[PPT] - FY 2010 Revised Budget and Beyond: State & Local Government PowerPoint Presentation

SLIDE 1

1

FY 2010 Revised Budget and Beyond: State & Local Government Structure & Tax Policy

Staff Presentation to the House Finance Committee April 22, 2010

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 2

2

Introduction

l Government Services Overview l State and Local Governments l Services and Functions

u How are they delivered? u How are they funded?

l What are options for change?

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 3

3

References

l House Fiscal Reports: Revenues, Education

and Local Aid

u http://www.rilin.state.ri.us/HouseFinance

l Department of Revenue

u http://www.tax.ri.gov u http://www.muni-info.ri.gov

l RI Dept. of Elementary & Secondary Ed

u http://www.ride.ri.gov/Finance/ride_insite/Default.htm

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 4

4

References

l US Census Bureau

u http://www.census.gov/

l Rhode Island Public Expenditure

Council

u http://ripec.com

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 5

5

Government Services Overview

l State of RI = Population 1 million

u Five Counties

39 cities and towns

– 39 municipal governments – 36 school districts – 38 police departments – 52 fire departments/districts

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 6

6

State Expenditures

$(301.8) $7,512.9 $7,814.7 Total (54.1) 1,769.6 1,823.8 Other 14.4 176.8 162.4 Restricted (110.8) 2,717.5 2,828.2 Federal $(151.3) $2,849.1 $3,000.3

Gen. Rev.

Change Gov 2011 FY 2010

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 7

7

Uses – All Funds by Category

Operating Xfers 1.7% Capital 6.4% Personnel & Operating 30.7% Local Aid 13.9% Asst., Grants, Benefits 47.3%

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 8

8

Uses – General Revenues by Category

Operating Xfers 4.3% Capital 5.7% Personnel & Operating 31.3% Local Aid 28.2% Asst., Grants, Benefits 30.4%

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 9

9

Uses – All Funds by Function

Transportation 5.7% Education 28.1% Human Svcs. 39.4%

Gen. Govt.

19.5% Public Safety 6.0%

Nat. Res.

1.3%

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 10

10

Uses – General Revenues by Function

Education 35.2% Human Svcs. 36.5%

Gen. Govt.

13.5% Public Safety 13.5%

Nat. Res.

1.3%

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 11

11

State Government Functions

l 46 departments, agencies, boards etc l Quasi-public entities l 13,000 -15,000 staff

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 12

12

State Government Functions

l Safety Net expenses l Local Aid l All Other

u Public Safety - prison, courts, state police u Infrastructure u Regulatory functions u Public Health/Environment u Education – higher ed., policy u Government

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 13

13

State Government Functions

l Recessions renew review of government

structure as well as discrete costs

l Often focus is on if services are delivered

cost effectively, efficiently

u How many agencies does a business, come

in contact with completing a single job or starting an enterprise ?

u How many agencies are involved in the lives

f a family in need?

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 14

14

State Government Functions

l Also need to consider policy choices

n the services themselves

l How much can the economy support?

u What services are essential? u Necessity vs. Desirability

l Out year forecasts show current

revenue structure does not support current spending patterns

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 15

15

Sources

$- $0.3 $0.6 $0.9 $1.2 $1.5 $1.8 $2.1 $2.4 $2.7

Fed. Funds

PIT Sales Univ./College ESSI/TDI Business Lottery

Misc. Other

Dept. Other Taxes Restriced Gas Tax

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 16

16

Revenues: How We Compare

16.3% 21.5% All Other Taxes 9.4% 9.9% Selective Sales 16.6% 21.1% General Sales 27.1% 20.4%

US

37.2% Property 20.6% Individual Income

RI

Share of State & Local Taxes (FY 2007 Census)

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 17

17

Revenues: How We Compare

15 21 All Other Taxes Collections 23 15 Selective Sales Collections 30 39

Gen. Sales Tax Collections

7 24 Rank 1997 7 Property Tax Collections 26 Individual Tax Collections Rank 2007 State & Local Taxes Per Capita

(FY 2007 Census)

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 18

18

Revenues

l Recent Assembly actions attempted to

improve these rankings

l Alternate Flat tax l Stronger Property Tax caps l Meal and Beverage and Hotel l Previous increases in general revenue

sharing and car tax phase-out

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 19

19

Evaluating Revenue System

l Equity l Economic Efficiency l Competitiveness l Revenue Adequacy l Revenue Responsiveness & Stability l Accountability l Simplicity – Ease of Administration

