Education Legislative Report

from looking elsewhere early in their careers. He points out, however, that Vermont has a favorable inflow of people between the ages of 35 and 55. “We soak up some of the most talented people in the world between the ages of 35 and 55,” Kavet says, “and young Vermonters come back to Vermont between those ages for the quality of life here, not for our jobs.” Kavet calls this an “amenity factor.” Vermont’s amenity factor is positive, he says, while many places have negative amenity factors. On average, Kavet suggests, Vermont has a net inflow of population according to Kavet’s analysis, not, as Woolf suggests, a net outflow.

Hoffer challenged the premise that Vermont is “overtaxed.” He points out that our property tax system is unique, and that our income tax burden is “about average.” When looking at tax burden overall, Hoffer concludes that Vermont is “only ½% above average for overall tax burden.” And, Hoffer suggests, “Vermont looks pretty good when you look at what you get for your tax dollar.”

The two committees also heard from former superintendent and deputy commissioner of education Bruce Richardson, who summarized his research on past education governance reform efforts. Based on his research, Richardson made several recommendations.

Any governance study conducted should base its recommendations on a careful analysis of existing conditions, and not upon data from other states.
Governance studies must be conducted in full public view.
Emphasis must be placed first on defining ‘quality of education’ in terms of outcomes and then seek out the structure that provides the best opportunity to support that definition.
Variations on centralization of governance should be considered.
More faith should be placed in the ability of citizens to participate in issues so vitally of concern to them. Experts defining and solving problems on behalf of the people is evidently not the Vermont way.

The House Education Committee also devoted four blocks of time this week to hear from representatives of our associations and the Vermont NEA on the question of “what do we expect of our schools.” Superintendents Alice Angney of Lamoille South, Frank Perotti of Rutland Windsor and Jeanne Collins of Burlington; school board members John Fike of Reading, Kristin Bristow of Vergennes and Jack Hoffman of Marshfield; and principals Chris Young of Craftsbury, Madeline Young of Highgate, Ken Page of Duxbury and Patrick Burke of South Burlington discussed with the committee the characteristics of their respective school districts, the demands placed on schools by external forces and the expansion of the mission of schools in the 21^st century. One factor in which the committee has expressed particular interest is the degree to which conditions of poverty negatively impact a child’s school experience and the extent to which schools are providing services to students intended to counter the effects of poverty. The obvious question here is “how much should schools be doing (and property tax payers funding) that might be more efficiently done by human services agencies?”

The House Education Committee will continue its fact-finding for another week or so, and then will begin to focus on specific proposals –all in an effort to answer the questions on the wall.

Another Education Fund Shortchange Uncovered

Editor’s Note: The following article has been excerpted with permission from last week’s Vermont League of Cities and Towns legislative report. The issue raised—under-funding of the General Fund transfer to the Education Fund—is very much alive in this legislative session. The Governor’s administration has recommended a transfer increase of only 2.5%; far short of the statutory requirement. Our associations have joined the VLCT in calling for a General Fund transfer in FY08 that accurately reflects the growth in General Fund spending, and for the transfer of funds from the General Fund to the Education Fund an amount equal to the amount of under-funding in FY06 and FY07.

Testimony given before the House Ways and Means Committee on January 10^th disclosed that the state General Fund obligations to fund education have been under-funded to the tune of $25.7 million over the past two state budget years. Paul Cillo, President of the Public Assets Institute and former legislator, first raised this issue earlier this fall.

Even though Act 60 had included a one-time increase in non-property tax revenues for local schools, succeeding years saw those other state revenue sources dwindle. Between FY99 (the first full year of implementation of Act 60) and FY03, non-property tax revenues for the Education Fund actually dropped $7.9 million from $347.8 million to $339.9 million. At the same time, school expenses were increased by $172.2 million and state property tax proceeds climbed $179 million.

