2017

State lawmakers returned to Raleigh this week to hold a special legislative session.  The special session, which started on Wednesday, involved lawmakers taking up veto overrides and moving a few stand-alone pieces of legislation, including a multi-part “technical corrections” bill.  Prior to the start of the special session, NCSBA contacted all legislators outlining several issues with the new school administrator pay model and principal bonuses with the hope that lawmakers would address some of the concerns while they were in town.  Attached please find a copy of the email that NCSBA transmitted to lawmakers with the school administrator pay concerns.

The “technical corrections” bill that ultimately passed (SB 582) included one of the school administrator pay fixes- a clarification that principals and assistant principals who are paid on the teacher salary schedule WILL be held harmless for the 2017-18 fiscal year.  SB 582 did NOT extend the hold harmless past 2017-18 or make any of the other fixes NCSBA suggested.  The bill did NOT include any relief from the lower K-3 class size requirements for next school year.  There is a provision clarifying test cut scores for new teachers to qualify for accelerated placement on the salary schedule.  Governor Roy Cooper has 10 days to sign or veto the bill.  There are several controversial provisions in the bill which could prompt his veto.  Notably, the bill did not pass either chamber with enough votes to override a veto (29-17 in the Senate and 70-46 in the House).

Lawmakers will be holding skeleton sessions (no votes) until October 17 to avoid having to return in November to hold veto override votes.  There will be another special session beginning January 10, 2018, at which the General Assembly may take up a number of different items, including: judicial redistricting, constitutional amendments, vetoes, pending conference reports, bills responding to legal challenges and local bills that passed the originating chamber.

Click here to read the school administrator pay letter.

The new Innovative School District Superintendent talked about the anticipated plans for the selection of schools for the Innovative School District. Selections will be made in December.

Click here to read more.

The 2017 budget ordered the SBE to reduce the DPI budget by $3.2 million. The State Board has approved a plan for $2.5 million of those cuts. Read more by clicking here.

BUDGET ACTIVITY

On Monday Governor Roy Cooper vetoed the budget that was sent to him by the General Assembly.  He held a news conference that morning to explain his veto, at which he highlighted the public education portion as a large concern.  Gov. Cooper expressed disappointment that the budget did not put additional funding into teacher assistants, school counselors, or school nurses.  He also criticized the budget’s shifting of additional funds to the Opportunity Scholarship voucher program and the decision to not raise salaries at the first and last steps of the teacher salary schedule.  If you would like to watch the Governor’s full press conference you can click here.  You can read the Governor’s veto message by clicking here.

Twenty-four hours later the General Assembly overrode the veto, with the Senate voting 34-14 and the House voting 76-43.  The budget bill has now been codified into law- SB 257 (S.L. 2017-57).  As usual a stand-alone bill later passed making technical changes to the budget bill (HB 528, see below).  You can read the Money Report here.

This marks the first time since 2011-12 that a State budget has been enacted before the July 1 start of the new fiscal year.

REGULAR SESSION ENDS/LOOKING AHEAD

In addition to the budget, lawmakers passed a flurry of stand-alone bills this week as they closed out the 2017 legislative regular session.  The General Assembly officially adjourned its 2017 regular session early this morning.

Lawmakers will be home for a little over a month and will then return to Raleigh for a limited special session starting on August 3, 2017.  At this session, the General Assembly will be able to finish up some work on some bills that were moving in the final days of the regular session, as well as take up overrides of gubernatorial vetoes, confirmation of appointments, and responses to lawsuits.

There will also be a special session on September 6, 2017.  House Rules Chairman David Lewis (R-Harnett) said this session will likely focus on redistricting (lawmakers are under court order to redraw the legislative districts).  However, the adjournment resolution also says that the GA could take up bills revising districts for local governments (including school boards).

The GA will begin its 2018 regular “short session” on May 16, 2018.

As usual, there will be several committees meeting throughout the periods between legislative sessions, including the Joint Legislative Education Oversight Committee.  Some notable special committees that will be meeting during this time include the Joint Legislative Task Force on Education Finance Reform and a special committee to study the new school construction lottery grant program (see below).  Any legislative recommendations that emerge from these committees can be taken up during the 2018 regular session beginning May 16.

This will be our last weekly legislative report until the August special session.  We will be publishing monthly reports covering these interim committees and other legislative news that might come up until the next session.  We will also be publishing our end of year summary of K-12 legislation and the budget sometime in the middle of July.

