Legislature(1999 - 2000)
04/24/1999 10:09 AM House HES
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL
SERVICES STANDING COMMITTEE
April 24, 1999
10:09 a.m.
MEMBERS PRESENT
Representative Fred Dyson, Co-Chair
Representative John Coghill, Co-Chair
Representative Jim Whitaker
Representative Joe Green
Representative Carl Morgan
Representative Tom Brice
MEMBERS ABSENT
Representative Allen Kemplen
COMMITTEE CALENDAR
HOUSE BILL NO. 191
"An Act relating to charter schools; and providing for an effective
date."
- HEARD AND HELD
HOUSE BILL NO. 195
"An Act relating to school construction grants and to municipal
school construction debt reimbursement."
- HEARD AND HELD
HOUSE BILL NO. 115
"An Act relating to the University of Alaska; and providing for an
effective date."
- FAILED TO MOVE HB 115 OUT OF COMMITTEE
HOUSE BILL NO. 15
"An Act relating to disclosure of information about certain
children; and amending Rule 22, Alaska Child in Need of Aid Rules."
- SCHEDULED BUT NOT HEARD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 191
SHORT TITLE: CHARTER SCHOOLS
SPONSOR(S): REPRESENTATIVES(S) DYSON, Kohring
Jrn-Date Jrn-Page Action
4/13/99 794 (H) READ THE FIRST TIME - REFERRAL(S)
4/13/99 794 (H) HES, FIN
4/20/99 (H) HES AT 3:00 PM CAPITOL 106
4/20/99 (H) HEARD AND HELD
4/24/99 (H) HES AT 10:00 AM CAPITOL 106
BILL: HB 195
SHORT TITLE: SCHOOL GRANT/DEBT REIMBURSEMENT
SPONSOR(S): REPRESENTATIVES(S) DYSON
Jrn-Date Jrn-Page Action
4/13/99 795 (H) READ THE FIRST TIME - REFERRAL(S)
4/13/99 795 (H) HES, FIN
4/20/99 (H) HES AT 3:00 PM CAPITOL 106
4/20/99 (H) HEARD AND HELD
4/24/99 (H) HES AT 10:00 AM CAPITOL 106
BILL: HB 115
SHORT TITLE: USE OF UNIVERSITY OF ALASKA APPROPRIATION
SPONSOR(S): REPRESENTATIVES(S) BUNDE
Jrn-Date Jrn-Page Action
2/24/99 301 (H) READ THE FIRST TIME - REFERRAL(S)
2/24/99 302 (H) HES, FINANCE
4/20/99 (H) HES AT 3:00 PM CAPITOL 106
4/20/99 (H) HEARD AND HELD
4/24/99 (H) HES AT 10:00 AM CAPITOL 106
WITNESS REGISTER
ACTION NARRATIVE
WES KELLER, Researcher
for Representative Fred Dyson
Alaska State Legislature
Capitol Building, Room 104
Juneau, Alaska 99801
Telephone: (907) 465-3759
POSITION STATEMENT: Presented sponsor statement for HB 191.
CAROL COMEAU, Assistant Superintendent for Instruction
Anchorage School District
P.O. Box 196619
Anchorage, Alaska 99519
Telephone: (907) 269-2290
POSITION STATEMENT: Testified on HB 191.
GLEN BIEGEL, Member
Board of Alaskans for Educational Choice
Board of Alaska Charter School Association
Academic Policy Committee for
Aquarian Charter School
P.O. Box 202280
Anchorage, Alaska 99520
Telephone: (907) 346-6244
POSITION STATEMENT: Testified on HB 191.
GREG MILLER, Chair
Advisory Policy Committee
Aquarian Charter School
2311 Albion Circle
Anchorage, Alaska 99515
Telephone: (907) 344-9672
POSITION STATEMENT: Testified on HB 191.
BARBARA GERARD, Principal
Academy Charter School
258 South Bailey
Palmer, Alaska 99645
Telephone: (907) 745-3369
POSITION STATEMENT: Testified in support of HB 191.
JACK MILLER, Chair
Academic Policy Committee
Family Partnership Charter School
2448 Brook Drive
Anchorage, Alaska 99517
Telephone: (907) 243-0849
POSITION STATEMENT: Testified in support of HB 191.
ROBERT HALL, Board Member
Midnight Sun Family Learning Center
P.O. Box 871906
Wasilla, Alaska 99687
Telephone: (907) 373-6555
POSITION STATEMENT: Testified on HB 191.
EDDY JEANS, Manager
School Finance Section
Education Support Services
Department of Education (DOE)
801 West Tenth Street, Suite 200
Juneau, Alaska 99801
Telephone: (907) 465-2891
POSITION STATEMENT: Testified on HB 191.
BRUCE CAMPBELL, Legislative Assistant
to Senator Randy Phillips
Alaska State Legislature
Capitol Building, Room 103
Juneau, Alaska 99801
Telephone: (907) 465-2661
POSITION STATEMENT: Presented HB 195.
LARRY WIGET, Executive Director
Public Affairs
Anchorage School District
4600 DeBarr Road
Anchorage, Alaska 99519
Telephone: (907) 269-2255
POSITION STATEMENT: Testified on HB 195.
DEE HUBBARD, Member
Bond Reimbursement and Grant Review Committee
4251 Pinnacle Circle
Anchorage, Alaska 99504
Telephone: (907) 337-6370
POSITION STATEMENT: Testified on HB 195.