In response to this state shifting of expenses onto the property tax, the architects of Act 68 amended the law to require the following:

16 § 4025. Education fund (a)(2) …, in fiscal year 2006 and thereafter there is appropriated and transferred from the general fund to the education fund the amount appropriated and transferred in the prior fiscal year adjusted by the percentage change in general fund base spending in the current fiscal year. For each fiscal year, the governor shall present a budget to the legislature providing for a general fund appropriation and transfer to the education fund in this amount, and the legislature shall appropriate and transfer this amount adjusted as necessary to reflect the actual amount of general fund base spending enacted by the legislature for that fiscal year. (Emphasis added)

We have no reason to believe that it was intentional on anyone’s part, but things went awry in FY06. For the FY06 budget, the Governor’s initial request for the General Fund transfer increase to the Education Fund equaled his proposed increase in General Fund expenditures, which was 4%. For some reason, that transfer figure of $259.3 million remained unchanged as the budget was amended upwards by the legislature, with the increase in General Fund spending ending up 7.1% higher than FY05.

The Governor’s FY07 transfer amount was masked by his aborted attempt to shift the responsibility for a large portion of the state’s teacher retirement system from the General Fund to the Education Fund, which would have added even more weight to the already strained backs of property taxpayers. When the whole budgeting process was done, General Fund expenses for FY07 rose by 7.4%, while the transfer to the Education Fund rose only 3.6%. The chart below prepared by the Joint Fiscal Office shows the steps taken and the ultimate impact:

Fiscal Year	General Fund Base Growth Rate	General Fund Transfer to Education Fund Required by Law	Actual General Fund Transfer	Difference	Actual Growth Rate
2005	–	$249.3 million	$249.3 million	-
2006	7.1%	$266.9 million	$259.3 million	$7.7 million	4.0%
2007	7.4%	$286.8 million	$268.7 million	$18.1 million	3.6%
		$803 million	$777.3 million	$25.7 million

This year, a penny on the state property tax rate will raise $8.5 million. Using that figure, the state property tax rate was one penny higher than it should have been in 2006 and two cents higher in 2007.

If the $25.7 million underpayment for the past two years is not reimbursed and the state only bases this year’s General Fund transfer for its portion of the education bill where it should be ($286.8 million), combined with an increase of General Fund expenses comparable to the average rate since 1994 (4.2%), the General Fund transfer for FY08 should be $298.85 million – an increase of $30 million over the current year.

If the state just applies the same growth rate against the lower figure actually appropriated this year, the FY08 payment will only be $280 million – $19 million less than what it should be, resulting in the state property tax rate having to be 2.25 cents higher than what the law requires. As anyone familiar with the impact of compounding knows, unless corrected, these underpayments in the two previous years will cause property taxpayers to pay more each and every year into the future.

The Governor and legislature should use the $286.8 million that is required by law as a base amount to determine the FY08 General Fund transfer and the FY08 appropriation should accurately reflect the actual growth in General Fund spending. Further, the Governor and legislature should commit to transferring the first $25.7 million in General Fund surpluses realized in this and coming fiscal years to the Education Fund to reimburse property taxpayers for their overpayments made in fiscal years 2006 and 2007.

The 2007 legislative session will certainly be busy not only cleaning up the issues of the past created by our education funding system, but also trying to invent a new and improved model for the future.

FY2008 State Board of Education Proposal Lacking Funds for Necessary and Useful Initiatives

Federal Funds for School Grants Down $3 Million

The FY2008 State Board of Education Budget Proposal anticipates that federal funds for school districts and for the administration of federal programs at the Department of Education will be $3 million less than was available in FY2007. This is partially due to an anticipated reduction in federal funds and may have an impact on local districts.

At its January meeting, the State Board of Education adopted a budget proposal for FY2008 that omits requests for funding of several initiatives that were deemed important by the board during preliminary discussions at its meeting on October 18^th.

The State Board funding requests were jettisoned from the budget after the Agency of Administration nixed the items in its budget review process. The items presumably fell victim to the “consensus” budgeting process which was initiated several years ago to ensure agreement between the governor and State Board on budget requests. Under consensus budgeting, the State Board has sought approval for its Department Budget, a change in long standing previous practice when the Board took the budget if felt was necessary directly to the General Assembly without specific regard to the governor’s budget recommendations.

