Legislature(2013 - 2014)SENATE FINANCE 532
04/25/2014 08:00 AM Senate FREE CONFERENCE COMMITTEE ON HB 278
| 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 | ||
HB 278-EDUCATION
8:15:18 AM
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 the FCCS HB 278, Version Q].
CHAIR HAWKER directed attention to the work draft, Version Q,
before the committee. The Free Conference Committee has dealt
with subsequent issues although, several questions still need to
be addressed. He asked for further clarification on the
distinction between "residential schools" and "boarding
schools."
8:16:02 AM
MIKE HANLEY, Commissioner, Department of Education and Early
Development (EED), noted that previously the department has used
the term "boarding schools" and so that term will be referenced
in statute; however, the current term is "residential schools."
Thus, he thought the terms were used synonymously; however, in
further response to a question, he indicated that the department
currently uses the term "residential schools."
8:16:40 AM
CHAIR HAWKER recalled Chair Meyer also has a question on the
repeal for the [High School Graduation Qualifying Exam (HSGQE)]
exit exam.
CHAIR MEYER related that the exit exam applied to charter
schools. He wanted to be certain that "residential schools"
would also fall under the same guidelines and policies.
COMMISSIONER HANLEY responded that the HSGQE and the repeal of
the exam applies to all schools. Interestingly, charter schools
are slightly different and have increased autonomy. He then
referred to page [8], line 27, which says that charter schools
are exempt from the local school district's textbook, program,
curriculum, and scheduling requirements. However, the statute
requires students to take the HSGQE, which is referenced
separately in order to put some "sideboards" on their autonomy,
but again, the HSGQE exit exam applies to all schools and the
repeal will also apply to all schools.
8:19:19 AM
CHAIR MEYER moved to adopt Amendment 1, labeled 28-GH2716\Q.3,
Mischel, 4/24/14, which read as follows:
Page 2, lines 8 - 9:
Delete "the school size factor and the school
district cost factor for"
Page 38, line 12:
Delete "January 1, 2016"
Insert "June 15, 2015"
Page 38, line 20:
Delete "January 31, 2016"
Insert "June 15, 2015"
Page 38, line 24:
Delete "STUDY"
Insert "STUDIES"
Page 38, line 25:
Delete "a study"
Insert "two studies"
Page 38, line 26:
Delete "January 20, 2015"
Insert "June 15, 2015"
Following "entity":
Insert "or entities"
Page 38, lines 29 - 30:
Delete "The study must include consideration of"
Insert "The studies must include, but are not
limited to, consideration of
(1) for the first study,"
Page 38, line 31:
Delete "(1)"
Insert "(A)"
Delete "sustainable"
Insert "predictable"
Page 39, line 2:
Delete "(2)"
Insert "(B)"
Page 39, line 4:
Delete "(3)"
Insert "(C)"
Page 39, line 6:
Delete "(4)"
Insert "(2) for the second study,"
CHAIR HAWKER objected for discussion purposes.
8:19:34 AM
JULI LUCKY, Staff, Representative Mike Hawker, Alaska State
Legislature, identified an earlier concern which is the
consolidation of the LB&A reports and to ensure that the reports
are due at same time so all the information will be available to
the legislature as it moves forward to determine the best school
funding method and other decisions.
CHAIR HAWKER interjected and directed attention to page 38 of
Version Q to the three reports.
MS. LUCKY said that Amendment 1 will standardize all of the
reports, which are all due on June 15, 2015. Beginning on page
38, line 31, Amendment 1 would also bifurcate the study of the
policy and methodology from the data. She directed attention to
page 38, line 31, through page 39, line 6, to paragraphs 1-3,
which comprises one study and paragraph 4 [page 39, lines 7-9],
which comprises the second study. She highlighted two word
changes to address the concern that the scope might be too
narrow. First, "but are not limited to consideration" is
inserted on page 38, lines 29-30, which would then read, "The
studies must include, but are not limited to, consideration of
...." Secondly, on page 38, line 31, it would remove,
"sustainable" and insert, "predictable."
CHAIR HAWKER asked for comments on whether this language will
ameliorate Senator Hoffman's concerns.
SENATOR HOFFMAN answered that it does.
CHAIR HAWKER removed his objection. There being no further
objection, Amendment 1 was adopted.
8:22:21 AM
CHAIR HAWKER directed attention to fiscal notes.