SPECIALTY TEACHERS/CLASS SIZES

Per HB 13, all school districts will have to lower their K-3 max and average class sizes by 1 starting this upcoming school year.  School districts will also have to abide by several new reporting requirements.  The Department of Public Instruction has put together a helpful informational document reviewing the class size changes and LEA reporting requirements.  To find this document you can click here.

One of the issues looming over the next school year will be the scheduled K-3 class size changes for 2018-19 when LEAs will have to equalize funded and average class sizes and significantly reduce max class sizes.  The final budget did not include a new allotment stream for program enhancement teachers in 2018-19 but the budget technical corrections bill (HB528) DID include language expressing legislative intent to establish an allotment stream for K-5 program enhancement teachers starting in 2018-19.  Timing will be a big challenge for school districts on this issue.  Unless the General Assembly takes up the issue in one of the special sessions the earliest opportunity for the GA to deal with this issue will be the 2018 session that starts May 16.  This is the same period when LEAs will be in the latter stages of developing their 2018-19 budgets.  During the interim, make sure to speak with your House and Senate members and make them aware of this timing challenge.

SCHOOL CONSTRUCTION

While regular session adjourned without passage of the $1.9 billion school construction bond, some new school construction lottery money was included in the budget through a new Needs-Based School Capital Fund.  This Fund contains new school construction lottery monies ($30 million in 17-18 and $75 million in 18-19) that will available to the 40 least economically healthy counties as designated by the Department of Commerce (Tier I counties) until 2020-21.  Eligible counties will have to apply for grants from this Needs-Based Fund, which can be up to $15 million for one county’s school capital needs in a fiscal year, with a 3 to 1 match.  As a comparison, the largest distribution of lottery school capital that went to a Tier I county last year was $1.5 million (Robeson).  It is likely that two Tier I counties will get the grants in year 1 and five will get it in year 2.  Starting 2020-21, Tier II counties (the next 40 least economically healthy) will also become eligible for grants from this fund.

Note that this new money is in addition to the $100 million in school capital lottery money that has traditionally been going out to counties.  Those counties that apply for and receive lottery school capital money through the new Needs-Based Fund will be excluded from receiving a portion of the $100 million appropriation for a five-year period, meaning that the remaining appropriation will be reallocated to the other districts.

While this new money for school construction is helpful, it is just a drop in the bucket compared to the staggering $8 billion backlog of school construction needs around the state.  If you talk to your legislators during the interim let them know the new lottery school capital money is appreciated but it is not by itself going to be enough to deal with the school construction backlog.

With regard to the statewide bond, we will be working with other interested groups over the coming weeks and will have a more detailed plan of action shortly.

To see county tier designations you can click here.
To see what your county received from the $100 million lottery school capital allocation click here.

BILLS STILL ELIGIBLE FOR 2018 SESSION

As a reminder here are some of the notable K-12 education bills that made crossover in 2017 and can be taken up during the next regular session that begins May 16, 2018.

School Calendar Flexibility

HB 375.  Allows LEAs statewide the flexibility to start the school year as early as August 15 to align with their local community college.  It passed the House and is currently residing in Senate Rules.

HB 389.  Allows 20 LEAs to start the school year as early as August 10 for 3 years as part of a pilot to study the impact of an earlier school year on travel/tourism and student achievement.  It passed the House and is currently in Senate Rules.

Make sure to continue talking about school calendar flexibility with your Senate members during the interim.  Make them aware that school districts were forced into another condensed calendar in 2017-18, with school not allowed to start until August 28.  Continue to make them aware of the challenges of setting academically sound calendars into this extremely narrow window.

Local Education Funding Lawsuits
SB 531.  Eliminates school boards’ local education funding lawsuit authority.  It passed the Senate and is currently residing in the House State and Local Government I Committee.

A-F School Grades
HB 322.  Reforms the A-F school grade formula to give equal weight to performance and growth (50/50) instead of the 80/20 weight that is currently used.  It passed the House and is currently in Senate Rules.

Low-Performing Schools Definition
HB 826.  Narrows the definition of “low-performing school” so that if a school is meeting growth it is not considered low-performing.

School Construction Bond
HB 866.  Puts a statewide $1.9 billion bond for school construction on the ballot.  Because it is a Finance bill it remains eligible for session.  It has passed a House Committee and is now in House Finance.

Fines/Forfeitures and School Technology
HB 554.  Establishes a plan to repay the $747 million in improperly withheld fines that Judge Manning ordered are owed to schools for technology purposes.  It is residing in the House K-12 Education Committee.

UPDATES ON NOTABLE BILLS THIS WEEK

SB 117, the bill to retroactively overturn the court ruling in the pension-spiking case, did not move this week and remains in the House K-12 Education Committee.

