education Units, and CTE Centers).

Important considerations every board must make when estimating expected “new money” include:

• “New money” is computed on a biennial basis—how much you expect to get over the next two years compared to the past two years. Don’t give away more than you can sustain.

• Check DPI printouts carefully for the first AND second years so you don’t put an amount of compensation increase in the first year that prevents you from meeting new requirements in 2010-11.

• TFFR employer contributions will increase .50% to 8.75% in 2010-2011. Be sure you prepare for that increase and include it in your computations since it counts toward the 70%.

• Several other new requirements will become effective in 2010-11. Be sure to allow for new staff you may have to hire.

• In 2010-11, the number of calendar days will increase to 181. Be sure you account for that extra day when negotiating—it counts in the 70%.

CAUTION

1. State Supplemental Operations Grants will come in one lump sum by September 1, 2009, but are to be used for ongoing operational expenses, including payroll. This grant is not to be used for one-time expenditures. Put it in the bank and use it as you would foundation aid.

2. The amount districts can increase their spending until they reach the cap has been lowered from 18% to 12% a year.

HB1400 HIGHLIGHTS

This comprehensive education bill is 36 pages long and contains 68 sections. We encourage you to download the bill and read it in its entirety. Highlights of HB1400 include the following:

Funding

2009-10	$375.4 million in foundation aid $16.8 million in State Supplemental Operations ADM Grants $85 million in State Supplemental One-Time Grants (ADM)
2010-11	$433.8 million in foundation aid

• Per pupil foundation aid payments: $3,200 in 2009-10 and $3,779 in 2010-11.

• State Supplemental Operations Grants: Paid in lump sum September 1, 2009, at a rate of about $175 per ADM. (Section 53 of the bill)

• State Supplemental One-Time Grants: Approximately $900 per ADM paid in 4 equal monthly installments September, October, November and December. Consult Section 52 of HB1400 to find acceptable uses of these one-time payments (not for compensation).

• New weighting factors: .30 for least proficient ELL students, .20 for ELL students deemed not proficient, .07 for somewhat proficient ELL students, .07 in support of special education services, .004/ADM for REA participation (paid directly to REAs), .002/ADM to support technology.

• Excess cost reimbursement for special education contracts will begin at 4 times the cost of regular education.

• 2009-10 Minimum: 108%, Maximum: 120%; 2010-11 Minimum: 112.5%, Maximum: 134%.

• Equity imputations will now include in lieu of tax money from distribution and transmission of electric power, revenue from U.S. flood control payments, and taxes on mobile homes and telecommunication taxes (computed on formula in Section 34 of HB1400).

• State Supplemental One-time Grant money will not be counted in ending fund balance through June 30, 2011.

• Through June 30, 2011, the limit for required DPI approval of construction, modernization, or renovation project is raised to $40,000.

Transportation

• Increase of $10 million in hard dollars and $5 million in contingency dollars based on the state’s ending fund balance.

• Reimbursement rates: $.92 for large buses, $.44 for 9 or fewer passengers, and $.24 per one-way ride.

New Requirements

HB1400 requirements beginning 2009-10:

Section 9: Requires all schools use Power School, converting on a schedule provided by ITD and EduTech. Local cost should be about $5/student.

Section 10: All districts must conduct an inventory of property, obtain a formal appraisal of value (2009-10 and every eight years thereafter), and provide proof of full insurance coverage to DPI each year.

Section 14: Required course offerings are more specifically defined.

Section 22: Interim assessments, approved by DPI (such as MAP), must be administered annually to students in grades 2-10.

Section 23: A career interest inventory (recommended by CTE and approved by DPI) must be administered to students once during 7th or 8th grade and once during 9th or 10th grade.

Section 24: Each 11th grade student must take the ACT or three WorkKeys assessments (IEP students may be exempt). DPI will negotiate a state rate for ACT exams.

Section 51: Explanation of 70% new money to compensation.

Section 52: Explains acceptable uses of State One-time Supplemental Grants.

Section 53: Explains State Supplemental Operations Grants.

Section 56: REAs will each receive direct funding of $25,000 base grants each year of the biennium.

HB1400 requirements beginning in 2010-11

Section 5: School calendar: 181 days/174 instructional/2 professional development days. A third optional professional development opportunity may be taken by shortening 4 instructional days by 1 ½ hours and providing 2 hours for professional development. If a district takes one 6-hour or two 4-hour blocks it would constitute a third day of professional development which is not paid for by the state.

