Posts tagged: JFAC
Legislative budget writers are hearing a presentation this morning on the education stakeholders task force recommendations, which have been endorsed by Gov. Butch Otter and state schools Superintendent Tom Luna. “If the recommendations were implemented today, it’s a range of $346 million to $406 million dollars” in fiscal impact to the state, legislative budget analyst Paul Headlee told the Joint Finance-Appropriations Committee. That estimate is for the minimum costs. Some of the 20 recommendations from the task force wouldn’t require more state spending, such as moving to a “mastery-based” system for advancing students from one grade to the next; enhancing pre-service teaching opportunities; and adopting new teacher preparation recommendations.
The priciest items on the list: $82 million to restore operational funds cut from the schools during the state’s economic downturn, and $252 million for a new career ladder system for paying teachers, which would include substantially boosting pay and shifting to a three-tiered professional licensing system. Luna this week unveiled his budget request for next year, which seeks to phase in the proposals over the next five to six years.
Headlee noted that the career ladder recommendation, if phased in over six years as recommended, would cost $42 million next year, split into $26 million for the first year of the new ladder, and $15.9 million for leadership awards. That’s roughly equivalent to a 3.7 percent increase in teacher pay overall next year for the career ladder changes, and another 2.2 percent from the leadership awards. You can see Headlee’s full presentation here.
“Within this model, an instructor could conceivably move backwards, if their evaluation shows they’re not achieving,” Headlee said, or if they move backwards on the licensure tiers. “So the ladder possibly could move both ways. There’s more detail that needs to be worked out on this.”
As far as the operational funding, Headlee noted that the cost to restore the funds – which are apportioned out to school districts through a per-classroom formula – will rise each year. Those funds have dropped from nearly $25,700 per classroom unit before the recession to just $20,000 this year. The $82 million figure is how much the restoration would cost this year. Next year, projections show there will be about 82 more classrooms, pushing the cost up to about $84 million. If the restoration is phased over five years, the cost would be about $115 million.
Overall, funding all the task force recommendations would require an increase in Idaho’s public school budget of between 26.5 and 31.1 percent, Headlee calculated.
PERSI, the Public Employee Retirement System of Idaho, has seen its fortunes improve dramatically since the economic downturn, lawmakers learned this morning, and during fiscal year 2013, which ended June 30, PERSI reached an all-time high asset value in excess of $13 billion. Gains have continued since then, legislative budget analyst Robyn Lockett told JFAC this morning during the joint budget committee’s interim meeting in Pocatello. By the end of the fiscal year, PERSI’s funding ratio had climbed to 87 percent; systems with funding levels above 80 percent are considered top performers by the Pew Center on the States. “PERSI is solidly in that elite group,” Lockett said.
State law requires contribution increases, for both employees and employers, when the amortization period for unfunded actuarial accrued liability exceeds 25 years; when that happened, a three-year phased increase was approved by the PERSI board in 2008, but postponed because the state couldn’t afford it in 2009. The increase kicked in this year, fiscal year 2014; it was the first increase since 2004. Now, however, the amortization period has dropped to 12.1 years. So the next phase of the rate increase scheduled for next year, fiscal year 2015, could be postponed; the PERSI board will vote on that issue at its meeting Oct. 15. “There is some speculation that they might postpone that increase,” Lockett told JFAC.
The Legislature's Joint Finance-Appropriations Committee is holding its interim meeting in north-central Idaho today and tomorrow, and today the lawmakers, along with State Board of Education members, state Division of Financial Management officials and staffers, toured the University of Idaho's research facilities and labs in Moscow and talked with professors and students. UI President Duane Nellis said over the past four years, the university has lost $30 million in state funding, but has partnered with 250 private and public entities to keep research and academic programs going. “While we're very proud and very grateful for the non-governmental support we've received, we realize that there is a limit to the lifelines others can provide,” Nellis said in a statement. “We believe our legislators will understand that we're exceptionally good stewards of our resources.”
The legislative budget writers will be in Lewiston and Orofino tomorrow, with stops including the Port of Lewiston, the Idaho Correctional Institution-Orofino, Clearwater Valley Hospital, and a juvenile corrections center in Lewiston.
Senate Finance Chairman Dean Cameron, R-Rupert, said despite the positive budget outlook lawmakers are facing with state revenues growing, he doesn't feel like the state's in surplus mode, with its revenue still below 2008 levels. “From my way of thinking, a surplus is when you have paid all your bills and you have money left over,” he said. “We're not at that point. We haven't paid all our bills.” He pointed to tens of millions that state hospitals and nursing homes assessed themselves to help Idaho keep its federal Medicaid matching funds this year, and automatic salary fund reductions built into the public school budget going years out into the future. “That in my mind should be paid for,” he said. “So in my mind, we're not operating with a surplus.”
