HB473 By Representatives McMillan, Davis, Faust, Hill (M), Sessions, Gaston, Beckman, Patterson and Shiver RFD Ways and Means Education Rd 1 23-MAR-16

SYNOPSIS: Under existing law, the annual apportioning of Foundation Program funds for education is determined by calculating the average number of students enrolled on a daily basis for the first 20 scholastic days following Labor Day of the preceding school year.

This bill revises existing law to require that the annual apportioning of funds be determined by calculating the average number of students enrolled on a daily basis for the first 20 scholastic days following Labor Day of the preceding school year and then adding or subtracting the change in ADM of the two preceding school years.

A BILL TO BE ENTITLED AN ACT

To amend Sections 16-13-231 and 16-13-232, Code of Alabama 1975, relating to the Foundation Program; to provide that the annual apportioning of funds be determined by calculating the average number of students enrolled on a daily basis for the first 20 scholastic days following Labor Day of the preceding school year and then adding or subtracting the change in ADM of the two preceding school years, depending on whether the system experienced an increase or decrease in enrollment between the two preceding school years.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. The following is found and declared by the Legislature of Alabama:

(1) The Legislature frequently funds a large number of students that are no longer enrolled in Alabama’s public schools or are enrolled in different school systems. This bill substantially resolves the funding misappropriation and creates savings that can be used to help fully fund the Foundation Program.

(2) From fiscal year 2015 to fiscal year 2016 the total number of students enrolled in Alabama public schools declined by approximately 2,600. Under the current method for calculating ADM, the Alabama Legislature is required to fund teacher units for the 2,600 students that are no longer enrolled in Alabama’s public schools. The result is misallocated or wasted funds that should be properly spent to help fully fund the Foundation Program.

(3) Additionally, many school systems within the state are experiencing a downward trend in student enrollment each year while other systems are experiencing an upward trend in enrollment each year. Alabama school systems with declining enrollment lost a cumulative 6,513 students from fiscal year 2015 to fiscal year 2016 while the growing systems added a cumulative 3,886 students. The end result was a total change of 10,399 students.

(4) Under the current method of calculating ADM, the systems that are losing students are still receiving funds for the students that are no longer in their systems while the growing systems are not receiving funds for the new students that they are now required to educate. The Legislature attempts to remedy this misallocation through a special “Current Units” line item in the education budget that has been chronically underfunded in recent years. This bill remedies this misallocation to fully fund the Foundation Program.Section 2. Sections 16-13-231 and 16-13-232 of the Code of Alabama 1975, are amended to read as follows:

§16-13-231.

"(a) In addition to all other appropriations and apportionments of public school money now provided by law and made available for public schools there shall be apportioned and paid to local boards of education from the Foundation Program Fund, the amounts to be determined as hereinafter provided and in accordance with regulations of the State Board of Education. This Foundation Program Fund shall be used principally:

"(1) To aid in providing at least a 180 full instructional day minimum school term, or the hourly equivalent thereof, except as otherwise provided in paragraph c. of subdivision (1) of subsection (b); and,

"(2) To assist in the promotion of educational opportunity for all children in the public schools.

"(b) The following requirements and procedures, supplemented when necessary by regulations of the State Board of Education, shall govern the apportionment of the fund:

"(1) REQUIREMENTS FOR PARTICIPATING IN FUND. In order for a local board of education to share in the apportionment of the Foundation Program Fund and to receive the maximum benefits therefrom, the board shall meet the following conditions:

"a. The appropriate local governing body must insure that the local board of education within its jurisdiction is receiving an amount of local tax receipts equivalent to ten mills of school tax as computed from the most current assessed valuation of property which comprises the school tax district or districts of the local board of education. The State Superintendent of Education shall determine compliance with this provision of the law in accordance with rules or procedures adopted by the State Board of Education. In determining compliance for a county board of education, tax revenues provided to the county board of education from the county, from whatever tax source derived, shall be considered. In determining compliance for a city board of education, tax revenues provided to the city board of education by the county and the city, from whatever tax source derived, shall be considered.

"b. In the expenditure of all funds available for the Foundation Program as herein defined, the local board of education shall as nearly as practicable provide the same length of term in all schools.

"c.1. The local board of education shall provide a school term of at least 180 full instructional days, or the hourly equivalent of no less than 1080 instructional hours. The local academic school calendar shall be annually established by the local board of education, within the parameters of subparagraph 3. In case the local board of education fails to operate any schools the minimum 180 full instructional day term, or the hourly equivalent thereof, or the minimum term as defined by the State Board of Education, the Foundation Program allowances of the local board of education shall be computed only for the actual period the schools are in session that school year.

