In response to the governor’s proposed Investing in Teaching Initiative, your school board association has prepared a new issue brief titled “Teacher Quality, Teacher Compensation and HB1234.”

The document provides a section-by-section analysis of the bill, presents a concise overview of related research and summarizes related reform efforts that have existed or are underway in South Dakota. The issue brief is publicly available on our website at: http://www.asbsd.org/page174.aspx.

The governor’s proposal will have a dramatic impact on local schools and on the authority of local school boards to effectively and efficiently govern public school systems. We strongly encourage everyone to review this issue brief, and you are free to share it with anyone – including legislators – that you believe would benefit from a more thorough review of the issues.

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A massive overhaul of the state’s public school accountability laws was expanded Thursday to include a new “financial accountability rating system” that lawmakers say will help schools operate more efficiently.

Legislators added the language to Senate Bill 25, legislation that houses the framework for a new statewide accountability system. The amendment, sponsored by Sen. Deb Peters, R-Hartford, is patterned after the School Financial Integrity System of Texas, or FIRST.

In Texas, the law encourages districts to manage financial resources in a way that provides the most money possible for direct instructional purposes, and was used initially to determine whether schools were spending at least 65 percent of district expenditures as classroom expenditures. The law requires districts to submit financial information to the state education department to assign districts to one of four financial accountability ratings, superior achievement, above-standard achievement, standard achievement or substandard achievement.

The amendment doesn’t detail how schools would be held accountable for academic performance, but it does grant the South Dakota Department of Education sweeping authority to define indicators of financial management performance. The new law would also “integrate existing academic accountability and financial data” and rank the state’s public schools based on the “relative performance of school districts.”

The amendment was proposed after the committee had closed the public hearing on the measure, and lawmakers nearly adopted the amendment before taking public comment. Mitch Ritchter, an education lobbyist, had to interrupt committee action to request an opportunity to comment on the new language.

ASBSD Executive Director Wade Pogany testified against the amendment. He asked what legislators were intending to accomplish and how they would measure effectiveness.

“What do you want from us?” Pogany asked. “I think it’s fair that we answer that question.”

Sen. Jeff Haverly, R-Rapid City, said he struggles with how schools spend their money and the state needs to bring uniformity to how districts spend their money.

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The state collected a $12 million windfall because changes to the state aid formula weren’t implemented as the Legislature intended, members of the Senate State Affairs Committee learned Wednesday.

Sen. Larry Rhoden, R-Union Center, used a public hearing on Senate Bill 124 to explain circumstances surrounding last year’s cuts to the per-student allocation. In order to reduce Gov. Dennis Daugaard’s proposed 10 percent cut, Rhoden said lawmakers agreed to keep local property taxes level while cutting only the state’s share of the per-student allocation – a move that Rhoden argues should have resulted in a 6.6 percent ongoing cut to the per-student allocation.

During final-hour negotiations last year, lawmakers cut a deal with the executive branch to reduce ongoing per-student funding by 8.6 percent, allowing the state to realize a one-time savings of $12 million. To make up the difference, legislators provided schools with $97 in one-time money.

Rhoden said lawmakers only agreed to the proposal because they expected state officials to make the one-time allocation permanent before applying the annual inflationary increase in the next budget year. According to Rhoden, per-student increases should have been applied to a base number of $4,494.28. Instead, the governor’s proposed budget used a base number of $4,389.95.

“With the way this law was applied, there was roughly a $24 million savings by the property tax not being lowered,” Rhoden explained. “The way this has played out, education funding is only getting half that money. The other half is going on the state’s general fund bottom line.”

To ensure the law was implemented as intended, Sen. Rhoden said that lawmakers should use the higher per-student allocation as “a starting point” for education funding discussions this session. Applying the legally required 2.3 percent inflationary increase to the higher base number lifts the per-student allocation to $4,597.65 for FY13, approximately $106 higher than Gov. Daugaard has proposed.