Said Cameron, “I guess early on I cringed at all the jubilation. … I'll be happy when we get back to revenues growing at a reasonable pace,” and ground lost since 2008 has been made up. “Then I'll breathe a sign of relief. Until then, it's more pain, it's just in degrees of agony.”
Idaho's longitudinal data system for public schools is working better now, JFAC members were informed today. After the big data upload in November to calculate school enrollment, legislative budget analyst Paul Headlee said the state Department of Education is reporting that 141 school districts or charter schools submitted error-free data, out of 159; that's up from just nine the previous year. “So it appears that there's been quite an improvement in the quality of the data that's being submitted from the school districts to the department,” Headlee said.
Sen. Bert Brackett, R-Rogerson, noted, “The state spent millions on this longitudinal data system.” He asked how much school districts have spent. Tom Taggart, president of the Idaho Association of School Business Officials, said, “It's going to be an ongoing burden on the districts. It'll become less so after we've worked it out and accommodated it. I know in our district we've had five people directly involved and put hundreds of hours into it.”
Idaho's various reserve funds hit a high of $393 million total at the end of fiscal year 2008, but now they're projected to be at $30.4 million by the end of the current fiscal year on June 30. That includes the unendowed portion of the Millenium Fund, which comes from tobacco proceeds; the economic recovery reserve fund, which basically has been spent all the way down; the public education stabilization fund, which had $11 million on June 30, 2011, and is projected to have $15.5 million by the end of this fiscal year; the budget stabilization fund, also spent down; and the governor's emergency funds, which stand at $3 million.
Legislative budget analyst Ray Houston told JFAC, “It took you five years to get up to $400 million, and it took you four years to get down to $30 million.”
Senate Finance Chairman Dean Cameron noted that if lawmakers consider raises for state employees - known as CEC, or “change in employee compensation” in budgeting speak - the “Students Come First” school reform laws could complicate that when it comes to public schools. That's because the laws require a shift of 2.38 percent out of salary funds next year to fund technology boosts and teacher merit-pay bonuses.
“We know the governor, at least at this point, has recommended about a 3 percent CEC,” Cameron said. “One of the dilemmas we have is if you apply that to public schools, if they have 3 percent CEC and at the same time a 2.38 percent reduction, that won't translate to a 3 percent for public schools. We have to keep in mind how to work through that. … There may be a perception issue that there may be more revenue there than will be available.” Legislative budget director Cathy Holland-Smith responded, “That's correct.”
As Idaho lawmakers begin to plan for setting the fiscal year 2013 budget, they'll have a beginning balance left over from the current year, because state tax revenues came in so far above the amount for which they budgeted. Under current revenue forecasts, that'll be $130.3 million, legislative budget director Cathy Holland-Smith told JFAC this morning. “This $130 million … assumes that the revenue forecast will stay,” she said. “I think we can all assume that it will go down.”
Then, if state revenues next year grow by a hypothetical 3 percent, $26 million is automatically transferred to the state's budget stabilization fund, the next $15 million bump in the grocery tax credit is funded, and non-discretionary adjustments are covered to keep state services at their current level, lawmakers could cover all costs and still have $79.3 million left over. State agencies have submitted $147 million in requests for new line items vying to be funded from that pot next year, including restoring cuts; other potential uses include pay hikes for state employees who've long gone without; further replenshing drained rainy-day funds; or other moves. “It's going to be the call of the Legislature,” Holland-Smith said.
If state tax revenues next year grow by 4 percent rather than 3 percent, the amount available after covering costs for current service levels grows to $105.4 million. If it's 5 percent, the amount grows to $131.4 million.
“It really is good news, but it's cautionary, because there is a significant pent-up demand,” Holland-Smith said.
Legislative budget director Cathy Holland-Smith noted that there are differing views of the $16.2 million that state tax revenues have lagged behind forecasts since the start of the fiscal year on July 1. Though that's only a 1.6 percent shortfall from the forecast, and lawmakers budgeted well below the forecast, it suggests that “that revenue forecast is not going to hold,” she said.
“Right now, on paper, there's $160 million … of additional revenue that's available compared to when you budgeted,” she told lawmakers on the Joint Finance-Appropriations Committee. If Idaho then covered the $4.2 million in deficiency warrants that have been run up for fires and pest control, and funded all $30 million in supplemental budget requests for the current year that have come in, lawmakers still would have a $127.2 million surplus as they begin their budget-setting task for next year, if revenue continues to come in as predicted in the August state forecast.
