Governor's Blue Ribbon Task Force -- April 1, 2004 Minutes

Meeting Schedule, Agendas and Minutes

April 1, 2004 Minutes

In attendance were Chairman William W. Wilkins, Vice-Chairman Jim Hyre, Committee Chair Matthew Filipic, Committee Chair Chuck Gossett, Committee Chair Walt Davis, Committee Vice-Chair Dick Maxwell, Committee Vice-Chair Dan Navin, Committee Vice-Chair Dennis Woods, Dick Baker, John Brandt, Eric Burkland, Barbara Byrd-Bennett, Representative Chuck Calvert, Fred Church, Paolo DeMaria, Christine Hansen, Russ Harris, Representative William Hartnett, Representative James Hoops, Senator Jeff Jacobson, Jim Mahoney, Tom Mooney, Senator C.J. Prentiss, Barbara Shaner, Barbara Sprague, Richard Stoff, David Varda, Scott Williams, Tom Zaino and Susan Zelman.

Presentation:

Blue Ribbon Task Force Committee Presentations (PDF*, 286 KB)

Mr. Wilkins called the meeting to order at 10:10 a.m. He thanked everyone for being there and for their active participation. He said that he understands the time and hard work that has been required and believes it will pay off in the long run. He expressed his appreciation of everyone working in good faith to try and fix school funding. He understands that there are passionate disagreements but believes a solution will be found because the right people are at the table.

Mr. Wilkins went on to describe the day's agenda. Progress reports will be heard from each committee. These reports will include what has been done and what is planned to be done in the future. He noted that it is important that the committees work together so that nothing slips through the cracks. He also reminded the members of the Governor's charge to "recommend a funding system for public elementary and secondary education in Ohio, including appropriate mechanisms for paying for such a system." This charge should be kept in mind as the Task Force deliberates today. He also reminded members that the conference calls with the chairs and vice-chairs have served to coordinate the work of the three groups. He then turned to Matt Filipic to present the Funding for Success Committee's report.

Funding for Success

Mr. Filipic began by explaining that the Funding for Success Committee has been given a difficult challenge. The committee has spent a lot of time trying to understand successful experiences around the state because it is believed the committee can learn from these models of success, particularly for those children from poverty backgrounds. He agrees that while the members of the Funding for Success Committee have different perspectives on some difficult subjects, the right people are around the table.

Mr. Filipic noted that a key issue of this committee is the relationship between what is being spent and what is being achieved. There are very divergent views among committee members on this issue. Some think what needs to be spent to achieve a given level of success is known, some think it is not known now but is knowable, and some think it cannot be known at all.

He then outlined the presentations that were heard by the committee since December when the Task Force last met. He noted that two presentations on fiscal stress were presented. Although the main focus of the committee is to link funding to academic achievement, it is also important to be aware of the stress districts are under and have a funding system that responds to that stress.

Mr. Filipic explained that the committee has been focusing on an input-based approach. This work began with the presentation by Dr. Richard Brandon from the University of Washington. The committee has attempted to prioritize the inputs to focus on those that have the largest impact on student achievement.

Certain categories of Ohio schools have been reviewed by the committee to see how they are spending their money. First, a subset of Gap Aid districts is being reviewed. This subset includes those that have demonstrated achievement according to the Department of Education's performance standards. These schools are being reviewed to analyze the appropriateness of the inputs being provided at these minimum levels. Mr. Filipic noted that the committee is not assuming the expenditures of these Gap Aid districts are a new foundation level. Second, districts containing Schools of Promise are being reviewed. These schools face a more difficult challenge to be successful because of their higher concentrations of poverty. Staff has been talking to the superintendents and principals in these districts to see how they are deploying their resources to achieve success academically.

The inputs identified through review of the Schools of Promise include:

Job-embedded professional development
Preschool and/or all day kindergarten
Intervention strategies such as extended year, summer school, small group, and one-on-one education
Parental involvement
Class size
Supporting work of classroom teachers
Management of the whole process through data-based decision making

Mr. Stoff asked why only Schools or Promise are being reviewed. Perhaps it is better to use districts participating in SOAR (Schools Online Achievement Reports) since there are data available for these districts. Mr. Mahoney added that Battelle for Kids is (like Task Force staff) trying to understand how districts sustain progress over time. He indicated that his group's field research will be complete in June.

