Financial Summary

2011 General Session 2

3 LEGISLATIVE BUDGETING

Close a $313 Million Structural Imbalance Fund $60 Million Enrollment Growth Fund $39 Million Medicaid Growth Legislative Strategy for FY2012  Adjusted Revenue Estimates:$263 million  Agency Reallocations:$ 80 million  Other Sources of Revenue:$ 19 million  Remaining Structural Imbalance:$ 50 million 4

5

State funding for Public Education increased by 2.1% or $50.3 million Exceeds Governor’s Budget by $29.8 million Enrollment growth of 14,754 with $30.6 million new funding; short $26.6million to fully fund with new money Real value of WPU decreased by $23 per WPU 6

2011 General Session 7

MSP Transfers to Offset Forecast Shortfall in Basic Program Increase to Educator Salary Adjustment + $1,728,500 Appropriation of Federal Education Jobs Funding Reduction to Flexible Allocation by $50 Million to Offset Education Jobs Funding Additional Section 146 Reporting—transfers in and out Library Books & Electronic Resources + $200,000 8

2011 General Session 9

WPU Value = $2,816 WPU Value = $2,577 – Special Ed Add- on/CTE Add-on Estimated Basic Rate =  $284,221,713 10

Enrollment growth of 2.6% funded Expansion of Section – Flexibility in Use of Program Funds ADM Disallowance for Students Attending UCAT Creation of Two “Block Grant” Programs:  Enhancement for At-Risk Students Program  Enhancement for Accelerated Students Program 11

Consolidation of Special Educators Additional Days into Special Education – State Programs Early Intervention Program  Potential Replacement of OEK concept  Up to $2.5 million for an RFP for adaptive learning technology and assessments K-3 Reading Improvement Program  $7.5 million to be used for computer-assisted instructional learning and assessment programs One-time appropriation for classroom supplies  $5,000,000  Distributed same as last year 12

Program Elimination  PEJEP—keeps existing educators; no new ones  Performance-Based Compensation Pilot 13

Program Reductions  Flexible Allocation by $194.6 million  Adult Education by $0.3 million  Interventions for Student Success BG by $8.2 million  Capital Outlay Foundation/Enrollment Growth by $100,000 to $14,399,700  USOE by $0.7 million 14

Program Continuance  Administrative Costs for Districts and Charters Schools  To and From School – Pupil Transportation  Transportation Levy Guarantee  Youth in Custody  Matching Funds for School Nurses  Beverly Taylor Sorenson Arts Learning  Regional Service Centers  Teacher Supply and Materials  Professional Staff 15

Program Increases  Basic School Program 11.0%  Utah Common Core $2.0 million  Charter School Enrollment Growth $8.7 million  Teacher Salary Supplement $1.7 million  6 th Grade Math Assessment $0.7 million 16

Increases the Voted and Board Leeway state guarantee multiplication factor ( ) each year by  Times the value of the prior year’s WPU.  FY12 - $2,577 X = $27.17  FY13 - $2,816 X ( ) = $31.09  FY14 - $2,816 X ( ) = $32.50 Subject to the Legislature appropriating funds 17

School districts do not have to provide cause for non-renewal of a provisional employee contract 18

An enrollment of 2,500 students or more:  May use the proceeds of a maximum of per dollar of taxable value of the Capital Outlay levy:  Maintenance of School Facilities An enrollment of fewer than 2,500 students:  FY 12, 13, and 14  May use proceeds of the Capital Outlay Levy  For expenditures made within Function 2600, Operation and Maintenance of Plant Services 19

 EXCLUDING:  Mobile Phone Service expenditures  Vehicle Operation and Maintenance expenditures Notify the public of the local school board’s use  PRIOR to the board’s budget hearing; and  At a budget hearing All Districts may continue use Capital Outlay for M&O (except Administration) through FY12 20

Encourages school districts to form Regional Service Centers with the Interlocal Agreements. A regional service center formed by an Interlocal Agreement may receive legislatively appropriated funds. 21

Gives the SBE authority to withhold School LAND Trust funds if schools do not comply with requirements:  Qualifications for a parent or guardian member;  Election for the parent members must  Extend for at least three consecutive school days;  Begin no later than 30 days after the first day of school. Requires a Principal to provide notification of an election at least 21 days before the beginning of the election. Modifies the Officer Positions. Legislative Auditor to perform audits. 22