The initiatives and amounts that did not make it into the final proposal were described in documents developed by the State Board at its October meeting as follows:

1. Science Assessments - $300,000. This funding was deemed necessary to support the development of the No Child Left Behind Act science assessment at one elementary grade, one middle school grade, and one high school grade.

2. Support for Non-Title I Schools -$180,000. This funding would support mentoring and professional development activities in schools not receiving federal Title 1 funds.

3. A World of Difference Training - $130,000. Through FY2006, the Department has been supporting staff and student diversity leadership training with federal and state funds. The program has been very successful, with more schools requesting assistance. Federal funding ended in August 2006. The $130,000 was requested to support existing school initiatives and to modestly increase the number of participating schools.

4. Policy Governance Training - $60,000 These funds would be utilized to support the training of local school boards in policy governance functions.

According to staff at the Department of Education, the Department may be in line for funding of the $300,000 for the science assessment from FY2008 one-time funds. The No Child Left Behind Act requires on-going administration of a science assessment.

Also worth noting is the .0017 percent proposed increase in the Department’s General Fund budget. The Department’s FY2007 General Fund allocation was $13,842,960. The request for FY2008 is up $23,708 to $13,866,668. Operating expenses within the Department were reduced in order to cover the necessary increases in personal services, which include salaries and benefits such as health care.

Education Associations Release Report on DOE Communications

In response to concerns from local school officials about the volume and frequency of communications from the Department of Education, our Associations reviewed one year of communications from the Department to the field and last week we issued a report on our findings. To read the full report, go to www.vtvsba.org. A brief summary of our observations follows.

During calendar 2006, the DOE sent at least 410 memoranda and electronic mail messages to school administrators. 92 of these included specific required actions or responses by all the recipients. An additional 24 communications required specific actions or responses from at least some of the recipients. We classified another 166 of the communications as “advisory,” because though the communication may not have required a tangible, immediate response, the information was critical enough that it demanded the recipient’s time and focus. Another 44 communications were direct revisions or clarifications of previously sent information. The net result is that of the 410 communications we analyzed, roughly three out of four required specific focus and attention by the recipient.

The report illustrates both the volume and breadth of the communications originating at the Department and directed to the field. While September 20 may not be a typical day, it serves as a legitimate example of why field administrators might express some concerns. Here is an excerpt:

On September 20, superintendents received four messages from the DOE. One communication highlighted new requirements (enacted by the Legislature) regarding allergies and illnesses, and strongly encouraged administrators to plan and train staff to accommodate highly allergic students. Another message urged administrators to identify staff needed to attend an unrelated training. A third message reminded superintendents of the importance of the Tuitioned Student Survey, and the last message encouraged them to apply for school wellness grants. If the superintendent had decided to phone his or her principals for support in these endeavors, they would have discovered the latter received two other communications that day asking them to send staff to a different training and to verify a dataset for accuracy.

It is evident that these officials are being pulled in several directions simultaneously. Too often the DOE itself appears to want its field administrators to be focusing on too many tasks at once.

On January 2, 2007, the Department of Education announced a new field communication system, presumably intended to address the observations made in the Communications Report. The new system includes several attempted improvements—each of which we would have recommended as a result of our analysis. If the new system is successfully implemented, much of the duplication and ambiguity noted within the report should be alleviated. We appreciate the opportunity to draw the DOE’s attention to our concerns in this regard, and we look forward to continued constructive monitoring of the Department’s field communications system.

Pre-K Study Committee Settles on Draft Report

Schedules Public Hearing

The study committee created by Act 186 of 2006 is required to complete its work by January 30^th, and has issued a draft report. The draft report, largely reflective of recommendations made by Commissioner Cate, can be read in its entirety on the Committee’s website at

http://www.leg.state.vt.us/PreKEducationStudyCommittee/Default.cfm. The committee will hold a public hearing in room 11 of the State House in Montpelier on Thursday, January 25, from 6:30 - 8:30 p.m. The committee will settle on a final report at a yet-to-be-scheduled meeting following the public hearing.

