LEGISLATIVE NEWSLETTER

March 13, 2009

THINGS ARE "UP IN THE AIR"

Things are very “unsettled” at the capitol right now. State vs. federal funding for foundation aid, conflicting distribution formulas, meeting and sustaining new requirements in HB1400, and computing new money for teacher compensation purposes are just a few of the major issues to be resolved because of the way some want to use the “stabilization” portion of the federal stimulus money in North Dakota.

The Senate Education Committee heard HB1400 on Monday. Given the Governor’s recommendation for use of federal education stabilization dollars (part of the economic stimulus package), sections of the bill would be impacted if $63 million in federal dollars distributed on the Title I formula were used to replace $63 million in state dollars that would have gone out on the foundation aid formula.

In testimony Monday, NDSBA presented the following list of sections of HB1400 we believe will be impacted:

Section 22: State-funded per pupil payments going out on the foundation aid formula will have to be lowered by $100-$150 the first year (2009) and $200-$250 the second year (2010) because $63 million of general fund money would be replaced with the same amount of federal money that would be distributed on the poverty-based Title I formula. If that were to happen, $63 million in state general fund money would be removed from the DPI budget bill - HB1013.
Section 23: Determinations of minimums and maximums in the state foundation aid formula would have to be adjusted because only about $37 million (rather than $63 million) in new state dollars will go out on the foundation aid formula.
Section 24: Imputations for purposes of determining valuations will likely require adjustment.
Section 44: 70 percent of “new” money for teacher compensation must be carefully defined, i.e., 70 percent of which new money? To ensure sustainability of salaries, districts must only be required to give 70 percent of the dollars they would have received if the $63 million went out as foundation aid. Why? Because money will go out using the foundation aid formula the next biennium (2011-2013).
NDCC 15.1-27-35.3: This section of Century Code sets the maximum ending fund balance a school district can have without losing foundation aid dollars. This will have to be amended or suspended for 2009-2011 and possibly for 2011-2013 as well. Why? Because of the anticipated amount, timing, distribution, and use of federal dollars for Title I, IDEA, and other federal programs during the 2009-2011 biennium.
HB1400: Multiple sections of this bill require new staffing and programming. Therefore, DPI must make clear to districts how much of which funds they receive in 2009-2011will be replaced with state dollars in 2011-2013, along with an estimate of what their state foundation aid payments will be for the 2011-2013 biennium. Without this information, districts will not know what can be spent on meeting the new requirements in HB1400. These new program expenditures will need to be sustained.

Preliminary printouts show that decreasing new state money decimates the carefully crafted foundation aid funding formula and will most likely prevent any of the adequacy recommendations from being implemented. This should NOT OCCUR during a legislative session when North Dakota has ample resources available to fund K-12 itself!

Please meet with your legislators and explain to them the insurmountable problems created by using two completely different distribution formulas over the course of four-years (two biennia). There is very little time!

The Senate Education Committee has started working on HB1400. They will complete their amending of the bill next week. Thus far they have adopted amendments which:

Remove all language relating to early childhood education (except for the federally required language creating an Early Childhood Education Council).
Require students to take a career inventory in 7th or 8th grade and 9th or 10th grade.
Remove Section 15 which delineated “specific curricular directives.”

The committee is waiting on possible amendments to at least 20 other sections of the bill.

NDSBA provided testimony this week on two other bills we are tracking.

SB2199 (Governor’s property tax bill) was heard this week by the House Finance and Taxation Committee. There was testimony on the adverse treatment of excess levy and unlimited levy districts. It may be possible to amend the bill to soften the language. Representative Kasper from Fargo proposed an amendment that would limit the taxable value of property. The committee has not taken action on the bill. We will be watching for “unfriendly” amendments.

The House Education Committee held a hearing on SB2357. This is the bill that (in its original form) would have required school districts to relinquish their authority to discharge a teacher to an Administrative Law Judge (ALJ). NDSBA opposed this and worked closely with the bill sponsors to amend the bill. As it came to the House Education Committee, SB2357 only requires school boards to hire an ALJ to preside over a discharge hearing. The ALJ will not make the final decision on discharge or make a recommendation. The board will make the final decision on termination of its employees. In the spirit of compromise, NDSBA supported the amended version of this bill. NDSBA Legal Counsel Gary Thune believes having an ALJ preside over discharge hearings protects boards upon appeal. This bill relates ONLY TO DISCHARGE and does not apply to nonrenewals.

There is a light hearing schedule for next week because committees have to get the bills they have heard to Appropriations by next Friday.

Keep communicating with your legislators. If they have questions you aren’t comfortable answering, direct them to Bev Nielson or Jon Martinson at NDSBA.

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