Legislature(2013 - 2014)HOUSE FINANCE 519
03/18/2014 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB278 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 278 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 278
"An Act increasing the base student allocation used in
the formula for state funding of public education;
repealing the secondary student competency examination
and related requirements; relating to high school
course credit earned through assessment; relating to a
college and career readiness assessment for secondary
students; relating to charter school application
appeals and program budgets; relating to residential
school applications; increasing the stipend for
boarding school students; extending unemployment
contributions for the Alaska technical and vocational
education program; relating to earning high school
credit for completion of vocational education courses
offered by institutions receiving technical and
vocational education program funding; relating to
education tax credits; making conforming amendments;
and providing for an effective date."
1:36:14 PM
MICHAEL HANLEY, COMMISSIONER, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT, relayed that he discussed the components
of the bill during the previous meeting (HFIN 031714 1:33
PM) on HB 278.
Representative Wilson requested clarification regarding the
components of the bill. She asked the commissioner to
explain how the programs in the legislation were changed
from their current practice and what the expected outcomes
were.
Commissioner Hanley replied that the charter school
proposal had two components. Both components were centered
on equity. Charter schools were administered differently
via an Academic Policy Committee but were public schools
and deserved equal treatment as traditional public school.
He explained that one component authorized an appeal
process through the commissioner of the Department of
Education and Early Development (DEED) and eventually
through the State Board of Education if a charter school
application was denied by the school district. The other
component clarified language in statute that the funding
for charter schools should not be less than the funds
generated by the number of students in the same manner that
the funds were generated by the district. The language
specified that the statute pertained to special education,
vocational education, and transportation.
Representative Wilson wondered why charter schools were
required to have teachers with the same requirements as
public schools. She hoped for increased flexibility.
Commissioner Hanley addressed the requirement for
certificated and "highly qualified" teachers were contained
in statute and regulation. The administration believed
students should have the same expectation of quality. The
issue had intentionally not been addressed in the bill
because public school teachers were expected to be
certificated and highly qualified. He noted that charter
schools were an alternative style of education but still
remained public schools.
Representative Wilson surmised that a certified teacher did
not necessarily have to be in a union. She wondered why a
qualified teacher had to be hired out of the same union
pool.
Commissioner Hanley replied that the union issue was dealt
with on a local level and part of its negotiated agreement.
He voiced that some districts did not have unionized
teachers, but many did. Currently, if a charter school
wanted to hire teachers outside of the bargaining unit the
school needed to obtain an agreement between the school
district, bargaining unit, and charter school.
Representative Wilson desired the flexibility to hire non-
union and non-certificated individuals from the
professional, business, and scientific communities to teach
at charter schools. She wanted to see the most qualified
people in the classrooms.
Representative Holmes discussed the potential significant
financial impact if a charter school was operated by the
State Board of Education due to an appealed denial by a
local school district. She asked whether a preferred method
would be to force the local school district to accept the
charter school. She asked for elaboration on the issue.
Commissioner Hanley answered that a school district denial
of a charter school application must be provided in writing
based on fact and law. He hoped that the provision would
limit the number of overturned denials on appeal. He
offered that an appeal had never come before the state
board of education. The bill authorized that a denial could
be overturned by the commissioner or board based on fact
and law. The bill authorized that the state board would be
the school board for the charter school and would operate
similarly as a local district and become a separate school
district. The state board would have to hire a
superintendent and hire state employees.
Representative Holmes expressed concerns regarding creating
additional school districts when currently over fifty state
school districts were in operation. She understood the
problematic nature of the charter school operating under a
school district that denied its application. She wondered
how the transportation funding applied to charter schools.
1:48:53 PM
Commissioner Hanley replied that the provision was included
by the House Education Committee and was based on the
recognition that students generating transportation should
have the opportunity for transportation. He communicated
that charter school students were not contained in
geographic boundaries like traditional schools but
transportation should be provided. He provided some
examples of how a few school districts provided
transportation. The Anchorage school district picked up
students on current routes and in the Mat-Su parents
dropped students off at a hub or certain location for pick
up by school transport. The bill supported the
transportation mandate already contained in statute.