The draft report includes the following recommendations.

The pre-kindergarten education committee believes that the time has come to step back and examine our entire system of early childcare. Although we have been charged with looking only at pre-kindergarten education, our study has convinced us that we do our children a disservice by thinking about early educational services as separate from other childcare services. Young children grow and develop best when all parts of their lives are integrated so that transitions from educational services, to social skills services, to simple nurturing care services are conducted in a seamless fashion guided, as much as possible by the parents, and without having to move the child from place to place. Therefore, we need a funding and regulatory system that encourages this type of integrated system.

Further, we are concerned about the viability of our fragile childcare infrastructure.

Many childcare providers have cobbled together funding from a variety of state, federal and private funds, and even so, struggle to make ends meet. Those who have chosen to work with public school districts to provide pre-kindergarten education services may not be able to continue if they lose the funding and support that the school districts offer them. We believe that the General Assembly should continue to support existing pre-kindergarten education service providers while working toward a better regulatory and funding system.

First, we recommend that the General Assembly act immediately to ensure that our existing pre-kindergarten service providers can continue to offer services but that it limit the number of students who may be counted in the average daily membership in order to contain costs while we work toward a more coherent system. Further, the legislature should provide more guidance to ensure that the services are of high quality and that pre-kindergarten education is better integrated with other types of early childhood programs and the K-12 education system. Finally, the General Assembly should work toward integrating funding and regulatory systems for early childhood services. Therefore, we recommend that the legislature implement recommendations 1 - 7 immediately, and set a process in place to consider recommendation 8.

1. Clearly authorize public schools to provide pre-kindergarten education services to three- and four-year-old residents and to count a student served in its pre-kindergarten education program in its average daily membership as 0.46 for ten hours of services a week.

2. Cap the number of students a school district may count as a pre-kindergarten student in its average daily membership (ADM). All students receiving Essential Early Education services may be counted. Additionally, a number of non EEE three-and four year-old students may be counted as follows: the greater of 10 students or the average annual percentage increase in enrollment in the first grade as counted in the census period over the prior three years and multiplied by the prior year's first grade census count. If more than the allowable number wishes to enroll, the district may enroll them but may not count them in the ADM. If the number served exceeds the number that may be counted, the district must give priority to those students deemed to be at risk of school failure as defined by the state board of education by rule.

3. Require the State Board of Education (SBE) and the Secretary of Human Services to jointly adopt rules that:

A. Establish that before beginning a pre-kindergarten education program in which it wishes to count students in its ADM, a school district must engage the community in a collaborative process that includes an assessment of the need for the services in the community and an inventory of the existing service providers.

B. Direct a school district to use existing and interested public and private qualified service providers unless it finds that it cannot efficiently and effectively meet quality program standards by using one or more of these providers when beginning or expanding a pre-kindergarten education program for which it wishes to count students in the ADM.

C. Establish a requirement for effective parental participation in the pre-kindergarten education program.

D. Establish a process by which a resident parent or a resident or non-resident provider may petition the district to enter into a contract with a resident or non-resident provider. The process shall include an appeal to the commissioner whose decision shall be final.

E. Establish how ADM funds may be spent for services such as tuition reduction, improving quality, and direct services provided to private providers by the district.

F. Provide transparency and accountability by requiring private providers under contract with a school district to report pre-kindergarten and EEE costs to the school district. Require school districts to report pre-kindergarten and EEE costs to the commissioner of education.

G. Require school districts to include pre-kindergarten and EEE costs in their annual budgets and reports to the community.

4. Require the Commissioner of Education and the Commissioner for the Department of Children and Families to report to the legislature by January 2011 on the effectiveness and cost of the pre-kindergarten education program.

5. Adequately fund the child care subsidy program administered by the Department for Children and Families which enables many at -risk children to receive developmental services crucial to preparing them to enter school.

