Legislature(2011 - 2012)HOUSE FINANCE 519

02/06/2012 01:30 PM House FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 142 PRESUMPTION AGIA PROJECT IS UNECONOMICAL TELECONFERENCED
Heard & Held
+ HB 180 VETERAN DESIGNATION ON DRIVER'S LICENSE TELECONFERENCED
Moved CSHB 180(FIN) Out of Committee
+ HB 198 SPEC. EDUC. SERVICE AGENCY FUNDING/SUNSET TELECONFERENCED
Heard & Held
+= HB 118 RESEARCH AND DEVELOPMENT TAX CREDIT TELECONFERENCED
Heard & Held
2:26:09 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 198                                                                                                            
                                                                                                                                
     "An Act relating to the special education service                                                                          
     agency."                                                                                                                   
                                                                                                                                
REPRESENTATIVE  ALAN  DICK,   CHAIR,  SPECIAL  COMMITTEE  ON                                                                    
EDUCATION, testified in support of  HB 198. He observed that                                                                    
House  Bill  198  would  remove  a  sunset  requirement  and                                                                    
increase  state funding  for the  Special Education  Service                                                                    
Agency  (SESA),  which  was  a  not-for-profit  organization                                                                    
established  in  statute  in  1986.  The  Special  Education                                                                    
Service  Agency was  governed by  the Governor's  Council on                                                                    
Disabilities and  Special Education and its  own independent                                                                    
board of directors.                                                                                                             
                                                                                                                                
Representative  Dick noted  that  sometimes districts  could                                                                    
not   fully   serve    students   that   had   low-incidence                                                                    
disabilities  with existing  personnel and  resources. House                                                                    
Bill 198  would incorporate the recommendations  of the most                                                                    
recent  legislative audit,  completed in  2007. The  Special                                                                    
Education Service Agency assisted  local school districts to                                                                    
provide needed  special education  services. House  Bill 198                                                                    
would  repeal  the  sunset  requirement  and  increase  SESA                                                                    
funding.                                                                                                                        
                                                                                                                                
Representative  Dick   noted  that  the   Special  Education                                                                    
Service  Agency received  state support  based on  a funding                                                                    
formula  adopted  in 1998.    Each  year the  Department  of                                                                    
Education and  Early Development allocated to  SESA not less                                                                    
than  $15.75,  times  the   number  of  students  statewide.                                                                    
Although local  school districts  had received  increases in                                                                    
state funding since  1998, SESA had not.  Under  HB 198, the                                                                    
multiplier  would increase  as the  base student  allocation                                                                    
increases.    Currently  the   computation  (.4  percent  of                                                                    
$5,680) equaled  $22.72 which  would approximate  the impact                                                                    
of  inflation  from  1998  to 2011.  He  observed  that  the                                                                    
Committee did not change the provision.                                                                                         
                                                                                                                                
The Special  Education Service Agency  was set to  expire on                                                                    
June  30, 2013.   During  previous performance  audits, both                                                                    
the  Department of  Education  and  the Legislative  Auditor                                                                    
recommended removing  SESA from  the sunset process.   House                                                                    
Bill 198 would repeal the  sunset requirement and thus allow                                                                    
SESA to  plan long-term  and have  adequate funding  to meet                                                                    
special needs of special children.                                                                                              
                                                                                                                                
2:29:51 PM                                                                                                                    
                                                                                                                                
MILLIE  RYAN,  EXECUTIVE  DIRECTOR,  GOVERNOR'S  COUNCIL  ON                                                                    
DISABILITIES AND SPECIAL EDUCATION,  testified in support of                                                                    
HB  198. She  observed  that the  council's  mission was  to                                                                    
improve  the  lives  of people  with  disabilities  and  the                                                                    
quality   of    education   provided   to    students   with                                                                    
disabilities. The council consisted  of 27 members appointed                                                                    
by  the   governor.  Sixty  percent  of   the  members  were                                                                    
individuals with  disabilities or parents or  family members                                                                    
of  people  with  disabilities.   There  were  state  agency                                                                    
representatives from  the Department of Education  and Early                                                                    
Development,   Division    of   Vocational   Rehabilitation,                                                                    
Department  of   Health  and  Social  Services;   and  other                                                                    
representatives designated in federal law.                                                                                      
                                                                                                                                
