The Weekly Advocate



In This Issue:
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Legislative Action
News on MSBA's Platform Issues
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E-12 Finance Bill Highlights

  As we reported last week, here is a quick summary of some of the issues MSBA has been following closely throughout session and want to draw particular attention to those:
  • Formula: Increases 1.5% per year
  • Compensatory revenue remains linked to the formula and compensatory pilots are rolled into the compensatory formula and made permanent. Increase in Compensatory over base must be used for extended time activities.
  • Voluntary Pre-K program is repealed. School districts currently receiving voluntary Pre-K will receive the same level of funding through School Readiness permanently.
  • Pupil transportation formula is adjusted to close gap between actual expenses and transportation aid by paying 18 percent of the difference for certain districts.
  • Pathway II Scholarships are frozen at the FY17 level.
  • Pathway I Scholarship funding is increased by $9.5 million per year in the 2018-19 biennium and by $10 million per year in the 2020-21 biennium.
  • Concurrent Enrollment Teacher Training grants receive $375,000 annually.
  • Perpich Arts School will close June 30, 2018 and the commissioner of administration is directed to convey or sell Crosswinds School as soon as possible after July 1, 2017.
  • Unrequested Leave of Absence (ULA) requires school boards and teachers to negotiate a plan that does not require seniority.
  • Multiple teacher shortage provisions.
  • Innovation Zones pilot created.
 
Indicates a MSBA Initiative


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My Legislators

Runs, Resources and Side-by-Sides
Monday Legislative Briefing
May 8, 2017 - Week 19
A Legislative Alert from the GR Team
It's Not Too Late to Tell Leadership 2% is a Minimum
Budgets and Conference Committee Meetings
Late Friday afternoon, leadership announced they were still negotiating budgets. Governor Dayton called it "cordial and constructive" adding they would reconvene Saturday morning.  Watch the press conference by clicking photo or YouTube icon.
View our videos on YouTube

It's not too late to let your voice be heard in St. Paul as the Senate and House leadership await further negotiations with the Governor for a three-way target. Please reach out to Speaker Daudt, Majority Leader Gazelka and Governor Dayton to let them know with a $1.6 billion surplus, a 1.5 percent per pupil increase and an education target of $303 million is not only not enough, it isn't fair.

E-12 Finance H.F. 890

House Research and Senate Counsel Bill Summary

Conference Committee Budget Items

E-12 Conference Committee:
House: Loon (Chair), Erickson, Bennett, Kresha and M. Murphy
Senate: Nelson (Chair), Pratt, Weber, Eichorn and Wiger  

The E-12 Conference Committee met Tuesday evening; however, they still need to take final action on the conference committee report.

We are including a district-by-district run to see how provisions in the conference committee report for H.F. 890 may impact your district. We have also created a quick reference guide by subject for you to use to make it easier to find topics of interest in the bill.


Pensions
The Legislative Commission on Pension and Retirement
posted a preliminary draft of a pension bill late Friday evening on the LCPR website. It can be accessed at: http://www.commissions.leg.state.mn.us/lcpr/documents/mtgmaterials/2017/LCPR17-038.pdf

Public testimony on the bill will be taken at a hearing scheduled for Monday, May 8, 2017, 5:30 pm in Room 123 of the State Capitol.  If you wish to testify, contact Lisa Diesslin at 651-296-6806 or lisa.diesslin@lcpr.leg.mn BEFORE the meeting, identifying the agenda item of interest.
 
