Legislature(2013 - 2014)
04/23/2014 07:14 PM HB278
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HB 278-EDUCATION 7:14:59 PM CHAIR HAWKER announced that the only order of business would be 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." [Before the committee was CSHB 278(FIN)am and SCS CSHB 278(FIN)amS.] CHAIR HAWKER stated the purpose of this meeting will be to discuss the open or unresolved items in the House and Senate versions of HB 278. He reported that significant discussion has occurred between and among the caucuses and the committee. He related that a final solution will ultimately come before the committee in the form of a free conference committee substitute (FCCS) for HB 278 once the resolution on the remaining open items has been reached. 7:16:39 PM CHAIR HAWKER summarized the accord the Free Conference Committee has reached thus far, including that the state will appropriate $100 million per year in funding for the education budget for each of the next three years. This funding will be split evenly, with $150 million provided within the BSA [base student allocation] and $150 million provided funding outside the BSA [outside the foundation formula]. In addition, some direct grants will be funded as well as specific targeted programs. The aforementioned $300 million solution will provide a BSA equivalent increase of $348 in FY 15, $356 in FY 16 and $356 in FY 17. In addition to this funding increase to the BSA, program funding will increase by approximately $13 million in FY 15, $11 million in FY 16, and $11 million in FY 17. The reason for the slight drop off in program funding is due to the number of studies and further research into education in the first year and other one-time spending that will not continue beyond the first year, he said. CHAIR HAWKER directed attention to the committee handout entitled "HB 278 Comparison, dated 4/23/14, 7:11 PM," and offered to identify whether the House or Senate language was adopted by the Free Conference Committee for insertion into the proposed FCCS for HB 278. 7:18:57 PM CHAIR HAWKER directed attention to [Section 2] to the testing- out option. The House language allowed secondary students [grades 7-12] to test-out for all topics but the Senate's version limited the testing-out option to high school students and credit mastery of core topics. After extensive discussions with the caucuses, the department, and school districts, the Free Conference Committee will adopt the House language, but will limit it to core topics only. CHAIR HAWKER said the language in Senate Section 3, will be adopted, which replaces the exit [HSGQE] exam and will allow students the ability to take either the SAT, ACT, or WorkKeys prior to high school graduation. Currently, by regulation, the WorkKeys has been the default exam; however, this change will allow students an option to also select either the SAT or ACT exam, which is consistent with the governor's proposal. He pointed out a number of technical sections were adopted along with this provision, including Senate Section 54, which will allow students who has previously been denied a diploma for failure to complete the HSGQE to apply for and retroactively be issued a diploma so long as they otherwise meet the graduation requirements. CHAIR HAWKER related that the Free Conference Committee accepted $5 million of the funding in [Senate Section 7A] to bring Internet speeds for eligible schools up to 10 megabits. This funding will be needed to access a federal subsidy program for that activity. The Free Conference Committee did not accept the [Senate Section 7B] one-to-one personalized learning opportunity grant program or [Senate Section 7C] the innovative approaches to learning at this time. Certainly the legislature could entertain these grants in the future, but the programs needed additional work. 7:21:58 PM CHAIR MEYER remarked that the House's education plan was originally funded at $75 to $76 million per year with the Senate's version set at $125 million per year since it also included reform measures. The Senate worked to reduce the amount to $100 million. Senate Sections 7A, 7B, and 7C were three items that were also considered. Initially, increased funding for Internet services was proposed at $7.3 million, but was ultimately reduced to $5 million. However, the one-to-one personalized learning opportunity grant program could dovetail with the capital budget and the governor's digital learning initiative, he said. He concurred that the innovative approach to learning grant program needed more time to better define the program. 7:23:21 PM CHAIR HAWKER directed attention to Section 13 [House and Senate version] and indicated that the $500 one-time per student charter school grant program was adopted. Also accepted was Senate Section 14, the allotment rollover language, which allows students in correspondence study programs to rollover funds without the funds lapsing, recognizing that any unspent funds will lapse back to their respective districts when students leave the program. He indicated that with respect to the school debt reimbursement in Section 20, the 70/30 program was retained but the 60/40 program, previously altered to a 40/60 program, was ultimately adopted as a 50/50 program in recognition of the state's need to consider the amount of educational funding support to communities for school construction and maintenance. He characterized this measure as a little "belt tightening," and a compromise from the original bill. CHAIR HAWKER directed attention