February 16, 2007 - Volume 27 / Issue 11
Overview Info
Stats
| Days of Session Remaining | 37 |
| Days of Session | 23 |
| Bills Introduced (as of Feb. 8) | 1,664 |
Quote: “Allowing us to be part of the process is going to improve it, we hope.” – West Virginia Federation of Teachers President Judy Hale discussing proposed changes in the state grievance procedure for school employees and state workers. The bill passed the Senate Government Organization Committee Monday, with a second reference to the Senate Finance Committee.
Inside
News
Educator's pay raise still unsettled issue in Legislature
Teachers groups unhappy with pay proposals as now presented
The House of Delegates Education Committee upped Gov. Joe Manchin's proposed pay hike for educators from 2.5 percent to 3.5 percent Tuesday, while making his one-time payment for school service personnel a permanent raise.
But in doing so, the committee removed language from the governor's bill House Bill 2277 that would have established a minimum $30,000 salary for all full-time classroom teachers. The panel advanced the bill to House Finance on a unanimous voice vote.
House Education Chairwoman Mary Poling, D-Barbour, said that provision would have left teachers with only a bachelor's degree without any additional increases for several years.
Both of the state's major teachers' groups remain unhappy with the bill even as amended, seeing Tuesday's boosts as just a starting point for higher raises. Each also said some among their rank-and-file have weighed calling a strike if the session ends without a satisfactory proposal.
"It froze those people, and then they didn't get a raise,'' Poling said.
Both of the state's major teachers' groups remain unhappy with the bill even as amended, seeing Tuesday's boosts as just a starting point for higher raises.
Each also said some among their rank-and-file have weighed calling a strike if the session ends without a satisfactory proposal.
"We've had a couple of counties meet and discuss the issue,'' said Charles DeLauder, president of the West Virginia Education Association. "We're taking a wait and see attitude. The Legislature's not done yet.''
Judy Hale, president of The American Federation of Teachers-West Virginia, said the threat of a strike does not help ongoing talks with lawmakers.
"That's really at the grassroots level at this point. There has not been any discussion of that at the state level,'' Hale said. "That's a March decision. You wait until you see what you can do here.''
Manchin had proposed adding $26 million to the budget for the 2.5 percent raise, plus $10 million next year for the bonus-like payment. The amended bill's annual price tag is estimated at $48.6 million.
Poling said the extra percentage would still leave new teachers with a bachelor's degree below $30,000 in annual pay, but would steadily increase their salaries to that level after three years. Those figures also don't count supplements several counties provide to their teachers, she noted.
The committee also kept the $1,000 Manchin wants to add to the $2,500 bonus awarded classroom teachers certified by the National Board of Professional Teaching Standards.
DeLauder said WVEA continues to seek raises totaling 15 percent spread over three years, with 6 percent the first year.
"We need to maintain a decent salary schedule,'' he said. "We continue to rank in the bottom 40s and we're not moving.''
AFT-WV seeks a $5,000 raise, and Hale was slightly more upbeat about Tuesday's progress.
"This committee had the courage to take up this bill earlier than the final night of the session,'' Hale said. "It puts it on the radar screen and allows us to continue to make our case.''
In other action this week, the Senate Government Organization Committee approved Senate Bill 442 which establishes a streamlined grievance procedure, a procedure that removes county boards entirely from the process and which, at least in some legislators’ minds, requires county superintendents to hear “all employees grievances.”
"This committee had the courage to take up this bill earlier than the final night of the session. It puts it on the radar screen and allows us to continue to make our case.'' – Judy Hale, president of the American Federation of Teachers/West Virginia
”I don’t read the measure that way, especially the bill adopted Monday (Feb. 12). It would allow a designee to hear grievances, meaning someone else could hear them,” said WVSBA Executive Director Howard M. O’Cull, Ed.D.
O’Cull said an attempt may be made in the Senate Finance Committee to specify that one of the members of the newly-created Public Employees Grievance Board be a county superintendent. “I’m fairly confident a county board member couldn’t serve in this role, given recent state Ethics Commission rulings, but a county superintendent would have no such restriction,” according to O’Cull.
Sen. Donna J. Bailey, R-Pleasants, contends the measure is skewed too far toward employee and labor groups.
A new process procedure – new Level II – requires some type mediation and discussion.
Grievances still can be appealed to circuit court.
In addition to streamlining the process by eliminating Levels I and II and by “redoing” Level II, the bill brings education, state and higher education employees under the same procedure.
In terms of higher education employees, there is considerable speculation university and college officials want to be removed from the process completely. However, several sources, including members of the Governor’s Workgroup which prepared the legislation, say higher education employees will remain under the proposed legislation.
The House Government Organization Committee has yet to consider its companion measure, House Bill 2862. That bill was introduced Feb. 6.
In other legislative action this week:
- The Senate Education Committee adopted two bills, one relating to “non-educator” coaches and the other to the Kids First program. (Refer to the “Administrative Perspective” in this newsletter for more detail.)
- A House Education Subcommittee approved a report regarding the House’s school finance proposal. It departs from the Senate measure in that the House’s bill was “informed” by practitioners, according to Del. David Perry, D-Fayette, who headed the subcommittee.
Some HEC members have been openly critical of a two-year interim school finance study group which reviewed the state’s school support formula. Many House members say considerable time was spent “educating” these members in regard to the SAF itself.
