The Value of Association Membership - On Display at the State House--2014

March 17, 2014

Your VOICE was heard at the legislature. Thank you for your willingness to be actively engaged in the legislative process. YOU made a huge impact on the outcome of the 2014 legislative session.

The gavel fell last Thursday night on the 2014 Session of the Indiana General Assembly and once again the value of ISTA membership was seen. What follows today is a brief synopsis of a select few bills that were enacted and (as important) a list of some bills and provisions that did not pass. With each of these, ISTA influence (which, by the way, means YOUR LOBBYING) was both meaningful and palpable.

A complete list of education-related bills will be posted on the website this week, but for today, take a look at the following:

PENSION

HEA 1075: Teachers Retirement Fund (TRF) and Public Employees Retirement Fund (PERF) Annuity Savings Account (ASA) Program Changes: This bill was brought forward in response to action taken by the Indiana Public Retirement System (INPRS) last June to privatize its annuity work beginning October 1, 2014 (thereby reducing by upwards of 25% ASA member benefits for those choosing to annuitize "in-house" after September 30, 2014).

ISTA members lobbied legislators for months to "undo" INPRS' intentions. Because of that, the awareness level by rank and file legislators on this issue was extraordinarily high. The provisions in this bill changed numerous times throughout the session. Under the enacted version of this bill:

• The annuity discount rate will remain at the current 7.5% through September 30, 2014.
• Beginning October 1, 2014 through September 30, 2015, the rate will be 5.75% (which was the highest proposed rate we had seen since early in the session when the House passed the bill out).
• Beginning October 1, 2015 through December 31, 2016, the rate will be the greater of the interest rate for similar annuities being purchased in the private market as determined by INPRS or 4.5%. If interest rates increase over time, the rate will increase.
• Beginning January 1, 2017, INPRS will be permitted to outsource this work--which gives us all time to work this issue into the deeper future.

ISTA and its members never stopped advocated for a better formula and were always considered to be a lead stakeholder group working this bill.

HEA 1074: 13th Check (PERF/TRF): Provides a 13th check to PERF and TRF member retirees; delivered September 2014. Of course, ISTA prefers a cost-of-living-adjustment (COLA) as TRF/PERF members have not had a COLA since 2009. However, the 13th check will provide some assistance. The benefit structure for both PERF/TRF is as follows:
If a member has creditable service of at least:

• 5 years but less than 10 years -- $150 (only in the case of the member receiving disability retirement benefits)
• 10 years but less than 20 years -- $275
• 20 years but less than 30 years -- $375
• 30 years -- $450

VOUCHERS

HEA 1004: Early Education Pilot Program: All voucher language was removed from the preschool bill, resulting in a 5-county pilot program for families at not more than 127% of poverty. Originally, the bill included a voucher feeder component that would have provided every preschool voucher student (and their siblings) at 185% of poverty automatic eligibility for a K-12 voucher. The fiscal impact would have been $7.5 - $30 million annually.

ISTA worked to remove the voucher component of the bill-and the effort was successful. NOTE: It is likely that voucher proponents will be back next year looking to garner that "direct connection" from preschool to K-12.

The state will use $10 million in funds in the first year that had reverted under the state's Family and Social Services Administration (FSSA) and FSSA will administer pilot program that begins this fall. An additional up to $5 million can come from private donations/federal funds.

A preschool and early learning student commission will convene this summer as well. ISTA supports this version of HB 1004. A longitudinal study will also assess the impact on student achievement.

CHARTER SCHOOLS/REFORMS

HEA 1321: IPS: This bill originated as a far-reaching bill that could have permitted IPS to contract out to charter schools and/or reconstitute existing schools throughout the district-with few restrictions. ISTA and IEA (Indianapolis Education Association) negotiated with the IPS Superintendent, the Mayor of Indianapolis, and multiple legislators, to narrow the scope of the bill.
Negotiations resulted in the following:

1. An imposition of a 10% cap on the number of schools that could be reconstituted in year 1.
2. A/B schools will be statutorily protected from reconstitution or from sharing space with any other charter school even if these A/B schools have unused space in their buildings.
3. Schools in IPS that could be reconstituted were limited to schools that have been labeled D/F for the last 3 consecutive years, plus the 3 existing "innovation-like" schools already in existence (should they want to convert under the new law).
4. Language to provide supports for teachers who may want to take leadership roles in creating these innovation schools/programs. (A separate Memorandum of Understanding (MOU) between IPS and IEA adds further language on these supports).
5. Language to require that the agreement include performance metrics to be achieved by the management company (the prior versions were silent on this).
6. Language to require the agreement to include terms for revocation (the prior versions were silent on this).
7. Language in the MOU will require that the IPS administration and IEA will have a continuing dialogue on the implementation of HB 1321.