Ms. Ryan  noted that  the council had  five responsibilities                                                                    
in statute.  Five Council members  serve on the  SESA board.                                                                    
There  were  representatives  from:  school  administrators,                                                                    
special   education   administrators,   and   the   National                                                                    
Educational  Association.  The  special  education  director                                                                    
from the  Department of Education and  Early Development and                                                                    
Ms. Ryan were ex-official members.                                                                                              
                                                                                                                                
2:32:33 PM                                                                                                                    
                                                                                                                                
Ms. Ryan  noted that  the job  of board  was to  assure SESA                                                                    
provided   assistance   to   school  districts   and   early                                                                    
intervention  programs serving  students with  low incidence                                                                    
disabilities,  particularly those  who  lived  in rural  and                                                                    
remote areas of the state.  The board also assured that SESA                                                                    
supported education that was  student, family and community-                                                                    
centered and met the individual  needs of students; assisted                                                                    
SESA   in  addressing   other  state   education  needs   of                                                                    
individuals  with low  incidence  disabilities, as  external                                                                    
funding  was  obtained;  and  monitored  SESA  policies  and                                                                    
procedures.                                                                                                                     
                                                                                                                                
Ms. Ryan  observed that SESA  was established in 1986,  as a                                                                    
not-for-profit  corporation  that  operated under  a  sunset                                                                    
provision.  She  noted  that  SESA  received  Low  Incidence                                                                    
Disabilities (LID) funding from  the Department of Education                                                                    
and Early Development based on  prior year's statewide total                                                                    
enrollment and federal and state grants and contracts.                                                                          
                                                                                                                                
2:33:45 PM                                                                                                                    
                                                                                                                                
Representative Wilson referred to  LID funding. She asked if                                                                    
funding was  based on all  students that were  designated as                                                                    
special education students. Ms.  Ryan explained that funding                                                                    
was based on the entire student  count not just the count of                                                                    
special education students.                                                                                                     
                                                                                                                                
Ms. Ryan  pointed out that required  services were itinerant                                                                    
outreach  services to  students who  were deaf;  deaf-blind;                                                                    
cognitively impaired; hearing  impaired; blind and visually,                                                                    
orthopedically disabled,  multiple disabilities,  or autism.                                                                    
She  noted that  these disabilities  tended to  be uncommon.                                                                    
Special education instruction support  and training of local                                                                    
school district personnel were provided  to both special and                                                                    
regular  education  staff.  Other  services  appropriate  to                                                                    
special education needs were also provided.                                                                                     
                                                                                                                                
2:35:13 PM                                                                                                                    
                                                                                                                                
Ms. Ryan  spoke to  the funding formula  set in  1998, which                                                                    
was  $15.75 times  the number  of students  in the  state in                                                                    
average daily membership in the preceding fiscal year.                                                                          
                                                                                                                                
Ms.  Ryan observed  that the  recommended change  in funding                                                                    
formula for SESA was 0.40%  of the current year base student                                                                    
allocation  (BSA) X  total  average  daily membership  (ADM)                                                                    
from previous  year. She explained  that the  increase would                                                                    
catch SESA up  in terms of inflation. The  formula would tie                                                                    
SESA funding to the BSA.  The sunset provision would also be                                                                    
removed.                                                                                                                        
                                                                                                                                
Ms. Ryan  explained that  the funding  formula for  SESA was                                                                    
based on  a fixed  student allocation that  was set  in 1998                                                                    
and  did not  keep up  with inflation.  She emphasized  that                                                                    
SESA  specialists traveled  frequently to  rural Alaska  and                                                                    
travel expenses were rising. In  FY 2013, SESA would receive                                                                    
less money  than it  did 10  years ago;  SESA's BSA  did not                                                                    
change  when school  district's BSA  changed. If  SESA's BSA                                                                    
had  changed at  the same  time,  its rate  would be  $22.71                                                                    
instead of $15.75.                                                                                                              
                                                                                                                                