“This is a measure that will be voted up at 11:50 p.m. on the last night of the session,” according to O’Cull.
O’Cull said reduction in “local share” is a major issue yet to be resolved. “It would appear, based on Tuesday’s HEC subcommittee meeting,” that the House wants a more directed approach to local share, he said.
“This became obvious to me from the discussion. I don’t think this is all bad, although counties should have some discretion locally,” he said.
Both education committees are slated to meet tomorrow.
For more information regarding the week’s legislative action, refer to the Administrative Perspective.
Sources: WVSBA reporting, Charleston Daily Mail, The Charleston Gazette and MetroNews.
Administrative Perspective
School aid formula funding may be up for consideration today in Senate committee
House Education Committee passes bill changing governor's recommended teacher pay raise from 2.5 percent to 3.5 percent
By Martha Dean, Executive Director
West Virginia Association of School Administrators
Feb.15, 2007
Legislation relating to School Aid Formula funding for local school boards may be up for consideration today by the Senate Education Committee. Senate Bill 541 was introduced in the Senate Friday, Feb. 9.
The bill’s co-sponsors are Senate Education Committee Chairman Bob Plymale, D-Wayne, and Vice Chairman Larry Edgell, D-Wetzel. Most of the provisions of SB541 are in line with the goals of West Virginia Association of School Administrators.
The measure requires local assessors to assess property at 60 percent of market value and further directs that local share be calculated on the basis that presumes values are assessed at that rate.
The bill sets permanent rates for the different classes of properties, with Class I rate being 20.05. As mentioned in this column last week, there is an added definition for “financially impacted county” which means any county in which second month net enrollment has increased by at least 100 students in any three of the past five years and the number of classrooms covered by highly qualified teachers is 93 percent or less of the total classrooms in the county over two of the past three years. These counties would get to keep additional local tax monies to be used solely for salaries and personnel.
SB541 specifically states that counties which have been required to support their public libraries by a special act of the Legislature should continue to do so with the funds from regular levy proceeds that exceed the local share calculation.
It further provides that if there isn’t enough money to pay the amount required by the special act that the current law would supersede the requirement of the special act. I think a major concern continues to be a requirement that funds realized from the change in local share might be designated for specific expenditures.
It was interesting to hear the explanation of the proposed Grievance Bill in the Senate Government Organization Committee Monday. There was a fair amount of discussion about Senate Bill 442, as an originating bill in committee. I believe the definition of grievance is the same as in the previous law.
It does shorten the number of steps from four to three. The chief administrator (superintendent) is Level I and grievances are to be filed in writing within 15 days of the grievable event. There can be a conference or a hearing or it can proceed directly to level three in certain cases.
Level II is called alternative dispute resolution and can be mediation, private mediation, or mediation-arbitration. Either private mediation or mediation-arbitration must be agreed to by both parties.
Level III is called adjudication and is very much like the current level IV hearing before administrative law judges. This bill now goes to the Senate Finance Committee.
Tuesday was very busy and the weather was horrible! Subcommittee A of the House Education Committee met at 8 a.m. and discussion centered on provisions they want to make sure are included in a bill they are to originate in committee. The bill was to be drafted by Tuesday afternoon. Some provisions will make changes in the school funding formula.
First, the calculation of state aid would be based on net enrollment without considering adjusted enrollment.
Counties would be designated as either low-density, medium-density or high-density. Each of these categories would have a different ratio of professional personnel to net enrollment.
Another formula change would be to replace the administrative allocation in Step V with allocations for counselors, nurses, librarians and information technology specialists, all called student support services.
This bill also contains provisions to change the local share and to designate how the counties funding local libraries would pay the bill for the libraries as indicated in special laws.
Tuesday afternoon, the House Education Committee met and passed out an amended HB2777, changing the governor’s recommended teacher pay raise from 2.5 percent to 3.5 percent. The committee also inserted a permanent salary change for school service personnel of 3.5 percent, choosing to have one bill rather than two separate measures. In doing this, the HEC removed the governor’s proposed $30,000 floor for teachers as in the original bill. It was surprising to me that there was little discussion. The bill was just explained and the motion was approved to report the bill out of committee with a recommendation “do pass,” but that it first be sent to the House Finance Committee for a vote.
Senate Education Committee also met Tuesday afternoon. The committee considered two bills: SB334 (committee substitute) and SB452. The former would allow non-teacher coaches who have served at least three years in the same position and has received satisfactory evaluations to continue to serve even if a teacher wanted the job. It provides that the school board is not required to post the coaching position annually if those conditions are met.
SB452 is named the West Virginia Kids First Act. It relates to programs for children up to eight years old. The purpose of the bill is to improve the quality and accountability of early childhood development. In doing so, the bill creates a board to govern West Virginia Kids First, with the measure establishing board duties and responsibilities. One requires the board to consult with the West Virginia Department of Education about any education component.
The measure supports collaboration among the various agencies that support this age group of children. It passed unanimously and has two other references – committees on Government Organization and Finance.
WVSBA Briefs
Association conference Friday and Saturday
Members to visit legislators as part of activities
County board members are urged to arrange for visitations with legislators as part of the West Virginia School Board Association’s 2007 Winter Conference Friday and Saturday, Feb. 16 and 17 at the Charleston Marriott Town Center Inn.
