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Legislative and Budget Update

Dr. Chuck Essigs Arizona Association of School Business Officials Janice Palmer Arizona School Boards Association. Legislative and Budget Update. Non-Budget Legislation Affecting Public Schools. School Districts and Associations. HB 2002 (school district monies; associations; elections)

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Legislative and Budget Update

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  1. Dr. Chuck Essigs Arizona Association of School Business Officials Janice Palmer Arizona School Boards Association Legislative and Budget Update

  2. Non-Budget Legislation Affecting Public Schools

  3. School Districts and Associations • HB 2002 (school district monies; associations; elections) • Prohibits a school districts from paying for membership in an association that attempts to influence an election.

  4. Unification and Consolidation • HB 2219 (s/e: study committee; unification; consolidation) • Establishes the 16-member Joint Legislative Study Committee on School District Unification and Consolidation • Requires the Committee to report by Dec. 31st • Requires the Committee to: • Study issues regarding the unification and consolidation of school districts • Prepare legislation for consideration during the subsequent Legislative Session that encourages the unification and consolidation of school districts • Consider proposals for possible school district unifications or consolidations that include a process for a district governing board to develop its own unification or consolidation plan and a process for a county school superintendent to develop a unification or consolidation plan if the district governing board is unable to develop its own plan.

  5. School Accountability • HB 2234 (persistently lowest performing schools) • Allows the State Board of Education (SBE) to assign a school a letter grade of F under AZ LEARNS if the school is among the persistently lowest-achieving schools • HB 2706 (now: supplementary reading instruction; teachers) • Requires SBE to adopt guidelines to include supplementary training in reading instruction as part of a school’s improvement plan for K-3 teachers who teach in a school that receives a label of underperforming or D under AZ LEARNS.

  6. Bullying • HB 2415 (schools; bullying policies) • Expands those eligible to report from students to also parents and school district employees • Requires the district to supply a form and to establish appropriate disciplinary procedures for employees who fail to report suspected incidents known to them • Includes electronic technology and communication on school equipment and during school hours

  7. Bullying (cont.) • All students must receive a written copy of the rights, protections, and support services available to bullying victims at the beginning of each school year and provide that information to the alleged victims when an incident is reported. • District must maintain records of reported incidents for at least six years. • District must develop procedures designed to protect the health and safety of victims who are physically harmed as the result of bullying or harassment, including, when appropriate, procedures for contacting emergency or law enforcement personnel, or both.

  8. Financial Transparency • HB 2421 (school districts; budgets; financial reports) • Requires school districts to follow the same annual public meeting requirements to update voters on the use of monies spent as authorized by an M&O override as currently required for monies spent as authorized by a Capital Outlay override. • Requires ADE, within 6 months of the bill’s enactment, to post the following information on their website: • The annual financial report, by October 15 each year. • The proposed budget, by July 5 each year or no later than the publication of notice of the required public hearing. • The finalized budget, by July 18 each year. • Directs any school district that has its own website to post a link to the location on ADE’s website where its financial documents can be viewed.

  9. Financial Transparency • HB 2572 (government expenditure database; transparency; CAFR) • Requires the Arizona Department of Administration and each local government to post the comprehensive annual financial report of a budget unit on their official Internet website • Requires each local government to post a link, prominently displayed, on their website • School districts must comply on or before January 1, 2013

  10. “Spice” • HB 2167 (definition of dangerous drugs; synthetic) • Expands the definition of dangerous drugs to include specific chemical compounds that typically compose synthetic cannabinoids (i.e. spice) • Contains an emergency clause

  11. Military Recruiting • HB 2587 (high schools; military recruiting; form) • Requires charter schools to comply with state statutes regarding access to student information by educational and occupational recruiters • Directs a school district or charter school that chooses to release student directory information to do so by October 31 each year 

  12. JTEDs • HB 2646 (JTEDs; adult students) • Allows adult students to attend vocational programs on a central campus of a Joint Technical Education District (JTED) during school hours if they have a valid fingerprint clearance card • Requires JTEDs to send written notification to the parent or guardian of each student under the age of 18 when an adult enrolls in that same vocational program • States that adult students can only participate in vocational education programs offered by a school district if the purpose of the program is skill retraining or skill upgrading.  Adult students are prohibited from receiving college-level credit for those programs. • Prohibits adult students in massage therapy programs

  13. School Funding Study Committee • HB 2710 (study committee; outcome-based funding) • Establishes the 13-member Joint Legislative Study Committee on Outcome-Based Education Funding • Must report by December 31st • Committee is repealed as of September 30, 2012 • Contains an emergency clause

  14. Residency • SB 1141 (s/e: schools; residency requirements) • Requires parents, or persons who have custody, of a child who will attend a public, private or charter school to provide verifiable documentation of Arizona residency • Requires school districts and charter schools to maintain the documentation

