2009 LEGISLATIVE SESSION MEMO #22

On Monday, the members returned early in the day to work on the budget. House and Senate Education conferees scheduled a meeting at 3:30 PM and then rescheduled for 5:00 PM. When they convened they shared an updated money report on items they had agreed upon. There were several items still in contention in Education. Three of the items included: a university tuition increase, resident tuition for out-of-state athletes, and personnel cuts to DPI. The main changes to public schools funding were the following: Career Technical Education cut eliminated, Non-Instructional support cut reduced to $10 million and Transportation cut reduced to $15 million. There were several expansion items totaling $6 million added to public schools for Learn and Earn and Virtual schools. National Board Teachers Loan Program was delayed until 2010-2011. They did not review the Special Provisions. The Appropriations Chairs continued to meet on the funding targets, as well as the Finance Chairs who were working on an additional funding package. They are trying to reach agreement for $900 million in total revenue for the budget (House had $784 million). That issue is causing a problem for public schools as the Senate is pushing for a 4.5 percent tax on utilities. The impact on Wake County Schools is the need for an additional $1.2 million in local funding to pay the tax.

On Tuesday, work on the budget continued. Education Subcommittee Conferees met with the Full Chairs and presented a budget recommendation with a $100 million deficit in Year 1. The big chairs sent them back to make the necessary cuts to balance the budget and be prepared to return. Word began to get out to the Education groups that Central Office Administration was being cut by 50 percent ($60 million). Alerts were sent out to members, particularly the Senate, who seemed to be pushing this massive cut. As the day wore on budget talks seemed to be getting off-track.  The Senate convened their Session early, at 1:00 PM. This was odd and as they got moving on their calendar it soon became apparent what was up. They suddenly called for a recess to hold Appropriations meeting on the Senate Floor, where they approved a Continuing Resolution. The CR provides only 85 percent of funding based on 2008-2009 budget. It has no ending date, except when the State Budget is adopted. The CR is almost three pages, which is very short for a CR. The House was quite surprised by this move, but if the budget can’t be resolved they will need to have something ready to keep the State functioning even if it is at a reduced level. The House Appropriations Chairs did not meet with the Senate on Tuesday evening though the Senate Chairs met.

On Wednesday morning, Education Subcommittee Conferees met with Full Chairs and the Senate had decided to increase the Education deficit from $100 million to $136 million. Once again they were dismissed. Meanwhile, the Governor had planned to meet with Senate Chairs on Tuesday and House Chairs on Wednesday, but both meetings were cancelled, though the Education Subcommittee Conferees were seen heading to the Governor’s office to meet with her Wednesday morning. It appears she is trying to get support for her teacher and teacher assistant funding with the subcommittee chairs.

On Wednesday afternoon, two controversial bills passed the House and Senate. House Bill 88 Healthy Youth Act and Senate Bill 526 School Violence Prevention Act received the votes to move them forward, one to the Governor for signature and the other back to the House for Concurrence. Another controversial bill involving corporal punishment was defeated in the Senate even after several amendments passed to get additional member support for passage of the bill. The bill primarily focused on asking permission from parents to use corporal punishment. The vote was 25-21 with several Democrats standing in opposition with Republicans to defeat the bill. No announcements on the budget, no action in the House on the Senate Continuing Resolution and the members adjourned to head back to the drawing board. In other budget news on Wednesday, the Revenue Department said they anticipated another $150 million in revenue for NC next year. This number was quickly agreed upon and House and Senate with a plan to give this and plus another $100 million (from an unknown source) to Education, Health and Human Services and the other committees to help offset all the cuts. Education (all three groups together) was told they had an additional $75 million to spend. The additional funds will likely go to offset the central Office Administration cut, but we heard it was only reduced to a 25 percent cut, still not enough. After Session on Wednesday, the House and Senate Appropriations Chairs met for several hours to finalize their targets again and they quit around 7:30 PM having almost reached consensus and budget writers, in spite of the Senate passage of the CR were optimistic they could meet their July 1 deadline.

Thursday things began with a bang as we worked on Senate Bill 738, Diabetes Plans in Charter Schools, which is also intended to require significant reporting by LEAs annually on August 15.   Meanwhile, the Budget negotiations which began early took a turn for the worse and the rumor of a CR on the House side quickly spread through the building. The House and Senate convened at 1:00 with the house taking up HB 88 Healthy Youth Act for Concurrence. The debate went on and in the end it passed by a vote of 60-55. The House recessed at 2:30 PM for Democrats and Republicans to caucus and then they held an Appropriations meeting where they rolled out a PCS to the Continuing Resolution passed by the Senate the day before (SB 311). There were some additions, but the main change was the expiration date of July 15th. The Senate had it expiring upon passage of the State Budget. The House reconvened and they handled a few more bills on the calendar and adjourned, but they did not pass the CR. They will return to pass the CR on Monday evening and that will give the Senate until midnight Tuesday to concur on the CR and resolve their differences. When the House finally adjourned close to 4:00 PM they found the Senate had left for the weekend with no intentions of meeting (Appropriations Chairs or the Finance Chairs). Frustrations were running high as everyone left Jones Street for the weekend, with no budget and no CR yet. Wake County Public Schools continue to move forward to plan to open year round schools for 40,000 students on July 7th. The games have begun and next week they will certainly intensify as Wednesday, July 1, 2009 draws near. Hang on Sloopy!

House Committees:

Education

HB 687 Tax Credit for Children with Disabilities Failed to receive enough votes on a vote for a Favorable Report.

SB 962 Probationary Teacher Appeals Favorable Report to PCS.

HB 1019 Establish NC Financial Literacy Council Favorable Report.

Ways and Means

SB 859 Tort Claims Act/Local Gov Opt –In Favorable Report and re-referred to Judiciary II.

Health

SB 738 Diabetes Control Plans in Charter Schools Favorable Report and sent to Education.

Election Law and Campaign Reform

SB 248 Conform County School Board Vacancy Statute Favorable Report

Appropriations

SB 311 Continuing Budget Authority Favorable Report to PCS and sent to the House floor.

Senate Committees:

Appropriations/Base Budget

SB 311 Continuing Budget Authority Favorable Report to PCS and sent to the Senate Floor.

Health Care

HB 535 Health Insurance Coverage/Lymphedema Favorable Report and re-referred to Appropriations.

Judiciary I

HB 1329 Consolidate Expunction Statutes Favorable Report as amended.

Rules

HB 79 Extend School Formula Study Committee Favorable Report to PCS and sent to the Senate Floor.

House Floor:

SB 468 Authorize Insurance for Former Employees Passed second and third reading.

SB 526 School Violence Prevention Act Passed third reading (Speaker Hackney voted to break the tie) and Ratified.

HB 316 Assignment of Multiples to Charter Schools House Concurred to Senate PCS.

HB 1446 Amend Law RE: School Improvement Plans House Concurred to Senate PCS.

SB 1019 Establish NC Financial Literacy Council Passed second and third reading and sent back

to the Senate.

SB 248 Conform County School Board Vacancy Statute Passed second and third reading and sent to the Senate for concurrence.

HB 88 Healthy Youth Act Vote 60-55. Concurred to Senate PCS and sent to the Governor.

Senate Floor:

SB 1030 After-School Child Care Programs Passed second and third reading and Ratified.

HB 88 Healthy Youth Act Passed second and third reading and sent to the House for concurrence.

HB 316 Assignment of Multiples to Charter Schools Passed third reading and sent to the House for concurrence.

HB 79 Extend School Formula Study Committee Passed second and third reading and sent to the House for concurrence.

HB 1446 Amend Law RE: School Improvement Plans Passed second and third reading and sent to the House for concurrence.

HB 79 Extend School Formula Study Committee Passed second and third reading.

HB 442 Parental Involvement in School Discipline Defeated after two amendments were approved.

SB 311 Continuing Budget Authority Passed send and third reading and sent to the House.

Bills in Committees Next Week

HB 1287 Recycle Products Containing Mercury

SB 32 Employers Must Use Federal E-Verify Program

HB 1452 Local Government Code of Ethics

2009 LEGISLATIVE SESSION MEMO #21

On Monday, the Senate Appropriations Chairs began meeting in the afternoon to review the House budget passed last week. On Monday night the Senate rejected the House budget and appointed conferees. The Senate Education conferees include; Senators Swindell, Foriest, Stevens, Queen, Blue, Vaughan, Davis, and Hartsell. The Senate appointed all the Democrats in the Senate and several Republicans to the various subcommittees, to resolve the differences in the Senate and House budgets. The House members, having worked until Saturday last week, did not return to Raleigh until Tuesday. The House appointed their conferees on Tuesday afternoon. The House Education Subcommittee members include; Representatives Glazier, Rapp, McLawhorn, Bell, Lucas, Parmon, Tarleton and Wiley. The House included one Republican on each subcommittee. Standing committee meetings continued on Tuesday, while rumors were running rampant that the Governor wanted a total of $1.5 Billion in revenue in the final budget.

On Wednesday, the House and Senate Appropriations Chairs met and were supposed to meet with the Governor but she decided to head over to the Legislature to talk to the chairs. Then she left and held a rally at the Old Capital with NCAE and other Education leaders (except for Erskine Bowles). She challenged the members of the General Assembly to raise additional resources (though she did not say how to get these additional revenues) to restore class size and other educational personnel.  This was the first of six press conferences she plans to hold, across the State, to support public schools funding in the State budget. Senate Education Committee met on Wednesday and defeated a bill to require school board members to get their annual 10 hours of training. A fine of $50 per missed hour(s) of training created most of the problems with members and after a voice vote and hand count, the bill failed to receive a Favorable Report. Committee members were overheard, after the meeting, discussing other options for enforcing the school board training requirement, rather than a fine. House and Senate Appropriations Chairs were scheduled to meet after Session at 5:00 PM to decide on their funding targets/availability for each of the budget subcommittees. The various subcommittee conferee chairs are supposed to meet through the next few days to finalize their agreements on the budget and report to their subcommittee members and then to the Full Appropriations Chairs on Monday/Tuesday.

On Thursday, standing committee meetings continued in the morning. Ms. Gill was sworn in on Thursday to Senator Dan Blue’s seat in the House. The House has three new members, two Republicans replacing Rep. Allred, Rep. Bonner-Stiller and a Democrat replacing former Speaker Blue. The Full Appropriations Chairs met in the morning and again after the House Session to work on their areas of the budget, including capital, salaries and benefits. The various subcommittees also began meeting to discuss the differences between the House and Senate budgets, in funding and special provisions. There are major differences in the funding as well as the provisions. State revenues have continued to get worse ($4.7 Billion below projections/needs) since the Senate passed their budget in early April. The House was forced to cut very deep into spending, even with the $784 million tax package. The Senate and House conferees met Thursday afternoon and reviewed the targets, which have changed slightly from when the House finished their budget last week. The Education Subcommittee has received an additional $25 million in Year 1 and $67 million in Year 2 of the Biennium, to spend on all three Education areas. The initial plan shows them adding another $11.32 million in the first year to public schools. The House and Senate Education Subcommittee Conferee Chairs were planning to meet through the evening to try and work through their differences. The House and Senate Full Appropriations Chairs met to try and agree to the language in a Continuing Resolution, which needs to be ready in case they are unable to finish the budget by June 30th (10 days away). The Education Subcommittee Chairs were planning to meet late Thursday and into Friday and the weekend to try and reach an agreement on funding and special provisions. The subcommittee meetings will begin again on Monday. So next week should be

Select Committee Employee Hospital a& Medical Benefits

SB 287 State Health Plan $/Good Health Initiative (Smoking Section of Bill)

House Committees:

Education

HB 687 Tax Credit for Children with Disabilities Bill was not heard. Rescheduled 6/23

SB 1030 After-School Child Care Programs Favorable Report after much debate. The Child Care Commission argued about child endangerment, but in the end common sense ruled and the bill was sent to the House Floor.

SB 1019 Establish NC Literacy Council Favorable Report to PCS and re-referred to Appropriations.

Energy and Energy Efficiency

HB 282 Green School Construction/Loan Fund Favorable Report to PCS and sent to Appropriations. The bill was modified to provide encouraging language rather than requirements.