House Bill 195 – Debt Service Obligations of a Divided School District House Bill 262 – Divided School District Assets and Liabilities House Bill 275 – School District Division Amendments 23

Creates in statute many of the rulings that came out of arbitration from the Jordan School District split: H.B Debt Service Obligations of a Divided School District: New district and remaining district levy the same rate necessary to repay bonded indebtedness existing prior to the split— 24

If the remaining district has higher “reappraisal” + “new growth” relative to the new district, the remaining district will pay a higher dollar amount for the bonded indebtedness over time. If the new district has higher “reappraisal” + “new growth” relative to the remaining district, than the new district will pay a higher dollar amount over time for the indebtedness. 25

If a new district has other capital available to pay the bonded indebtedness, they may abate their property tax rate for bonded indebtedness. 26

HB 262 – Divided School District Assets and Liabilities: Created by a proposal made by a City or Interlocal Agreement participants 27

Defines different types of assets.  Associated Property – furniture, equipment, or supplies associated with a:  Physical Asset – building, land, or water right and associated revenue 28

Discretionary Asset or Liability – an asset or liability NOT tied to a specific project, school, student, or employee by law or District accounting practice. (Specifically not a physical asset, associated property, a vehicle, or bonded indebtedness) 29

Nondiscretionary Asset or Liability – an asset or liability that IS tied to a specific project, school, student, or employee by law or school district accounting practice. 30

Requires physical assets and associated property be divided according to: LOCATION 31

Discretionary Assets and Liabilities are to be divided according to: STUDENT POPULATIONS 32

Nondiscretionary Assets and Liabilities are to be divided according to: WHERE THE PROJECT, SCHOOL, STUDENT, OR EMPLOYEE WILL BE LOCATED 33

Vehicles Used for Pupil Transportation are to be divided according to: TRANSPORTATION NEEDS MEASURED BY ROUTES; AND EQUIVALENT FLEETS IN TERMS OF AGE, CONDITION, AND VARIETY TO SERVE THOSE ROUTES 34

Other Vehicles are to be divided according to: STUDENT POPULATIONS; AND EQUIVALENT FLEETS IN TERMS OF AGE, CONDITION, AND CARRYING CAPACITIES 35

Allows discretion for transition teams by mutual agreement to allocate assets and liabilities in a different manner than specified 36

HB 275 – School District Division Amendments:  Sets property tax rate provisions for a new and remaining district (excluding basic, judgment, and debt service levies).  If the new district has a larger base per student than the remaining district, for five years both districts must impose levies that were imposed by the divided district. 37

 The rate must be uniform between the districts unless a district goes through truth in taxation to raise a rate.  The certified rates must be set to generate the same amount of revenue. 38

 The property tax revenue is then distributed by the County Treasurer to the new and remaining district according to October 1 enrollment rather than the traditional method.  Excludes Salt Lake County from this provision for the.0006 Capital Outlay Levy. 39

Allows an District to sell advertising space on exterior of a school bus; Requires District to adopt guidelines for the types of advertising permitted; Prohibits certain types of advertising; 40

Requires DOT to make rules governing placement and size of advertisements; Concerns from the National Association for State Directors of Pupil Transportation Services; Utah is one of very few states to approve advertising on school buses. 41

Beginning January 1, 2012 Nine levies will be repealed  Recreation levy  Capital Outlay levy - 53A  Voted Capital Outlay levy - 53A  Transportation levy - 53A-17a-127  Board Approved leeway - 53A-17a-134  Public Law 874 (Federal Impact Aid-title VII) - 53A-17a-143  Ten Percent of Basic Tax rate - 53A-17a-145  Board leeway for Reading Improvement - 53A-17a-151  Tort Liability levy - 63G

Beginning January 1, 2012 Voted Local Levy—same Two new levies will be implemented  Capital Local levy - 53A  Board Local levy - 53A-17a A Capital local levy - NEW  Fund school district’s capital projects  May not exceed per dollar of taxable value in any calendar year 43

