APRIL NREAC MEETING NOTES

Attendees: Joe Bard, Jimmy Cunningham, Ray Patrick, Fred Nolan, Barbara Havlicek,

Jules Waber, Scott Turney, Dan Rask, Phil Gerik, Noelle Ellerson, Sasha Pudelski

Key Dates: May NREAC Meeting: 5/15 at 2 p.m. ET.; DC Meeting Scheduled for January 20, 2014 to January 22, 2014.

ESEA and Waivers: The only ESEA-related item that is new relates to Title I Carryover (See the next item). We are prepared for the House and Senate to begin to take action on ESEA reauthorization, with possible hearings in May/June and legislation to follow.

·  USED Announces Waiver Re: Title I Carryover: USED issued a letter to all chief state school officers related to waivers from the Title I 15% carryover limitation. In a nutshell, the letter states that USED will allow states to apply for a blanket waiver so they can grant LEAs flexibility to carryover more than 15% of their FY12 Title I funds, in recognition of the impact of sequestration. Specifically, it allows a waiver to be granted more than once every three years, which is the current statutory limit. Note: USED even provided a template letter states can use in application. Full details on the blog.

Appropriations and Budget:

·  President’s FY14 Budget: In April, President Obama released his FY14 budget. The Budget proposal assumes Congress is able to revert the deep cuts of sequestration. Once again, the administration highlights and prioritizes investment in education. Unfortunately, while AASA applauds the significant new funding in education, including a huge proposal related to expanding access to early education, AASA is appalled that every new dollar for K12 (totaling $1.2 billion!) is competitive. The proposal level funds all existing programs, including Title I, IDEA and REAP. The administration likes to tell us ‘this really represents an increase in funding, as we restored the cuts of sequestration.” While that sentiment is true, the fact still remains that of the $1.2 billion of new money (above restoring sequestration!) available for K12, not a single one goes toward federal flagship formula programs. Here’s a handy chart that provides an initial analysis of funding levels for FY14.


Bottom line? The President’s budget is more of a message piece, especially this year, since it came out after the House and Senate had already adopted their budget resolutions. Given the vast differences between the two chamber proposals, odds are good that, once again, our nation will have a continuing resolution, as it seems unlikely Congress will be able to bridge the differences that exist between the two proposals.

Background and Overview: (See the blog for AASA’s full analysis and response): President Obama’s proposal funds USED at $71.2 billion, an increase of $3.1 billion (4.5%) when compared to FY12. This year’s AASA budget response analysis compares the FY14 proposal to FY12, given that FY12 represents the last point of comparison pre-sequestration. Information on the President’s FY14 Budget regarding grants to districts to improve school safety, climate and mental health: http://aasa.org//uploadedFiles/prezbudgetsafeschools.pdf

The President’s proposal focuses on six priorities: early-learning opportunities, improving teaching and learning, safe schools/learning environments, career-readiness for all, improving affordability and quality in post-secondary education and supporting Ladders of Opportunity initiative for high-poverty communities.

·  Early Education: The President’s budget proposes $75 billion over the next ten years to support a significant expansion of early education opportunities for low- and moderate-income four-year-olds. The budget proposal pays for this expansion by increasing the federal tax on tobacco products. In the early years, federal funds would represent a larger share of the program and, as time passes, states would come to shoulder the fiscal responsibility of maintaining these high-quality early education opportunities. The program would be competitive, and states would use the funds to provide early education to families making at/below 200% of the federal poverty level. It provides $1.3 billion in FY14 for Preschool for All and $750 million for the Preschool Development Grants. In related early education funding, the proposal also includes funds for Early Head Start ($1.4 billion) and home visit services ($15 billion over ten years).

·  Improving Teaching and Learning: As in previous budget proposals, the FY14 plan calls for the consolidation of existing teacher-preparation programs. The ‘new’ element in the FY14 proposal is the School Leadership Program ($98 million) that would invest in training for principals. That new program accounts for virtually all of the $100 million increase to the Improving Teaching & learning line item.

