LEGISLATIVE NEWSLETTER

COMMISSION ON EDUCATION IMPROVEMENT

Wednesday, September 3, 2008

9:00 a.m.

Roughrider Room, State Capitol

INTERIM EDUCATION COMMITTEE

Thursday, September 4, 2008

9:00 a.m.

Roughrider Room, State Capitol

April 27, 2007

GO TO BILL TRACKING FOR FINAL TEXT OF BILLS

2007 Legislative Session is Over

Thanks to all board members and superintendents who contacted their legislators. Your voice was heard. The two most critical bills of the Session (SB2200 and SB2032) were settled the final week of the Session with compromises made to maximize benefits and minimize negatives to schools.

Please take time to thank your legislators for standing up for their school districts in a big way!

IMPORTANT ALERT! SB2200 requires 70% of new money in specific categories to go toward teacher compensation. Equity payments and contingency payments DO NOT count as “new money” for 70% purposes. Since new per pupil payments include monies previously paid outside the formula, you must add the following 2006-07 payments together in order to calculate “new” money in comparison to 2007-09 inclusive per pupil payments:

1. Per student payments

2. Tuition apportionment

3. Special Ed per student payments

4. ELL payments

5. Teacher Compensation (FTE) payments

6. Extended education program payments

7. Summer school and migrant summer program payments

8. Home-based education monitoring payments

Numbers 5, 6, 7, and 8 will be included in your per student payments from now on, so they must be added to your base year funding before you compute your increases for 70% purposes.

PLEASE HAVE YOUR SUPERINTENDENT CONTACT NDCEL TO RECEIVE INSTRUCTIONS ON HOW TO ADJUST YOUR CALCULATION OF 2007 PAYMENTS (UNDER THE OLD FORMULA) IN ORDER COMPARE TO YOUR 2008 PAYMENTS (GOING OUT UNDER THE NEW FORMULA.) YOU NEED TO MAKE CRITICAL ADJUSTMENTS BEFORE YOU CALCULATE YOUR INCREASE.

Also remember that increases to TFFR count as increased compensation. Beginning in 2007-08, districts will be required to pay the employer's side of TFFR for returning retirees. This contribution is 7.75% for 2007-08 and 8.25% in 2008-09. The increase to 8.25% employer's share for all teachers does not go into effect until the 2008-09 contract year. If you are negotiating a two-year contract, be sure to remember the upcoming TFFR increases.

SB2200 - Funding formula. The Conference Committee worked for weeks to make SB2200 the best it could be, given the variety of concerns. Compromises were reached and provisions included to help smaller school districts.

Imputes mineral and tuition revenues at 60% first year and 70% second year of the biennium
Puts FTE monies in the foundation aid formula
Funds per pupil payment at $3250/pupil the first year and $3325/pupil the second year of the biennium
Requires 70% of “new” money (as explained above) go to teacher compensation, however, equity payments and contingent payments do not count as “new” money for purposes of computing the 70%
Sets equity threshold at 88.5% of Imputed Taxable Valuation Per Pupil state average the first year; 90% the second year
Provides $5 million in deferred maintenance grants at $10,000 per district; requires a 150 minimum levy and equal monetary match (these funds would come from the state’s general fund ending fund balance after a set threshold)
Increases minimum guarantees to 3.5% the first year and 6.0% the second; this primarily helps smaller districts and those with significant declining enrollment
Remaining 2005-07 contingency dollars (between $5.8 and $6.6 million) are included in the baseline for guarantee computations
Increases contingency payment for ELL students from $450,000 to $550,000
Does not count tuition or students from the air bases
Covers remaining individual student costs for severely handicapped that exceed 2% of the district's annual budget
Provides $600,000 for the original 2% increase to minimum guarantees over the next biennium and $200,000 for adequacy study research from the contingency fund
Provides $2.6 million to increase per mileage payment for large buses in rural areas at 73.5 cents/mile and within city limits at 51.5 cents/mile from the contingency fund which takes the place of SB2401, the bus transportation funding bill; this is money outside the formula that will go primarily to the most rural districts
Takes $1 million from $2 million JPA appropriation and moves it to the 2007-09 contingency fund for payment
Provides $100,000 from contingency fund for $25,000 reorganization planning grants for districts whose total student enrollment exceeds 360 students (districts with smaller enrollment may still reorganize but will not be eligible for grant)
Provides an order of payment from the 2007-09 contingency fund: 1) $1 million special ed; 2) $2 million for REAs (a.k.a. JPAs); 3) $550,000 for ELL; 4) $200,000 Adult Basic Ed

