Legislature(1993 - 1994)
03/25/1993 03:00 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 85: PUBLIC SCHOOL FOUNDATION PROGRAM REP. BUNDE noted that there had been much communication and concern from the public concerning the bill. He said he would like to address those questions. Number 455 DUANE GUILEY, DIRECTOR, DIVISION OF EDUCATION FINANCE AND SUPPORT SERVICES, DEPARTMENT OF EDUCATION (DOE), testified in Juneau in support of HB 85. He briefly described the five major portions of the bill: 1) Creation of an Alaska School Price Index, which would use information from FY89 and FY92 to update and replace the Area Cost Differential established in 1985. 2) Changes in the vocational and gifted education programs to provide a flat rate of funding per student. The talented and gifted (TAG) educational programming would be based on 4.5 percent of the school population, multiplied by a weighting factor. 3) Inclusion of a hold-harmless clause so that for three years no district would receive less money under the proposed new formula than it did under the existing formula. 4) Amendments in the school enrollment projection process to allow the count to come after the current year count to improve districts' projecting and budgeting processes. 5) Inclusion of a forward-funding mechanism to allow districts to use current or previous year student enrollment data for funding, whichever would bring it more money, thus allowing districts to phase out expenses as they lost students. Number 499 REP. VEZEY asked when the DOE would produce its final plan for the Alaska School Price Index (ASPI). MR. GUILEY said the department was currently building up that index, had sent out and was receiving back completed data confirmation worksheets from districts, and was trying to resolve discrepancies to produce another list. He said the department had a draft of the index, but not a final index. Number 505 REP. VEZEY asked why medical (insurance) premiums were one of the factors considered in the ASPI. Number 506 MR. GUILEY said the index was an attempt to measure the differing costs of providing education at schools across the state, and insurance premiums were among the varying factors. Number 509 REP. VEZEY interrupted, saying that medical insurance premiums were the same across the state. Number 512 MR. GUILEY disagreed, saying that school employees were not covered by a uniform health plan; each school district provided its own medical plan and costs differed significantly. He said the index did not assess TRS (Teachers Retirement System), which is assessed uniformly across all 54 school districts. Number 525 REP. BRICE asked how money from the mental health trust fund was used under the current foundation formula and how it would be used under the ASPI. Number 529 MR. GUILEY said that the use of revenue in funding the foundation formula was not anticipated to change under ASPI. Any use of mental health trust fund money in funding the foundation formula would not change under the ASPI, he said. Number 534 REP. BRICE asked whether it was true that the mental health trust fund paid for TAG programs because the TAG programs could not be broken out of other special needs programs. Number 538 MR. GUILEY responded, "Not exactly. The gifted and talented program does generate separate educational units now. They are lumped together with special education and they're reported to the state, but they do have a separate weight factor and do generate revenue separately. The mental health trust fund severely under-funds the special education program in total, and we more than utilize the mental health trust fund within the handicapped student component, and do not have to assess any to the gifted and talented component." Number 543 REP. BRICE said he believed that all children deserved educations, whether or not they are beneficiaries of the mental health trust fund; and using the fund for educational proposes undermines the ideas upon which the trust was established. He encouraged removing the mental health fund from educational funding entirely and to use general funds instead. Number 550 REP. B. DAVIS asked Mr. Guiley to go through the rest of the bill's features and outline the changes. MR. GUILEY said the DOE had provided a sectional analysis at earlier meetings. He described the ASPI, which would replace the Area Cost Differential for state educational funding. He said the DOE had an amendment that would allow the state to use the secondary school funding formula, instead of the elementary school formula, to fund the secondary school elements of the centralized correspondence school. He said the bill updates the sections that apply to the Mt. Edgecumbe school in relation to the ASPI. He said the bill updates the TAG program by establishing separate units for calculating both the TAG program and the vocational education programs in section 5 and section 6. Number 565 REP. B. DAVIS asked for a more detailed explanation of sections 5 and section 6. She asked how much money the talented and gifted programs, once separated from