MIKE MORGAN, Manager
Facilities Section
Education Support Services
Department of Education (DOE)
801 West Tenth Street, Suite 200
Juneau, Alaska 99801
Telephone: (907) 465-1858
POSITION STATEMENT: Answered questions on HB 195.
REPRESENTATIVE CON BUNDE
Alaska State Legislature
Capitol Building, Room 501
Juneau, Alaska 99801
Telephone: (907) 465-4843
POSITION STATEMENT: Testified as sponsor of HB 115.
WENDY REDMAN, Vice President
Statewide University Relations
University of Alaska
P.O. Box 755200
Fairbanks, Alaska 99775
Telephone: (907) 474-7582
POSITION STATEMENT: Testified on HB 115.
ACTION NARRATIVE
TAPE 99-43, SIDE A
Number 0001
CO-CHAIRMAN COGHILL called the House Health, Education and Social
Services Standing Committee meeting to order at 10:09 a.m. Members
present at the call to order were Representatives Dyson, Coghill,
Whitaker, Morgan and Brice. Representative Green joined the
meeting at 10:24 a.m.
HB 191 - CHARTER SCHOOLS
Number 0099
CO-CHAIRMAN COGHILL announced the first order of business as House
Bill No. 191, "An Act relating to charter schools; and providing
for an effective date."
Number 0124
WES KELLER, Researcher for Representative Fred Dyson, presented the
sponsor statement for HB 191. In 1995, the Alaska State
Legislature passed CSSB 88(FIN) authorizing Alaskan charter
schools. The Center for Education Reform has pretty well
established that Alaska charter school law is viewed as being
relatively weak, and the liaison in the Department of Education
(DOE) has been in contact with the charter school people and has
asked them what could be done to make the bill stronger.
MR. KELLER referred the committee to the position statement in
their packets. The DOE has several recommendations that they took
into account. The first recommendation is to lift the current cap
on the number of charter schools in Alaska, and Section 1 takes
care of that. Their second recommendation is to ensure that
educational programs are based on state standards, and Section 2
takes care of that, so the charter schools could not be exempt from
taking the exit exam required in other public schools. The third
recommendation is to establish fund raising guidelines for charter
schools that are established as nonprofit under 26 U.S.C. 501
(c)(3), and Section 4 takes care of that. They also recommended
that they remove the sunset provision of 2005, and that is done in
Section 8.
MR. KELLER informed the committee that the DOE also recommended
that an appeals body be created at the local level for the charter
schools, and this bill has not done that. Part of the reason is
that they feel that the local school boards have that power now to
establish an advisory committee, and they didn't want to add
another level of bureaucracy. The next thing the DOE recommended
is to grant start-up funds for funding charter schools, and they
did not respond directly that way; they responded to the concern
about getting more money to the schools. The next recommendation
is to clarify that charter schools receive local revenues in excess
of required local contribution, as well as state determined basic
need, and they did that in Section 4.
MR. KELLER noted that Section 7 requires that charter school be
counted as separate schools for the purpose of calculating funding
for school districts. The DOE counts charter schools as
alternative schools when applying AS 14.17.905, which basically
says that alternative schools will be counted as part of the school
and district with the highest ADM [average daily membership], so
charter schools are counted currently with the largest school with
the highest ADM. The problem is that alternative schools reside in
a public school facility, and a charter school is in its own
facility. It seems like more money ought to be going to the
charter schools because they have to provide the facilities.
MR. KELLER acknowledged that HB 191 allows the district to charge
rent if the charter school resides in a school district facility.
This is the section that produced the $3.5 million fiscal note from
the DOE. In addition to what the DOE has recommended, this bill
does two things. One is addressed in Section 5, which requires the
districts to assign itemized costs of services provided to the
charter school and allows the charter school to opt out of any
service that it doesn't want that is not required by law.
Number 0495
MR. KELLER said that it requires an itemized list of the cost on a
per student basis. The intent of HB 191 in Section 5 is to show
exactly what the charter school is purchasing from the district.
Section 3 requires that the itemized cost be reflected in the
contract with the charter schools. The second thing HB 191 does in
Section 6, is it allows for the contracts of the charter schools to
be longer than five years. There were problems with long-term rent
arrangements with only five year contracts, and this extends it up
to ten years. He read a support letter from a charter school
student which read:
To the Capital,
I am a 1st grader at the Academy Charter School in
Palmer. My favorite [subject] is science and art. My
favorite food is pizza, ice cream, and candy. My name is
Danielle May Pempek. I am a happy kid. Can you give us
some money so we can have some more Academy Charter
Schools. My favorite teachers are Miss Cottle, Mrs.
Booth, Mrs. Schmidit, and Mrs. Gerard.
Love, Danielle Mary Pempek
CO-CHAIRMAN COGHILL asked who provides the itemized list in Section
3.
MR. KELLER referred him to Section 5 to answer part of that. He
understands that it is a negotiated contract between the charter
school and the school board. The local school districts shall
itemize each service provided by the school district to the charter
school. There is a school budget provided by the district, and the
school budget is roughly $4,000 per student. The student generates
quite a bit more than that and the difference between what the
student generates and what is in the school budget is often defined
as educational services, which includes items like special
education, transportation, audio-visual support and teacher
inservice. This bill is trying to itemize those things so the
charter school know exactly what they are "purchasing."
