Revision: Feb. 14, 2011, midnight
HB 337-FN-LOCAL – AS INTRODUCED
2011 SESSION
04/09
HOUSE BILL 337-FN-LOCAL
AN ACT relative to the calculation and distribution of adequate education grants.
SPONSORS: Rep. Hess, Merr 9; Rep. Flanagan, Hills 5; Rep. Ladd, Graf 5; Rep. Kurk, Hills 7; Rep. Bettencourt, Rock 4; Rep. Jasper, Hills 27
COMMITTEE: Special Committee on Education Funding Reform
This bill:
I. Determines the per pupil cost of the opportunity for an adequate education which includes aid distributed to schools based on the number of pupils eligible to receive special education, or eligible for a free or reduced-price lunch, or who are English language learners.
II. Provides fiscal capacity disparity aid, in addition to aid for the cost of the opportunity for an adequate education, based on a municipality’s equalized valuation, including utilities, per pupil and median family income.
III. Provides that:
(a) No municipality shall receive an adequate education grant in any fiscal year which is greater than the adequate education grant received in the 2011 fiscal year; and
(b) A municipality which is scheduled to receive an adequate education grant in a fiscal year which is less than the grant such municipality received in the 2011 fiscal year shall receive an additional grant from the education trust fund in an amount equal to 95 percent of the amount of the decrease.
IV. Requires that a municipality in which education property tax revenue collected exceeds the amount necessary to fund the cost of an adequate education in a fiscal year shall collect and remit 5 percent of such excess to the department of revenue administration. The municipality may remit the balance of the excess or may retain such balance to offset costs of school building aid projects or catastrophic special education costs incurred.
V. Establishes a joint legislative oversight committee on accountability for an adequate education.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
11-0053
04/09
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT relative to the calculation and distribution of adequate education grants.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Adequate Education; Definitions. RSA 198:38 is repealed and reenacted to read as follows:
198:38 Definitions. In this section:
I. “Average daily membership in residence” or “ADMR” means the average daily membership in residence of pupils in kindergarten through grade 12, as defined in RSA 189:1-d, IV of the second school year preceding the year in which the calculation is made, provided that no kindergarten pupil shall count as more than 1/2 day attendance per calendar year.
II. “Commissioner” means the commissioner of the department of education.
III. “Department” means the department of education.
IV. “Determination year” means the fiscal year that was 3 years prior to the fiscal year for which aid is to be determined. Unless otherwise indicated, determination year data shall be used to calculate aid.
V. “Educationally disabled child” or “educationally disabled pupil” shall mean “educationally disabled child” as defined in RSA 186-C:2, I.
VI. “English language learner” means a child who has a predominant language other than English or who is educationally disadvantaged by a limited English proficiency, and who is receiving regularly scheduled English language instruction.
VII. “Pupils eligible for a free or reduced-price meal” means pupils in kindergarten through grade 12 who are eligible for the federal free or reduced-price meal program.
VIII. “School district” means school district as defined in RSA 194:1 and shall include cooperative school districts as defined in RSA 195:1, I.
2 Adequate Education; Base Cost Per Pupil. RSA 198:40-a is repealed and reenacted to read as follows:
198:40-a Adequate Education; Base Cost Per Pupil.
I. The commissioner shall determine the base cost per pupil of the opportunity for an adequate education in each school district using the most recent statewide salary data available, divided into quartiles, as follows:
(a)(1) The average of the 3rd and 4th quartiles of salary for a teacher possessing at least a bachelor’s degree with no experience, multiplied by 1.33, then multiply the product by 1.05.
(2) For a teacher teaching art, music, world languages, media/technology, health, or physical education, multiply the amount determined under subparagraph (a)(1) by .20.
(b) The average of the 3rd and 4th quartiles of salary for a principal possessing at least a master’s degree and 3 years of educator experience, multiplied by 1.33, then multiply the product by 1.05.
(c) The average of the 3rd and 4th quartiles of salary for a guidance counselor possessing at least a master’s degree, multiplied by 1.33, then multiply the product by 1.05.
(d) The average of the 3rd and 4th quartiles of salary for a library/media specialist possessing at least a bachelor’s degree with no experience, multiplied by 1.33, then multiply the product by 1.05.
(e) The average of the 3rd and 4th quartiles of salary for a technology coordinator possessing at least a bachelor’s degree with no experience, multiplied by 1.33, then multiply the product by 1.05.
(f) The average of the 3rd and 4th quartiles of salary for a reading specialist possessing at least a master’s degree at step 2 of the teacher salary schedule for that position, multiplied by 1.33, then multiply the product by 1.05.
