Governor Signs Innovative Districts Bill

On Monday, April 22, Governor Sam Brownback signed HB 2319, the Coalition of Innovative Districts Act, which will allow up to ten percent of the state’s school districts (currently 28) to opt out of most state laws and rules and regulations in exchange for setting higher student achievement goals. After the first two districts are approved by state officials, it creates a Board of Innovative Districts to approve additional districts, up to the maximum number allowed.

Background and legislative history

The bill has become very controversial within the public education community, as well as the Legislature. It was drafted at the request of Senate Education Committee Chair Steve Abrams, R-Arkansas City. Sen. Abrams, a former member and chair of the Kansas State Board of Education, sought input from education leaders, including KASB.

KASB supported the bill because it included several key aspects of KASB’s First in Education plan. First, it requires innovative districts focus on improving college and career readiness, measured by student completion rates for college, technical programs and the military. Second, it gives school boards more flexibility to pursue higher achievement by allowing them to opt out of most state operating mandates, both laws and regulations, if they so choose. Third, it is focused on innovation and deregulation within the public school system, under the authority of elected local school boards, rather than outside the system through vouchers, tax credits or charter schools not accountable to voters or performance standards.

Testifying in support of the bill along with KASB in hearings before the House and Senate Education Committees were the McPherson and Kansas City school districts, which have received waivers from the Kansas State Board of Education and U.S. Department of Education allowing them to use more college- and career-focused tests instead of state assessments. Also supporting it was the Kansas Policy Institute, which is often critical of public school performance in Kansas and supports public funding for a wider range of educational options for students, such as private schools and independent charter schools.

However, the Kansas National Education Association strongly opposed the bill, in part because it would allow boards of innovative districts to operate exempt from state laws governing relations with teachers, such as professional negotiations, tenure or due process, and licensure.

The United School Administrators of Kansas testified as neutral on the bill, and the Kansas Parent Teachers Association was neutral before the House committee and opposed the bill in the Senate committee. Commissioner of Education Diane DeBacker provided informational testimony in the House Committee. No members of the State Board testified in either committee. Subsequently, some members of the State Board have expressed opposition to the bill to KASB.

The House passed the final version of the bill 71-47. The Senate passed the bill 29-11. In the House, an amendment to require innovative districts to follow state laws on teacher negotiations, due process and licensure, was defeated on a vote of 50-70.

Opponents of the bill, including all legislative Democrats and many moderate Republicans, generally focused on the possible exemptions for teacher laws, especially the ability to hire unlicensed teachers; and warned that student outcomes would decline in such districts as a result. A Democratic leader, Rep. Jim Ward, R-Wichita, tweeted this week “HB 2319 is not education reform nor is it innovative, it creates no accountability school districts. Bad policy.”

KASB advance the following points in support of the bill.

·         Innovative districts will continue to follow state laws and regulations until and unless the local board of education, accountable to local voters, parents, staff and community interests, decides otherwise.

·         The exemption authority provided to innovative districts will be a maximum of five years unless renewed. If the district does not demonstrate improvement – if the district plan doesn't work – it will lose the exemption authority. If the district fails to meet improvement targets for two consecutive years, the district can lose its innovative status.

·         If a district decides it would be helpful to operate outside of traditional laws and regulations to achieve higher educational outcomes, it will have to demonstrate its decision was successful, or lose that ability at the end of the five year authorization.

·         If districts are able to demonstrate success while operating without certain state requirements, the state will be able to evaluate the desirability of continuing such requirements and regulations.

·         If districts are able to demonstrate higher achievement without using exemptions, or if districts with such exemptions fail to perform at a higher level, it will provide evidence state requirements are not significant impediments; or are in fact helpful in promoting student achievement.

Here are the detailed provisions of the bill from legislative staff, with some additional comments from KASB.