SB 2032 - Property tax relief bill. After months of debate and literally hundreds of amendments, a compromise on SB2032 was reached in the final hours of the Session. The bill took an entirely different direction for returning tax dollars to the citizens of North Dakota.

The final version allows property taxpayers to receive an income tax credit equal to 10% of their property tax bill. Credit is available on primary residences, agriculture, and commercial property. It is limited to $500 for individual taxpayers and those married filing separately; $1,000 for married, filing jointly; and $1,000 for commercial. There are many other features to this bill but the important thing is that schools’ taxing authority and school district property taxes are no longer a part of the property tax relief plan.

There are only two sections of the bill that reference school district taxing authority and they include:

Ballot measures to increase a school district’s levy (or go to unlimited levy) must specify proposed mill increase, percentage increase in dollars levied or unlimited levy authority, and number of years for which the increased levy is to apply. Any increased levy approved after June 30, 2007, may not be effective for more than 10 years.
Citizens can petition to have a district’s increased levy authority placed on the ballot with signatures equal to 10% of the number of electors who voted in the most recent school district election (minimum of 25 signatures).
Basic structure of local taxing will not be changed.
School districts’ taxing authority, levy limits, and allowable growth are not be changed from current law.

Considering potential impact of growth caps, complicated valuation formulas, and property tax “reform” features in previous versions of SB2032, NDSBA is relieved that schools are impacted very little in the final version of this bill.

SB2046 sets forth new TFFR requirements:

Employers must begin contributing the employer’s share of TFFR for returning retirees at a rate of 7.75% in 2007-08 and a rate of 8.25% in 2008-09.

Employers must increase their share of TFFR contributions to 8.25% for all qualified employees beginning in 2008-09.

Establishes new retirement parameters for teachers hired on or after July 2008: 1) Rule of 90, 2) five-year vesting period, and 3) five highest years' salaries for computing retirement payout.

SB2309 contains new high school graduation requirements. The Conference Committee agreed on amendments that require 22 units for 2010 graduates and 24 units for 2012 graduates.

Beginning in 2008-09, every student must complete the following units of course work to graduate:

4 English

2 Math

2 Science

3 Social Studies (may include ½ unit Multicultural Studies and ½ unit of ND Studies)

1 Phy Ed (may include ½ unit of health)

1 Foreign language or Native American language, fine arts, or career tech

Make sure your high school juniors are all on track to meet these requirements for 2008-09 graduation.

Even though the Senate wanted to set requirements much higher, they agreed to delay the increased rigor requirements until next Session. You can anticipate increased course work requirements in the future. The bill requires DPI to begin defining what classes may count as a unit of math and/or science. It also requires school districts to submit their graduation requirements (course work and descriptions) to DPI by September 1. This information will be helpful in the interim adequacy study.

SB2260 makes state and national database information available to school districts for conducting background checks on employees and applicants.

The bill makes background checks on current employees optional but requires state and national background checks on all final applicants for positions that will have unsupervised contact with students.

Districts will have to put “Are you willing to submit to a background check?” on applications and require final applicants to submit their fingerprints to BCI to conduct the state and national check. The cost will be approximately $60 and is the school district's responsibility.

For final versions of bills on our tracking list, go to bill tracking.

The 60th Legislative Assembly was historic in many respects. As always, it was NDSBA’s pleasure to represent interests of locally elected school board members.

Carry on! You are doing important work. Thank you for your dedication to North Dakota’s students.

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