8:23:06 AM
CHAIR HAWKER said the fiscal notes are largely unchanged from
the prior bill. The fiscal notes have been conformed to Version
Q, with the biggest change being the rebalancing the amount of
money allocated inside the BSA and outside the BSA. He
referenced that the fiscal notes are identified by the [OMB
Component] number and the page number for each fiscal note. He
referred to fiscal note 1, [OMB component number 141 dated
4/23/14], noting the information contained in the narrative
shows the BSA increases and the funding outside the BSA [outside
the foundation formula]. He characterized this as splitting the
$300 million appropriation for educational funding equally
between inside the BSA and outside the BSA for the next three
fiscal years [FY 15, FY16, and FY 17].
8:24:32 AM
CHAIR HAWKER directed attention to fiscal note 2 [OMB component
number 2929, dated 4/23/14], which funds the BSA and outside the
BSA, as well as the correspondence school funding increase from
80 percent to 90 percent, and the $43,998.4 charter school
funding within the funding formula. These funds are
appropriated into the public education fund and this fiscal note
transfers that funding from the public education fund and makes
it available each year to fund the expenditures disclosed in the
first fiscal note just discussed.
8:25:20 AM
REPRESENTATIVE KITO III related his understanding that this
fiscal note does include the $25 million in the House version of
the operating budget outside the BSA.
CHAIR HAWKER said that that the aforementioned $25 million no
longer exists since the House and Senate versions were adjusted.
This fiscal note recognizes the compromises [in FCCS HB 278].
8:26:02 AM
CHAIR MEYER asked whether Representative Kito III was referring
to the governor's $25 million outside the BSA, which the House
increased to $30 million that is now included in the total.
REPRESENTATIVE KITO III agreed.
CHAIR MEYER referred to the spreadsheet attached to fiscal note
1.
CHAIR HAWKER suggested the committee review all the fiscal notes
first and then have Commissioner Hanley speak to the
spreadsheet.
8:26:53 AM
CHAIR HAWKER referred to fiscal note 3 [OMB component number
2796, dated 4/23/2014], which provides the fiscal consequences
of establishing the three-year pilot program for middle school
students related to the STEM program [Science, Technology,
Engineering, and Math] that incorporates the ANSEP concept. He
characterized it as an omnibus fiscal note, which includes
replacement of the secondary school competency [exit] exam with
the ability to participate in the ACT or SAT, for $525,000. It
also includes the House requested information on performance of
students of military personnel for $80,000 in FY 15 and $10,000
in outlying years. In addition, it includes the $500 per
student start-up grant for charter schools, the TVEP [Technical
and Vocational Education Program] change from .15 percent to .16
percent, and adds the pilot program for middle schools in
science and related activities of $3 million, he said.
8:28:23 AM
CHAIR HAWKER referred to fiscal note 4, [OMB component number
2737; dated 4/19/14] for $620,000 [$620.1] to the Department of
Education and Early Development (EED) to fund the prototype for
modular schools consistent across Alaska focusing on energy
efficiency, common designs with the goal to achieve higher
quality school facilities that will require less cost for
maintenance and engineering.
8:29:01 AM
CHAIR HAWKER directed attention to fiscal note 5 [OMB component
number 148, dated 4/19/14] related to $2.2 million for
residential schools to raise the funding level to the actual
cost of providing boarding school services. He stated that this
will provide full funding for the per pupil monthly stipend.
CHAIR HAWKER directed attention to fiscal note 6, [OMB component
number 208 dated 4/23/2014] which will provide $5 million to the
Alaska Library and Museums for initial funding to expand
broadband Internet services across the state, including
participation in a federal program to bring the first 10
megabits of download capability. The federal goal will be to
achieve 100 megabits in the near future, he said.
8:30:14 AM
CHAIR HAWKER directed attention to fiscal note 7, [OMB component
number 153, dated 4/24/2014], which accompanies the school debt
reimbursement changes. He related that this is indeterminate
since it will depend on which districts take advantage of the
program.
CHAIR MEYER asked to clarify that this is a credit to the state.
CHAIR HAWKER agreed; stating that this would maintain the 70/30
program as it stands and adjusting the 60/40 program to a 50/50
split, which will place a little more of the burden for
educational funding on local communities.
8:30:52 AM
CHAIR HAWKER directed attention to fiscal note 8 [OMB component
number 773, dated 4/24/2014], provides $650,000 [$650.0] to the
Legislative Budget & Audit Committee, Legislative Audit, to
conduct the two previously discussed studies included in
Amendment 1.
CHAIR HAWKER directed attention to fiscal note 9 [OMB component
number 56, dated 4/24/2014], which provides $610,600 [$610.6]to
the Centralized Administrative Services for the purposes of
conducting a salary and benefits schedule for school districts
that includes an evaluation of and recommendations for teacher
tenure across the state.