(g) The average of the 3rd and 4th quartiles of salary for an administrative assistant, multiplied by 1.33, then multiply the product by 1.05.
(h) The average of the 3rd and 4th quartiles of salary for a custodian, multiplied by 1.33, then multiply the product by 1.05.
II. In each biennium, the commissioner shall calculate the base cost per pupil of the opportunity for an adequate education in each school district as the sum of the following:
(a)(1) For teachers of pupils in kindergarten through grade 2, divide the ADMR of pupils in the municipality in kindergarten through grade 2 by 25, then multiply the result by the salary for teachers determined in subparagraph I(a)(1).
(2) For teachers of pupils in grades 3 through 12, divide the ADMR of pupils in the municipality in grades 3 through 12 by 30, then multiply the result by the salary for teachers determined in subparagraph I(a)(1).
(3) For a teacher teaching art, music, world languages, media/technology, health, or physical education to pupils in kindergarten through grade 2, divide the ADMR of pupils in the municipality in kindergarten through grade 2 by 25, then multiply the result by the amount determined in subparagraph I(a)(2).
(4) For a teacher teaching art, music, world languages, media/technology, health, or physical education to pupils in grades 3 through 12, divide the ADMR of pupils in the municipality in grades 3 through 12 by 30, then multiply the result by the amount determined in subparagraph I(a)(2).
(b) For principals, divide the ADMR of pupils in the municipality in kindergarten through grade 12 by 500, then multiply the result by the salary for principals determined in subparagraph I(b).
(c)(1) For guidance counselors for pupils in kindergarten through grade 8, divide the ADMR of pupils in the municipality in kindergarten through grade 8 by 500, then multiply the result by the salary for guidance counselors determined in subparagraph I(c).
(2) For guidance counselors for pupils in grades 9 through 12, divide the ADMR of pupils in the municipality in grades 9 through 12 by 300, then multiply the result by the salary for guidance counselors determined in subparagraph I(c).
(d) For library/media specialists, divide the ADMR of pupils in the municipality in kindergarten through grade 12 by 500, then multiply the result by the salary for library/media specialists determined in subparagraph I(d).
(e) For technology coordinators, divide the ADMR of pupils in the municipality in kindergarten through grade 12 by 1,200, then multiply the result by the salary for technology coordinators determined in subparagraph I(e).
(f) For reading specialists, divide the ADMR of pupils in the municipality in kindergarten through grade 8 by 500, then multiply the result by the salary for reading specialists determined in subparagraph I(f).
(g) For administrative assistants, divide the ADMR of pupils in the municipality in kindergarten through grade 12 by 500, then multiply this amount by the salary for administrative assistants determined in subparagraph I(g).
(h) For custodians, divide the ADMR of pupils in the municipality in kindergarten through grade 12 by 500, then multiply this amount by the salary for custodians determined in subparagraph I(h).
(i) For instructional materials, multiply the ADMR of pupils in the municipality in kindergarten through grade 12 by $130.
(j)(1) For technology costs for pupils in kindergarten through grade 8, multiply the ADMR of pupils in the municipality in kindergarten through grade 8 by $25.
(2) For technology costs for pupils in grades 9 through 12, multiply the ADMR of pupils in the municipality in grades 9 through 12 by $65.
(k) For transportation costs, multiply the ADMR of pupils in the municipality in kindergarten through grade 8 by $304.
III. In addition to the base cost calculated under paragraphs I and II.
(a)(1) An additional $685 for each pupil in kindergarten through grade 12 who is eligible for the federal free and reduced-price meal program, and who attends a public school in which at least 12 percent but less than 24 percent of the pupils reported in the school’s ADMA in the determination year are eligible for the federal free and reduced-price meal program.
(2) An additional $1,369 for each pupil who is eligible for the federal free and reduced-price meal program, and who attends a public school in which at least 24 percent but less than 36 percent of pupils reported in the school’s ADMR in the determination year are eligible for the federal free or reduced-price meal program.
(3) An additional $2,054 for each pupil who is eligible for the federal free and reduced-price meal program, and who attends a public school in which at least 36 percent but less than 48 percent of pupils reported in the school’s ADMR in the determination year are eligible for the federal free or reduced-price meal program.
(4) An additional $2,738 for each pupil who is eligible for the federal free and reduced-price meal program, and who attends a public school in which at least 48 percent of the pupils reported in the school’s ADMR in the determination year are eligible for the federal free or reduced-price meal program.
(b) An additional $675 for each pupil reported in the public school's ADMR in the determination year who is an English language learner and who is receiving English language instruction.
(c) An additional $1,856 for each pupil reported in the public school's ADMR in the determination year who is receiving special education.