"2. In extreme circumstances involving natural occurrences, health-related occurrences, or other extenuating circumstances that result in the cancellation of an instructional day, a local board of education may submit a plan for the approval of the State Superintendent of Education to replace cancelled instructional days by adjusting the school calendar to extend the hours of actual teaching time on specified instructional days. At any time the Governor declares a state of emergency for any part of the state, any affected school system that is closed as a result and loses student days or employee days, or both, may appeal to the State Superintendent of Education for relief in fulfilling the local school calendar with respect to student days or employee days, or both, with no loss of income to employees.

"3. The local board of education, in providing the minimum required number of instructional days or hours, shall have greater flexibility in establishing the school calendar by adjusting the days or extending the hours of actual teaching or instructional time provided on specified instructional days for the schools under the jurisdiction of the local board. The academic school calendar, established by the local board of education, shall include the minimum required number of instructional days or hours.

"d. The local board of education shall expend funds for teachers' salaries in accordance with a salary schedule adopted by the local board of education and approved by the State Superintendent of Education. The salary schedule shall be at least 100 percent of those salary amounts specified in the State Minimum Salary Schedule by cell.

"The local board of education shall allocate state and local Foundation Program funds to each school in an equitable manner, based on the needs of the students and the schools, as reflected in the current year's actual student populations, including at-risk students, students receiving special education services, and students enrolled in vocational/technical educational programs. The local board of education shall report annually to the State Board of Education on how all state and local funds for public education, including Foundation Program funds and capital outlay funds, have been allocated to each of its schools or area vocational centers.

"e. The local board of education shall submit to the State Superintendent of Education, under the regulations of the State Board of Education, the following:

"1. A proposed building program which sets out in detail the location of all present and proposed buildings; which indicates proposed educational centers and grades to be taught at these centers and which provides schools for all children of the local board of education.

"2. Except for those city boards of education not maintaining a transportation system, a proposed transportation program showing the proposed routing of buses and the condition of all roads to be used for transportation.

"3. A proposed professional development program which sets out in detail the professional development needs of employees of the local board of education.

"4. A proposed technology program which sets out in detail the proposed expenditures of technology funds.

"5. A proposed program for the provision of services to students with disabilities and gifted students in compliance with applicable state and federal laws.

"6. A proposed program for the provision of vocational educational services in compliance with applicable state and federal laws.

"7. A proposed program for the provision of educational services to at-risk students in compliance with applicable state and federal laws. The proposed program for at-risk students shall include the provision that all funds allocated shall be spent for at-risk students.

"f. The local board of education shall meet such other standards as may be set up by the State Board of Education to promote improved educational opportunity and provide better schools.

"(2) DETERMINING COST OF FOUNDATION PROGRAM. In determining the cost of the Foundation Program, the Legislature, based on the recommendation of the State Board of Education, shall proceed to find the following allowable costs for each local board of education: Teachers' salaries, fringe benefits, classroom instructional support, and other current expense. The rate per employee set by the Legislature for teachers' retirement and employees' health insurance shall be in effect for the entire fiscal year and shall not be increased by the Teachers' Retirement System or the Public Education Employees' Health Insurance Board, except by further action of the Legislature.

"a. The Foundation Program allowance for salaries of teachers shall be determined as follows: The number of teacher units allowed in Section 16-13-232 for each local board of education shall be multiplied by the amount or amounts per teacher unit, which amounts shall be based on the average salaries for each major classification required by the operation of the State Minimum Salary Schedule established by the Legislature in the Education Trust Fund appropriation bill and adopted by the State Board of Education. In recommending to the Governor and the Legislature the State Minimum Salary Schedule the State Board of Education shall give due consideration to degree level, certification, and public education experience. Any teacher, including, but not limited to, a vocational education teacher, currently under contract in excess of 187 days shall not have the term or salary of his or her contract reduced as a result of this article.

"b. The Foundation Program allowance for fringe benefits shall be determined by multiplying a uniform percentage times the amount of teachers' salaries allowed in paragraph a. above or by multiplying a fixed rate depending on the type of fringe benefit. The fringe benefits allowances shall include amounts for the employer's contribution for teachers' retirement, health insurance, Social Security, Medicare, unemployment compensation, personal leave, and sick leave. The fringe benefits allowance may include allowances for other fringe benefits as may be approved by the State Legislature. The State Legislature shall seek the input and advice of appropriate agencies and individuals in setting allowances. The Teachers' Retirement System and the Public Education Employees' Health Insurance Board shall recommend to the Legislature, on or before the first legislative day of each regular session of the Legislature, the rate for the following fiscal year. The Legislature shall set the rate in the annual appropriation bill.

