Dr. Joseph B. Morton State Superintendent of Education

Dr. Joseph B. MortonState Superintendent of Education

Superintendents’ MeetingWednesday, November 18, 2009

FY 2011THE MOST DIFFICULT

YET

A THREE-YEAR RECAPBudget Percentage

FY 2008 Education Budget $6,729,089,656 100.00% K-12 $4,497,415,170 66.84% Higher Education $1,954,695,139 29.05% Other $ 276,979,347 4.12%

Budget PercentageFY 2009 Education Budget $6,396,995,900 --Deduct 11% Proration* $ 703,669,549 --Budget After Proration $5,693,326,351 100.00% K-12 $3,902,419,386 68.54% Higher Education $1,571,109,934 27.60% Other $ 219,797,031 3.86%*FY 2009 Included $437 Million from the Rainy Day Fund

Budget PercentageFY 2010 Education Budget $5,726,000,000 --Deduct 7.5% Proration* $ 403,670,423 --Budget After Proration $5,322,329,577 100.00% K-12 $3,660,512,749 68.78% Higher Education $1,451,728,286 27.28% Other $ 210,088,542 3.95%

Dollars for Education Decreased $1.4 Billion from FY 2008—FY 2010

Alabama K-12 Public Education

Faces Two Major Issues

#1Alabama K-12 Public

EducationIs Underfunded

#2The Alabama Legislature Has Been Influenced to Historically Position the State’s Education Trust

Fund to Disproportionately Pay Health and Retirement Benefits From State Funds

Other Costs for K-12

68.63%

Projected Benefit Cost

for K-1231.37%

Projected FY 2011Benefit Costs

#1—K-12 Is Underfunded K-12 has 75.67% of the students in Kindergarten through

Graduate-level Programs (K-12/Postsecondary/Colleges/Universities)

K-12 receives 68.78% of the Education Trust Fund Budget in FY 2010

K-12 739,197 students(All are Full-Time

Students)Postsecondary 79,049 students

(Enrolled) 60,591 students

(Full-Time Equivalent—FTE)

Four-Year Colleges

158,599 students(Enrolled)

120,300 students(Full-Time Equivalent—

FTE)

Source: Enrollment and FTE Data for Postsecondary and Higher Education Obtained from Southern Regional Education Board, 2008Enrollment for K-12 Data Obtained from NEA, 2008 for Enrolled K-12 Students

Current Distribution of ETFAppropriations Per FTE

Four-Year Colleges $8,434 Per FTE

Postsecondary $7,213 Per FTE

K-12 $4,952 Per FTE

K-12 Cannot Adjust For Proration

K-12 has no mechanism to raise revenues at the state or local levels without legislative and/or local political body approval (often requires a vote of the people as well). This is a slow process that does not aid all 132 school systems in the times of greatest need.

Postsecondary can raise tuition with State Board of Education approval.

Colleges/Universities can raise tuition with individual Board of Trustees’ approval.

What Does The 10-Mill Requirement Mean In Dollars and

To Whom Does It Apply?132 local school systems must “match” the state-funded dollars in the Foundation Program with the equivalent of 10 mills of property tax.Total Match for 132 School Systems $504,379,320

Total Match for Postsecondary $0

Total Match for Higher Education $0

Current K-12 Funding Issues• Alabama Reading Initiative is underfunded

• Alabama Math, Science, and Technology Initiative is underfunded• Alabama Connecting Classrooms, Educators, and Students Statewide is underfunded• Foundation Program items, including the following, should be reinstated

Other Current Expense (OCE) Classroom Supplies Student Materials Technology Library Enhancements Professional Development Common Purchases Textbooks High Hopes 1% Salary Allocation Technology Coordinators Current Units At-Risk

• School Nurses are underfunded• English as a Second Language teachers are underfunded• Transportation is underfunded• Graduation Coaches are underfunded• Advanced Placement is underfunded• HIPPY is underfunded• Career and Technical Education is underfunded• National Board for Professional Teaching Standards is underfunded• After-School Programs are underfunded• Gifted Education is underfunded• Student/Teacher Testing is underfunded• Teacher Mentoring is underfunded• Character Education has no funding

#2—State Health and Retirement Costs Have Become

Disproportionately Too High At The State Level Year PEEHIP Single

Policy (Employee)

PEEHIP Family Policy

(Employee)

PEEHIP State Funding

1986 $2 Per Month $95 Per Month $60 Per Month↕

2010

2011 (Requested)

$2 Per Month

?