IV.(a) The sum total calculated under paragraphs I-III of this section shall be the cost of the opportunity for an adequate education in each year of the biennium.
(b) Prior to or coinciding with the first disbursement of each fiscal year under RSA 198:42, the department shall notify a school district of the total amount of funds that have been allocated for each school within its jurisdiction during the fiscal year based on the sum of the school district’s adequate education grant amount plus the amount available to the school district from the education tax. In addition, the department shall furnish to each municipality a report showing the municipality’s cost of an adequate education sorted by a pupil’s municipality of residence.
V. The department shall notify school districts of the estimated amounts of grants by the November 15 preceding the fiscal year for which aid is determined. The commissioner shall provide to the general court all data or reports requested by the general court in a form which the general court determines will facilitate the calculations required in this section.
3 Adequate Education; Provisions for Grants to Municipalities. RSA 198:40-b is repealed and reenacted to read as follows:
198:40-b Provisions for Grants to Municipalities.
I. No municipality shall receive an adequate education grant in any fiscal year which is greater than the adequate education grant received in the fiscal year ending June 30, 2011.
II. Each fiscal year, the commissioner of the department of education shall determine if a municipality is scheduled to receive an adequate education grant which is less than the adequate education grant received in the fiscal year ending June 30, 2011, and shall disburse to such municipality an additional grant from the education trust fund in an amount equal to 95 percent of the amount of the decrease.
4 Adequate Education; Fiscal Capacity Disparity Aid. RSA 198:40-c is repealed and reenacted to read as follows:
198:40-c Fiscal Capacity Disparity Aid.
I. In addition to aid for the cost of the opportunity for an adequate education provided under RSA 198:40-a, each fiscal year the department shall provide fiscal capacity disparity aid to a municipality’s school districts as follows:
(a) The department of revenue administration shall calculate the equalized valuation per pupil for each municipality in the state and shall sort the results into quartiles based on equalized valuation per pupil. The quartile containing municipalities with the lowest equalized valuation per pupil shall then be divided in half.
(b) A municipality with an equalized valuation per pupil in the lower half of the lowest quartile and which has a median family income which is less than the state average median family income shall receive fiscal capacity disparity aid in the amount of $3,360 multiplied by the municipality’s average daily membership in residence.
(c) A municipality with an equalized valuation per pupil in the upper half of the lowest quartile which has a median family income which is less than the state average median family income shall receive fiscal capacity disparity aid in the amount of $2,100 multiplied by the municipality’s average daily membership in residence.
II. Aid under this section shall be distributed pursuant to RSA 198:42.
III. In this section:
(a) “Equalized valuation per pupil” means a municipality’s equalized valuation, including properties subject to taxation under RSA 82 and RSA 83-F, as determined by the department of revenue administration, that was the basis for the local tax assessment in the determination year, divided by the school district’s average daily membership in residence, as defined in RSA 189:1-d for the determination year, provided that no kindergarten pupil shall count as more than ½ day attendance per calendar day.
(b) “Median family income” means the most recent census data published for New Hampshire counties and municipalities by the United States Census Bureau, United States Department of Commerce, as of October 1 preceding the beginning of the biennium for which aid is to be determined.
5 Adequate Education; Determination of Grants and Excess Tax. RSA 198:41, I and II are repealed and reenacted to read as follows:
I. Except for municipalities where all school districts therein provide education to all of their pupils by paying tuition to other institutions, the department of education shall determine the amount of the adequate education grant for the municipality as follows:
(a) Add the per pupil cost of providing the opportunity for an adequate education for which each pupil is eligible pursuant to RSA 198:40-a, and from such amount;
(b) Subtract the amount of the education tax warrant to be issued by the commissioner of revenue administration for such municipality reported pursuant to RSA 76:9 for the next tax year; and
(c) Add the fiscal capacity disparity aid pursuant to RSA 198:40-c.
II. For municipalities where all school districts therein provide education to all of their pupils by paying tuition to other institutions, the department of education shall determine the amount of the adequate education grant for each municipality as the lesser of the 2 following calculations:
(a) The amount calculated in accordance with paragraph I of this section; or
(b) The total amount paid for items of current education expense as determined by the department of education minus the amount of the education tax warrant to be issued by the commissioner of revenue administration for such municipality reported pursuant to RSA 76:9 for the next tax year.
