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SENATE PROPOSAL OF AMENDMENT 2007-2008

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H.526

 

An act relating to education quality and cost control

     The Senate proposes to the House to amend the bill by striking out all after the enacting clause and inserting in lieu thereof the following:

* * * Findings * * *

Sec. 1.  FINDINGS

(a)  Vermonters expect excellence from their schools and are justifiably proud of the state’s system of public education.

(b)  Vermont has demonstrated a commitment to equity in public school financing.  Nevertheless, the state cannot sustain public school spending at its present rate of growth. 

(c)  The general assembly acknowledges the commitment of school boards to managing costs under difficult circumstances.

(d)  The effect that a school funding system has on taxes should be more transparent.

(e)  It is important both to understand what Vermonters expect of their schools (including the expectations that are beyond the provision of traditional academic subjects) and to quantify the cost drivers that are causing increases in school budgets.  It is equally crucial to identify ways for schools to deliver these services more effectively. 


Sec. 2.  [Deleted]

Sec. 3.  [Deleted]

Sec. 4.  16 V.S.A. § 4010(c) is amended to read:

(c)  The commissioner shall determine the weighted long‑term membership for each school district using the long‑term membership from subsection (b) of this section and the following weights for each class:

Grade Level Weight

Elementary 1.0

Secondary 1.25 1.13

* * *

Sec. 5.  Sec. 6.  16 V.S.A. § 4010(h) is added to read:

(h)  The commissioner shall evaluate the accuracy of the weights established in subsection (c) of this section and, at the beginning of each biennium, shall propose to the house and senate committees on education whether the weights should stay the same or be adjusted.

Sec. 6.  SCHOOL DISTRICTS; ANALYSIS AND RECOMMENDATIONS

             REGARDING HIGH SPENDING

On or before January 15, 2008, the commissioner of education shall explore, analyze, and report to the general assembly regarding the reasons school districts exceed the excess spending threshold defined in 32 V.S.A. § 5401(12) and shall develop recommendations, including criteria, for exempting school districts from the consequences of exceeding the threshold in certain circumstances, including when:

(1)  The district has high costs for special education services, the department has recommended ways to lower the costs, the district has followed the recommendations, and the district still exceeds the threshold; or

(2)  The district has high costs for special education services, the department has been unable to identify ways to lower the costs, and the district still exceeds the threshold; or

(3)  The district pays tuition for all or most of its students to attend one or more schools outside of the district and the commissioner determines that it is not possible for the district to make alternative arrangements that would enable it to stay beneath the high spending threshold.

* * * School Construction * * *

Sec. 7.  16  V.S.A. § 3448(a)(2) is amended to read:

(2)  Approval of preliminary application.

(A)  When reviewing a preliminary application for approval, the commissioner shall consider:

(i)  regional educational opportunities and needs, including school building capacities across school district boundaries, and available infrastructure in neighboring communities;

(ii)  economic efficiencies;

(iii)  the suitability of an existing school building to continue to meet educational needs; and

(iv)  statewide educational initiatives and the strategic plan of the state board of education.

(B)  The commissioner may approve a preliminary application if:

(A)(i)  The project or part of the project fulfills a need occasioned by:

(i)(I)  conditions which threaten the health or safety of students or employees;

(ii)(II)  facilities which are inadequate to provide programs required by state or federal law or regulation;

(iii)(III)  excessive energy use resulting from the design of a building or reliance on fossil fuels or electric space heat; or

(iv)(IV)  deterioration of an existing building;

(B)(ii)  The need addressed by the project cannot reasonably be met by another means; and

(C)(iii)  The proposed type, kind, quality, size, and estimated cost of the project are suitable for the proposed curriculum and meet all legal standards.


* * * Superintendents * * *

Sec. 8.  SUPERINTENDENTS; VACANCIES; COMMISSIONER’S ROLE

On or before July 15, 2007, the commissioner of education and the state board of education shall submit a report to the senate and house committees on education concerning their respective responsibilities under 16 V.S.A.

§ 241(a), 16 V.S.A. § 261, and state board rules 3220 through 3241, all of which are set forth below.  In particular, the report shall address:

(1)  The protocol followed when the commissioner is notified of a vacancy or impending vacancy in a superintendent’s position.

(2)  The inquiries made by the commissioner or board concerning the process by which the supervisory union advertises for and selects a new superintendent and the qualifications of was selected.

(3)  The independent inquiries made by the commissioner or board concerning the qualifications of the superintendents considered or selected by the supervisory union board.

(4)  The nature and frequency of the “advice” provided pursuant to

16 V.S.A. § 241(a).


* * * Qualifications of Business Managers * * *

Sec. 9.  FINANCIAL MANAGEMENT OF SCHOOL DISTRICTS AND SUPERVISORY UNIONS

(a)  The commissioner of education, in consultation with the Vermont superintendents’ association, the Vermont school boards association, and the Vermont association for school business officials shall:

(1)  Examine the systems of financial management currently used by Vermont school districts and supervisory unions.

