Monday, March 27, 2017

The Bills are Rollin', Rollin', Rollin' Out.  No Clint Eastwood herding the bill ala "Rawhide," but the Senate E-12 Funding Division rolled out its version of the omnibus education funding and policy bill this afternoon.  Like the House bill, the target falls well short of the Governor's, but unlike the House bill, it's a very straightforward bill that doesn't seek to repeal current programs, de-link a lot of formulas, or implement broad new initiatives.  Instead, the bill puts money on the formula at 1.5%, directs an estimated $10 million to helping districts absorb the correction in the Teacher Retirement Association shortfall, increases funding for the Minnesota Reading and Math Corps, and a modest funding increase for the Early Childhood Scholarship program.  Along with funding for a set of isolated grant programs, it all adds up to the Senate Republican budget target of $300 million plus another $10 million that is expected to be generated from the sale of the Crosswinds Arts and Science Magnet School.

That's not to say this bill is bereft of any reform or new initiatives.  It's just that education funding and policy bills of recent vintage have been chock full of all kinds of programs and policy changes that inflate the bill to the size where one needs a figurative forklift to haul it around.  The bill expands on the reading at grade level by the end of third grade initiative that has been discussed over the past few years and contains the entirety of SF 4, Senator Eric Pratt's bill that establishes the Professional Educator Standards and Licensing Board.  The teacher licensure article also contains language that would eliminate the requirement that teachers holding an Academic and Behavioral Strategist (ABS) license take additional credits to maintain their license and instructs the newly-minted board to study Minnesota's current array of special education licenses to gauge for overlap.  The shortage of special education teachers has reached epic proportions and any measures undertaken to alleviate that shortage are needed.

Unlike the House bill that repeals the Governor's voluntary pre-kindergarten program, the Senate bill leaves it alone.  It does not embrace the $175 million the Governor has provided for the program in his budget recommendations, but that provision is left untouched in the Senate bill.  In her testimony, Education Commissioner Brenda Cassellius pointed out her disappointment that several items of importance to the Governor were missing from the bill, but there's no question that the Senate bill is less confrontational to the Governor than the House bill is.

The bill is slated for mark-up tomorrow morning, but it's difficult to envision many earth-shattering amendments being offered.  The House bill rankled a number of DFL members of the House Education Funding Committee with the de-linking of the compensatory formula from the basic formula and the deep-sixing of the voluntary pre-kindergarten program, but with policies like that absent from the Senate bill, it's difficult to see what amendments would promote and where they would take money from to fund the proposals would come from.  After that, the bill needs to head to the Senate Tax Committee (probably Thursday) and the Senate Finance Committee (probably Friday).  Both the House and Senate bills will be on the floor early next week.

Stay tuned.

Federal Rumblings.  President Trump signed the Congressional Review Act today and when it takes effect, two provisions relating to teacher preparation and teacher performance will be repealed.  There hasn't been a lot of talk about how the new administration will pursue some of its stated educational goals, most notably school choice and charter school promotion (which is understandable given the attention given to health care policy with tax policy on deck), but today's action marks the return to state jurisdiction a handful of policies.

Here is an article from US News and World Report on the policy changes:  Trump Signs Legislation Rolling Back Obama-era Regulations.

Sunday, March 26, 2017

Two Days of Parades.  There were parades in the House Education Finance Committee last Thursday and Friday.  Thursday's parade featured a long line of lobbyists (no floats or marching bands) providing their impressions of the House omnibus education funding bill.  Most of the positive comments came from those who support the House's move on early childhood education, which repeal the voluntary pre-kindergarten program established last session, increase funding for early childhood scholarships by $25 million, and create a new office in the Minnesota Department of Administration that would have control over almost all of the early childhood education programs currently in place in Minnesota.

Most of the negative comments about the bill were measured.  Most everyone realizes that given the committee's budget target of $258 million, it would be unlikely that there would be major increases in any program and that reaching a 2% increase in the basic formula for each of the next two years would be impossible.  As it is, the House managed to put 1.5% on the formula in each year, which puts $274 million into that element of education funding.  In order to put more money onto the formula than is actually in the House budget target, the committee cut the voluntary pre-kindergarten program, saving over $41 million in budget projections.  After increasing the early childhood scholarship program by $25 million, there was $16 million left to move toward the formula.  In other early childhood proposals, Pathway 2 scholarships, a program used by many school districts, would be eliminated and that also produced a number of concerns from witnesses.