CO-CHAIRMAN DYSON commented that it is the perception of some of
the charter schools that they are getting $3,035 per student to run
their school, and the district is getting between $7,000 and
$8,000, and the charter schools maintain that they are not getting
their fair share. The intention of this section is to get an
accounting of that to make it fair.
Number 0868
CAROL COMEAU, Assistant Superintendent for Instruction, Anchorage
School District, testified via teleconference from Anchorage saying
one of her jobs is the liaison with the charter schools in
Anchorage. She wanted to ask some questions and then will provide
to the committee their written response later. She noted that they
do not have any problem administratively with lifting the cap on
the number of charter schools or relieving them of the geographic
distribution. Anchorage currently has four charter schools, and
they are allotted ten. They would welcome additional applications,
but they wouldn't want to preclude others in the state from being
able to apply for charter school status if their allocation would
hinder that. They support that the charter schools will be
required to be tested, as all the other students are, and wondered
if that includes the benchmark testing as well as the state mandate
on the CAT [California Achievement Test] and the exit exams.
CO-CHAIRMAN DYSON answered that they didn't address that and asked
what she would prefer.
Number 0947
MS. COMEAU prefers that any required state testing would be
required of the charter schools, so they could include those into
their profile performance that they issue every fall to the public,
and the charter schools, and they are to include that in their
report back to the school board.
MS. COMEAU requested more clarification on Sections 3 and 5 as to
what would that mean. She wondered if they would be required to
itemize, literally in a log everyday, when they respond to
questions or provide information to each charter school. She
doesn't know how they would anticipate that ahead of time before
negotiating a contract. She wanted more information on their
intent on the school district's part.
CO-CHAIRMAN DYSON said their intent is that there be an accounting
trail of the overhead and administrative costs that the school
district has to devote to the administration and support of the
charter schools. It might be better to do that retroactively. He
is open to their coaching on making that clear and convenient.
Number 1067
MS. COMEAU noted that the current law requires that they subtract
from the overall allocation, the indirect cost rate which includes
all of her services, budget department purchasing, chief financial
officer, human resources, which would be all of their hiring
procedures, assessment evaluation services, technology and public
affairs, and others which they do not charge the charter schools
other than the [4.31] percent in the indirect cost rate for the
district. The charter schools don't have to pay for any of their
services. They do require them to pay for things set by law which
include special education. The state law requires that all
students are able to apply to a charter school. Some of the
charter schools have chosen not to provide the services, but they
wanted the district to provide the services so they have worked out
a charge back cost on that. That has mixed success because there
seems to be less ownership of identification and IEP [individual
educational plan] services on the part of the charter schools who
are not delivering the services themselves.
MS. COMEAU stated that they have two charter schools delivering the
services, and the others are getting the services from the
district. That is where they are struggling with this language
because they believe if they start to cost out all of the time they
are spending with the charter schools, it will be significantly
more than what the charter schools are being charged now. The
indirect cost rate of 4.31 percent is set by the state. She
believes that when they take the charter schools' total budgets and
reduce it by the indirect cost rate, she estimates it is going to
cost them less than it would be under this legislation. They will
wrestle with the itemization and costing things out for students
and submit a written response.
Number 1212
MS. COMEAU said they currently allow the charter schools to raise
funds as long as they identify the resources, and that is built
into their budget. She doesn't believe that HB 191 will do any
disservice to the fund raising aspect. She asked what they mean by
"must reflect state, local and other funding for that school
district." It seems to her that that may be tied to Section 5
where they list transportation, special education and intensive
services that come to the district based on the whole district's
needs. She wondered if the intent was to allocate transportation
funding to the charter schools, even though their policies do not
provide transportation to any of their alternative schools.
CO-CHAIRMAN DYSON said what they are trying to accomplish there is
just an open accounting so that the charter schools see clearly
what administrative and overhead costs are being deducted from the
total per-student allocation. They never intended that anything
here would preclude them from excluding charges like
transportation.
Number 1330
MS. COMEAU commented that she can assume from that that the list of
services are currently provided under the indirect cost rate, the
4.31 percent, which they take right off the top. She wondered if
they would then be itemizing how much time each of them in those
departments is spending, and that would be given to the charter
schools.
CO-CHAIRMAN DYSON indicated that the record of whatever they charge
to the charter schools would be a part of the accounting record
that they would have access to. But the district doesn't have to
charge them a pro-rata share of their time if they choose not to.
Number 1370
MS. COMEAU asked Co-Chairman Dyson to explain the opt out. If
their district policy requires that the charter schools follow the
district's purchasing procedures, and they want to opt out of that,
she wondered what the position is with this legislation on that.
CO-CHAIRMAN DYSON said that is one of the questions they are
interested in her response on. The problem of any school, or any
subset of the school district, doing purchasing and contracting is
backing them up; it is necessary to have some controls on that.
What they are interested in is if there a way for the charter
school to do purchasing under the district or state regulations and
do it themselves, as opposed to using the district's purchasing
department.
MS. COMEAU asked if he was asking the district to respond to what
they think the pluses and minuses would be of the services and
which ones they could support and which ones they think could be
problematic.
CO-CHAIRMAN DYSON said that is exactly right.