vocational education, would receive under the ASPI. She also asked what the funding cap would be for TAG programs. Number 567 MR. GUILEY said that the current practice saw special education units include TAG as a type of special education unit. The proposal was to remove TAG from special education units, and create new separate educational units for them. As TAG students were included in the current law, they generated 0.025 units per student identified as gifted. Districts are required to write service plans and Individualized Education Plans (IEP) for each TAG child, he said. The students are figured into the minimum level of funding by each funding community and for the minimum funding levels for special education by each district. The proposal would create separate educational units, based upon a revenue weight factor defined by regulation. So far, the DOE had approved a weight factor of 0.012 units, multiplied by 4.5 percent of the student population, without requiring an IEP or plan of service. The hope was to eliminate the administrative burden of the program and to provide a flat rate of funding, 4.5 percent of the student population. Number 588 REP. B. DAVIS said that, if each gifted student earned a school district 0.025 educational units, then it would take 40 students to generate one instructional unit, or $61,000. She said that under the new formula it would take 80 students to generate one instructional unit. She commented that this was a drastic change, resulting in immediate funding cuts. MR. GUILEY stated, "The section above that generated the vocational education instruction units again, a revenue weight factor as defined by the board. The board has currently approved .006 units for vocational education weight factor. The fiscal note, if you will, on that separate section was slightly in excess of $4 million. The fiscal savings on section 6 was approximately $4 million, so the two tend to wash themselves out with no fiscal impact on the state." Number 595 REP. B. DAVIS said, "So you're saying $4 million would have been saved from gifted and then added into this, the voc-ed. What is the cap on the voc-ed, I mean, on the special ed? At this time, every school district identified their children, they're turning that in, then you take that. Under the new plan that wouldn't be true." MR. GUILEY stated, "Under the new plan there would be no requirement to identify the children and turn them in. There would be simply a revenue weight factor that would assign a weight to 4.5 percent of the current average daily membership." Number 600 REP. B. DAVIS asked if it were not true that some districts had identified up to 12 percent or 14 percent of their students as gifted. MR. GUILEY said yes, and one district had identified 18 percent of its student population as gifted, while other districts claimed no gifted students. Since 1981, the state has never identified more than 4.3 percent of the entire student population as gifted. He said the national standard ranges between 4.5 percent and 5 percent, most years averaging 4.6 percent. TAPE 93-46, SIDE B Number 000 REP. BUNDE said he understood that some school districts identified their entire bands as gifted in an attempt to get more state funding. He suggested that the state might want to examine the definition of gifted student. He noted that the suggested separation of TAG from the special education program had generated large amounts of constituent action from an active lobby. He asked Mr. Guiley if he believed gifted students would not be as well served under HB 85. Number 020 MR. GUILEY said the state Board of Education intended that TAG students would continue to be served, and that more money targeted at them would go directly to the classroom programs addressing their needs. He said comparisons between expenditures compared to revenue generation by the program showed that 39 of 54 districts short-fund their TAG programs, some school districts short-fund by more than 30 percent, and some short-fund by from 50 percent to 60 percent. He said the DOE hoped there would be no changes in the delivery model for gifted students, and that the standards being developed would raise the standards for all students, such that some students now identified as gifted would be arriving at the normal outcomes and standards the DOE was developing. Number 054 REP. BUNDE said that the element of hopefulness Mr. Guiley had expressed, and not certainty, would be a concern. REP. B. DAVIS asked if there was not a national trend to include TAG programs under special education programs. Number 060 MR. GUILEY said he could not say. He did say, however, that the Governor's Council on the Handicapped and Gifted said 38 states do not fund TAG as part of special education programs, that there is no federal mandate to fund TAG programs, and that more than half the states do not do so. He said Alaska's $760 annual per-student funding for TAG showed state concern for the programs. He said some school districts charge the entire cost of TAG programs to TAG funds, whereas the