Establishment of Public Innovative Districts (Sections 3 and 5)

The act creates a process whereby a local board of education could apply for authority to operate as a “public innovative district.” The bill would limit the number of public innovative districts to no more than ten percent of the state’s school districts at any time. The application and approval requirements would differ as follows:

First two school districts.  A request for approval will go first to the Governor and the chairpersons of the Senate and House education committees. If a majority of these individuals approves the request, the district may submit an application to the State Board of Education (State Board), which will be required to review and approve the application within 90 days, if it includes the required contents (see below). Requirements regarding notification of both approval and denial are contained in the bill. If an application is denied, the district will have an opportunity to submit an amended application.

Remaining districts. The request for approval will go first to the Coalition Board (see below), which is made up of representatives of the approved innovative districts. The Coalition Board will have sole discretion to approve or deny the request and may make recommendations to the requesting school district to modify the request. Modifications could then be considered by the Coalition Board prior to making a final decision. If the request is approved, the district may submit the application to the State Board. The same review and notification requirements apply.

KASB comments: The act is designed to create a process of “peer review” for districts to operate under this authority. After the first two districts are chosen by the Governor and committee chairs, the approved districts are charged with evaluating the proposed programs and goals of innovative districts. In other words, the first two districts must approve the third, the first three must approve the fourth, etc., until all authorized slots are filled.

Application requirements.  The application must contain a description of the educational programs of the public innovative district, a description of parental and community interest and support, the specific goals and measurable pupil outcomes to be obtained, and an explanation of how pupil performance in achieving the specified outcomes will be measured, evaluated, and reported.

KASB comments: One of the key aspects of the act is the district's “completion percentage,” which is defined as “the percentage of high school graduates of a public innovative district that have enlisted in military service or completed a postsecondary educational certificate program or degree program as determined by the national student clearinghouse, or other postsecondary educational program completion database utilized by such public innovative district.” Increasing the district completion percentage is one of the factors in renewal of authority to operate as an innovative district.

Requirements and Exemptions for Public Innovative Districts (Section 3)

Requirements.  In addition to complying with its own stated goals, a public innovative district will be required to:

·         Participate in all applicable Kansas math and reading assessments or an alternative assessment determined by the local board of education;

·         Abide by all financial and auditing requirements applicable to school districts, except a public innovative district would be permitted to use generally accepted accounting principles;

·         Comply with all applicable health, safety and access laws; and

·         Be subject to the Special Education for Exceptional Children Act, the Virtual School Act, the School District Finance and Quality Performance Act, capital outlay requirements (KSA 72-8801 et seq.), all laws governing the issuance of general obligation bonds by districts, laws governing public employee retirement (KSA 74-4901 et seq.), laws governing school board elections, the Kansas Open Records Act, and the Kansas Open Meetings Act.

A public innovative district could not charge tuition for any pupils residing in the district’s boundaries.

Exemptions.  Unless otherwise required by the Act or decided by the board of education of the public innovative district, public innovative districts will be exempt from all laws and rules and regulations applicable to school districts.

KASB comments: Te act essentially requires districts to follow state finance laws and requirements, open meetings and records acts, and student assessments. Otherwise, districts appear to be exempt from most other state requirements.

Although innovative are exempt from these laws without having to go through any other process, the local board may continue to follow any or all of these laws if it wishes. For example, the districts would not be required to operate for the statutory minimum school terms, but the board could continue to do so.

Coalition of Innovative Districts; Coalition Board (Section 4, unless otherwise noted)

The act establishes the Coalition of Innovative Districts, with duties and functions to be carried out by a Coalition Board. The Coalition Board will consist of one representative of each public innovative district as designated by the board of education of the district.

Chairperson.  The chairperson of the Coalition Board will be appointed in a unanimous decision by the Governor and the chairpersons of the House and Senate Education Committees. The Coalition Board chairperson serves a five-year term, with any vacancy filled in the same method as a regular appointment.