Number 1440
MS. COMEAU said they recognize the constraints that the current SB
36 restriction on charter schools under 200 places on the charter
schools, and it seems to be forcing, in their estimation, the
charter schools to have to increase their enrollment over 200
students in order to access the funding. They are supportive of
the charter schools who would like to remain smaller but not be
penalized by having to attach themselves to the largest school in
the district. They tried to get that changed on SB 36 last spring
and were not successful, but they support that. If a charter
school wants to stay at 150 students, because they believe that is
the size that best meets their mission and space, the district
agrees they shouldn't be penalized in the funding because of that.
CO-CHAIRMAN DYSON appreciates her comments. Because the charter
schools are very separate, physically and administratively, it
seems to him, from a management and fairness perspective, that they
really are disadvantaged by being lumped with the largest school in
the district, which must by scale factor, be more efficient.
MS. COMEAU agreed that has been their position. As long as the
charter schools are housed in a separate facility, they do not want
them penalized for a smaller enrollment. They believe there is a
benefit in some of the charter schools to start smaller and grow as
they feel comfortable and are more successful. Her experience is
that they are more successful to start that way than to start large
for an artificial reason, just because a number is in the
legislation, rather than what is the best program for the student.
Number 1600
GLEN BIEGEL, Member, Board of Alaskans for Educational Choice,
Board of Alaska Charter School Association, Academic Policy
Committee for Aquarian Charter School, testified via teleconference
from Anchorage. He would like to respond to some things that Ms.
Comeau mentioned. One of the illustrations perfectly defines the
problem that charter schools are having in their attempt to provide
choice for parents. He read from his written testimony which
states:
It is a legitimate and most sacred function of government
to provide for the equal treatment among the unequal.
The manifestation of this as it is best known is the
court system that arbitrates fairly among people who are
manifestly unequal by position, wealth, circumstances et
cetera. In the world of charter schools, we are tasked
with bargaining with districts for the funding to allow
us to present to the public an equal and fair
presentation of school alternatives. What we are asking
for is protection from the word game. The word game is
really just a front for the discrimination game.
The statements of the district I would like to center on
are these: We in essence get local and state funding.
There happens to be $38 million we are not participating
in, this is called discretionary funds or discriminatory
funds. We receive a fair allocation of funds as would be
demonstrated if you read the general fund revenues
segment and the adopted financial plan of the school
district. I will take issue with that in a moment. The
district will treat all other public school students as
having a priority for housing. I believe that they are
funded at about 65 percent of other students.
The question is what is the function of the legislature
in guaranteeing and allowing charter schools to make an
equitable position for parents to choose, as our
constitution guarantees? There is no getting around the
fact that the expenditures ... for charter school
students are $3,900 per child. The expenditures for the
Anchorage School District are $7,500 per child. ... We
get $3,900 to spend; they get $7,500 to spend.
MR. BIEGEL commented that it is a question for the legislature. Is
that equitable? The charter schools do not have the ability to
impact that $3,900 on their own. They are asking for the ability
to guarantee that charter schools have the ability to provide
parents with an equitable choice. They can't provide it with
$3,900. And it may be very difficult to allow for the presentation
of that money to charter schools and the language in the bill as it
is currently written may not provide for that.
MR. BIEGEL noted that Carol Comeau is well-versed in how funding is
allocated by the state, and by various sources of funding. It is
very difficult to pry all that apart to say that the money is
allocated by per student on this basis. They have an allocation by
student in their plan here, and it shows that charter school
students actually receive more money per child than every other
school in this district. The average amount of money that every
other student in this district receives is $3,600. Charter school
students receive $3,900. But the expenditure discrepancy cannot be
reconciled by that statement. It is just simply not true. They do
not participate in 100 percent of local and state funding. It
cannot be reconciled. They are asking in HB 191 to have the
opportunity to be treated fairly in a funding way.
Number 1829
MR. BIEGEL indicated that they were denied housing, a primary and
necessary element of educating children. Some people in this room
who represent charter schools, are going to show that they just
simply won't be able to stay open unless they have a place to teach
their children. The charter school movement is willing to work out
how much less money they can do it for. They can't do it for 55
percent and no housing. They can't do it; they have tried. They
are required to expend money in every way that the school district
expends money. They are required to abide by all the same
contracts with all the different unions, all their building codes
much match the school district.
MR. BIEGEL agrees that HB 191 holds the essence of the solution to
this problem. They have some suggestions by charter school people
about how to fix that problem, but he is not sure that it is dealt
with adequately in the bill as it exists. Merely specifying what
money they are not receiving isn't going to be enough. It is not
going to be enough to say that the charter schools only gets $3,900
to expend per child, whereas the Anchorage School District gets
$7,500 to expend per child, are these reasons. Enumerating the
reasons isn't going to be enough.
MR. BIEGEL continued with his written testimony which states:
The real tragedy is that all the effort, all the thought,
hope and the trust, will have been misplaced and
unretrievable in the grave it has been cast into. There
is only so much constructive energy to make the public
school system more responsive and more effective. The
legislature acted in good faith and trusted the districts
to realize the dream of limited competition, but still
equal competition. I have heard it said that by some,
that the cry for equal treatment that there is a cry for
equal treatment and consideration for all. History has
shown that equality is reserved only to the equal. We
will not be able to present an equitable choice unless we
can secure the blessings of equality that our
Constitution guarantees by its clause regarding equal
access to education.
