2011 Legislative Update

Denise Ulberg, AdministratorOPI School Finance DivisionMASBO Summer Conference – BillingsJune 23, 2011

2011 Legislative Update

• SB 329 Generally Revise K-12 Laws• HB123 Revise Budget Deadlines• HB288 Students with Caretaker Relatives• HB372 Business Equipment Tax• Other Important Legislation

SB 329• K-12 BASE Aid• School District Block Grants• FY2012 General Fund Budgets• Fund Transfers• State and County Impacts from Oil and Natural Gas

Production• Pathway to Excellence Program• Multidistrict Cooperatives• Montana Digital Academy

Entitlement FY 2011 FY 2012 FY 2013

Elementary Basic $ 23,257 $ 23,033 $ 23,402

Middle School Basic $ 65,863 $ 65,231 $ 66,275

High School Basic $ 258,487 $ 256,003 $ 260,099

Elem Per-ANB $ 5,003 $ 4,955 $ 5,034

HS Per-ANB $ 6,405 $ 6,343 $ 6,444

K-12 BASE Aid - General Fund EntitlementsK-12 BASE Aid - General Fund Entitlements

School District Block Grants• School district block grants (20-9-630, MCA)

are frozen at FY2011 amounts:– General Fund– Transportation Fund– Combined Block Grantin FY2013, SB372 Business Equipment Tax

Reimbursements will be added to these payments

• Countywide transportation block grants (20-9-632, MCA) will continue to increase by .76% annually

FY2012 General Fund Budget• General Fund Balance Reappropriated (FBR)– Any unreserved fund balance in excess of 15% of a

school district’s maximum general fund budget must be remitted to the state• FY2012 – 100% deposited to state general fund• FY2013 - deposited to:– 70% Guarantee account– 5% State school oil and natural gas impact account– 25% County school oil and natural gas impact fund

– Note: This provision terminates June 30, 2016

FY2012 General Fund Budget

• Districts may permissively adopt an over-BASE levy that is equal to the higher of:– the highest over-BASE amount imposed (actually

levied) in any of the previous 5 years (FY2007 – FY2011), OR

– The highest over-BASE amount authorized by voters, up to the highest budget allowed, in any of the previous 5 years (FY2007 – FY2011)

FY2012 General Fund BudgetDistribution of oil and natural gas production taxes to

taxing units (15-36-332, MCA)– Dept. of Revenue (DOR) allocates per 15-36-331, MCA– DOR distributes to Counties– County deposits to school districts’ funds

Calendar Year 2011

Production Months

DOR Remits to County

Payments Made in FY2012

Jan. – Mar. On or before August 1Apr. – June On or before November 1July – Sept. On or before February 1Oct. – Dec. On or before May 1

FY2012 General Fund Budget• Limit on total oil and natural gas tax revenue– School district may receive 130% of its Maximum

General Fund budget– DOR distributes until the limit is reached– Excess of the limitation is deposited to:• In FY2012, to the state general fund• Beginning in FY2013:

– 70% to state guarantee account– 5% to state school oil and natural gas impact account – 25% to county school oil and natural gas impact fund

Note: this provision terminates June 30, 2016

FY2012 General Fund Budget• A school district must budget a minimum amount of

oil and natural gas production tax revenue in the General Fund equal to the lesser of:– 25% (FY2012) of the total oil and gas revenue

received in all funds in the prior year, OR– The general fund levy requirement (BASE and

over-BASE)– Required minimum receipts to be budgeted:

FY2012 25% FY2014 45%FY2013 35% FY2015 and after 55%

Note: this provision terminates June 30, 2016

Budget Amendments

• Any budget amendment (s) adopted in the same fiscal year that exceed 10% of the district’s adopted general fund budget

• Must be reported with an explanation of why the budget amendment is necessary to:– Board of Public Education– Education and Local Government Interim

Committee

Fund Transfers – One Time Transfer

• Transfer $$ prior to June 30, 2011• General Fund money in excess of 15% of

2011 GF budget• May transfer to any budgeted fund(s)• Notify OPI and county treasurer– Identify as “SB329 One-time transfer”– Amount transferred– Identify to which fund(s) $$ were transferred

Fund Transfers• Budgeted Fund to Budgeted Fund• Tax money (voted and non-voted) transferred:– Use must be related to the purpose for which the tax

was levied and the trustees hold a public hearing to accept public comment, OR

– Can hold election to obtain voter approval of the transfer; funds can be spent for purpose approved on the ballot

• Non-tax money transferred may be used for any purpose allowed by law

• Counts against expenditure budget• Public hearing, resolution, notification required

Fund Transfers• Note: if money is transferred from funds

supported by a non-voted levy, cannot backfill in the next year to restore the amount transferred