Section 6: The counselor ratio changes to 1/300 students in grades 7-12. One third of those may be certified career advisors.

Section 8: Requires 1 FTE student performance strategist (tutor) for every 400 students in K-3. Tutors must be licensed elementary teachers.

Sections 14, 15, and 16: These sections enumerate all new course requirements for students graduating in 2011 and beyond. Please read these sections carefully and be sure your students will be on track for graduation!

Sections 17, 18, and 19: These sections set forth eligibility requirements for academic and technical scholarships for 2010 graduates and those graduating in 2011 and beyond.

Section 21: Summer school reimbursement begins for grades 5-8 math, reading, science, and social studies.

Section 26: High school instruction must include concepts of personal finance as outlined in the section.

Section 54: Transportation grants.

It is critical that you read all of HB1400. This bill contains the most aggressive move toward academic rigor and accountability in the history of the state. It is a lot to absorb, but in the end, will provide a foundation for North Dakota’s students to succeed in college and work.

SB2199 HIGHLIGHTS

SB2199 is the property tax relief bill that in the end also included personal and corporate income tax relief. The property tax relief portion of the bill includes the following:

• Eliminates the option of voter-approved unlimited levies in the future.

• Requires districts that currently have voter-approved unlimited or excess general fund levies to have an election on a specific number of mills before December 31, 2015.

• Any election for a specific number of mills must specify the number of years the levy will be valid but cannot be for more than 10 years.

• Mill levy reduction grants are provided based on weighted student units up to 75 mills but cannot reduce the combined levy below 100 mills.

• To qualify for reduction grants, a district may not have a general fund levy over 110 mills (after applying the reduction) unless the district has a voter-approved excess levy, the higher levy is a result of reorganization, or the higher levy does not exceed the amount allowed under 57-15-.01.1 for taxable year 2008 reduced by the amount of the school district’s mill levy reduction grant under section 57-64-02 for the budget year.

• Excess levies resulting from reorganization must be reapproved by the voters before 2018 and such reauthorization is only valid for up to 10 years.

• If a reauthorization levy fails, the district’s general fund levy limitation for subsequent years is subject to 57-15-.01.1 or 57-15-14.

• The county auditor will apply tax reduction dollars first to reduce general fund mills, then to tuition mills, and then to transportation mills.

OTHER BILLS

HB1273—Allows 10th graders to take dual credit classes.

HB1360—Grants individuals employed by an REA the same statutory rights as individuals employed by a school district except where prohibited by law.

HB1378—Effective July 1, 2010, the age deadline for school enrollment is August 1 in the year of enrollment.

SB2064 & SB2353—Charge ND Office of Management and Budget with setting and adjusting state rates for mileage and lodging according to federal rates.

SB2154—Increases employer contributions to PERS by .014% for a retiree health benefit fund.

SB2217—Updates truancy law enforcement criteria.

SB2289—Prohibits schools from expanding the definition of “corporal punishment” found in NDCC 15.1-19-02. Requires all districts have consistent policies relating to corporal punishment and guidelines detailing how all incidents are to be investigated.

SB2357—Requires districts hire an administrative law judge to preside over discharge hearings for teachers, principals, and asst. superintendents.

Of course, there were many more bills being tracked. Numerous bills and proposed constitutional amendments that would have had negative impacts on school boards were successfully killed. To find the final status of all tracked bills go to BILL TRACKING.

It was an exciting Session. Thanks to board members for their grassroots efforts on behalf of their districts. Be sure to thank your legislators for their support!

Post-Legislative Meetings

May 6	6:30 p.m.	Grand Forks Public Schools Grand Forks Educational Center 2400 47th Avenue S (use west entrance)
May 7	6:30 p.m.	Fargo Public Schools District Office Board Room 415 N 4th Street
May 13	6:30 p.m.	Minot Public Schools District Office Conference Room 215 2nd St SE
May 14	6:30 p.m.	Bismarck Public Schools Hughes Educational Center Board Room 806 N Washington St. (parking on west side)

Everyone has access to bill topics and texts, hearing schedules, and bill status reports at the Legislature’s Web site. NDSBA’s Web site includes this weekly Legislative Newsletter, hearing schedules for the upcoming week, and the list of bills NDSBA is tracking. Updated information will be posted Thursday or Friday each week depending on when information becomes available.

ADDITIONAL INFORMATION:

ND State Web site: www.nd.gov

ND Legislative Information Web site: www.legis.nd.gov

Legislature Toll Free # 1-888-635-3447

Bismarck Legislative # 328-3373