  15. Private Schools/ Public Monies • SB 1186 (now: tax corrections; STO expansion; class six)-- VETO • Creates a new individual income tax credit for contributions to an STO that is certified as an STO for purposes of corporate tax credits. • Limits the amount of the credit to $250 for single filers and $500 for joint filers, and allows any excess credits to be carried forward up to five consecutive taxable years. • JLBC estimates the cost at $9 million to the state general fund • Contains numerous other provisions

  16. Private Schools/ Public Monies • SB 1553 (education; disabled students; empowerment accounts) • Establishes and prescribes rules and requirements for the Arizona Empowerment Accounts program (essentially a voucher) for special education students

  17. School Boards • SB 1205 (small transportation school districts; dissolution) • Establishes a process to call an election for the dissolution of a transporting school district with fewer than 10 pupils. • SB 1303 (schools; dropout recovery programs) • Establishes a dropout recovery program and specifies program requirements and funding • Voluntary for school districts

  18. School Boards • SB 1521 (schools; head injury policies; athletics) • Requires district governing boards to consult with AIA to develop guidelines, information, and forms to educate coaches, students, and parents about “the dangers of concussions and head injuries and the risks of continued sports play after a concussion” • Requires district governing boards to enforce a concussion policy that addresses risk awareness and appropriate response procedures  • Grants civil immunity to a school district, school district employee, team coach, official, team volunteer, or a parent or guardian of a team member for good-faith efforts to comply with the requirements of the bill, and to school districts and their employees for the failure of another person or organization to comply with the requirements of the bill. • Applies the provisions of the bill to any group or organization, except an out-of-state team, that uses school district property for athletic purposes.

  19. Education Omnibus • SB 1256 (education; omnibus) • Makes clarifying and technical changes to teacher certification, ADM/ADA, early kindergarten repeaters, etc.

  20. Public Employee Lobbying • SB 1329 (public employees; lobbying; political activities) • Prohibits a public employee who is paid in whole or in part from taxpayer monies from lobbying a governmental entity or engaging in any political activity during the employee’s hours of employment unless the employee lobbies using their vacation or compensatory time, uses authorized release time within the framework of a labor-management agreement such as a memorandum of understanding or takes an unpaid leave of absence. • Does not apply to a public employee who is registered as an authorized or designated public lobbyist and who lobbies for the employer as part of the employee’s official duties.

  21. Paycheck Deductions • SB 1365 (paycheck deductions; political purposes) • For payroll deductions made after October 1, 2011, prohibits a public or private employer from deducting a payment from an employee's paycheck for political purposes unless the employee gives written or electronic authorization on a yearly basis • Directs the Attorney General to adopt administrative rules for the acceptable forms for employee authorization and entity statements within 90 days of the effective date • Employer knowing violation = at least a $10,000 civil penalty for each violation 

  22. Move on When Ready • SB 1451 (high schools; board examination systems) • Clean up bill for the Grand Canyon diploma

  23. Parents Rights • SB 1453 (now: parents’ rights; schools) • States parents have a right to review learning material and activities and remove their child from certain activities or classes deemed harmful by the parent.

  24. Retirement System Changes SB1609 • Normal Retirement Age • Before July 1, 2011 80 points still available • After July 1, 2011 • Age 55/ 30 years of service • Age 60/ 25 years of service • Age 62/ 10 years of service • Age 65

  25. Retirement System Changes SB1609 • Alternate Contribution Rate (ACR) • Require employers beginning July 1, 2012 to pay an ACR (Est. 7%+) • Required for employees who are retired including direct/leasing/contracted (less than 20 hours too)

  26. Retirement System Changes SB1609 • Service Purchase • 10 years to quality vs. 5 years • Purchase only up to 5 years of service • Require members to forfeit time in old system to purchase it

  27. FY2011/FY2012 State Budget and Budget Related Legislation

  28. State Budget for FY2011 • State Funding Reduced by estimated $132 Million • Districts and Charters Budget Capacity Reduced by estimated $132 Million • Districts Could Use Edu. Jobs Funds to Cover Reduction • Budget Revision Not Required

  29. State Budget FY2012 • Base Level stays at $3,267.72/ No Increases • Inflation Increase of 0.9% • Transportation $0.02 Mile Increase • Addition Assistance for Charters • K-8 Increase of $14.47 to $1,621.97 • 9-12 Increase of $16.86 to $1,890.38

  30. Reductions to Soft Capital and CORL • Soft Capital Cut by $188.1 Million – Most Likely a Greater than 90% Reduction • CORL Cut #1 by $63.9 Million • CORL #2 Cut by an Additional $35 Million – Edu. Jobs Issue

  31. Reduction to Additional Assistance for Charters • Additional Assistance Cut by $17.7 Million (Average $135 per student)