Mr. Filipic responded that there may be examples of success beyond the universe the committee is reviewing. He explained that the sample districts being reviewed were expanded in the last two weeks to include those that have shown significant improvement. He also indicated that research currently being conducted will tell us a lot more in the future about what results in successful outcomes.

Mr. Filipic returned to the presentation by expressing that another key focus of the committee is the problem of low success rates in districts serving large numbers of low-income students. His fear is that that those that have not mastered their education will suffer in a knowledge-based economy and their children may enjoy fewer educational opportunities as a result, which could create a caste society. This focus on meeting the needs of poor children is one with which the whole committee agrees. He also noted that at the first meeting of the Task Force last summer Michael Griffith from the Education Commission of the States said that Ohio is a leader in this area because of Disadvantaged Pupil Impact Aid (DPIA) and other efforts that have given more money for educating children facing economic challenges. The committee wants to examine ways to continue to improve on this record.

Mr. Filipic added that the committee spent a lot of time developing principles that will drive its work. (See the April 1 PowerPoint presentation for the list of principles).

As Mr. Filipic outlined the principles, he provided extra commentary on some. For example, regarding data-based decision making, he said that districts applying such management practices have shown great gains in achievement but that many rely on grants for funding these practices. While there does seem to be some benefit to grant writing in that it forces district personnel to identify and clarify educational strategies, districts should not be required to have good "grantsmanship" to achieve success. Mr. Filipic also added that the committee is encouraged about efforts underway with Battelle for Kids. Value added is a good measure of success.

Next, Mr. Filipic explained the focus of some future meetings. He explained that the committee needs to decide its level of comfort with the inputs being provided by Gap Aid districts. Schools of Promise and the expanded universe of poverty schools making significant progress need to continue being reviewed and costs need to be estimated for the enhancements in these schools. Also, students with different needs such as special education and vocational education must be analyzed. The committee has not yet given these different types of students much attention. Finally, the mechanics of the current formula must be analyzed and certain funding streams within the formula need to be reviewed for possible reallocation.

Mr. Filipic completed his presentation by giving a summary of some of his thoughts on the committee's work stressing that this is simply his opinion. He said he senses that the recommendations made by the committee may be an interim solution until some research currently underway is completed. He feels that these efforts may bring people closer to knowing what practices lead to successful academic results. For now, an inference can be made from what successful districts are doing. Mr. Filipic went on to say that he does not foresee the committee recommending dramatically higher levels of funding for all districts and believes that districts will have to continue to supplement their funding through local efforts if they want higher levels of spending. This raises the question of the real problem that districts have with maintaining the margin above the base level. This is many times referred to as the phenomenon of Phantom Revenue. This loss of the margin of the base over time is incomprehensible to the local voter and is a reason people do not understand why districts continue to ask for more millage.

Mr. Mooney opined that this was thoughtful work but expressed concern that it was limited to Ohio. He feels that a cost study by an outside group should be completed. Also, other states have done some of this work and we should learn from what they have done. Mr. Filipic responded that the committee tried not to confine itself to only Ohio and drew on outside expertise to determine relevant inputs. Mr. Filipic explained that the committee has not done exactly what Mr. Mooney is suggesting but work has not been parochial. The presentation to the committee by Russ Whitehurst of the U.S. Department of Education is an example.

Mr. Mahoney noted the large inequities in valuations among school districts. One mill generates very different amounts in different districts. How has the committee addressed this? Mr. Filipic replied that, to some extent, this is a challenge being faced by all districts. The committee has discussed this issue but has not been focused on Mr. Mahoney's direct question.

Senator Jacobson stated that Parity Aid has addressed Mr. Mahoney's concern. Parity Aid is not so much a change in the tax system but a way to get all districts where they need to be through enhancement funding.