·  STEM: The proposal builds on previous efforts and consolidates 90 programs from 11 agencies to meet the President’s goal of producing 100,000 STEM teachers over the next ten years. Funded at $265 million, the proposal provides for STEM Innovation Networks ($150 million) to provide STEM learning opportunities in LEAs; $80 million for STEM Teacher Pathways to support STEM teacher preparation; and $35 million to establish a new STEM Master Teacher Corps.

·  Safe Schools: The proposal consolidates three programs and provides an additional $84 million above FY12 levels to supports grants that build the capacity of states/districts/schools to create safe, healthy and drug-free environments. The new program would give USED authority to reserve funds for Now is the Time, the President’s proposal that reflects the recommendations of Vice President Biden’s gun safety task force. This initiative would include $30 million to support development, improvement and implementation of emergency management plans; $50 million for School Climate Transformation Grants, supporting PBIS and emergency management technical assistance centers (REMS); and $25 million for Project Prevent grants.

·  State Assessments: The President’s budget proposes to level-fund the program that provides for the online testing consortia, while clarifying that these funds can be used to ‘…acquire, and to train teachers and other staff to use, the education technology needed to implement new, computer-based assessments’.

·  Rural Education: The President’s budget level funds the Rural Education Achievement Program, proposes to cut $66 million from Impact Aid, and reauthorizes the Secure and Rural Schools and Communities Program (funded at $214 million).

·  Competitive vs. Formula: In an alarming move, virtually all of the new money proposed for K12 funding is in competitive grants. Continued reliance on competitive funding undermines our nation’s commitment to ensuring all students have access to education and detracts from the federal government’s ability to meet its outstanding commitments to historically disadvantaged students through federal flagship programs, like IDEA and Title I.

·  School Construction: The President’s Fiscal Year 2014 budget includes proposals to build on the successful Qualified Zone Academy Bond (QZAB), Qualified School Construction Bond (QSCB) and Build America Bond (BAB) programs to create America Fast Forward Bonds for Infrastructure and for School Construction. The proposed America Fast Forward Bonds for School Construction will complement the support provided by over $11 billion of Qualified School Construction Bonds used by school districts in 49 states in 2010-2011 to build, renovate and repair schools. School districts in many states have also used Build America Bonds to modernize schools.

o  America Fast Forward Bonds for School Construction would support local school projects providing a 50-percent Federal subsidy rate for School Construction bonds saving the local school districts and community’s substantial costs for school bonds underwriting school construction, renovation and repair projects. The proposed America Fast Forward School Construction Bonds would be for 2014 and 2015. America Fast Forward Bonds proposed for other infrastructure projects including roads, bridges and pipelines would be permanent.

o  Eligible uses would be: (1) original financings for governmental capital projects for public schools and state universities; and (2) new money financings for section 501(c)(3) nonprofit educational entities, such as nonprofit schools and nonprofit universities that could use qualified section 501(c)(3) bonds.

o  The Treasury Department would make direct payments (through refundable tax credits) to State and local governmental issuers in an amount equal to 50 percent of the coupon interest on the bonds.

o  The Administration’s Budget proposal for the America Fast Forward Bonds for School Construction and for Infrastructure tracks the Senate Budget Resolution support for infrastructure. The Budget Resolution adopted by the Senate includes a $100 billion package targeting infrastructure to rebuild roads, bridges and schools to create jobs. \

o  RAS is continuing to work with Congressman Charles Rangel and Senator Jay Rockefeller on the re-introduction of the Rebuilding America’s Schools Act to extend and make permanent the Qualified Zone Academy Bond (QZAB) and Qualified School Construction Bond (QSCB) Programs.

o  Rebuild America’s Schools will work with the House Ways and Means Committee and the Senate Finance Committee for the permanent extension and school tax credit bond programs such as QZABS, QSCBs, and BABs and for the enactment of the Administration’s America Fast Forward Bonds as the Congress and the Administration begin work on tax reform.

o  The need for federal School Facility bond programs such QZABs, QSCBs, BABs and the proposed America Fast Forward Bonds exists in every state as local communities are struggling to provide their students modern school facilities that meet current health, safety and educational standards.

o  As noted in the last Rebuild America’s Schools update the Center for Green Schools at the U.S. Green Building Council (USGBC) “State of our Schools” report estimates that schools are currently facing a $271 billion deferred maintenance bill just to bring the buildings up to working order. – approximately $5,450 per student. The USGBC report also estimated that the cost to both bring schools into good repair and address modernization needs is $542 billion over the next 10 years for Pre-K-12 school buildings.