Below is a summary of the main provisions of the bill that affect TRA.  Note that some provisions may change as a result of technical refinements being worked on by Commission staff. 
  • Balance/shared sacrifice: Based on preliminary analysis by TRA, approximately 66% of the proposed package would be borne by active teachers, 21% by current retirees and 13% by employers.
  • 1% COLA (pages 41-43 of bill): Reduces TRA's 2% COLA to 1% effective with the next January 1, 2018 COLA.  Eliminates future COLA triggers that would increase COLAs if system funding improved. Also requires LCPR to study COLAs for all plans and make recommendations for change including whether a new COLA methodology should be adopted. The study is due in time for the 2021 legislation session. (page 48)
  •  COLA Delay (page 43): Delays payment of the first full COLA until a member reaches normal retirement age (age 66 for post-89 hires and age 65 for pre-89 hires). The delay is effective for retirements beginning January 1, 2018.  Under this proposal a teacher retiring at age 62 would have a frozen benefit for four years until eligible for a full COLA, whereas under current law the wait period for the full COLA is 18 months. Members retiring under the Rule of 90 are exempt from this COLA delay. Also exempt are disabilitants and younger survivors of members who die while active.
  • Early retirement benefits (pages 10-14): Reduce early retirement benefits by eliminating current-law augmentation rates that are used in calculating benefits.  Early retirement benefit augmentation would be eliminated over a four-year period beginning July 1, 2018 through June 30, 2022.  Compared to current law benefits, this provision, once fully implemented, would reduce early retirement benefits by approximately 18% for members retiring at age 60, by 11% for members retiring at age 62 (TRA's average retirement age), by 8% for members retiring at age 63 and by 6% for members retiring at age 64.  Reductions for members retiring before age 60 would be more significant, ranging from 19% at age 59 to 33% at age 55.
  • Contribution rates (pages 88-89): Increases employEE contribution rates from 7.5% to 8.25% phased in over four years, beginning July 1, 2017.  Increases employER rates from 7.5% to 8.5% phased in over four years, beginning July 1, 2017.  At this point, the bill does not contain any language that would provide funding to offset the increased costs to employers.
  • Deferred augmentation (pages 14-16): Reduce augmentation from 2% to 0% for vested deferred members who terminate employment and elect to leave their contributions with TRA.  The elimination of augmentation would occur for future years of deferral beginning July 1, 2018.
  • Investment return assumption (page 22): Lowers TRA's investment return assumption to 7.5% along with all other pension plans.  Also lowers to 7.5% the interest TRA charges members and employers for repayment of refunds, various leave payments, and omitted contributions (pages 70-72; 79)
  • Amortization period (page 28-30): Extends TRA's amortization period by 10 years from 2037 to 2047.  Most other plans' amortization periods are also extended to 2047.
  • Contribution stabilizer (page 16): The contribution stabilizer authority the TRA Board has under current law would be repealed. Under that law, the Board has authority to recommend adjustments in contribution rates to address funding deficiencies or sufficiencies. Any contribution rate change is subject to review and approval by the LCPR.
  • Actuarial impacts:  As of this point in time, no actuarial estimates of the impact of the proposal on system funding have been made available, but we understand that the goal of the proposal is to attain a 90% funded ratio in the next 25 years.
For a summary of provisions affecting systems other than TRA, you may check the LCPR website f
or a staff memo as well as agendas.

MSBA will continue to follow and analyze the impact to school boards and keep you updated. 

Pensions is scheduled to meet Monday, May 8th and Tuesday, May 9th.  
 

Teacher Licensure H.F. 140

Conference Committee on H.F. 140
Chairs: Sen. Eric R. Pratt and Rep. Sondra Erickson
CONFEREES: Senate: Pratt; Housley; Kent - House: Erickson; Bennett; Mariani

The Teacher Licensure Conference Committees met Monday morning. They heard testimony from Commissioner Cassillius and members from the Board of Teaching.

The next scheduled meeting is Tuesday, May 9th at 10:00 a.m., or at the call of the chair.

Higher Education S.F. 2214

Education Provisions in Higher Education Bill

Chairs: Sen. Michelle L. Fischbach and Rep. Bud Nornes
CONFEREES: Senate: Fischbach; Clausen; Draheim; Jensen; Anderson, P. - House: Nornes; Omar; Daniels; Christensen; Whelan

The Higher Education Conference Committees met Monday morning and adopted its conference committee report.


Jobs and Economic Development S.F. 1937
 
Chairs:
Sen. Jeremy R. Miller and Rep. Pat Garofalo 
CONFEREES: Senate: Miller; Anderson, P.; Champion; Dahms; Osmek - House: Garofalo; O'Neill; Mahoney; Hoppe; Newberger

The conference committee members met Tuesday. 
State Government Finance S.F. 605 
Education Provisions in State Government Finance Bill

Chairs: Sen. Mary Kiffmeyer and Rep. Sarah Anderson
CONFEREES: SENATE: Kiffmeyer; Anderson, B.; Hall; Laine; Koran - HOUSE: Anderson; Dettmer; Fenton; Nash; O'Driscoll 

Tuesday afternoon, the conference committee members met and adopted its conference committee report.
  • School district health insurance (Healthcare Insurance Transparency Act - HITA)
 
Taxes H.F. 4
Education Provisions in Tax Bill

Chairs: Sen. Roger C. Chamberlain and Rep. Greg Davids
CONFEREES: Senate: Chamberlain; Miller; Rest; Dahms; Senjem - House: Davids; McDonald; Drazkowski; Hertaus; Marquart
 
Tuesday afternoon, the conference committee members met and adopted its conference committee report.
  • Ag credit
  • Tax credits for private education
  • School board elections
 
Independent Bills

S.F. 870
Authorizes cities, towns, counties, and school districts to spend money or raise funds for National Night Out or any event that will foster positive relationships between law enforcement and the community.

H.F. 1345
Eliminates the $800 annual cap on expenditures for
the purchase of awards and trophies. The proposed
change applies to home rule charter and statutory
cities, towns, counties, school districts, any incorporated post of the American Legion, or any veterans' organization.  

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