$134 Per Month

?

$752 Per Month

$995 Per Month

25 Years Single Policy (Employee)

Family Policy (Employee)

State Funding

1986-2010 No Change (0%)

+41% +1,153%

2011 ? ? +1,558%

Did Teachers Lose Salary Benefits in Order to Obtain

High-Quality Insurance Largely Provided by the

State?1986 Alabama Average Teacher Salary $23,040

2009 Alabama Average Teacher Salary

(Estimated)$48,906

+ $2,155 per month

(12 months)Source:National Education Association

Teacher Salary Comparison1986-2009

Average Teacher Salary(U.S.)

Average Teacher Salary

(Alabama)1986 $25,201 1986 $23,0402009 $53,910

Estimated

2009 $48,906 Estimated

+114% +112%Source:National Education Association

Recommendations for K-12 Funding Beginning With The FY 2011 Education

Budget (2010 Regular Session, Alabama Legislature)

1. K-12 Education should receive, at a minimum, 70% of all expenditures approved in the FY 2011 Education Budget.

2. The Legislature should freeze the state appropriation for the Public Education Employees’ Health Insurance Plan (PEEHIP) at the FY 2010 level and instruct the PEEHIP Board of Directors to develop a health insurance program to match funds available. Funds available may include an increase in the employee monthly/annual payment and/or changes in benefits, but that should be a part of the PEEHIP Board action.

PROPOSED CONSTITUTIONAL AMENDMENT?Beginning with the FY 2012 Education Budget, the Legislature shall appropriate funds to PK-12 elementary and secondary education, postsecondary education (two-year colleges), and four-year colleges and universities, including graduate programs, based on the number of students enrolled at each level of education. A constant four percent of the annual Education Budget shall be allocated to state agencies and entities providing services to education in Alabama.

3. The Legislature should amend current law that establishes the minimum number of years of service required for retirement benefits to be 30 years and 55 years of age, instead of the current 25 years and no age minimum, and make it effective for all new employees beginning with the 2010-2011 school year.

4. The Legislature should amend current law related to the Deferred Retirement Option Plan (DROP) to make the requirement to participate be a minimum of 30 years of service and 57 years of age and make it effective for all new employees beginning with the 2010-2011 school year.

5. The Legislature should amend the law enacted in 1975 for all current and future Retirement Systems of Alabama members to increase payments from the current 5% of gross annual payroll to 6% of gross annual payroll, and the Retirement Systems Board of Directors should move from the current 20-year funding period for retiree obligations to 30 years, which more clearly reflects the industry standard.

Recommendations for K-12 Funding Beginning With The FY 2011 Education

Budget (2010 Regular Session, Alabama Legislature)

How Much “New” MoneyCould We Have For FY 2011?

If growth continues in the Education Trust Fund (ETF) at a positive rate like October 2009 there could be no increase in the current 7.5% proration and perhaps a reduction in FY 2010 proration. Assuming a 3% growth rate for FY 2011 there could be $159,669,887 “new dollars” in growth for the ETF.

“IF”

If K-12 education receives 70% of the ETF (currently 68.8%) and the ETF amount for FY 2011 is $5,481,999,464, then K-12 would receive $3,837,399,625. That would be $245 million more than we are receiving now at proration level funding and 68.8% of the budget.

If K-12 can regain all $245 million for FY 2011 budget priorities that focus on improving the classroom and restoring cuts to the Foundation Program and not have some or all of it diverted to benefits, K-12 can begin to climb out of the deep hole we are in due to two years of devastating proration. PEEHIP administrators are asking for $238 million “new dollars” and Retirement administrators are asking for $57 million. If new dollars go to benefits, any funds available to fill the “proration gap” would be lost.

“If” is often called the biggest two letters ever put together by man to form a word.

So, “if” the previous ifs come to pass and “if” the legislature will level fund benefits, then the Alabama Reading Initiative, the Alabama Math, Science, and Technology Initiative, and the Distance Education Initiative can live on; some cuts to the Foundation Program can be restored; Transportation can come closer to being funded; and K-12 education in Alabama can survive.

