Court filings: District Court, the districts' reply to Arkansas Department of Education's (ADE's) response to their motion for summary judgment on the issue of teacher retirement matching

The transcript for this item was created using Optical Character Recognition (OCR) and may contain some errors. IN THE UNITED STATES DISTRIC'): COUR'r EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION LITTLE ROCK SCHOOL DISTRICT PLAINTIFF v. LR-C-82-86 PULASKI COUNTY SPECIAL SCHOOL DISTRICT NO. 1, ET AL r..: (' ~ 0 1996 L, I J ... DEFENDANTS MRS. LORENE JOSHUA, ET AL INT ERVEN ORS KATHERINE KNIGHT, ET AL Office 01 Deseg:ag:rc.on M.:in,iCfiilJ THE DISTRICTS' REPLY TO ADE'S RESPONSE TO THEIR MOTION FOR SUMMARY JUDGMENT ON THE ISSUE OF TEACHER RETIREMENT MATCHING INTRODUCTION INTERVENORS As one of the cornerstones to its defense, the State continues to pervert the literal language of the Settlement Agreement just as it previously did when the worker compensation and loss funding issues were on appeal. At page 1 of its brief served December 13, 1996 the State maintains that: [T]he language of the settlement agreement ... expressly permits the State to make fair and rational changes of general applicability to its school funding scheme. The Settlement Agreement authorizes such changes only as respects funds distributed through the "funding formula". As Robert Shaver clearly explained in his recent deposition attached as Exhibit "A": Q Back when we were operating under Act 34, if someone would mention the funding formula to you, what did that mean to you? A The distribution of minimum foundation program aid. 1 Q okay. And that did not include workers' compensation, for instance, did it? A No. Q Did not include teacher retirement matching? A No. Q Did not include health insurance? A No. Q They were never part of the funding formula? A Well, now, I think the funding formula is the way -- they were part of the total funding system. Q But they weren't part of the minimum foundation program aid distributed by the formula? A That's right. Thus, the teacher retirement issue clearly falls within the category of a "program" for which the State provided funding at the time of the- Settlement Agreement. Thus, the State should continue to fund these programs for these three districts so as to comply with the Settlement Agreement. THE SALARY ISSUE For the State to contend that the salary levels which prevail in these three districts are simply a matter of "local choice" is at best a naive assertion. The history of teacher strikes in all three districts, strikes bottomed on salary demands, is enough to belie this notion. Further, the very state standards mandated by the Arkansas state Board of Education in large measure dictate the 2 student teacher ratios that must be met by these and other districts. Further, and a factor unique to these three districts, is the presence of staffing requirements and ratios contained in the Desegregation Plan which further, and sometimes dramatically, dictate the level and intensity of staffing in these districts. With the exception of the Fort Smith School District, these three districts are the only districts in the State which must contend with powerful and aggressive teacher unions. Thus, the rationale which initially impressed this Court concerning workers' compensation becoming a responsibility of the school districts does not exist here. It was not contested that the shift of workers' compensation claim paying responsibility to the districts would prompt them to take measures to reduce their - workers' compensation costs. This rationale, under these unique facts, however, does not transfer to the issue of teacher retirement. The factors outlined above by and large dictate the necessary number of employees and the State law prohibition on reduction in teacher salaries creates a perpetual floor resulting in a level of employer matching that will never be reduced. Further, in the same session in which the State decided to shift teacher retirement costs to the districts, it further mandated a minimum salary law which will raise