2:36:51 PM                                                                                                                    
                                                                                                                                
Ms. Ryan observed  that the 2007 audit  recommended that the                                                                    
statutory  funding  formula  be  reevaluated  based  on  the                                                                    
effects  of  inflation  and increased  employee  costs.  The                                                                    
interim commissioner  of Department  of Education  and Early                                                                    
Development  concurred with  the audit's  recommendations at                                                                    
the time of the audit.                                                                                                          
                                                                                                                                
Co-Chair   Stoltze   asked   the   position   of   the   new                                                                    
commissioner. Ms. Ryan stated  that the new commissioner was                                                                    
non-committal.                                                                                                                  
                                                                                                                                
2:38:04 PM                                                                                                                    
                                                                                                                                
Ms. Ryan observed  that in response to the  last audit, SESA                                                                    
successfully  secured additional  grants and  contracts that                                                                    
fit with  its mission.  "Soft" money dedicated  for specific                                                                    
purposes in 2011  comprised 45% of SESA's  budget; there was                                                                    
a $236,000 contribution  to overhead. As a  result, SESA was                                                                    
able to  fund 3 positions  for the LID program.  She pointed                                                                    
out that specialists that consult  with districts would have                                                                    
to  be reduced  if the  "soft" money  did not  continue. She                                                                    
concluded  that  SESA  had   increased  grant  funding  over                                                                    
previous years.                                                                                                                 
                                                                                                                                
2:38:46 PM                                                                                                                    
                                                                                                                                
Ms.  Ryan reiterated  that SESA  had already  had difficulty                                                                    
meeting  its statutorily  mandated  duties. If  there was  a                                                                    
reduction  in  grants  and  contracts  the  situation  would                                                                    
worsen and negatively impact students and school districts.                                                                     
                                                                                                                                
Ms.  Ryan  emphasized  that  SESA  brought  the  ability  to                                                                    
provide  evidence-based  strategies   to  school  districts,                                                                    
which would be decreased without  funding. A lack of funding                                                                    
would result in fewer and shorter on-site visits.                                                                               
                                                                                                                                
Ms. Ryan  stressed the  importance of  SESA for  new special                                                                    
education teachers  and to  classroom teachers  working with                                                                    
students who have unique, low-incidence disabilities.                                                                           
                                                                                                                                
2:40:14 PM                                                                                                                    
                                                                                                                                
Representative Wilson  spoke to mentoring and  observed that                                                                    
the Department  of Education  and Early  Development already                                                                    
mentors first  and second year teachers  and suggested there                                                                    
was a duplication of service.                                                                                                   
                                                                                                                                
P.J, FORD  SLACK, PH.D,  BOARD PRESIDENT,  SPECIAL EDUCATION                                                                    
SERVICE AGENCY, observed that she  was also the principal at                                                                    
Sitka  High  School and  the  former  superintendent of  the                                                                    
Delta  Greely  School  District.   She  responded  that  the                                                                    
mentorship   program  did   not  mentor   special  education                                                                    
teachers or specialists while she  was at Delta Greely. Only                                                                    
core academic areas were mentored.                                                                                              
                                                                                                                                
Representative   Wilson   argued  that   special   education                                                                    
teachers were  included in the  Department of  Education and                                                                    
Early Development's  mentoring programs  and asked  for more                                                                    
data.                                                                                                                           
                                                                                                                                
PATRICK  PILLAI,   EXECUTIVE  DIRECTOR,   SPECIAL  EDUCATION                                                                    
SERVICE AGENCY (SESA), added that  a lot of the new teaching                                                                    
mentoring  was  done to  bring  teachers  into the  teaching                                                                    
environment    for   strategies,    while   SESA    provided                                                                    
professional development in special  education that might be                                                                    
specific  to a  particular  syndrome. He  observed that  new                                                                    
teachers  might  have  only taken  one  generic  class.  The                                                                    
professional development provided by  SESA was for classroom                                                                    
strategies  and on-going  professional  development for  the                                                                    
general school body.                                                                                                            
                                                                                                                                
2:42:27 PM                                                                                                                    
                                                                                                                                
Representative   Wilson  suggested   there   needed  to   be                                                                    
discussion with  the university and Department  of Education                                                                    
and  Early  Development  if  there  were  special  education                                                                    
teachers without a special education degree.                                                                                    
                                                                                                                                
