Sunday, April 12, 2015

The Week that Will Be.  It's not Que Sera Sera time yet, as the contents of the omnibus education funding bills have yet to be introduced.  That means there is still some time to get some last-minute lobbying in (and I have been doing a little on both sides of the street).  It's difficult to discern at this precise moment what the bills are going to look like.  The Senate target of $350 million is almost $200 million more than the House target of $157 million (and both targets are well below the the Governor's target of $694 million).  That gives the Senate a little more elbow room to put together a more wide-ranging bill (it would be difficult to call it comprehensive with the target where it is) and I expect that the Senate bill will contain provisions on facilities, student support personnel, and early childhood education in addition to an increase on the basic formula.  A 1% increase in the formula costs between $55 million and $60 million per year, which would mean a biennial increase for a 1% increase in both years of the biennium between $165 million and $180 million.  That's the formula increase in the Governor's budget recommendations and that would absorb half of the Senate budget target.  One advantage for the Senate is that because there are property tax implications with most any facilities revenue increase, any state aid costs related to the equalization that would likely accompany any levy increases would only have to be carried in the second year of the biennium (Pay 2016/FY 2017), which would in effect cut the cost of any change in half for this biennium (I'm assuming--always dangerous--that if there is an increase in facilities revenue it will not come in the form of "aid only").  I still don't know what the tea leaves have in store in the Senate.

In the House, I think things will get really inventive.  Given the $2.2 billion tax cut target in the House budget resolution, there may be the opportunity to carry the state aid costs that would accompany changes in education-related levies, but given the calculations on what it costs to put money on the basic formula, the House cannot even match the Governor's 1%/1% unless they de-link compensatory revenue and sparsity revenue from the basic formula increase (and even then it gets really tight).  The possibility exists that some revenue categories could be combined with money moving toward the basic formula as a result, but it's hard to see which categories could be the target of such a strategy.  Needless to say--and this goes for all three of the budget targets (Governor, Senate, House)--there are going to be a lot of districts contemplating going to the voters for a referendum if the general education basic formula is only increased by 1%.

I was WRONG!  Mark it down (you've probably got a notebook full of my mental miscues and misstatements already, so this is nothing new).  Last week I reported that the funding bills had to be out of their last committee by April 24.  That is not the case.  The bills only need to be out of their funding division by that point.  Given we are five weeks away from the constitutionally-mandated adjournment date for the regular session, that might constitute a distinction without a difference, as the Education Funding Divisions appear intent on getting their bills of committee a week before the April 24 deadline.  That means they could conceivably clear the Tax and Finance/Ways and Means Committee treks before May 1.  That would give the conference committees two full weeks to put together a package to bring to the respective floors of the Legislature.  That seems like a tight time frame and in some respects it is.  But it certainly isn't an impossible task.

Interesting Bill.  HF 983 authored by Representative Eric Lucero was heard last Friday afternoon in the House Education Finance Division.  This bill takes a bit of a different tack on providing funding equity for low-funded school districts.  The bill targets revenue to districts that are both in the bottom 20% of per pupil general education funding (minus referendum) and the bottom 20% in referendum market value per pupil unit.  Of the 21 districts who meet these two criteria, 11 are SEE member districts (as Gomer Pyle would say "Surprise!  Surprise!  Surprise!).  All but a handful of SEE districts fall well below average in per pupil general education funding (with or without including the referendum) and we are property poor districts.  The projected biennial cost of HF 983 is approximately $19 million, which makes it a tad on the pricey side for the House target of $157 million, but that doesn't mean it can't or won't happen.  At the very least, the bill is another reminder of how so many SEE districts find their way to end of the line with limited resources at their disposal and impaired ability to improve their revenue position with voter-approved levies.

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