Jason Dilges, the state’s chief budget officer, testified against the measure and pushed back against the notion that state officials didn’t properly apply the law. He said lawmakers shouldn’t be surprised by how the law was implemented and denied that the state received any benefits from the change. He cautioned lawmakers against adopting the bill because it would cost the state more than $15 million this year.

During time reserved for proponent rebuttal, Sen. Rhoden held strong to his contention that the law was incorrectly applied, telling state officials to examine public testimony from last year to better understand what lawmakers expected to occur.

“Everybody is entitled to their own opinion, they’re not entitled to their own facts,” said Rhoden. “You’re using the wrong PSA number with the adjusted Cutler-Gabriel percentage.”

Members of the committee endorsed the measure, but hedged on the notion that the measure would result in more funding for K-12 next year. ASBSD supports the bill.

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Parents should have the option to offset the costs of academic programs that aren’t required by state law, members of the South Dakota House of Representatives decided Wednesday.

Lawmakers voted 55-12 to approve HB 1195, an ASBSD-backed bill intended to clarify that school boards have the authority to charge for voluntary pre-kindergarten and driver education programs. The measure garnered enough support to pass with an emergency clause attached, which means the law takes effect once the governor signs the bill.

Floor debate focused mostly on a proposed amendment, offered by Rep. Roger Hunt, R-Brandon, to strike language allowing schools to charge for voluntary pre-k programs. Rep. Hunt pitched the amendment to correct what he said was overly broad language allowing schools to collect fees for providing “early childhood services.” He argued that the definition would open the door to charging for non-educational services and force private daycare providers out of business.

Rep. Nick Moser, R-Yankton, urged lawmakers to resist Rep. Hunt’s amendment, telling legislators that daycare providers in his community don’t oppose the measure and aren’t fearful of competition. He said pre-k programs are often funded through public-private partnerships that seek to provide services that aren’t otherwise available in communities.

The amendment garnered 26 votes, 10 tallies shy of the majority support necessary to change the bill. After his amendment was defeated, Rep. Hunt asked lawmakers to support the bill in its original form. He expressed disappointment the amendment failed, but said passage of the bill would help young people across South Dakota.

The measure now moves to the Senate.

VOTE TALLY FOR HB 1195 

VOTING YES

Abdallah, Blake, Bolin, Boomgarden, Brunner, Carson, Conzet, Cronin, Deelstra, Dennert, Dryden, Fargen, Feinstein, Gibson, Greenfield, Haggar, Hawley, Hickey, Hoffman, Hunhoff (Bernie), Hunt, Iron Cloud III, Jones, Killer, Kirkeby, Kirschman, Kloucek, Lucas, Lust, Magstadt, Miller, Moser, Nelson (Stace), Novstrup (David), Perry, Romkema, Rozum, Schaefer, Schrempp, Scott, Sigdestad, Sly, Solum, Steele, Street, Stricherz, Turbiville, Van Gerpen, Vanneman, White, Wick, Wink, Wismer, Rausch

VOTING NO

Feickert, Gosch, Hansen (Jon), Hubbel, Jensen, Kopp, Liss, Russell, Tornow, Venner, Verchio, Willadsen

EXCUSED

Elliott, Munsterman, Olson (Betty)

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The South Dakota Senate approved changes Tuesday to how electric cooperatives are taxed, a move that opponents argue will cut millions from public schools.

Currently, electric cooperatives pay a 2 percent gross receipts tax on the power sold to consumers. Under the measure, power providers will be taxed at a fixed rate per kilowatt hour sold.

Sen. Larry Rhoden, R-Union Center, asked lawmakers to support the change, arguing that it represents a necessary adjustment to existing tax laws. He said existing tax policy is no longer fair to electric cooperatives and consumers. According to Rhoden, the current gross receipts tax amounts to a 10 percent annual tax increase, adding later that the measure would reduce growth to approximately 4 percent.

For schools, the change means a drop in gross receipts revenue, funding that is delivered outside the state aid funding formula. While exact data detailing how the change will impact schools is difficult to determine and has not yet been made available, the change will limit the growth of gross receipts taxes.