Ms. Ryan  explained that a  special education  teacher could                                                                    
have  a general  background, but  SESA provided  specialized                                                                    
services.                                                                                                                       
                                                                                                                                
Representative  Gara  summarized  that urban  districts  had                                                                    
their own  special education expertise  and SESA  focused on                                                                    
smaller districts.  Ms. Ryan  agreed that  the focus  was on                                                                    
rural districts  and pointed out  that Anchorage  and larger                                                                    
districts  had  the expertise  to  work  with special  needs                                                                    
students.  She   added  that   SESA  provided   support  and                                                                    
information to all school districts.                                                                                            
                                                                                                                                
Representative  Gara stressed  the  common  goal to  provide                                                                    
needed services in the most  sufficient manner. He asked how                                                                    
many students SESA  served. Mr. Pillai noted  there were 354                                                                    
LID  students.  He added  that  SESA  also worked  with  the                                                                    
general education  staff and peers that  interact with those                                                                    
students through training.                                                                                                      
                                                                                                                                
Representative Gara  asked the per student  dollar cost. Mr.                                                                    
Pillai agreed  to provide the information.  He stressed that                                                                    
services were provided to more than just the students.                                                                          
                                                                                                                                
2:45:52 PM                                                                                                                    
                                                                                                                                
Representative   Costello  observed   that  the   foundation                                                                    
formula  based  on   student  attendance  was  approximately                                                                    
$5,682  per   student.  The  LID   program  was   a  general                                                                    
percentage of total student population.                                                                                         
                                                                                                                                
Mr. Pillai clarified  that the child count was  the count of                                                                    
special  education  students.  The  calculation  was  $15.75                                                                    
times the ADM,  which was not tied to  BSA. School districts                                                                    
were functioning  at 5 percent  of the consumer  price index                                                                    
(CPI), while SESA was 30 percent below the CPI.                                                                                 
                                                                                                                                
Representative Costello  concluded that  the rate  was based                                                                    
on total student population based on a historical number.                                                                       
                                                                                                                                
Mr. Ryan clarified that the  number of children was similar,                                                                    
but  funding  was tied  to  all  the children  receiving  an                                                                    
education in  the state and  was a flat rate.  She explained                                                                    
that  SESA  funding would  decrease  with  the child  count;                                                                    
unlike school districts  whose funding was tied  to the BSA.                                                                    
The  legislation   would  tie  SESA  funding   to  the  BSA.                                                                    
Districts refer children to SESA.                                                                                               
                                                                                                                                
2:49:33 PM                                                                                                                    
                                                                                                                                
Representative  Costello noted  the  program was  set up  to                                                                    
primarily  help rural  students.  She  referred to  children                                                                    
with  autism enrolled  in  Anchorage.  Mr. Pillai  clarified                                                                    
that  while  larger  districts  tended  to  have  their  own                                                                    
specialists; SESA provides training for larger districts.                                                                       
                                                                                                                                
Representative Costello questioned how  funding for SESA fit                                                                    
with  other  state needs  and  why  the  request was  for  a                                                                    
percentage instead of a dollar amount increase.                                                                                 
                                                                                                                                
Mr.  Pillai  stressed  the   difficulty  of  recruiting  and                                                                    
maintaining staff  at the  current funding  level. Multiple-                                                                    
disability  specialists  were  reduced from  five  to  three                                                                    
through  attrition. New  recruits did  not receive  the same                                                                    
level  of   wage  or  benefits  as   those  being  replaced.                                                                    
Competition    with   other    school   entities    affected                                                                    
recruitment;  there was  a  40  percent discrepancy  between                                                                    
SESA and the Anchorage School District.                                                                                         
                                                                                                                                
Mr. Pillai  spoke to  the demand for  services. The  ADM was                                                                    
dropping, but  the LID numbers  and the number  of referrals                                                                    
from rural  Alaska had increased.  Some districts had  up to                                                                    
eight  or nine  students  with autism.  Extra funding  would                                                                    
allow  more  specialists  to be  hired  and  improve  salary                                                                    
scales for retention.                                                                                                           
                                                                                                                                
