The Legislature held a fifth round of Interim Committee Meetings last week, Governor Scott released his 2018 Budget Recommendations, the Constitution Revision Commission is considering 103 proposed amendments to the Constitution, and Congress is moving forward with the 2018 federal budget and competing tax reform packages. Please click on the links below to access our reports on these and other issues.
[toggle title=”Report on Legislative Interim Committee Meetings – November 13-17, 2017“]
During a relatively quiet week of Interim Committee Meetings, discussion continued on hurricane preparedness and response, enhancing postsecondary institution programs and services, and public records and public meetings issues.
The House Select Committee on Hurricane Response & Preparedness met twice last week in the ongoing effort to gather information from various stakeholder groups on the various components of the state’s emergency preparedness and response. This has included presentations from the education community. The Select Committee also began discussion of policy recommendations. It is expected that final recommendations will be presented during the last round of Interim Committee meetings in December.
The Senate Education Committee also considered, among other things, the emergency response by K-20 education entities. The Committee reviewed DOE Hurricane Resources that are available on the FSBA Health & Safety page in our Resource Room. In addition, the committee considered:
SB 540 – Postsecondary Education by Hukill – AMENDED AND PASSED WITH A COMMITTEE SUBSTITUTE (CS)
The bill creates the “Community College Competitiveness Act of 2018” to strengthen state leadership and accountability for Florida’s community colleges as an essential component of this state’s system of higher education. Specifically, the bill:
- Modifies the governance of the Florida Community College System by:
- Renaming the Florida College System as the Florida Community College System; and
- Establishing a State Board of Community Colleges (SBCC), and transferring specified responsibilities from the State Board of Education to the SBCC.
- Clarifies expectations and oversight of baccalaureate degree programs offered by community colleges, and:
- Modifies the baccalaureate approval process for all community colleges.
- Establishes a 20 percent cap on upper-level, undergraduate full-time equivalent (FTE) enrollment at each community college, and a 10 percent cap on upper-level, undergraduate FTE enrollment for the Florida Community College System, and specifies conditions for planned and purposeful growth of baccalaureate degree programs.
- Establishes the “2+2” targeted pathway program to provide students guaranteed access to baccalaureate degree programs at state universities.
- Establishes the Supporting Students for Academic Success program to fund the efforts of community colleges in assisting students enrolled in an associate in arts (AA) degree program to complete college-credit courses, graduate with an AA degree, and transfer to a baccalaureate degree program.
- Modifies the community college performance accountability metrics and standards to promote on-time student graduation.
- Enhances transparency and accountability of community college direct-support organizations.
[NOTE: The amendments were generally technical in nature. This was the first of three committees of reference for this bill. As yet, there is no House companion bill.]
The Senate Judiciary Committee considered, among other things:
SB 560 – Public Meetings and Records/ Imminent Litigation by Steube — PASSED
The bill expands the current public meeting exemption that allows a governmental entity and its attorney to meet privately to discuss pending litigation. The bill expands this exemption to allow the governmental entity and its attorney to meet to discuss “imminent” litigation. Litigation is defined to be imminent when the entity has received notice of a claim or demand by a party threatening litigation before a court of administrative agency. For the meeting to be legal, the attorney must identify the name of the potential claimant or litigant at a public meeting, in addition to meeting other existing requirements. If the imminent litigation does not begin, the transcript of the private meeting must be made part of the public record after a reasonable time or when the underlying statute of limitations expires. [NOTE: This was the first of three committees of reference for this bill. The House companion bill – HB 439 – is similar but has not been heard in either of two committees of reference.