CHAIR HAWKER directed attention to fiscal note 10 [fiscal note
number 27, published 4/19/2014], which reflects the changes to
the TVEP. It provides additional funding, and recognizes the
Ilisagvik vocational technical program in Barrow. It would put
all of the university funding into one pool and will eliminate
specific earmarks for the individual campuses; however, the
programs within the university system have indicated they can
have a greater total funding as a result of this methodology.
He characterized it as being a restructuring as well as adding
Ilisagvik as a recognized entity.
8:32:19 AM
CHAIR HAWKER directed attention to fiscal note 11 [OMB component
number 1296, dated 4/18/14], which recognizes the consolidation
of the TVEP program and the additional funding for the program.
CHAIR HAWKER summarized that these 11 fiscal notes which
accompany the proposed FCCS for HB 278 total approximately $300
million, based on the estimated student enrollment for the next
three years. The aggregate $300 million represents $100 million
per year for the next three fiscal years.
CHAIR MEYER, referred to the fiscal note 1 spreadsheet and
pointed to Anchorage as an example, and asked for further
clarification that the total amount the Anchorage School
District will receive is $24,438,413 for FY 15.
8:33:24 AM
LES MORSE, Deputy Commissioner, Office of the Commissioner,
Department of Education and Early Development (EED), agreed.
CHAIR MEYER asked for further clarification on how the breakout
works between charter schools, correspondence schools, and
neighborhood schools.
MR. MORSE answered that charter school funding is an indication
of an increase relative to the change in size factor for charter
schools. He related that any district affected by that change
is noted in the spreadsheet. He then offered to provide a clean
spreadsheet to the committee.
CHAIR MEYER asked whether Juneau and Kenai are the only school
districts affected by this.
MR. MORSE answered that under the current enrollments those were
only two school districts affected in the current calculation;
however, other districts could be affected in the future.
8:36:07 AM
CHAIR MEYER questioned whether dropping the enrollment to 75
students may affect other school districts in the future.
MR. MORSE responded any change would be funding rolled into the
formula funding. He offered his belief that the spreadsheet
represents a pretty accurate picture of the future. He
acknowledged that if there are new charter schools it will have
an impact; however, there would also be an adjustment in the
amount of funding to the district since the students will be
funded through the charter schools. Although it is difficult to
predict the future, these figures are accurate for the current
look of charter schools throughout the state, he said.
8:37:15 AM
COMMISSIONER HANLEY said that largely the impetus behind this is
the recognition that it is a challenge for some districts to
reach 150 students for full funding, especially in smaller
communities. He said that Anchorage may have been less
interested in starting a charter school with less than 150
students since the funding would have been less. However, now
that funding will be the same for charter schools with 75
students, there may be new charter schools because of the
additional funding.
CHAIR MEYER asked whether most charter schools are calculated
differently than neighborhood schools.
COMMISSIONER HANLEY acknowledged that charter school budgets are
handled differently. He suggested that significant language in
HB 278 speaks to that since the current statutory language
relates that the budget for a charter school shall not be less
than the amount generated by the students enrolled in the
charter school. He characterized it as being a contract between
the district and the charter school, but the budget needs to
reflect at least the amount of money generated by the students.
He pointed out significant clarifying language exists, but
typically, for a neighborhood school, the district has a big pot
of funding which is distributed. Charter schools have autonomy,
but have parameters on the amount of funding that should be
generated. Thus, it is a different structure, he said.
CHAIR MEYER expressed concern that some of the funds might not
be following the child to the charter school.
COMMISSIONER HANLEY agreed. He said the governor started the
conversation, but the legislature wanted equity for students.
CHAIR HAWKER said fiscal note shows that the $500 per student
start-up grant will also follow the students.
COMMISSIONER HANLEY agreed that the one-time $500 per student
start-up grant will also follow the students.
8:40:05 AM
CHAIR MEYER pointed to correspondence schools, noting that
Anchorage School District has a $500,000 increase. He noted
that Galena [City School District], heavy with correspondence
schools will receive $2 million in funds and the Matanuska-
Susitna [Borough School District] will receive over $1 million.
He asked for further clarification on how correspondence school
funding is calculated. He said his interest is that currently,
Anchorage had a deficit of $21 million so he assumed the $24
million in funding would cover the deficit. However, after
speaking with the finance section of the Anchorage School
District, he questioned whether it would be enough funding since
charter schools and correspondence schools are factored
differently.