the perpetual floor even higher. Accordingly, it is disingenuous at best for the State to contend under the circumstances which prevail here, that these districts are in any position to significantly control either the number of their employees or their compensation. The State's argument loses all force and persuasion when one examines what the State did as regards ADE employees, Educational Cooperative employees, employees of the Department of Corrections School, employees of the Math & Science School in Hot Springs, Vocational Center employees, and the employees in Adult Education. It is undisputed that the State continues to pay 100% of the teacher retirement costs generated by those employees {See, ADE's response to Item #23 of the Districts' Statement of Undisputed Facts dated December 13, 1996). Not only does the State pay 100% of those costs, but it has requested, as a matter of "priority" additional sums for fiscal years 1998 and 1999 to provide: "For a six percent increase to provide for growth in staff and salaries." - See, Arkansas Budget System at pp. 14 and 31 attached as Exhibit B (hereafter "ABS") Thus, for the State to argue that the districts could eliminate unnecessary employees or reduce excessive salaries {State Brief at page 11) seems hypocritical when the State itself is seeking increases in its own appropriations to cover increases in the number of its employees and increases in their salaries. THE APPROPRIATION ISSUE There are at least two ways to discredit the State's current contention that no funds are contained in Act 1194 that were "specifically earmarked or intended to satisfy school districts' teacher retirement contributions" {State Brief at p. 15), and, by extension, for other matters such as health insurance, special 4 education, transportation aid, and certain former grants. One is to present testimony from knowledgeable witnesses such as Dr. Benny Gooden and the other is to simply look at what the State has in fact done or proposes to do. For fiscal year 1994-95, $1,233,546,155 was spent from the public school fund (See Imber, Finding of Fact No. 23). During that year, $123,000,000 was budgeted by ADE for teacher retirement matching, (Imber, Finding of Fact No. 24), a matter undisputed by the state. For fiscal year 1997, the public school fund appropriation is $1,456,697,089. (See Act 1194 at Sec. 1, p. 5625). As a matter of pure logic, and with the increases in the fund described above, the only conclusion that can be reached is that for obligations which continue today that were extant in 1994-95, the sums that were previously either paid directly by the state or appropriated as line items for distribution to the districts must be components of a fund that is forecast to be over $200,000,000 more than it was at the time of the Lake View decision. This logical outcome is amply supported by the State's own witnesses and documents. The most telling testimony comes from Dr. Bobbie Davis, Assistant Director for Finance and Administration, who testified: Q Under Act 34, there was set-aside funds for transportation costs. I believe districts received the funds based on the linear mileage rate or something to that effect; is that correct? A There was a formula you went by, yes. Q Is there such a formula for administration of 5 transportation funds now? A No, sir. Q How are those funds administered? A There are no identifiable transportation funds in Act 917. Q And why not? A Those dollars, or the total dollars, that were part of the previous funds, that went to public schools, were all consolidated into equalization funding. Q So that means all of the add-ons and weighted average factors that were distributed to districts, such as Brinkley, were, then, consolidated for approximately $300 million? A Into equalization, so they were no longer identifiable as those weighted things, yes. (Emphasis supplied.] (Davis deposition, pp. 6-7, attached as Exhibit "B") While the Arkansas Budget System attached as Exhibit "C" has - been reasonably well sanitized on this issue, certain significant concessions remain. ADE tells us at page 32 of the ABS that: Transportation Aid was eliminated under Act 1194 as a separate line item and incorporated into the new school funding formula. (Emphasis supplied.) 