2:53:31 PM                                                                                                                    
                                                                                                                                
Representative Costello asked the  turnover rate. Mr. Pillai                                                                    
observed that there  was a low turnover rate  for many years                                                                    
due to retirement incentives, but  six employees had left in                                                                    
the previous  year. He  noted difficulties  with recruitment                                                                    
due to salary and the high degree of specialty needed.                                                                          
                                                                                                                                
2:54:53 PM                                                                                                                    
                                                                                                                                
Ms.  Ryan spoke  to the  sunset provision.  The 2007,  audit                                                                    
found  that:  SESA  performed   a  valuable,  effective  and                                                                    
efficient service  to school districts  that they  could not                                                                    
provide themselves  because of  the nature of  low incidence                                                                    
disabilities;  students  were able  to  be  served in  their                                                                    
local  communities;  and  SESA did  not  duplicate  services                                                                    
provided by the Department  of Education & Early Development                                                                    
or local school districts.  The audit recommended removal of                                                                    
the sunset.  She observed that  another audit  was underway,                                                                    
which added  to the  difficulty of recruiting  and retaining                                                                    
qualified staff.                                                                                                                
                                                                                                                                
2:55:53 PM                                                                                                                    
                                                                                                                                
Vice-chair  Fairclough  asked  if   the  student  count  was                                                                    
breakdown by region. She asked  if there was a concentration                                                                    
in specific  school districts. Mr.  Pillai observed  that 54                                                                    
school districts  were served. Almost every  school district                                                                    
was   served,  but   there  were   cloisters  in   different                                                                    
districts. Some  districts had eight to  ten students, while                                                                    
others  had one  or two.  There  was a  referral process  in                                                                    
place.  Vice-chair  Fairclough  reiterated that  she  wanted                                                                    
student service numbers.                                                                                                        
                                                                                                                                
Vice-chair Fairclough  asked for  a copy  of the  2007 audit                                                                    
and  expressed   concerned  about   the  fiscal   note.  She                                                                    
suggested that the  fiscal note did not  adequately show the                                                                    
cost of  continuing the program.  She requested  a breakdown                                                                    
of administrative  costs and the  cost of  Public Employees'                                                                    
Retirement  System (PERS)  and  Teachers' Retirement  System                                                                    
(TRS) prior to servicing students.                                                                                              
                                                                                                                                
2:58:55 PM                                                                                                                    
                                                                                                                                
Co-Chair  Thomas  observed that  he  had  not heard  of  the                                                                    
program and  spoke against the sunset.  He expressed concern                                                                    
that   money  had   been  given   several  years   prior  to                                                                    
disadvantaged  children  and  wondered whether  the  program                                                                    
would serve the same children twice.                                                                                            
                                                                                                                                
Vice-chair  Fairclough discussed  the  district cost  factor                                                                    
increment  increases, which  were currently  in their  final                                                                    
year.  She  thought  that   additional  resources  had  been                                                                    
appropriated  toward  disabilities   and  wondered  how  the                                                                    
programs  worked  together.  She asked  for  an  explanation                                                                    
about  how the  program provided  unique opportunities  that                                                                    
were not  covered by the  Department of Education  and Early                                                                    
Development.                                                                                                                    
                                                                                                                                
3:02:19 PM                                                                                                                    
                                                                                                                                
Mr.  Pillai, in  response  to a  question by  Representative                                                                    
Neuman,  explained that  intensive funding  was provided  to                                                                    
schools for special education; SESA  was more in the role of                                                                    
providing  onsite  professional   development  for  teachers                                                                    
based  on the  referral process.  School districts  referred                                                                    
students to SESA for services.                                                                                                  
                                                                                                                                
Representative  Neuman   expressed  concern  on   behalf  of                                                                    
smaller  school  districts  and requested  a  follow  up  on                                                                    
costs.                                                                                                                          
                                                                                                                                
MARCY  HERMAN, SPECIAL  ASSISTANT,  DEPARTMENT OF  EDUCATION                                                                    
AND EARLY DEVELOPMENT,  testified in support of  SESA with a                                                                    
sunset  and  offered   that  Michael  Hanley,  Commissioner,                                                                    
Department  of  Education  and Early  Development  would  be                                                                    
happy to attend the next hearing.                                                                                               
                                                                                                                                