SEA 205: Charter School Accountability: The bill increases charter school accountability in the following ways:

1. The State Board of Education must take action against any charter authorizer who renews a charter or fails to close a charter that does not meet minimum standards.
2. A process is established for a situation where more than one charter wants to purchase a vacant building. The charter with the higher letter grade receives the building.
3. Turnaround schools in their 5th year of failure can go back to the district, become a charter or undergo other intervention. NOTE: ISTA supported the school going back to the district.
4. A sponsor must provide a report to the State Board, DOE and the public.
5. An authorizer is prohibited from requiring a charter to contract with the authorizer of that charter.
6. A charter agreement is limited to 7 years.

SCHOOL SAFETY

SEA 229: Firearms in School Parking Lots: One of the more high-profile bills this session, SEA 229 allows a person who legally possesses a firearm to possess the firearm in a locked truck, glove compartment of a locked car, or otherwise stored out of plain sight in the person's locked car without the threat of committing a felony. The bill prohibits the following from being able to possess a firearm on school property:

1. Any high school student (unless the high school student is a member of a shooting sports team and the principal has approved the person keeping the concealed firearm in the high school student's car on the days of competition or practice).
2. A former student of the school if the student is no longer enrolled in the school due to disciplinary action taken within the last 24 months.

This enacted version is an improvement over prior versions (narrowed). However, ISTA continues to oppose permitting firearms on school property by non-school resource officers. One of the key points of opposition has been that the law prohibits giving the local school board authority over developing school safety policies dealing with firearms on school property.

SCHOOL FINANCE & FUNDING

SEA 1: Elimination of business personal property tax with no replacement (SB1/HB 1001): Throughout the session, ISTA has been a partner in a coalition called "Replace Don't Erase" that is made up of various stakeholder groups (local government/schools/libraries) that rely, in part, on business personal property tax revenue. The enacted bill passed by a vote of 63-37 in the House and 36-12 in the Senate.

The final version was much more narrowed from the original versions in the House and Senate. However, the terms are as follows:

1. There will be a reduction in the corporate gross income tax over 6 years, landing on 4.9%.
2. There will be a reduction in the financial institutions tax rate over 6 years, landing on 4.9%.
3. There will also be "super-abatement" options (exempting the tax for up to 20 years) for certain new initiatives.
4. Each of the SB 1 and HB 1001 original approaches (small business personal property tax exemption and local option elimination of the business property tax for new equipment, respectively) were maintained as parallel local options (ie. the state is not mandating these exemptions occur):

• Local option small business personal property tax exemption: If the local COIT board (schools do not have a seat on the COIT board) approves, small businesses may exempt personal property with an acquisition cost of less than $20,000. This would eliminate 50% of those who filed under the tax previously. The fiscal impact is being projected at $7.6 million if every county opted in. Of this, about $2 million would be lost to schools.
• Local option for the elimination of property tax on new business personal property: If the local COIT board approves, "new" business equipment would be exempted from the business property tax. Eventually as all equipment is replaced, the property tax on equipment will disappear and revenue to local governments and schools will fall.

While it is undeniable that the scope of the Governor's original sweeping proposal has been scaled back dramatically, it is disturbing that changes potentially impacting the levels of Indiana's state revenues would be made prior to the long, budget-writing session and without identifying replacement revenues.

HEA 1062: School Debt Restructuring: This is a good bill, which holds the promise of providing a degree of relief to some 90+ school districts that have been impacted by 10% or more with regard to circuit breaker/protected taxes restrictions. Under the bill, these districts would be exempt from protected taxes for 2014, 2015, and 2016. Also, the proposed bill will allow school districts to carry a 50% operating balance in their Debt Service Funds or any debt originally incurred before July 1, 2014 (in other words, for existing debt). Refinancing of debt after July 1, 2014 would continue to have a 50% operating balance threshold, too. Debt incurred beginning July 1, 2014, could have an operating balance in the Debt Service Fund of 15%.