Co-Chair Stoltze remarked that a number of school districts
were "intransigent" and "did not want to deal with charter
schools" and was the reason the issues were addressed in
the legislation. He did not believe the provisions would
lead to new school districts but lead to further
discussions.
Commissioner Hanley agreed that the public process for
appeal brought "validity" to the issue and would influence
a more deliberative outcome.
Representative Holmes agreed that she wanted the districts
to improve its relationships with charter schools.
Co-Chair Stoltze believed that some districts were hostile
towards charter schools.
Representative Gara asked for clarification about the
percentage of Base Student Allocation (BSA) funding charter
schools received. He thought charter schools received 80
percent of the BSA instead of 100 percent.
Commissioner Hanley replied that home school students were
funded at 80 percent of the BSA and that charter schools
were funded at the same level as public schools and
received 100 percent funding.
Representative Gara supported providing transportation for
charter schools. He wondered whether the provision to add
more charter school students for transportation diverted
transportation funding for traditional schools. He asked
whether more students would need transportation with the
current amount of funding or should the funding be
increased.
Commissioner Hanley replied that if the district was not
providing transportation for a charter school then the
provision would "potentially divert funds or resources" to
create equity as opposed to the disparity that currently
existed.
Representative Gara did not want to take transportation
away from students that were already receiving it. He
suggested increasing the funding to ensure all students
were provided transportation and asked for the
commissioner's consideration of the issue.
Commissioner Hanley responded that most of the eight school
districts that contain charter schools provided
transportation for charter school students. He indicated
that the provision applied to the districts that do not
provide any aspect of transportation services but were
receiving transportation funds for the charter students. He
did not believe the situation warranted additional funds,
but required the districts to provide an equitable
distribution of services.
Representative Gara asked for clarity about the legislation
creating equity for charter schools in the area of
vocational education.
Commissioner Hanley answered that the bill clarified but
did not change current statutory language that specified
that the funds designated for charter schools could not be
less than the funds generated by the charter students.
Representative Gara reported that there was a federal law
that only applied to foster youth under a certain income
level that stipulated foster youth should finish the school
year in the original school when placements changed if
feasible. He discussed studies that showed it was damaging
for foster children who changed schools during the year
when foster placement changed. He asked whether the
commissioner would support an amendment requiring foster
children to stay in the original school for the remainder
of the school year.
Commissioner Hanley replied that it was already occurring
in Anchorage in the Child in Transition program but he was
uncertain to what extent.
Representative Gara agreed that it was being worked on, but
transportation was not provided to all youths only as many
as the funding allowed.
Co-Chair Stoltze cited the commissioners remarks that
charter schools received 100 percent funding. He asked why
some school district retained 20 percent to 25 percent of
its charter school's funding.
Commissioner Hanley replied that charter schools operated
under a budget contract with the school district. The
school district retained some portion of funding for
services provided by the district for the charter school.
He stated that "theoretically they should be funded
equally."
Co-Chair Stoltze wanted the record to reflect that charter
schools were not receiving 100 percent of the money.
1:58:36 PM
Representative Thompson wondered why the bill had removed
the SAT, ACT, and career readiness assessment exam
requirements.
Commissioner Hanley did not know the intent of the House
Education Committee. He reported that the bill had
initially included the SAT and ACT tests, but had been
removed by the House Education Committee. The career
assessment, WorkKeys remained an assessment option.
Representative Thompson questioned the two different
definitions of a dual credit in the bill. He read the
definition on page 22, line 10:
"dual-credit student" means a secondary level student
in the state who simultaneously earns college and high
school credit for a course;
Representative Thompson pointed to page 19, Section 24,
which defined a dual credit as a credit towards a career or
vocational certification. He asked why one referred to
college and one referred to vocational education. He
wondered if the bill contained two separate programs.