Representative Calvert has heard that the Funding for Success Committee will be spending time on local versus state funding. He observed that all tax revenue is local money. He feels that the committee should focus on equalization of revenue rather than how much of a school district's revenue is state and how much is local.

Mr. Brandt asked about the principle that adequate funding should not be based on grants. He asked whether the committee has discussed the time spent by districts trying to pass local levies. Mr. Filipic responded that he is against school districts being required to return to voters as often as they do. He added that both Funding for Success and Revenue and Taxation will need to get together to address this issue.

Mr. Brandt asked Mr. Filipic how the committee will know when adequate funding has been reached. Mr. Filipic replied that he does not feel there is any consensus yet on this topic. The committee will continue to discuss this issue but is not sure how it will be resolved.

Mr. Stoff opined that the Governor's charge about reaching higher levels of student achievement speaks to outputs, not inputs. There seems to be a shift in thinking emerging from the committee. He asked if the committee has thought about how to embed inputs into a formula so that they achieve outcomes. Mr. Filipic responded that this is clearly a challenge since there is a weak relationship between funding and success. It is hard to find just one number that will result in success when school districts face so many different situations. The committee is trying to understand how to base a funding system on successful practices but is not sure how to do this.

Mr. Mooney opined that it is known that wealth in the home and in the community, not just in the district, relates to success. What supplemental funding is needed and on what should it be spent? How do we compensate for what is not in the community and home? He said that he liked that the focus is on targeting resources to those in need.

Mr. Stoff observed that research done by Katie Haycock demonstrates that wealth may not be a limiting factor. Mr. Mooney answered that Dr. Haycock's research was too broad brushed. The schools she studied tended to be those with very motivated parents. They were almost all magnet schools.

Mr. Filipic noted that one of the reasons the universe was expanded was to make sure that the committee was not just looking at a few unusual examples. Cleveland, for example, has a large number of school buildings in this expanded universe.

Senator Jacobson opined that we need to recognize that wealth and achievement are both symptoms of the same thing without one causing the other. It cannot be assumed that if everyone had more money they would be fine. We also cannot assume that more is better than less. If it costs $1,000 to achieve a very minimal gain that takes away jobs, this is not good. We must balance gains with costs. School districts may be spending a lot because of motivated parents who are willing to pass levies, or the district is so wealthy that a relatively small tax rate generates a lot of revenue. It seems that it would be better that policy making be focused on inputs, which is why we need to go to this direction. Using inputs also helps to explain school funding at the local level. We could then say what inputs at given levels of funding can buy. This level of clarity cannot be achieved today.

Mr. Brandt commented that it appears the committee has rejected the successful schools model (output-based approach). He expressed concern that using Gap Aid districts seems to be taking the lowest spending schools. Using only these districts excludes a number of successful districts. Mr. Filipic responded that the committee is only focusing on successful Gap Aid school districts to determine what inputs this minimum level buys. You must answer this question first.

Ms. Shaner asked what the next steps are for the Funding for Success Committee. She asked whether the committee will look at the mechanics of the current formula. Has the committee discussed how to account for student enrollments in whatever formula is developed? Schools need to be able to provide the programs for the body of students that they must serve. Mr. Filipic answered that, based on the principle that the Funding for Success committee is focusing on children from poverty backgrounds, the committee would not want to do something to take money away from these districts.

Revenue and Taxation

Mr. Navin began the Revenue and Taxation Committee's presentation by noting that the principles driving the work of this committee are: simplicity, equity, stability, neutrality and competitiveness. A focus on simplicity is the recurring theme around the committee's discussions. (See the April 1 PowerPoint presentation on the Blue Ribbon Task Force's website.)

Mr. Navin noted that a main theme of the Revenue and Taxation Committee is growing voter resistance to new school levies. He also discussed tax reduction factors, Phantom Revenue and eroding local tax bases. Mr. Navin stated that the committee is looking at a number of options to address problems with the current system of providing revenue to school districts.