One area of considerable concern is the House's recommendation to de-link the compensatory formula from the basic formula.  As currently implemented, the compensatory formula is automatically inflated by increases in the basic formula.  If the formula increases by 1%, the compensatory revenue base is also inflated by 1% in addition to any changes that may take place due to higher numbers (or lower numbers) of students on free- or reduced-price lunch and building concentration levels.  The House proposes to cease the automatic increase and in its place institute a new targeted compensatory program that would distribute approximately $50 per free- or reduced-price lunch pupil unit that would be reduced proportionately for districts not reaching 95% participation on the MCA tests.  In other words, a district reaching 80% of the 95% target would have their per pupil allotment reduced by 20%.  While not as stark as moves to contain the growth of compensatory revenue and to redistribute the dollars, it would still likely move revenue away from districts with the greatest challenges in terms of closing the achievement gap.  Stay tuned for the developments here.  While the Commissioner of Education and most of the district-based education lobbying organizations expressed either opposition or skepticism to the move, developments in this area will be something to watch.  It is expected the Governor would strongly oppose this change, we are a long way from when funding bills and a tax bill will hit the Governor's desk.

In my testimony (and thankfully it came near the end so there was a time limit), I hit many of the same points as others with one exception--that was also mentioned by AMSD and MREA--and that was the failure of the committee to hear Representative Joe McDonald's HF 1351, the referendum and debt service equalization bill that would have delivered needed tax relief to low property wealth school districts throughout the state.  None of the organizations that supported this bill expected the revenue needed for the program to come from the education committee's target and instead wanted it to be considered as part of the tax bill, which is already carrying considerable education tax relief in the form of the Ag Bond Credit for debt service levies and expanded education tax credits, tax deductions, and scholarship contributions for private school tuition.  But to get to the Tax Committee for possible consideration in that committee's target, it would have to be heard by the Education Finance Committee.  Without that hearing, it stalled completely and it is disappointing that in a year when the House is suggesting a $1.3 billion tax cut bill, that some money for equalization could not have been carved out for that purpose.

On Friday, it was a paper parade as sixteen amendments to the omnibus education funding bill were considered.  Most of the amendments that passed were technical in nature and nearly all of the amendments offered by DFLers failed.  The theme for the DFLers centered around the changes to the compensatory formula and the proposed shuttering of the Perpich Center for Arts Education that is contained in the bill.  Revenue for the programs proposed to be funded by the DFLers--full service community schools, after-school programs, student teaching stipends for teaching candidates in shortage areas, and school-linked mental health grants--came from the proposed increase in the early childhood scholarship program.  The exchanges in committee became contentious at several junctures and a charge was leveled by the DFLers that the bill is out-of-balance because it assumes revenue that is yet to be collected in the form of the sale of the building formerly used for the Crosswinds School for the Arts and Sciences.  The state bonded for that school several years back, but the school is slated for closure and the building will be sold.  That will generate revenue, but it is difficult to peg an amount or develop a timeline by which the revenue could be used.

It's deja vu all over again.

The result of Thursday and Friday made my recall that words of that famous educational philosopher Yogi Berra, who once said "It's like deja vu all over again."  The Governor's education target sits at just over $700 million, very close to where he was two years ago.  Further, the Governor doubled down on his voluntary pre-kindergarten program with his supplemental budget.  While the House education budget target of $258 million is slightly more than $100 million more than its target two years ago, it still is far below that of the Governor's.  The Senate target of $300 million is a bit below the $350 million target of the DFL Senate majority two years ago, it is not that much lower as to change the overall situation.  The Legislature is low and the Governor is high.  We will know more about the Senate bill when it is released tomorrow, but like the House, I don't expect it to be too much different than the House's bill.

The Governor reacted to the House bill with this very short statement:

“It looks like the House Republicans intend to use pre-kindergarten funding as a bargaining chip in the upcoming budget negotiations. It is appalling that the best interests of Minnesota four year-olds are being used as a political bargaining chip by House Republicans.”