Commissioner Hanley replied that the programs were not
meant to be separate. The programs were designed to allow a
student to receive post-secondary and high school credit
simultaneously but not delineate between vocational or
college education. The intent may not be clear; the
department was open to clarifying language.
Representative Thompson discussed the charter school appeal
process. He related that the original version of the bill
allowed the commissioner to remand the appeal back to the
school district but the House Education Committee version
authorized the state to operate the school and the district
could subsequently appeal to get it back. He asked for
clarification about the changes.
Commissioner Hanley referenced page 6, lines 19 through 23,
and noted that the commissioner's options remained
unchanged. The commissioner could remand the appeal,
approve the charter school and forward to the state Board
of Education, or uphold the decision to deny the
application. He voiced that the provision the Education
Committee added was that a charter school approved on
appeal would be operated by the state Board of Education.
Co-Chair Stoltze surmised that the school districts were
strongly motivated to keep the students in its district for
the benefit of the student count.
Commissioner Hanley replied in the affirmative.
Representative Thompson pointed to education tax credits in
the bill and noted that insurance premium taxes and oil and
gas property and production taxes were not included. He
wondered why some were excluded.
Commissioner Hanley answered that the tax credits remained
the same based on the current tax statutes, but the
eligibility for the credits changed. He could not speak to
the change. He deferred the question to the Department of
Revenue (DOR).
Representative Thompson communicated that eligibility for
education tax credits was extended to multiple tax programs
in statute that included: corporate income tax, fishery
business and resource landing tax, insurance premium tax,
title insurance premium tax, mining license tax, and oil
and gas production and property tax. He reiterated that not
all of the credits were identified in the bill.
Commissioner Hanley restated that he needed clarification
from DOR. He indicated that the intent of the tax credits
was to foster private partnerships with public education.
Representative Guttenberg questioned the charter school
appeal process. He asked what the standards were for
approval or denial of a charter school application. He
cited page 6, line 19 that allowed the commissioner to
remand the appeal back to the local school board for
further review. He noticed that a time limit was not
designated for the remand. He asked for clarification.
Commissioner Hanley answered that the local school board
had sixty days to make a decision in order to avoid a
denial by delaying. He indicated that on page 5, line 22
the appeal must be filed within 60 days of a denial and if
approved by the commissioner the application must be
forwarded to the state board within 30 days found on page
6, line 2.
Representative Guttenberg wondered if a timeline was
necessary if the commissioner remanded the appeal to the
local school board in order to avoid delaying the
application.
Commissioner Hanley supported the idea. He wanted to ensure
the process was concise and would determine whether the
current language regarding timelines applied to the
remanding provision.
Representative Guttenberg asked for additional examples of
why a school board would deny an application. He wondered
what the standards were.
Commissioner Hanley replied that the standard was broad. He
furthered that local school boards had requirements that
charter schools were expected to meet. A denial was based
on a "finding of fact" that the charter school did not meet
the local criteria.
Representative Guttenberg cited page 18, Section 22 that
discussed reporting [expenditure and performance report].
He had heard over the years that the type of reporting
required was difficult and wondered how "successfully" the
reporting was done in the past.
Commissioner Hanley replied that the provision applied to
the Technical Vocational Education Program (TVEP) and was
under the Department of Labor and Workforce Development
(DOL).
2:10:38 PM
Representative Guttenberg referred to the TVEP reporting
requirements and the department's ability to compile the
information regarding: the number of students who had jobs
one year after leaving the program, the median wage of
former participants, and the percentage of former
participants who obtained jobs related to training received
under the program. He wondered how successfully the
department had tracked the individuals.
DIANE BLUMER, COMMISSIONER, DEPARTMENT OF LABOR AND
WORKFORCE DEVELOPMENT, replied that the department provided
a report to the legislature each year. She related that
obtaining the information from some of the regional
training centers proved challenging. The legislation
allowed DOL to reduce funding for regional training centers
that were not tracking or meeting the performance
standards, which allowed a more rigorous reporting process.