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 20

20

State Revenues

l Rhode Island has high-rate, low yield

revenue structure

l Exemptions, credits and narrow bases l Income and Sales largest sources of

general revenues

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 21

21

Personal Income Tax

l

25% of federal liability on the federal rates in effect immediately prior to 2001 tax cut, with brackets adjusted for inflation

l

Marginal Rates: Example below for single filers $372,950 9.9% $171,550 9% $82,250 7.75% >$33,950 7% >$0 3.75%

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 22

22

Personal Income Tax

l Flat Tax option since 2006

u % of federal AGI: no deductions or credits other

than taxes paid to other states

u The tax rate was 6.5% for 2009 and will be 6.0%

for 2010

l 860 filers in 2007; 1,140 in 2008 l Most still find current rate structure more

favorable because of credits and deductions

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 23

23

Personal Income Tax

l Recent proposals have sought to

replace current system with more simplified brackets

l Remove “stigma” of 9.9% top marginal

rate in state comparisons

l Issue of winners and losers persists

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 24

24

Business Corporation Tax

l 9% Percent of Net Income w/$500

minimum tax

l 2008 SOI data

u 48,597 returns u 45,063 paid minimum

l $94.1 million in FY 2010; est. $100

million for FY 2011

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 25

25

Business Corporations

Governor’s FY 2011 budget:

l

$22.5 million loss from new and increased tax credits and tax cuts (1.0) H 7397 K-12 Scholarship Organization Contribution Credit (11.5) H 7397 Corp minimum tax from $500 to $250 $(10.0) H 7397 Small Business Job Tax Credit New losses, tax cuts

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 26

26

Business Corporations: Issues

l Gross/Net receipts l Proposals to phase out tax rate and

replace with tiered minimum

l Combined Reporting

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 27

27

Sales and Use Tax

l The tax began July 1, 1947 at 1

percent. The current 7 percent rate

became effective July 1, 1990

l State has high rate but narrow base l No local option

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 28

28

Sales and Use Tax

l Comparisons with other states

u 46 states levy sales tax (Alaska at local

level only)

u 2007 Census data ranks RI 30th on per

capita collections; 37th on collections as percent of personal income

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 29

29

Sales and Use Tax

l The tax began July 1, 1947 at 1

percent. The current 7 percent rate

became effective July 1, 1990

l State has high rate but narrow base l No local option

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 30

30

Sales and Use Tax

RI does not generally tax services -

declining base relative to consumption

21 of 45 states taxing services (7-1-

2009)

u

17 tax cleaning services

u

22 tax repair services

u

12 tax transportation services

u

6 tax professional/personal services

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 31

31

Sales and Use Tax

Many exemptions that narrow base No local sales tax

u

Most states have city/county/special district local option sales taxes

u

When added up, exceed 7% in many cases

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 32

32

Local Government

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 33

33

FY 2010 Local Revenue Sources

Federal 0.5% Non-Property 8.2% Property Taxes 64.5% State 26.8%

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 34

34

Property Tax

l RI Constitution – Article XIII, Section 5

“Nothing contained in this article shall be deemed to grant to any city or town the power to levy, assess and collect taxes or to borrow money, except as authorized by the general assembly.”

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 35

35

Property Tax

l Power to Levy- RIGL

“The electors of any city or town qualified to vote

n any proposition to impose a tax or for the

expenditure of money, when legally assembled, may levy a tax for the purposes authorized by law, on the ratable property of the city or town, either in a sum certain, or in a sum not less than a certain sum and not more than a certain sum...”

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 36

36

State and Local Property Taxes

$4,509 $1,850

RI

12 $4,270 Total State & Local Taxes 7 $1,282 Per Capita

Rank US

(FY 2007 Census)

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 37

37

Property Tax: Statutory Exemptions

l Statutory

Exemptions (RIGL 44-3-3)

u Cemeteries u Charitable u Church u Federal u Hospital u Libraries u Schools

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 38

38

Property Tax: Local Exemptions

l Elderly Exemptions (RIGL 44-3-13) – Mostly

ffered to persons over the age of 65

l Disability Freeze (RIGL 44-3-15) – Freeze tax

rate and valuation

l Elderly Freeze (RIGL 44-3-16) – Freeze tax

rate and valuation

l Veterans’ Exemptions (RIGL 44-3-4) –

Offered to persons served in military or naval service

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 39

39

Property Tax Cap

l 2006 Assembly capped property tax levy at 5.25%

ver the prior year, dropping annually by 0.25

4.00 2013 4.25 2012 4.50 2011 4.75 2010 5.00 2009 5.25 2008

Levy % incr. Fiscal Year

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 40

40

Property Tax Cap

l Law provides for safeguards to enable

communities to exceed the cap when setting initial rates

u Loss of non-property tax revenues u Increase in debt service costs u Emergency u Substantial growth in tax base