Sen. Corey Brown, R-Gettysburg, spoke against the bill, saying he couldn’t justify voting to limit funding for public schools at a time when the state’s education funding formula doesn’t provide stable funding.

“This particular piece of legislation has the ability to take potentially millions of dollars and re-direct them away from our public schools,” he said. “At the end of the day, I think I’ve got to fall out on the side of students on this one.”

The measure passed on a 25-9 vote, enough to clear the two-thirds threshold required to change state tax policy. The bill now moves on to the House of Representatives. ASBSD opposes the legislation.

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Public entities should have the legal authority to release employee contracts, members of Senate Education decided today. The committee unanimously endorsed SB 106, a measure designed to add clarity to the state’s public records laws.

A state-established commission ruled earlier this year that a school district correctly applied state law by denying a citizen access to a superintendent’s contract. According to the commission’s findings, state law prohibits schools from releasing any personnel records other than salary and routine directory information.

The law put school boards in a difficult position of trying to adhere to the law while also having to refute the implication that the board was withholding information from taxpayers.

Sen. Al Novstrup, R-Aberdeen, is the prime sponsor of the legislation.

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A plan to allow schools to charge fees for voluntary pre-k and driver education courses encountered resistance Monday from opponents of early learning programs.

During public testimony on HB 1195, Rep. Roger Hunt, R-Brandon, raised questions about whether schools should be allowed to charge for services that don’t have clearly defined standards. His comments came during time reserved for committee questions.

“We would be authorizing schools to charge for services that, as a legislative body, we do not know what they are going to provide,” Rep. Hunt said. He added that legislators have spent a lot of time outlining public school curriculum, and passing HB 1195 would go against that practice.

ASBSD Executive Director Wade Pogany, who led testimony in support of the plan, responded to Rep. Hunt by stressing that program is voluntary, and that parents have a choice to enroll their children in the program.

To avert what he called a “slippery slope” toward the establishment of pre-kindergarten standards, Rep. Hunt moved an amendment to strike provisions that would allow schools to charge for voluntary pre-k programs. The amendment failed, but garnered support from six lawmakers.

The committee added language, called an emergency clause, to make the bill effective as soon as the governor signs the bill. In order to pass with an emergency clause, the bill needs a two-thirds vote in both the House and Senate.

After changing the bill, lawmakers endorsed the measure on a 9-5 vote.

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The Senate Appropriations Committee is best positioned to consider changes to the state’s sparsity funding formula, lawmakers decided Tuesday.

Members of Senate Education voted unanimously to send SB 165 to the Legislature’s budget-building committee. The bill lowers the maximum distribution any one district can receive to $110,000, down from $123,750. According to data from the South Dakota Department of Education, the most any one district will receive in 2013 is $105,000.

A second measure, HB 1199, strikes a state law that requires the state to pro-rate available funds if the legislature doesn’t appropriate enough money to fully fund the formula. Taken together, the measures would eliminate the need to pro-rate available appropriations, but still preserve the amount schools currently receive.

ASBSD will continue to monitor both bills.

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• The committee endorsed HB 1147, a measure that removes personal financial liability school board members may incur if a district can not meet contractual obligations.
  
• Narrowly passed HB 1195, a measure that would allow school boards to charge fees for voluntary Pre-k and driver education programs.
  

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A new ASBSD issue brief outlines ways in which South Dakota’s new accountability system may impact local school boards. The brief, titled Public School Accountability and SB 25, is available on ASBSD.org.

The document briefly explains public school accountability laws, then dives into the language of Senate Bill 25. The majority of the document focuses on education policy that would be enacted through the South Dakota Board of Education’s sweeping regulatory authority to design, implement and enforce measures of school performance.

The issue brief echoes testimony ASBSD Executive Director Wade Pogany recently delivered during the Senate Education Committee’s public hearing on SB 25, including an overview of possible unfunded mandates contained in the education department’s plan to implement new accountability laws.

To access the issue brief, click here.

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