6 Education Tax; Subdivision Heading Amended. Amend the subdivision heading immediately preceding RSA 198:46 to read as follows:
Excess Education [Property] Tax Payment
7 Adequate Education; Excess Education Tax Payment. Amend RSA 198:46, I to read as follows:
I. A municipality in which education [property] tax revenue collected exceeds the amount necessary to fund the cost of an adequate education in a fiscal year, as determined in RSA 198:40-a, shall collect and remit 5 percent of such excess to the department of revenue administration on or before March 15 of the tax year in which the excess occurs. [For fiscal years 2010 and 2011, the version of RSA 198:41, II effective for the fiscal year ending June 30, 2009 shall be used to determine excess.] A municipality may remit the balance of such excess, or any portion thereof, to the department of revenue administration as provided in this paragraph, or retain the balance of such excess to be used in the current fiscal year or a future fiscal year to offset the costs of a school building construction or renovation project, or to offset catastrophic special education costs incurred, provided that, notwithstanding the eligibility provisions set forth in RSA 198:15-a through RSA 198:15-h, RSA 198:15-u through RSA 198:15-w, and RSA 186-C:18, the municipality shall exhaust such excess as a condition of eligibility for school building aid, alternative school building aid, or catastrophic special education aid; or
8 Joint Legislative Oversight Committee on Accountability for an Adequate Education.
I.(a) There is hereby established the joint legislative oversight committee on accountability for an adequate education. The members of the committee shall be as follows:
(1) Three members of the house of representatives, which shall include 2 members of the house education committee and one member of the house finance committee, appointed by the speaker of the house of representatives.
(2) Three members of the senate, which shall include 2 members of the senate education committee and one member of the senate finance committee, appointed by the president of the senate.
(b) Members of the committee shall receive mileage at the legislative rate when attending to the duties of the committee.
II. The committee shall review and study the assessment and assistance methods, reporting requirements, and other methods of accountability presently being used by the department of education and local school districts to determine whether such methods, programs, and standards will ensure the delivery of an adequate education as set forth in RSA 193-E:2-a.
III. Following a public hearing, the committee shall report its findings and recommendations concerning the sufficiency of existing statutory law to provide accountability for the delivery of the opportunity for an adequate education as defined in RSA 193-E:2-a, and the possible need for additional legislation, to the governor, the speaker of the house of representatives, the president of the senate, and the state librarian no later than November 15, 2011.
9 References Amended. Amend the following RSA sections by replacing “statewide education property tax” or “education property tax” or “education property taxes” with “education tax” or “education taxes,” as the context dictates: RSA 76:8, I; the introductory paragraph in RSA 198:57, IV, and RSA 198:57, VI(a).
10 Effective Date. This act shall take effect July 1, 2011 at 12:01 a.m.
LBAO
11-0053
Reviesd 02/14/11
HB 337 FISCAL NOTE
AN ACT relative to the calculation and distribution of adequate education grants.
FISCAL IMPACT:
The Department of Education states this bill will decrease state education trust fund expenditures and local revenue by $82,709,442 in FY 2012 and each year thereafter. There will be no fiscal impact on county and local revenue or expenditures.
METHODOLOGY:
The Department of Education states this bill makes changes to the determination of the per pupil cost of the opportunity of an adequate education, distributes differentiated aid for students with Free and Reduced Lunch (F&R) status for F&R eligible students only, and changes the amount of fiscal disparity aid per pupil. The Department assumes Average Daily Membership (ADM) is calculated based upon the student level End of Year (EOY) submissions provided by each school; Free and Reduced Lunch (F&R) status is determined based upon the F&R collection, Fall 2008. All students receiving Free Milk, Reduced Meal or Free Meals are included. Students reported as F&R and in a school on October 1st are included; ADM for F&R include all ADM for identified students as student moves from school to school; FY09 School F/R concentrations are based upon student ADM for F&R students. These concentrations exclude kindergarten students; the 1999 median family income figures published by the Census are the most current town level information; the change in the per pupil adequacy rates has been estimated as one times the average annual change in the Northeast Urban Consumer Price Index (NE CPI) without medical from 2006 to 2009, 2.6%; Differentiated aid is provided based upon the subpopulations of Limited English Proficient (LEP) and Special Education (SPED); and Aid is only provided for half day kindergarten. The Department’s estimates do not include any impact on charter schools.