Mr. Navin then outlined the presentations and discussions of the committee since December. He stated that the Revenue and Taxation Committee spent considerable time reviewing two major plans that addressed school district revenues, one prepared by the Ohio School Boards Association (OSBA) and one by the Ohio Department of Taxation. Each of these plans addressed issues identified by the committee. Mr. Gossett will expand on these two plans later.

Mr. Navin went on to explain that the committee also examined the impact of moving to a statewide 73-mill rate for the tangible personal property tax. In one presentation, the committee was given a general feel of the impact of this change on different areas of Ohio.

In early February the committee reviewed passage rates of operating levies from 1990 to 2003. Mr. Sobul also did an overview of Ohio's reappraisal cycle, which recurs over a six-month cycle. Depending on the year, there are widely divergent valuation amounts factored into the state's Foundation Program, which has profound implications for school funding. One possibility is to change this to a four-year cycle with annual updates. Using a four-year reappraisal cycle, with an appropriate mix of counties, would mean that about 25% of total property would be up for reappraisal each year.

The committee also examined the hold-harmless provisions associated with the electricity deregulation change. This analysis helped guide the committee as it considered what a hold-harmless provision might look like under either the OSBA or Taxation plan.

At the February 24^th meeting of the Revenue and Taxation Committee, former-Representative Don Mottley offered his ideas on how to address Phantom Revenue and the phase out of the tangible personal property tax. Regarding Phantom Revenue, Mr. Mottley suggested allowing some increase in property tax millage to make up for what is lost due to Phantom Revenue. Also, school districts should be given the authority to have voters approve levies that would not be subject to the H.B. 920 tax reduction factors. Finally, Mr. Mottley recommended that one way to pay for the phase-out of the tangible personal property tax would be to phase out the 10% property tax rollback on commercial and industrial property.

Another presentation to the committee consisted of a legislative panel composed of Representatives James Trakas, Timothy Grendell, Jon Peterson and William Hartnett. This group offered suggestions on how to address Phantom Revenue and cautioned the committee about recommending a statewide property tax. One suggestion to address Phantom Revenue was to allow school districts to solicit voter approval of levies that are not subject to the H.B. 920 tax reduction factors.

Mr. Navin then turned the presentation over to Mr. Gossett. Mr. Gossett noted that one major issue is the role of the property tax in Ohio's school funding formula. The main focus with regard to this issue is the reduction of the tangible personal property tax and how to replace the revenue that is lost if this tax is eliminated. Mr. Gossett noted that the committee has a long way to go on this issue.

If the state adopted Taxation's plan to bring all tangible personal property tax revenues to the state at a 73-mill rate, about two-thirds of businesses would see a decline in their tax obligation and one-third would see an increase. The concern with this plan relates to the businesses that would see increases in their tax liabilities.

The next major issue the Revenue and Taxation Committee has identified is the complexity/lack of transparency/credibility of the current system. With regard to this issue the committee has reviewed tax capacity and tax effort by looking at what kind of return districts are receiving for their effort. The committee has talked about how the General Assembly has attempted to address such issues through changes in the school funding formula and the consequences of such changes. Another area of discussion concerning this issue is abatements in relation to the foundation formula. Businesses are negotiating with businesses for cash payments to get around some of the problems with the formula. Is this good policy? Before Revenue and Taxation finalizes its recommendations on this issue it will need to link with Funding for Success Committee.

Mr. Gossett explained that the third major issue identified by the committee is the balance between state and local shares. He said that some think the local share should be zero while others think it should be a partnership. He also opined that the current system encourages residual budgeting. To fix this there needs to be a way to determine what the base cost amount should be so that it is known how much needs to be funded. Right now the formula is structured in such a way that the base cost amount can be whatever one chooses. It is important to work with the Funding for Success Committee on this issue as well.

The next major issue identified by the committee is predictability/reliability. With regard to this issue the lack of revenue growth and the lack of stable revenue sources are the two primary causes for this issue with the current funding system.