Beginning January 1, A-17a-164 – Board Local Levy – NEW  Fund the school district’s general fund  May not exceed per dollar of taxable value  May not exceed per dollar of taxable value if:  During calendar year January 1, 2011 (FY12), the combined tax rate for the following levies was greater than :  Recreation levy  Transportation levy  Board-authorized levy  Impact aid levy  10% of basic levy for purposes other than capital outlay or debt service  Reading levy  Tort liability 44

Beginning January 1, A-17a-164 – Board Local Levy – NEW  State guarantee of of the first.0004 per dollar of taxable value that generates an amount equal to time the value of the prior year’s WPU  Hold harmless provision applies for 5 years 45

Senate Bill 65 – Statewide Online Education Program Public Education Online program April 2011

What does Senate Bill 65 (SB 65) do?  Creates the Public Education Online program.  Allows students to enroll in online courses from any Provider LEA offering an online program.  Provides students high school graduation credit through the completion of online courses.  Redistributes MSP funds from Primary LEAs of enrollment to Provider LEAs that conduct online courses.

What does SB 65 do? – Online Course Enrollment and Process The Student or Parent indicates the student will be enrolling in an online course or courses.

What does SB 65 do? – Online Course Enrollment and Process The online course can be provided by the students Primary LEA of enrollment, or any other LEA in the State of Utah – the Provider LEA. Primary LEA of enrollment Provider LEA conducting online course

What does SB 65 do? – Online Course Enrollment and Process The student’s Primary LEA of enrollment amends the students SEOP to include an online course provision.

What does SB 65 do? – Online Course Enrollment and Process The student’s Primary LEA of enrollment fills out a Public Education Online Registration Agreement (PEORA) referred to as a Course Credit Acknowledgment in SB 65.

What does SB 65 do? – Online Course Enrollment and Process The LEA conducting the online course or Provider LEA confirms the Public Education Online Registration Agreement (PEORA).

The Primary LEA and Provider LEA remit and confirm the PEORA to the State Board of Education

$ per 1.0 course credits The State Board of Education withholds the fee, as defined by statute, from the student’s Primary LEA of enrollment for the online course for that student. What does SB 65 do? – Diversion of funding at the course level

If the student remains enrolled in the online course for longer than 10 days….

$ …the State Board of Education remits 50% of the fee to the Provider LEA conducting the online course.

If the student completes the course within the specified time, a semester or year depending on the course requirements,…

$ …the State Board of Education remits the other 50% to the Provider LEA conducting the online course.

If the student does not complete the course within the specified time, a semester or year…

…the student can remain enrolled in the course until completion, or graduation.

$ If the student completes the course prior to graduation, the State Board of Education remits an additional 30% of the fee to the Provider LEA conducting the online course.

$ The remaining 20% of the fee is retained in the Uniform School Fund. Uniform School Fund $$$

$ If a student withdraws from an online course prior to ten days, the fee amount would be remitted to the student’s Primary LEA of enrollment.

Students enrolled in an online course for which a statewide assessment is administered are required to take the test. What does SB 65 do? – Assessment requirements

The State Board of Education is required to make rules providing for the administration of the statewide assessment related to the online course. What does SB 65 do? – Assessment requirements

The Provider LEA conducting the online course is required to proctor the assessment. What does SB 65 do? – Assessment requirements

The State Board of Education is required to collaborate with Provider LEAs conducting online courses in the program to develop a report on the performance of the program. What does SB 65 do? – Performance Reporting

What are Primary LEAs required to do per SB 65?  Amend students’ SEOP plans to facilitate online courses when requested by students / parents.

What are Primary LEAs required to do per SB 65?  Remit a Public Education Online Registration Agreement (PEORA) to the State Board of Education for students who wish to take online courses, for each course.

What are Primary LEAs required to do per SB 65?  Publish information about the Public Education Online program on their website.

What are Primary LEAs required to do per SB 65?  Include information about the Program and Provider LEAs in high school registration materials.

What are Primary LEAs required to do per SB 65?  NOT “give preference” to an online course or Provider LEA.

What are Primary LEAs required to do per SB 65?  LEAs may not restrict a student from enrolling in an online course under the program that fulfills a graduation requirement.

What are Primary LEAs required to do per SB 65?  Students may not enroll in online courses that would cause them to exceed normal course credit hours unless their SEOP plans for early graduation.