Vice-Chair Neuman wondered whether the commissioner had a
basic understanding of the funding for technical and
vocational training programs that originated from the
unemployment insurance compensation. He remembered that
the intent of the program was to retrain unemployed
Alaskans in new skills to reenter the workforce. He asked
for clarification.
Commissioner Blumer responded that his understanding was
basically correct and reported that the intent was to train
people with employable skills to make sure they could
obtain work or upgrade skills for sustainable employment.
Vice-Chair Neuman referenced Section 24 that defined
"articulation agreement." He asked for an explanation of
the definition.
Commissioner Blumer explained that the articulation was
between the regional training center and the high school
and allow for simultaneous dual credits while attending the
training center.
Vice-Chair Neuman asked whether the training center had
accreditation from the state board or DOL for certain skill
sets related to math or other subjects.
Commissioner Blumer answered in the affirmative.
Vice-Chair Neuman asked how the state measured the skills
against grade level standards for the accreditation.
Commissioner Hanley replied that the articulation agreement
between the two entities covered the criteria for
accreditation of dual credits for both institutions. The
articulation agreement ensured that the students will
receive the credit in their public school after attending a
training program.
Vice-Chair Neuman referred to the summary of changes
titled: "Summary of Individual Components and HEDC
Amendments to CSHB 278 (N)" (copy on file) related to
Section 37 and read:
Section 37 repeals Section 3, ch. 91, SLA 2010 which
will remove the sunset date and that will allow Alaska
to continue to seek federal grants for providing
start-up funds for new charter schools.
Vice-Chair Neuman noted that Section 37 in the legislation
repealed Section 3 without further language. He asked for
further clarification.
Commissioner Hanley clarified that a federal program
potentially provided funds for charter school start-ups but
the federal funds for the program was never appropriated.
The program was due to sunset in the current year. The
language was suggested by Representative Kito to allow the
sunset date to continue with the knowledge that funding was
contingent upon the federal government funding the grant
program.
Vice-Chair Neuman wondered whether the funds were reflected
in operating budget.
Commissioner Hanley replied in the negative.
Vice-Chair Neuman asked for clarification regarding Section
39 that applied to the high school competency examination.
Commissioner Hanley answered that the language in the bill
repealed the High School Graduation Qualifying Exam (HSGQE)
and the section provided the transition language. He
communicated that the governor's bill included a three year
transition period. House Bill 220 [HB 220-Secondary School
Exit Exam; Perf Report] changed the repeal date from 2017
to 2015.
2:20:01 PM
Co-Chair Stoltze interjected that HB 220 was in committee
and a committee substitute (CS) was evolving. He voiced
that the CS authorized repeal after the current year. The
committee considered the test invaluable and "meaningless."
Vice-Chair Neuman supported eliminating the test. He asked
about charter school transportation. He was concerned that
there were not enough school buses and that they were
overbooked. He worried that the school districts could
renege on providing transportation for charter schools by
claiming that the district did not have enough busses. He
wondered whether state law required a certain number of
buses based on average daily membership.
Commissioner Hanley replied in the negative. He read the
language in the CS, on page 9, line 3:
(2) at a minimum, provide transportation services for
students enrolled in the charter school on a space
available basis along the regular routes that the
students attending schools in an attendance area in
the district are transported;
Vice-Chair Neuman asked for verification on whether the
school district excluded charter school students in its
Average Daily Membership (ADM) calculation for student
transportation.
Commissioner Hanley responded that the ADM counted for
transportation funding no matter what school students
attended in the district.
Representative Costello identified the charter school
funding equality issue. She wanted clarification regarding
the commissioner's previous statement that charter schools
received 100 percent funding. She related that she had been
approached by a charter school hoping for legislation
providing equity for charter schools.
Co-Chair Stoltze pointed out that the school district
received the funding not the charter school.
Commissioner Hanley concurred with the Co-Chair and
clarified that the school district received full funding
for the students and a contract between the district and
charter stipulated the school's funding. Statute required
that the budget of the charter should not be less than the
funds generated by the number of students and distributed
in the same manner as students in other public schools in
the district. He stated that the charter schools should
have equitable funding.
