March 5 - Issue #5

Most School Budgets Pass; Addison NW Votes to Consolidate

233 school budgets passed on or before Town Meeting Day this year, and 14 were rejected. The 94 percent success rate is fairly typical, as Vermont voters continue to show strong support for local public school districts. Voters in four districts approved their budgets after reducing the amount recommended by the board.

As we have reported previously, education spending in Vermont is expected to decrease slightly from the prior year for the first time in recent memory. However, due to decreasing enrollment, the common level of appraisal, and reduced state support for public education among other factors, many towns that cut and level-funded their school budgets will still face tax increases. A Department of Education summary prepared last week indicates that 58 percent of district boards proposed reduced or level-funded school spending but only 12 percent of towns could expect decreased residential education tax rates.

Voters in the five towns of the Addison Northwest Supervisory Union voted to consolidate into a unified union district commencing in the 2011-12 school year. The vote had been highly anticipated among both local and state-level observers. A similar vote failed in 2005, and many wondered whether economic conditions and local appetite for district consolidation had changed sufficiently since then to produce a different result. The Addison Northwest experience is sure to be cited in Legislative debates on the merits of consolidating or merging districts.

Education Committees to Hold Hearing on Consolidation

Editor’s Note: Because the original date of the consolidation hearing was postponed until March 10, we are reprinting some information about consolidation bills from our prior Education Legislative Report. The voluntary merger bill description has been updated to reflect the latest version of the bill.

On Wednesday, March 10^th, the Senate and House Education Committees will hold a joint hearing on school district consolidation and merger from 5:00 to 8:00 p.m. in Room 11 at the Statehouse. The public is invited to provide brief testimony on voluntary school district merger and other administrative restructuring. We hope that a sizable number of school officials will testify, sharing local experiences and opinions with legislators. The two school district consolidation or merger bills that are currently receiving the most consideration in the Legislature are described in the following paragraphs.

The bill generating discussion in the Senate Education Committee is S.252, introduced by Senator Hartwell of Bennington County, would abolish existing supervisory unions and direct the Commissioner of Education to establish no more than 16 new, larger supervisory unions across the state. S.252 would also require the Commissioner to develop a plan for Legislative approval, by January 15, 2011, for the mandatory merger of school districts within the new supervisory unions, with each S.U. having a single governing board. Members of the S.U. board would be elected on an at-large basis, thereby favoring the larger districts within each supervisory union. The Commissioner would also be required to include in his plan the consolidation of schools within S.U.’s that “offer the same or similar grades and that are within 10 vehicular miles of each other in order to use existing physical space for fully and to reduce the number of school buildings in operation.” In order to meet any new construction needs caused by the consolidation of schools under this provision, the bill would proved 75% state construction aid in FY 2013 and 2014 for capital improvements and additions resulting from school building closures. The Hartwell bill would further require the new supervisory unions to assume responsibility for business services, employment, special education, transportation for the member districts within the supervisory union. Finally, the bill would require the Commissioner to recommend, by January 15, 2011, any statutory changes necessary to address transitional issues, such as the ownership of assets, assumption of debt and incorporation of existing employee contracts by the newly created supervisory unions. S.252 envisions that all required governance changes would be implemented prior to the 2014-15 school year.

In a new approach respectful of local involvement in the management of district merger, the House Education Committee is considering a bill that would provide incentives to school districts that choose to voluntarily merge with contiguous districts. The proposed concept would direct all supervisory union boards to discuss merger options, and would allow districts to initiate locally-planned district mergers. Mergers would be encouraged through the creation of tax incentives over a transition period of up to four years during which the new, larger districts would merge operations and implement efficiencies. The concept proposal, introduced by Rep. Peter Peltz of Woodbury, is unique among current governance reform proposals in that the governance change would be initiated and approved locally, in contrast to mandated sweeping consolidation into new districts as determined by the state. Our Associations supported further consideration of the basic concept outlined below, with the caveat that many important details of the proposal must be developed prior to final legislative approval.

The following is a brief outline of the proposal’s components:

The basic conditions triggering the merger incentive would be that the merged district must include at least 1250 students or five existing contiguous districts or both. The merged district must offer comprehensive education kindergarten through grade 12, and must include opportunities for distance learning, vocational education through an existing technical education center, post secondary enrollment opportunities that lead to both college and high school graduation credit and “opportunities for internships and other connections with area businesses, artisans, and organizations.” Whether the district would be required to offer prekindergarten education as well is an issue yet unresolved in committee discussions.
If the merger is approved by the voters in each participating school district, the taxpayers of the merging districts would benefit from a budgeting incentive for up to the first four years of the district’s operation. The incentive would lower the tax rate that district residents would otherwise have to pay. The amount of the incentive would be inversely proportional to the annual budget increase approved for the district (i.e., lower budget increases result in a more significant incentive for taxpayers). The bill would also limit the equalized (i.e., pre-CLA) tax rate increases or decreases to a maximum of five percent annually during the incentive period.
The merging districts would become “unified supervisory districts,” and would assume all the authorities and duties of existing supervisory unions and school districts.
Districts that are interested in the concepts in the proposal, but for reasons of geography, size or other factors, wish to present their own incentives for merger would be allowed to go before an authority (the Legislature or state board of education) to request approval for their own locally-developed merger incentive plans.
The bill concept also includes two governance changes unrelated to district merger:

1. The recommendations of the Business-Education Alliance regarding (1) reconfiguring the composition of the state board of education and, (2) elevating the education commissioner to a secretary of education appointed by the governor. For more on these recommendations, see page 8 of our first Education Legislative Report of 2010.