Fasten your seatbelts, it's going to be a bumpy night.

Seeing that quote, I could only think of the words of another famous educational philosopher Bette Davis in her immortal words from the winner of the 1951 Oscar for Best Picture All About Eve.  Switch the word "session" for "night," and I think it about sums it all up.  One advantage this year is that while things will get exciting, it appears the Legislature may get its bills to the Governor in a time frame that will allow a good couple of weeks for negotiations between legislative leadership and the administration.  That may or may not matter, but I think everyone's cards will be on the table before the last weekend of the session.

Wednesday, March 22, 2017

The Appetizers are Served.  Think of the Legislative Session as a dinner party.  The first few months are spent over apertifs with lots of conversation and then out come the hors d'oeuvres in the form of the omnibus bills.  The omnibus policy bills were released and discussed last week and today we saw the first of the omnibus funding and tax bills in the House.  The centerpiece of the House program this year will be their tax bill, in which they propose to cut Minnesota taxes by over $1.3 billion.  In order to achieve this goal, they are spending less than the Governor above the base in most program categories and less than the base in some budget categories.

HF 890, the House Education Funding and Policy Omnibus Bill (the omnibus policy provisions of HF 1376 have been folded into the same bill as the funding provisions) was released today and there are a few surprises in the $258 million spending put forward in the bill.  The basic formula is increased by 1.5% in each year of the biennium; $70/PU for the 2017-18 school year and $71/PU for the 2018-19 school year.  Then things start to get interesting.  First off, the compensatory formula is de-linked from increases in the basic formula and a new $24 million compensatory formula not based on concentration of poverty is implemented.  That trade washes out into $2 million of savings for the bottom line as de-linking saves more than the new program spends. Further, the entire voluntary pre-kindergarten program enacted last year is repealed.  More about that later.

The biggest changes in the bill come in the area of early childhood education.  Under the bill, administration of most early childhood programs would be folded into a new office to be housed at the Minnesota Department of Administration.  In place of the Governor's voluntary pre-kindergarten program, the House bill increases school readiness by $8.5 million and the early childhood scholarship program $24.6 million.  As we witnessed during the last biennium, the House is opposed to the voluntary pre-kindergarten program.  I just thought they would leave it alone, but the only thing that surprises me is that I am sometimes still surprised.  The other surprise is that the bill closes the Perpich Center for the Arts.

Here are the highlights of the bill, some of which were mentioned in the text above:

  • 1.5% increase in the basic formula in each of the next two years $(274.6 million).
  • Current compensatory revenue program de-linked from increases in the basic formula (Savings of $26.6 million).
  • New targeted compensatory revenue formula created ($24.0 million).
  • Voluntary Pre-kindergarten program repealed (Savings of $41.0 million).
  • No money to help districts correct TRA deficit (Governor had $68.6 million).
  • No increase in special education formula (Governor had $45.4 million increase).
  • $4 million for teacher loan forgiveness.
  • $2.6 million cut in ABE funding by reducing growth factor in formula.
  • New new Office of Early Education and Development.
  • Increases Early Childhood Scholarship Program ($24.6 million).
  • Drops age of eligibility for scholarship down to birth.
  • Eliminates Pathway 2 Scholarships.
  • Increases School Readiness Formula ($8.5 million) and makes charter schools eligible for school readiness.
  • De-links ECFE allowance from the basic formula. 

There will be a lot of discussion on these provisions and policy changes over the next two months.

Here are the links to the bill and bill summary on HF 890.

Bill:  HF 890 Language

Summary:  HF 890 Summary

Budget Tracking Sheet:  HF 890 Budget

Tuesday, March 21, 2017

Committees Winding Down.  With the final target announced--the House Majority Caucus' target for E-12 is $258 million above base--the finance committees in the House and Senate will be putting together their bills very shortly.  It was announced today that the House Education Finance Committee may be rolling out their bill tomorrow and will take public testimony on Thursday.