• Budgeted Funds Supported by a Non-Voted Levy• 10 Transportation• 11 Bus Depreciation Reserve• 13 Tuition• 17 Adult Education• 19 Non-operating~ Transfers from Retirement and Debt Service are not allowed ~

Fund Transfers- Closing Inactive Funds• 20-9-201, MCA– Inactive fund may be closed to any fund deemed

appropriate by trustees• Removes restriction on closing inactive tuition fund to

miscellaneous programs fund

– Inactive fund must not have a deficit cash or fund balance

• 20-10-147, MCA– SB329 removes restriction on transferring $$ from Bus

Depreciation Reserve fund (11)• No longer have to sell all the buses and obtain voter

approval to transfer

Impacts From Oil and Natural Gas Production• State School Oil and Natural Gas Impact Account

(effective July 1, 2013)– Purpose: to provide money to schools not receiving oil and

natural gas tax revenue but are impacted by contiguous counties that are benefitting from oil and natural gas tax revenue

– Funding sources (FY2013 – FY2016):• Excess fund balance available for reappropriation• Excess oil and natural gas production tax revenue

– Amount in fund is limited to $7.5 million; excess is deposited in the state general fund

– School applies to OPI for funds– Awards based on need, impacts and other criteria

Impacts From Oil and Natural Gas Production

• County School Oil and Natural Gas Impact Fund– County distributes 80% of the fund when:

• A school district receives 30% or less of the district’s 4-year average oil and gas revenue, OR

• The average price of oil is $50 or less for the fiscal year, OR• Production of oil in the county drops 50% or more below the county’s

5-year average production

– County may retain 20% to:• Pay outstanding capital project bonds• Other expenses incurred prior to reduction in price,• Offset property taxes• Promote diversification and economic development in the county• Attract new industry• Provide cash incentives for expanding employment base in the

impacted area

Pathway to Excellence Program

• Promote education excellence in Montana’s public schools through data-driven decision-making

• Maintain a focus on continuous improvement and increased academic achievement for public school students

Pathway to Excellence Program• OPI must develop an education data

profile for each district• Each school district must annually report

certain information to OPI and post the information on its website

• OPI required to implement a data collection plan

• OPI must gather, maintain and distribute longitudinal, actionable data

Growth and Enhancement of Montana Students (GEMS)

• The GEMS Data Warehouse Project is Montana’s Statewide Longitudinal Data System (SLDS).– GEMS is a data repository that will provide access to multiple years of

longitudinal data in order to track school and student information across time

– GEMS will remove barriers to obtaining data in a usable form for decision-makers

– GEMS will develop a blueprint that will serve as the basis for organizing longitudinal data on each student

– GEMS will store all data collected by the OPI to provide an effective, timely and efficient approach to analyze student and school performance

Growth and Enhancement of Montana Students (GEMS)

• The GEMS Project will help satisfy the Pathway to Excellence Program requirements.– GEMS will maintain a focus on continuous improvement and increased

academic achievement for public school students– GEMS will allow for comparative data between schools and districts by

developing an education data profile for each district– GEMS will measure state and local performance using criteria, which is

more comprehensive than NCLB related reports– GEMS will utilize all of the pertinent and/or available data within the

OPI and will manage data from a variety of sources– GEMS will promote education excellence in Montana’s public schools

through data-driven decision-making by providing districts the ability to access data housed by the OPI

Growth and Enhancement of Montana Students (GEMS)

The OPI will be forming a GEMS User/

Stakeholder Committee to provide input on this project.

Those interested in participating see sign up sheet or

contact Jamey Ereth at jereth@mt.gov

Multidistrict Cooperatives• Any two or more school districts• Multidistrict agreement creates a multidistrict

cooperative• Perform any services, activities and

undertakings of the participating districts• Provides for joint funding and operation and

maintenance of all participating districts• Subject to terms and conditions mutually

agreed upon by the districts

Multidistrict Cooperatives

• Trustees of all participating districts must approve the agreement annually by April 1– If signed by April 1:• Effective retroactive back to July 1 of the

current fiscal year, OR• Effective for the ensuing fiscal year

– If signed after April 1, can only be effective for ensuing fiscal year

Multidistrict Cooperatives“Multidistrict Cooperative” - created by a multidistrict

agreement (two or more school districts) or by an interlocal agreement between a school district and other public entity under Title 20, chapter 9, part 7Prime Agency (a.k.a. fiscal host or coordinating agency)

Could be a school district or other public entityIf the prime agency is a school district:Maintains Interlocal Agreement Fund (82)Financial reporting responsibilities:

Trustees Financial Summary (TFS)Annual financial audit

Cooperating Agency (participating district)Sends a warrant (funding) to Prime Agency

Multi-District Cooperatives - Funding Sources

• If the prime agency and cooperating agencies are school districts, they may:– Transfer from General Fund - limited to