“That's not likely to happen,” Holland-Smith said. Rather than growing by 6.4 percent, she said it's now looking like state revenue may grow at 4 or 5 percent, so the forecast could be revised. “It's likely that you're going to begin to see that pushdown,” she said. Because every 1 percent of the state general fund is $26 million, “You can quickly see where that would change,” she said. “We'd be probably right in the (range of) $50 million off of that $127 million surplus.”
That would leave lawmakers with a $77 million state budget surplus.
Every member of the Legislature's Joint Finance-Appropriations Committee has turned out for today's interim meeting, where the first agenda item is a general fund update. JFAC Co-Chair Dean Cameron, R-Rupert, told legislative budget director Cathy Holland-Smith that the lawmakers are looking forward to hearing about all the extra money the state's going to have.
Here's a link to my full story at spokesman.com on Idaho's budget-crunched schools looking at a possible $50 million one-time boost in July, no strings attached, if state tax revenues meet projections in the final month of the state's fiscal year that ends June 30. And here's a link to my full story on the dustup over the state's new longitudinal data system for schools, which local school officials around the state say has serious problems, but state schools Supt. Tom Luna says must be in place by September. After Tom Taggart, president-elect of the Idaho Association of School Business Officials and director of business and operations for the Lakeland School District, urged lawmakers today to “slow down” the process so bugs can be worked out, Luna said that's not an option, under strings tied to the $300 million in federal stimulus funds Idaho's accepted in the last few years. “We lost that option when we took the money from the feds – we have a Sept. 30, 2011 deadline,” Luna said. “It's time to meet those commitments.”
State schools Supt. Tom Luna said some concerns raised by local school officials about the new longitudinal data system are valid, but others aren't. He said school districts could choose whether to automate the process of entering data into the new system the first year. “To date, districts have chosen not to automate the process but to use this money for personnel and upload this data manually,” Luna told JFAC. “This is why many districts are reporting additional burdens on staff and resources. I continue to encourage districts to automate this process so they can minimize labor and maximize the benefit of this system.”
He said the state department needs to help districts more with the system, and acknowledged there have been many “frustrations.” But he said there also have been “success stories.” He said the department has heard the concerns, and, “We are taking steps to address them.”
Luna said he's launching a third-party audit of the data collection to verify its accuracy, and has asked school districts to volunteer for similar audits at their end; a half-dozen have now volunteered, he said.
State Superintendent of Schools Tom Luna is now addressing JFAC about the new longitudinal data system, and his picture is very different than that offered by local school district business managers. “This is the first year ISEE has been operational,” Luna told lawmakers. “We are the last state in the nation to deploy a statewide longitudinal data system, but we have made progress quickly. This is the most accurate data we have ever had.”
He said the state and districts have made “impressive progress” in getting the system up and working right. “It's been a huge undertaking for us as we work with limited time and limited resources,” he said.
Lakeland School District business manager Tom Taggart, head of the Idaho Association of School Business Officials, told JFAC that district workers feel the new longitudinal data system and its problems is an “emergency” situation. “We think the entire process should be slowed down,” he said. “We think that a big step forward would be the leadership of the state department standing up saying, 'This has not gone as well as we hoped, it's got serious problems, we could've done a better job at the start.' I think that acknowledgement gives us comfort we're going to fix it.”
He said, “I think when it's done and it's fully implemented and it works well, we will love it, and we're willing to help get there. But overwhelmingly, the people in the districts are frustrated and they're upset and they're looking for help.”
The Joint Finance-Appropriations Committee is now hearing an update on the new student longitudinal data system, known as ISEE, or Idaho System for Educational Excellence. “The system is pretty well developed now and the department is transitioning off of federal funds,” explained legislative budget analyst Paul Headlee. “It looks like at this time, both the development and maintenance of the system is less than was originally proposed in 2008.” From fiscal years 2009 to 2011, the state has appropriated $8.64 million for development, including a $5.9 million federal grant, and in fiscal year 2012, the state has appropriated $1.09 million for maintenance and operations.
Tom Taggart, president-elect of the Idaho Association of School Business Officials, told the lawmakers, “We want to look forward in what we can do to make this work, without being too negative, but I think part of our message is a dose of reality as to what's going on at the school level with ISEE. We're the nuts and bolts people who are in the business offices in the schools. We like it when things work, and when they don't work we like to find a way to fix them.”