Board of Education believed it was providing enough money to fund just the incremental additional cost of such programs. Number 084 REP. B. DAVIS asked if the new foundation funding formula would not address the issue of equitable funding for single- site school districts. MR. GUILEY said the ASPI included a table for additional resources for certificated and classified school staffers as a district got smaller. He said that does address and resolve the single-site school district issue. Number 101 REP. B. DAVIS recalled that a representative of the Alaska School Board Association had testified at a previous meeting that he had provided some suggested changes to HB 85 to Mr. Guiley. She asked if the state Board of Education had adopted those changes. MR. GUILEY answered that the school board did adopt those changes, but he had not brought them to the HESS Committee for its review. Number 110 REP. OLBERG asked if the state would lose any federal revenue if it ceased to fund TAG programs. MR. GUILEY answered no. Number 115 REP. NICHOLIA asked if the changes that the state Board of Education had adopted would be included into HB 85 by amendment in the House Finance Committee. She asked why the changes had not been provided to the HESS Committee. Number 120 MR. GUILEY said he thought HB 85 was scheduled for another hearing in the HESS Committee the following week next, and he hoped to have final numbers, with all changes to the bill, ready for the committee at that time. Number 127 REP. BUNDE said he wanted to hear the bill again the following Thursday, April 1, 1993. He invited public testimony via teleconference. Number 130 RICHARD M. SWARNER, EXECUTIVE DIRECTOR, BUSINESS MANAGEMENT, KENAI PENINSULA BOROUGH SCHOOL DISTRICT, testified via teleconference from Kenai in support of HB 85. He referred to a letter he had sent to the committee stating his position on the bill. He noted that his district's 9,700 students represented 8 percent of Alaska's student population. He said something was wrong with the funding system when such a major district had reached its funding cap and had the lowest administrative cost in the state, but still faced severe financial problems, including high pupil- teacher ratios, low salaries and no raises, no equipment money and an inability to buy books. He said HB 85 would go a long way toward fixing state school financing. Number 164 REP. G. DAVIS cited the DOE's efforts to finalize the ASPI, and asked whether the Kenai Peninsula Borough School District had submitted its final numbers in response to DOE queries for the ASPI. Number 170 MR. SWARNER answered that the district had, and he believed the district's funding rate would not change under the new funding formula. Number 175 MARY RUBADEAU, ASSISTANT SUPERINTENDENT FOR INSTRUCTION, KENAI PENINSULA BOROUGH SCHOOL DISTRICT, testified via teleconference from Kenai in support of HB 85. She said the district had good community support, but in the last five years, when the district had been at the funding cap, she had seen erosion in the instructional programs, even though the district had been thrifty with raises, hiring, benefits, and equipment purchases. She said the cost differential for Kenai needed to be addressed. Regarding the elements of HB 85 dealing with the TAG program, she said the district puts more money into its TAG programs than does the state. She said she wanted HB 85 to maintain a steady formula funding mechanism for TAG funding. She said 5 percent of the district's students were gifted, and the current funding level was proper. REP. BUNDE asked a clarifying question whether Ms. Rubadeau supported HB 85's provisions for TAG programs. Number 212 MS. RUBADEAU stated, "We support the bill in its entirety. I was just speaking in terms of that one section that we do put in the current amount of money that we generate from state in terms of gifted programs and probably would continue even if this bill went through as written. Thank you." Number 218 MARILYN DIMMICK, KENAI PENINSULA BOROUGH SCHOOL DISTRICT, testified briefly via teleconference from Kenai in support of HB 85. Number 277 BRUCE STANTON, A TEACHER and VICE PRESIDENT, KETCHIKAN EDUCATION ASSOCIATION, testified via teleconference from Ketchikan, representing himself, in support of HB 85. He referred to a letter he had written to the committee, which is on file in the committee room. In summary, he said that Ketchikan, like Kenai, had long been at its funding cap and it could only seek funding solutions from the state. He suggested raising the local contribution cap from the current 4 mill rate to six mills, which could save the state $40 million and fund $64,000 instructional units at no cost to the state. He noted that Alaska is third in the nation in percentage of education funds coming from the federal government, but the state ranks 46th in percentage of local contribution to education funding. He said it might be the time in Alaska to turn to local governments for more education funding. REP. BUNDE observed that Mr. Stanton might find resistance to