"c. The Foundation Program allowance for classroom instructional support shall be determined by multiplying a uniform amount times the number of teacher units allowed in Section 16-13-232. The uniform amount shall include allowances for library enhancement, classroom materials and supplies, professional development, and technology. The library enhancement appropriation shall be for K-12 Public School Library/Media Centers and is an absolute appropriation. Other expenditures may include book binding, repair, CD Roms, computer software, computer equipment, cataloging, audio-visual materials, newspapers, magazines, recordings, and video tapes. The uniform amount may include allowances for other classroom instructional support as may be approved by the State Board of Education. The Foundation Program allowance for classroom instructional support shall also include an allowance for textbooks which shall be determined on a per pupil basis. The number of pupils shall be determined by the number of pupils in average daily membership during the first 20 scholastic days after Labor Day of the first preceding school year plus the difference in average daily membership during the first 20 scholastic days after Labor Day between the first preceding school year and the second preceding school year. The State Board of Education shall recommend to the Governor the amount for each cost factor included in classroom instructional support on or before December 1 of the current fiscal year for the ensuing fiscal year.

"d. The Foundation Program allowance for other current expense shall be determined by multiplying a uniform amount by the number of earned units. The uniform amount shall be recommended by the State Board of Education to the Governor on or before December 1 of the current fiscal year for the ensuing fiscal year.

"e. The State Board of Education may cause, from time to time, a study of allowances for teachers' salaries, fringe benefits, classroom instructional support, and other current expense of local boards of education to be conducted and, based on the results of the study, may propose any necessary changes to the Governor and Legislature.

"f. The total cost of the Foundation Program for any local board of education shall be the total allowed for teachers' salaries, for fringe benefits, for classroom instructional support, and for other current expense. The allowances herein to the local boards of education shall be expended subject to all applicable laws, rules, and regulations; however, the total funds calculated in the total cost of the Foundation Program for teachers' salaries shall be expended for salaries within the instructional program.

"(3) DETERMINING FUNDS AVAILABLE TO PROVIDE FOUNDATION PROGRAM.

"a. The funds available to meet the cost of the Foundation Program shall be appropriated by the Legislature taking into consideration an amount of local effort required on the part of each local board of education. The required local effort charged against each local board of education for its share of the cost of the Foundation Program shall be as follows:

"1. For the 1995-96 fiscal year, the equivalent of five mills of local school tax district ad valorem tax as reported pursuant to subsection (b)(1)a.

"2. For the 1996-97 fiscal year, the equivalent of seven and one-half mills of local school tax district ad valorem tax as reported pursuant to subsection (b)(1)a.

"3. For the 1997-98 fiscal year, the equivalent of ten mills of local school tax district ad valorem tax as reported pursuant to subsection (b)(1)a.

"4. For each fiscal year thereafter, the equivalent of ten mills of local school tax district ad valorem tax as reported pursuant to subsection (b)(1)a.

"b. After calculating the total cost of the Foundation Program for each local board of education, the state allocation from the Education Trust Fund is calculated by subtracting the local effort required by this section from the total cost. Although the cost of the Foundation Program is calculated for each school, the one sum allocation for each local board of education shall flow monthly to the local board of education. The state funds for the Foundation Program shall be allotted by the State Board of Education consistent with State Board of Education rules and regulations.

"(c) No local board of education may reduce the amount in any cell of any employee salary schedule, or otherwise reduce the compensation of any employee, based upon the amendments to this section made by Act 2012-482 or upon any future modification to its calendar or schedule pursuant to the amendments to this section made by Act 2012-482. Salary appropriations in all future Education Trust Fund budgets shall be based upon the number of contract days allocated by the Legislature, or the hourly equivalent thereof.

§16-13-232.