What are Primary LEAs required to do per SB 65?  For enrollment purposes, students are still considered enrolled in their Primary LEA irrespective of the number of online courses they enroll in outside the Primary LEA under the Public Education Online program.

What are Primary LEAs required to do per SB 65?  Track course credits and assessment results for their students that take online courses from other Provider LEAs.  History - online  Biology  English  Algebra  Drivers Education  Seminary Release  Football

What are Primary LEAs required to do per SB 65?  Provide for Open-entry, open-exit; allow online students:  the flexibility to begin or end study at any time  to move through course material at their own pace  to demonstrate competency when knowledge and skills are mastered.

What else is the State Board of Education required to do per SB 65?  In fiscal 2017, students may enroll for as many as 6.0 course credits under the program:  6.0 Course Credits X $ = $4, which would be diverted from the Primary LEA of enrollment to the Provider LEA(s) conducting the online course.

What else is the State Board of Education required to do per SB 65?  Track and retain assessment information about each student that enrolls in an online course offered through the program.  Provide information on its website about the program.

What resources did the Legislature provide to implement SB 65?  School Finance indicated in the fiscal note input for SB 65 that $1.7 million in initial year funding, and $991,500 in ongoing funding would be required to implement and run the program.  These amounts included a material amount for LEAs to implement the provisions required of them in SB 65.

What resources did the Legislature provide to implement SB 65?  The Legislature appropriated $250,000 in the bill for the implementation and operation of the program.

What are the possible outcomes for your LEA from the implementation of SB 65?  If you provide online courses, the LEA could retain its funding by providing those online courses to students enrolled in its high schools.  If you provide online courses, the LEA could realize increased funding by enrolling students from other LEAs in its online courses.

What are the possible outcomes for your LEA from the implementation of SB 65?  If you do not provide online courses, the LEA could lose funding diverted to other LEAs if the LEA’s students enroll in the other LEA’s online courses.

What are the possible outcomes for your LEA from the implementation of SB 65?  The Primary LEA of enrollment could realize volatile class sizes as multiple students in a single course divert to online courses.

What are the possible outcomes for your LEA from the implementation of SB 65?  The Primary LEA of enrollment could realize volatile class sizes as multiple students in a single course divert to online courses.

What are the possible outcomes for your LEA from the implementation of SB 65?  Metrics based on 1.0% diversion of high school students to Provider LEAs conducting online courses. $2.7 Million 3,300 Primary LEA Course Credits 3,300 Provider LEA Course Credits

Allows all Redevelopment Agencies to receive ALL of the tax increment that they are entitled to receive, not just up to the amount that is stated in the November 1 Report to County Auditors. Retains the 2/3 majority vote for all actions of the TEC EXCEPT a simple majority vote is required for:  An inactive industrial site  An inactive airport  Closed military base TEC may not meet on a day the Utah Legislature is in session, unless by unanimous consent of the members of the TEC. 87

A TEC resolution of finding of blight or approving a project budget is final and not subject or repeal, amendment or reconsideration unless the RDA Agency consents to the proposed change. The bill makes it easier for RDA Agencies to extend collection of tax increment in both Urban Renewal (blight-based) and Economic Development (job- based) projects: 88

If the project extension is made after May 20, 2011, the Agency may:  Amend the budget in the regular way with the TEC; or  Use the new provisions:  Obtain approval of the taxing entity through an inter-local agreement;  Provide Notice and Hold a public hearing on proposed extension  After the expiration of a project area budget, an agency may continue to receive tax increment through an inter-local agreement. 89

Funding for a “business resource center” has been added as an appropriate use of tax increment Department of Transportation may not close a public road with a railroad crossing that is in the boundaries of an RDA project in an inactive industrial site 90

 This bill clarifies that a charter school is considered to be a school district for the purposes of a property tax exemption. 91

A post retiree who is NOT receiving benefits (Medical, Dental, Other Insurance, Paid time off) Can earn up to $15,000 per calendar year or ½ of the retiree’s final average salary whichever is lower, without interruption of their retirement benefits. If the retiree fails to report earnings to the retirement office they must withhold one months retirement benefit for each month the employee fails to report. 92

Financial Summary Larry Newton—(801)