Duties.  The Coalition Board will carry out the duties and functions of the coalition, including the following:

·         The Coalition Board will conduct the initial review of all but the first two prospective public innovative districts, and have the sole discretion to approve or deny a district’s request to become a public innovative district. (If the Coalition Board approves the request, the district’s petition to become a public innovative district may proceed to the State Board.)

·         As part of the initial review, the Coalition Board may make recommendations to modify the request and may subsequently consider the modifications prior to making a final decision. (Section 5)

·         If a public innovative district fails to meet any of the specified renewal criteria (see “Performance- Related Provisions,” below), the Coalition Board may petition the State Board to request the public innovative district’s authority be revoked. (Section 7)

Reports.  The Coalition Board must report annually to the Legislature regarding pupil performance in the public innovative districts, the laws and rules and regulations deemed problematic by the Coalition Board, and any other information regarding success or problems experienced by the public innovative districts during the previous year.

Meetings.  The Coalition Board may meet as often as, and wherever, deemed appropriate, and may form subcommittees.

Operational Time Limit; Performance-Related Provisions; Petition for Revocation of Authority (Sections 6-8)

Authority and renewal.  A public innovative district will be granted authority to operate as such for a period of five school years. At least 90 days prior to expiration of this period, a public innovative district may submit an application to renew its authority to the State Board, and if the application is complete, the State Board is required to approve the application within 60 days of submission, with related notification deadlines. The renewal application must contain:

·         Evidence the public innovative district has met the standards on the designated math and reading state or alternative assessments during the five-year period;

·         Evidence the public innovative district has shown improvement in its completion percentage (see above) during the same period;

·         Demonstrated progress the public innovative district is achieving the goals and outcomes described in its application; and

·         A description of compliance with the requirements of the act.

Early revocation of authority.  However, if a public innovative district fails to meet any of the renewal criteria for two or more consecutive years, either the public innovative district itself may petition the State Board for a release from its public innovative district status, or the Coalition Board may submit a petition to the State Board requesting the public innovative district’s authority to operate as such be revoked.

·         The State Board must honor any such petition request originating from the public innovative district itself, and release from the authority to operate under the act will be effective for the school year immediately following the grant of the petition.

·         In the case of a Coalition Board-initiated petition, the public innovative district will be provided the opportunity to have a hearing on the matter. A time frame for the hearing request and subsequent decision is provided. If the petition is granted, the authority to operate as a public innovative district will be revoked beginning with the school year immediately following the grant of the petition.

Monthly meetings.  The act requires the superintendents of the public innovative districts to meet at least monthly to discuss the success or failure of educational programs.

Additional Duties of the State Board (Sections 9 and 10)

The bill requires the State Board to provide technical advice and assistance in preparing an application for authority to operate as a public innovative district, upon the request of a prospective school district. Additionally, the State Board is to adopt rules and regulations as deemed necessary to implement the act.

State Revenue Estimate Essentially Unchanged

New state revenue estimates released today were almost unchanged from November projections the Governor and Legislature have been using to develop the state budget.  State general fund revenues were projected to be $29.9 million higher in the current year that the estimate released in November.  SGF projections for next year were projected to be $10 million lower than the November estimate. The net upward change of $19.9 million is just 0.3% of nearly $6.2 billion in total state general fund revenues this year.

Although revenue estimates are almost unchanged from November, state revenues are dropping significantly.  Total SGF revenues were over $6.4 billion in last year (Fiscal Year 2013), but are projected to drop to $6.2 billion this year (3.3%) and $5.5 billion next year (12.0%), due to the major income tax cuts adopted last session and the scheduled expiration of the special one cent sales tax on June 30 of this year.  The new revenue estimates indicate the loss of revenue will be slightly less than had been previously projected.  The consensus estimates are developed by staff from the Governor's Budget Division, Legislative Research Department, and state university economists.