to Senate Section 23, noting the adoption of the increase to the residential school stipend to $2.25 million, bringing the stipend for residential schools to the level recommended by the administration. This was partially funded in the past but is now fully funded, he said. 7:25:20 PM CHAIR HAWKER turned to Senate Section 24 and emphasized that substantial dialogue occurred with respect to increasing the required local contribution by altering the local mill tax levy, but ultimately it was not accepted in this bill. 7:25:53 PM CHAIR HAWKER noted Senate Section 26 was accepted, which will increase state funding for the correspondence study factor from 80 percent to 90 percent of the BSA. Further, the Free Conference Committee also accepted Senate Section 27, to provide additional funding for charter school grants for the first three years to support the initiation of charter schools. CHAIR HAWKER directed attention to House Sections 20, 21, and 22, with respect to the BSA. The Free Conference Committee adopted an increase of $150 to the BSA the first year, an additional $50 increase in the second year, and an additional $50 increase in the third year. Thus, the overall effect will be to increase the BSA by $150 in FY 15, $200 in FY 16, and $250 in FY 17, he said. CHAIR HAWKER related that the Free Conference Committee has expressed an interest in a comprehensive study of Alaska's education system. He directed attention to House Section 47 and Senate Section 55, relating the Free Conference Committee accepted the House version for a salary and benefits proposal study. Under the proposal, the Department of Administration will perform a thorough statewide exam of school salary and benefits as well as tenure issues and come back to the legislature with statewide recommendations for best practices on all these issues, he said. 7:27:20 PM CHAIR HAWKER directed attention to House Section 48, to grants outside the BSA. As previously recapped, this mechanism will provide $100 million of funding each year, split evenly over the course of three years between funding inside the BSA and funding outside the BSA [formula]. He related the total grant amounts of $42,953,000 in FY 15; $32,243,000 in FY 16, and $19,904,000 in FY 17. He explained that the decrease in grant funding reflects the proposed increase to the BSA for the same timeframe, with the BSA increasing to $37.5 million in FY 15, $50 million in FY 16, and $62.5 million in FY 17. 7:28:24 PM REPRESENTATIVE KITO III asked for further clarification on the BSA for FY 15. CHAIR HAWKER answered that the $37.5 million total funding represents a $150 increase in the BSA. 7:28:43 PM CHAIR HAWKER directed attention to Sections 50-51, to the two studies recommended by the Senate - the District Cost Factor Study and the School Size Factor Study. These studies were rolled into a more comprehensive approach to evaluate all aspects of education funding and spending, including to further review the Department of Administration's salary and benefits and tenure proposals. He related that these studies will begin immediately this summer via professional services contracts issued by the Legislative Budget & Audit Committee (LB&A). He anticipated that the 29th Legislature will evaluate the proposals and make recommendations for all aspects of education and spending in the next legislature. 7:29:27 PM CHAIR HAWKER reported that the School Design and Construction Study in Senate Section 52 was adopted and will consider energy efficient and cost effective designs for engineering and construction school facilities statewide. He reported that Senate Section 53 was accepted, which will extend the ANSEP [Alaska Native Science and Engineering Program] high school STEM [Science, Technology, Engineering and Math] program for a pilot program in middle schools that will terminate June 30, 2017. Upon completion, this program also requires a performance report and an evaluation report, he said. 7:30:13 PM CHAIR HAWKER reported that the Free Conference Committee did not adopt the House changes to teacher tenure [House Sections 23- 24]. Instead the Free Conference Committee would like teacher tenure to be thoroughly studied and reported the legislature to allow the legislature to make decisions on how to approach teacher tenure from a best-practices standpoint. CHAIR HAWKER said this concludes the Free Conference Committee's recommended changes. He commended Chair Meyer for a productive negotiation process. 7:31:03 PM CHAIR MEYER also exchanged optimistic statements with the House Chair. He said that the proposed [FCCS for HB 278] is a good compromise bill, which is acceptable and in accord with both bodies. He reiterated that the Senate's education bill had set overall funding at $125 million and the House's version totaled approximately $75 million. This committee has met in the middle at $100 million, with half inside the BSA and half outside the BSA. Although some Senate members would have preferred not to increase BSA funding since the overall foundation formula needs to be addressed, other members preferred that the additional funding should remain outside the BSA. Still, a compromise was struck and the bill contains additional reform that will advance educational practices in Alaska. Further, the proposed [FCCS HB 278] will provide parents with more options and teachers with adequate resources. He thanked the Senate members for their participation. 