Finance

SB 453 Use of Funds Received From Parking Meters Favorable Report

SB 457 Add Definition of Biodiesel Favorable Report

SB 498 Affordable Housing for Teachers/Edgecombe Co. Favorable Report and sent to the House Floor.

Local Government I

SB 68 No ABC Establishment with/1,000 ft of School Favorable Report and re-referred to Alcoholic Beverage Control Committee.

Judiciary 1

SB 526 School Violence Prevention Act Favorable Report

Pensions and Retirement

HB 229 Retired Teachers Return to Work Pulled from Agenda

Transportation

SB 931 Commercial Drivers License Changes Favorable Report and re-referred to Finance.

House Committee on Economic Recovery

SB 963 Expedite Use of Federal Stimulus Funds Favorable Report as amended with updated numbers and sent to Senate Appropriations

ARRA-Education Programs Review

SB 963 Expedite Use of Federal Stimulus Funds Favorable Report to PCS and re-referred to Appropriations.  Deletes content of the 1st edition and replaces it with An Act to appropriate Federal Stimulus Funds Received by the State for the 2008-09 Fiscal Year. Provides for ARRA funds received were used for the 2008-09 fiscal year as follows:

State Fiscal Stabilization Fund                                     $360,000,000

Federal Medical Assistance Percentage                         $695,000,000

Highway Infrastructure Investment                                     $470,000,000

Drinking Water State Revolving Fund Loans                          $86,000,000

Education Title I Grants                                                 $128,722,477

IDEA Part B                                                                         $157,205,020

IDEA Part B (Preschool)                                                     $6,035,571

School Lunch Equipment                                                     $3,313,727

Senate Committees:

Education/Higher Education

HB 348 Modify Education Requirement of School Board Members Failed to receive a Favorable Report upon motion for a Favorable Report.

HB 1446 Amend Law: School Improvement Plans Favorable Report to PCS.

Finance

HB 206 Affordable Housing for Local Employees Favorable Report

House Floor:

HB 1032 Modify History and Geography Curricula Concurred with Senate Proposed Committee Substitute.

SB 498 Affordable Housing for Teachers/Edgecombe County Removed from the Calendar.

SB 457 Add Definition of Biodiesel Concurred

SB 509 Revenue Laws, Technical, Clarifying & Admin. Changes Re-referred to Finance.

SB 1030 After-School Child Care Programs Passed second and third reading and sent to the Senate for concurrence.

Senate Floor:

HB 88 Healthy Youth Act Placed back on the Calendar for Tuesday, June 23.

SB 202 Appropriations Act of 2009 Senate failed to Concur. Conferees Appointed.

SB 509 Revenue Laws Technical, Clarifying, and Admin. Changes Passed third reading and sent to the House.(Technical Corrections bill)

SB 754 Changes for Bonds Authorized Under ARRTA Concurred on third reading and sent to the Governor.

HB 1446 Amend Law Regarding School Improvement Plan Passed second and third reading and sent back to the House.

HB 316 Assignment of Multiples to Charter Schools Passed second and third reading.

HB 206 Affordable Housing for Local Employees Passed second reading.

Bills In Committee Next Week:

Education Conference Subcommittee – Monday, 3:30 PM

HB 687 Tax Credit for Children with Disabilities

SB 962 Probationary Teachers Appeals

2009 LEGISLATIVE SESSION MEMO #20


On Sunday, the House Appropriations Chairs returned to review their draft budget plan. They met for several hours and were still working behind closed doors, to find revenue to manage the horrendous cuts to Health and Education, in the House budget proposal. Meanwhile, the phones in the legislature were ringing off the hook. People across the State were calling to advocate against the cuts to programs in the State budget. Members were also getting thousands of e-mails pleading for restoration of the cuts.

On Monday, they continued their work in the House and in the afternoon the Democrats met in caucus to discuss a possible revenue package yet again. The House finally set their calendar for Tuesday and scheduled Finance and Appropriations meetings for 8:30 AM. The Speaker told members to plan to stay all day and possibly into the night and they would likely be here through Friday.

Tuesday was a dash between House Finance Committee and Appropriations, one on the fifth floor and one on the sixth floor. House Finance began their meeting with the revenue package (HB 1588) and somewhere in the process they had their first amendment (Rep. Braxton-D) to take out the Tobacco Tax. This tax was projected to provide $122 million of the $937.6 million in the initial package. Later that day Rep. Faison and Wainwright, both Democrats, took out the beer and wine tax, which accounted for another $31.4 million in revenue. They met until 9:30 AM Tuesday evening and after much debate, the Finance Committee passed the revenue package by a vote of 16-13 (straight down party lines). The final revenue total was $783.6 million. The Finance package highlights will be sent under separate memo. House Appropriations met until 2:30 PM to review the budget bill and receive amendments. The Democrats and Republicans caucused several more times on Tuesday in order to work through the issues with the Finance package. Appropriations ran about 60 plus amendments in Committee and finally approved Senate Bill 202, proposed committee substitute with amendments rolled into a new PCS. It was referred to Finance, but not before a very bad amendment for public schools had been adopted. The fiscal staff had erred in making a cut to Civil Fines and Forfeitures in the latest public schools budget, which meant they had to find $15.5 million from somewhere else. Instead of cutting it from a line item funded category they had an amendment drafted to add a $15.5 million Discretionary Reduction. This was a problem for LEAs and School Boards who have been telling the members for months that they wanted line item cuts and not a discretionary cut. So efforts began to try and resolve this cut with some of the new revenue in the Finance package. Unfortunately, that would not turn out to be an easy task as the Education Subcommittee Chairs had committed to restore jobs through the areas mentioned in the Finance package first, and if there were any other funds they would try and reduce the Discretionary Cut. The Finance bill had a series of areas that were to receive funding if additional revenue was provided. Those areas included: Class Size, At-Risk, Low-Wealth, Instructional Support and Assistant Principals. These were the public school areas, but they were not listed with any specific funding amounts. Meanwhile, NCSBA was working on the Bus Tort Claims provision in the Justice and Public Safety section of the House budget. This provision would have moved all bus tort claims to public schools by July 1, 2009. The fiscal implication to LEAs was huge with Wake anticipating needing more than $750,000 to purchase insurance. If that wasn’t bad enough the provision, as it was written, would have left the settlement of the claims with the Attorney General’s office and left the LEAs with the bill. That begged the question, could school systems get insurance with this convoluted process.

On Wednesday, things started slowly in the House while Senate Committees had several key bills on the agendas. Senate Mental Health had HB 88 The Healthy Youth Act (comprehensive sex education) which had been modified by the Senate, much to the chagrin of both the opponents and advocates. There was not even enough space to get into the Committee room, but the discussion on the Hall was not good. Neither side liked the changes, though it was given a Favorable Report and went to the Senate floor, where on Thursday the vote was delayed until June 16th.  Another controversial bill this week in Senate Education was the HB 442 Corporal Punishment bill which also generated a lot of discussion. Several problems were raised by Democrats and Republicans including the reporting requirement. Senator Dorsett gave it a Favorable Report and it was sent to the Senate floor, where it too was pulled until June 24th. Around Noon on Wednesday, the House Appropriations Chairs were called into meet with all the subcommittee chairs to give them the funds that Finance had generated in their revenue package. The subcommittee chairs were then supposed to propose the distribution of these funds to the various allotments. The subcommittees received their instructions and they agreed to meet to go over the funds to be added to all areas of education in the budget. They added $138,958,000 back to Increase Class Sizes and modified the provision to only add two students from Grades 4-12, next they restored $70 million to At–Risk, $4.8 million to Low-wealth, $19.4 million to Instructional Support, $17.6 million to Assistant Principals and $2.9 million to the Discretionary Reduction ($15.5 total cut). The House Education Appropriations subcommittee met and voted favorably on the new revenue for education. The House Finance Committee met until 11:00 PM on Wednesday after reconvening around 8:30 PM to add the Finance package to the Appropriations bill (SB 202). The total education funding was $355 million for K-12, Community Colleges and Universities.

On Thursday, there were several committee meetings and the House came into Session at 11:00 AM to supposed have the budget bill on second reading, but a snafu had occurred and the word was they had to take it back to first reading because they changed the title of the bill. The new plan was to take as many amendments as they could, then adjourn and come back Friday night at 8:00 PM for second reading and stay until midnight to pass the bill on third reading. Two key education amendments that everyone had worked on hit the floor late in the day. The Bus Tort Claims provision amendment was first and eliminated the provision requiring LEAs to take over 100 percent of all claims. The amendment passed without discussion. The second amendment to eliminate the Discretionary Reduction and take the funds from At-Risk ran into problems with Rep. Alma Adams of Greensboro. Attempts were made to communicate with her Superintendent and in the end the amendment was pulled and a new amendment was drawn to take the funds from Career Technical Education, which had not seen any cuts in either the Senate or House budget. The cut was about a 4.5% cut in the first year and 3.5% in year 2. There was a great deal of consternation, but the amendment passed by a vote of 87-27 with only one inquiry. The House adjourned after 32 amendments, around 8:30 PM, and agreed to return on Friday at 8:00 PM for second reading with a few more amendments and then they will stay until 12:01 AM for third reading.

Once the House passes the budget it will head to the Senate where they will not concur and conferees will be appointed to resolve the differences and supposedly finish the State budget in the next two weeks (by July 1) or face the unenviable task of trying to keep the State running with less money in the form of a reduced Continuing Resolution.

The week is not over yet, so if there are any other major issues to develop with the House Budget tonight a brief e-mail will be sent Saturday to inform you.

House Committees:

Finance

HB 1588 Limit Corp. Deduction for Certain Salaries Favorable Report. This legislation contains the $784 million tax package.  After several lengthy discussions and amendments, the bill passed out of the House Finance Committee late Tuesday evening by a vote of 16-13.

SB 202 Appropriations Act of 2009 Favorable Report as amended.

Local Government II

SB 1028 Volunteers to Support Academic Success in School Favorable Report to PCS.

Pensions & Retirement

SB 202 Appropriations Act of 2009 Favorable Report and re-referred to Finance.

Transportation

SB 931 Commercial Drivers License Changes Pulled

Senate Committees:

Education/Higher Education

HB 442 Parental Involvement in School Discipline Favorable Report.

HB1032 Modify History and Geography Curricula Favorable Report to PCS.

Finance

SB 509 Revenue Laws Tech, Clarifying & Admin. Changes Favorable Report to PCS.

Judiciary II

HB 1261 Protect Our Kids/Cyber Bullying Misdemeanor Sent to a subcommittee.

Mental Health & Youth Services

HB 1046 Child Care Facilities Rules Favorable Report and sent to the Senate Floor.

HB 88 Healthy Youth Act Favorable Report to PCS. Provides one course and students or parents can opt out of the instruction on comprehensive sex education.

State and Local Government

HB 213 VSL Nonfamily Sick Leave Donations Favorable Report and sent to the Senate Floor.

House Floor:

SB 754 Changes for Bonds Authorization under ARRTA Passed second and third reading and sent to the Senate for concurrence.

HB 391 Community College May Offer Safety Driving Course Concurred and sent to the Governor.

HB 440 The Nicolas Adkins School Bus Safety Act Concurred and sent to the Governor.

HB 1031 Bldg. Standards/Pre-K Classes in Public Schools Concurred and sent to the Governor.

Senate Floor:

HB 9 No Texting While Driving Passed second and third reading. Ratified

HB 659 Study Existing Children/Youth Programs Passed second and third reading. Ratified

SB 509 Revenue Laws Technical, Clarifying, & Admin Changes Passed second reading.

HB 88 Healthy Youth Act-Rescheduled for June 16.

HB 213 Voluntary Shared Leave Nonfamily Sick Leave Donations Re-referred to Appropriations.

HB 442 Parental Involvement in School Discipline Rescheduled for June 24.

HB 1032 Modify History and Geography Curricula Passed second and third reading and sent to the House for concurrence.

HB 1046 Child Care Facilities Rules Passed second and third reading and sent to the Governor.