Number 1967
GREG MILLER, Chair, Advisory Policy Committee, Aquarian Charter
School testified via teleconference from Anchorage. He has two
children at Aquarian Charter School in Anchorage, and he has been
involved the past two years. There are 110 students in that school
housed in seven portables. They don't have a library, gym,
cafeteria, or any busing, and food isn't provided; yet they have
made it and are here to stay. He wrote various letters last year
regarding this issue: The breakdown of revenues, state versus
local revenues and how they are being allocated. He stopped that
endeavor about halfway through last year because he couldn't figure
out the revenue side. He told himself he wouldn't approach them
again until he did have it figured out, and he believes he does
now. The irony of it is that he agrees with both Ms. Comeau and
Mr. Biegel. This bill is a tremendous effort to fix some of the
weak points in the existing statute.
MR. MILLER referred to Section 4(a) which is a revenue versus cost
issue in his mind. The cost allocation has never been a problem
with charter schools. He agrees the school district shouldn't be
burdened with more work for an itemized list. The revenue side of
the existing statute is wholly inadequate, and HB 191 takes a very
good stab at trying to clarify that. But he suggested that it
doesn't quite get there because of some of the language. He thinks
they need to take away any possible ambiguity within Sec. 4(a).
Representative Dyson mentioned that what he is trying to do in this
section is to make the allocation of revenues and funds fair and
clear with an open accounting.
Number 2107
MR. MILLER suggested equal funding. The school district has always
said that the charter schools do get equal funding, and that isn't
correct. They do get an equal share of the state monies, but they
do not get an equal share of the local funding. There is about $92
million locally in the Anchorage School District that goes into the
local funding side of it, and they get approximately 60 percent of
that, if he understands the numbers correctly. That comes down to
$36 to $38 million that Glen Biegel mentioned. Those funds are
allocated by the school district per its discretion. He
recommended that the language in the bill eliminate that discretion
so it is equal.
MR. MILLER suggested a formula for equal funding: Take the total
amount of money in from all sources; divide that by the number of
full-time equivalent students, and that gives the cost per student.
Multiply that by the number of students in the charter school, and
that is the revenue side. Alter the cost side, whether it be the
4.31 percent or an itemization of the costs, but the revenue side
can be just that clear. That will then require the school district
to say what the charter schools are being charged for or not, and
they can opt in or opt out. He applauded Carol Comeau and the
Anchorage School District for their efforts.
Number 2242
CO-CHAIRMAN DYSON commented that if they are going to get anything
done this session, they must do it well and quickly.
TAPE 99-43, SIDE B
Number 2280
BARBARA GERARD, Principal, Academy Charter School, testified via
teleconference from the Matanuska-Susitna (Mat-Su) Legislative
Information Office (LIO). She read her testimony which states:
I am one of the founders of Academy Charter School. I
currently have a first grader in this school, and I am
also the current Principal of Academy Charter. I reside
in Palmer. I have spent the last three years totally
immersed in the formation and implementation of this
school. Our school has been extremely successful. Our
success has been largely due to the incredible parent
dedication and commitment in both time, money and
supplies and whatever else it has taken, including
physically building a school out of a field last year.
I am hoping you will help us by protecting us and getting
a stronger law which delineates equity in funding.
Currently our school is receiving $5,800 per student.
Next year, due to the harm of HB 36, we are barely going
to be able to scrape by. We are hoping that with the
Representative Dyson's bill that we will be able to
receive somewhat of an equity, an equal portion, and not
lose that $1,000 per student. It is critical. Our
students have not lessened in value from last year to
this year, but yet we will receive less. I am hoping you
will support both [HB] 191 and [HB] 197 and enable us to
truly provide, and continue to provide, choice in
education, and guarantee its quality, its rigor and its
content.
Charter Schools are true catalysts for school reform. We
have seen schools all over the district that have been
positively stimulated by the challenge the charter
schools have placed them in. To stop the status quo and
get busy and find some new innovative ways and which they
can function within their own building and provide great
education. Please, I can't say it enough, help us,
provide us with some strength in that law. I read
Representative Dyson's bill and I was excited. It says
many of the things that need to be said and will help
some of those gray areas become black and white.
...Thank you Representative Dyson for putting forth this
bill and for all of you hearing it. Thank you.
Number 2175
CO-CHAIRMAN DYSON asked Ms. Gerard if it was the defining of
charter schools as alternative schools in HB 36 which caused them
to lose $1,000 per student.
Number 2166
MS. GERARD answered it basically classified their school with the
largest neighboring school. Then through the district wizardry of
funding determination, it was determined that they would drop from
$5,800 to $4,817. They haven't figured out that rationale. No one
seems to know what the formula is.
Number 2124
JACK MILLER, Chair, Academic Policy Committee, Family Partnership
Charter School, testified via teleconference from Anchorage. He
has a son enrolled in their high school program, and he has been
involved with the charter schools for the past two years. He
reiterated that the challenge for the charter schools is to get
equal funding, so they can provide housing and the other
educational services that the children need. They cannot do that
with the funding that they have now.