“I have alerted legislators that county board members will be at the Capitol for visitations from 9 a.m. – Noon,” said Howard M. O’Cull, Ed.D. WVSBA executive director. He said legislators also have been invited to the association’s reception this evening.
The reception is co-sponsored with the West Virginia Association of School Administrators (WVASA).
“We expect good attendance at the reception, although there are some ‘competing receptions,’” he said.
In terms of the conference program, O’Cull said the “chief program topic” will be the Governmental Accounting Standards Board (GASB) issue along with school security, special needs students’ issues, legislative matters and a number of workshops.
In regard to a few telephone calls from county board members, O’Cull said association policy is one of not canceling meetings due to weather, but he said members should use their own judgment about attending if travel conditions are hazardous.
Thus, far we’ve had five cancellations, with about 245 persons registered to attend the program. “In the jargon of the meeting and convention business, we do expect some ‘slippage,” O’Cull said.
This is the last planned association training session until May. That program will provide 4.5 hours of training, as it is a “drive-in” conference similar to the program format for this past November’s school security workshop.
A copy of the program is included below.
West Virginia School Boards Association 2007 Winter Conference Program February 16/17 Charleston Marriott Town Center
Charleston Marriott Town Center
Thursday, Feb. 15
6:00 p.m. WVSBA/WVASA Reception with Legislators” Salons A-C
8:00 p.m. WVSBA Executive Board Meeting Allegheny
Friday, Feb. 16
7:30 a.m. Breakfast Salons A-B
8:15 a.m. Visits to Capitol (Individual Arrangements)
11:30 a.m. Reception/Visit with Exhibitors Foyer C-D
1:00 p.m. “Perspectives on GASB” Salons A-F
Segment I – Representatives/West Virginia Association of School Administrators:
Danny Kaser, Hancock County Schools Superintendent
Greg Minnich, Regional Education Service Agency VI Coordinator – Purchasing and Finance
Deborah Akers, Ed.D., WVASA President
1:45 p.m. Break Foyer A-B
2:00 p.m. Perspectives on GASB” Salons A-F
Segment II – Representatives/West Virginia Department of Education (WVDE):
Jack McClanahan, Ed.D., Deputy State Superintendent of Schools
Susan Smith, WVDE Office of School Finance
Joe Panetta, WVDE Executive Director Office of School Finance
2:45 p.m. Wrap-up Salons A-F
3:15 p.m. School Safety (Ingress/Egress) Salons A-F
Mark Manchin, Ed.D., Executive Director School Building Authority of West Virginia
4:00 p.m. Adjournment (Dinner on Own)
7:00 p.m. Workshops (Please select one):
- Participant-led discussions Salons A-C
- Participant-led discussions Salons D-F
- “ Policy 2510” Cumberland-Appalachian
Howard M. O’Cull, Ed.D., WVSBA Executive Director
Selected Members/WVSBA Executive Board
Stan Hopkins, WVDE Assistant Superintendent/Division of Technical and Adult Education Services
9:00 p.m. Adjournment
Saturday, Feb. 17
7:15 a.m. Breakfast Salons A-F
8:00 a.m. FY08 Annual Business Meeting Kanawha-Blue Ridge
9:00 a.m. Special Needs Students: Salons A-F
The latest information about proposed West Virginia Board of Education policy and practical approaches to practice
Lynn Boyer, WVDE Executive Director, Office of Special Education
Claudia Bentley, Esq., Bowles Rice McDavid Graff & Love (Martinsburg Office)
10:30 a.m. Break Foyer A-B
10:45 a.m. Workshops (Please select one):
- “Board-Superintendent Relations: What’s going on?” Salons A-C
- County Board Excess Levies: An Overview Salons D-F
Howard M. O’Cull, Ed.D., WVSBA Executive Director
Howard E. Seufer, Jr., Bowles Rice McDavid Graff & Love,
WVSBA Counsel
Steve Cook (Monongalia), WVSBA Vice President
Joe Panetta, WVDE Executive Director, Office of School Finance
11:45 a.m. Adjournment
Committee on Communications to Meet Feb. 16
The Association’s Committee on Communications, headed by Jean Westfall (Ritchie), will meet Friday, Feb. 16 immediately following the school safety presentation. “It is imperative that all committee members and interested persons attend this meeting,” said Westfall. For more information, please contact the WVSBA office at 304.346.0571.
Resources
RESA VII sponsoring workshop relating to Reductions in Force (RIFs) and transfers
RESA VII to sponsor RIF, transfer workshop; all county board members, superintendents invited
West Virginia School Board Association counsel Howard E. Seufer Jr., Bowles Rice McDavid Graff & Love, will present a workshop regarding personnel Reductions in Force (RIFs) and transfers Feb. 19 from 10:00 a.m. – Noon at RESA VII offices in Clarksburg. County board members from RESA VII and other regions in the state are invited to attend and will receive two hours’ school board member training credits. Persons wishing to attend the meeting, should contact RESA VII officials by Feb. 15. There is a $50 program fee. For further information, please e-mail RESA VII Executive Secretary Regina Snider at rasnider@access.k12.wv.us or call 304-624-6554 Extension 221.
Frequently Asked Questions about GAAP and GASB
Issued on January 22, 2007
A focus group was formed to study issues relating to two significant requirements issued by the Governmental Accounting Standards Board. These requirements will be adopted by local education agencies (LEA) in West Virginia. “Frequently asked questions” were compiled as a result of the Jan. 4 meeting. These questions were not only raised in the focus group meeting, but have been noted by LEA staff and others.