The next round of Interim Committee Meetings will be held December 4-8, 2017
[toggle title=”Governor Scott’s Budget Recommendations“]
Governor Scott has proposed an $87.4 billion state budget for 2018-2019. This is a significant increase — about $5 billion – over the current year budget. With regard to the K-12 Education Budget, the Governor has recommended more than $21.4 billion to fund the FEFP. This is an increase of nearly $770 million (3.73%) in total FEFP funds over the current year and will provide $7,497 in total funds per FTE – an increase of $200 (2.74%) over the current year. The Base Student Allocation (BSA) is increased by $152 (3.63%). Substantial increases also are provided in the FEFP for the Sparsity Supplement, Safe Schools, and for Teachers Classroom Supplies. It is important to note that this total FEFP funding increase is supported, in large part, by Governor Scott’s recommendation to maintain the current Required Local Effort (RLE) millage rate — this provides about $450 million of the total FEFP funding increase. The Governor’s budget recommendation for non-FEFP spending generally maintains funding levels for the current year with adjustments for growth and inflations. His budget also provides funding for two new programs outside the FEFP: $15 million for a program to expand opportunities for middle and high school students to learn coding and computer science and $12 million in funding to establish the English Language Learners Summer Academics program for students in grades 4-8. We have posted the Education-Related Highlights and the FEFP Funding Summary from the Governor’s budget recommendation on the FSBA website.
While the Governor’s budget recommendation is attractive in many respects, there are several important issues to keep in mind:
- The Governor does not write the budget – that is a task specifically assigned to the Legislature – so these recommendations really serve only as advice to the Legislature on what programs and services the Governor considers to be priorities for allocating available funds. As a result, the Governor’s budget recommendations are more of a policy document than a funding document.
- The Governor is required to issue his recommendations at least 30 days before the opening day of the Legislative Session. As a result, the Governor must rely on data – such as state revenue estimates and school enrollment figures — that is likely to change and/or be out of date by the time the Legislative Session begins and legislators begin crafting the budget. Further, the Governor’s budget does not include spending for several projects and programs — such as local project funding requests – that the Legislature may wish to fund.
- In light of recent state revenue projections and costs associated with Hurricane Irma, the Legislature was already anticipating a revenue shortfall that could require budget reductions rather than significant budget increases. The Governor has suggested dipping into about $5 billion in state reserves to offset this revenue shortfall — a suggestion that House Speaker Richard Corcoran has rejected.
- As mentioned above, a good portion of the proposed FEFP funding is generated by maintaining the current Required Local Effort (RLE) millage rate. Speaker Richard Corcoran has stated that this represents a tax increase that the House will not consider. However, Senate Appropriations Committee chair Rob Bradley has publicly expressed his disagreement with the Speaker’s position. He used this analogy to describe his views: “If I were to buy a lawnmower at Home Depot for $200 in January and then buy the same lawnmower as a present for my brother four months later and it’s priced $230, there will be more taxes owed on the $230 purchase, but that’s not a tax increase.”
For more background information, please see our outline of the state budget development process. We will continue to keep you informed of progress in developing the state budget.
[toggle title=”Update: Constitution Revision Commission“]
The Constitution Revision Commission (CRC) has posted a total 103 proposed constitutional amendments — 35 of these are of direct or tangential interest to school board members. FSBA staff has posted a CHART on the FSBA website that provides details and links on these 35 proposals. CRC committees will hold a round of meetings November 27-30, 2017. The CRC Education Committee will be meeting at 11:00 a.m. – 5:00 p.m. on Monday, November 27, 2017. The agenda for this meeting is available HERE. In addition to receiving presentations on Civic Literacy, Aid to Sectarian Institutions, and Class Size Requirements, the Committee will consider three specific proposals of particular interest:
- Proposal 32 — Provides that members of the State Board of Education, district school boards, state university boards of trustees, and the Board of Governors of the State University System shall serve without compensation but are entitled to reimbursement for travel and per diem expenses.
- Proposal 33 — Requires that the superintendent of schools of a school district be appointed by the district school board.
- Proposal 43 — Establishes a limitation on the period for which a person may be elected as a member of a district school board.