6. Clarify statutory authority of SBE and DCF to regulate early childhood programs by incorporating the provisions of the memorandum of understanding (described in section VIII of this report) into state statute.

7. Provide incentives to businesses to offer early care and child development services.

8. In order to create the integrated system of early childhood programs that we envision, the General Assembly should consider moving the authority to regulate and fund all early childhood programs to the Department of Chldren and Families, including those services offered by public school districts. To accomplish this, the General Assembly will need to determine how it will pay for these services without monies from the education fund.”

The following individuals have served as members of the Pre-K Study Committee

Representative Duncan Kilmartin, Chair

Senator James Condos, Vice-Chair

Representative Denise Barnard

Education Commissioner Richard Cate

Senator Don Collins

Department of Children and Families Commissioner Steve Dale

Senator Vincent Illuzzi

Representative Tim Jerman

State Board of Education member Chris Robbins

Media Advisory Issued by the Department of Education

January 17, 2007

*CLARIFICATION REGARDING GOVERNANCE MEETINGS*

MONTPELIER – There have been some recent news reports regarding the public Education Governance Meetings that have led to some misunderstanding on the format and focus of these meetings.

One piece that has caused confusion among the public is the statement that Commissioner Cate himself is hosting the thirty meetings across the state. This is not true. As stated in our press release, the meetings are being facilitated by Robin Scheu and George Appenzeller. Commissioner Cate will not be attending the meetings.

“I am happy to attend all thirty meetings, but I am concerned that my presence would detract from the important conversations I want Vermonters to be having about education governance,” said Cate.

Secondly, the meetings are designed to discuss education governance, as it relates to the structure of supervisory unions. By discussing “consolidation”, we are referring to consolidation of the governance structures of the supervisory unions and school boards, not the closing of schools or consolidation of buildings.

Following the first meeting, held Tuesday, January 16 at Oxbow Union High School, we plan to adjust the format and methodology of gathering information at these meetings. The meetings will start with an introduction by Commissioner Cate via video, describing the current education governance structure and the advantages and disadvantages to that system. In the video, he will briefly describe a model as he outlined in his white paper, released in May 2006. The meetings will the focus on the attendees’ thoughts on the advantages and disadvantages to their local system, and their reactions to the education governance model outlined in the white paper.

For that reason, the meeting in Hartford, originally scheduled for January 22, will be rescheduled. The next meeting will be held Wednesday, January 24 in Enosburg Falls. Please review the schedule below. Changes have been made. Note Woodstock will now be held March 28.

For more information on this education governance public engagement process, including a complete schedule of meetings and materials, visit http://education.vermont.gov/new/html/dept/governance.html. To make public comment, please send messages to governance@list.education.state.vt.us, via FAX at 802-828-3140 or via postal mail at Education Governance Public Comment, c/o Jill Remick, Department of Education, 120 State Street, 4^th Floor, Montpelier, VT 05620-2501.

DOE EDUCATION GOVERNANCE PUBLIC ENGAGEMENT

SITE MEETINGS

NOTE: ALL MEETINGS BEGIN AT 6 P.M.

DATE	SITE	FACILITY
January 16	Bradford (SU 27)	Oxbow High School Cafeteria
January 24	Enosburg Falls (SU 20)	Enosburg Falls Middle/High School Cafeteria
January 29	Ludlow (SU 39)	Ludlow Elementary School Multipurpose Room
January 30	Burlington (SD 15)	Burlington High School Cafeteria
February 6	St. Johnsbury (SD 11)	St. Johnsbury School
February 7	Fair Haven (SU 04)	Fair Haven High School Library
February 7	Grand Isle (SU 24)	Grande Isle School Cafeteria
February 12	Springfield (SD 56)	Springfield High School UVM Room
February 13	Hinesburg (SU 14)	Champlain Valley Union High School Cafeteria
March 7	Jamaica (SU 46)	Jamaica Village School Cafeteria

DATE