Participating in the focus group were superintendents and chief school business officials from a representative sample of counties chosen by the Association of School Administrators (WVASA), legislative staff, professional and service personnel organizations, auditors, and West Virginia Department of Education (WVDE) representatives.
Responses to the FAQs represent the West Virginia Department of Education’s position on the issues and are the official guidance from the Department to aid LEAs in implementing these new standards. More information is available from the Office of School Finance at 558-6300.
- What is GAAP accounting?
GAAP is an acronym for “generally accepted accounting principles.” They are the standards for external financial reporting developed over many years by various authorities and are currently driven by the Governmental Accounting Standards Board (GASB), a non-profit organization. The intent of GAAP is to provide fair, accurate and complete financial reports that are comparable among governmental entities.
County Boards of Education (BOEs), Regional Education Service Agencies (RESAs) and Multi-County Vocational Centers (MCVCs) have been reporting on a regulatory basis of accounting. Regulatory basis accounting is financial reporting standards prescribed by the reporting government’s regulatory agency. For BOEs, RESAs and MCVCs, the regulatory agency is the West Virginia Department of Education. Regulatory basis financial statements are not comparable among government entities and do not carry the same weight and respect as GAAP statements, the national standard.
- Are BOEs, RESAs and MCVCs required to change to a GAAP basis of accounting for the year ending June 30, 2007?
Yes. All local governments in West Virginia have been required by the state auditor to use GAAP for financial reporting. The state superintendent of schools has entered into an agreement with the state auditor requiring the standards for BOEs, RESAs and MCVCs for the year ending June 30, 2007.
When the agreement was reached with the state auditor there was discussion of implementing GAAP for the year ended June 30, 2006, and granting waivers for counties unable to convert on time. However, the final decision was to delay implementation a year and grant no waivers for the year ending June 30, 2007. No waivers will be granted to any entity.
- Will day-to-day operations at BOEs, RESAs and MCVCs be affected by changing to a GAAP basis of accounting?
Not significantly. Most requirements under GAAP affecting day-to-day operations have been incorporated into the regulatory basis of accounting over the past 10 years and already should have been adopted by all entities. GASB Statement 34 is the final significant requirement to be adopted to make the conversion from regulatory basis to GAAP basis. The implementation of GASB 34 will affect year end reporting, not day-to-day operations. As your entity works with your auditors on your first GAAP basis audit, additional issues could be identified which will affect daily operations, however, those issues should not be significant.
- Will the conversion to a GAAP basis of accounting negatively affect the fund balance in the governmental funds statements?
No. The fund balance used to determine whether an entity is in deficit will not change. The fund balance in the governmental funds will continue to be reported to the Legislature as in the past. Because most significant GAAP issues already have been incorporated into the regulatory basis of accounting, fund balance in the governmental funds will be the same as on a regulatory basis. GASB 34 simply requires two additional statements be presented which shows the financial information on an entity-wide basis, much like a private sector business enterprise. GASB 34 makes no changes to the governmental fund statements or the data in WVEIS (West Virginia Education Information System). GASB 45 (explained in more detail in future questions) will affect only the entity-wide statements, not the fund balance in the governmental funds.
- Will BOEs, RESAs and MCVCs receive additional funding to help offset costs of additional resources needed to make the change to GAAP and the increased audit costs as a result of the conversion?
WVDE supports the notion of additional funding to help offset these costs. WVDE will work with other state agencies and the Legislature to try to secure additional funding.
Converting to a GAAP basis of accounting will result in additional work for entities which must be performed either by current staff or contracted services. Many entities will use a hybrid approach to accomplish this additional work. The State Auditor’s Office intends to provide some funding to assist entities in offsetting conversion costs.
In addition, the annual audits will require more testing when GAAP is adopted because of additional statements presented. Most audit firms will increase their fees accordingly. However, the State Auditor’s Office has agreed to perform fiscal year 2006-07 audits for the same cost as fiscal year 2005-06 audits.
6. If an entity does not successfully change to GAAP on the June 30, 2007, financial statements, what are the consequences?
Any entity that makes significant effort toward conversion should be able to secure an unqualified or a qualified audit opinion. An unqualified opinion means the financial information was presented fairly, in all material respects, under GAAP. A qualified opinion means the information was presented fairly according to GAAP except a specific area(s). WVDE and your auditors are committed to working with entities to attain this goal. If, however, your entity chooses not to make significant effort toward conversion, an adverse audit opinion will be issued. An adverse opinion means financial information was not presented fairly under GAAP. In addition to the adverse audit opinion, entities that do not make the conversion will receive an audit finding.
- If I receive an adverse audit opinion, will my federal funding be negatively affected?
Not likely. BOEs, RESAs and MCVCs have been receiving adverse audit opinions on GAAP for years with a qualifying statement that the financial statements are presented fairly in respect to the regulatory basis of accounting prescribed by WVDE. This type of opinion has not negatively affected federal funding. However, if you receive adverse opinions for several years in a row without the regulatory basis qualifier, it may reflect poorly on your entity and cause concern with federal grantors.
- What is GASB 45 and when it is effective?