Educator and Student Standards

HEA 1388: Teacher Preparation Programs: This bill was about holding schools of education accountable for its graduates once they become licensed. ISTA secured language in this bill that makes any teacher evaluation data that is transferred and that is personally identifiable either by teacher name or identification number is confidential under law and not subject to a public records request.

SB 91: Education Standards: This bill was the Common Core bill and, in a practical sense, reflects a bit of a compromise between Common Core proponents and those who opposed Common Core. The bill "voids" Common Core State Standards effective July 1, 2014. However, Superintendent Glenda Ritz and the State Board of Education are currently on track to adopt College and Career Ready Standards before the July 1, 2014 deadline.

The bill also requires the Office of Management and Budget to cost out the implementation of a new state assessment and requires the state to seek a waiver from the Federal Government for the adoption of the College and Career Ready Standards. The bill ensures safeguards for student data privacy.

NOTE: ISTA worked on an amendment to delay high-stakes consequences for teacher evaluations in the likelihood that student test scores will be different for up to 3 years during the transition to the new standards and assessment. The amendment did not pass but ISTA is working to develop a coalition on this issue that will likely include the Indiana Chamber of Commerce.

SOMETIMES THE BEST BILLS ARE THOSE THAT DON'T PASS

As you might imagine, much of what occurs in the General Assembly centers on working to defeat measures that:

1. don't make much practical sense in the public school world;
2. could be hurtful to the school employees, students, or public schools; or
3. are intended to devalue the work of the Association.

Here is a quick list of some of the ideas that, with ISTA & ISTA member lobbying, did not make it to enactment:

HB 1233: School Employees Enhanced Criminal Background Checks: Would have required that school employees be subject to an "enhanced" criminal background check every 5 years at the employee's expense. Later, a narrowed-down version would have required anybody who had never had a background check (life license teachers), plus all new hires to pay for an enhanced background check within 5 years. No version passed.

SB 178: Release of Employee Information: Would have criminalized routine communication that occurs between a labor organization and an employer concerning certain employee information. Was heard in Senate Pensions & Labor Committee but was not voted out.

SB 190: Bargaining Law Changes: Would have allowed non-members to sit on exclusive representative discussion teams and vote on the proposed collective bargaining agreement. After having scheduled the bill for a Senate hearing, the author agreed to pull it from the schedule. Similar language later appeared as a House Education Committee amendment to SB 284-but the House Sponsor of SB 284 (Sen. Rhonda Rhoads) agreed to not bring the bill down on 3rd reading. Since the language never passed a chamber, the language was not eligible for Conference Committee revival.

SB 322: Voucher Schools and ISTEP: Would have expanded the school voucher program by allowing voucher schools to bypass accountability by not being required to administer ISTEP. The bill also would have prohibited the DOE from requiring voucher schools to report any information "that is not necessary" and to reduce "undue reporting burdens." Ultimately, the bill failed to meet 3rd reading deadlines in the Senate.

SB 284: Diversion of General Fund Monies from School General Funds: As part of a bigger bill, language was inserted in SB 284 to allow school districts to remove from school general funds interest income, rental income, or other school district activity income. Estimates indicated that the diversion of funds could total over $70 million statewide-which is more than 1% on the school funding formula. .

ISTA and ISTA members worked very hard to keep SB 284 from reaching a floor vote in the House-and were successful when the sponsor of the bill (Sen. Rhonda Rhoads) agreed to not call the bill down on 3rd reading.

SB 416: Prohibit Automatic Dues Deduction: This bill, plus 2 separate 2nd reading amendments (one involving all labor and one involving school employees only) were offered in 2014. Each time, with intense lobbying, ISTA was able to defeat these efforts. As long as ISTA continues to engage in dues deduction through the local district administration rather than through its own EASY PAY system, the General Assembly will be able to continue to leverage this issue against ISTA, thereby diverting attention away from fighting for and against issues that are more impactful to K-12 public education.

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