MR. MILLER said he believes that the only way to solve the housing
problem is for the legislature to enact a bill like HB 191. It has
to come from the state as a mandate to all the local school
districts that they provide equal funding, so that the charter
schools can obtain housing and provide the educational programs and
services the children need. The intent of the original
legislation, and the whole charter school movement across the
country, is to provide a good, honest, solid educational
alternative for parents whose children don't fit well into the
local school district's programs. Without the equal funding, they
can do it better for less, but they can't do it for so much less
that they barely scrape by. The children need more money, and the
legislature is the only one who can provide that. He supports HB
191 and the basic challenge to get them equal funding, so they can
continue with the charter school movement in the state.
Number 2027
ROBERT HALL, Board Member, Midnight Sun Family Learning Center,
testified from the Mat-Su LIO. They have 90 students, four
teachers and staff, and the charter school experience has been
exciting and challenging. The workload has been far greater than
expected, and they are still very excited about it. He reported
that they have received more support from the Mat-Su School
District than they expected. The district has been very supportive
and nurturing. However, there has been a great void of
understanding of the relationship between a charter school and the
district. It has changed each year; not in an adversarial way, but
just because of new personnel. The funding formula isn't really a
formula, it is just something that they make up every year. The
idea of giving the local school board direction on how much of a
local share they are entitled to is good. The charter schools do
not want the overall bureaucracy charged to them because the
fundamental idea of a charter school is that they can do things
differently.
MR. HALL commented that the idea of housing is difficult, and no
one has really addressed the capital side: He wondered if a
charter school wanted to be bonded, would the state step in, what
would the process be, and what would be the role in support at the
local level. Most school facilities are not paid for out of
operating funds; many charter schools are. There is a great need
for HB 191. There are a lot of little things to be worked out;
clarifying the role and relationship between the charter schools
and the districts in the state that will fill a big void, and it
will lead to stronger and better charter schools, which offer a
more appropriate alternative for students and parents.
Number 1896
EDDY JEANS, Manager, School Finance Section, Education Support
Services, Department of Education (DOE),came forward to testify and
clarified several issues. The DOE's position is that charter
schools are a part of the public school system, so they will be
required to do the testing at the different grade levels as the
other schools are. He discussed indirect rates versus itemizing
administrative costs. Now they calculate what the charter schools'
entitlement is, and then the school district is permitted to deduct
from that an amount up to their state-approved indirect cost rate.
Indirect cost rate is for the administrative overhead: purchasing,
accounting, payroll, computer systems and so forth. An itemized
list with a dollar amount will create a burden on the school
district. It may be better for them to list out what services they
are providing in that indirect cost rate, as opposed to trying to
account for every time they work with a charter school and
assigning a dollar value to that.
MR. JEANS indicated that it is his understanding that charter
schools do not know what services they are receiving for that
indirect cost rate. In calculating charter school entitlement, the
DOE has calculated a minimum that the school district has to
provide to the charter school. They went to the foundation program
and ran through a formula called basic need. From basic need they
subtract the four mill required local effort, impact aid, and that
is how they arrived at state aid. To apply the charter school law,
they calculated basic need for that charter school, and that will
be the minimum that the school district has to provide to the
charter school. That includes the four mill required local effort.
It does not include the excess local contribution over and above
the four mills, and this is what the charter school people are
complaining about. The DOE has left that optional local
contribution up to the municipalities to decide whether or not they
will provide that to the charter schools.
MR. JEANS commented that the DOE would be looking for clarification
and direction on Section 4. The foundation program provides
operational funds; it does not provide the federal categorical
funds. Those are accounted for outside of the school district
operating funds: federal grants for special education, vocational
education, bilingual education, and so forth. Most of those
programs generate money based on students' needs identified through
an application process. He assumes that if the charter school
children are being identified through these programs, then that
money should go there.
MR. JEANS said the entire district budget includes special revenue
funds. His opinion is that it is not appropriate to take the
district's entire budget, divide that by the number of students,
and say that this is what the allocation should be for the charter
school because they are including costs that the charter school is
not going to incur. The DOE has focused on the school operating
fund and the foundation program for calculating entitlement. They
focused on the four mills, not the local excess contribution.
Number 1620
REPRESENTATIVE BRICE noted that one of the biggest issues that he
is aware of deals with the capital cost of developing a charter
school. He wondered how the state, under HB 191, would look at
costs that certain charter schools might incur by building their
own and bonding, or getting a loan and incurring certain capital
costs, or would they look at incorporating charter schools within
the current school construction programs.
Number 1560
MR. JEANS said that schools cannot bond; the municipalities bond,
and that has to be approved by the local voters. They could use
existing capital requests for charter schools if they meet the same
criteria as any other school within that district, and that
district can demonstrate the need for the additional space. There
is a mixed bag of charter schools in this state. Some are being
housed in school facilities, some are renting space, and some have
long-term leases.
REPRESENTATIVE BRICE asked if there isn't a certain amount of logic
to ensuring that local school districts are responsible for that
cost that is incurred by the charter school. From what Mr. Jeans
said, he gathered that those costs aren't necessarily reflected in
the base rate that the state provides to charter schools, and HB
191 would require that the school districts look at those costs as
well and provide funding for those costs.
Number 1450
MR. JEANS said the foundation program provides funding for the
academic and operations of the school district, which would include
leasing of buildings. That would be part of the maintenance of the
school district, and he believes that part is already covered. In
terms of long-term capital costs, he believes that the charter
schools can, through the school district, apply for, and get on the
capital request list if they can demonstrate the needs, just like
any other school in the state.