GASB Statement 45 requires government entities to report the total obligation that exists for Other Post-Employment Benefits (OPEB) other than retirement. For most governments, OPEB would consist of health insurance benefits available to employees upon retirement. In West Virginia, retirees can convert unused sick leave to paid-up PEIA premiums or purchase PEIA coverage at a deeply discounted rate if they have no sick leave to convert. The liability for OPEB is computed much like that of a defined benefit retirement plan and requires the assistance of an actuary. Governments with total revenues of at least $100 million are required to implement this standard for fiscal year 2008, governments with total revenues of less than $100 million but at least $10 million in fiscal year 2009, and all others in fiscal year 2010.
- What is this bill each governmental entity will be receiving from PEIA beginning in July 2007?
PEIA has established an irrevocable trust fund to account for money required to fund the OPEB plan pursuant to HB 4654. PEIA has worked with two actuarial firms to determine total OPEB liability and will be billing employers for their share of that liability. For many years, employers have been paying a portion of the subsidy for the deeply discounted retiree premiums as a part of the active employees’ current premium amounts on the regular monthly bill. Now that the trust has been established, PEIA will begin billing that portion on this new bill and amounts remitted will be deposited into the trust fund. As a result, the regular monthly bills from PEIA for active employees’ current coverage will be reduced by that amount ($184.51 for fiscal year 2008).
- Why is the amount of the bill so large?
The bill is a large amount because we are now going to begin paying into the trust fund for the past service liability which has been ignored since the inception of the benefit plan. The total past service liability is amortized over 30 years and divided by the number of policyholders in the PEIA system to arrive at an amount to be billed for each policyholder to their respective employers. For fiscal year 2008, this amount is $515.27 per month per policyholder. The total liability calculated by the actuaries is $7.8 billion. Approximately one eighth of that total is the liability for the conversion of unused sick leave to paid-up PEIA premiums upon retirement. The remainder, approximately $7 billion, is attributable to the liability for the subsidy for deeply-discounted premiums retirees can purchase.
- What should we pay when we begin receiving the bills from PEIA for the OPEB liability?
Pay only the retiree subsidy portion ($184.51 for fiscal year 2008) for each policyholder. PEIA believes the total OPEB liability may be reduced by the future implementation of a Medicaid prescription drug plan. In addition, if the Legislature provides funding directly to the irrevocable trust the total liability would be further reduced. Additionally, paying $515.27 per policyholder and then later learning the amount has been reduced due to the two reasons cited above would be problematic.
- Should I pay the PEIA bill for my federally-funded employees?
Pay only the retiree subsidy portion of the bill ($184.51) from federal funds for each federally funded policyholder at this time. There is concern that charging federal programs for the remaining portion per policyholder ($515.27) would be an unallowed cost due to a consistency violation if it is not paid for all other employees. We are not recommending paying the $515.27 for any employees due to reasons cited in the previous question.
- Do we need to reduce the number of federally-funded employees to compensate for the OPEB liability?
No. Continue operating federal programs as you have in the past until funding questions and the possible consistency issue is resolved.
- What is the difference between the OPEB liability and the retirement liability? Specifically, why do I have to show a liability on my financial statements for OPEB but not for retirement?
The contributions made to the retirement plan accumulate to pay future benefits only. There are no retirement benefits received by current employees while they are employed. Premiums paid to PEIA cover the cost of current PEIA coverage for the employees included in the billing each month. Prior to July 2007, employers have not been billed an amount that will be accumulated to cover the cost of future benefits afforded to employees upon retirement. Therefore, a liability exists for the past that employers have not been planning for the future costs of PEIA coverage for retirees while no liability is reported by counties for future retirement benefits because they have been contributing to the future costs all along.
- How will GAAP affect my bond rating?
Whether you use a regulatory basis of accounting or GAAP, the Securities and Exchange Commission requires the OPEB liability be reported. Failure to disclose liabilities carries a more severe penalty than acknowledging them.
- What assistance will be provided to assist BOEs, RESAs and MCVCs in adopting accounting changes?
WVDE and the state auditor will continue to provide technical assistance and training opportunities. WVDE has developed Excel spreadsheets to assist in the adoption of GASB 34 and they are available on the WVDE Web site. The State Auditor’s Office provides additional training opportunities on GAAP and GASB statements. Your auditors may provide some assistance or you could contract with a separate accounting firm to provide more extensive financial statement preparation services.
The Office of School Finance will sponsor a workshop to discuss PEIA billing and accounting issues in greater detail. Information about that training will be sent to the chief school business officials.