The fifth major issue identified by the committee is Phantom Revenue. The lack of growth related to the property tax reduction factors is a principal cause of the frequency of levies on the ballot. District residents vote to have different programs. As the state share goes down they are forced to use the local share to fund basic programs. The business community realizes it is bad that schools have to be on the ballot every few years. We need to talk about what is best for all stakeholders.

The final issue identified by the committee is the competitiveness of the current tax structure. To address this issue Ohio needs a tax base that grows more predictably over time. One way to achieve this growth is through the statewide collection of real property taxes of 20 effective mills. This would solve many of the issues facing the Revenue and Taxation Committee. It improves equalization since all districts would receive the same amount from the state. Mr. Gossett acknowledged that this is a radical approach that has perception problems, but functionally it does not change much since Ohio already has a 20-mill charge off.

Another way to achieve growth is to provide for growth levies that would not be affected by H.B. 920 stipulations. There is some question regarding the constitutionality of some of these approaches being considered. For example, because valuations are assessed at 35% of true value and the 10-mill limitation for inside mills is based on the assessed rate, basing the limitation on the true value would make available 28.57 inside mills. Whether this would require a constitutional amendment is debatable.

Mr. Gossett then explained some of the main discussions of the committee. He described the differences between the OSBA and Taxation plans relative to their treatment of the tangible personal property tax. Taxation's plan would have the state collect tangible personal property taxes. The OSBA plan takes 20 mills of this tax to the state. The committee is considering the impact that each of these proposals would have.

One idea being considered is what would happen if a larger charge-off for personal property valuations was applied. This would free up more money in the formula for other things. Mr. Gossett explained that this is not a recommendation but the committee is taking a look at it with regard to what types of districts would be affected by such a change.

The committee has discussed how to replace revenue lost if the tangible personal property tax is phased out, but it has not reached any conclusions. The committee has also discussed what an appropriate statewide tangible personal property tax rate might be if that direction is selected.

In addition to these more radical approaches, the Revenue and Taxation Committee is considering other possibilities that might achieve the same goals. For example, allowing school districts to collect 20 inside mills might reach the same end as some other options. Mr. Gossett noted that the purpose of Parity Aid is to give an equalized 9.5 mills to all but the wealthiest 20% of school districts. Using a blend of real property and personal income wealth helps districts that appear rich because of relatively high real property wealth but are actually poor because of lower personal income wealth.

Mr. Gossett noted that the Revenue and Taxation Committee will continue to review data and analyze the implications of possible recommendations. The committee will consider ways to provide more funding to support economically disadvantaged students and to reduce the frequency with which school districts return to voters for additional resources. Mr. Gossett observed that the committee is considering how specific the recommendations should be. Members realize that there may be different ways to accomplish the same purpose.

Senator Jacobson disagreed that the problem with the state collection of property taxes is one of perception. He thinks it is reality. Allowing property taxes to grow without taxpayer input is a problem. Committee members should not ignore the taxpayer in their analysis. Senator Jacobson also expressed concern that one consequence of addressing Phantom Revenue is that wealthier school districts would be given more access to taxes. Is this best in the long run? This would not bring districts closer together with regard to spending.

Mr. Gossett responded that he is very cognizant of this concern. He is not interested in rich districts receiving a lot more money. Mr. Gossett noted that the Department of Taxation's proposal does limit the growth on the state-collected 20 mills. He added that 350 school districts are now at the 20-mill floor and so their property tax revenue is growing without a cap.

Mr. Gossett went on to explain that all school districts with a 20-mill effort should receive an adequate amount of funding. Poor districts should have the ability to receive what they need and rich districts should be able to pay more if they want. Under Ohio's current school funding system, school districts are forced to use some levy revenues that were approved by voters for extras on basic education. He does not think it is fair to fund basic education costs with revenues the community approved to support extras. Voters can hold districts accountable when they know what is being funded with what they approved. Mr. Gossett agrees that voters must be a central part of these decisions.

Representative Hoops asked why the committee is reviewing the property valuation reappraisal schedule. Mr. Gossett replied that the committee is attempting to even out the growth pattern in property valuations. Representative Hoops expressed concern that it would be costly to update property values annually. Mr. Navin answered that the committee understands that the County Auditors Association needs to have input on this. He added that this would be phased in over several years.