I was remarking to someone today that it's almost like I'm Rip van Winkle, but instead of falling asleep for 20 years, I only fell asleep for two.  Like two years ago, the Governor doubled-down on voluntary universal pre-kindergarten in his supplemental budget and both houses of the Legislature have come in well below his nearly $700 million above base budget target (almost identical to what it was two years ago).  While the House target is about $100 million above what it was two years ago, it is still below what is needed to get to a 2% increase in the basic formula (as is the case in the Senate).  It will be interesting to see what rolls out in the next couple of days.

The House Education Finance Committee did have a hearing today in which they heard Representative Ron Kresha's HF 1558, a bill that would change the way districts bid for insurance.  The big change in the bill is that a district and the bargaining units would have to agree in order to request a bid from PEIP, which is a substantial change from current law when the bargaining units can request a bid without district approval.

The Senate E-12 Policy Committee met to listen to a presentation by the Legislative Auditor on their recently-released study on Minnesota's student testing system.

Here is a link to the report's page on the Legislative Auditor's site:  Standardized Student Testing Report

Sunday, March 19, 2017

Significant Committee Meeting Last Friday.  The Senate E-12 Funding Committee met last Friday morning from 9:00 AM until the early afternoon.  The committee covered a number of very interesting bills, some of which will be folded into the omnibus education funding bill and some that will likely move on their own.  Perhaps the most interesting bill is Senator (and Committee Chair) Carla Nelson's bill--SF 1885--that would establish Foundation and Incentive Revenue (FAIR).  This bill grew out of a desire to channel additional revenue to smaller school districts and is a bit of an offshoot from Senator Tom Bakk's SF 87, a bill that would have raised the pupil eligibility number from 960 pupils to 1,500 pupils.  Going in a bit of a different direction, SF 1885 provides a flat $200,000 to all school districts that is adjusted up or down based upon a school district's three-year rolling average on MCA scores.  Translating this into examples, if a district is small, the per pupil benefit ($200,000/Number of Pupils) is quite large.  If you are a large district, the effect is the opposite.  The $200,000 number changes due to student performance and higher test scores will lead to more revenue, which will add or subtract from the per pupil value.  

The bill spends approximately $60 million, which would translate to approximately $60 per pupil.  A back of the envelope calculation would indicate that a district of around 3,300 pupils with average performance on the MCAs would be the break point where the equation balances.  In other words, if you are above 3,300 pupils, you are better served by money going on the formula (provided your student performance is average or above average).  If you are under 3,300 pupils, the distribution of revenue in SF 1885 will probably favor you.  But again, a lot depends on a district's student performance.

There's no question that how smaller school districts are funded needs to be investigated and it's probably a reason why the school finance task force in Representative Urdahl's HF 149 needs to be pursued.  We may have reached a point in the education funding formula where it may collapse under its own weight.  At any rate, watch for SF 1885's progress as the Senate puts together its omnibus education funding bill.

Chair Nelson's SF 2094 was also heard.  This bill would increase the special education formula beginning next biennium and would add approximately $80 million to the budget tails.  There would be no new revenue in the next two years under this proposal, but special education costs are expected to continue to rise, making this bill very helpful to school districts throughout the state.

E-12 Policy Chair Senator Eric Pratt had four bills up, including the omnibus education policy bill--SF 1222--and SF 4, the bill that would establish the Professional Educator Licensing and Standards Board.  SF 1475, another Senator Pratt bill, would provide financial incentives to school districts to promote participation in the state MCA testing program.  More and more parents are opting their students out of MCA testing, making the value of the tests increasingly questionable.  

Other bills heard were:

SF 609-Dahms-Increasing Appropriation to Promote Participation in SW State Program that Provides Opportunities for Paraprofessionals to Obtain Special Education Teaching Licenses

SF 1792-Nelson-Increase in Adult Basic Education Funding

SF 1698-Nelson-Appropriation for Rochester Children's Museum

SF 1567-Pratt-Funding for African-American Registry to Improve Cultural Competency of Teaching Candidates

Targets Being Announced.  The Governor and the Senate Republicans announced their budget targets on Friday and the House Republicans will announce theirs tomorrow (Monday) morning.  The Governor adds $100 million to his voluntary pre-kindergarten program in his supplemental budget and leaves the rest of his education budget released in January alone.  This puts his revenue over base request at approximately $700 million, almost exactly the same as he proposed in 2015.  