Focus Group Committee Members:
Danny Kaser, superintendent, Hancock County Schools
Joe Campinelli, CSBO, Hancock County Schools
Dr. Paul Barcus, superintendent, Wetzel County Schools
Jeff Lancaster, CSBO, Wetzel County Schools
Dr. Deborah Akers, superintendent, Mercer County Schools
Joy Hubbard, CPA, CSBO, Mercer County Schools
Dr. Charlotte Hutchens, superintendent, Raleigh County Schools
David Brooks, CSBO, Raleigh County Schools
Larry Jessup, director of accounting, Raleigh County Schools
Phillip Jarrell, director of purchasing, Raleigh County Schools
Carolyn Long, superintendent, Braxton County Schools
Ginger Altizer, CSBO, Braxton County Schools
Greg Minnich, CFO, RESA VI
Bill Duncan, CPA, CSBO, Putnam County Schools
Dave Mohr, House Education Committee
Brian Stephens, Senate Education Committee
Loarie Hanna, House Finance Committee
Michael Cook, Senate Finance Committee
Stuart Stickel, deputy state auditor
Chris Deweese, CPA, member, Suttle & Stalnaker
Chris Nice, CPA, Arnett & Foster
Howard O’Cull, executive director, School Boards Association
David Haney, WVEA
Judy Hale, AFT
Bob Brown, WVSSPA
Dr. Jack McClanahan, deputy state superintendent, WVDE
Jan Stanley, WVDE
Lynn Boyer, WVDE
Nancy Walker, WVDE
Joe Panetta, WVDE
Terry Harless, WVDE
Susan Smith, WVDE
2007 Legislative Calender
First Day - Jan. 10, 2007: First day of session. (WV Const. Art. VI, §18)
20thDay – Jan. 29, 2007: Submission of Legislative Rule-Making Review bills due. (WV Code §29A-3-12)
41st Day – Feb. 19, 2007: Last day to introduce bills in Senate. Does not apply to originating or supplementary appropriation bills. (Senate Rule 14) Does not apply to Senate resolutions or concurrent resolutions.
45th Day - Feb. 23, 2007: Last day to introduce bills in House of Delegates. Does not apply to originating or supplementary appropriation bills. (House Rule 91a) Does not apply to House resolutions or concurrent resolutions.
47th Day - Feb. 25, 2007: Bills due out of committees in house of origin to ensure three full days for readings.
50th Day - Feb. 28, 2007: Last day to consider bill on third reading in house of origin. Does not include budget or supplementary appropriation bills. (Joint Rule 5b)
60th Day - March 10, 2007: Adjournment at Midnight. (WV Const. Art. VI, §22)
From the West Virginia Legislature
Commentary
Supreme Court finds funding formula void as applied to counties required to support libraries
When the Legislature creates unfunded mandates it must do so through general laws and not through intrusive and discriminatory local and special laws.
By Robert M. Bastress Jr.
John W. Fisher II Professor of Law
West Virginia University College of Law
In 1957, the Legislature passed a special law requiring the Kanawha County Board of Education (along with Kanawha County and Charleston) to level specified property taxes and apply the proceeds to support the Kanawha County Public Library. Because Article X, § 1 of the West Virginia Constitution imposes stringent caps on property tax rates, and because the county was already taxing at those caps, the special law effectively displaced other funding priorities of local governments. The school board thus incurred a reduction in its “local share” of school funding, West Virginia Code § 18-9A-11(a).
Eight other counties in addition to Kanawha have been subjected to similar laws compelling local property tax support for public libraries.
The Legislature has not provided for any increase in the Kanawha County Board’s “basic foundation program,” West Virginia Code § 18-9A-12, or in other state funding that would make up for revenues diverted to the library. In fiscal years 2003 and 2004, the amount of taxes so diverted exceeded $2.2 million each year. Eight other counties have been subjected to similar laws compelling local property tax support for public libraries.
In 2003, the Kanawha County Board of Education filed an action in that county’s circuit court to challenge the constitutionality of the state’s failure to adjust the state education funding formula to make up for the sacrificed portion of the board’s local share. A Dec. 9, 2005, order denied the claim and granted summary judgment to the West Virginia Board of Education and superintendent, who were named defendants. One year later, however, the West Virginia Supreme Court reversed, 3-2, finding the state funding formula’s failure to account for Kanawha’s special onus violated the equal protection principle in Article III, § 10 of the Constitution.
The majority opinion by Justice Maynard recognized that in most cases the state can satisfy equal protection analysis if its statutory classification is rationally related to some legitimate purpose. This is a highly deferential standard that begins with a strong presumption of constitutionality. This case, however, implicated the right to an education, which Article XII, § 1 of the Constitution makes a fundamental right. Because children in Kanawha County receive fewer resources by virtue of the special law diverting property taxes to the library, the failure to adjust the education formula to account for that, discriminated against those children in the provision of educational services.
Because children in Kanawha County receive fewer resources by virtue of the special law diverting property taxes to the library, the failure to adjust the education formula to account for that, discriminated against those children in the provision of educational services.
“A statute that creates a lack of uniformity in the state’s educational financing system is subject to strict scrutiny, and this discrimination will be upheld only if necessary to further a compelling state interest,” the court concluded, quoting a 1994 precedent. Applying that standard, the court could “find no compelling reason that justifies treating those school boards differently that are charged by law with applying a portion of their local share to support a non-school purpose such as a public library.” Accordingly, the court ordered that the state formula for funding education must be adjusted “to account for the fact that a portion of the county school board’s local share is required by law to support a non-school purpose.” The court presumed that legislative action was needed to correct the situation and thus stayed the effective date of its decision until July 1, 2007.
Justices Starcher and Albright dissented, each emphasizing the value of public libraries in this state and their integral link to public education. Chief Justice Davis filed a brief concurrence. She chided the dissenters for supporting diversion of public education dollars and reenforced the fundamental status of the right to education under our Constitution.