1 The ABS at page 23 informs us that: Act 917 of 1995 (the Equitable School Finance Act of 1995) and Act 1194 of 1995 (Appropriation Act for the Public School Fund) eliminated at-risk funding as a separate line item and combined approximately $30,000,000 into the State Equalization Funding Formula. 1Tellingly, for the next biennium, ADE has requested a line item appropriation of $10,000,000 each fiscal year "to assist districts with high cost transportation." This is a "priority request" of ADE. See, Arkansas Budget System at p. 14. Apparently ADE is willing to consider "needs" issues when it suits it. 6 Similarly, at p. 11, the ABS states: "Act 917 and 1194 for 1995 eliminated all at-risk tunding from the Department of Education's budget and shifted approximately $30.0 million into state Equalization Aid. [Emphasis added.] Act 1194, appended to the State's brief as an exhibit, at Item 28, reflects a $30,000,000 appropriation for at-risk grants and training for 1995-96, the last year that Act 34 operated. Accordingly, it is clear that in this category, the State recognizes that what used to be funded as a line item was folded into the 1996-97 appropriation for state equalization funding, the new near equivalency of MFPA under Act 34. The ABS also informs us at p. 34 as respect to grants to school districts: These payments are made to Missouri for educating students in North Arkansas who cannot get to their assigned district because Bull Shoals Lake separates them from their district and it would require a round trip of more than 35 miles. This program was incorporated into the school funding formula, but the Department is requesting a separate line item of $27,000 for the 1997- 99 biennium. [Emphasis added.] Again, in examining Act 1194 at Item 11, "grants to school districts", the identical figure, $27,000, was appropriated for 1995-96, the last year of operation of Act 34. In addition to this, the districts' assertion is supported by the deposition testimony of Dr. Charles Dyer, Superintendent of the Alma School District, the district that was the lead plaintiff in Alma v. Dupree, the original funding case. When asked what became of these items previously paid directly by the state, including teacher retirement and health insurance, Dr. Dyer explained his 7 understanding that: Q I always say that wrong. A billion, three hundred million, I'm sorry. A Okay, that's somewhere in the neighborhood, yes. Q All right. Do you know how that figure was built or gotten at, where it came from? A Only in general terms. Q Okay. I'll take that. A I can't remember exactly what the MFPA was. We had a substantial amount of money that was already targeted for MFPA, had about fifty billion [million) in transportation funds that was put over there. I say put over there. It was put together with the MFPA. Around a hundred and thirty-one, two or three million dollars of teacher retirement payments that was also put in. Somewhere in the mid-forty millions, forty-three, four or five million of payment for health insurance. Q Sure. A It was my thoughts that they were taking X number of dollars from the Department of Education that they had originally put out in all these other categories and put into one large pool. Q Yeah. A I think that's the same thing that you're saying. And then, in addition to that, they were putting in somewhere around $60,000,000.00 of additional money to come up to this 1.3 billion or one billion, two hundred and eighty-eight million or whatever that figure, somewhere in that neighborhood. These deposition pages are attached as Exhibit "D". Additionally, the expert witness engaged by the state in the Lake View case, Dr. Robert Rossmiller was asked these same questions and testified that: Q Can we agree, though, that by transferring that obligation to the school districts, both for paying teacher retirement and paying health insurance, that if the state