Representative Munoz stated that currently a charter school
could contract with a district to provide special education
and other services for a certain percentage of funding. She
wondered whether a disincentive for the district to provide
special education services to charter schools was created
when a charter school received 100 percent of its funding.
Commissioner Hanley reiterated that the state provided
funding to school districts and not individual charter
schools and the contract delineated the services provided
and how or if the school was charged. He believed that the
charter schools were typically strongly supported by the
district.
Representative Munoz asked about the requirements for a
charter school that was placed in a single site district on
appeal.
Commissioner Hanley answered that if a charter school
became a single site district the school would be required
to meet all of the needs of students by itself. He noted
that the school would be required to find special education
teachers, provide transportation and other resources.
Small districts were relatively vulnerable when trying to
provide all of the required services. Single site school
districts often utilized "itinerant" resources from nearby
school districts.
Representative Munoz shared that in other states
"alternative chartering organizations" were authorized to
approve a charter school. She wondered whether the
chartering organization would become a school district upon
appeal if alternative chartering organizations were
permitted in Alaska.
Commissioner Hanley concurred that several states allowed
the scenario and affirmed that "in essence" the charter
schools were their own school district as defined by the
authorizer and not by their geography.
Co-Chair Stoltze asked about the likelihood of single site
charter school districts in cases of appeal. He presumed
that all parties would seek to avoid a single site district
outcome.
Commissioner Hanley replied that the likelihood would be
rare. He believed that a strong incentive existed for all
parties to work together towards a solution.
Co-Chair Stoltze believed the issue was being "overblown"
and provided "sound bites' regarding the formation of new
school districts.
Representative Wilson pointed to page 7, line 19 and read:
"the indirect cost rate approved by the department up
to 4 percent…"
Representative Wilson asked whether the charter school
would receive 96 percent of the funding and the district
kept 4 percent for indirect costs or whether the contract
would focus on the 96 percent.
Commissioner Hanley explained that indirect costs were
administrative costs the districts incurred for all of its
schools which included compliance and budgetary issues.
Direct costs were not addressed in the language. He spoke
to the indirect administrative cost. He stated that the
indirect figure seemed low. The administration did not
include the language in the original bill in order not to
"insert themselves in the contracts between the charter
school and the local district." He understood that it was a
measure to protect the charter school from unfair charges.
Representative Wilson believed that the goal was to ensure
more equity between traditional and charter schools. She
supported the language in the bill. She wanted to clarify
that the language did not guarantee that 96 percent of the
funding would be passed through to the charter school and
that a contract based on the 96 percent was required for
direct cost services.
Commissioner Hanley answered that 96 percent of the funding
would go to the district and a contract would ensue for
direct cost services. He reiterated that the intent of the
language was to limit indirect costs.
2:34:15 PM
Representative Wilson discussed charter school
transportation. She did not understand why charter school
transportation should be limited to space available when
the state was paying for all of the students in a district.
She was concerned about the issue. She believed that if the
bill was about equity then all students on the same route
should be provided transportation. She asserted that if the
extra students were traditional school students the
district would have to provide the transportation.
Co-Chair Stoltze commented that the idea opened up a big
issue. He relayed that students attending optional public
schools were also not provided transportation. He continued
that the minimum standard was to provide transportation on
a space available basis to at least force the most
"intransigent" districts that did not allow for any
transportation to provide it.
Representative Wilson understood the issue but felt that
since the state was paying for the student's transportation
it should be provided.
Co-Chair Stoltze wondered whether the state board could
declare that a charter school approved upon appeal could be
forced on the district and placed under "administrative"
observation to ensure the districts compliance towards the
charter school. He wondered whether a new school district
would need to be created under an appeal scenario.
Commissioner Hanley agreed that alternatives to the single
site school district scenario existed.
Co-Chair Stoltze believed that a better scenario was
possible than creating new school districts. He expressed
frustration with the way the single school district
scenario was being repeated by detractors of charter
schools. He noted the commissioner's statements that the
possibility was "unlikely." He stated that the committee
had the ability to make the single site district an
"impossible" scenario.