  32. Small District Adjustment • For districts with fewer than 1100 students, Soft Capital and CORL cuts cannot total more than $5 million statewide

  33. Phase Out of Career Ladder and OPIP • Base Level Adjustment • 4% FY2012 • 3% FY2013 • 2% FY2014 • 1% FY2015 • Qualifying Tax Rate • $0.10 K-8 and 9-12 districts • $0.20 K-12 Districts

  34. Facilities Funding • New School Formula – Suspended • Building Renewal Formula - Suspended

  35. Joint Tech Districts • Prohibits JTED’s from Receiving State Funding for 9th Grade Students • Spending on 9th Grade Students Still Allowed (HB2237)

  36. JTEDs • HB 2237 (JTEDs; ADM; student count) • conforms state funding for JTEDs with ADM in place of ADA • Beginning in FY 2011-12, states the student count for a JTED is equal to the JTED’s ADM • Stipulates that a student enrolled in an approved JTED course generates 0.25 ADM for each course, capped at the limits currently prescribed by statute • Allows JTEDs to use their property tax revenues to provide JTED courses to ninth grade pupils.  • Allows students whose district of attendance is a member district of a JTED, and whose district of residence pays tuition to the district of attendance, to attend that JTED as a resident student. 

  37. Other Items • Actual Utility Funding Formula Eliminated • Teacher Performance Pay Program (ARS15-977) Eliminated

  38. “Jobs” Bill and TABOR Light • “Jobs” Bill – K-12 Specific Items • Reduces the Class 1 (business) assessment ratio from 20% to 18%, in ½ percentage point increments per year, beginning in Fiscal Year 2014 (FY14) and ending in Fiscal Year 2017 (FY17) • Reduces Class 2 (agricultural and vacant land) from 16% to 15% beginning in Fiscal Year 2017 • Increases the homeowner’s rebate for FY14 through FY17 by the amount needed to offset the assessment ratio change effects • TABOR Light • HB 2707 (general fund revenue limit) • Creates a state General Fund revenue limitation and outlines guidelines for the growth and reductions in revenues

  39. ASRS Contributions • Changes Current 50/50 Split to Employee Pays 53% and Employer Pays 47% • Estimated Rate Beginning July 1, 2011 • Employee would be 10.75%, now will be at 11.40% • Employer would be 10.75%, now will be at 10.10%

  40. Increase for Both From FY2011 to FY2012 • Employee goes from 9.85% to 11.40% • Employer goes from 9.85% to 10.10% • Employee up 1.55% • Employer up 0.25%

  41. Estimated Impact of ASRS on FY2012 Contributions Amount district saves will result in reduced state aid and budget capacity. Charters are also impacted.

  42. Classroom Site Fund • Started In FY2002 • Highest year FY2008 $397 per weighted student • District had been allowed to spend to estimate • For FY2010 cumulative shortfall of $195 • Starting in FY2011 state had to adjust for shortfall

  43. Classroom Site Fund

  44. FY2012 Number • Estimated amount $219 • Adjusted for shortfall $219-$124.99 = $94 • Legislature may set amount at $120 (SB1263)

  45. Budget Limit – Classroom Site Fund • Allocation from ARS 15-979 (per weighted student) $120* per weighted student • Unexpended budget balance from FY2011 • The net interest earned during FY2011 *with SB1263

  46. Reeves v. Barlow • Arizona Court of Appeals: School districts do not have authority to pay CSF funds to individuals that are not certified as teachers • School districts do have discretion to include individuals that do possess teaching certificate • Applies to base (011) and performance pay (012) but not menu (013) • If you can justify under numbers 1,3,5 in §15-977H • Overrules/contradicts AGO I01-014

  47. SB1263 Supplanting/ Classroom Site Fund • Additional teacher compensation money from sources other than Classroom Site Fund for FY2012. • Not considered supplanting for FY2013 calculation.

  48. TNT Tax Rates / QTR and State Equalization • Current QTR $2.9594 Unified / $1.4797 Elementary and High School • Proposed (FY2012) $3.5364 Unified / $1.7682 Elementary and High School • State Equalization Rate Current is $0.3564 proposed (FY2012) is $0.4259

  49. SB1263 Schools, Administrative Reduction • Classroom Site Fund - $120 and supplanting for FY2012 • Override calculation relief continues for FY2012 – Base level and Full Day K • Changes performance pay for Superintendents – Excludes benefits and sets amount up to 20% • Flexibility on disposal of equipment, furnishings and supplies

  50. SB1263 Schools, Administrative Reduction Continued • Allows warrants drawn on the County Treasurer to be processed through an electronic system • Shortens timelines for school closures • Allows for elections to change list of projects and time period to issue extended from 6 to 10 years • Increases bonding capacity for bonds approved prior to April 15, 2011 – Elem/HS 5% to 10% and unified 10% to 20%

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