The court has previously applied strict scrutiny to, and invalidated, provisions in the state funding formula that caused particular counties to receive less than a proportionally equal distribution of the state’s educational funding (State ex rel. Board of Education for the County of Randolph v. Bailey, 192 W.Va. 534, 453 S.E.2d 368, 1994; State ex rel. Board of Education for Grant County v. Manchin, 179 W.Va. 235, 366 S.E.2d 743, 1988.) The only difference in the Kanawha case was that the funding inequality was not created by the formula in §§ 18-9A-1, et seq., but by the disparate effects of special laws diverting property taxes away from schools in the affected counties. The majority apparently did not consider that to be a distinction that made a difference and thus ordered the funding formula adjusted to eliminate the disparate impact.
Justices Starcher and Albright dissented, each emphasizing the value of public libraries in this state and their integral link to public education. Chief Justice Davis filed a brief concurrence. She chided the dissenters for supporting diversion of public education dollars and re-enforced the fundamental status of the right to education under our Constitution
A serious constitutional issue in the case -- an issue that was not addressed by the court -- can be traced to the special statute that started the controversy. Article VI, § 39 prohibits the Legislature from enacting “local or special laws . . . regulating or changing county or district affairs[.]” By ordering a county school board and a county commission to levy taxes and to spend those taxes on a specified matter, the Legislature quite clearly “regulates and] changes” the local governments’ “affairs.”
Section 39 exists, in part, to keep the Legislature from meddling in matters that are more properly controlled at the local level. Enactment of the 1957 special law ordering the Kanawha County governing bodies to fund a library ignored that purpose. Unfortunately, when that law was later challenged, the Supreme Court refused to hold that it violated § 39 (Kanawha County Public Library v. County Court, 143 W.Va. 385, 102 S.E.2d 712, 1958. See also Hedrick v. County Court of Raleigh County, 153 W.Va. 660, 172 S.E.2d 312, 1970). The court’s decisions interpreting the language, “regulating or changing . . . county or district affairs” are hopelessly muddled and contrary to the obvious intent and prohibition of § 39. Undoubtedly, that reality prompted both the litigants and the court to rely on equal protection rather than § 39 to undo the legislative meddling that occurred in 1957.
The Legislature may in myriad ways regulate its local governments and require them to spend their tax dollars to address social, economic, environmental, and other problems. The Legislature does that all the time. Such measures are called unfunded mandates. When it creates those mandates, however, it must do so through general laws and not through intrusive and discriminatory local and special laws.
ETC.
Wisdom
If you wish to drown, don’t torture yourself with shallow water. – Bulgarian proverb.
Meanwhile in New Jersey...
A New Jersey high school has banned students from tape recording their classes after a teacher was caught telling non-Christian students they were going to hell. Keamy High School history teacher David Paszkiewicz also told students that big-bang theory and global warming are myths. School officials say that Paszkiewicz should not have shared his religious views in class, but that the taping violated the teacher’s and the students’ privacy. The new rule “sends all the wrong messages,” said Paul McClair, whose son, Matthew, 16, recorded the lectures. – Numerous sources, including The Week Feb. 16, 2007.
Soundbites
“This is further evidence of the shell game we’ve been playing with the (state) School Aid Formula.” – Del. Richard Browning, D-Wyoming, discussing a House Education Committee subcommittee proposal regarding what he contends is a school funding philosophy adopted by the Legislature over the past several years.
“I understand the rationale of the (West Virginia Education Association) in pushing for a percentage raise because they represent administrators, but (West Virginia Federation of Teachers) represents teachers, just teachers. We have always felt that everybody should get the same." – WV/AFT President Judy Hale in discussing teacher pay raise philosophy. Her comments were made to MetroNews.
"This committee hears from people in the trenches every day and they knew two and a half percent was not enough." – West Virginia School Service Personnel Executive Director Bob Brown discussing school employee pay raises.
“It does go in the right direction…” – Del. Walter Duke, R-Berkeley, discussing a proposal relating to addressing “growth county” SAF needs.
Last Word
GASB not the problem – it's communication
“Listeners” needed from top to bottom
By Howard M. O’Cull, Ed.D.,
West Virginia School Boards Association executive director
The problem of GASB, of course, isn’t GASB.
Rather, the problem is one of ambiguity as school superintendents begin to wrestle with its “implications,” lacking details as to what might happen because of GASB.
In case you’ve been asleep for the past few months, GASB is an acronym for Governmental Accounting Standards Board Statements 34 (and 45). In simple terms, GASB will require county boards of education to show their financial “liabilities,” including retired employees who are guaranteed Public Employees Insurance (PEIA) benefits the rest of their lives.
GASB is symptomatic of how policy often is made – lacking in effective communication -- leaving ambiguity for those ”on the ground,” so to speak, who will have to deal with new rules, regulations and procedures. The farther one gets from those making official pronouncements, the greater the confusion.
County boards have not had to “show” these liabilities. They were considered state liabilities, although county boards were required – and still will be – to pay about $148 per retired employee for PEIA purposes.
GASB is symptomatic of how policy often is made – lacking in effective communication -- leaving ambiguity for those ”on the ground,” so to speak, who will have to deal with new rules, regulations and procedures. The farther one gets from those making official pronouncements, the greater the confusion.
Even if an agency were to go to great lengths to attempt to dispel the ambiguity, the agency isn’t “on the ground at the front line.”
Moreover, the agency may actually harm its own efforts at trying to address the ambiguity. The agency removed from the “action on the ground” often operates at a different level and with differing goals than those who are to implement the policy. There’s also the problem of working with “funders” such as legislators and others with whom the agency must interact and often “please” to stay in favor.