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 41

41

Property Tax Cap

l Auditor General reviews and approves

exemptions relating to emergencies

l Municipal Finance reviews and approves

exemptions relating to growth

l Levy in excess of caps must be certified

by the DOR

u Requires an affirmative vote of at least 4/5ths

f the local governing body

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 42

42

Property Tax Cap

l Requested Exemptions

u 7 municipalities u Loss of revenue and debt service

increase

u $15.9 million above tax cap

l Allowed Exemptions

u Dept. of Revenue approved all seven u $14.6 million

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 43

43

Local Aid

Diff. FY 11 Gov. FY 2010 Enacted $(135.3) $0 $135.3 Car Tax

8.7

8.7 Library Aid 0.2 27.8 27.6 PILOT*

10.4

10.4 Distressed Comm.

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 44

44

Revenues (Pass-through)

l Public Service Corp. Tax

u Tangible personal property includes lines,

cables, ducts, pipes, machines and machinery

u Funds are collected by Taxation u Statute allows for the use of up to 0.75 % for

administrative expenses

u Distributed to the municipalities based on local

population

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 45

45

Revenues (Pass-through)

l Local Meals and Beverage

u 1.0% from retail sales of meals & beverages

in/from eating/drinking establishments

u Meals=sold ready for immediate

consumption

u Collected by Taxation and distributed

quarterly to the city or town where the meals and beverages are delivered

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 46

46

Revenues (Pass-through)

l Hotel Tax

u 6.0 % on any space furnished in buildings or

structures with a minimum of 3 rooms

u Taxation collects the tax for all hotels except

those located in the City of Newport

u Taxes divided among CVBs, locals and state u The 2004 Assembly added 1% additional tax

n occupancy charges effective January 1,

2005 to dis

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 47

47

Distributed State Aid

State School Aid 74.6% State Municipal Aid 25.4%

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 48

48

Historical Spending

$- $500.00 $1,000.00 $1,500.00 $2,000.00 $2,500.00 $3,000.00 $3,500.00 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Municipal Services Education

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 49

49

FY 2010 Budget

Municipal Services 42.6% Education 57.4%

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 50

50

Historical Spending

l FY 2004 expenditures

u $2,599.5 million

l FY 2009 expenditures

u were $3,187.4 million

l Growth of 22.6% over 5 years

u Average of 4.5 percent annually

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 51

51

Municipal Services – Uses

All Other 19.7% Fire Protection 12.9% Police Protection 15.4% Public Works 11.0% Debt Service 14.3% Employee Benefits 26.8%

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 52

52

Police Expenses

Per capita

12 16 RI Rank 15 9 MA Rank $308 $171 RI 2007 1997 Fiscal Year $281 $175 US 20 10 CT Rank

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 53

53

Fire Expenses

Per Capita

1 1 RI Rank 8 3 MA Rank 15 5 CT Rank $233 $131 RI 2007 1997 Fiscal Year $123 $71 US

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 54

54

FY 2010 Staffing

9,306.1 Total 534.1 Other 1,999.0 Fire 2,586.0 Police 4,187.0 Municipal Staffing Services

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 55

55

Health Insurance Co-Shares

l Varies by municipality l Some municipalities have different rates

for different groups of employees:

u police, firefighters, public works, etc.

l Nearly all co-share

u Percentage of salary u Percentage of premium

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 56

56

Health Insurance Co-Shares -Examples

l Urban

u Cranston percentage of premium range from

12% - 25%

l Suburban

u Cumberland - police officers $1,150 per year

l Rural

u Richmond - 15.5% of premium

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 57

57

Municipal Health Waiver Bonus

l Urban

u Woonsocket: $3,400 municipal and fire;