On ISEE, he said, “There's still a lot of concern and frustration. … We're not here to whine, we're not here to put up roadblocks. We don't have any political agenda. We want see this thing work. However to our members it's clear at this point it isn't working for the school districts, and we haven't seen what we'd like to see in response to our concerns.” Trying to get the system to work has placed a “huge burden” on school district staffs, Taggart said. “They are spending hundreds and hundreds of hours. … A lot of time it's like whack-a-mole: You solve this problem and three more pop up over here you have to deal with.”
As a result, he said, “I'm not sure anyone can say exactly how many units are being funded this year, how many teachers are being funded. … Normally at this time, we'd have that information.” That's created uncertainty in setting district budgets, he said. “There's great frustration out there.”
The possible $50 million additional payout of discretionary money to Idaho schools, if state surplus funds hold up in June, will be “very significant,” said JFAC Co-Chairman Dean Cameron, R-Rupert. “We were hoping it'll be a little higher,” he said. “It may be the very thing that helps 'em through this tough budget year.”
His co-chair, Rep. Maxine Bell, R-Jerome, cautioned, however, “June isn't here yet.” June typically is the fourth-largest month for state tax revenues, and in some past years, she noted, it's brought bad news. Said Cameron, “We'd feel better about June had May been a better number.”
School districts, already facing big cuts, will have full discretion on how they spend the one-time payout of discretionary funds. “They can do whatever they feel they need to do,” Cameron said. “They may buy back furlough days. They may use it toward staffing needs.” Bell said, “This has no strings attached to it at all.” But both Cameron and Bell said they'd encourage them to “be cautious, because we know the next budget may be worse.”
The state budget for schools for next year includes a 1.6 percent cut in salary-based apportionment, the main state funding source for staff salaries for schools, and the following year, that apportionment will be cut by 4.2 percent as part of the new school reform laws, with those funds shifted elsewhere, including to technology investments. “That's already built in in statute,” Cameron said. “From my perspective, they are wise to hang onto it for the following budget year.”
The final numbers aren't in yet, but the latest estimates suggest that, depending on what happens with state tax revenues in June, Idaho school districts and charter schools could get about $50 million in a one-time distribution of discretionary funds to satisfy federal maintenance-of-effort requirements attached to federal stimulus funds Idaho accepted earlier. That would be about $3,587 per support unit; a support unit is a calculation roughly equal to a classroom.
Legislative budget analyst Paul Headlee said under the same requirements, community colleges likely would get about $5.5 million. If there's a negative variance in this year's school funding formula calculations, the amounts to be distributed could drop; if the state collects more than forecast in June, they could go up, and if it collects less than forecast, they could drop.
Legislative budget analyst Paul Headlee told JFAC members this morning that of the $51.6 million in federal jobs funds that became available to Idaho school districts to save jobs, about $13.7 million have been drawn down by the districts, leaving $37.8 million; the funds can be spent between now and the first three months of fiscal year 2013. However, when Rep. John Vander Woude, R-Nampa, noted that the breakout showed the Kuna school district hadn't spent any of its jobs money but the district told him it's spent half, Tim Hill of the state Department of Education said the payments are processed only every other week, so additional amounts could have been spent since the last report. The state budgeted as if districts would spend half that money this year, and half that money next year, in fiscal year 2012.
The Joint Finance-Appropriations Committee is gathered for its interim meeting and tour today, starting out at Columbia High School in Nampa. Nampa School District Superintendent Gary Larsen, asked by committee members how he'll cope with state budget cuts and new requirements to shift salary funds to technology, said, “We'll work with what we get. … I'm a little leery about cutting back the workforce more than we have.”
JFAC Co-Chair Maxine Bell, R-Jerome, said, “We're not even using the word 'normal' any more in this situation.”
Among those joining the joint legislative budget committee for its meetings this morning are state schools Supt. Tom Luna.
Idaho's longitudinal data system for its K-12 public schools has been roundly panned in surveys of the members of the Idaho Association of School Administrators and the Idaho Association of School Business Officials. The business managers survey found that only 1 percent rated the state Department of Education's overall job implementing the project, which is dubbed the “Idaho System for Education Excellence,” positively, while 30.3 percent were neutral and 68.7 percent rated it negatively. Asked if their school district “fully understands the reasons for, and uses of, ISEE,” 37.8 percent of the business managers said yes, while 62.2 percent said no. Among the school administrators, 91.2 percent said the ISEE has added “a great deal of additional work” for personnel in their school districts.
An overview and demonstration of the multimillion-dollar student data system, along with the survey results, is on the agenda for the Legislature's Joint Finance-Appropriations Committee tomorrow, which is beginning its interim meeting and tour in Nampa. JFAC also will discuss school funding and the Idaho Education Network.