COMMISSIONER HANLEY, referring to the spreadsheet, pointed out
the column [labeled FY 2015 [Correspondence] adjustment from .80
to .90] reflected the increase from .80 to .90 so it represents
the number of students multiplied by the factor for every school
district that has correspondence programs. Previously, Mr. Teal
presented information on the entire funding formula. He said
that correspondence students are limited to the BSA component,
which previously was .80 of $5,680. Now that it has been raised
to .90, it will be .90 of $5,680, which is the funding that will
go straight to the district. Again, these schools are public
schools and district schools and the local district will
ultimately determine how to support their correspondence school
students.
8:42:06 AM
CHAIR HAWKER noted that the funding [for FCCS HB 278] uses an
unusual process since the legislature is in special session and
the operating budget has been closed out. He emphasized that
these figures represent operating budget expenditures, but the
legislature will include an appropriation for the operating
budget to accommodate the fiscal notes for FCCS HB 378 in the
capital budget.
8:42:49 AM
CHAIR MEYER moved to adopt the fiscal notes as presented, noting
the funding will be an operating budget appropriation included
the FY 15 capital budget. SB 119.
CHAIR HAWKER objected for discussion purposes.
8:43:21 AM
CHAIR HAWKER removed his objection. There being no further
objection, fiscal note was adopted.
8:43:38 AM
REPRESENTATIVE KITO III highlighted some concerns. At the time
HB 278 passed the House, he had expressed concern regarding the
tax credits during the floor debate. Those provision were also
contained in the Senate version of the bill. Thus, he still has
the same concern about the Senate provision, on page 11, related
to the student allotments, in which parents or guardians can
purchase non-sectarian services and materials from a private,
public, or religious organization. He questioned whether this
language raises a constitutional issue. He asked to have his
concerns placed on the record.
CHAIR HAWKER acknowledged his concerns.
8:44:47 AM
CHAIR MEYER asked his members to indicate whether they were
comfortable with the language in the proposed FCCS for HB 278.
8:44:59 AM
SENATOR DUNLEAVY asked for further clarification that the
language discussed in the past few days is contained in the
proposed Version Q, with the exception of Amendment 1 adopted
today.
CHAIR HAWKER said that the Free Conference Committee would be
adopting Version Q, which was changed by Amendment 1. The
fiscal notes will be attached, he said.
8:45:47 AM
SENATOR HOFFMAN said he appreciated the bifurcation of the
studies. He expressed concern with the timeframe being reduced
by six months. He offered his belief that this might place some
burden on the Legislative Budget and Audit (LB&A) committee.
CHAIR HAWKER appreciated his willingness to find accord.
CHAIR MEYER said he thought this bill represented a good
compromise. He acknowledged that he spoke to his school
district's finance personnel, noting he preferred the Senate
numbers; however, he characterized the proposed FCCS for HB 278
as a good compromise and one that represents a good package that
offers incentives for innovation and reform. He further
remarked that he believed the committee process worked
effectively this legislative session.
8:47:51 AM
CHAIR MEYER moved that the Free Conference Committee for HB 278
recommend the House and Senate adopt the proposed free
conference committee substitute (FCCS) for HB 278, Version Q,
labeled 28-GH 2716\Q, Mischel, 4/23/14, as amended, with the
attached fiscal notes.
CHAIR HAWKER reiterated that the motion is to adopt a
recommendation for the House and Senate to adopt the FCCS for HB
278, as amended, with the attached fiscal notes.
REPRESENTATIVE HAWKER objected for discussion purposes.
SENATOR HOFFMAN asked whether the objection to Amendment 1 has
been withdrawn.
CHAIR HAWKER was unsure, but removed his objection to Amendment
1 [which had previously been removed].
[The FCC treated it as though the objection to adopting the FCCS
for HB 278 had been removed.]
8:49:07 AM
A roll call vote was taken. Senators Hoffman, Dunleavy, and
Meyer and Representatives Gattis, Kito III, and Hawker voted in
favor of the House and Senate adoption of the proposed free
conference committee substitute (FCCS) on HB 278, Version Q,
labeled 28-GH 2716\Q, Mischel, 4/23/14, as amended, with the
attached fiscal notes. Therefore, the FCCS HB 278 was reported
out of the Free Conference Committee on HB 278 by a vote of 6-0.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 278 House - Senate - Conference Comparison .pdf |
JHB278 4/25/2014 8:00:00 AM |
HB 278 |
| HB 278 Conference Bill/FCCS Summary.pdf |
JHB278 4/25/2014 8:00:00 AM |
HB 278 |
| Amendment 1 4-25.pdf |
JHB278 4/25/2014 8:00:00 AM |
HB 278 |