CO-CHAIRMAN DYSON asked Mr. Jeans if it would follow that the
districts not charge the charter schools a pro rata share of what
it costs them to operate facilities across the district, if indeed
the charter schools are paying their own facility operations and
maintenance costs.
MR. JEANS indicated that if the charter schools pay rent for a
facility, the school district is taking that out of their
allocation and appropriately should be.
Number 1325
MR. JEANS explained that the foundation formula has a 20 percent
allocation for special needs. This has been an issue raised by
charter schools whether they are entitled to that funding or not.
The DOE's position has been if they are providing the services
on-site, then they are entitled to that funding. If the school
district is sending staff over to provide those services, then that
money should be retained by the school district. The DOE has left
it up to the charter school and the school districts to negotiate
that.
MR. JEANS referred them to the fiscal note. There are 17 charter
schools in the state now. All except for The Family Partnership
Charter School in Anchorage, they fall under the alternative
schools classification as the DOE defined in regulation. This
means that they have to be serving over 200 students to get the
benefit of going through the school-size-adjustment table as an
independent school. If they have under 200 students, they are
lumped in with the largest school in the district, and it does
reduce the amount of funding, quite substantially, by being grouped
in with the larger schools. In the school-size-adjustment table,
for schools over 750 the adjustment is .84. That means that every
charter school student is funded at 84 percent of the base student
allotment which is $3,940. Each time they go through the formula,
they get a base allocation. Base allocation is about $150,000.
Taking each one of these schools and moving them from the .84
adjustment, putting them through the formula based on the number of
students that they are serving, is what generated the $3.5 million
fiscal note.
CO-CHAIRMAN DYSON asked Mr. Jeans what the multiplier would be if
the school was at 150 students.
Number 1140
MR. JEANS said if they had 150 students, the multiplier would be
1.27. If they had 151 students the multiplier would be 1.08. If
they had 150 students, the adjustment subtracts 75 students and the
remaining 75 would be multiplied at 1.27; add that to the 122.85 to
get the school size adjustment for that charter school.
CO-CHAIRMAN DYSON said there are about 1,200 students in charter
schools. He figured that the difference in moving from the .84 to
the 1.27 is about $3,000 more per student.
MR. JEANS explained the school size adjustment table is there to
provide additional resources because the smaller the school, the
less efficient it is to operate, so they are going to have higher
fixed costs on a per-student basis. They have taken the students
here and put them through a formula, as if they are all housed in
independent facilities with very high fixed costs, low
pupil-teacher ratios and on and on.
Number 0963
REPRESENTATIVE BRICE asked when the policy changed and moved
charter schools from regular schools to alternative schools. He
asked if alternative schools were defined in statute or regulation.
Number 0896
MR. JEANS told Representative Brice that the definition of schools,
or facilities constituting schools, made it into SB 36 last year
when the bill was in House Finance. Up until that time, the DOE
ran every school regardless of size through the formula. It wasn't
until they got to the House Finance Committee that this criteria
was established.
Number 0788
MR. JEANS said the definition for alternative schools is in
regulations adopted by the State Board of Education in November
1998.
REPRESENTATIVE BRICE asked when SB 36 went into effect.
MR. JEANS answered July 1.
REPRESENTATIVE BRICE asked how the state divided up the money in
the current year's budget, with the understanding that alternative
schools included charter schools, obviously without a definition.
MR. JEANS said the regulation process takes a very long time. The
DOE issued a numbered memorandum to school districts stating that
these were the regulations that they were taking to the state board
for consideration; and until the board acted on those regulations,
this is the way they were going to apply the rules. The board did
adopt those regulations.
Number 0707
CO-CHAIRMAN DYSON asked if it is legal for the legislature to tell
local school districts what to do with the local contribution.
MR. JEANS said that is a very good question. Right now under SB
36, they are telling districts what to do with their local
contribution with the 70 percent minimum expenditure requirement.
They are telling them what to do with their local money as well as
their federal money.
CO-CHAIRMAN DYSON said until somebody takes them to court they will
not know.
Number 0614
CO-CHAIRMAN DYSON asked Ms. Comeau how they account for paying for
building operation and maintenance.
Number 0562
MS. COMEAU answered they do not charge the charter schools for the
district-wide costs. Their policy charges a pro rata share for the
custodial services for the space the charter schools use in the
district's facilities. The other charter schools pay the full cost
of their upkeep and maintenance through their leased or rental
agreement. It varies with each charter school, but they are not
charged for district-wide costs.
Number 0486
MR. JEANS raised a couple of other issues for their consideration.
The DOE does have a concern with changing charter schools so that
they are not classified as alternative schools, especially with
lifting the cap on the charter schools. The DOE may see
alternative schools in districts, like alternative high schools and
other such programs, apply for charter school status so that they
can then go through the school-size-adjustment table. If they
start having these little pockets of schools popping up all over
under the umbrella of charter school, they could have some
extremely high costs for the educational programs.
CO-CHAIRMAN DYSON asked how they could fix that and asked Mr. Jeans
for any suggestions.
MR. JEANS said they may be able to come up with some ideas for
fixing that.
CO-CHAIRMAN DYSON said they are eager to do it right and well and
not have some unintended, negative effects.