DSA– Transfer from other budgeted funds

(except Retirement and Debt Service)

• Transfers count against adopted budget• Transfers must be made by April 1 each year• No transfers from non-budgeted funds

Multi-District Cooperatives• Note: if money is transferred from funds supported by

a non-voted levy, you cannot backfill in the next year to restore the amount transferred. • This is true regardless of the source of the money

transferred, i.e., whether it is tax or non-tax money

Budgeted Funds Supported by a Non-Voted Levy:10 Transportation 17 Adult Education11 Bus Depreciation Reserve 19 Non-operating13 Tuition

~ Transfers from Retirement and Debt Service are not allowed ~

Multi-District Cooperatives• One-Time Payment for Districts Participating in

Multi-District Cooperatives– Participating as of December 31, 2012– SB329 and HB2 appropriated $2 million– Allocation is based on the proration of each

district’s FY2013 BASE budget to the total BASE budgets for all districts participating in multi-district cooperatives

– Payment to districts no later than Feb. 1, 2013– $ may be used to fund cooperative efforts

Cooperative Purchasing Contracts• 20-9-204(4), MCA• Two or more districts may enter into a cooperative

purchasing contract for procurement of supplies or services

• Can purchase supplies and services through a cooperative purchasing group– Group must have a publicly available master list of items

available with pricing– Group must provide opportunity at least twice yearly for

any vendor to compete for inclusion on the list

• Advertisement for bids not required

Montana Digital Academy

• Montana Virtual Academy is now the Montana Digital Academy (MTDA)

HB123 Revise Budget Deadlines

• Effective with FY2012 Budgets• Significant changes:– By July 20: County Treasurer provides cash balances– 3rd Friday in July: OPI allocates appropriation for

technology fund– Between July 1 and August 10: Clerk publishes one

notice of the final budget meeting– On or before August 20: Trustees meet to consider

budgets

HB123 Revise Budget Deadlines• Not later than August 25: Trustees adopt final budgets• Within 3 days of final approval: Deliver adopted

budgets to county superintendent• By 1st Tuesday in September: County superintendent

reports school district levy requirements to county commissioners

• On or before September 15: Electronically submit TFS and Budgets to OPI

HB288 Students with Caretaker Relatives• Amends 1-1-215, MCA Residency– The residence of an unmarried minor is the residence

of :• the minor’s parents• the parent having legal custody (if parents don’t

share the same residence or one parent is deceased)• the legal guardian or custodian appointed by a

court of competent jurisdiction, or• the caretaker relative, if conditions in 20-5-502,

MCA are met

HB288 Students with Caretaker Relatives

• Conditions in 20-5-502, MCA– Parent voluntarily gives custody to caretaker relative– Parent expressed no definite time period in which they

would return for the child,– Child resides with the caretaker relative full-time– Caretaker unable to contact parent, or parent(s) unable or

unwilling to regain custody of the child– No appointment of a guardian or power of attorney has

been made for educational needs of the child– Caretaker completes an educational authorization affidavit

HB288 Students with Caretaker Relatives

• Students expelled or suspended through formal disciplinary action– New school may:• Implement the previous school district’s disciplinary

action without further due process,• Hold a hearing and determine whether the student’s

conduct in the previous district merits denial of enrollment,• New school may require compliance with a behavior

contract as a condition of enrollment.

Effective July 1, 2011

SB372 Business Equipment Tax

• Class 8 Property Tax rate reduced• Provides for full reimbursement for reduction

in tax base to local governments, including school districts and tax increment financing (TIF) districts

• School districts will be reimbursed through the school block grant payments– Reimbursement begins with FY2013 block grant

payments

Other Important Legislation

• HB70 Revise PERS laws• HB86 Revise TRS laws• HB116 Actuarial Funding for TRS• SB219 Revise Property Tax Protest Laws• HB15 Quality Schools Facility Grant Program• HB182 Financing Energy Conservation

Measures• HB538 Allow Sale of Bonds at Private Sale

Other Important Legislation

Election Bills- HB327 Revise School Election Laws- HB91 Revise Election Laws- HB99 Generally Revise Laws for Absentee Ballots and Mail Ballots- HB484 Absentee Ballot List

OPI School Finance Division• Denise Ulberg 444-1960dulberg@mt.gov• Nica Merala 444-4401nmerala@mt.gov• Janelle Mickelson 444-3249jmickelson@mt.gov• Rebecca Phillips 444-0783rphillips2@mt.gov• Donell Rosenthal 444-3024drosenthal@mt.gov• Paul Taylor 444-1257ptaylor2@mt.gov• Brenda Thomas 444-4524bthomas@mt.gov• Kathleen Wanner 444-9852kwanner@mt.gov