$2,000 police

l Suburban

u Middletown: $2,600 town hall, $4,500

public works and police, $7,000 fire

l Rural

u Charlestown: $2,500

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 58

58

Fire Districts

l Levy separate property tax l 2000 Assembly eliminated authority of

fire districts to levy motor vehicle excise taxes

l Fire districts have been reimbursed for

100% of the lost revenues since FY 2001

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 59

59

Fire Districts

25 Total

1 Tiverton 2

S. Kingstown

6 Lincoln 3 Glocester 1

E. Greenwich

4 Cumberland 4 Coventry 4 Burrillville

Fire Districts Town

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 60

60

State Mandates

l State law requires state to issue a report on

all state mandates enacted since 1979

l Requires Budget Office forward the costs for

unfunded mandates to the governor for consideration

l FY 2010 report identifies 86 mandates l FY 2008 report noted $1.1 million in costs

u FY 1992 was last reimbursement state made

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 61

61

Recent Proposals to Assist Locals

l Collective Bargaining Issues

u Teacher Contract Approval u Minimum Manning u Police and Fire Injured on Duty u Pension Limitations u Retiree Health Limitations

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 62

62

Revenues: How We Compare

15 21 All Other Taxes Collections 23 15 Selective Sales Collections 30 39

Gen. Sales Tax Collections

7 24 Rank 1997 7 Property Tax Collections 26 Individual Tax Collections Rank 2007 State & Local Taxes Per Capita

(FY 2007 Census)

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 63

63

Issues Facing Locals

l Property Tax Limits and Yields

u Foreclosures u Declining revenues

l Long Term Liabilities

u Pensions u Retiree Health

l Uncertainty of state support

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 64

64

State Mandates

l State law requires state to issue a report on

all state mandates enacted since 1979

l Requires Budget Office forward the costs for

unfunded mandates to the governor for consideration

l FY 2010 report identifies 86 mandates l FY 2008 report noted $1.1 million in costs

u FY 1992 was last reimbursement state made

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 65

65

Recent Proposals to Assist Locals

l Maintenance of Effort

u Library Support u Education Funding

l Realignment Commissions l Statewide Purchasing l Statewide Transportation

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 66

66

Local Government: Education

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 67

67

Public Education – Who we are

l 147,629 Students l 36 Districts l 4 Regional school districts l 13 Charter Schools

u 3 of which are district affiliated

l State Schools

u School for the Deaf u Davies Career and Technical School u Metropolitan Career and Technical School

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 68

68

How do we compare?

Data from the United States Census and National Center for Educational Statistics

4,101 Rhode Island 3,460 US Average 3,438 Connecticut 3,178 Massachusetts 1,141 New Hampshire 654 Maine 343 Vermont Average Number of Students per District - 2008

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 69

69

How do we compare?

l US Average can be misleading

u 24 districts in the US have more than

100,000 students

u 26% of Texas districts have more than

50,000 students; 24% have less than 5,000 students

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 70

70

How do we compare?

RI US Enrollment 281 590 1,064 2,012 3,309 1,762 1,903 2,724

# of Districts

25,000 or more 3 10,000 – 24,999 5 5,000 – 9,999 14 2,500 – 4,999 9 1,000 – 2,499 1 600 – 999 2 300 – 599 2 1 - 299

Size of District

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 71

71

Governance

l City School Boards, Local Boards,

County School Boards, Consolidated School Boards

l Elected vs. Appointed l RI: elected local school boards except

for

u Providence – appointed by mayor u Central Falls – Board of Trustees appointed by

state

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 72

72

What do we spend our money on?

FY 2007 InSite Data

Leadership 11% Operations 15% Instructional Support 16% Instruction 52% Other 6%

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 73

73

Expenditures

l Instruction – 52%

u Salaries and benefits for teachers,

substitutes

46.6% of all expenditures

u Instructional materials

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 74

74

Expenditures

l Instructional Support – 16%

u Guidance/counseling u Library u Student health services u Staff development u Therapists

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 75

75

Expenditures

l Operations – 15%

u Transportation – 3.5% u Food services u Safety u Building maintenance – 7.3% u Data processing u Business operations

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 76

76

Expenditures

l Leadership – 6%

u Principals/Assistant Principals – 3% u Superintendent u Legal u Administrators

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 77

77

Expenditures

l Other – 11%

u Debt service – 2% u Capital projects u Retiree benefits – 1.6%

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 78

78

How do we pay for it?

Data from United States Census Bureau

Local 53% Federal 8% State 39%

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 79

79

How do we pay for it?

l Local

u Property taxes

l State Aid

u Direct aid, school construction, teacher

retirement

l Federal

u Title I, IDEA, School Lunch, etc.