his ideas in Ketchikan, but not in Juneau. He asked if Mr. Stanton was speaking for the Ketchikan Education Association (KEA), and if so, whether the KEA supported breaking the TAG program away from special education. Number 290 MR. STANTON said KEA did not object to splitting the two programs. He said there was a very small TAG program in Ketchikan, with possibly one class each in the elementary and high school levels and none in the middle school. REP. VEZEY said he admired Mr. Stanton's bravery in advocating a local tax increase for education. He asked why people would want to raise their taxes to increase school funding when other areas of the state did not pay taxes for their schools. Number 305 MR. STANTON said that was part of the complication of the issue. He said there was a need to consider what REAAs (Rural Education Attendance Areas) actually could do contribute to state educational funding and how much they might be asked to contribute. He repeated that the Ketchikan school district, facing a state funding cap, faced the need to continue cutting expenses or imposing more local taxes. REP. NICHOLIA asked who Mr. Stanton represented. MR. STANTON answered that he represented the KEA. Number 320 REP. NICHOLIA asked if the KEA had given him a letter identifying him as the association's representative. MR. STANTON answered no, and said the KEA had not taken a vote to support HB 85. He said the KEA was interested in $474,000 that would go to the district. REP. NICHOLIA observed that, in the absence of any authorizing vote, Mr. Stanton did not really officially represent the KEA. MR. STANTON said, "You could say it that way, yes." Number 334 REP. NICHOLIA noted Mr. Staton's comment that REAAs should contribute to their educational funding and asked how, in the absence of any funding base or property of value, they could be expected to do so. MR. STANTON said that was a good question. He said he had not said they should have to contribute the same way other districts did. Number 345 REP. NICHOLIA said anyone who asserted that the REAAs should contribute to educational funding should also offer suggestions as to how they could do that. CHAIR TOOHEY applauded Mr. Stanton's heroism in taking an unpopular position, but said he probably had more leeway to do so as he was representing himself and not the KEA. Number 363 REP. B. DAVIS noted that the state general fund received money from the federal government on behalf of REAAs and single-site school districts. She said the committee would be surprised at the amount of money that came in from the federal government, which she said showed the REAAs and single-site school districts did not have a free ride. REP. BUNDE asked Mr. Stanton to ask the KEA to formulate a position on school consolidation and the single-site issue for later submission. Number 380 MORRIS VERVERS, SUPERINTENDENT, KLAWOCK CITY SCHOOL DISTRICT, testified in Juneau in support of HB 85. He said the new formula had gone through a year and a half of intense work, including input from many people, which was a highly credible process. He added that the bill would end the practice of holding school children hostage in political budget battles each legislative session. Number 395 REP. G. DAVIS asked if the state should establish a regular time frame in which to review and adjust school funding numbers every few years. MR. VERVERS observed that equity in school funding was a goal aimed for but not usually attained. He repeated that the 18 months of work on the new funding formula lent it credibility. Number 404 STEVE GIBSON, A PARENT, testified via teleconference from Homer in support of the ASPI in HB 85. He asked for a more precise definition of what constituted a TAG student. He said some TAG students are liable to become bored in school and to drop out, wasting their abilities. He said that the TAG programs also enrich students not enrolled in the programs. He encouraged the legislature not to diminish the TAG program. Number 422 DEB GERMANO, A PARENT, testified via teleconference from Homer in support of HB 85. She expressed concern that the TAG program might be damaged by efforts to address problems in other programs. She said money spent on TAG programs was well spent. REP. BUNDE invited those testifying to submit written testimony as well. Number 449 JACK CADIGAN, a TEACHER and MEMBER of the CENTRALIZED CORRESPONDENCE SCHOOL EDUCATION ASSOCIATION (CCSEA), testified in Juneau on behalf of the CCSEA in support of HB 85. He said the 23-member association was concerned with section 2, which changes the funding formula for the Centralized Correspondence School (CCS) from that applied to elementary schools to 65 percent of that applied to regular schools. He said it was in one sense a question of equity for the CCS, a fully accredited school which about 1,200 students in both urban and rural areas, and both elementary and secondary students. He said the school had been adequately funded for years when the state paid all costs for it, and when summer school was added, other funding sources