Representative Gara wondered about the provisions regarding
testing out of a course found in Section 1 of the
legislation. He wondered whether a student that tested out
of a course would have to take another course. He did not
want a student to have to take a course in a subject the
student already mastered but also did not want a student to
sit idle.
Commissioner Hanley replied that clarification on the
provision was necessary. He anticipated that the school
districts offered students the ability to test out of a
course in the beginning of the school year or semester so
the student could take something else. He commented that
the student would receive credits for testing out of the
course but the student could move on to take another
required course.
Representative Gara surmised that if a student tested out
of a required course the student did not need to take
another course because they acquired the credit.
Commissioner Hanley replied that if a student received the
credit for testing out of a class and met all of the
requirements the student could graduate early. He reported
that typically a student will elect to take another course.
Representative Gara wondered whether the provision needed
more fine tuning. He noted that the student was not
required to take another course.
Commissioner Hanley answered that currently a student
tested out of a class and graduated early or took less
credits during a semester. The provision "simply"
authorized the ability for students to test out of classes
for credit.
Representative Gara asked about the 4 percent for indirect
costs in Section 9. He noted that the indirect costs were
currently determined by DEED. He wondered what percentage
DEED calculated for indirect costs.
Co-Chair Stoltze asked whether the indirect costs were
currently determined by the department or school district.
Commissioner Hanley clarified that the indirect costs were
determined by the school district but approved by the
department.
Representative Gara requested what the percentage
difference was between the bill and current practices.
ELIZABETH NUDELMAN, DIRECTOR, SCHOOL FINANCES AND
FACILITIES, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT,
stated that the amendment would set a 4 percent cap on
indirect costs. Currently the indirect costs were based on
a formula and approved by the department. She reported that
the indirect rates ranged from 4.5 percent to 5.5 percent
and were calculated annually.
Representative Gara believed in adequate and equitable
funding for charter and other public schools. He spoke to
inequities that existed in traditional public schools. Some
schools required more labor intensive services than others
and the districts determined the levels of funding. He
wondered why a formula would be carved out for charter
schools when districts used its own funding discretion for
traditional schools within the same district.
Commissioner Hanley responded that the legislation
recognized that the mechanism for funding a charter school
under contract was set up differently than the traditional
schools in the district and largely spoke to the different
operating structure of charter schools.
2:45:57 PM
Representative Gara agreed that charter schools were
treated unfairly under certain circumstances. He expressed
discomfort about removing the school districts discretion
to fund schools at a level to best educate all of the
students in a district. He wondered why he should feel
comfortable by the language in the bill.
Commissioner Hanley answered that the 4 percent provision
added by the education committee was a new provision and
limited the amount a district could charge for indirect
costs. He explained that traditionally in the Anchorage
school district costs for the schools were taken care of by
the school district and a small amount was allotted to each
school for discretionary funds. Charter schools received
additional money but had the additional responsibility to
set up a school. Charter school funding was not changed in
the legislation.
Representative Costello wondered whether the credit for a
student that tested out of a class would show up on a
transcript. She asked whether a student could fill the time
with a college class.
Commissioner Hanley replied in the affirmative. He restated
that testing out of a course was currently allowed. The
districts decided how to allocate the credits. The bill
required the districts to provide the opportunity for
students to test out of a class. The intent of the
legislation was to provide the student the opportunity to
test out and take a college class or elective based on
their need.
Co-Chair Stoltze thanked the departments for their time.
HB 278 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 278 NEW FN Debt Service SDR 3-14-14.pdf |
HFIN 3/18/2014 1:30:00 PM |
HB 278 |
| HB 278 EDC Letter of Support NWALT LOS.pdf |
HFIN 3/18/2014 1:30:00 PM |
HB 278 |
| HB 278 Public Testimony.pdf |
HFIN 3/18/2014 1:30:00 PM |
HB 278 |