As a result, suspicions arise -- especially when those “at the top” don’t understand the plight of those “on the ground.”
Those at the top often send “missionaries” to bring the good news about programs to be implemented. The trouble arises when those on the ground are three or four generations ahead with a circular debate that focuses on the ambiguities rather than the rational approach taken by the agency.
The agency suddenly finds itself in a struggle to regain control of what has become a conversation fueled by speculation.
In these type conversations, agencies often make a fatal mistake. Agency officials presume because they’ve delivered their message they will prevent any discontent with what they believe is rational policy.
Meanwhile, those on the ground, having carved out their rhetorical path earlier and having honed their logic well, may simply refuse to accept agency information and logic.
Those on the ground also send out their missionaries. Instead of the “good” message, however, their message concentrates on ambiguity the agency hasn’t been able to satisfactorily answer.
Given this set of circumstances, the agency ramps up its formal communications, bringing out the computers and PowerPoint presentations. Those on the ground, having secured the conversation based on its ambiguity, concentrate on winning converts to their thinking and easily turn aside the official information.
The problem with GASB isn’t GASB. This, too, shall pass -- joining the long list of once red-hot educational topics such as the “C-average” debate of the early- to mid-1980s, Policy 2000 and Senate Bill 300 of the 1990s and most recently, the federal No Child Left Behind Act (NCLB).
I need not use this piece to identify the players. We know who they are.
I want to make an appeal to county board members in particular to keep an open mind when it comes to GASB. In the long run, it may provide you more and better information about the true financial conditions of your systems and – not surprisingly – the public also will be better informed.
I want to make an appeal to county board members in particular to keep an open mind when it comes to GASB. In the long run, it may provide you more and better information about the true financial conditions of your systems and – not surprisingly – the public also will be better informed.
I do not discount the possible effects upon excess levies and bonds. This is far too speculative to respond to rationally at this point.
A second GASB concern is that county board bond ratings might plummet. This could happen, but worse could occur in these post Enron days if true liabilities are not known and revealed.
This brings me to my third point. The agency, the West Virginia Department of Education, has been accused of dropping the ball on GASB in terms of effectively a communicating its implications.
Given the information the agency may have had at its disposal, the WVDE discussed GASB, but didn’t really communicate GASB in a way sympathetic enough to those on the ground. They needed to have a Clinton-like “I can feel your pain” approach.
Even if the state Department of Education had taken that approach, the ambiguity wouldn’t have been displaced, but, in an ole farm boy’s terms, the fields would have been harrowed and readied for further conversation.
School administrators like most of us don’t like ambiguity. Budgets have to be made, school goes on and personnel season is upon us.
Those enmeshed in great struggles naturally seek clarification. That’s the entry-point for county board members and legislators to come on stage and enter the play. Fair enough is fair enough. I, for one, took GASB in its most literal sense. I missed the “real” GASB conversation fueled by ambiguity.
When I first heard of the matter, I thought – and still do – that it’s a good means to inform the public about a county board’s true financial picture.
I have been accused of deserting WVSBA members who were drawn into an elongated discussion of which I or the association literally had no real responses.
When I first heard of the matter, I thought – and still do – that it’s a good means to inform the public about a county board’s true financial picture.
I don’t apologize for my part in having kept county board members until relatively recently out of the “Great GASB Debate,” but I do apologize for not recognizing the fear and dread the issue engenders.
With that said, the current GASB conversation is centered on winning the hearts and minds of county board members – both from the agency perspective and from the West Virginia Association of School Administrators’ perspective.
It is my hope that county board members will enter the WVSBA Winter Conference discussion of this issue with the intent of truly learning about the issue – from the WVASA perspective and from the WVDE perspective.
I hope no one is drawn and quartered during the discussion, although the rack has been dusted off for those who are dispassionate about the topic, awaiting its fuller discussion.
Let’s leave the conference more confident in our “knowledge” about GASB and that we park unnecessary rhetoric along the way. It won’t hurt much and there will be another issue soon that may prove just as captivating.
Again, GASB isn’t about GASB. It’s about how we make policy. Now about GAAP…
The Legislature is published by the West Virginia School Boards Association. It provides county board of education members, state policymakers, school administrators and the education community information and opinions regarding West Virginia legislative issues. The views expressed in this publication do not necessarily reflect official opinion or policies of the WVSBA, unless specifically stated.
West Virginia School Boards Association
PO Box 1008
Charleston, WV 25324
Phone (304) 346-0571 • Fax (304) 346-0572 WVSBA.ORG
Kim Cooper (Raleigh), President
dukecoop77@yahoo.com
Jean Westfall (Ritchie County), Chairman
WVSBA Committee on Communications*
Ljwm1108@ruralnet.org
Howard M. O’Cull, Ed. D., Executive Director, Editor
hocull@wvsba.org
Shirley M. Davidson, Administrative Assistant,
Production and Circulation
sdavidson@wvsba.org
* Committee on Communications: Judi Almond (Raleigh), Beth
Cercone (Clay), Bob Duckworth (Taylor), David McCutcheon (Roane),
Mike
Mitchem (McDowell), Nancy Walker
(Monongalia), Don Tuttle (Wetzel)
Vincit omnia veritas
“Truth conquers all”