It is important to note that all three of these proposals are sponsored by CRC member and Collier County School Board member Erika Donalds. FSBA staff will be in attendance at the meeting and will offer testimony on some of these agenda items. We will provide an update on the results of this meeting at the Annual Joint Conference and in our next issue of the Session Spotlight. Please keep in mind that you may watch the meeting via the Florida Channel.
The next round of CRC Committee meetings is scheduled for December 11-15, 2017. For more information about the CRC, please visit the Education Legal News page in our Resource Room.
[toggle title=”Update: Federal Funding and Tax Reform Package“]
The federal fiscal year began on October 1 which should have been the deadline for Congress to pass a budget for fiscal year 2018-2019. Instead, Congress chose to temporarily suspend the debt ceiling and passed a Continuing Resolution (CR) to continue to fund government programs and services through December 9, 2017 at about the same level as fiscal year 2017-2018. Then, in late October, Congress finalize a budget resolution — House Continuing Resolution 71 – that provided broad goals, but few details, for federal spending and tax reform. While the CR was short on details, it did accomplish one important goal: The CR provided reconciliation language that paved the way for passage of a tax reform package (discussed below) to be approved with a simple majority vote, thus avoiding the risk of a filibuster in the Senate. Since that time, both chambers have focused attention on their respective tax reform packages and there has been little attention on finalizing the budget. We have posted this CHART comparing the education budgets proposed by President Trump, the House, and the Senate as they existed prior to the passage of the CR. In brief, President Trump has recommended cutting education funding by about $9.2 billion, the House would cut education spending by about $2.3 billion, and the Senate would essentially maintain current funding levels by providing a modest $29 million increase. These budget issues will be thrust back into the forefront as the CR nears its expiration date. We will continue to keep you informed as the budget process moves forward. In the meantime, if you wish to access background information on these federal budget issues, please see our Issue Brief on the Federal Deficit and Federal Debt and our backgrounders on the Federal Budget Process and the federal process for How a Bill Becomes a Law.
As for the Congressional tax reform efforts, the House has passed its tax reform package — H.R. 1, the Tax Cuts and Jobs Act (TCJA) – last week. Meanwhile, the Senate Finance Committee completed work on its version of the tax package on Friday and it is now ready for consideration by the full Senate where it may be amended further. There are several significant differences between the two versions. In general, the Senate version softens several of the more controversial elements contained in the House version but also contains provisions that of concern. Here are some of the issues addressed in one or both version of the tax package that are of interest to school boards:
School Choice/Vouchers: The House version would expand Coverdell education savings accounts – that are currently only available for post-secondary tuition — to allow contributions of up to $10,000 to private schools, thereby providing a tax-advantaged investment account for private school tuition. The Senate version does not include this provision.
State and Local Tax (SALT) Deductions: Under current law, taxpayers may deducts on their federal taxes for state and local taxes such as sales tax, property tax, and state income tax (state income tax deduction is not applicable in Florida). The House version of the tax package would limit property tax deduction to $10,000. The Senate version would eliminate all SALT deductions. In effect, limiting or eliminating SALT deductions would increase the amount taxpayers must submit to the federal government and would have a chilling effect on taxpayer’s willingness to support referenda for local taxes such as school capital outlay sales tax or additional operating millage levies.
School Bond Programs: The House version would terminate advanced refunding that allows districts/communities to refinance bonds at lower interest rates, as well as private activity bonds and tax credit bonds used by school districts (such as Qualified Zone Academy Bonds). The Senate version would terminate advance refunding but does not address private activity bonds or tax credit bonds.
Teacher Tax Deduction: Both the House and Senate versions would end the $250 tax deduction for teachers who use their own funds to augment instructional materials and classroom supplies for students.
The House version passed the House by a somewhat narrow margin of 227 to 205 — 13 House Republicans voted with all House Democrats to oppose the measure. Because there are currently 52 Republicans, 46 Democrats, and 2 Independents in the U.S. Senate, the floor vote on this legislation is likely to be very close. The Senate intends to take up the bill before the Christmas holidays. For more information, please see NSBA’s letter to the Senate Finance Committee leadership.