2. The recommendations of the Committee on the Financing and Effectiveness of Public Education. This committee’s recommendations were also detailed in our first Legislative Report of the year, and the recommendations are also their own separate draft bill also currently under consideration in House Education. Look for more developments on these recommendations in future Education Legislative Reports.

Both approaches have proponents and opponents among House and Senate committee members, and some legislators may prefer doing nothing at all on this issue. The hearing on Wednesday the 10^th will therefore provide an important opportunity to inform legislators and to help them as they consider school district consolidation and merger policies. The committees may be ready to vote on the bills as soon as Friday, March 12.

House Passes Student Graduation Bill

Last week, the House passed H.66, a bill that would allow students receiving special education or Section 504 services to participate in graduation ceremonies and other senior year activities with their peers, regardless of whether they intend to remain enrolled in school for continuing academic or individual services. The law would be applicable to any school in Vermont receiving public funds. At the graduation, the student would receive a certificate in lieu of a diploma until he or she completes all the requirements for graduation. The bill will now move to the Senate for consideration.

Senate Education Passes Designated School Tuition Bill

Prior to the Town Meeting break, the Senate Education Committee passed S.259, a bill that would modify the cap on tuition paid by school districts to a non-designated school, when the district has designated a public or independent high school as the school for the district. Current law states that if a board approves a parent’s request to pay tuition to a non-designated school, the tuition paid by the district will be limited to the least of the following:

1. The statewide average announced tuition of Vermont union high schools;

2. The per-pupil tuition of the designated school;

The tuition charged by the school that the student enrolls in.

S.259 would eliminate the first option. This change would mean that when a district designates a public or independent high school with a tuition charge greater than the statewide average for union high schools, the district will also pay that amount to non-designated schools (assuming the non-designated school’s tuition is equal to or greater than the designated school).

The Committee’s only amendment to the bill as introduced was to specify that it take effect upon passage. The bill will be considered by the full Senate upon their return from the break, and if it passes, S.259 will then move over to the House.

Challenges for Change Signed Into Law

The Challenges for Change bill was signed into law by the Governor on February 25^th. In brief, Challenges is a cost-cutting methodology whereby agencies and functions of state government are given specific budget reduction targets, and “challenges” (i.e., goals and priorities). Executive-branch managers are expected to realize the budget reductions while meeting the challenges. The law states that managers have four weeks to develop a implementation plan that will meet the challenges.

The Department of Education has named a design team that will be charged with developing the public education challenge implementation plan. The following is the challenge the design team will address, and a list of the members of the team.

The education challenges are below.

1. To improve student learning and reduce costs of administration – This is a multiyear process which many school districts have already begun to work on and which the legislature and the administration are anxious to support and encourage.

2. To improve special education student outcomes, including graduation rates and employment

These challenges are to result in lower administrative and special education costs of $17 million in FY2011 and $40 million in FY2012.

The law says that, “total education spending related to administration … will be reduced $13,332,500.00 from the 2009 estimates of fiscal year 2011 education spending…” The estimates of fiscal year 2011 education spending appear to have been overestimated by approximately $20 million.

The design response to these challenges will be guided by the following outcomes:

(1) Increase electronic and distance learning opportunities that enhance learning, increase productivity, and promote creativity.

(2) Increase the secondary school graduation rates for all students.

(3) Increase the aspiration, continuation, and completion rates for all students in connection with postsecondary education and training.

(4) Increase administrative efficiencies within education governance in a manner that promotes student achievement.

(5) Increase cost effectiveness in delivery of support services for students with individualized education plans.

(6) Increase the use of early intervention strategies that enable students to be successful in the general education environment and help avoid the later need for more expensive interventions.

Design Team members

Armando Vilaseca, Education Commissioner, Design Team chair

Bill Talbott, DOE CFO, Design Team vice chair

Laurie Hodgden, Milton Middle School/High School principal

John Tague, BFA Fairfax math teacher

Tom O’Brien, Addison Northwest SU superintendent

Marilyn Frederick, Lamoille North SU business manager

Carl Mock, River Valley Technical Center director

John Hollar, Montpelier School Board chair

Ellie McGarry, Rutland City SD Student Support coordinator

Rob Levine, Northern VT chapter of the American Red Cross executive director

Stephan Morse, State Board of Education representative

The team will be expected to report its plan no later than March 25, and we will report on further developments in this process as they occur.