Additionally, the House inserted language into HB 894 that includes the 2-hour LEA personnel training requirements on suicide prevention and awareness that mirrors the original version of HB 285.  This version is NOT aligned with the State Board’s Mental Health Policy.  HB 894 did not pass this week but under the rules of adjournment could be taken up during the August special session.

Below are some of the notable bills that passed the General Assembly in the waning days of session this week and have been sent to the Governor.

HB 528.  This is the annual bill that makes technical corrections to the budget.  It includes language stating the General Assembly’s intent to fund K-5 program enhancement teachers in 2018-19 (see story above).  It also changes some reporting requirements for DPI.

HB 155.  This omnibus education bill includes:

– A provision saying that if a high school has 1,500 students or more then assistant principals may conduct the annual performance evaluation of a teacher, provided that the principal does at least one of the teacher’s first three annual evaluations.

– A provision that delays implementation of the State Board’s recently passed school-based mental health policy.

HB 800.  This bill makes it easier for charters not identified as low-performing to expand their student population without needing approval from the State Board of Education.  Starting immediately, these charters can expand automatically if they are expanding 25% (was 20%) beyond their original anticipated enrollment.  This allowance will expand to 30% on July 1, 2018.

Leanne E. Winner
Director of Governmental Relations
N.C. School Boards Association
(919)747-6686 direct dial

Bruce Mildwurf
Associate Director of Governmental Relations
N.C. School Boards Association
(919) 606-3916 mobile

Richard Bostic
Assistant Director of Governmental Relations
N.C. School Boards Association
(919)747-6677 direct dial

The 2017-19 budget has officially been enacted, as the General Assembly easily overrode Gov. Roy Cooper’s budget veto today (June 28). Click here for more details.

**Note that lawmakers are wrapping up the legislative session.  Session may end as soon as next week so this may be one of our last weekly legislative updates.**

Budget PASSES

A final compromise budget was made public late Monday night.  It quickly moved through the House and Senate this week and was presented to the Governor late yesterday afternoon.  The budget passed each chamber with veto-proof majorities (77-40 in the House, 39-11 in the Senate), with Republicans unified and a handful of Democrats crossing over to vote in favor.  You can watch the House debate here.  The Governor has 10 days to sign or veto.  If the legislature adjourns before he takes action, he would have 30 days to sign or veto.

For K-12 public schools, the final budget contains pay raises for teachers, a restructuring of the school administrator pay system, an increase in NC Pre-K slots, new lottery funding for school construction, and new opportunities for school employee bonuses.  However, it does not make investments in professional development (which remains zeroed out at the State level) or textbooks (there is an appropriation but it is just to replace a cut which was supposed to go into effect).  These were some areas outlined in the NCSBA legislative agenda as needing additional funding.

There are also several concerning provisions, including Education Savings Accounts, restrictions on transfers between LEA allotments, cuts to Central Office, no retiree health benefits for new hires after 2020, and no funding nor language stating intent to fund K-5 specialty teachers for 2018-19.

NCSBA has put together materials showing all the major funding and policy provisions for the final budget.   Attached please find the budget documents.

ANTI-PENSION SPIKING Bill

SB 117 was a hot topic this week.  The bill was moved on and off the House calendar a few different times throughout the week.  It now sits in the House Education K-12 Committee.  There is expected to be an amendment put forth to remove the retroactive applicability of the language that says the Trustees don’t have to go through rule-making.  This would preserve the favorable superior court ruling in the Cabarrus/Wilkes/Union/Johnston lawsuit as it applies to all the LEAs that have been assessed up to that ruling.

LOCAL OPTION SALES TAX

HB 333, legislation to expand the ability of localities to establish local option sales taxes for public education, remains parked in Senate Rules.  The House passed it a few weeks ago but the Senate has not taken any action.  With lawmakers wrapping up their business for 2017 the window for moving HB 333 this session is closing.  This bill gives localities another tool to help address school construction backlogs and other pressing local education issues.

Please contact your Senator(s) and let them know that HB 333 is a priority item for school boards and tell them it is important to pass HB 333 before this session ends!

Other News

Local Education Funding Lawsuits
It appears that lawmakers are not going to take action on the issue of local education funding lawsuits this session.  SB 531, which is the Senate’s bill to eliminate school boards’ local education funding lawsuit authority, remains eligible for the next session since it made crossover.

Omnibus Education Bill
HB 155 passed out of committee this week.  A Senate Committee took a bill on another topic and revised it to make several changes to the 115C public education statutes.  The most notable among these changes are:

– A provision that says if a high school has 1,500 students or more then assistant principals may conduct the annual performance evaluation of a teacher, provided that the principal does at least one of the teacher’s first three annual evaluations.