were found to pay. He said the FY94 budget left the CCS short by between $100,000 to $300,000. Number 477 CHAIR TOOHEY asked what percentage of the 1,200 students attended summer school. MR. CADIGAN said the CCS actually made money from the summer school, as all of the services necessary for summer school were already available from the regular school year, including some staff, the warehouses, books and equipment. Therefore, being funded under the elementary school formula would not have much negative impact, as funding was sufficient, he said. But when summer school was taken away, as it was last year, the issue of what formula CCS is funded under became critical, he said. He noted CCS was originally just for elementary grades, but 12 or 14 years ago expanded to a full K-12 school. Number 490 GREG MIDDAG, MEMBER, KETCHIKAN EDUCATION ASSOCIATION'S EXECUTIVE BOARD, testified in Juneau in support of HB 85. He said some in his district were concerned about TAG students, though there was not much of a TAG program in Ketchikan. He said Ketchikan had been at its funding cap for the past five or six years and there were no other sources of funding for education. He expressed the hope that Ketchikan could maintain some of its programs. He said the district has cut school nurses, daytime janitors and special needs aides, and the district has had to raise money from the community for special needs students. He voiced support for the district administration and its efforts to maintain funding, but said the district needed someplace else to go for funding. He encouraged passage of HB 85 and asked the committee to help local governments find some more money. Number 521 REP. BUNDE asked if White Cliff School were still operating in Ketchikan and commented that his wife had attended the school in the past. MR. MIDDAG said that the school would probably have to keep operating for the next 20 years, if it stood. Number 521 KATHI MCCORD, VICE PRESIDENT, COMMUNICATIONS, ANCHORAGE EDUCATION ASSOCIATION and MEMBER of the BOARD OF NEA-ALASKA, testified in Juneau on HB 85. She expressed concerns that HB 85, by separating the TAG programs from special education, would remove accountability from the TAG programs. She said she had been told that schools could spend money allocated for TAG programs on other unrelated programs. Number 533 CHAIR TOOHEY stated she needed to have someone from the school district present to answer such questions. She said that issue had been addressed the previous day and such diversion of funds was not possible under HB 85. Number 538 REP. BUNDE corrected Chair Toohey, saying that the committee had dealt the previous day with HB 235, which required IEPs, but not the three-year evaluation. Number 545 DENNIS WETHERELL, PRESIDENT, MAT-SU TALENTED AND GIFTED ASSOCIATION, testified via teleconference from Anchorage in opposition to HB 85. He addressed what he perceived to be the committee's misunderstandings that TAG education had been coupled with special education in the first place because TAG students were at risk of dropping out of school and of life. He listed problems TAG students had in succeeding in school and in life. He said HB 85 cut funding in four ways. He stated the bill would result in the Mat-Su district receiving $4 million less than it would have under the existing foundation formula in effect. He said HB 85 did not mandate funding for TAG education, while special and voc-ed programs had guaranteed or minimum funding levels. He stated that independent analysis by the district showed that HB 85 would cut TAG funding for the district by 40 percent. He commented that districts were not bound to spend TAG money on TAG programs. Number 573 LARRY WIGET, LEGISLATIVE LIAISON, ANCHORAGE SCHOOL DISTRICT (ASD), testified via teleconference from Anchorage in opposition to HB 85. He repeated the district's position that HB 85 would cost the district money. According to Mr. Wiget, Anchorage has 37.73 percent of the state's school population, and while it receives 30.27 percent of the state educational funding under the existing system, it would receive 29.69 percent under the proposed formula. He favored leaving TAG under special education funding and opposed changing the funding weight factor for TAG. REP. BUNDE asked a clarifying question whether the ASD opposed separating TAG and special education program funding. MR. WIGET answered yes. TAPE 93-47, SIDE A Number 000 KENT DURAND, ASSOCIATION OF ALASKA SCHOOL BOARDS (AASB), testified in Juneau in support of HB 85. He said the ASPI would level the playing field for almost all state school districts, and with a few minor adjustments to the ASPI, it will provide equity in funding. He said rural districts had higher non-personnel costs, often due to extremes in weather and geography. He said some school districts were also concerned about how inflation would affect school funding. He said the AASB asked for a statutory inflation-proofing mechanism to be added to the ASPI, and language directing the DOE to submit an annual recommended unit value