SB 754 Changes for Bonds Authorized Under ARRTA Passed second reading and calendared for June 15 for third reading.

Bills in Committees Next Week:

SB 287 State Health Plan $/Good Health Initiative

HB 687 Tax Credit for Children with Disabilities

SB 1030 After-School Child Care Programs

SB 1019 Establish NC Literacy Council

HB 229 Retired Teachers Return to Work

HB 1446 Amend Law: School Improvement Plans

HB 348 Modify Education Requirement of School Board Members

HOUSE REVENUE PACKAGE SUMMARY

HB 1588

6/10/2009

Individual Income Tax –Effective for taxable years beginning on after January 1, 2009

Revenue Impact $256.7 million

Income tax rate increase to 8.25 percent for couples earning more than $200,000 and up to $500,000.

Income tax rate increase to 8.5 percent for couples earning more than $500,000.

Single Income Tax Return for Unitary Business- Effective beginning on or after January 1, 2010

Revenue Impact $18 million

Bill requires unitary businesses to file a single income tax return that includes the state net income of the unitary business group.

Franchise Tax on LLCs- Effective beginning on or after January 1, 2010

Revenue Impact $59 million

The bill would make the franchise tax applicable to all business entities.

Throwback Rule- Effective beginning on or after January 1, 2010

Revenue Impact $5.9 million

Amends the State’s corporate income tax so that sales of property shipped by a corporation from North Carolina to the federal government or to a purchaser located in a state that cannot tax the corporation would be included in calculating the corporation’s North Carolina income for tax purposes.

Change Bank Interest Deduction- Effective beginning on or after January 1, 2010

Revenue Impact $2.6 million

The bill reverses a corporate income tax interpretation allowing corporations engaged in banking business to deduct interest expenses incurred in producing tax-exempt interest income.

Sales Tax-Warranties, Installations and Repairs; Local and Interstate Courier Services; Digital Products and Click-Throughs- Effective October 1, 2009

Revenue Impact (Digital/Click-Throughs $13.2 million) (Amusements/Movies $23.6 million) (Warranties, Installations, Repairs $176.2 million) and (Local and Interstate Courier Services $25 million)

This legislation would also impose state and local sales and use tax on service contracts and on repairs, maintenance and installation services for tangible personal property effective October 1, 2009 and would permanently impose sales and use tax on local and interstate courier services (DHL, FedEx, UPS etc).

Movies and other amusements in lieu of the privilege tax (exemptions include: events at elementary or secondary school, entertainment activity produced for benefit of religious, charitable, benevolent or educational purposes, youth athletic contest with an admissions price under $10.00 (participants under age 20), choral or theatrical performance, recreational or entertainment activity for teenagers and farm-related entertainment.) Also, includes digital products and remote sellers with gross receipts of at least $10,000.

Increase General Sales and Use Tax Rate- Effective August 1, 2009 and October 1, 2009

Revenue Impact 1/4 – cent sales tax $195 million Tax Rate 7 percent = 4.75 percent state and 2.25 local. Reduce local sales tax to 2 percent and increase State Sales Tax to 5 percent on October 1, 2009 pursuant to the legislation on Medicaid with the State taking responsibility for local Medicaid funding.

The general rate of State Sales Tax does not apply to construction materials purchased to fulfill a lump-sum or unit-price contract entered into or awarded before the effective date of the increase or entered into or awarded pursuant to a bid made before the effective date of the increase when the construction materials would otherwise be subject to the increased rate of tax.

Alcoholic Beverage Taxes- Effective August 1, 2009

Revenue Impact $8 million

Increases the excise tax on liquor from 25 percent to 26.5 percent.

2009 LEGISLATIVE SESSION MEMO #19

On Monday, House Appropriations Chairs returned to Raleigh in the AM to begin working on the House Capital budget. They also had to meet with subcommittees. The House Democrats caucused on Monday to talk about budget revenue. Meanwhile five education groups held a press conference at State PTA to tell lawmakers you cannot cut your way out of this problem. You need to look at a combination of cuts and revenue. The House met in caucus Monday twice, and Tuesday twice and still had not resolved the revenue issue.

On Tuesday, Superintendents from across the state met for two hours with Senator Basnight, Senate Appropriations Chairs and Finance Chairs to discuss State budget options for education. The Superintendents invited to attend were from the districts represented by members. Charlotte, Gaston, Dare, Guilford, and Wilson were some of the counties in attendance. The Superintendents were asked about new taxes. That decision needs to be made by the Senate leadership and the legislators. They did spend time discussing the impact of the cuts to education in their districts, the layoffs, and how to manage the cuts (increased flexibility).

Senator Clodfelter confirmed on Tuesday that an agreement, on HB88 Healthy Youth Act, had been reached. The proposed changes, which have not been seen yet, are supposed to modify the curriculum to provide sex education in public schools as part of the Health curriculum and then to allow parents to opt out of the part of the curriculum where sex education is taught. The bill may be up next week in the Senate.

On Wednesday, Senate Education met to roll out several House bills listed below. Other than that most of the day was spent working on budget issues in the House. The House Democrats met after Session to work on the Revenue package again and they are still talking about a Sales Tax increase of 1.5-2.0 cents and other tax increases, but they still do not have enough votes to pass a revenue package yet. They will caucus at 5:00 PM on Monday in hopes of getting consensus on revenue.

On Thursday, the Education Appropriations Committee was scheduled to meet at 8:30 AM to roll out their section of the budget, but the meeting was postponed until after Session. They released an updated education budget and special provisions Thursday afternoon. The cuts were all still there, though they made some minor changes, the biggest change came in Year 2 of the Biennium when the Class Size Increase went from two students to three students. They also eliminated most of the expansion items except for the Dropout Grants of $13 million and Tarheel ChalleNGe $1,228,350.  The funding gained in the elimination of the expansion funds was added back to the low-wealth cut. The low-wealth cut to the 13 LEAs was reduced from 50 percent to 25 percent for this year and 50 percent for next year.  There was also another $2.1 million added back to Instructional Support. There was only one amendment in the Education subcommittee and it passed. The amendment and moved funding of $105,000 from a program at NC State (Millennium Seminars and Public Safety Leadership, a program being managed by Mary Easley) to the Community Colleges. Finally, after much hand wringing, Representative Parmon made a motion to send the education budget report out of committee without prejudice. There was a lot of frustration and talk about revenue.

Other issues developing this week included yellow buses tort claims, pre-K classrooms, diabetes plans and volunteerism in schools.  The yellow bus issue is part of the Justice and Public Safety budget, which cuts $6.8 million from their funds and will require local school systems to pay 100 percent of tort claims for school bus accidents. The change would become effective July 1, 2009 or when the budget passes. The Senate included this issue for 2010, but only required 50 percent of responsibility for yellow bus tort claims. There are some legal issues with the provision and right now we can’t change the House provision unless we find $6.8 million in the JPS budget to delay it, for at least one year.

On Thursday, as most of the House Appropriations subcommittees tried to roll out their budget reports the Appropriations Chairs were assigned to various subcommittees to be present to vote to get the reports out of committee. Much of the talk this week was the Health and Human Services budget and how there were not enough votes to move the bill out of the subcommittee. The Committee met for several hours including a recess or two before they were able vote to move their budget report without prejudice to Full Appropriations. Justice and Public Safety was also a free-for-all with members trying to adjourn the meeting without a vote. Their budget is being cut so deep, they are proposing to close nine prisons. So I guess the next question is “Will the inmates be moved elsewhere or freed?” The House budget is so bad right now even the Republicans who support a lean State budget will not support this one.

The House budget plan for next week is to read the budget in on Monday and spend Tuesday trying to pass the bill in Full Appropriations (usually have 50-75 amendments, an all-day process) and then to the House Floor for a vote on Wednesday and Thursday. This schedule may be modified based on what happens to the House revenue plans. The only other thing left in the budget that we haven’t seen is the salary section and we are being told there will be no changes up or down to salaries for state employees and public school employees.

Once the House budget passes there will be two weeks before the end of the fiscal year. This means the House and Senate will have to come to an agreement or somehow provide some amount of funding to keep the state running until they are able to pass a budget. Things will be very interesting next week.

House Committees:

Education

SB 386 Make Best Use of Corporate Tax Revenue Favorable Report and re-referred to Appropriations.

SB 498 Affordable Housing for Teachers/Edgecombe Favorable Report and re-referred to Finance.

Health

SB 738 Diabetes Control Plans in Charter Schools Pulled until next week.

Insurance

HB 589 Insurance/Cover Hearing Aids Favorable Report to PCS and re-referred to Appropriations.

Local Government II

SB 1028 Volunteer to Support Academic Success in School Pulled

Pensions & Retirement

SB 204 Retired Nurses Return to Work Favorable Report

SB 468 Authorize Insurance for Former Employee Favorable Report to PCS and re-referred to Insurance.

Senate Committees:

Education/Higher Educations

HB 1031 Bldg Stds./PreK Classes in Public Schools Favorable Report to PCS.

HB 391 Community College May Offer Safety Driving Courses Favorable Report to PCS.

HB 442 Parental Involvement in School Discipline Favorable Report

HB 482 Reinstatement of Sick Leave/School Employees Favorable Report

HB 735 Bldg. Code/High Schoolers at Community College Favorable Report

HB 1032 Modify History and Geography Curricula Favorable Report

Health Care

HB 18 Speech Language Pathologist Qualifications Favorable Report

Mental Health & Youth Services

HB 659 Study Existing Children/Youth Programs Favorable Report and sent to the Senate Floor.

State and Local Government

HB 213 VSL Nonfamily Sick Leave Donations Favorable Report and sent to the Senate Floor. Calendar 6/9

House Floor:

HB 96 Local Government Surplus Property Donations Concurred on conference report.

SB 204 Retired Nurses Return to Work Passed second and third reading and sent to the Governor.

Senate Floor:

HB 1294 NC Risk Pool Premiums/Notice Requirements Passed second and third reading and sent to the House for concurrence.

HB 1327 Schools Notified of Criminal Intelligence Information Passed second and third reading and sent to the Governor.

HB 43 School Board Members/Failure to Discharge Duty Passed second and third reading and sent to the Governor.

HB 18 Speech Language Pathologist Qualifications Passed second reading and third reading and sent to the Governor.

HB 391 Community College May Offer Safety Driving Course Passed second and third reading and sent to the House for concurrence.

HB 440 The Nicolas Adkins School Bus Safety Act Passed second and third reading and sent back to the house for concurrence.

HB 482 Reinstatement of Sick Leave/School Employees Passed second and third reading and sent to the Governor.

HB 659 Study Existing Children/Youth Programs Withdrawn. Calendared 6/9.

HB 735 Building Code/High Schoolers at Community Colleges Passed second and third reading and sent to the Governor.

HB 1031 Building Standards/Pre-Kindergarten Classes in Public Schools Passed second and third reading and sent back to the House for concurrence.

HB 316 Assignment of Multiples to Charter Schools Withdrawn. Calendared 6/18.

Bills in Committee Next Week:

SB 202 Appropriations Act/House Budget

HB 687 Tax Credits for Children with Disabilities

SB 1030 After-School Child Care Programs

SB 1019 Establish NC Financial Literacy Council

SB 534 Healthy Families and Healthy Workplaces Act

SB 509 Revenue Laws & Clarifying Admin. Changes

HB 1048 Child Care Facilities Rules

HB 88 Healthy Youth Act

HB 9 No Texting While Driving

HB 1291 Protect Our Kids/Cyber Bullying Misdemeanor

HB 213 Voluntary Sick Leave Nonfamily Sick Leave Donations

Summary of June State Board of Education Agenda: June 3-4, 2009

The following State Board of Education Committees met on Wednesday, June 3: Globally Competitive Students (10:30 AM) including the State Board of Career and Technical Education, 21st Century Professionals Committee (1:45 PM), and the Leadership for Innovation Committee (1:30 PM). On Thursday, June 4, the Business/Finance and Advocacy Committee (7:30 AM) met prior to the State Board of Education meeting scheduled to begin at (9:00 AM).

