Opinion No.

The Honorable James C. Scott State Senator 321 Highway 15 North Warren, Arkansas 71671

Dear Senator Scott:

This is in response to your request for an opinion on several questions contained in a letter you have enclosed from the Director of the Ashley County Lifelong Learning Center. Specifically, the Director wants to know how the "new State funding formula for education will affect Arkansas adult education programs at the local levels." Specifically, the questions posed are as follows:

Under the new education funding formula for Arkansas, will local adult education programs be required to budget 12% funds for Teacher Retirement for local employees and also will local programs be held responsible to pay matching employee Health benefit? If so, where will these funds come from for our program? How will the clause "based on Average daily student attendance" affect our program for budgeting when Federal guidelines require 10 adults per class?

It appears that the answer to the first part of your question is unclear. These amounts must be paid, as local employees of the Ashley County Lifelong Learning Center are entitled to teacher retirement contributions on their behalf and to health insurance matching payments made on their behalf, but is it unclear whether these amounts can be paid from any state appropriations or whether they must be paid out of the budget of the Center. This question, and the second question posed are not, strictly speaking, legal questions, but are rather, administrative questions. The funds to pay the required amounts may be available from more than one source, and the law does not dictate from which source they must come. The answer to the last question above concerning "average daily attendance" is also unclear. It is my understanding, however, that the Division of Vocational and Technical Education is currently drafting rules and regulations which should address this issue.

I assume your questions refer to the 1996-97 school year, the first year the pertinent provisions of the "new State funding formula" are applicable. See Act 917 of 1995 and Act 1194 of 1995. With regard to the first question posed, concerning teacher retirement contributions and employee health insurance matching funds, it is my understanding that moneys to pay for these items has, in the past, including the 1995-96 school year, been paid at the state level out of state appropriated funds. See Act 1194 of 1995, Section 1, Items 01, and 06. Two pertinent provisions of Act 1194, however, address what is to occur in the 1996-97 school year, as follows:

SECTION 13. Beginning with the 1996-97 school year, Local School Districts shall pay the teacher retirement employer contribution rate for any eligible employee in accordance with rules and regulations established by the Teacher Retirement Board of Directors. Furthermore, beginning in the 1996-97 fiscal years, the appropriation contained herein for Teachers Retirement Matching shall be used to provide the employer matching for employees of the Cooperative Education Services Area, Vocational Centers and the school operated by the Department of Correction.¹

SECTION 14. Beginning with the 1996-97 school year, local School Districts shall pay the health insurance contribution rate established by the State Board of Education for each eligible employee electing to participate in the Public School Employee Health Insurance Program. Furthermore, beginning with the 1996-97 fiscal year, the appropriation contained herein for Public School Employee Insurance shall be used to provide the state contribution for insurance premiums for employees of the Cooperative Education Services Areas, Vocational Centers and the school operated by the Department of Correction.²

Thus, beginning with the 1996-97 fiscal year, the individual school districts will be responsible for payment of these sums. This fact affects entities such as the Ashley County Lifelong Learning Center because, as I understand it, this program is operated through the Ashley County Board of Education and is treated in many respects as a local school district with regard to funding matters. The Ashley County Lifelong Learning Center is not an "Education Service Cooperative," or a "Vocational Center" as set out above. Eligible employees of the Ashley County Lifelong Learning Center are, however, entitled to the teacher retirement and health insurance benefits mentioned above. See generally A.C.A. § 6-51-205(c), (stating that "[a]ll laws governing the employment of personnel of the Department of Education, including such matters as leave regulations and teacher retirement membership, shall apply to employees of all vocational-technical and adult education schools").

In answer to your first question, therefore, the state appropriation act which specifically addresses teacher retirement contributions and health insurance matching does not authorize a specific amount for payment of these sums on behalf of Lifelong Learning Centers operated by county boards of education. The question of where these funds will come from is not one governed by any specifically worded law. The appropriation act for the Department of Education (Grants and Aids appropriation), Act 1194 as quoted above, does not provide a specific line item to cover these amounts. It does include a general appropriation for "Adult Basic General Adult Education." See Act 1194 of 1995 Section 2, Item 01. Other appropriation acts of 1995, including Acts 88 of 1995 (appropriating funds for additional personal services for lifelong learning centers) and 1199 of 1995 (appropriating funds to the Vocational and Technical Education Division of the Department of Education) contain general appropriations, and specific appropriations for certain specific institutions, but do not contain specific line-item authority for the obligations about which you have inquired. It is impossible for me to determine, as a legal question, whether these appropriations are available to pay the sums in question. This is an administrative or legislative question, which might more properly be answered by officials at the Department of Finance and Administration, The Department of Education, or the Legislative Council.

In response to the last part of the question presented (involving "average daily student attendance") it is my understanding that the Division of Vocational and Technical Education is in the process of drafting rules and regulations which will address this question. I therefore suggest that officials at the Division of Vocational and Technical Education be contacted for help in resolving this question.

The foregoing opinion, which I hereby approve, was prepared by Deputy Attorney General Elana C. Wills.

Sincerely,

WINSTON BRYANT Attorney General

WB:ECW/cyh

¹ The "appropriation contained herein" is found in Section 1, Item 01 of Act 1194. For fiscal year 1995-96 (where the teacher retirement contribution is paid by the State), the amount appropriated is one hundred and thirty million dollars ($130,000,000.00). For the 1996-97 fiscal year, where local school districts are to pay the teacher retirement amounts, the amount appropriated is one million six hundred thousand dollars ($1,600,000.00) (which is to pay retirement matching for employees of the Cooperative Education Service Areas, Vocational Centers, and the school operated by the Department of Correction.)

² The "appropriation contained herein" is in Section 1, Item 06, which appropriates forty two million eight hundred and fifteen thousand dollars ($42,815,000.00) in fiscal year 1995-96 (where the State pays the health insurance amounts for all districts), and four hundred and eighty thousand and five hundred dollars (480,500.00) in fiscal year 1996-97 (where this amount is to be used to pay the health insurance premiums for the employees of the Cooperative Education Services Areas, Vocational Centers and the school operated by the Department of Correction).