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 80

80

Current State Aid

l House budget provides $640.3 million of

direct aid

u $595.5 million from general revenue u $42.7 million from federal stabilization

funds

l State’s MOE limits budget options

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 81

81

State Aid History – in millions

$300 $400 $500 $600 $700 $800 $900 F Y 2 F Y 2 1 F Y 2 2 F Y 2 3 F Y 2 4 F Y 2 5 F Y 2 6 F Y 2 7 F Y 2 8 F Y 2 9

Formula Aid Teacher Retirement Construction Aid Other

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 82

82

How We Compare

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Rhode Island New England US Average Federal Local State

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 83

83

Per Pupil Expenditures

7 $9,666 $12,318 $12,612 2007 8 $7,701 $9,136 $9,718 2002 5 $5,882 $6,914 $7,381 1997 Rank US New England RI Fiscal Year

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 84

84

Per Pupil Expenditures

l What factors contribute to regional

differences?

u Teachers’ salaries u Student poverty u Cost of living

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 85

85

Recent Efforts for Efficiencies

l Regionalization l Joint purchasing l Statewide transportation l Collaboratives l Health Care

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 86

86

Recent Efforts for Efficiencies

l Regionalization

u Currently have 3 full and 1 partially

regional districts

u Regionalized between 1958 and 1991 u Regionalization bonus aid discontinued but

exists in base funding

u Current bonus for school construction aid

projects

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 87

87

Recent Efforts for Efficiencies

l Joint Purchasing

u Voluntary statewide purchasing system for

goods, supplies and services

u Article 18 permits public schools to join

cooperatives consisting of two or more states

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 88

88

Recent Efforts for Efficiencies

l Statewide Transportation

u 2009 Assembly adopted legislation

mandating use of statewide system for special needs students and eventual implementation of system for all students

u Out of district began Sept 2009 with 14

districts

u Dept estimates savings to districts of $1.6

million

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 89

89

Recent Efforts for Efficiencies

l Collaboratives

u Established through districts and school

committees

u Joint educational programs and/or

administrative functions

u 5 regional collaboratives

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 90

90

Recent Efforts for Efficiencies

l Health Care

u Assembly adopted legislation creating a

uniform medical & prescription drug benefit plan for school district & charter school employees

u Board of Directors designs and approves

medical benefits & prescription drug plans

u Choice of benefit plan from those approved,

cost sharing, payment for waiving insurance, eligibility and retiree benefits still negotiated

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 91

91

Recent Efforts for Efficiencies

l Health Care

u Teacher cost shares for FY 2010 range

from 0% - 20%

u Most between 10% - 15% of plan u Most office co-pays between $10 and $15

l Waivers range from either

u $1,000 to $6,000 u 25% to 50% of premium

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 92

92

Proposals for Further Efficiencies

l Statewide Teacher Contract l Realignment Commission l Administrative Districts l Statewide Food Service Contract

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 93

93

Proposals for Further Efficiencies

l Statewide Teacher Contract

u 2003 Assembly instructed DOA to conduct

cost/benefit analysis of a statewide teacher contract

u Study found 6 cost drivers related to

collective bargaining:

Direct salary (scale), longevity, degrees,

healthcare, social security participation, student/teacher ratio

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 94

94

Proposals for Further Efficiencies

l Statewide Teacher Contract

u Found potential savings of up to $234.0

million using lowest cost structure and potential costs up to $271.7 using highest cost structure

u Did not attempt to assess quality issues

u http://www.budget.ri.gov/Documents/Special%20

Reports/

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 95

95

Proposals for Further Efficiencies

l Realignment Commission

u Governor proposed in FY 2009 revised and

FY 2010 revised budgets

u Review and make recommendations for

realigning school services in cases where such realignment will be cost effective

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 96

96

Proposals for Further Efficiencies

l Administrative Districts

u Legislation introduced during 2008 session

to create 4 administrative districts or regions for administration and purchasing

u A different bill would have 5 regional

districts with regional superintendents and deputy district administrators

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 97

97

Proposals for Further Efficiencies

l Statewide Food Service Contract

u Governor proposed as part of FY 2009

revised budget

u Dept of Ed would develop and implement a

statewide food services program for al districts, charter schools, state schools

u Dept estimated savings to districts of $3.2

million

PDF created with pdfFactory trial version www.pdffactory.com

SLIDE 98

98

FY 2010 Revised Budget and Beyond: State & Local Government Structure & Tax Policy

Staff Presentation to the House Finance Committee April 22, 2010

PDF created with pdfFactory trial version www.pdffactory.com