Wednesday, June 3, 2009

Globally Competitive Students (10:30 AM) Board Room

Action and Discussion

Action

  • GCS 1 Recommended Changes to Achievement Level Descriptors for NCEXTEND2 for 2009-10 School Year Approved amending policy HSP-C-026 and the achievement level descriptors for NCEXTEND2 students in each of the four achievement levels for mathematics, reading, and science.

Committee Meeting: A brief review of the item was presented. No further discussion.

  • GCS 2 High School Courses Taken in the Middle School Considerations for Social Studies Approved the expansion of the existing policy to include high school social studies courses completed in middle school.

Committee Meeting: Since there seemed to be no opposition to expanding this policy, Board members suggested the policy be expanded to include additional high school courses. Staff indicated they would submit a recommendation to include a more comprehensive list of courses for discussion in August, rather than continuing to approve these courses one course at a time.

State Board of Career and Technical Education

  • GCS 6 Construction Education Programs Certification and Credentials Approved the new policy to ensure construction education programs (carpentry, electrical trades and masonry) offered in NC public schools provide students with skills and knowledge meet or exceed industry standards. When a program is certified by the National Center for Construction Education Research (NCCER), participating students will graduate with industry-developed skills and knowledge to prepare them for further education and employment. The NCCER program leads to various craft certifications and credentials. Students can earn community college credits, while in high school. Requirements for certification include: 1) Construction Programs must be certified by the NCCER/NCDPI as Accredited Training and Education Facilities, 2) Instructors must successfully complete the Instructor Certification Training Program and be certified as a Craft Instructor in their field, and 3) Students must be entered into the NCCER national registry. They will receive certification and credentials upon successful completion of curriculum as follows: 1) Must achieve a score of 70 percent on written assessment administered by a certified instructor and 2) Must demonstrate competence on required performance task.

Committee Meeting: Since all questions concerning this item had been answered, it was moved to Action as it had been discussed several times. Staff presented the overview of the Readiness Survey requested by the Committee. The survey was sent to 100 school systems that participate in the program. There were 12 school systems that indicated the costs would exceed the $350 required for instructor certification, programs certification, and instructor materials. Of these12 schools, there were 7 systems reporting concerns and CTE regional staff will work with these LEAs to immediately address strategies to bring programs into compliance with safety standards. There is $24.4 million available from the Perkins Grant to address issues of program certification for faculty, safety, equipment, material and tools. Implementation timeline is for all teachers ICTP certified by August 1, 2010 and all construction programs will be ATEF certified by August 1. 2011.

Items moved to Action on First Reading;

  • GCS 4 Proposed Grading Policy Revision and Course for Credit Issues Approved the revised grading scale policy for immediate implementation and approval of the courses in the Comprehensive Articulation Agreement (CAA) and/or Transfer Advisory Committee (TAC). The proposed policy revision will allow schools to reflect student grades by either a letter entry or a numeric entry in both scales. This policy revision should bring all 115 school systems into compliance with their grading entries into NC Wise. Board members will be updated on other procedures regarding course for credit and the standardized transcript.

Committee Meeting: High Schools will use one of two grading scales –one standard one augmented. There are two options for converting percentage grades to letter grades for the following scale: 93-100=A; 86-92=B; 77-85=C 70-76=D; <<69=F. In the Standard Scale Option 1 for NC WISE Standard Scale Entry Letter Grades without Pluses and Minuses: A=4.0;   B=3.0;     C=2.0;      D=1.0;       F0.0 WF=0.0

FF=0.0; WP=0.0;  INC=0.0;  AUD=0.0; P=0.0

Option 2 for NC WISE Standard Scale Entry-Numeric Grades:

93%-100%=4.0;  86%-92%=3.0; 77%-85%=2.0; 70%-76%=1.0;  <69%=0.0

WF=0.0;     FF=0.0;     WP=0.0      INC=0.0    AUD0.0      P=0.0

Augmented Scale:

Option 1 for NCWISE Graduated Scale Entry-Letter with Pluses and Minuses

A+=4.000     A=4.000     A-=3.67    B+=3.333     B=3.000    B-=2.667    C+=2.333

C-2.000     C-=1.667    D+=1.333    D=1.000    D-=0.667 F=0.000    WF=0.000

FF=0.000    WP=0.000    INC=0.000    AUD=0.000    P=0.000

Option 2 for NCWISE Augmented Scale Entry-Numeric Grade:

96%-100%=4.000       91%=3.375     86%-2.750      81%=2.125     76%=1.500

95%=3.875 90%=3.250 85%=2.625 80%=2.000 75%=1.375

94%=3.750 89%=3.125 84%=2.500 79%=1.875 74%=1.250

93%=3.625 88%=3.000 83%=2.375 78%=1.750 73%=1.125

92%=3.500 87%=2.875 82%=2.250 77%=1.625 70-72%=1.000

<<69%=0.000

FF=0.000    WF=0.000    WP=0.000    INC=0.000    AUD=0.000    P=0.000    F=0.000

Courses that are Eligible for Weights include 9th grade (except Algebra I)and high-level courses that fall into one of the four categories: 1) Honors/AIG sections of standard level academic courses that are aligned to the honors curriculum (1 point); 2) Pre-calculus, non-AP/IB calculus, mathematics courses beyond the level of calculus and foreign language course beyond the second year (1 point); 3) Arts education courses meeting the standards for music honors, dance honors, visual art honors and theatre arts honors (1 point); 4) All AP/IB and high-level college courses that have been approved for the Comprehensive Articulation Agreement (1 point); 6) Independent colleges and universities and UNC campuses may also have any of the CAA courses taught by their colleges receive quality points. Remedial courses are not eligible for weighting. Elementary schools and middle schools are allowed to use grading systems approved by their local boards of education. It is recommended that local boards of education base their grade scales on the framework of grading scale 93%-100%=A; 86%-92%=B; 77%-84%=C; 70%-76%=D; <60%=F.

  • GCS 5 Legislative Update on Evaluation of Services to Students with Hearing and/or Visual Impairments Approved the report so it may be presented to the appropriate legislative agencies and the Fiscal Research Division. In the April 2008 report, the Fiscal Research Division suggested moving the administration of the residential schools for the deaf and blind to the Department of Public Instruction. At the conclusion of the April report two recommendations were made by DHHS and DPI: 1) DHHS and DPI should establish a task force, with a one-year reporting date, to examine how a free and appropriate public education is ensured for hearing and visually impaired children throughout North Carolina and 2) establish an administrative committee to examine and make recommendations to the two departments regarding the issue of administration of the State’s schools for the deaf and blind. In its examination, the committee could not find convincing evidence that transferring management of the State residential schools serving deaf and blind students will actually result in a better model than the one that currently exists. There does not appear to be any administrative cost savings to be realized by transferring these schools from one agency to the other. However, the following recommendations are presented for consideration: 1) DHHS should continue to provide management and oversight of the State residential schools serving deaf and blind students; 2) DHHS should provide yearly updates on progress made in addressing educational outcomes to the State Board of Education 3) Management of Services for the Early Intervention Program for children who are deaf or hard of hearing should be maintained in DHHS and 4) Non-residential and non-day school programs currently affiliated with the State’s schools for the deaf and blind should collaborate routinely with DPI to ensure consistency in providing services to LEAs.

Committee Meeting: Mary Watson gave a brief summary of the report and the item was moved to Action on First Reading.

Late Item/Action on First Reading

  • GCS 9 State Board Policy Language Update-Occupational Course of Study The Department of Public Instruction recommends “360 hours of paid employment” be inserted back into the State Board of Education policy HSP-N-004. State Board policy submitted in May erroneously reflected a strikethrough of “360 hours of paid employment” This language change of re-inserting “360 hours of paid employment” is being submitted to still allow students the option of obtaining paid employment.

Committee Meeting: Staff briefly explained the language update. No further discussion.

Discussion

  • GCS 3 Academic Scholars Program The Academic Scholars Program must be revised to align with the Future-Ready Core Graduation Requirements, approved in September 2008, for students entering ninth grade for the first time in 2009-2010. A revised option will be presented for discussion based on SBE input (last month) and review of the national and international honor society criteria. A third option includes 24 credits: 4 Mathematics credits (with the fourth credit required to be a higher level math), 3 Science credits, 3 social studies, 1 Health and Physical Education, 2 elective credits in a second language required for UNC System, 4 elective credits (reduces elective requirements by 3), 3 Higher level courses taken in junior or senior years which carry 5 or 6 points or 2 Higher Level courses and the completion of the NC Graduation Project.) The revisions made were 1) Cumulative GPA to 3.500 (un-weighted), 2) 3 additional credits or higher level courses or 2 additional credits or higher level courses and completion of the Graduation Project.

Committee Meeting: Staff presented a review of the new option. Committee members seemed to favor this Option. Currently 18 to 22 percent of this year’s graduating seniors will be receiving the Academic Scholars Program seal. This item will be back in August with a recommendation on the effective date for incoming freshman.

  • GCS 7 Academically or Intellectually Gifted (AIG) Program Standards The State Board of Education discussed adoption of new North Carolina AIG Standards. Last year the program was audited by the State Auditor and as a result DPI agreed to the following; DPI shall develop a review process of local AIG programs, which support continuous program improvement of local AIG programs and plans based on a body-of-evidence; and DPI shall ensure that these recommendations are integrated into state practices and policies. The AIG Program Standards have been developed to serve as a statewide framework for local AIG programs and will guide LEAs to develop, coordinate, and implement thoughtful and comprehensive AIG programs. These standards will convey expectations for quality local AIG programs and services, guide the development, revisions and monitoring of local AIG programs, articulate best practices for local AIG programs, provide a guide for personnel and professional development, promote strong partnerships and communication between and among home, school, and community and serve as a vehicle for continuous program improvement and accountability.

Committee Meeting: Staff presented an overview of the history, legislation and the recommendations from the May 2007 audit. The six AIG Program Standards included 1) Student Identification, 2) Differentiated Curriculum and Instruction, 3) Comprehensive Programming within a total school community, 4) Personnel and Professional Development, 5) Partnerships with stakeholders and 6) Program Accountability. These AIG Program Standards will help to guide LEAs to develop, coordinate, and implement thoughtful and comprehensive AIG programs, better meet the academic, intellectual, social and emotional needs of gifted learners and 3) optimally develop AIG students’ potential. Committee members were committed to finding the gifts in all students that tests do not reveal, to standardize the identification procedures with global involvement, and provide AIG professional develop training to all teachers. Also, several concerns were raised regarding the level of funding provided from the General Assembly for the AIG students.

New Business:

-Honors Review Follow-Up Rescheduled for July.

-Plans and Implications for Releasing Test Forms to the Public The proposed plan for release of one form of each test was presented by Dr. Fabrizio.  The release date will coincide with the release of the ABCs Results, 2) Released forms will be posted on the NCDPI web site and accompanying each released form will be the answer key and generic instructional information or FAQs. Released forms for the following will be released August 2009: Pretest Grade 3, End of Grand and Mathematics for Grades. 3. 4, 5, 6, 7,8, End of Grade Science, Grade 5 8, Computer Skills Grade 8 and High School English I, Algebra I, Geometry, Algebra II, Physical Science, Biology, Chemistry, Physics, Civics and Economics, and History.  To maintain at least 3 forms in the administration cycle through 2011-12 (mathematics, science, and computer skills,) and through 2012-2013 (ELA and social studies replacement forms will have to be constructed requiring 20 additional forms 2009-10, 13 additional forms 2010-11, and 6 forms 2011-2012. Additional costs involved will be for the final teacher reviews and permission to post copyrighted materials on NCDPI web site. Copyrights are estimated at $50,000 per year and teacher form reviews are estimated at $96,000 for 2009-2010. Replacement forms for the EOGs/EOC are estimated at $146,000 for 2009-2010, therefore, the recommendations is that due to the budget crisis NCDPI recommends that after the release of the test forms in August 2009, no further new test form releases will occur during the remainder of the test edition cycles for the respective tests, but NCDPI would still continue to pay copyright fees to maintain the web postings of the initial forms.