Sports Concussion Bill Under Consideration

Last week, the House Education Committee took testimony on H.708, a bill that would institute new rules and procedures regarding concussions and school athletics. Introduced by Rep. George Till of Jericho, with assistance from the Brain Injury Association of Vermont, the bill would require students who are believed to have suffered a concussion to forgo school-based athletics until (1) at least one day has passed since the student last exhibited symptoms, and (2) the student has been examined and been given written permission to participate by a licensed medical professional. The bill would also require the Commissioner of Education to ensure that all school-based athletic team coaches receive annual training on the symptoms of concussion. The Commissioner would also be required to work with the VPA to develop guidelines and policies that would educate coaches, students, and parents on the nature and risks of concussions.

Several high school athletic trainers and sports medicine physicians in Vermont testified that concussions are a serious matter that schools do not treat lightly, but that the range of incidences that are classified as concussions is too broad to fall under the restrictions imposed by the bill. Some concussions are so minor that the proposed law would be overly burdensome for the students and the medical professionals who would be required to evaluate them, according to the testimony. The VPA testified that requiring each school-based elementary, middle-level, and secondary school coach to receive concussion training every year would be a significant additional cost to school districts (potentially $500,000 annually). The VPA is also concerned about the additional level of responsibility that is being placed on coaches, many of whom are not full time school employees.

Most of the witnesses indicated that ensuring that coaches and athletic trainers are trained to recognize concussion symptoms, and the severity of those symptoms, was the most effective component in protecting the health and well-being of student athletes. The VPA believes this goal is attainable without much of the prescriptive language in H.708 (i.e., training for every coach every year). A better approach would be to focus on flexible and sensible policies that ensure all student athletes have access to coaches or other school personnel who are well-trained to evaluate and protect children exhibiting the symptoms of concussion.

House Approves Property Tax Impact Rule

The House has amended one of its own rules of procedure to require that bills that would “materially [affect] the revenues of one or more municipalities” to receive a level of scrutiny on par with state taxation and expenditure, by requiring the bill to be considered by a “money” committee (i.e., Ways & Means or Appropriations). The rule was recommended by the House Committee on Rules, and was approved by the body unanimously. The Senate does not have a commensurate rule regarding the revenues of local municipalities.

The rule will not prohibit the legislature from requiring unusual uses for the education fund and the property tax, but it will require such actions to receive an extra layer of scrutiny. We expect that any bill that will have a demonstrative impact on the statewide property tax will be subject to the rule.

House Passes Teachers’ Retirement System Bill

The House has passed H.764, a bill that would adjust the contributions and benefits of the Vermont State Teachers’ Retirement System (VSTRS). The adjustments would require many teachers to work longer and for all to pay more into the system to receive full benefits, but would also increase the maximum benefits attainable for some educators. The combination of changes is expected to save the state $15 million next year and at least $15 million in future years, as compared with making no changes to the system.

For all educators, the percentage of salary that VSTRS members would be required to contribute would increase from 3.54 percent of salary to 5.0 percent.

VSTRS members who are already retired, or who are at least 57 years old, or who have completed 25 years of service as of June 30, 2010 will be exempted from the pension changes described below. Members who are not 57 or do not have 25 years of service will now be required to work until they are 65 years old or have a combined age and years of service of 90 to receive full retirement benefits.

For employees who are more than five years away from normal retirement, the maximum percentage of an employee’s average final compensation that he or she could receive as a pension is increased from 50 to 60 percent. However, those employees would have to work 34 years to earn the full 60 percent benefit; a 30-year career will result in about a 50 percent benefit, as it would under current law.

For new hires and VSTRS members who are not yet vested, the health benefit for VSTRS retirees will now require more years of service to earn, but will pay an 80 percent two-person benefit for the retiree and a spouse if the member serves for at least 25 years. Educators working at least 15 years will receive a lesser single-person benefit. Vested VSTRS members will retain their retiree healthcare 80 percent single person benefit. Vested members will also be able to earn an 80 percent two-person benefit but it will require additional years of service.

The law regarding “spiking” average final compensation has also been changed. Spiking refers to the alleged practice of significantly increasing an employee’s salary in the last years of service for the purpose of enhancing his or her pension benefit. The maximum amount of salary increase that will be recognized in a single year is now limited to 10 percent. This could potentially have a negative impact on educators who accept a higher-paying position for just one or two years at the end of their careers. VSTRS members who choose to work in a higher-paying position for three or more consecutive years at the end of their careers will not be negatively affected by this change in policy.

The bill will now move to the Senate for consideration. For more detailed information on the proposed changes to VSTRS, visit http://www.vermonttreasurer.gov/retirement.

Editor’s Note: There were no new education-related bills introduced by legislators since the publication of our previous Education Legislative Report.