– A provision that delays implementation of the State Board’s recently passed school-based mental health policy.

Charter Schools
The Senate dropped a House proposal to give preferential enrollment treatment to parents who work for an organization that donates land/money/resources to a charter school.  The Senate Education Committee took this provision out of a multi-part charter school bill- HB 800.  The major component of the revised bill now is a provision that makes it easier for charters not identified as low-performing to expand their student population without needing approval from the State Board of Education.  The new threshold (25%) is a little less than what the House originally passed.  HB 800 goes to the Senate floor next week.

3^rd Grade Teacher Bonuses
SB 169 passed the House this week and has been sent to the Governor.  This bill gives bonuses to teachers who taught 3^rd grade last year and were in the 25% of state or local reading growth scores and then were moved to a different grade this year.  Due to a quirk in the language of the original legislation setting up the 3^rd grade reading bonus program, those teachers were initially ineligible.  This bill will ensure that those teachers get the bonus.  A provision in the new State budget ensures that 3^rd grade top 25% reading growth score teachers who are moved to a different grade the next year are eligible for the bonuses going forward.

School Staffing Flexibility
SB 448- Professors in the Classroom, unanimously passed the House and is heading to the Governor’s desk.  This bill would provide local boards of education with the flexibility to hire university/college professors to teach core academic subjects in any grade K-12.

Teacher Prep Reform
SB 599, the restructuring of the state’s teacher prep system, was revised by a House Committee this week and is going to the House floor.  The House Education K-12 Committee made a number of changes to the language of the bill but kept the core in tact.  SB 599 is scheduled to be heard on the House floor Monday.   If you want to see the changes that the Committee made to this bill you can click here.

Leanne E. Winner
Director of Governmental Relations
N.C. School Boards Association
(919)747-6686 direct dial

Bruce Mildwurf
Associate Director of Governmental Relations
N.C. School Boards Association
(919) 606-3916 mobile

Richard Bostic
Assistant Director of Governmental Relations
N.C. School Boards Association
(919)747-6677 direct dial

NC lawmakers passed the 2017-19 biennium State budget. The budget is on its way to Governor Cooper for his signature. Read more here

http://www.wral.com/nc-budget-in-cooper-s-hands/16778878/

ANTI-PENSION SPIKING

The House Pensions and Retirement Committee yesterday took a bill that crossed over from the Senate- SB 117- and rewrote to add a provision designed to undo the recent court ruling on the anti-pension spiking law.  Included in the rewrite of SB 117 is a section that retroactively exempts the Retirement System Board of Trustees from the rule-making process for setting the pension spiking benefit cap factor.  In doing so, this section would undo the trial court ruling in cases filed by the Johnston, Union, Wilkes, and Cabarrus school boards that we reported to you last week.  The ruling said that State officials did not follow proper procedure in developing the formula used to determine the pension-spiking benefit cap factor.

The bill next goes to the House floor.  It has been put on the House calendar for Monday.  If you are concerned about this provision please be sure to contact your House member(s).

SCHOOL BOND

Please make another round of contacts asking House members to move HB 866, the school bond bill.  Even if you have already contacted them please be sure to contact them again.  Attached are a set of talking points on the bond that you can use in discussions.

Budget

Negotiations on the budget are still ongoing, with a few items still to be agreed upon.  Lawmakers remain on pace to have a budget in place by the start of the new fiscal year.  Yesterday Speaker Tim Moore said that today’s (Friday) session is scheduled today to receive the conference report on the budget.  Members would then have two days to review before a vote on Monday and Tuesday.  A Saturday session would be held if needed to provide time for negotiations to conclude.

NCSBA has put together a document that compares all the major funding and policy provisions in each budget pertaining to public schools.

Click here to see the budget provision comparison document.

Click here to see the line-item comparison of all the money provisions.

Click here to see a document on NCSBA’s positions on the budget that was shared with the appropriation chairs.

TEACHER PREP REFORM

The Senate this week debated and approved a restructuring of the state’s teacher preparation system.  SB 599- Excellent Educators for Every Classroom, was approved 35-13, most along party lines.

Leanne E. Winner
Director of Governmental Relations
N.C. School Boards Association
(919)747-6686 direct dial

Bruce Mildwurf
Associate Director of Governmental Relations
N.C. School Boards Association
(919) 606-3916 mobile

Richard Bostic
Assistant Director of Governmental Relations
N.C. School Boards Association
(919)747-6677 direct dial