Bill: Senate File 447 - Reorganization Incentives with New Administrative Sharing Incentive
Committee: Education
Date: April 24, 2007
Staff: Ann McCarthy (1-3015)
______
Reorganization Incentives with New Administrative Sharing Incentive
This bill reinstates reorganization incentives that expired July 1, 2006. The bill also spend anywhere between $6 million and $32 million on a new administrative sharing incentive. This new incentive is supposed to create efficiencies.
Property taxpayers alone are estimated to pay between $1 million and $4.5 million as an incentive for their districts to share.
______
Summary of Action
The Senate PASSED SF 447, on March 26, 2007, by a vote of 48-1.
The House PASSED SF 447on April 24, 2007, by a vote of 82-16:
The Governor SIGNED SF 447 on May 9, 2007.
______
Section by Section Analysis
Section 1: Reinstates Property Tax Equalization. Reinstates the reorganization incentive when a district over 600 students merges with a district fewer than 600 students. The incentive is property tax equalization. In the year preceding the reorganization the foundation property tax for the reorganized district is $4.40. The foundation property tax increases according to the following schedule:
First seceding year: $4.90; Second seceding year: $5.15; Third seceding year: $5.40
Fiscal Estimate for FY09: $340,000
Section 2: Reinstates Whole Grade Sharing with Intent to Reorganize. Districts studying reorganization can receive a weighting for whole grade sharing for up to three years. The weighting is 0.10 times the percentage of the time the student is in the neighboring district. In the second and third years the districts involved must demonstrate progress towards reorganization. This weighting expires in 2014.
Fiscal Estimate for FY09: $514,000 state aid and $73,000 property tax
Section 3: Regional Academies Repealed. Little used weighting the gives the host district the ability to generate a weighting is phased out.
Fiscal Estimate for FY09: $225,000 state aid savings and $32,000 property tax savings
Section 4: New Shared Administrative Operations Weighting.
Eligible sharing partners: Districts can share operational functions with other school districts, “governmental” subdivisions, townships, cities, counties, community colleges, AEAs and the Regents. AEAs are eligible to form operational sharing partnerships too.
Operational functions: Superintendent management, business management, human resources, transportation or operation and maintenance for at least 20 percent of the school year.
Amount of weighting: The following weighting is available for EACH discrete operational function shared. 0.02 times the budget enrollment in the district for a minimum weighting equal to 10 students and a maximum weighting of 40 students.
Length of Weighting: 5 years with the amount reduced by 20% each year.
Fiscal Estimates for FY09:
Participation Level / IF all districts participate and share one operational function / LSA estimate of participationSchool districts / $32 million state aid
$4 million property taxes / $6.3 million state aid
$900,000 in property taxes
AEAs / $1.7 million state aid
$460,000 property taxes / $550,000 in state aid
$115,000 in property taxes
TOTAL / $33.7 million in state aid
$4.5 million in property taxes / $6.8 million in state aid
$1 million in property taxes
Legislative Service Agency estimate of district participation:
Districts Size LSA Estimate of # of District
Under 500 students 40% of districts will participate
500 – 1,000 students 33% of districts will participate
1,000 and 2,000 students 10% of districts will participate
Over 2,000 students No districts will participate
Section 5: Reinstates Reorganization Incentive. Districts intending to reorganize are eligible for a weighting for one year before and three years after the reorganization.
Fiscal Estimate for FY09: $270,000 in state aid and $38,000 in property taxes
Section 6: DE Sharing and Efficiencies Initiative. This section picks up on an idea offered during the 2005 legislative session regarding statewide conversations about sharing opportunities. This section makes a one-year appropriation of $400,000 to the DE for four FTEs. The DE in conjunctions with AEAs and other appropriate education stakeholders host efficiency conversation in each AEA.
By January 15, 2008 each AEA submits a plan to the DE identifying the existing, new or expanded opportunities for school district sharing or efficiency.
By March 15, 2008 the DE reports the findings to the legislature.
Fiscal Estimate for FY08: $400,000
______
Amendments
Amendments Adopted
None.
Amendments Defeated
H-1720B by Deyoe No Property Taxes This amendment would have eliminated the $1 to 4 million property tax impact of the new administrative sharing incentive. LOST on a record roll call vote of 46-50.
H-1719 by Raecker and Rants Cap spending This amendment capped the spending for the administrative sharing weighting at $3 million. H-1719, as amended, LOST on a record roll call vote of 45-51
H-1728 to H-1719 by Raecker Technical correction to include AEAs. ADOPTED by voice vote.
Amendments Withdrawn or Out of Order
H-1720A by Deyoe No Property Taxes This amendment would have picked up the property tax portion for the reorganization incentives. WITHDRAWN