·  Senate Budget Resolution: For the first time in four years, the Senate adopted a budget resolution. After more than 13 hours of debate, including consideration of more than 70 amendments, the Senate passed Sen.Con.Res 8, its budget proposal for FY14. details of the budget—including amendments AASA was monitoring—are available in a previous blog post. Four Democrats (Baucus, Begich, Hagan and Pryor) voted against the budget. The IDEA and Impact Aid amendments AASA was following were not voted on. Here is an overview of the education-related amendments that were covered:

·  Senator Murray introduced an amendment that was the Ryan House budget (defeated 40-59).

·  Alexander’s Title I portability (Voucher) amendment was defeated 39-60, with six Republicans (Blunt, Collins, Fischer, Kirk, Moran and Murkowski) voting against the proposal.

·  Senator Baucus’ amendment to create the Office of Rural Education Policy at USED was adopted.

·  Senator Lee’s amendment relating to Payment in Lieu of Taxes (PILT) payments was adopted. The amendment supports PILT reauthorization, and would impact 1,900 counties in 49 states.

School Nutrition: As reported in an earlier blog post, USDA issued a proposed rule that would regulate competitive foods within schools. That is, USDA is proposing rules that would impact the nutritional requirements and availability of foods sold during the school day, but outside of the reimbursable meal pattern. You can read the PDF version of AASA’s response here.

Forest Counties: Earlier this month, USDA issued letters to governors in 42 states, informing them that they needed to refund a portion of their Secure Rural Schools payments, made in January as part of federal fiscal year 2012. The letters to the governors indicate that the agency is rescinding these funds in compliance with the anti-deficiency act. States had until April 19th to let the agency know the money will be repaid. AASA is working in conjunction with our friends at NEA and the Forest Counties coalition to support a Dear Colleague letter on Capitol Hill. Signed by members of Congress, the letter asks for a justification for the retroactive refund and urges the administration to work more closely with Congress and meet with impacted states before moving forward with collection notices. There are still a lot of moving pieces related to the proposed rescission of funds; we are waiting for a response from USDA answering some of the questions put forth in the Dear Colleague letter. Stay tuned; we will post additional information as it becomes available.

Education Technology and E-Rate:

·  Domenech Accepted to USAC Board: AASA’s Executive Director, Daniel Domenech, was accepted to the USAC Board, the entity that oversees the E-Rate program. A BIG thank you is due to AASA’s members and advocacy networks, who submitted nearly 40 different letters of support. In talking with the FCC, it was relayed that they were ‘overwhelmed’ with the support for Dan. Your letters were critical to supporting Dan’s nomination. Read the letter announcing his acceptance and/or the blog post listing all the letters of support.

·  E-Rate Demand in FY13 Twice the Level of Available Funding: USAC, the entity that oversees the E-Rate (Schools and Libraries Program) within the FCC recently released the 2013 demand letter. Demand in 2013 (for funds available through June 2013) is $4.986 billion, well beyond the available $2.34 billion. The FCC received 45,189 applications.
Demand for Priority One Services (telecommunications services and Internet Access) came in at $2.709 billion. Priority Two Services (Internal Connections) demand totaled $2.277 billion. Overall demand for FY13 is down $251 million (4.8%) from FY12. Demand for Priority One Services is up more than 10%. Demand for Priority Two Services is down 18.5%.
So, if demand is down, does that mean schools have what they need in terms of connectivity? NO! The reality is that applicants have come to recognize that P2 services are rarely available to schools outside of the 90% discount. As such, knowing the limits on available funding, schools outside of the top discount band do not submit a P2 application, as it represents unnecessary paperwork. As we have long argued, demand for E-Rate is likely consistently artificially low, as schools choose not to pursue P2 applications because they know it won't be funded.

Rural Policy Matters: Special School Violence Report: Our friends at the Rural School and Community Trust recently issued a special edition of Rural Policy Matters, focused on school violence. This special edition of Rural Policy Matters presents information gathered from some 700 media accounts of specific incidents of violence in schools since 1974. The edition was reproduced on the blog, with permission.