Representative Hoops asked if the committee has discussed the issue of current agricultural use valuation (CAUV). Mr. Gossett replied that the committee has only touched on this topic.

Mr. Harris asked whether the committee had discussed raising the Homestead Exemption provision to reduce the burden that property taxes place on individuals living on a fixed income. He opined that this exemption could be increased three to four times current levels at a minimal cost and help these people. Mr. Harris also asked if the committee had examined the type of approach used in Michigan, which reduced reliance on property taxes in exchange for an increase in the sales tax. Mr. Gossett replied that the committee has looked at how to help those on fixed incomes as part of the implementation strategy being considered.

Mr. Navin noted that one reason so many levies are failing is because elderly voters on fixed incomes tend to vote against levies. There are other potential causes as well. People are tired of taxes generally and this is the only place where they can show their frustration. Mr. Navin feels that the Revenue and Taxation Committee needs to explore the reasons for levy failure. If elderly voters are a problem then a strategy needs to be developed to address this issue.

Mr. Church cited research conducted by Dr. Howard Fleeter that found no statistically significant correlation between levy approval rates and the size of the elderly population. He is not sure that data support what is being assumed about the voting tendencies of Ohio's elderly population. Mr. Church also noted that Michigan started at a very different place than Ohio in its tax structure. Ohio's property tax burden was much less than Michigan's at the time that Michigan reduced its property taxes in exchange for an increase in the sales tax.

Mr. Woods stated that his school district has been on the ballot six times in the last several years. Only 20% of his school district's residents have children in school. He supports a property tax circuit breaker. As Ohio's population ages, older voters become increasingly important.

Mr. Mooney agrees with Mr. Woods. We should not pretend that our current system has protected people from property tax increases. House Bill 920 was supposed to give voters a choice, but they really have no choice if they want a good school system. He added that the Funding for Success Committee must recommend an adequate school funding amount.

Dr. Byrd-Bennett stated that Cleveland has polled its voters and found that most of those who opposed levies to support the district do not have children in the district's schools. Such voters say that they simply do not have the money to pay additional taxes.

In response to Mr. Mooney's comment, Mr. Navin stated for the record that the purpose of H.B. 920 was not to protect the taxpayer but to limit increases in property taxes.

Mr. DeMaria agreed with Mr. Navin and noted that, since levies need to support school districts for several years, districts must front-end load the levy. School districts accumulate surpluses in early years of a levy and then draw these balances down. This necessity makes it difficult to have the discussion the next time they go to the voters.

Mr. Harris stated that Ohio is one of a few states that votes on rates for school levies. Other states vote on school budgets. Voting on the use of funds instead of tax rates results in different conversations. For example, when people vote on school budgets, conversations focus on priorities and reallocation.

Ms. Shaner noted that studies have shown that, statewide, property tax revenue collections are about the same as they would have in the absence of H.B. 920. The impact on individual districts, however, would have been different had there not been tax reduction factors.

Mr. Zaino opined that a good feature of Taxation's revenue plan is that the state would fund a basic education and locals would determine extras. He also feels that a statewide tax is easier to explain. He added that all taxes come from individuals.

Senator Jacobson asked whether there is a revenue shortfall compared to current law under the OSBA or Taxation proposals. Mr. Gossett replied that Taxation's plan would provide about $40 to $50 million less than current law if all school districts are held harmless. He added that the OSBA has a much larger shortfall

Mr. Hyre asked how Ohio compares to other states with regard to property taxes. Mr. Navin replied that Ohio's taxes are about the same as other states. Mr. Hyre observed that it probably seems to residents that Ohio is at the high end since school districts are constantly going back to ballot. This misperception must be fixed. Mr. Hyre concluded that it is agonizing to have to go beg for money. This is a waste of talent, time, and effort. Reducing ballot frequency is a crucial element of any solution.

Operations and Efficiency

Mr. Davis stated that the recommendations of the Operations and Efficiency Committee are complete. He outlined for the Task Force the committee's recommendations around four issues.