This is a survival plan,

but in times such as

these,

a survival plan

is what is needed.

“IF”

Needed Non-Budget LegislationThe Legislature should amend the existing

Teacher Tenure Act and the Fair Dismissal Act to allow for a hearing at the local level before a local board of education regarding dismissal of employees. That ruling should be enforced immediately after the board vote, and no additional payments should be paid to the employee. If the employee appeals the decision to a circuit judge, the employee’s pay should be placed into an escrow account. If the employee wins the appeal, the employee receives back pay. If the employee does not win the appeal, the funds revert back to the general operations of the school system.

CRAIG POUNCEYASSISTANT STATE SUPERINTENDENT OF EDUCATION

Superintendents’ meetingWednesday, November 18, 2009

CRAIG POUNCEYASSISTANT STATE SUPERINTENDENT OF EDUCATION

“What does the future hold?”A closer look at FY 2011

Proration of FY 2010 resulted in the loss of $290 million for K-12

Based on Dr. Morton’s proposals that include:

3% growth 70/30 split

We stand to regain $245,280,275

Even with 100% success in these proposals, we still fall short some $44,821,714 in regaining the level of state dollars that was appropriated for FY 2010

Let’s review our options . . .

Follow the path of the past and assume that the state will continue to meet any increases required for peehip and retirement. This would require all new dollars being directed to meet these

needs. It would not restore state funding that was lost for the local districts

This would also require a loss of approximately 2,900 teachers and 1,400 support positions

All other programs would be funded at their prorated amounts, which would include transportation

Option 1

Level fund existing employee benefit costs

Direct any new growth dollars back to the local districts

Here are the details . . .

Option 2

amount directbenefit To:fully funding all state-earned $254,002,222 LEAscertified positions using the current divisors

Level fund OCE at its current No Change LEAsprorated level

Level fund At-Risk at its current No Change LEAsProrated level

Student materials from $0 to $125/unit $ 6,071,985 LEAs

Library enhancement From $0 to $50/unit $ 2,428,803 LEAs

Textbooks from $15 to $18/student $ 1,605,342 LEAs

Foundation Program

amount direct

benefit To:

Fleet renewal $ 7,506,203 LEAs($5,599/bus) on a 12 yr schedule

Operations/salaries $ 9,995,793 LEAs

Transportation

amount directbenefit To:

AMSTI $ 6,272,358 LEAs/state

Current units $ 5,000,000 LEAs

School Nurses $ 2,514,550 LEAs

ARI $ 1,682,959 LEAs/state

Career Tech $ 1,000,000 LEAs

ACCESS $ 921,400 LEAs/state

Governor’s At-Risk $ 828,898 LEAs

National Board Certified Teachers $ 750,000 LEAs

Line Items

amount directbenefit

To:ESL $ 744,416 LEAs

Advanced Placement $ 447,506 LEAs

Technology Coordinators $ 500,000 LEAs

Character Education $ 300,000 LEAs

Graduation Coaches $ 297,225 LEAs

Teacher Testing $ 181,860 LEAs

Teacher Mentoring No change LEAs

Line Items - continued

Option 2 Results in 99.87% of all new state dollars being directly sent back to the local school systems.

Summary

State Health OfficerDr. Don Williamson

Alabama H1N1 Update

School Superintendents 11/18/2009

10/1

010

/16

10/2

210

/28

11/3

11/9

11/1

511

/21

11/2

712

/312

/912

/15

12/2

112

/27

1/2

1/8

1/14

1/20

1/26 2/

12/

72/

132/

192/

25 3/3

3/9

3/15

3/21

3/27 4/

24/

84/

144/

204/

26 5/2

5/8

5/14

5/20

5/26 6/

16/

76/

136/

196/

25 7/1

7/7

7/13

7/19

7/25

7/31 8/

68/

128/

188/

248/

30 9/5

9/11

9/17

9/23

9/29

10/5

10/1

1

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

7.2

2007-2008 2008-20092009-2010 Regional Baseline

Week Ending Dates

% o

f Visi

ts fo

r ILI

Percentage of Visits for Influenza-like Illness (ILI) Reported by the US Outpatient Influenza-like Illness Surveillance Network (ILINet), Alabama