-Supplemental Educational Services (SES) Evaluation Report A powerpoint presentation was provided by Steven M. Ross and Martha J. Alberg from the Center for Research in Educational Policy at the University of Memphis.

The entire report can be accessed at http://www.memphis.edu/crep. The intent of the report was to evaluate the services and customer satisfaction of the Supplementary Education Service providers that are mandated by NCLB in order to increase student achievement. A survey was sent to providers, district coordinators, principals/site coordinators, teachers and parents requesting feedback on services, effectiveness of the programs and customer satisfaction. Data from 2006-2007 and 2007-2008 was compared on graphs showing an increase in the response rate with North Carolina showing the best parent return rate. The charts also indicated there was no strong trend toward improvement in student achievement in either Reading or Mathematics for the SES students. The program is funded at $13 million in North Carolina and provides services to 8,934 students. The report indicated several areas to be considered if the program is to be successful. The question was how much impact will an additional 20-40 hours of tutoring have on a student’s state assessment results. Policies or criteria should be defined for determining what constitutes satisfactory provider performance. A classification system for providers should be clearly defined. The provider and teacher communication is vital and has been lacking in the results from the survey. Collaboration among all stakeholders is necessary to increase focus on the individual needs of each SES student. School personnel and providers should meet to discuss ways to adapt and integrate tutoring services with classroom activities. It was noted that attendance was also a concern. The committee indicated they would continue to work on this issue and return with policies and recommendations for approving SES providers. Also noted was the fact that nationally there has never been a provider removed for lack of effectiveness. Currently, staff has made changes to the provider application form, broadened the advisory board representation and plans to add a minimum of hours (30 hours) and a monitoring piece to the application process.

Leadership for Innovation Committee (1:30 PM) Board Room

Action on First Reading

  • LFI 1 Approval of LEAs and Charter Schools Technology Plans Approved the Technology plans for Healthy Start Academy and Kinston Charter School. Final approval by the State Board of Education qualifies these LEAs for the School Technology Trust Funds, NCLB and federal eRate monies, as well as a variety of private technology grants.

Committee Meeting: Review of the item and no further discussion was necessary.

  • LFI 2 Revision of Policy EEO-U-002 Regarding Criminal Fingerprint History Checks for Employment Applicants and Individuals Handling Fiscal Matters in Charter Schools Approved the policy changes. New language added as follows: Appropriate staff of the Office of Charter Schools, in consultation with legal counsel, will determine whether to invite a charter school employee applicant into the Superintendent’s Ethics Advisory Committee (SEAC) for an interview. The SEAC will determine whether to recommend an applicant for employment in the charter school and will forward its recommendation to the State Superintendent for a final decision. Also, deletes language in reference to refusing to submit to a finger print check.

Committee Meeting: A review of the policy change was explained by staff attorney and the process and procedures to appropriately handle any incidents that may arise. The change above accidentally deleted the language……charter school personnel responsible for the fiscal affairs of the school. Council has requested this language remain in policy.

Discussion:

  • LFI 3 Recommendations for Preliminary Approval of 2009 Charter School Applications The Office of Charter Schools recommends the LFI Committee present three applicants to receive preliminary charters to the SBE for Action at the July 2009 meeting. There are three openings for new schools at the beginning of the 2009-2010 school years. Seven applicants have been interviewed by the LFI Committee. They are: Bear Grass Charter School, Duplin Charter School, Henderson Collegiate, Lake Lure Classical Academy, McKinney Academy Charter School, Mountain Island Charter School and New Bern International Academy. The Committee was expected to have a Conference Call to rank the seven applicants in order to recommend the top three charter schools for approval next month. There were no applicants selected from Wake County.

Committee Meeting: Ms. Bartlett reviewed the process for ranking the applications and provided information regarding the selection and the summary of the seven applicants selected for the interview process. The three applications chosen by the Committee for recommendation to the Board were: Lake Lure Classical Academy, Henderson Collegiate and Bear Grass Charter School. The rank was done in a conference call in May. In the Committee discussion a member indicated that in light of some new information recently acquired, he would not have voted the way he did and would not vote the same today. Ms. Bartlett reminded the members that the applications selected were only recommendations and the full Board would have an opportunity to vote on the selection of the three applications to fill the charter school openings.

Board Meeting: The issue of the vote taken to rank the applications was again brought into the discussion and the staff attorney was called upon to clarify the vote.  He indicated that the ranking process was not actually a vote, but a numerical description of an opinion at the time. This item is scheduled for Action by the full Board in July (a conference call meeting.) Members were strongly urged to do more research on the charter school applications in question.

  • LFI 4 Standardization of Waiver/Exemption List for Cooperative Innovative High School Program Application The SBE reviewed routine waiver exemptions recommended to become a part of the application process. Staff is requesting the State Board Chairman be authorized to approve these routine waivers for LEAs that are opening innovative programs and not require Board Approval. The current process unnecessarily burdens personnel at the school district and at NCDPI. In most cases, the exemptions requested are routine. SBE Waiver ID descriptions are classified as CA-1, CA-2 for waivers requested in accordance with the Calendar Bill, P-1 and P-2 specify waivers for personnel, CU-1 relates to routine waiver with curriculum, and TST-1, TST-2, TST-3 relate to issues with testing. They are changing the TST-3 recommendation. They plan to waive the requirement for the EOC scores of students “simultaneously enrolled” in more than one school and to count the score of the test, where the course is taught. The revised recommendation states: Remove this as not required. Current practice is for these scores to be counted at the base school, which is the practical effect of this waiver as requested by districts in the past.

Committee Meeting: After some discussion, the Committee decided to only include six of the waivers as routine exemption descriptions. Calendar waiver 2 and the testing waiver 3 were deleted. A copy of the revised waivers is available upon request from this office. There was no discussion on the Board chairman handling routine waivers. This item will be presented for Action in July.

New Business:-

-District and School Transformation Update Dr. Ashley provided an update of the activities of the Transformation Teams stating that travel to the districts has been limited due to the restrictions on travel expenses. Work is continuing on the self-assessment instrument for school improvement and a majority of the resources in the department have been dedicated to the Halifax Initiative.

-NC Virtual Public School/Learn and Earn Online (LEO) Director’s Report Dr. Setser indicated there were several organizations including DPI that were now using Twitter and were able to broadcast now in real time. He reported there were 5,400 students registered for summer courses through Lean and Earn Online from 111 LEAs, an increase of 91 percent over the Fall 2008 enrollment figures.

-2010 Charter Schools for Renewal Mr. Moyer indicated there are two charter schools requesting renewals: Cape Lookout and Moore Academy.

21st Century Professionals Committee (1:45 PM) Room 504

Action on First Reading

  • TCP 1 Final Decision in Contested Cases Approved the decision of the Administrative Law Judge.
    • Joseph Woods vs NCDPI Closed Session

Joseph Woods filed a petition for a contested case to challenge the State Board’s denial of Petitioner’s request for non-teaching work experience. The Administrative Law Judge reversed the agency’s action.

  • Amanda Linn Eldridge Howard vs NCSBE, NCDPI Closed Session

Amanda Linn Eldridge Howard filed a petition for a contested case to challenge DPI’s denial of Petitioner’s request to waive her repayment obligation for failing to complete the NBPTS certification process. The Administrative Law Judge upheld the agency’s action.

Discussion

  • TCP 2 State Evaluation Committee Teacher Education Program and Alternative Lateral Entry Program Approval Recommendations The Committee recommends the State Board discuss and then give final approval next month of the following programs: Campbell University, Elizabeth City State University, and UNC-Chapel Hill. Alternative programs for lateral entry are also included for Charlotte-Mecklenburg Schools’ Career and Technical Education Lateral Entry Program and Mt. Olive College Lateral Entry Program.

Committee Meeting: Representatives from each of the institutions provided a brief summary of their programs. This item will be presented for Action in July.

Thursday, June 4, 2009 (7:30 AM) Room 504 Videoconferencing Center 5th floor

Business/Finance and Advocacy Committee Meeting

Action and Discussion Agenda

Action on First Reading

  • TCS 1 Approval of Grants
    • Even Start Family Literacy Program-Recommended Grant Awards 2009-2010 Approved the five continuation sites for the program in Ashe County, Bertie County, Caldwell County, Craven County, and Lenoir County. Also, approval is requested for six new sites in Burke County, Greene County, Lee County, Randolph County/Asheboro City, Rutherford County and Washington County. Funding for 2009-2010 is projected at $1,585,153.
    • Equipment Assistance Grant Approved The American Recovery and Reinvestment Act of 2008 provides a one-time appropriation to North Carolina DPI in the amount of $3,313,727 for competitive grants to School Food Authorities (SFAs) participating in the National School Lunch Program (NSLP). The Act requires preference be given to schools where 50 percent or more of students are eligible for free or reduced price meals when awarding the grants. All eligible SFAs were invited to submit competitive proposals based on specific guidelines and requirements. Proposals receiving the highest total scores will be ranked by score. SFAs will be notified upon board approval and grant funds will be transferred no later than June 15, 2009. A list of the recipients by district was provided. District 3 was awarded $439,962.72. Wake County Schools received a total of $84,611.36 for the following: Powell Elementary $23,537,74/Serving Line; Knightdale Elementary $12,295.00/Double Deck Steamer; Vandora Springs Elementary $12,020.40/Double Deck Steamer; Creech Road Elementary $26,221.09/Serving Line; Fox Road $10,437.13/DoubleDeck Oven.

Late Item:

  • 2009-10 Reading First Funding Adjustment Approved Northampton County Schools closing of one of its Reading First Grant schools due to a decrease in enrollment. New enrollment figures indicate an increase of 60 students. To accommodate these students, funding in the amount of $5,969.40 is requested to cover the projected increase in enrollment for these students.
    • TCS 2 Pre-Approval of Financial and Business Services’ Policy Manuals Approved the issuance of the following manuals upon the adjournment of the General Assembly, allowing the Department to incorporate changes approved by legislative action that do not require State Board approval, to change any policy directives.  The documents impacted are: Public School Personnel State Salary Schedules and Manual, Allotment Policy Manual, and the Benefits and Employment Policy Manual for Public School Employees.

Committee Meeting: This is a routine item and no further discussion.

Moved to Action on First Reading

  • TCS 3 Membership for the State Advisory Council on Indian Education Approved the individuals recommended by the North Carolina Commission of Indian Affairs for membership to the State Advisory Council on Indian Education. Recommended for Appointment are: Audrey Hunt, replacing Diane Goins, Tiffany Graham-Locklear replacing Rhonda Truitt, Katherine Hernandez replacing Ginger Stone and Joseph O. Richardson replacing Katrina Lynch Rolon-Lopez. Recommendations for a second term include Marcia H. Hollifield, Gwendolyn Locklear and Kara Steward.

Committee Meeting: Routine item and no further discussion.

Discussion

  • TCS 4 Governor’s School Board of Governors The State Board of Education is asked to appoint Jim Hard (President of the North Carolina Governors’s School Alumni Association) to complete a current term ending on June 30, 2011. The State Board is asked to re-appoint Daniel Turner (WCPSS Staff) to a second term ending June 30, 2011 and to recommend four additional appointments, one each from Districts 2, 4, 5 and 8.

Committee Meeting: Dr. Watson presented the item to the Committee. Upon receipt of recommendations for the remaining four districts this item will be presented for Action.

Update on Contracts

Contracts over $25,000 –12 Proposals

Contracts under $25,000 – 8 Proposals

New Business:

-Communications Update Ms. Jeter indicated the Department was responding to inquiries regarding the upcoming budget and preparations for the release of AYP (July) and ABC (August) data. In addition, promotional information was in development for the Library Summer Reading Program.

-Budget Update Mr. Price provided limited information to the Committee regarding the status of the budget. The hope is for the House budget to pass the House floor next week.

-Intern Update The summer intern students were introduced.  They will be researching two projects; Effect of Traditional and Block Scheduling on the End of Course Tests and Effects of BMI (Body Mass Index) on Academic Performance. The reports will be completed in August.