Ms.   Herman   replied   to   an   earlier   question   from                                                                    
Representative  Wilson  and  explained that  there  were  36                                                                    
special  education  teachers   being  mentored  through  the                                                                    
mentoring program.                                                                                                              
                                                                                                                                
LARAINE  ADANS, DIRECTOR  OF  SOCIAL  SERVICES, LOWER  YUKON                                                                    
SCHOOL  DISTRICT,  MOUNTAIN  VILLAGE  (via  teleconference),                                                                    
spoke  in support  of continued  funding  through SESA.  She                                                                    
observed  that  the 11  villages  in  the district  were  in                                                                    
strong support of the legislation.                                                                                              
                                                                                                                                
DR. CASSIE  WELLS, DIRECTOR,  STUDENT SERVICES,  NORTH SLOPE                                                                    
BOROUGH SCHOOL DISTRICT,  BARROW (via teleconference), spoke                                                                    
in strong support of SESA  and the elimination of the sunset                                                                    
clause.   She   emphasized   that  SESA   provided   on-site                                                                    
specialized  programing and  training  for  those that  work                                                                    
with the  students with  the most  significant disabilities,                                                                    
particularly in rural and remote areas.                                                                                         
                                                                                                                                
Co-Chair Stoltze  noted that  HB 198  would remain  open for                                                                    
additional public testimony.                                                                                                    
                                                                                                                                
HB  198  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
AT EASE                                                                                                                         
3:08:29 PM                                                                                                                    
                                                                                                                                
3:08:52 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                

Document Name Date/Time Subjects
Explanation of Changes _ HB 180.pdf HFIN 2/6/2012 1:30:00 PM
HB 180
HB 180 Military Discount List.pdf HFIN 2/6/2012 1:30:00 PM
SSTA 3/22/2012 9:00:00 AM
HB 180
HB 180 Sponsor Statement.pdf HFIN 2/6/2012 1:30:00 PM
HB 180
HB 198 SESA Presentation - House Finance 2012.ppt HFIN 2/6/2012 1:30:00 PM
HB 198
SESA's Funding comparison Charts.pdf HFIN 2/6/2012 1:30:00 PM
HB 198
HB 198 SESA Responsibilities.pdf HFIN 2/6/2012 1:30:00 PM
HB 198
HB 198 SESA Sunset EliminationFunding Request.docx HFIN 2/6/2012 1:30:00 PM
HB 198
HB 198 Sponsor Statement.pdf HFIN 2/6/2012 1:30:00 PM
HB 198
SESA Audit 1994.pdf HFIN 2/6/2012 1:30:00 PM
HB 198
CSHB142 FIN WORKDRAFT.pdf HFIN 2/6/2012 1:30:00 PM
HB 142
CSHB 142 FIN workdraft Summary of Changes.pdf HFIN 2/6/2012 1:30:00 PM
HB 142
CSHB 142 (FIN)Workdraft Sponsor Statement.pdf HFIN 2/6/2012 1:30:00 PM
HB 142
CS HB118 FIN Workdraft.pdf HFIN 2/6/2012 1:30:00 PM
HB 118
HB118CS(L&C)-NEW FN-DOLWD-UI-2-3-12.pdf HFIN 2/6/2012 1:30:00 PM
HB 118
2012 HB118-CCED-DED-PowerPoint.pdf HFIN 2/6/2012 1:30:00 PM
HB 118
CSHB 180 FIN WORKDRAFT-27-LS0589-T.pdf HFIN 2/6/2012 1:30:00 PM
HB 180
CSHB 180 Proposed Changespdf.pdf HFIN 2/6/2012 1:30:00 PM
HB 180
HB 198 SESA Agency Facts 022312.pdf HFIN 2/6/2012 1:30:00 PM
HB 198
HB 198 SESA Answers to HFIN Questions from 020612.pdf HFIN 2/6/2012 1:30:00 PM
HB 198
CS HB198 SESA Av Daily Membership FY 88 to FY 11.pdf HFIN 2/6/2012 1:30:00 PM
HB 198