The committee recommends a two-year pilot project where the Auditor of State would conduct annually 10 to 12 performance audits. One purpose of these audits would be to study fiscal efficiency and academic performance. Another purpose would be to identify best practices and share them.
In the area of group purchasing, the committee recommends that the Ohio Department of Education engage a consultant to make recommendations on how to implement a regional or statewide health insurance purchase system.
The committee also endorsed the recommendations of the Commission on Teaching Success with some modifications.
Under the topic of governance and management, the Operations and Efficiency Committee recommends that all school board members be required to participate in training that includes legal and ethical topics. The committee also expressed its support of the Ohio Department of Education's regionalization efforts.

Mr. Zaino asked how much savings are associated with the committee's recommendations. Mr. Davis responded that the health care insurance recommendation should result in savings of at least $40 million annually.

Mr. Harris asked where the recommendation for mandatory ethics and legal training for school board members originated. Mr. Davis replied that this issue arose from committee discussions. The committee debated many issues related to governance, and this recommendation was the only one that gained consensus. Mr. Harris finds this recommendation odd since other public officials are not required to have this training. Why are school board members being singled out?

Representative Calvert asked whether the Operations and Efficiency Committee had looked at the possibility of a statewide salary schedule. Would it be more efficient if Ohio had centrally negotiated contracts? Mr. Davis replied that this possibility had been discussed in committee, but there was no consensus to recommend statewide salary schedules.

Mr. Mooney expressed his agreement with a statewide health care insurance plan. He noted the need to look for more ways to develop master teachers. Mr. Mooney asked if the committee's proposal regarding performance audits is the same as what was done with urban school districts a few years ago. Mr. Davis replied that it was, but that the committee felt perhaps the scope and number of audits should be expanded

Mr. Mooney asked if the committee had considered offering incentives for voluntary district consolidation. Mr. Davis replied that the committee had not considered this option.

Mr. Woods added that he would support providing incentives for school district consolidation, but noted there are huge local barriers to accomplishing district consolidations. It is difficult to see the issues at the state level. Mr. Baker opined that he has never seen school consolidation improve efficiency.

Mr. Zaino asked why the committee could only generate $40 million in savings out of $13 billion in spending statewide. He suggested that perhaps the Operations and Efficiency Committee should consider this as the Task Force moves forward.

Mr. Stoff stated that Mr. Zaino made a good point. It is difficult to produce cost savings in a consensus environment. No one person is in charge of making school districts run more efficiently. It works differently for businesses.

Next Steps

Mr. Wilkins discussed a timeline for completion of the Task Force's work that he asked Mr. Marshall to prepare. He noted that school funding is too complex a subject to force premature closure.

The timeline calls for draft recommendations from the committees to be completed by the end of June. A draft report would be prepared in early July with a meeting of the full Task Force the week of July 22^nd to discuss this draft.

Mr. Wilkins asked if the Task Force should then solicit input from around the state. He offered that one idea is to hold five regional meetings. We would encourage interested organizations and members of the public to participate. This would happen within a two-week period in early August. The draft report would also be on the Task Force's website.

After the regional meetings the Task Force would then come back together one last time.

Mr. Harris expressed concern that if regional meetings are held after the draft report is released it may give the impression that there is no room for modifications. There may not be a lot of interest if the report is nearly finalized. Mr. Mooney is not sure he agrees with Mr. Harris. Maybe the Task Force will get more reaction at this point. He feels that it is smarter to have hearings toward the beginning of school.

Mr. Filipic added that it might be good to have regional meetings before the final meeting. He expressed concern that not doing this would cause people to think their input is not being used to shape the report.

Committee members agreed on the need to have regional meetings. Such meetings would solicit constructive input if the conversation is framed in the right way. Otherwise, the focus will be only on the problems with the current system.

Mr. Wilkins also raised the possibility of inter-committee meetings. There may be a need to have vice-chairs, staff, and the Department of Education get together to discuss some of the issues.

Mr. Wilkins adjourned the meeting at approximately 2:00 p.m.

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