9:00 AM State Board of Education Meeting, Dr. Bill Harrison, Chairman

Call to Order,

Swearing-In Ceremony for New Board Member – The Honorable Paul M Newby, Associate Justice, Supreme Court of North Carolina presiding:

- Mrs. Christine J. Greene, High Point, Education District 5 SBE Member

Closed Session

9:50 AM Board Reconvenes

Pledge of Allegiance, Approval of Minutes

Special Recognition – Outgoing State Board of Education Advisors

-Dr. Shirley Prince, Superintendent Advisor

-Dr. Debra Morris, Wachovia North Carolina Principal of the Year Advisor

-Mr. James Bell, North Carolina Teacher of the Year Advisor

Information Agenda

Globally Competitive Students

  • GCS 8 Annual Report: State Advisory Council on Indian Education The State Board is asked to accept information presented by State Advisory Council on Indian Education in its annual report.

Board Meeting: Ms. Priscilla Maynor and Dr. Zoe Locklear presented a summary of the annual report to the Board. The State Advisory Council on Indian Education placed priority on two specific concerns: 1) Improving the graduation rates for Native Students and 2) Addressing the dropout crisis. While the number of American Indian students leaving school without graduating declined, this group of students continues to drop out in disproportionate numbers. The high school drop-out rate for American Indian students has decreased 1.88 percentage points over the last four years; however, statewide these students are leaving school 1.4 times as often as other students. American Indian males, with a rate of 7.89 percent, have the highest dropout rate of any ethnic group. During the 2007-08 academic year, the 4-year graduation rate for American Indian students was 55.7 percent. The Council was gratified to learn that American Indian students were participating in some of the Innovative Education Program such as Learn and Earn Early College and the Redesigned High Schools, but the Council was discouraged by the very low participation rates of American Indian students in Advanced Placement and International Baccalaureate courses. Some of the recommendations of the Council to the State Board of Education include: 1) Establish and implement a broad array of innovative high school reform programs to provide rigorous academic experience for American Indian students and aggressively identify, enroll and monitor all students who would benefit from participation in such programs; 2) Develop and implement nontraditional outreach and communication strategies to effectively reach all American Indian families, and 3) Integrate accurate information regarding Native culture in all aspects of the curriculum, 4) Establish supportive and caring school environments for all American Indian students and 5) Identify and eliminate barriers, which inhibit the participation of American Indian students in innovative educational opportunities.

21st Century Professionals

  • TCP 3 Update on Teacher Evaluation Instrument Implementation and Next Steps on Phase-In The Office of Professional Development presented an update on the next phase of the instrument roll-out as well as information gained from LEAs currently using the instrument. There are 40 districts scheduled to implement the new evaluation instrument in 2009-2010 in Phase 2. Feedback from the survey results from the teacher training indicated the Quality of Training was rated Excellent, the Effectiveness of Trainers received an excellent rating and was it Worth the Time rated a Strongly Agree of 756 from the 904 randomly selected surveys that were reviewed. The report also contains background information on the Principal Evaluation Instrument.

Board Meeting: Cheryl Fuller presented an overview of the background, history, and implementation of the Principal and Teacher Evaluation Instruments. She included some of the survey results from the responses received from participants in Phase One.  In conclusion, roll out information was provided for those areas involved in Phase Two.

Board Meeting and Committee Chair Reports-Listed Above

-State Superintendent’s Report

Dr. June Atkinson Commented on the Cyber Summit on 21st Century Skills and the Press Conference held by NCPTA, NCASA, NCSBA and NCAE and the Public School Form regarding the cuts to the education budget. She presented a brief summary on the first meeting of the Career-Ready Commission and recognized Derek Graham, Section Chief for Transportation Services who was instrumental in the NCDPI’s project “Clean School Bus WEPN” which was selected for funding in the amount of $509,000. She also recognized Jacob Dewitt from C.B. Aycock High for being number one in the Entrepreneurship Participating Independent Business category in the National DECA competition.

Chairman’s Remarks

Update on the Framework for Change Dr. Garland indicated central standards had been released for Mathematics, Science and Computer Skills and staff was currently updating information received from stakeholders in the school system and businesses. One concern seemed to be with the K-5 Science standards and if the science kits would be aligned to the new standards. Committee selection had begun for the new standards for Social Studies and Writing. Webinars had been used to communicate with stakeholders with great success and will possibly be used more often.

Halifax County Update  Staff is working on the short-term issues to be addressed by the end of the 2008-09 schools year are: 1) Assess K-2 students n six schools/K-2 assessments were not completed in 2008-09, 2) Reorganize assessment procedures to correct significant issues occurring in EOG administration before EOC administration, 3) Develop a balanced budget approved by the Board, 4) Select administrators/instructional coaches by July 1, 5) Develop structures for routine central office leadership team meetings and 6) Distribute/collect registration for summer professional development prior to end of school year.

Legislative Update Chris Minard, Legislative Liaison, briefly presented information regarding the status of legislation and the House budget. The Education Appropriations meeting scheduled for early morning had been rescheduled until after Session so there was little new to report on the budget. Board member Tate had concerns regarding pending child care legislation and Dr. Matthews addressed his concerns.

Adjourn

Preview of June State Board of Education Agenda

June 3-4, 2009

The following State Board of Education Committees will meet on Wednesday, June 3: Globally Competitive Students (10:30 AM) including the State Board of Career and Technical Education, 21st Century Professionals Committee (1:45 PM), and the Leadership for Innovation Committee (1:30 PM). On Thursday, June 4, the Business/Finance and Advocacy Committee (7:30 AM) will meet prior to the State Board of Education meeting scheduled to begin at (9:00 AM).

Wednesday, June 3, 2009

Globally Competitive Students (10:30 AM) Board Room

Action and Discussion

Action

  • GCS 1 Recommended Changes to Achievement Level Descriptors for NCEXTEND2 for 2009-10 School Year The Department discussed amending policy HSP-C-026 and the achievement level descriptors for NCEXTEND2 students in each of the four achievement levels for mathematics, reading, and science and is presented for approval at the June SBE meeting.
  • GCS 2 High School Courses Taken in the Middle School Considerations for Social Studies SBE members are requested to approve the expansion of the existing policy to include high school social studies courses completed in middle school. K-12 Curriculum, Instruction, and Technology staff shared information last month with the GCS Committee on expanding the current policy HSP-M-001.

Discussion

  • GCS 3 Academic Scholars Program The Academic Scholars Program must be revised to align with the Future-Ready Core Graduation Requirements, approved in September 2008, for students entering ninth grade for the first time in 2009-2010. A revised option will be presented for discussion based on SBE input (last month) and review of the national and international honor society criteria. A third option includes 24 credits: 4 Mathematics credits (with the fourth credit required to be a higher level math), 3 Science credits, 3 social studies, 1 Health and Physical Education, 2 elective credits in a second language required for UNC System, 4 elective credits (reduces elective requirements by 3), 3 Higher level courses taken in junior or senior years which carry 5 or 6 points or 2 Higher Level courses and the completion of the NC Graduation Project.) The revisions made were 1) Cumulative GPA to 3.500 (un-weighted), 2) 3 additional credits or higher level courses or 2 additional credits or higher level courses and completion of the Graduation Project.
  • GCS 4 Proposed Grading Policy Revision and Course for Credit Issues The ASIS staff recommends the SBE adopt the revised grading scale policy for immediate implementation and approval of the courses in the Comprehensive Articulation Agreement (CAA) and/or Transfer Advisory Committee (TAC). The proposed policy revision will allow schools to reflect student grades by either a letter entry or a numeric entry in both scales. This policy revision should bring all 115 school systems into compliance with their grading entries into NCWise. Board members will be updated on other procedures regarding course for credit and the standardized transcript. A copy of the new policy was not provided.
  • GCS 5 Legislative Update on Evaluation of Services to Students with Hearing and/or Visual Impairments The SBE is recommended to approve the report so it may be presented to the appropriate legislative agencies and the Fiscal Research Division.  In the April 2008 report, the Fiscal Research Division suggested moving the administration of the residential schools for the deaf and blind to the Department of Public Instruction. At the conclusion of the April report two recommendations were made by DHHS and DPI: 1) DHHS and DPI should establish a task force, with a one-year reporting date, to examine how a free and appropriate public education is ensured for hearing and visually impaired children throughout North Carolina and 2) establish an administrative committee to examine and make recommendations to the two departments regarding the issue of administration of the State’s schools for the deaf and blind. In its examination, the committee could not find convincing evidence that transferring management of the State residential schools serving deaf and blind students will actually result in a better model than the one that currently exists. There does not appear to be any administrative cost savings to be realized by transferring these schools from one agency to the other. However, the following recommendations are presented for consideration: 1) DHHS should continue to provide management and oversight of the State residential schools serving deaf and blind students; 2) DHHS should provide yearly updates on progress made in addressing educational outcomes to the State Board of Education 3) Management of Services for the Early Intervention Program for children who are deaf or hard of hearing should be maintained in DHHS and 4) Non-residential and non-day school programs currently affiliated with the State’s schools for the deaf and blind should collaborate routinely with DPI to ensure consistency in providing services to LEAs. A copy of the report is available upon request from this office.

State Board of Career and Technical Education

  • GCS 6 Construction Education Programs Certification and Credentials The new policy is being proposed to ensure construction education programs (carpentry, electrical trades and masonry) offered in NC public schools provide students with skills and knowledge meet or exceed industry standards. When a program is certified by the National Center for Construction Education Research (NCCER), participating students will graduate with industry-developed skills and knowledge to prepare them for further education and employment. The NCCER program leads to various craft certifications and credentials. Students can earn community college credits, while in high school. Requirements for certification include: 1) Construction Programs must be certified by the NCCER/NCDPI as Accredited Training and Education Facilities, 2) Instructors must successfully complete the Instructor Certification Training Program and be certified as a Craft Instructor in their field, and 3) Students must be entered into the NCCER national registry. They will receive certification and credentials upon successful completion of curriculum as follows: 1) Must achieve a score of 70 percent on written assessment administered by a certified instructor and 2) Must demonstrate competence on required performance task.

This item is returning again for Discussion at the June meeting. Results of the readiness survey will be provided to SBE members for the June meeting to be included in the discussion process.

  • GCS 7 Academically or Intellectually Gifted (AIG) Program Standards The State Board of Education will discuss adoption of new North Carolina AIG Standards. Last year the program was audited by the State Auditor and as a result DPI agreed to the following; DPI shall develop a review process of local AIG programs, which support continuous program improvement of local AIG programs and plans based on a body-of-evidence; and DPI shall ensure that these recommendations are integrated into state practices and policies. The AIG Program Standards have been developed to serve as a statewide framework for local AIG programs and will guide LEAs to develop, coordinate, and implement thoughtful and comprehensive AIG programs. These standards will convey expectations for quality local AIG programs and services, guide the development, revisions and monitoring of local AIG programs, articulate best practices for local AIG programs, provide a guide for personnel and professional development, promote strong partnerships and communication between and among home, school, and community and serve as a vehicle for continuous program improvement and accountability. This item is presented for discussion in June and will be presented for Action in July. A copy of the program standards is available upon request from this office.

New Business:

-Honors Review Follow-Up

-Plans and Implications for Releasing Test Forms to the Public

-Supplemental Educational Services (SES) Evaluation Report

Leadership for Innovation Committee (1:30 PM) Board Room

Action on First Reading

  • LFI 1 Approval of LEAs and Charter Schools Technology Plans The State Board is asked to approve the Technology plans for Healthy Start Academy and Kinston Charter School. They have been approved by both ITS and DPI technology consultants. Final approval by the State Board of Education qualifies these LEAs for the School Technology Trust Funds, NCLB and federal eRate monies, as well as a variety of private technology grants.
  • LFI 2 Revision of Policy EEO-U-002 Regarding Criminal Fingerprint History Checks for Employment Applicants and Individuals Handling Fiscal Matters in Charter Schools The State Board Staff Attorney and the Office of Charter Schools recommend the SBE approve the policy changes. New language added as follows: Appropriate staff of the Office of Charter Schools, in consultation with legal counsel, will determine whether to invite a charter school employee applicant into the Superintendent’s Ethics Advisory Committee (SEAC) for an interview. The SEAC will determine whether to recommend an applicant for employment in the charter school and will forward its recommendation to the State Superintendent for a final decision. Also, deletes language in reference to refusing to submit to a finger print check.