put that money in the appropriation, it freed 8 up more money to flow through the equalization formula? A Yes. Q But do you know whether or not that happened? A Whether what happened? Q Do you know what became of the money that the state used to use to pay the teacher retirement and the health insurance? A I can only assume that it was put into this pool. I don't know specifically. I believe I heard yesterday that there is no appropriation for it. Q Yes. A So in that regard, it has disappeared. Now, where did it go? I assume it went into the equalization pool, but I don't know for sure. (Rossmiller Deposition, p. 115) These testimony abstracts are attached as Exhibit "E". The ABS explains the aid distribution changes as follows: Act 917 of 1995 changed the method the State uses to distribute aid to school districts. Prior to 1996-97 the Department of Education distributed the majority of state aid as Minimum Foundation Program Aid (MFPA) . In addition, the state funded other programs such as Transportation Aid and At-Risk Grants by formulas or based on need. The State also paid Teacher Retirement Matching and Health Insurance Matching on behalf of school districts. The calculation for MFPA included addon weights for various categories such as Special Education, Isolated School Districts, Consolidation Incentives, Vocational Education and Centers, Gifted and Talented Students, and growth and loss funding. Act 917 now requires State Equalization Funding to be distributed to districts based on the number of students, Average Daily Membership (ADM), equalized by the wealth of the district. The purpose of this funding is to equalize the disparities of property wealth throughout Arkansas. (ABS at p. 29). The structure of this explanation by ADE strongly suggests the recognition that the sums previously paid through MFPA, as teacher 9 retirement matching and health insurance matching, and as transportation aid and at-risk grants are simply now distributed as state equalization funds. Finally, the State complains that the districts are isolating certain funding programs and not considering the new formula outcomes as a whole. First, the Settlement Agreement specifically provides for the districts' approach when it sets forth the State's obligation to continue funding "programs" for these three districts when it has historically funded them. Second, the calculations of Mr. Green offered for the proposition that the PCSSD does better under the new formula than the old are unadjusted for the increases in teacher retirement and health insurance costs that the PCSSD is experiencing this year and instead rely upon data from the previous school year. Exhibit "F" demonstrates that even in utilizing Mr. Green's analysis, the district loses over $100,000 as compared to last year. When that same analysis is further adjusted for the current effects of M-to-M transfers, the PCSSD is shown to be losing almost $1,000,000 as compared to last year. Further, the state makes no response whatever to PCSSD's analysis which accompanied this motion initially in which it compared Act 34 funding outcomes as if Act 34 were still in place and funded at current funding levels. That comparison demonstrates that the PCSSD is losing millions of dollars under the current scheme as compared to the previous 10 program. 2 CONCLUSION For the foregoing reasons, the districts' pray that their motion respecting teacher retirement be granted, for their costs, attorneys' fees, and all proper relief. PULASKI COUNTY SPECIAL SCHOOL DISTRICT M. Samuel Jones WRIGHT LINDSEY & JENNINGS 2000 Boatmen's Bank Bldg. 200 West Capitol Little Rock, AR 72201 (501) 371-0808} NORTH LITTLE ROCK SCHOOL DISTRICT Stephen Jones JACK, LYON & JONES 3400 TCBY Tower Little Rock, AR 72201 (501) 375-1122 Respectfully submitted, LITTLE ROCK SCHOOL DISTRICT FRIDAY, ELDREDGE & CLARK 2000 First Commercial Bldg. 400 West Capitol Little Rock, AR 72201 (501} 376-2011) By: II 2Given the holiday seasons, counsel for the PCSSD was not able to obtain similar analyses for the NLRSD and the LRSD but on their behalf would request permission to present those analyses as soon as reasonably possible. 