AASBO Legislative Update Chuck Essigs Spring 2006

HB2103 – ASRS; Local Termination Incentive Program Employer retirement incentive option is amended to replace the word “retirement” with the word “termination”. (Sent to Governor ) HB2340 – ASRS; Deferred Retirement; Repeal Repeals DROP program. (Signed by Governor – Chapter 11)

HB2101 – ASRS; Terminated Employees; Contribution Refund Any new hire after 1/1/08 will receive a return of the member’s contributions only. Could reduce contribution rate by 0.125%. (Passed House / Senate Appropriations)

HB2357 – School District Receivership; Mismanagement Gross mismanagement of non-fiscal duties is added to fiscal mismanagement as reason to appoint receiver. (Passed House/Failed Senate Ed.)

HB2360 – Tax Exemption; Food; School Districts Exempts certain vendors that provide hot prepared food to school districts or charter schools for consumption during school hours from sales tax. Retroactive effective date from and after 12/31/99. (Passed House/Senate Fin.) Now includes private schools.

HB2505 – School Budgets; Annual Reports Permanently eliminates the need for school by school budgets. (Passed House / Ready for vote in Senate) HB2557 – High Schools; Nutrition Standards Adds high schools to the Arizona minimum nutrition standards. (Held in House Ed./dead this session)

HB2592 – School Buildings; Developer Partnerships Allows agreement between developers and school district to build school with private funds. (Passed House/Senate Ed.) HB2593 – Schools; Capital Overrides Adds a limit on C/O overrides of 75% of soft capital limit, but allows some F&E for new schools to be purchased from bond funds. (Final vote in House.)

HB 2665 – School Districts; Overrides M/O overrides could only be held on the “first Tuesday after the first Monday of November.” (Passed House on reconsideration; No action in Senate) HB2700 – JTED; Omnibus Changes a number of provisions for the operation of JTED programs. (Passed House/Senate Ed.)

SB 1040 – School Districts; Minor Boundary Changes Allows minor boundary changes with a petition approved by 90% of electors in transfer of no more than 1.5% of students. (Passed Senate/House Ed.) SB1094 – School Boundary Changes; Financial Impact Follow up language to last year’s bill on requirement for unorganized area to join a school district if 150 or more students attend school district. (Passed Senate / Ready for final House vote.)

SB1205 – Schools; Transportation RCL Freezes TRCL at 120% of TSL. (Passed Senate) AASBO estimates a negative impact to over 150 districts. (Budget issue) SB1226 – School Board Members; Increase Requires school board members in districts with 15,000 or more students to vote on question to raise number of board members from 5 to 7. If board votes yes, then voters must vote on issue. (Passed Senate / Failed House – 25 yes, 34 no)

Major State Budget Issues in Addition to K-12 Property tax and/or income tax cuts New dollars for border issues Pay package for state employees Funding existing formula programs for AHCCCS, DES and Corrections Paying off budget adjustments, such as K-12 rollover

Done Deal Base Level – Minimum of 2% increase (inflation 2.7%) Transportation – 2% increase; 175 days ASRS Rate – Increase from 7.4% to 9.1% Prop $333 for Revised

Might Be Part of the Deal Increased $’s for ASRS contribution rate Full Day K – M/O expansion Full Day K – C/) adding to SFB formula Increase Base Level – no strings Increase Base Level – Career Ladder / Excess Utilities Increase teacher compensation Transportation formula / TRCL capped at 175% of TSL Creative solution