Summary 2009-10 and Previous Seasons

Date Reported: 11/13/2009

Green: < 5%Yellow: 5% - <10% Orange: 10% - <15%Red: 15% - <20%Fuchsia: 20% - <25%Purple: >25%

Alabama State Department of Education School Absenteeism Report5-Day Average of Absenteeism by School, 11/06– 11/13/2009

Date Reported: 11/17/2009

Date Reported: 11/17/2009*Data prior to 9/11/2009 are subject to over inflation of schools <5%

8/29 9/

5

9/12

9/19

9/26

10/3

10/1

0

10/1

7

10/2

4

10/3

1

11/7

11/1

4

-10%

0%

10%

20%

30%

40%

50%

60%

47.10%45.36%

45.44%

52.31% 52.32% 51.12% 50.36% 51.26% 56.75% 57.32% 56.44% 51.43%

41.39%44.61%

47.22%

40.98% 40.10%42.26% 43.51%

40.97%38.82%

37.34%39.19%

42.22%

9.54%8.05%

6.25% 5.61% 6.01% 5.63% 4.82% 6.05%3.50% 4.01% 3.41%

5.23%

Alabama State Department of Education School Absenteeism Report Percentage of Schools by Absenteeism Percentage,

Week Ending Date (08/29 - 11/14/2009)*

< 5%

5 - < 10%

10 - < 15%

15 - < 20%

20 - <25%

25% and greater

Week Ending Date

Perc

enta

ge o

f Sch

ools

Data obtained: 11/16/2009

Week ending 9/05/2009

Week ending 9/12/2009

Week ending 9/19/2009

Week ending 9/26/2009

Week ending 10/3/2009

Week ending 10/10/2009

Week ending 10/17/2009

Week ending 10/24/2009

Week ending 10/31/2009

Week ending 11/07/2009

Week ending 11/14/2009

0

1000

2000

3000

4000

5000

6000

7000

8000

0.0

5.0

10.0

15.0

20.0

25.0

7206 7484

6358

56195001

3765 3502 3227 2984 2835 2877

64 62 63 60 60 60 56 57 55 53 58

19.820.3

18.0

16.5

15.3

14.0

12.0 12.011.1 10.9 10.9

Number and Percent of ER Visits with Influenza-like IllnessTotals by Week as Reported through AIMS

ER ILI Visits Average number of reporting hospitals % ER visits with ILI

Num

ber o

f ER

visit

s with

ILI

Perc

ent o

f ER

visit

s with

ILI

Cumulative ER ILI Visits: 50,858

Data obtained: 11/16/2009

Week ending 9/0

5/2009

Week ending 9/1

2/2009

Week ending 9/1

9/2009

Week ending 9/2

6/2009

Week ending 10/3

/2009

Week ending 10/1

0/2009

Week ending 10/1

7/2009

Week ending 10/2

4/2009

Week ending 10/3

1/2009

Week ending 11/0

7/2009

Week ending 11/1

4/2009

0

50

100

150

200

250

300

350

400

0.0

1.0

2.0

3.0

4.0

5.0

389 396

342375

290 275 267 272

322287 275

64 62 63 60 60 60 56 57 55 53 58

3.8 3.8

3.1

3.6

2.7

3.0 3.0 3.0

3.43.2

3.0

Number and Percent of Hospital Admissions with Influenza-like Illness - Totals by Week as Reported through AIMS

ILI Admissions Average number of reporting hospitals % Admits with ILI

Num

ber o

f Adm

issio

ns w

ith IL

I

Perc

ent o

f Adm

issio

ns w

ith IL

I

Cumulative: 3,490

Target Groups• Pregnant women• Persons aged 6 mo-24 yrs of age• Household contacts of <6 mo of age• Healthcare and emergency services

personnel• 25-64 years of age with chronic health

disorders

H1N1 Dosing Regimen

• <9 years of age 2 doses• >10 years of age one dose

• Supported by preliminary data from NIH and manufacturer sponsored studies– Adults >18 years: 1 dose– Children 10-17 years: 1 dose– Children 6m-9 years: 2 doses

Dr. Tommy Bice Deputy State Superintendent of Education

Race to the Top

Alabama’sPlan for the

Future

Criteria

RESULTSBased on AYP and Multiple

Metrics

Student to Teacher to School to System

Statewide System of Differentiated Support

Turnaround of Low-Performing Schools