For the purposes of the fiscal note, data collected during the preparation of the February 1, 2008 report from the Joint Legislative Oversight Committee on Costing and Adequate Education was used. The estimated adequacy calculations are as follows -
FY 2012
K-2 Teacher Adequacy $56,458,139
3-12 Teacher Adequacy $214,024,144
K-2 Art Teacher Adequacy $11,291,628
3-12 Art Teacher Adequacy $42,804,829
Principal Adequacy $40,766,540
K-8 Guidance Counselor Adequacy $11,208,026
9-12 Guidance Counselor Adequacy $9,689,040
Library/Media Science Adequacy $15,664,356
Technology Coordinator Adequacy $6,526,815
Reading Specialist Adequacy $11,664,826
Administrative Assistant Adequacy $14,305,579
Custodian Adequacy $12,664,048
Instruction Materials Costs $25,246,157
K-8 Technology Costs $3,196,866
9-12 Technology Costs $4,311,226
Transportation Costs $38,873,398
Total Base Adequacy Costs $518,695,617
The bill would distribute differentiated aid to students with Free and Reduced Lunch (F&R) status based on the number of eligible students only. The per pupil rates for Free and Reduced Lunch status students are as follows - F&R Per Pupil Rates
(A) F&R for all students if school is 12-23.99% $685
(B) F&R for all students if school is 24-35.99% $1,369
(C) F&R for all students if school is 36-47.99% $2,054
(D) F&R for all students if school is 49% or greater concentration $2,738
The Department estimates the cost of F&R Differentiated Aid would total $53,164,493 in FY 2012.
The bill would distribute $693 (which includes a CPI adjustment of 2.6%) for each pupil reported in the public school’s ADMR who is an English language learner (LEP) and who is receiving English language instruction, at a cost of $2,111,049 in FY 2012. The bill would also distribute $1,904 (which includes a CPI adjustment of 2.6%) for each pupil reported in the public school’s ADMR who is receiving special education, at a cost of $57,569,258.
The bill would increase the Fiscal Capacity Disparity Aid per pupil amounts from $2,000 to $3,360 for municipalities with an equalized valuation per pupil in the lower half of the lowest quartile and which has a median family income below the state average, and from $1,250 to $2,100 for municipalities with an equalized valuation per pupil in the upper half of the lowest quartile and which has a median family income below the state average. The Department estimates the cost of Fiscal Capacity Disparity Aid would total $114,906,726 in FY 2012.
In total, the Department estimates the FY 2012 cost of an adequate education as follows –
FY 2012
Base Adequacy $518,695,617
F&R Differentiated Aid $53,164,493
LEP Differentiated Aid $2,111,049
SPED Differentiated Aid 57,569,258
Fiscal Capacity Disparity Aid $114,906,726
Total Calculated Cost of an Adequate Education $746,447,143
The bill makes no changes the State-Wide Education Property Tax (SWEPT) provisions, and the Department estimates the amount of SWEPT raised will total $363,121,283 in FY 2012.
To determine a municipality’s education grant amount, the Department deducts the estimated SWEPT payment from the total calculated cost of an adequate education. In the event that a municipality’s estimated SWEPT payment is greater than the total calculated cost of an adequate education, they would be required to send 5% of the excess SWEPT to the state for deposit in the Education Trust Fund (ETF), and could retain the remaining 95% of excess funds locally. These towns are also known as donor towns. The estimated SWEPT revenue is broken down as follows –
SWEPT Revenue (Local and State Revenue)
SWEPT retained by towns $346,143,646 $361,358,428 $(15,214,782)
Excess SWEPT Sent to ETF $16,977,637 $1,762,855 $(15,214,782)
Total SWEPT Revenue $363,121,283 $363,121,283 $0
After determining the amount of the excess SWEPT, the Department calculated total education grants as follows –
FY 2012
Total Cost of an Adequate Education $746,447,144
Minus SWEPT $(363,121,283)
Total Education Grants $418,582,965
The bill provides that no municipality shall receive a grant in a fiscal year which is greater than or less than the adequate education grant received by such municipality in FY 2011. In the event that the calculated grant is less than the FY 2011 amount, the Department would be required to distribute an additional grant equal to 95% of the amount of the decrease. As a result, the Department would decrease certain municipality’s grants by $(15,036,398), and increase other municipality’s grants by a total of $163,365,092. This will result in a net additional adjustment grant cost of $148,328,694. This would result in a total calculated education grant amount of $566,911,659 ($418,582,965 + $148,328,694). The Department will not distribute grants to donor towns that are eligible for a total calculated education grant, but will deduct the amount of the calculated adjustment grant from the portion of the excess SWEPT that is required to be returned to the Education Trust Fund. The Department estimates the fiscal impact on state expenditures and local revenue as follows -
Total Education Aid (State Expenditures and Local Revenue)
Current Law Proposed Bill Difference
(Annual) (Annual) (Annual)
Net SWEPT retained by Town $346,143,646 $361,358,428 $15,214,782
Total Education Grants $664,835,883 $566,911,659 $(97,924,224)
Total Education Aid $1,010,979,529 $928,270,087 $(82,709,442)
The Department assumes the FY 2012 figures will remain constant for FY 2013 through FY 2015.