Discussion:

  • LFI 3 Recommendations for Preliminary Approval of 2009 Charter School Applications The Office of Charter Schools recommends the LFI Committee present three applicants to receive preliminary charters to the SBE for Action at the July 2009 meeting. There are three openings for new schools at the beginning of the 2009-2010 school years. Seven applicants have been interviewed by the LFI Committee. They are: Bear Grass Charter School, Duplin Charter School, Henderson Collegiate, Lake Lure Classical Academy, McKinney Academy Charter School, Mountain Island Charter School and New Bern International Academy. The Committee was expected to have a Conference Call to rank the seven applicants in order to recommend the top three charter schools for approval next month. There were no applicants selected from Wake County. This item is presented for discussion in June and will be presented for Action in July.
  • LFI 4 Standardization of Waiver/Exemption List for Cooperative Innovative High School Program Application The SBE is asked to approve routine waiver exemptions to become a part of the application process. It is also recommended that the State Board Chair be authorized to approve these routine waivers for LEAs that are opening innovative programs not requiring Board Approval. The current process unnecessarily burdens personnel at the school district and at NCDPI. In most cases, the exemptions requested are routine. SBE Waiver ID descriptions are classified as CA-1, CA-2 for waivers requested in accordance with the Calendar Bill, P-1 and P-2 specify waivers for personnel, CU-1 relates to routine waiver with curriculum, and TST-1, TST-2, TST-3 relate to issues with testing. A draft copy of the standards for waivers is available upon request from this office. They are changing the TST-3 recommendation. They plan to waive the requirement for the EOC scores of students “simultaneously enrolled” in more than one school and to count the score of the test, where the course is taught. The revised recommendation states: Remove this as not required. Current practice is for these scores to be counted at the base school, which is the practical effect of this waiver as requested by districts in the past. This item is presented for discussion in June and will be presented for Action in July.

New Business:-

-District and School Transformation Update

-NC Virtual Public School/Learn and Earn Online (LEO) Director’s Report

-2010 Charter Schools for Renewal

21st Century Professionals Committee (1:45 PM) Room 504

Action on First Reading

  • TCP 1 Final Decision in Contested Cases
    • Joseph Woods vs NCDPI

Joseph Woods filed a petition for a contested case to challenge the State Board’s denial of Petitioner’s request for non-teaching work experience. The Administrative Law Judge reversed the agency’s action.

  • Amanda Linn Eldridge Howard vs NCSBE, NCDPI

Amanda Linn Eldridge Howard filed a petition for a contested case to challenge DPI’s denial of Petitioner’s request to waive her repayment obligation for failing to complete the NBPTS certification process. The Administrative Law Judge upheld the agency’s action.

Discussion

  • TCP 2 State Evaluation Committee Teacher Education Program and Alternative Lateral Entry Program Approval Recommendations The Committee recommends the State Board discuss and then give final approval next month of the following programs; Campbell University, Elizabeth City State University, and UNC-Chapel Hill. Alternative programs for lateral entry are also included for Charlotte-Mecklenburg Schools’ Career and Technical Education Lateral Entry Program and Mt. Olive College Lateral Entry Program. This item is presented for discussion this month and for Action in July.

Thursday, June 4, 2009 (7:30 AM) Room 504 Videoconferencing Center 5th floor

Business/Finance and Advocacy Committee Meeting

Action and Discussion Agenda

Action on First Reading

  • TCS 1 Approval of Grants
    • Even Start Family Literacy Program-Recommended Grant Awards 2009-2010 The State Boards is requested to approve the recommended five continuation sites in Ashe County, Bertie County, Caldwell County, Craven County, and Lenoir County. Also, approval is requested for six new sites in Burke County, Greene County, Lee County, Randolph County/Asheboro City, Rutherford County and Washington County. Funding for 2009-2010 is projected at $1,585,153.
    • Equipment Assistance Grant The American Recovery and Reinvestment Act of 2008 provides a one-time appropriation to North Carolina DPI in the amount of $3,313,727 for competitive grants to School Food Authorities (SFAs) participating in the National School Lunch Program (NSLP). The Act requires preference be given to schools where 50 percent or more of students are eligible for free or reduced price meals when awarding the grants. All eligible SFAs were invited to submit competitive proposals based on specific guidelines and requirements. Proposals receiving the highest total scores will be ranked by score. SFAs will be notified upon board approval and grant funds will be transferred no later than June 15, 2009. The list of applicants and grant award recipients was not available at this time.
      • TCS 2 Pre-Approval of Financial and Business Services’ Policy Manuals The SBE is asked to approve, in advance, the issuance of the following manuals upon the adjournment of the General Assembly, allowing the Department to incorporate changes approved by legislative action that do not require State Board approval, to change any policy directives.  The documents impacted are: Public School Personnel State Salary Schedules and Manual, Allotment Policy Manual, and the Benefits and Employment Policy Manual for Public School Employees.

Discussion

  • TCS 3 Membership for the State Advisory Council on Indian Education The State Board of Education is requested to approve names of individuals recommended by the North Carolina Commission of Indian Affairs for membership to the State Advisory Council on Indian Education. Recommended for Appointment are: Audrey Hunt, replacing Diane Goins, Tiffany Graham-Locklear replacing Rhonda Truitt, Katherine Hernandez replacing Ginger Stone and Joseph O. Richardson replacing Katrina Lynch Rolon-Lopez. Recommendations for a second term include Marcia H. Hollifield, Gwendolyn Locklear and Kara Steward.  This item is presented for discussion in June and will be presented for Action in July.
  • TCS 4 Governor’s School Board of Governors The State Board of Education is asked to appoint Jim Hard (President of the North Carolina Governors’s School Alumni Association) to complete a current term ending on June 30, 2011. The State Board is asked to re-appoint Daniel Turner (WCPSS Staff) to a second term ending June 30, 2011 and to recommend four additional appointments, one each from Districts 2, 4, 5 and 8. One of these must be a local superintendent. This item is presented for discussion in June and will be presented for Action in July.

Update on Contracts

Contracts over $25,000 –12 Proposals

Contracts under $25,000 – 8 Proposals

New Business:

-Communications Update

-Budget Update

-Intern Update

9:00 AM State Board of Education Meeting, Dr. Bill Harrison, Chairman

Call to Order,

Swearing-In Ceremony for New Board Member – The Honorable Paul M Newby, Associate Justice, Supreme Court of North Carolina

- Mrs.Christine J. Greene, High Point, Education District 5 SBE Member

Closed Session

9:50 AM Board Reconvenes

Pledge of Allegiance, Approval of Minutes

Special Recognition – Outgoing State Board of Education Advisors

-Dr. Shirley Prince, Superintendent Advisor

-Dr. Debra Morris, Wachovia North Carolina Principal of the Year Advisor

-Mr. James Bell, North Carolina Teacher of the Year Advisor

Information Agenda

Globally Competitive Students

  • GCS 8 Annual Report: State Advisory Council on Indian Education The State Board is asked to accept information presented by State Advisory Council on Indian Education in its annual report.

21st Century Professionals

  • TCP 3 Update on Teacher Evaluation Instrument Implementation and Next Steps on Phase-In The Office of Professional Development will present an update on the next phase of the instrument roll-out as well as information gained from LEAs currently using the instrument. There are 40 districts scheduled to implement the new evaluation instrument in 2009-2010 in Phase 2. Feedback from the survey results from the teacher training indicated the Quality of Training was rated Excellent, the Effectiveness of Trainers received an excellent rating and was it Worth the Time rated a Strongly Agree of 756 from the 904 randomly selected surveys that were reviewed. The report also contains background information on the Principal Evaluation Instrument.

Board Meeting and Committee Chair Reports-Listed Above

-State Superintendent’s Report

Dr. June Atkinson

Chairman’s Remarks

Update on the Framework for Change

Halifax County Update

Legislative Update

Adjourn

2009 LEGISLATIVE SESSION MEMO #18

Monday was a holiday for the Legislature, but they returned on Tuesday to begin again on the budget. House Education Appropriations met Tuesday morning to release an updated budget spreadsheet for Education. There were some major and minor changes. After their meeting with the Full Appropriations Chairs they had to cut another $100 million from public schools to replace the $100 million from the five day reduction they were not allowed to take in the budget. They cut another $50 million from At-Risk with a new total of $70 million. They cut another $10 million from transportation increasing that to $29 million and another $10 million from Textbooks ($50 million). There were some other miscellaneous cuts totaling $100 million. Meanwhile, House and Senate committees continued their meetings to pass bills. The House Education Committee met and passed several bills, but got bogged down in debate over SB 526 School Violence Prevention Act (requires enumerated categories in policy on bullying prevention). They returned to pass the bill on Thursday in House Education and sent it to Judiciary I, after it received a Favorable Report voice vote, and after a very boisterous and contentious debate by the Republicans. The Education Committee members who opposed the bill were not happy.

On Wednesday morning the House Appropriations Chairs had breakfast with the Governor who is continuing to work on a rewrite of her budget. She presented her first budget in March, but it did not have enough cuts and the State revenues continue to decline. Senator Basnight and Speaker Hackney had a meeting with the Governor Wednesday afternoon before Session. The talk around the building continues to be we need some new revenue, but the House is not willing to consider it. Even if the House were to accept the $500 million in increased taxes the Senate proposed, the word from Rep. Michaux is that those funds would need to go into the Rainy Day Fund and there still wouldn’t be enough money to offset the deep cuts to Education and Health. The Education Appropriations Subcommittee had agreed to meet and review budget special provisions, but cancelled until Thursday. House Appropriations Subcommittees continued working and presenting to the Big Chairs throughout the week. Education is bad and DHHS (Dept. of Health and Human Services) is worse. Education was cut $1.3 billion and so was DHHS. As part of their budget they cut school nurses $1 million and Medicaid, which were among a few of the 12 pages of cuts. The Health budget has so many small moving parts it takes cuts from many small allotments just to begin to make a difference. Also on Wednesday, the Senate Mental Health and Youth Reform Committee began discussing HB 88 Healthy Youth Act (sex education). Everyone anticipated, including the bill sponsor that the bill would be voted out of Committee, but Senator Rand advised the Chairs to have discussion only. The bill has not been rescheduled for next week yet.

The Education Committee met on Thursday to review the budget special provisions and most of the members seemed exasperated with what was being proposed. Not so much with the provisions, but the entire funding portion of the education budget. The House Appropriations chairs and subcommittee worked most of the Thursday into the evening to try and get a handle on less revenue and more cuts. It’s hard to say where this is going to end.

The House is still trying to keep to their schedule to finish their version of the budget by June 18th.

House Committees:

Education:

HJR 364 SBOE Confirmations Favorable Report to Proposed Committee Substitute and re-referred to Rules.

SB 526 School Violence Prevention Act Favorable Report and re-referred Judiciary I.

SB 689 Modify DPI/SBE Reporting Requirements Favorable Report and re-referred to Appropriations.

SB 708 Amend the Compulsory School Attendance Law Favorable Report and re-referred to Appropriations.

Energy and Energy Efficiency:

SB 457 Add Definition of Biodiesel Favorable Report and re-referred to Finance.

Finance:

SB 754 Changes for Bonds Authorization Under ARRTA Favorable Report and re-referred to Appropriations.

SB 871 Pre-Stimulus Federal Medical Assistance Percentage for Medicaid Hold Harmless Favorable Report and re-referred to Appropriations.

Health:

HB 589 Insurance/Cover Hearing Aids Favorable Report to Proposed Committee Substitute and re-referred to Insurance.

SB 957 Special Enrollment Period/Group Health Insurance Favorable Report and re-referred to Insurance.

SB 1030 After-School Child Care Programs Favorable Report to Proposed Committee Substitute and re-referred to Education.

SB 738 Diabetes Control Plan in Charter Schools Pulled

Senate Committees:

Education/Higher Education:

HB 42 Science Safety in the Public Schools Favorable Report and sent to the Senate Floor.