11 CERTIFICATE OF SERVICE on December 2.:i_, 1996, a copy of the foregoing was served by U.S. mail on the following persons. Mr. John W. Walker John W. Walker, P.A. 1723 Broadway Little Rock, AR 72201 Mr. Christopher Heller Friday, Eldredge & Clark 2000 First Commercial Building Little Rock, Arkansas 72201 Ms. Ann Brown ODM Heritage West Bldg., Ste. 510 201 East Markham Street Little Rock, Arkansas 72201 James M. Llewellyn, Jr. Thompson & Llewellyn 412 South 18th Street P. o. Box 818 Fort Smith, Arkansas 72902-0818 J:jhsl050.030 12 Mr. Richard W. Roachell Roachell and Street First Federal Plaza 410 W. Capitol, Suite 504 Little Rock, Arkansas 72201 Mr. Timothy Gauger Assistant Attorney General 323 Center Street, Suite 200 Little Rock, Arkansas 72201 Mr. Stephen W. Jones 3400 TCBY Tower 425 West Capitol Avenue Little Rock, Arkansas 72201 Ms. Elizabeth Turner Department of Education 4 State Capitol Mall Little Rock, AR 72201 ___,.> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 IN THE CHANCERY COURT OF - PULASKI COUNTY, ARKANSAS SIXTH DIVISION * * * * * * * * * * * * * * * * LAKEVIEW SCHOOL DISTRICT * NO. 25 OF PHILLIPS COUNTY, * ARKANSAS, ET AL, Plaintiffs * 1 VERSUS * NO: 9 2 - 5 318 MIKE HUCKABEE, GOVERNOR OF * THE STATE OF ARKANSAS, ET AL, * Defendants * * * * * * * * * * * * * * * * * VOLUME II DEPOSITION OF ROBERT E. SHAVER TAKEN BEFORE Vanessa C. Aucoin, Certified Court Reporter, LS Certificate No. 503, Bushman Court Reporting, 620 West Third Street, Suite 101, Little Rock, Arkansas 72201 on Thursday, October 10, 1996 at the offices of the Attorney General, 200 Tower Building, 323 Center Street, Little Rock, Arkansas, commencing at 9:30 a.m. VANESSA C. AUCOIN, RPR, CCR BUSHMAN COURT REPORTING (501) 372-5115 I EXHIBIT A 1 2 3 4 5 6 7 8 9 10 11 12 13 - 14 15 16 17 18 19 20 21 22 23 24 25 13 l. . Q. Back when we were operating under Act 34, if someone would mention the funding formula to you, what did that mean to you? A. The distribution of minimum foundation program aid. Q. Okay. And that did not include workers' compensation, for instance, did it? A. No. Q. Did not include teacher retirement matching? A. No. Q. Did not include health insurance? A. No. ... .. -- ~ Q. They were never part of any funding formula? A. Well, now, I think the funding formula is the way -- they were part of the total funding system. Q. But they weren't part of the minimum foundation program aid distributed by the formula? A. That's right. Q. Bob, I'm trying to -- I wrote this down. What did you have to say about the treatment of carry-over balances? Was that in the context of that's not necessarily tied to a particular appropriation? A. With respect to the comments a few minutes ago about whether or not there was a 60-million or VANESSA C. AUCOIN, RPR, CCR BUSHMAN COURT REPORTING (501) 372-5115 IN THE CHANCERY COURT OF PULASKI COUNTY, ARKANSAS SIXTH DIVISION LAKEVIEW SCHOOL DISTRICT NO. 25 OF PHILLIPS COUNTY, ARKANSAS,; MEMBERS OF THE BOARD OF EDUCATION, IRMA MOREHOUSE, PRESIDENT, INDIVIDUALLY AND IN HER CAPACITY AS PRESIDENT OF THE SCHOOL BOARD; GENORA FRAZIER, INDIVIDUALLY, IN HER CAPACITY AS VICE PRESIDENT OF THE SCHOOL BOARD AND THE ON BEHALF OF HER CUSTODIAL GRANDCHILDREN, LOUIS LONG, JR. AND CHRISTOPHER FRAZIER; HENRIETTA J. WILSON AND IN HER CAPACITY AS SECRETARY; SIDNEY FITZHUGH, SR., INDIVIDUALLY AND IN HIS CAPACITY AS A MEMBER; VELMA LARKIN, AND ON BEHALF OF HER CHILDREN, TAWANNA LARKIN SUPERINTENDENT, INDIVIDUALLY AND IN HIS CAPACITY AS SUPERINTENDENT OF THE LAKE VIEW SCHOOL DISTRICT NO. 25. PLAINTIFFS vs. No. 92-5318 MIKE HUCKABEE, GOVERNOR OF THE STATE OF ARKANSAS; JIMMIE LOU FISHER LUMPKIN, TRASURER OF THE STATE OF ARKANSAS; REP. BOBBY HOGUE, SPEAKER OF THE ARKANSAS HOUSE OF REPRESENTATIVES; STANLEY RUSS, PRESIDENT PRO TEMPORE OF THE ARKANSAS SENATE; ARKANSAS DEPARTMENT OF EDUCATION; GENE WILHOIT, DIRECTOR OF THE ARKANSAS DEPARTMENT OF EDUCATION; STATE BOARD OF EDUCATION; JAMES McCLARTY, CHAIRMAN; EDWIN B. ALDERSON, JR., MEMBER; CARLE. BAGGETT, MEMBER; GARY BEASLEY, MEMBER; MARTHA DIXON, MEMBER; WILLIAM B. FISHER, MEMBER; JAMES WHITMORE, MEMBER; LUKE GORDY, MEMBER; BETTY PICKETT, MEMBER; ELAINE SCOTT, MEMBER; RICHARD SMITH, MEMBER; SHERRY WALKER, MEMBER DEFENDANTS * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * DISCOVERY DEPOSITION of Dr. Bobbie A. Davis Friday, October 11, 1996 2:45p.m. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * REPORTED BY: GRIGGS REPORTING SERVICE Alvah M. Griggs, CCR 1-501-633-2124 I EXHIBIT (3 6 1 Q We would meet, periodically, throughout the session, durin 2 days, you know, while our other jobs were going on. Sometimes 3 those meetings would go over into the evenings. We were asked to 4 respond to legislative proposals . We were asked to respond to 5 proposals by the Governor's Office. We were asked to, I guess, 6 be a "think tank" more than anything else. 7 Q Are you currently, fairly, familiar with t he 8 Administration's Act 917? 9 A I am familiar with it in kind of a general sense. I am not 10 the technician that Dr. Shaver or Tristan are -- certainly not. 11 Q 12 A Were you familiar with Act 34, in any way? Not in any -- when that was in place, I was an administrator 13 at school, certainly not at the day to day work that we are 14 now. 15 Q But, you as Superintendent of Brinkley Schools, you were 16 somewhat familiar with the plan -- 17 A 18 Q 19 A 20 Q Somewhat. Is that correct? Yes. Under Act 34, there was set-aside funds for transportation 21 costs. I believe districts received the funds based on the 22 linear millage rate or something to that effect; is that correct? 23 A There was a formula that you went by, yes. 24 Q Is there such a formula for administration of transportation 25 funds now? ALVAH M. GRIGGS, CCR 1-501-633-2124 1 A 2 Q 3 A 4 Q 5 A 7 No, sir. How are those funds administered? There are no identifiable transportation funds in Act 9-17. And why not? Those dollars, or the total dollars, that were part of the 6 previous funds, that went to public schools, were all 7 consolidated into equalization funding. 8 Q So that means all of the add-ons and weighted average 9 factors that were distributed to districts, such as Brinkley, 10 were, then, consolidated for approxomately $300 million? 11 A Into equalization, so they were no longer identifiabie as 12 those weighted things, yes. 13 Q '-14 A 15 Q Are there any weighted factors under 9-17? No. Under equalization the money is distributed by ADM. And, I believe, that you heard Mr. Green's testimony, I 16 believe that basically said that all of those funds were 17 considered under Category One for the purposes of meeting the 18 19 20 Federal Range Ratio; is that correct? A Right. Q Do you agree with that assessment? 21 A 22 Q I agree with that assessment, yes, sir. Now, in teacher -- under Act 34, Teacher Retirement was 23 distributed or paid by the State their portion. 24 25 Q MS. TURNER: Object to the form of the question. (Mr. Lewellen continuing) : Do you agree with Teacher ALVAH M. GRIGGS, CCR 1-501-633-2124 - -------- - ---------- l - . ,iilKANSAS BUDGET SYSTEM - AGENCI' l'ROGRAIH COMMENTARI' -- ---------------- _ _ __ 1_9_9_7_-_1_99_9 ________________ _ runuc SCIIOOL FllNll PRIORITY BlillllliSIS /\l-lUSK GRANTS - Acl 917 and 1194 for 1995 diminalcd all al-risk funding fr11111 Ilic I h:par1n1cn1 of hl11ca1io11. s b11Jgcl anJ shiflcd approximalely $30.0 million inlo Slale Eq11aliza1ion t\id. The fkparlmcnl is reqm:slillf! 1hat 1he follo\\ ing at-risk programs he conlinucd in 1he biennium. The priorily requesls lotaling S 17.1 million each liscal year can he sepa1 alcd inlo two parls. 1-'irsl. is a request for $7. 