"(a) In determining the number of teacher units for the purpose of apportioning the state Foundation Program, one teacher unit or fraction thereof shall be allowed for the specified number of pupils in average daily membership as provided for in subsection (b), during the first 20 scholastic days following Labor Day of the first preceding school year plus the difference in average daily membership during the first 20 scholastic days after Labor Day between the first preceding school year and the second preceding school year, in the public schools. The number of pupils shall be determined grade by grade for the first 20 scholastic days following Labor Day average daily membership for the two preceding years. In extreme circumstances involving natural occurrences, health-related occurrences, or other extenuating circumstances as determined and approved by the State Superintendent of Education, average daily membership for local boards of education may be calculated using alternative days to the first 20 scholastic days following Labor Day. Such alternative calculation shall be determined by the State Department of Education on a case by case basis. If a request from a local board is made to the State Superintendent, the superintendent shall submit a report detailing the decision of the superintendent to the Chair of the Senate Finance and Taxation-Education and the House Education Appropriations Committees and to the Department of Examiners of Public Accounts within 30 days following the end of the average daily membership reporting period. Average daily membership is defined as the average number of students enrolled on a daily basis. Each school, at a minimum, shall earn instructional support units based on the accreditation standards of the commissions which comprise the Southern Association of Colleges and Schools or as otherwise required by an accreditation system adopted by the State Board of Education. Instructional support units shall be earned for principals, assistant principals, counselors, and librarians, and shall be added to a school's teacher units to determine total units earned for each school. Notwithstanding the accreditation standards referenced above, every school shall earn one full-time principal unit beginning with the fiscal year 2008-2009. An instructional support unit earned for a principal shall be increased by a factor of .7 for high schools, unit schools, and area vocational centers; .6 for middle schools; and .5 for elementary schools. An instructional support unit earned for an assistant principal shall be increased by .3; and an instructional support unit earned for a high school guidance counselor shall be increased by .1. Each area vocational center shall earn only one instructional support unit which shall be a principal (director) and shall continue to earn a counselor should it have received a counselor unit in 1994-95. Beginning in the 2009-10 school year, the salary supplement factors for instructional support units, including principals, assistant principals, counselors, and librarians, shall be recommended to the Governor and the Legislature annually by the State Board of Education, but shall not be less than the factors established above. Those local boards of education which show an increase in average daily membership during the first 20 scholastic days following Labor Day of the current year may be allowed one additional teacher unit or fraction thereof for each specified number of pupils in subsection (b) in such increase in average daily membership for such current year. Fractional teacher and instructional support units shall be combined to create whole units. Assignment of whole and fractional teacher and instructional support units shall be made by the local superintendent of education and submitted for approval of the local board of education. Any funds remaining from a fractional teacher and instructional support units that are not combined with and used to make a whole teacher or instructional support unit may be used by the local board of education for salaries and benefits.

"(b) The grade level divisors for each fiscal year shall be weighted for each grade to provide funding for special education and vocational education. For the 1995-96 school year the grade level divisors include for special education 5 percent full time equivalent across all grades weighted 2.5 times the regular student weight. For the 1995-96 school year the grade level divisors include for vocational/technical education 7.4 percent full time equivalent in grades 7-8 weighted 1.4 times the regular student weight, and 16.5 percent full time equivalent in grades 9-12 weighted 2.0 times the regular student weight. The weights for special education and vocational education shall be recommended to the Governor and the Legislature annually by the State Board of Education. For the 1995-1996 school year, one teacher unit shall be allowed for each 16 pupils in average daily membership in kindergarten through third grade; one teacher unit shall be allowed for each 24 pupils in average daily membership in grade four through grade six; one teacher unit shall be allowed for each 23 pupils in average daily membership in grade seven through grade eight; and one teacher unit shall be allowed for each 20 pupils in average daily membership in grade nine through grade twelve. Beginning in the 1996-97 school year, the teacher unit divisors shall be recommended to the Governor and the Legislature annually by the State Board of Education, but shall not be higher than the divisors established for the 1995-1996 school year.

"(c) It is the intent of the Legislature that local boards of education experiencing increases in average daily membership receive payment for additional current teacher units earned pursuant to subsection (a) as early in the school year as possible. The State Superintendent of Education shall certify to the State Budget Officer the amount for additional current teacher units earned and/or other current expense increase required by subsection (j) and shall adjust the local board of education's regular allocation of state funds, and make requisition on the state Comptroller accordingly, within thirty days of receipt of the first 20 scholastic days membership report.

"(d) Current units shall be calculated by comparing the first 20 scholastic days following Labor Day of average daily membership of a current year with that of the prior year the specified number of pupils used in subsection (a) to determine the number of teacher units. This comparison shall be grade by grade with the prior year first 20 scholastic days following Labor Day average daily membership the specified number of pupils used in subsection (a) subtracted from the current year first 20 scholastic days following Labor Day average daily membership. The difference shall be divided by the Foundation Program grade divisor for each grade. The result by grade shall be summed over all grades to yield current teacher units by local board of education. No current teacher units shall be earned if the number of units by local board of education is less than or equal to zero. The total of all current teacher units by local board of education determines the number of state current teacher units for the year.

"(e) The allocation of funds for current teacher units shall be determined by multiplying the average allocation per teacher unit in the current year Foundation Program.

"(f) Current teacher unit calculations shall be completed by the State Department of Education not later than December 1 of the current year and the allocation of current teacher unit funds shall be distributed in accordance with subsection (c).

"(g) If funds allocated for current teacher units are insufficient to fully fund current teacher units, the allocation for each current teacher unit shall be prorated accordingly based upon funds available for that purpose.

"(h) The State Department of Education shall report to the Governor by December 1 of each year the estimated current teacher units for the next budget year.

"(i) Current teacher units shall be allocated only when earned.

"(j) Current teacher unit funds not earned shall be distributed to all local boards of education as an increase in other current expense.

"(k) Local boards of education have the management responsibility to allocate current teacher unit funds where needed."

Section 3. This act shall become effective on the first day of the first month following its passage and approval by the Governor, or its otherwise becoming law.

Education

Foundation Program

Appropriations

Schools

Code Amended