adjustment. The association hoped the ASPI would address single-sites and recommended the state consider district size and enrollment in making funding adjustments for school funding. He also encouraged de-politicizing funding of single-site school districts. REP. BUNDE encouraged the AASB to consider the capital budget, showing that some school districts had 22 schools with fewer than 12 students. He encouraged the association to prepare to provide testimony to the committee on that topic. (Rep. Brice left at 4:39 p.m.) Number 062 DIANA GREELY, PARENT OF A CHILD IN KETCHIKAN SCHOOLS, testified via teleconference from Ketchikan in opposition to HB 85. She spoke against changes in the TAG program funding plan and in favor of maintaining the program in Ketchikan, where 62 elementary schools had been identified as TAG. She said that, as a parent of a sixth grader, she would work to help establish a TAG program in Ketchikan's middle school. Number 080 CATHERINE PLASENCIA, PARENT OF A CHILD IN KETCHIKAN SCHOOLS, testified via teleconference from Ketchikan in opposition to HB 85. She spoke against changing funding for TAG programs in the absence of other legislative mandates concerning TAG funding. She wanted TAG funding left under mandated special education funding. Number 090 MARYSIA OCHEJ, BUSINESS MANAGER, SOUTHEAST ISLANDS SCHOOL DISTRICT, testified via teleconference from in Ketchikan support of HB 85. She agreed with the price differential, saying she had worked around the state and had experienced the inequities of the existing price differential system. As a parent, however, she said it was important not to reduce services to TAG children. She said the DOE needed to address funding of TAG programs as part of its mission to address all students' learning needs. Number 125 REP. G. DAVIS asked what was the differential with which Ms. Ochej had expressed satisfaction. MS. OCHEJ replied, "One point two-two (1.22). It's currently one point 0-four(1.04)." Number 133 REP. VEZEY asked her where she got her figures. MS. OCHEJ said the foundation formula currently assigned the Ketchikan district a price differential factor of 1.04 and the proposed new formula would increase that factor to 1.22. Number 140 REP. VEZEY said he had been trying for a month, without success, to get a copy of the ASPI, but he had heard from Ms. Ochej and others that they already had the information. Number 146 BETT JAKUBEK, PARENT OF TAG CHILDREN, testified via teleconference from Ketchikan in opposition to HB 85. She said she wanted her children to be able to enjoy the benefits of a TAG program when they advanced to middle school. She said some teachers see TAG programs as a frill, and potential targets for budget cuts. She wanted her children to get the kind of education they needed and the latitude allowed for TAG funding under HB 85 did not ensure that TAG programs would be properly funded. Ms. Jakubek acknowledged the need to eliminate paperwork and encouraged the committee to find new ways to protect the current system and not remove TAG from special education. Number 189 REP. BUNDE invited her and others to fax in written testimony. Number 210 MALCOLM FLEMING, PRINCIPAL, SEWARD JUNIOR-HIGH SCHOOL, testified via teleconference from Seward in support of HB 85. He said the Seward school budget was inadequate and student-teacher ratios were too high. He said the Kenai school district needed special adjustments and HB 85 appeared to help by replacing the Area Cost Differential with the ASPI. He said Kenai's education costs were higher than those of Anchorage; the district was at its funding cap; and school fund-raising was paying as much as the school district for some supplies and activities. REP. BUNDE asked Mr. Fleming his opinion about breaking TAG students out of special education funding. MR. FLEMING said he had no problem with the break-out as the 4.5 percent level matched his school's needs. Number 240 MIKE SMITH, A PARENT, testified via teleconference from Seward in support of HB 85. He said he agreed with the testimony from Mr. Swarner and Mr. Fleming that Kenai's educational costs were higher than those of Anchorage's district. Number 250 SUSAN WALLIN, A PARENT, testified via teleconference from Trapper Creek in support of HB 85. Her written testimony is on file in the committee room. In summary, her testimony praised the ASPI and encouraged even closer consideration of small rural districts in the Mat-Su Borough. She opposed removing TAG funding from special education, and also expressed concern about the bill's adjustment of the enrollment estimate date, saying it might slow budgeting. REP. BUNDE provided the committee's fax number, 465-6790, so that others in Trapper Creek and elsewhere could submit written testimony. He announced that the committee would hear HB 85 again the following Thursday, April 1, 1993. REP. B. DAVIS asked permission to pass out amendments to HB 85 for the committee members' examination before the members next considered the bill. REP. BUNDE assented, then ADJOURNED the meeting at 4:55 p.m.