Governor Sam Brownback, who championed last year's income tax cut and wants to phase-out the state income tax entirely, has called for keeping the sales tax at the current level to avoid funding cuts in "core" state services.  The Senate has passed the sales tax extension, but the House has rejected that proposal.  Both have reduced other proposals by the Governor to raise revenue by eliminating income tax deductions.  Without that revenue over the next two years, the House budget cuts state higher education funding by four percent.  The Senate plan cuts higher education by two percent.  Both keep K-12 funding mostly unchanged, with increased funding this year to maintain the base budget per pupil at $3,838 and funding increased bond and interest aid and retirement contributions over the next two years.

The budget and tax policy issues were not resolved during the regular session of the 2013 Legislature and will the key issues when lawmaker return May 8 for the final wrap-up session.

Also today, the Legislative Research Department and Division of the the Budget released new estimates for human services caseload costs in the current year and the next two fiscal years. Citing changes in state policy through the "KanCare" Medicaid program and the improving economy, a savings of almost $68 million in the state general fund is expected over the three years, with almost $130 million in all state funds.

Lt. Governor Dr. Jeff Coyer said the Governor will ask legislative leaders to use a part of what he called the "KanCare Dividend" to enhance funding in other health-related areas, such as reducing waiting lists and expanding the University of Kansas Medical Center. He said the administration remains to committed to its tax plan in order to maintain full funding of both K-12 and higher education, increase targeted health care spending, meet the statutory target of a 7.5% state general fund ending balance, and continue income tax cuts.

Although new budget profiles based on the updated revenues have not been released, that plan almost certainly requires keeping all or a significant part of the sales tax in place.  However, extending the sales tax is opposed by Democrats and some Republican moderates who see that sales tax as regressive on low income earners, especially as taxes have been cut for higher income taxpayers; and by some conservatives who support deeper cuts in state taxes and spending.

The new estimates project that state income tax receipts, although down sharply because of last year's rate cuts, will be $61 million more than projected in November for the current year, and $26 million more for next year.  That is different than the warning of some income tax cut critics who said many more small businesses would switch their tax status to avoid the state income tax completely.  On the other hand, sales and use tax receipts were reduced by $45 million this year and $40 million next year, compared to November.  Supporters of the income tax cut said it would stimulate the Kansas economy and lead to increased spending and sales tax revenues at the state and local levels.  The new projections do not indicate that income tax cuts are having a major positive impact on economic growth; but supporters will likely point to external factors like the state's severe drought and national economic factors like the federal budget sequestration to argue the economy would be worse if the tax cuts hadn't been implimented.

The Senate Ways and Means Committee will meet next Thursday and Friday, April 25 and 26, and the House Appropriations Committee will meet Monday and Tuesday, April 29 and 30, to consider revisions to their respective budget positions.  Meanwhile, Governor Brownback will visit seven public universities and community colleges April 22-26 and May 6 to campaign against higher education funding cuts.

Gun Bill Prompts Questions on Schools

GovernorBrownback signed Senate Substitute for House Bill 2052 earlier this week. Thisbill makes a number of changes to the regulation of firearms under the KansasPersonal and Family Protection Act. A number of questions have been raisedregarding this bill’s impact on school districts. School leaders may have heardincomplete media accounts or from individuals affiliated with other publicbodies that are affected in different ways. 

Here is asummary from KASB legal and advocacy staff on the key points in this bill:

1.     School districts are exempt from thenew security requirements for buildings.

HB2052 restricts state agencies and municipalities from prohibiting carrying aconcealed handgun by a licensed individual into a state or municipal buildingunless the  building has “adequatesecurity measures,” as defined below.

However,school districts are specifically exempt from the definition of municipalityand are not required to have the “adequate security measures” defined in thelaw to prohibit the carrying of concealed weapons in schools.