(2)  Examine the range of training and expertise currently held by persons responsible for the financial management of Vermont school districts and supervisory unions.

(3)  Examine and assess the training or credentials required of financial managers employed by public schools or school districts in other states.

(4)  Develop proposals to ensure that all school districts consistently use uniform, high‑quality financial management practices.

(b)  On or before November 15, 2007, the commissioner shall submit a report to the senate committee on education outlining the results of the examinations required in subdivisions (a)(1)–(3) of this section and recommending proposals to ensure uniform, high quality financial management practices as required in subdivision (a)(4) of this section.  The report shall include both an analysis of the budgetary impact, if any, of the commissioner’s proposals and drafts of any proposed legislation. 

* * * Mandates * * *

Sec. 10.  MANDATES; REPORT

The legislative council and the joint fiscal office, in consultation with the Vermont school boards association, the Vermont superintendents association, the Vermont principals’ association, the Vermont – national education association, the Vermont council for special education administrators, superintendents, principals, school board members, and school personnel shall examine the requirements placed on local school districts resulting from state legislation, board rules, and interagency cost shifts implemented since

January 1, 1997.  The examination will identify and quantify associated process requirements, staffing effects, and financial implications.  Legislative council and the joint fiscal office shall prepare a report for submission to the senate and house committees on education on or before December 1, 2007.

* * * Special Education Costs; Study * * *

Sec. 11.  SPECIAL EDUCATION SERVICES PROVISIONS; STUDY

As a continuation of the fine work contained in the Report on the Provision of Special Education Services issued in January 2001, the joint fiscal office, in consultation with the secretary of human services, the commissioner of education, the commissioner of employment and training, the Vermont superintendents’ association, the Vermont school boards association, the Vermont principals’ association, the Vermont – national education association, the Vermont council for special education administrators, the Vermont coalition for disability rights, the Vermont parent information center, and other members of the education community, shall study how the agency of human services, the department of education, and the department of employment and training should provide for special education services for eligible persons under 22 years of age in school or out of school.  They shall also:

(1)  assess the extent to which school districts have absorbed service costs for special needs children that were historically paid by other service providers, including the extent to which:

(A)  children formerly admitted to institutional care are now being provided services through special education;

(B)  costs now found in school budgets historically were part of the budgets of nonschool agencies;

(C)  costs now found in school budgets would be attributable to nonschool agencies; and

(D)  Medicaid funds are being used to provide services;

(2)  examine the interagency agreement regarding coordination of special education services entered into pursuant to 20 U.S.C. § 1412(a)(12) to determine if services are currently provided and paid for in the most appropriate and cost-effective ways;

(3)  prepare an estimate of the number of children with individualized education plans (IEP) who lose health care coverage through Dr. Dynasaur because of nonpayment of a premium and the financial impact on schools because of the disenrollment in Dr. Dynasaur; and

(4)  report its findings and recommendations to the general assembly on or before November 1, 2007.

* * * High Special Education Costs; Departmental Review * * *

Sec. 12.  16 V.S.A. § 2974 is amended to read: 

§ 2974.  SPECIAL EDUCATION PROGRAM; FISCAL REVIEW PANEL OF HIGH SPENDING DISTRICTS

(a)  Annually, the commissioner shall report on:

(1)  special education expenditures by school districts;

(2)  the rate of growth or decrease in special education costs, including the identity of high and low spending districts;

(3)  outcomes for special education students;

(4)  the availability of special education staff;

(5)  the consistency of special education program implementation statewide; and

(6)  the status of the education support systems in school districts; and

(7)  a statewide summary of the special education student count, including:

(A)  the percentage of the total average daily membership represented by special education students statewide and by school district;

(B)  the percentage of special education students by disability category; and

(C)  the percentage of special education students by in‑district placement, day placement, and residential placement.

(b)  The commissioner shall review high spending districts to determine Annually, but no later than October 1, based on the previous year’s expenditures, the commissioner shall notify high spending districts that they have been designated as such.  Each designated district shall respond within 60 days with an explanation of its spending to address whether:

(1)  costs could be decreased while still providing needed special education services;

(2)  the district made reasonable efforts to provide, purchase, or contract for goods or services that are the most reasonably priced yet appropriate for its students;

(3)  the district reported special education expenditures appropriately; and

(4)  all expenditures identified as special education expenditures were properly attributed to eligible students and the services for which the expenditures were made were included in the students’ individualized education plans;

(5)  the district’s special education staff‑to‑child count ratios were higher than the state average, including a breakdown of ratios by staffing categories;

(6)  the number of students in more restrictive environments such as day programs and residential placements was above the state average of special education students in those placements and, if so, information about the categories of disabilities for the students in such placements;

(7)  the district was in compliance with section 2901 of this title; and

(8)  if the district’s proportion of its average daily membership who are enrolled in special education exceeds 20 percent of the statewide average, any unusual community characteristics contributed to this condition.