The Senate, while not outlining any specific initiatives, proposes to add $300 million above the current law base.  This gets a bit confusing because the Senate Republican press release shows that the biennium-to-biennium increase will be be $1.144 billion.  However, the February forecast shows that the education funding base will increase by $844 million without any legislative action.  The $844 million is generated due to higher pupil enrollment, the final year phase-in of the Long Term Facilities Maintenance Revenue Program, an increase in special education funding due to the growth factor in that formula, and the carrying forward of the second year increase in the basic formula enacted last biennium.  I will be writing more about this as things continue to take shape.

Thursday, March 16, 2017

Early Childhood Discussion Goes Late.  Well, not that late, but the discussion of a number of bills related to early childhood comprised the first real night education-related committee meeting of the session.  At the risk of making light of the discussion, I'll say that in history there has been the War of the Roses, the American Civil War, and the Peloponnesian War, but what has been brewing at the Minnesota Legislature over the past decade is the War over Early Childhood Paradigms.  One side is largely on the side of school-based or school-administered programs and programs administered through the Department of Human Services while the other side is skeptical of that approach and would like to go toward a parent-choice scholarship program.  I have oversimplified the case, but support and opposition on the bills discussed tonight seem to break along those lines.  Two of the bills--HF 1491 and HF 2259--presented tonight are authored by House Education Finance Chair Jenifer Loon so it is obvious they will have traction.  HF 1491 would expand eligibility and eliminate the individual scholarship dollar cap for Pathway 1 scholarships down to birth and would eliminate Pathway 2 scholarships entirely.  That would certainly put a lot of school-based programs that use the Pathway 2 scholarships at risk.  HF 2259 would create a new agency that would handle all early childhood programs.  Proponents believe that putting all of the early childhood programs under one roof would promote efficiency and allow analysts to determine which programs are working best.  They also believe that providing more parent choice will help narrow the programs to those with the highest level of need.  Opponents believe that the current framework of programs--patchwork though it may appear--provides flexibility to school districts and other service providers and that combining the programs may lead to a system that won't meet the needs of a broad range of students.  Representative Ron Kresha's HF 1997 contains elements of HF 1491 and the home-visiting program contained in Representative Loon's HF 1801.  Representative Julie Sandstede's HF 1684, which increases funding for the school readiness program was also heard.

The rest of the committee time was dedicated to bills relating to alternative teacher licensure (HF 1663-Chief Author Representative Sondra Erickson), increasing the use of third-party billing for special education evaluation services (HF 1338-Chief Author Representative Paul Thissen), increasing the reimbursement for school lunches (HF 1217-Chief Author Representative Deb Kiel), and a bill modifying the regional public library funding formula (HF 1382-Chief Author Representative Bud Nornes).

Representative Steve Drazkowski's HF 654 was also heard.  Representative Drazkowski has tried to limit the dates on which school districts can hold bond and capital project elections and HF 654 states that districts can only go to the voters on election day in the even- or odd-numbered years.  In previous years, Representative Drazkowski's proposals attempted to limit it further to election years in even-numbered years only.  The bill also provides for a reverse referendum where voters could vote to reduce levies implemented by the school board.

Legislative Auditor's Report on Standardized Student Testing Released.  The House Education Innovation Policy Committee heard a presentation by the Office of the Legislative Auditor on their recent report on standardized testing.  In sum, the report gives the Minnesota Department of Education high marks in the administration of the program, but the report questions the value of standardized testing.  Here is a link to the report's page with links to the report's executive summary and text of the full report.

Office of the Legislative Auditor Report on Standardized Student Testing

LIFO Bill Passes House.  On a vote of 71-59, the House of Representatives passed HF 1478, the bill that would change how layoffs would be implemented at the district level.  Basically, seniority would no longer be the determinant in making staffing decisions when cuts are made.  Because the bill went to the floor on its own, it's difficult to discern the next step.  The bill has not been heard in the Senate, so it's dead on that side of University Avenue, but the House could put it in its version of the omnibus education bill.  Even if it is included in the final omnibus bill, it would likely be greeted with a veto by the Governor.

