May 9, 2017

Legislature Ends: Sine Die  

The 2017 Legislative Session ended May 8^th, with approval of a budget and seventeen budget conforming bills. A Legislative Session Budget Update will follow later this week after analysis of 2017-18 budget funding for each college and university. The 2017 Session was very disappointing in regard to the final week and especially the final conference meetings over the weekend. Transparency was lost and surprise substantive policy amendments were added to many conforming bills. While the Senate Rules Chair ruled them in order, substantive policy was adopted without ever receiving vetting by House or Senate committees, and in one K-12 addition was actually defeated in the Senate Rules Committee. It was a real backhanded attack on the process, especially after Speaker Corcoran had claimed this would be a transparent session.

Higher Education Policy

SB 374 – “Florida Excellence in Higher Education Act of 2017”

SB 374 became a 292-page budget conforming bill despite many issues being policy and not budget-related. Here is a synopsis of SB 374 policy issues.

• Removes state colleges from the oversight of the State Board of Education and places them under a new State Board of Community Colleges.
• Prohibits, beginning July 1, 2022, a state college or university from permitting a college or university direct-support organization (DSO) from using personal services (personnel, facilities, etc.) of the college or university.
• Enacts new performance metrics for colleges including 100% of normal-time program completion and graduation rate for full-time, first-time-in-college students but is not applicable to non-degree students; continuing education or post-graduation job placement rate for workforce education programs; graduation rate for first-time-in-college students enrolled in an associate of arts degree program who graduate with a baccalaureate degree in 4 years after initially enrolling in an associates of arts degree program; and one performance metric based on college affordability.
• Establishes a Distinguished Florida Community College System Institution Program with excellence standards.
• Adds within the Preeminent State Research Universities Program a 4-year graduation rate of 60% percent or higher for full-time, first-time-in-college students effective for the 2018-19 fiscal year. NOTE: This was a surprise addition at the final hours of the Appropriations conference process and was never considered by the Legislature in the committee process.
• Requires a 4-year graduation metric for universities and adds a metric regarding access rates at or above 50%. New metrics will be applied in 2018-19.
• Increases student financial aid and tuition assistance for Florida Bright Futures Academic Scholars in fall and spring terms and adds support to these students in the summer term.
• Revises the state-to-private match requirements for contributions to the First Generation Matching Grant Program from 1:1 to 2:1.
• Requires state university boards of trustees to adopt a student block tuition policy for adoption in the fall 2018 semester. A report to the Legislature is required by December 1, 2017 of the adopted policies, the Board of Governor’s review and approval process and the BOG recommendations for improvement of the block tuition policies.
• Strengthens “2+2” articulation by establishing the “2+2” targeted pathway program.
• Removes statute pertaining to St. Petersburg College process for approving baccalaureate degree programs and eligibility for a continuing contract for upper division faculty.
• Requires colleges to submit a notice of interest to propose a baccalaureate degree program 180 days prior to submitting a notice of intent. The notice of interest must be submitted to a shared postsecondary database to allow other institutions to preview and provide feedback. A written notice of intent must be submitted to the newly created Chancellor of the Florida Community College System 100 days prior to submission of the proposed baccalaureate program. Further timelines are established for objections and final approval.
• Requires new baccalaureate degree program proposals to indicate the institution’s efforts to keep tuition for the entire degree program at a level not to exceed $10,000.
• Allows for specific annual increases in upper-level full-time equivalent enrollment but caps the total upper-level full-time equivalent enrollment at 15% of the total combined upper and lower-level full-time equivalent enrollment.
• Requires an annual review and report of each baccalaureate degree program with justification for continuation of the program.
• Requires the Board of Governors to conduct a study of state investment allocation methodologies for the performance-based funding model. The study must include various options, including options in which each university may be eligible to receive some portion of the state investment based on benchmarks that reflect the institutional mission of each university and irrespective of their performance-based funding model score relative to other university scores. The Board of Governors shall submit a report describing the study, and any action taken by the Board of Governors relative to the study, to the chairs of the House and Senate Education Appropriations Subcommittees by December 31, 2017. Note: This provision was a last minute surprise addition to the bill but is similar to a bill filed on behalf of UFF by Senator Jeff Clemens and Representative Ramon Alexander.
• Prohibits Florida Community College institutions from offering a bachelor of arts degree program.
• Requires school districts to provide notification to students and parents about applying acceleration mechanism credit to a postsecondary degree.
• Creates a scholarship program for students from farmworker families.
• Adds funding pools for hiring and retaining top-level faculty and rewarding outstanding graduate programs.

SB 7022 – FRS, State Employee Health Insurance, and State Employee Pay Raises

SB 7022 became the “conforming” bill to implement FRS rates, FRS policy changes, state employee health insurance, and the state employee pay raise in a single package. FRS rates and pay increases are budget issues but not the policy changes in FRS and state employee health insurance, the plan for university faculty. The bill reverses the FRS default choice for future employees from the defined benefit plan to the defined investment plan, except for special risk employees. The logic being police and fire are career employees and faculty, K-12 teachers, and state employees are not. We have strong reason to believe this will negatively impact the future of the FRS defined benefit system if a growing percentage of new hires select the investment plan. The default decision-making time was extended from six to nine months. Employee unions are going to have to educate new hires on the plusses and minuses of both plans.

SB 7022 added the state employee health insurance bill which has concerned UFF all session. The most significant provision as described in the staff analysis is as follows:

“HB 7007 (bill replaced by SB 7022) amends provisions of the State Group Health Insurance Program. The bill, for plan year 2020 and thereafter, requires the Department of Management Services (DMS) to offer four health insurance coverage levels of at least a certain actuarial value under the Program as follows: Platinum – 90 percent, Gold – 80 percent, Silver – 70 percent, and Bronze – 60 percent. The state will make a defined contribution for each employee toward the cost of purchasing a health plan. If the state’s contribution is more than the premium cost of the health plan selected by the employee, the bill specifies that the employee will be permitted to allocate unused state health insurance contributions to other benefits or as salary. The bill requires the DMS to recommend contribution policies and employee education strategies regarding the coverage levels and other benefit alternatives.”

What will be the defined contribution? No one knows if it will fund the 60% actuarial value, the 90% actuarial value or somewhere in between. This proposal, while being sold on the aspects of health insurance choice, health savings accounts, and a small amount of price transparency, will most certainly shift the cost of health insurance in 2020, if not sooner, to those employees with medical concerns and those at greater risk.

There is no real plan to curb escalating health care costs except for more price transparency.

The required employer FRS rate for Regular Class increases from 5.80% to 6.25% of salary.

Other Legislation – Died in Committee

Good Bill:

SB 1276 — Fee Waivers for Graduate Assistants

Bad Bills:

HB 11 — Union Decertification

HB 351 — Secret Executive Searches

SB 622 — Guns on Campus