1 > million to continue programs the agency plans to li111d in FY1>7 with 1'11hlic School Fund balances. Second. is n rcq11csl fiir $9.2 million each fiscal year to conlinue funding for K-5 summer s1.:hool prog1ams. The re411est for $7 .9 million each fiscal year lo conlinue e:--.isling programs rnusis1i11g 111 l 'ollcge l'rcparalory Emichmcnl l'rngram ll 'l'l:1') (SI ,800,000). Early Childhood Training ($3,000.000). Limited English l'rolicicnc~ I I I I')($::!. I 00.000) and Training. Monitoring and Technical Assistance for Academic and Fiscal Dis1rcss ($1.000.000). CPL:1'-Dming the 191)5-96 school year lhe depa11111enl lumlcd -D scho11I disll ids and 1> cooperali\es 111 provide ACT training lo 3.41111 students. EARi. Y Cl IILDI 1000 lRAININ(i- In 1he I 1l1JS -% school year Al )I: dis11 ihu1cd $IA 111illiu11 to pro\'iJe slilff ,.kvclopmenl 1rai11i111! for 5,555 K-5 teachers anJ ad111i11istrah1rs. t\ddi1i1111ally. Al>E pwvi1bl $1 .h 111illi1111 1'11r 1he K-4 crusade 10 1rain 2,319 leachcrs 1 he deparlment anticipates similar pnrticipatio11 in FY1J7 I l:P-Du1i11g the 1995-96 school year. the /\UL dis11ihu1cJ $3,972.8 Ill dirc1.:ll) 1t1 schnul Jistiids In provide runJing for 1.1-:1' s1ude11ls for a two-year period. 1 his money sci vcd I . 'iK s111de11l in I 31 districls. /\ I >I : also p1 ovides $1110.0110 in 1.-ai11ing lo schoul dist, icls for these progrnms. The $2 .1 million priorily n:t111est each fiscal year ,..,ill rn111i1111e 10 liind the program at previous k\'cls I RAININ(i, MONITORING AND IH.:I INH.'AI . ASSIS f/\NCE- I his is a new rcq11ire111e111 i11 FY%. Act 915 of 1995. requires the department to identify school districls in academic and fiscal dis1ress. As a pail of 1hc process. 1he dcparlmenl is 1eq11i1ed tn provide !raining, 1111111i1oring. and technical assistann: 1111h11se school dislricts \\'ho a,e ide111ilicd as dis1resscd. 'I he p1iority runding is 1eq11i1c<l l111.:nntinue 1his process -------------------- unrncron AGENCY PAGE A<;ENCY PROGRAM AHKANSAS DEl'ARUIENI' OF Ellt.lCATIOO EXHIBIT GENE \.lllJKHT C:OMMENTARV , 11 ~lt21 '---______ . __ __.___., C - - --------------------- AGENCY PROGRAM COMMENTARY L - 1\RKANSAS BUDGET SYS1'EM _- ------------- ____19_ 9_7_-_1_99_9_ ________________ _J The n:quesl for $9.2 million each liscal year for s111nn1e1 sdlllol will allow 1he Alli: 111 rnntinue lo fund K-5 di1ec1 services for approximately 1S.000 sludents. This priority will provide runding 10 school disll ids 111 pay sun11ner sd1nol teacher salaries .-ind purchase instructional materials. ISOI.All:D FUNDING - The priority request of $272 .1100 in FY98 and $283 ,1100 in I Y11 "ill provide $80.000 euch Ii seal year liir additional districts that may qualify for isolated status and $1 ')2 .0110 in FY9H and $111 , . 'i '.:! 11 in FYI)) li,r M:, grmvth in 11ase l.ocal lkve 1111 e Per Student. S Ill DEN r liROWTII - The priority request of $1110.lltltl em:h liscal year is neelkd In p11,, ide for 6'1~ growth in the Base l.ocal Re,ernie l'er Student and a growlh of approximately 7.400 students in growing di sll icts l"hc lkp;11 t11ll.:111 Base I eve! li1r Student < irnwth is $21 .<, million. AODITIONAL BASE FlJNDINCi - The appropriation 1e4uest for Additional Base lu11di11g f11r the hiennium emling June 30, 1999, is based upon worst case sccmuio projections. The main concern of the flcpa,1mcnt is the "I''""' Inca! rc,wuc iucocascs in the Polaski ('unnly school dislricts of 1en pci-cenl. If that is in fact the situation beginning in FYl)H_ and all 111her c1111ditions rem;1in the same (1111mbcr of sludenls, assessment. and stale funding), then increases in Additional Base lullllill~ 111 $ I (1 -I million in FY98 and $20.4 million in FY 1 J') ,.,,ill he necessary for lhe state 10 meet the court test and abide by thc intent of The Fquitahlc School Finance S) stem Acl of I 995 . l>EI' AIU MEN I" OF COIWEC I ION - I he Al>I: p1 i11rily rel1uesl uf $128..11111 i11 I Y1'8 and $16-l.Stl-l prm i1ks liir a <i% inc1ease in the l\asc I .ocal Revenue l'er Student. After the hudgct suh111issi11n, the Department uf ( 11rrecti1111 Sch11ol District (I)( 'SI>) requested the A ni: suh111i1 .i request for additional funding for new schools they plan to open in the hiennirnn . The I>( 'SD plans to establish schools al two (2) new prisons in FY97-98 . They anticipate an ADM gnm th or 400 students in l-'Y98 a111I I Oil in I Y99. The I)( 'SI) has requested the Department of Correction to fund the FY98 growth of $447.S0II and therealier thc ADI: 111 continue funding for FYIJ<> . n,c $447.S00 for FY99 nectls he considered as a priority