(c)  The commissioner shall review low spending districts to determine the reasons for their spending patterns and whether those districts used cost‑effective strategies appropriate to replicate in other districts.

(d)  For the purposes of this section, a “high spending district” is a school district that, in the previous school year, spent at least 20 percent more than the statewide average of special education eligible costs per average daily membership.  Also for the purposes of this section, a “low spending district” is a school district that, in the previous school year, spent no more than 80 percent of the statewide average of special education eligible costs per average daily membership.

(e)  For the purpose of advising the commissioner and providing technical assistance to school districts, the state board shall appoint a fiscal review panel of seven people who have expertise in the areas of data collection and finance, and in the fields of special education, business or health and human services. The panel, at the request of a district school board, shall work with the department of education to review spending patterns and provision of special education services in the district and provide advice to the school board and staff concerning cost control mechanisms and cost‑effective practices. In addition, the panel shall make recommendations on what types of data to collect for purposes of the annual report required under subsection (a) of this section, and how the data should be analyzed.  If, after a review of a high spending district’s explanation, the commissioner finds that the explanation is not satisfactory, the commissioner shall conduct a performance review to include one or more of the following:

(1)  a review of the district’s special education student count patterns over time;

(2)  a review of the district’s compliance with section 2901 of this title and any unusual community characteristics that exist;

(3)  an on‑site review to examine a sample of special education student records and related financial and business records;

(4)  a review of the district’s compliance with federal and state requirements to provide a free appropriate public education to eligible students; and

(5)  a review of other factors.

(f)  Within 60 days of completing the performance review, the commissioner shall notify the district in writing of his or her findings and whether the results of the performance review are satisfactory or not satisfactory.  If the results of the performance review are not satisfactory to the commissioner, the commissioner and the school district jointly shall develop a remediation plan.  The district shall have two years to make progress on the remediation plan.  At the conclusion of the two years or earlier, the district shall report its progress on the remediation plan. 

(g)  Within 30 days of receipt of the district’s report of progress, the commissioner shall notify the district that its progress is either satisfactory or not satisfactory. 

(1)  If the district has failed to make satisfactory progress by the conclusion of the remediation plan, the commissioner shall notify the district that in the ensuing year the district will be subject to a withholding of up to 10 percent of its special education expenditures reimbursement under section 2963 of this chapter.

(2)  If the district has failed to make satisfactory progress by the end of the year in which a portion of the special education expenditures reimbursement was withheld under subdivision (1) of this subsection, the commissioner shall notify the district that in the ensuing year the district will be subject to a withholding of up to 20 percent of its special education expenditures reimbursement.

(3)  If the district has failed to make satisfactory progress by the end of the year in which a portion of the special education expenditures reimbursement was withheld under subdivision (2) of this subsection, the commissioner shall notify the district that the state board of education will impose a plan of remediation. 

(4)  If the district makes satisfactory progress under any subdivision of this subsection, the commissioner shall release to the district any special education expenditures reimbursement withheld for the prior fiscal year only.

(h)  Within 10 days after receiving the commissioner’s notice under subdivisions (g)(1), (2), or (3) of this section, the district may challenge the commissioner’s decision by filing a written objection to the state board of education outlining the reasons the district believes it made satisfactory progress on the remediation plan.  The commissioner may file a written response within 10 days after the district’s objection is filed.  The board may give the district and the commissioner an opportunity to be heard.  The board’s decision shall be final.  The state shall withhold no portion of the district’s reimbursement before the state board issues its decision under this subsection.

* * *

* * * Governance * * *

Sec. 13.  EDUCATION GOVERNANCE; COMMISSIONER OF
  EDUCATION; COUNCIL ON EDUCATION GOVERNANCE

(a)  In May 2006, the commissioner of education released a white paper outlining a plan for changing education governance in Vermont and initiating a year of facilitated public discussions throughout the state.  The final discussion session is scheduled for May 2007. 

(b)  On or before December 1, 2007, the commissioner shall submit a report to the house and senate committees on education that describes insights obtained from the recently concluded public engagement process.  The report shall consider other governance models and shall also outline any proposals the commissioner wishes to make for restructuring governance in Vermont.  Any proposed changes should foster increased cooperation and collaboration among public schools and provide support for the new demands and expectations placed on schools by an increasingly technological and global society. 