HB 96 Local Government Surplus Property Donations Favorable Report to PCS and sent to the Senate Floor.

HB 218 Parent & Student Education Involvement Act  Favorable Report and sent to the Senate Floor.

HB 223 No High School Graduation Project Required Favorable Report and sent to the Senate Floor.

HJR 365 Joint Session for SBOE Confirmations Favorable Report and sent to the Senate Floor.

HB 1504 Transfer NCCAT to SBE Favorable Report and sent to the Senate Floor.

Commerce:

SB 375 Insurance/Cover Hearing Aids Favorable Report

Judiciary II:

HB 43 School Board Members/Failure to Discharge Duty Favorable Report and re-referred to Appropriations.

HB 1327 Schools Notified of Criminal Intelligence Information Favorable Report.

HB 440 the Nicolas Adkins School Bus Safety Act Favorable Report to PCS and re-referred to Appropriations.

Mental Health & Youth Services:

HB 88 Healthy Youth Act No Vote, Discussion only

Pensions, Retirement and Aging:

HB 642 Retirement Technical Corrections Favorable Report and sent to the Senate Floor.

HB 1221 Develop State Employee Benefits Statement Favorable Report and sent to the Senate Floor.

State and Local Government:

SB 427 Restore Contract Rights to State & Local Not Heard

Senate Floor:

HB 316 Assignment of Multiples to Charter Schools Rescheduled for June 4.

HB 42 Science Safety in the Public Schools Passed second and third reading and sent to the Governor.

HB 96 Local Government Surplus Property Donations Passed second and third reading and sent to the House for concurrence.

HB 218 Parent and Student Educational Involvement Act Passed second and third reading and sent to the Governor.

HB 223 No High School Graduation Project Required Passed second and third reading and sent to the Governor.

HJR 365 Joint Session for State Board of Education Confirmations Passed second and third reading and Ratified.

HB 642 Retirement Technical Corrections Passed second and third reading and sent to the Governor.

HB 1221 Develop Employee Benefits Statement Passed second and third reading and sent to the Governor.

HB 1504 Transfer NCCAT to SBE Senate decided Re-refer this bill to Appropriations.

Bills in Committee Next Week:

SB 386 Make Best use of Corporate Tax Revenue

SB 498 Affordable Housing for Teachers/Edgecombe Co.

SB 583 Tuition Reciprocity/Community Colleges

SB 509 Revenue Laws, Technical, Clarifying, & Administrative Changes

SB 204 Retired Nurse Return to Work

SB 468 Authorize Insurance for Former Employees

SB 863 Purchase Service/Certain Employment

SB 738 Diabetes Control Plan in Charter Schools

SB 712 State Surplus Property/New Recipient

HB 659 Study Existing Children/Youth Programs

2009 HOUSE PROPOSED BUDGET HIGHLIGHTS

The House Select Committee on Economic Recovery met jointly with the Senate on Tuesday to report on the current economic conditions in the State.  The governor has already spent $400 million of the Stabilization Funds leaving a balance of $935 million over the next two years. The belief is the Education subcommittee will simply divide the funds in half. The education subcommittee met Wednesday after Session to release their proposal to cut the education budget. Their target for all of Education was $10.5 billion and if you add the stimulus funds ($467 million) you will reach $10.97 billion. The continuation funding for all of education is estimated at $12.34 billion so when you do the math you need to cut $1.37 billion from all the education entities. This equates to an 11% percent cut to each of the three education groups, based on the continuation funding. The projected target figure of the cuts for public schools for the House Education subcommittee chairs is approximately $917,194,957.

Highlights of the Recurring Statewide Cuts:

Class Size Increase of two students: $322.7 million (6,005 classroom teachers)

Central Office: $6.5 million

Improving Student Accountability $38.4 million (eliminates fund)

Non-Instructional Support $20.2 million (5 percent reduction)

Eliminate Teacher Assistants 3rd Grade $130.1 million (4,663 teacher assistants)

Instructional Support: $21.5 million (354 personnel)

School Building Administration $17.6 million (187 Assistant Principals 1:890)

Eliminate Literacy Coaches $12 million

At Risk Student Services $22.9 million

Eliminate Learn and Earn Online $1.35 million

Transportation $19.42 million (5 percent reduction)

National Board Program $3.27 million (eliminates application funds and substitute allotment)

Shorten School Year 5 days 09-10 and 10 days 10-11-$100/$200 million

These cuts though not all of them are listed above, total $784,813,928 Million.

The highlights of the non-recurring cuts are as follows and total $123.5 million:

Highlights of Non-Recurring Cuts

Textbooks $38 million

Staff Development $12.56 million (eliminates for two years)

Redirect Construction Capital Funds $60.5/$64.5 million

Expansion items total $22 million with the majority going to Dropout Grants ($14 million).

This is shock and awe as we affectionately refer to it. There will certainly be a great deal of maneuvering in the next two-three weeks as the House works to finalize and pass their budget. Whatever they come up with will then go to the Senate after which they will have to go to Conference until they can reach a final agreement on the budget.

2009 LEGISLATIVE SESSION MEMO #17

On Monday, the House and Senate returned to Jones Street, but they did not have any bills on their calendars, having cleared all of them off last week. The House also came back ready to begin to their work on the House budget, again. The subcommittees had been working on and off and it was rumored they would begin reviewing their budget proposals later in the week.

On Tuesday, the Senate Economic Recovery Committee met to hear a presentation on the American Recovery Reinvestment Act and the Education Budget. Staff presented more than 47 slides of information. Of note was the fact that Governor Perdue has already spent $400 million, in the past few weeks, of the funds slated for NC to cover the budget shortfall. This leaves a balance of $935 million in non-recurring funds, to be used either all at once or over the next two years as part of the education budget. There are competitive funds of $4.5 billion available to states who implement strategies to help struggling students close the achievement gap. They reviewed Title I funding to the LEAs, maintenance of effort, supplement not supplant and how the requirement for the LEAs to implement new and innovative strategies and serve more students using the federal funds. The 2009-2010 targets for Education total $10.5 billion and in 2010-2011 they drop to $10.3 billion, with lower revenue anticipated. The State is required to fund the three education groups above the 2005-2006 funding level. In 2005-2006, K-12 funding totaled $6.95 billion. The State can direct how the federal stabilization funds can be spent by the Community Colleges and Universities, but not the public schools.

On Wednesday, the Chairs of the House Education subcommittee met to hear a presentation on the federal stabilization fund and to present their recommendations for education funding in 2009-2010 and 2010-2011. Their budget plan proposes an 11.1 percent reduction in spending ($917,194,957) for public schools, Community Colleges ($119,310,621) and the Universities ($336,626,657) in 2009-2010 and 14 percent ($1.17 billion cut) in 2010-2011. With State funding projected to be lower next year they had to plan on deeper cuts for the second year of the Biennium.

The Chairs presented education cuts for public schools to include the following: Increase Class Size by 2 per grade (6,005 teachers), Shorten the School year by 5 days in 2009-2010 and 5 more in 2010-2011, Eliminate teacher assistants in grade 3 (4,663 TAs), Reduce Instructional Support (354 counselors, media, social workers), Reduce School Building Administration (Assistant Principals 1:890-187 APs), Central Office at LEAs face a reduction of $6.5 million, a Reduction to Non-Instructional support (clerical and custodians), Eliminate Learn and Earn Online, Eliminate funding for National Board program, Eliminate Literacy Coaches, Eliminate Improving Student Accountability, a 10 percent reduction to At-Risk Student Services, and a 5 percent Reduction to Transportation. There is also $60.5 million in a non-recurring cut to school construction funds for each of the next two years. In addition, there will be a reduction in the Low Wealth Supplemental funding to counties at or below 90 percent, eliminating 13 LEAs, Small County Supplemental funding reduced by $4.5 million, and a ten percent cut to More at Four. DPI is recommended for an 11 percent reduction for 2009-2010 and an additional four percent (total 15 percent) for 2010-2011. This equates to the elimination of 52 positions in 2009-2010 and 19 more (71 total) for 2010-2011. The proposal does not include any changes to salaries and the additional non-recurring fund reduction related to the federal stabilization funds. The Chairs also included expansion funds of almost $48 million between the three education funds. Public schools had $22 million most of which was in the Dropout Prevention Grants program. It was our understanding there would be “No Expansion” funds and that was part of the direction to all subcommittees, however education still included some of these funds in their proposal.

On Thursday, the House Education subcommittee met to finish their budget review and hear questions from members. Most of the questions were simply what are we going to do with all these cuts.  The Chairs told committee members they were planning to work Friday to complete drafting the special provisions for the budget. They asked the members to return on Tuesday with suggestions and ideas for changes they may want to consider to the education budget plan.  They also told the committee their plan is to vote on the education proposal on Wednesday and give it to the big Chairs on Thursday. The big Chairs are responsible for salaries, benefits and capital as well as balancing the whole budget and agreeing to the subcommittee recommendations.  The House budget calendar calls for the big Chairs to work on the budget the following week, June 1-5, and then begin rolling it out the week of June 8th. Final House approval should occur by June 18th. That only leaves two weeks for the House and Senate to come to an agreement on the final budget before the end of the 2008-2009 fiscal year (June 30). Meanwhile, the Finance Chairs are responsible for putting together the funding package for the budget. Everything we are hearing right now indicates the House will not do anything to increase revenue for the state, but will focus on only making cuts.

Tough choices and decisions await the House and then how will the Senate respond to these deep cuts, especially in Education. The Senate has yet to present the revenue plan for the spending in their budget proposal. The Public Schools, Community Colleges and Universities are working very hard to assess the impact of this initial education budget. It’s hard to say right now with the limited funding how some if not all of these cuts can be avoided. As you look at the K-12 budget plan the interesting part is not where the cuts were made, but what funding allotments were not cut, like Special Education, Vocational Education, Academically Gifted, Supplies and Materials and Learn and Earn. These programs appeared to be spared in Round 1. Guess we will have to wait and see next week where this is headed. Education has made great progress in North Carolina over the past twenty-five years, but we may be headed backwards with an increasing student population and a decrease in funding. Public schools in North Carolina have continued to improve nationally in the rankings, but can these be academic gains be sustained with a decrease in per pupil funding? A decrease that may be here to stay for the next three to five years!

Senate Committees:

Education/Higher Education

HB 65 Students Under 16 May Attend Community College Favorable Report

HB 316 Assignment of Multiples to Charter Schools Favorable Report to Proposed Committee Substitute.

Finance:

HB 1508 Tech Corrections – 2/3rd Bonds Act of 2008-Favorable Report

Judiciary II:

HB 9 No Texting While Driving Favorable Report and re-referred to Appropriations.

Mental Health & Youth Services Meeting Cancelled.

HB 88  Healthy Youth Act The Democrats caucused about possible changes to the bill to get enough votes for passage, but they were unable to finish so they postponed the meeting.

State and Local Government:

HB 220 Write-In Candidate Rule Favorable Report and sent to the Floor.

Senate Floor:

HB 220 Write-In Candidate Rule Passed second and third reading and Ratified.

HB 65 Students Under 16 May Attend Community College Passed second and third reading and Ratified.

HB 316 Assignment of Multiples to Charter Schools Calendared 5/26

Bills in Committee Next Week:

HB 42 Science Safety in the Public Schools

HB 43 School Board Members/Failure to Discharge Duty

HB 96 Local Government Surplus Property Donations

HB 218 Parent and Student Educational Involvement Act

HB 223 No High School Graduation Project Required

HB 364 SBOE Confirmations

HB 440 The Nicolas Adkins School Bus Safety Act

HB 589 Insurance/Cover Hearing Aids

HB 1031 Building Standards/Pre-K Classes in Public Schools

HB 1327 Schools Notified of Criminal Intelligence Information

SB 427 Restore Contract Rights to State& Local

SB 526 School Violence Prevention Act

SB 689 Modify DPI/SBE Reporting Requirements

SB 708 Amend the Compulsory School Attendance Law

SB 957 Special Enrollment Period/Group Health Insurance

SB 1030 After-School Child Care Programs

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