2.     Postsecondary institutions, cities,counties and other public buildings are included.

Schoolleaders may be hearing about requirements imposed on other publicbuildings.  In order to prohibit carryingconcealed weapons, public buildings other than school district buildings mustadopt ‘‘adequate security measures.’’ These are defined as the use ofelectronic equipment and personnel at public entrances to detect and restrictthe carrying of any weapons into the state or municipal building, including,but not limited to, metal detectors, metal detector wands or any otherequipment used for similar purposes to ensure that weapons are not permitted tobe carried into such building by members of the public.

3.     Colleges may adopt a four-yearexemption from the new requirements.

Despiteinclusion under the new requirements, postsecondary institutions and certainother public bodies may get an exemption from these requirements for a periodof four years by stating the reasons for the exemption and sending notice of theexemption to the Kansas attorney general. Therefore, postsecondary institutions will have a grace period of fouryears before they are required to put these measures into effect.

4.     School boards and colleges areauthorized, but not required, to allow employees to carry concealed weapons.

Schoolboards may permit any employee licensed to carry a concealed handgun asauthorized by state law to carry a concealed handgun in any building of theinstitution. The employee must meet the institution’s own policy requirementsregardless of whether or not notice of prohibited concealed carry isconspicuously posted in the building.

Pleasenote that KASB believes school boards already had the authority to authorizeconcealed carry, but the new law clarifies this authority.

Thisauthority also applies to the governing body or chief administrative officer(if no governing body exits) of a postsecondary educational institution; astate or municipal-owned medical care facility; a state or municipal-ownedadult care home, a community mental health center; or an indigent health careclinic.  (These institutions are alsoeligible for the four-year exemption from the building security requirements.)

5.     The new law is effective July 1,2013.

Schoolboards are encouraged to consult with their local insurance carrier beforeauthorizing or adopting new policies related to this law.  Some insurance companies have voiced concernsabout coverage for school districts that allow concealed carry in theirbuildings.

Governor Signs School Finance Changes

KASB will provide reports on major education bills signed by the Governor. Governor Sam Brownback signed SB 23 yesterday, April 16. The bill contains provisions from five different bills considered during the regular Legislative session that were bundled together by a conference committee.

Continuation of the 20-Mill Levy

The bill authorizes the 20 mill school district property tax levy for the 2013-2014 and 2014-2015 school years, and continues the $20,000 residential property tax exemption to the end of tax year 2014. The statewide levy raises an estimated $575 million each year, which equals about 22% of total statewide school district general fund budgets, and about 10% of total school district spending.

Capital Outlay; New Uses and When Authorized
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The bill expands the authorized uses of district capital outlay funds to include property maintenance, various equipment for academic uses, computer software, and performance uniforms. However, expanded authorization will not take affect until the Director of the Budget and the Director of Legislative Research jointly certify to the Secretary of State that capital outlay state aid is fully funded at 100 percent of the amount a district is entitled to receive. Currently, no funding for capital outlay state aid has been appropriated by either the House or Senate in their budget bills for the next two years. As a result, capital outlay is currently funding entirely by capital outlay mill levies and transfers from other funds. The State Department of Education estimates that it would require over $25 million to fund the capital outlay state aid at 100%.

The three judge panel is the Gannon school finance case ruled in January that any use of school district capital outlay funds is unconstitutional unless the state aid program is fully funded. That decision has been stayed pending appeal to the Kansas Supreme Court.

Changes to the Kansas Uniform Financial Accounting and Reporting Act

The bill requires each school district and the Kansas Department of Education (KSDE) to report on their websites the budget summary for the current school year, as well as actual expenditures for the immediately preceding two school years showing total net transfers and amounts spent per pupil by specific functions, disaggregated to show the per-pupil revenue amounts from local, state, and federal sources.

The specific functions required to be reported are the following budget areas: (1) instruction, including classroom teachers, aides and paras; (2) student support, such as counselors and health services; (3) instructional staff support, as as libraries, technology support and professional development; (4) administration, including principals, superintendents, and board expenses; (5) operation and maintenance, such utilities, insurance, safety and security; (6) transportation; (7) food service; (8) other "current" spending; (9) capital outlay, including equipment, repair and remodeling; and (10) debt service on bonds. The bill also requires reporting the spending allocated to instruction, excluding capital outlay and debt service expenditures, as a percentage of total expenditures; and the same spending on instruction as a percentage of current spending, which is the sum of expenditures less capital outlay and debt service expenditures.