rcquesl of the ADE. AGENCY DIRECTOR AHKANSAS DEl'AR'ltlENl' Of EllUCATIOO GENE \.l[IJk)IT AGENCY PROGRAM COMMENTARY Hlt21 PAGE 12 ----------- ,ill KANSAS BUDGET S1'S1'EM AGENCY PROGRAM COMMENTARY 1997 - 1999 Pl JUI.IC SCIIOOI. EMPLOYEE INSlmANCI: - prll\ ides for health insurance c11n11 ib111i11ns li,r emph>) ees or 1he l'ouperalive b.l11ca1i1111 Service Areas. Vocational Centers and the school opcralcd hy the l)cpa1t111cnt of('tirreclilln 1'11e prioi-ity request of $36.030 in FY 1 18 a11d $74,222 in FY99 allows for a 6% t;rowlh in rates or employees. SPEClAl. EDUCATION SERVICES - The priority request of $747,630 each r1scal ) c,11 "ill provide apprnpriatinn anJ hmJing ahove Base Level for the anticipated program needs of $3,747.630. The program ind mks $2.725 .llllll Ill n.:imbmscment to school districts for Special hlucation Supcrvisms. $402,630 for extended school year services. $50.0011 li,r ~L'I, i1:cs 111 foster children. $270.000 lor Regional Transitional Specialists. and $300.000 for consultants rm students ""i1h se,c1e disahili1ics COOl'ERATIVE 1:l>l lCA l'IONAL SERVICl~S Alff AS - I he priority request 111' $1.5211.IIIHI in FY98 and $116.000 i11 l-'Y9 1 > will p10\'i1k a Jistance learning classroom in each educational cooperative and one to he lncatcd in l'ulas~i ( ounty. The cost of each dassrnnm is '\; 1 >5 .0110 Continuing lim: charges arc projected at $7,250 per focility each year. rhe dis1a11cc ka111ing dassroon1s will he useJ li1r staff dcvdllpmcnl. student instruction, and to provide a statewide conununication netwrn k. DEBT SERVICE FUNDING SUPPLEMENT - 1 he Base l.evd appropriation or $21111 million is for olJ Jeht", which is Jdincd as Jehl voted prior to fcbruary 22. J9()5. The priority request of$l0 0 million each r1sc.1l ~ca1 \\1111ld limd new clcht voted alier 1hat date. DIS'l RICT FISCAL CRISIS RELi L:.F - I he p1 iorit} 1eq11est ol a uegati\'e $ I ll.11111illiu11 ..:ach year is tu eliminate the base kvcl appropriation. It is the understanding that the appropriation was l'nr one fiscal year lo p1m ide transition 1'11nJs hcca11sc of the changes in the method school fumling is distrihutetl. SI All: 1:QlJAI.IZA rlON AIIJ - the priority reL111csl or $71).255 .2 18 in i:'1'98 and $15 7. 7511 .338 in l Y 1>1 > prnvides ror a (1'1/o, increase each fiscal year and for the continuation of $5.203,218 h11dgc1cd from FY1)7 fund balances tin potential tleseg1egation cost. A(;J~NCY l>tnECTOlt AGENCY PAGE AHl<ANSAS DEl'AHUIENI' OF EJXJCATIOO GF.NE WllJK>IT PROGRAM COMMENTARY Billi 13 I I [ 1\RKANSAS BUDGE1' S1'S1'EM AGENCY PROGRAM COMMENTARI' ... ------------ 1997 - 1999 TEACIIER RETIREMENT MAlCI IINU - provides 1cad1cr rc1i1c111cn1 111a1chi11g 1111 e111pl11) ccs lllTllnpcralive l:duca1io11 Service 1\reas, Vocalional Centers, and the school operated by the Ocpa11mc11t of Corn.:clion. 111 lhi!> line i1c111. 1hc deparlmcnl has a base level budget of $2.1 million. The dcparlment was-required 10 increase 1hc FY97 hudgcl from lhc app111p1 i.1lill11 level of $1 .5 million Ill 1hc $2 .1 111 fully fund 1his program. The priority request of $126,000 in fYC)K anti $2S9.S60 in FY()<) p1m idc!> li11 a 6'!1, increase 111 provide for growth in stall and salaries. 11lANSPORTATION AID-The priority request of $10.8 million each liscal consist 111 ll\11 prngra111s. First. is $8011.000 each liscal year Ill cunlinue 10 fund safely training for school hus drivers and mechanics. In FY1 Jl1 lhc .\1)1 : 11.1i11cd 7.:wo d1ivcrs and 2411111ccha11ics. I he department plans to utilize Public School Fund balances 111 rnn1in11e lhc p1ogra111 in FY1J7 111 addililln. $10.11 is req11es1ctl each tiscal year 111 assist dislricts with high cost transportation. RESIDENTIAL CENTERS - 1 he priorily re4uest of $85b.22 I in FY98 and $9111Ul(1::! 1111 I Y1J 1 J is to provide adtli1ional funding for anticipated growth in student placeme.nt at approved rcsidcnlial treat1nent fadli1ics a11d 1 111 j11n:nik dclention facililics. D111ing the 199S-IJ6 school year there was an increase of approximately I Oil new heds in lhe rcsi1lc111ial farililics. Sludenls a1e lhc responsih