7:32:47 PM SENATOR DUNLEAVY acknowledged that the agreement in the committee's proposal doesn't represent all of his preferences; however, he said the overall "package" will help the state look toward the future since questions about sustainability certainly exist. Further, studies within the proposal will examine some of the issues and help the state make decisions on an overall approach to education and delivery system in Alaska. While the current system may not be sustainable, it doesn't mean that the state can't have a robust public education system, although it may ultimately not look like it does now. For one thing, the current educational system is costly. He anticipated further discussions on other items, including "common core" standards, concern about implementation of standards, and the high school graduation assessment [exit exam] to determine whether high school graduates are prepared for the future. He emphasized that the proposal contained in the proposed [FCCS for HB 278] will buy the state time to explore the issues in more detail. He cautioned members not to be afraid of change since some changes will better serve students. 7:35:36 PM CHAIR HAWKER, in response to Senator Dunleavy's comments on "common core" standards, advised that the proposed [FCCS for HB 278] contains two House provisions related to "common core" standards. First, the proposed FCCS for HB 278 will contain a provision to prohibit the EED from spending funds on "common core" standards implementation for K-12. Second, the proposed bill will contain language to ensure that the state may not cede any measure of autonomy or control over education standards and assessments. This language places a "firewall" between the state and infiltration of the "common core" standards into the state education system, he said. CHAIR HAWKER acknowledged that House members have diverse opinions and all members are not happy with all elements in the proposal. Certainly, House members had preferred less overall spending and more spending inside the BSA than outside the BSA; however, the Free Conference Committee has reached a very good agreement. He said, "One of my watchwords is one always have to be careful not to let the perfect be the enemy of the possible." He offered his belief that what has been accomplished is what is possible. 7:36:57 PM REPRESENTATIVE GATTIS acknowledged that the proposal spends more money than initially was considered; however, there are many great things in the proposed [FCCS for HB 278]. She said isn't a huge proponent of studying matters; however, she thinks these studies are long overdue. She related correspondence studies are important in her district and she is pleased some charter school provisions are included in the proposal since many parents want charter schools. Finally, she offered her belief that the proposed [FCCS for HB 278] indicates that the state strongly supports public education. 7:38:06 PM REPRESENTATIVE KITO III commended the Chair and his staff for keeping the committee informed. He also agreed that the caucus would have appreciated additional BSA increases; however, $100 million [for each of three years] is fairly substantial funding. He expressed concern about the potential loss of teachers, hoping not many teachers would be laid off. He expressed further concern that the one-time funding is not being put through the formula. REPRESENTATIVE KITO III remarked on the existing education system. Statewide studies have shown the state has had an increase in poverty levels in the state from 31 percent to 46 percent. Thus, a significant number of students have higher needs in our schools. Despite the increase in poverty levels, schools have experienced an increase in student scores. For example, students might not be reading at the right level in fourth grade, but by eighth grade are reading at level or better. This might mean that the state is falling behind in early education and pre-kindergarten, he said, so examining pre- kindergarten funding will be important. Although the funding is approximately $100 million in increased spending, in terms of the $5.8 billion operating budget and a substantial capital budget, these are small amounts that will allow the state to adjust and prioritize education in the system. He appreciated the work the Chair and other members have put forth to reach this proposal. 7:40:12 PM SENATOR DUNLEAVY pointed out that local school districts, school boards, parents, and other groups will ultimately be making determinations on spending and decisions on salaries, hiring teachers, or starting pre-kindergarten programs. 7:41:01 PM CHAIR MEYER thanked the governor for proposing the initial bill. The bill was taken up in both bodies and the conference committee blended the House and Senate views. He hoped the respective bodies of the legislature will support the [HCCS for HB 278] when it comes to the floor. He thanked Chair Hawker and all parties involved in the process, including staff. He specifically thanked David Teal, Suzanne Armstrong, and Edra Morledge for their assistance. He said that the Free Conference Committee could not have operated without good staff. CHAIR HAWKER joined in expressing thanks to participants. He acknowledged that his staff, Juli Lucky, Rena Delbridge, and Cecile Elliott, are invaluable. 7:42:50 PM CHAIR HAWKER announced that the next meeting will be recessed to a time certain. He advised that the proposed free conference committee substitute (FCCS) for HB 278 is currently being drafted and will be reviewed and distributed. 7:43:40 PM CHAIR HAWKER recessed the meeting until 10:00 a.m. on April 24, 2014.