State law makes it a "public policy goal" for districts to spend at least 65% of state funding on instruction, but does not define how that percentage is calculated. According to state and federal reports, Kansas districts on average spend about 62% of current expenditures on instruction, which ranks 13th highest in the nation, but the percentage of spending on instruction is about 50% of total expenditures, which includes capital spending on building and equipment, and debt service. However, these percentages vary considerably among districts, partly because of different local circumstances and partly because of different spending choices by boards.

The bill does not require districts to spend a specific percentage on instruction, but may draw more attention to districts that spend below the state target.

Continuation of Military Student Second Count

The bill continues a second count date of military students on February 20 to determine the number of students enrolled in a school district through the 2017-2018 school year. The authorization is currently set to expire at the end of the 2012-2013 school year. This count was adopted to provide additional funding for districts serving military families that transfer during the school year.

Extension of Ancillary School Facilities Tax

The bill allows a local school board that has levied a property tax for ancillary school facilities for two years to continue to levy the tax for up to six years. The amount of the levy would be reduced to 90 percent in the first year of the six-year period; 75 percent in the second year; 60 percent in the third year; 45 percent in the fourth year; 30 percent in the fifth year; and 15 percent in the sixth year.

Current law allows local school boards that have levied an ad valorem tax for ancillary school facilities for two years to continue to levy the tax for up to an additional three years. Currently, four rapidly growing districts qualify and have adopted mill levies for this weighting.

School Board Members: Re-election and Turnover

KASB has begun a series of training workshops for local school board members elected April 2, starting in Garden City yesterday, Oakley today and Beloit tomorrow. We will be in Kansas City Saturday, Greenbush next Tuesday, Clearwater Wednesday and Topeka Thursday, with two final Saturday sessions in Hays May 4 and Hutchinson June 22. New board members, experienced board members and district administrators can register to attend here.

School district elections were a big issue this Legislative session, with a number of bills proposed that would change the date of elections. None passed, but the debate will continue next session. Our KASB research director, Jim Hays, has just compiled his biennial report on school board elections.

The 372 new board members elected this year are the smallest "freshman class" since KASB started keeping records 40 years ago. That's partly because in most districts, three of the seven board seats were on the ballot this year, rather than four seats; partly because there are fewer board seat available due to consolidation of districts; and party because 88.3% of board members who were seeking reelection won. That re-election percentage is the second-highest on record. The highest rate was 88.9% two years ago.

From 1973 to 1981, re-election rates averaged about 82%. Between 1983 and 1999, re-election rates averaged between 75% and 80%. Since 2001, over 84% of board members who sought reelection won.

However, school boards also experience significant turn-over. Since 1973, an average of 35% of board members decide not to run for reelection in each two-year cycle. About 1.5% are defeated in the primary and about 10.5% are defeated in the general election. In other words, about 45% of individual elected every two years are new.

This year is no exception. When the 372 new members elected this year take office on July 1 are combined with the 521 new members elected in 2011, it means 44.7% of school board members in Kansas will have served two years or less.

These results indicate that there is a high level of satisfaction with the performance of school boards at the local level, from the voters closest to local schools. That's a contrast to frequent criticism of school board financial management and educational outcomes heard at the state level. It also shows that there is a consistent blend of new and experienced board members undertaking the constitutional duty to "maintain, develop and operate" public schools.

The KASB research bulletin with this election data is available to members by going to www.kasb.org/Advocacy and Research, then clicking on "Research Publications." If you are not yet logged into the website you will receive a prompt.)

For more information, contact KASB Research Director Jim Hays.