Wednesday, March 15, 2017

Things Flying All Over the Place.  With the policy deadlines pretty much in the past, the funding divisions for the various categories of state funding have been running through a lot of bills.  Most of these bills probably won't find their way into the omnibus funding bills, but a number of interesting perspectives are being presented.

Here are some of the highlights from the bills that have been heard and the committees in which they were heard.  

  • One bill getting quite a bit of attention is HF 1963/SF 1362 dealing with the use of proceeds from bond sales emanating from voter-approved bond referenda.  Under the bill, a district could not increase instructional space within five years after closing a building without a positive vote from the community.  The discussion of this bill emanates from decisions to close buildings made in the Stillwater district and the subsequent passage of a bond issue by the Stillwater voters just last month.  This has caused some consternation in neighborhoods where the buildings were closed, but there's no question a bill like this applied statewide could cause quite a few problems.  The bill has been heard in both the House and Senate and is on the list for possible inclusion in the omnibus education funding bill in each house.  Stay tuned.
  • Senate Education E-12 Funding Chair's SF 1556 was heard on Monday in the Senate E-12 Committee.  The bill calls for a 2% increase in the general education basic formula in each of the next two years.  It mirrors the Governor's budget recommendation and has a House companion in HF 1716, authored by House Education Finance Chair Jenifer Loon.  There is growing sentiment that this is where the formula increase will end up, but I'm also hearing rumblings that it may be a long road to get there.  Everyone will know more when the budget targets are set and it wouldn't be a surprise if the spending contained in those legislative targets will be well below the amount needed--$379 million--to fund a 2%/2% set of increases.  This is another one to watch unfold.
  • The House Education Finance Committee heard the bill that would abolish the Perpich Center for Arts Education (HF 1825) today.  The push to close the center springs from the report performed by the Office of the Legislative Auditor that was critical of the internal controls and operations at the center.  While the report didn't expressly call for the center to be closed (and a new board of directors has been appointed), the future of the center is being discussed.  The fate of the Crosswinds School for Arts and Sciences (a charter school) is also intertwined with discussion of the Perpich School.
  • Senator Mary Kiffmeyer has introduced SF 1332, a bill that would create a new revenue stream that would be based on a flat per pupil amount that is not linked to any of the categorical funding programs and was heard on Wednesday in the Senate E-12 Finance Committee.  A surefire way to start a verbal conflagration at the Legislature is to suggest that categoricals like compensatory and sparsity should be de-linked from the basic formula.  Rather than go that route, Senator Kiffmeyer has suggested that a new revenue stream not connected in any way to the categoricals could deliver revenue in a way that would help those districts that generate below average amounts of categorical revenue.  It will be interesting to see if this gets any traction because it is a concept that does need to be discussed.
  • Senator Roger Chamberlain's SF 1252 was heard on Monday in the Senate E-12 Finance Committee.  This bill would raise the equalizing factor on the first $300 per pupil unit of referendum levy (either board-approved or voter-approved) from $880,000 of referendum market value to $950,000 of referendum market value.  The total cost of the bill is approximately $10 million, which would be spread as property tax relief to all but a handful of districts in the state.  This approach provides relief to a broader base of school districts that Senator Dave Senjem's SF 1206, which is targeted to lower property wealth school districts in the second and third tiers of the referendum levy (and spends four times the amount of SF 1252).  There is no question that a strong case can be made for either of these approaches and hopefully that discussion will take place this session.  The equalization issue has yet to receive a lot of attention in the House, but there is still time to have a hearing on this issue.  What needs to be stressed is this is not a subject for the education committees where the tax relief contained in the equalization bills would be pitted against the basic formula and other programs.  This discussion needs to take place in the tax committee.
  • The private school scholarship bills carried by Senator Chamberlain in the Senate and Representative Ron Kresha in the House are on their way to their respective tax committees and will likely be part of the omnibus tax bills that will ultimately be passed by the Legislature (and will then likely be vetoed by the Governor).
It is going to be a busy two weeks as the funding bills are constructed.  I will try to keep up and get you the latest on some of the more high profile bills (but they are all high profile to someone) being heard.