(c)  The commissioner shall request the following organizations to submit, jointly or independently, recommendations regarding the future governance of school districts:  the Vermont superintendents’ association, the Vermont school boards association, the Vermont principals’ association, and the Vermont national education association.  The commissioner shall include the recommendations in the report to the house and senate committees on education required in subsection (b) of this section.

* * * Small Schools Grants * * *

Sec. 14.  16 V.S.A. § 4015(e) is amended to read:

(e)  In the event that a school or schools which have received a grant under this section merge in any year following receipt of a grant, and the consolidated school is not eligible for a grant under this section or the small school grant for the consolidated school is less than the total amount of grant aid the schools would have received if they had not combined, the consolidated school shall continue to receive a grant for three years following consolidation.  The amount of the annual grant shall be:

(1)  In the first year following consolidation, an amount equal to the amount received by the school or schools in the last year of eligibility.

(2)  In the second year following consolidation, an amount equal to two‑thirds of the amount received in the previous year.

(3)  In the third year following consolidation, an amount equal to one-third of the amount received in the first year following consolidation.

* * * Education Property Tax Implications; Study * * *

Sec. 15.  EDUCATION PROPERTY TAX IMPLICATIONS; STUDY

The commissioner of taxes shall study the impact that the education property tax on homestead and nonresidential property has on various groups of taxpayers.  The commissioner shall design the study and select the groups of taxpayers in consultation with and upon the advice of the department of education and the joint fiscal office.  The commissioner shall submit a written report detailing the results of the study to the general assembly on or before January 15, 2008.    

Sec. 15a.  32 V.S.A. § 5402b is amended to read:

§ 5402b.  STATEWIDE EDUCATION TAX RATE ADJUSTMENTS

(a)  Annually, by December 1, the commissioner of taxes shall recommend to the general assembly, after consultation with the department of education, the secretary of administration and the joint fiscal office, the following adjustments in the statewide education tax rates under subdivisions 5402(a)(1) and (2) of this title:

* * *

(b)  If the commissioner makes a recommendation to the general assembly to adjust the education tax rates under section 5402 of this title, the commissioner shall also recommend a proportional adjustment to the applicable percentage base for homestead income based adjustments under section 6066 of this title, but the applicable percentage base shall not be adjusted below 1.8 percent.

Sec. 16.  16 V.S.A. § 562a is added to read:

§ 562a.  School budget; Douglas supermajority

     Authorization by the electorate pursuant to section 562(8) of this title or a municipal charter shall require approval by sixty percent or more of those voting if the proposed amount of money exceeds 104 percent of the prior year authorization, and the proposed education spending per equalized pupil exceeds 104 percent of the education spending per equalized pupil of the prior year.

Sec. 17.  16 V.S.A. § 562a is amended to read:

§ 562a.  School budget; Douglas supermajority

     Authorization by the electorate pursuant to section 562(8) of this title or a municipal charter shall require approval by sixty percent or more of those voting if the proposed amount of money exceeds 104 103.5 percent of the prior year authorization, and the proposed education spending per equalized pupil exceeds 104 103.5 percent of the education spending per equalized pupil of the prior year.


Sec. 18.  REPEAL

     Section 562a of Title 16 (supermajority vote requirement) is repealed January 1, 2013, effective for budgets for fiscal years 2014 and after.            

Sec. 18a.  VOLUNTARY CONSOLIDATION; TAX BENEFIT

There is created a committee consisting of two members to be appointed by the committee on committees of the senate, two members to be appointed by the speaker of the house of representatives, and four members to be appointed by the governor, and a chair to be jointly chosen by all three leaders to develop a system to provide tax incentives to school districts that voluntarily consolidate.  The chair shall convene the first meeting of the committee on or before July 1, 2007.  The department of education shall provide administrative support to the committee.  The committee shall present a detailed plan to provide tax benefits to consolidating districts to the general assembly on or before December 1, 2007.  Committee members shall receive no financial compensation for service on the committee.

Sec. 19.  EFFECTIVE DATES 

(a)  Sec.  4 of this act shall take effect on January 1, 2010, and shall apply to budgets beginning in the 2010–2011 school year.

     (b)  Sec. 12 shall take effect on July 1, 2008, and the commissioner’s annual review shall begin with expenditures made during the 2008-2009 academic year.   

     (c)  Sec. 16 (school budget limit of 104%; supermajority vote) shall take effect upon passage but shall affect budgets for fiscal year 2009 only.

     (d)  Sec. 17 (school budget limit of 103.5%; supermajority vote) shall take effect January 1, 2009, and shall affect budgets for fiscal years 2010, 2011, 2012, and 2013.

(e)  Sec. 15a (no annual adjustment of the 2% "applicable percentage") shall take effect upon passage and shall apply to claims filed in 2008 and after.

(f)  All other sections of this act shall take effect on July 1, 2007.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us