Number 0330
MR. JEANS mentioned charter schools that are providing distance
delivery or programs similar to "correspondence" programs. Right
now they have the Delta-Greeley Cyber School, which is a distance
delivery program, and the DOE has classified that charter school,
for funding purposes, as a correspondence school. He asked if
there was a way to clarify what the intent was for these types of
programs. The foundation program has two pots of money: One for
the school-size-adjustment to cover facilities, fixed costs and
such, and one for the correspondence allocation which is a flat 80
percent allocation per student; that is an issue for them.
Number 0244
REPRESENTATIVE MORGAN wondered how the DOE deals with the two small
boarding schools in Galena with 75 students and Takotna with 25
students. He doesn't want to jeopardize them.
MR. JEANS said those two schools are classified as alternative
schools because they are serving less than 200 students. Under the
charter school law now, charter schools that have boarding programs
cannot get state funds for their residential component of that
charter school. That has been an issue for those communities, but
the law prohibits it, so the DOE can't help out for the funding on
the residential component of that program.
CO-CHAIRMAN DYSON asked Mr. Jeans how they could fix that.
Number 0160
MR. JEANS answered they would need to remove the prohibition in the
statute.
Number 0127
CO-CHAIRMAN COGHILL noted that the fiscal note on that small change
would change the chances of getting something through this year.
REPRESENTATIVE BRICE asked what was the purpose of having that
addition outside the fiscal impacts.
MR. JEANS said he doesn't know why that was placed in there. It
was placed in there about the same time Galena was getting their
charter school approved as a boarding school.
Number 0051
REPRESENTATIVE MORGAN said the schools in Takotna and Galena are
the last line for these students. These are hard-to-place
students, and these two schools have zero tolerance.
TAPE 99-44, SIDE A
Number 0019
CO-CHAIRMAN COGHILL suggested that they make some amendments and
bring HB 191 back for discussion on Tuesday. [HB 191 was held
over.]
Number 0131
CO-CHAIRMAN DYSON made a motion to adopt an unnumbered bill on the
Medical Marijuana as a committee bill. There was no objection, so
it will be introduced as a committee bill.
HB 195 - SCHOOL GRANT/DEBT REIMBURSEMENT
Number 0174
CO-CHAIRMAN COGHILL announced the next order of business as House
Bill No. 195, "An Act relating to school construction grants and to
municipal school construction debt reimbursement."
Number 0218
BRUCE CAMPBELL, Legislative Assistant to Senator Randy Phillips,
came forward to present the sponsor statement for HB 195. This is
a companion bill to SB 95 which is supported by the Anchorage
school board, the Anchorage caucus and the Fairbanks school board.
Senate Bill 95 recognizes the grades 6 to 8 middle school concept.
Currently, the statutes deal with junior high, grades 7, 8, and 9,
but they don't have a middle school concept in the statute process;
it makes it difficult to address middle schools in determining the
school size and calculations for construction. Anchorage junior
highs have been converted to the middle school concept. In
downtown Fairbanks, there are still junior highs, grades 7 through
9, but North Pole has a middle school of grades 6, 7 and 8. This
change seeks to expand the DOE regulations in a manner that
conforms with the middle school concept, and it gives school boards
flexibility in determining how they house their students. The core
of the bill is on page 3 where they have added the middle school
concept in lines 20 through 23.
MR. CAMPBELL told the committee that currently sixth graders are
calculated as if they were in elementary schools, even though they
are in a middle school. Elementary schools have smaller size
requirements than middle schools.
Number 0417
REPRESENTATIVE BRICE asked how this will affect existing schools
that have the sixth graders in elementary schools.
MR. CAMPBELL said there would be no change.
CO-CHAIRMAN DYSON believes this is not going to have any
detrimental affect of schools and students now, but it will allow
districts to plan and build for the middle school concept and be
able to treat the students according to the facility they are in,
not the academic progression. He asked if this change will get
more operational funding for the student for the district.
MR. CAMPBELL answered no, it is strictly the capital side.
Number 0752
LARRY WIGET, Executive Director, Public Affairs, Anchorage School
District, came forward to testify. Their goal is allow them to be
able to count students who are in a middle school program have the
square footage counted as a secondary school student to meet the
program needs of that student. Sixth graders that are housed in
elementary school programs will be counted as elementary students.
They believe this will allow them the flexibility in the design in
putting up new middle school, if the school board decides they want
a sixth grade combination in a middle school program. This will
allow them to put the square footage in. They are looking for
flexibility in the design of new facilities and being able to count
the sixth graders in a middle school program as secondary students
as they should be.
Number 0914
DEE HUBBARD, Member, Bond Reimbursement and Grant Review Committee,
testified via teleconference from Anchorage. She is also a
volunteer. She sees two concerns. One deals with the wording in
both Sections 1 and 2 which talks about a specific building. She
pointed out that there are schools in this state that house grades
K-8 and K-12. The way this language is written, because the K-8 is
housed in an elementary school, these sixth grade students, if they
were receiving a secondary program education, would not be counted
to allow the increase in square footage from 106 to 150 square
feet. She suggested that instead of talking about the physical
structure of where they are housed, they should talk about the
level of education that they are getting. That would remove the
barriers for schools with other configurations that aren't covered
in this legislation.
MS. HUBBARD said the other concern involves a lot of paperwork. If
the bill does not take care of the K-8 and K-12 schools, the school
districts will be keeping two sets of books, and that causes a
consternation problem. She admitted to being the culprit of this
bill. In 1994, she noticed the anomaly in the statute and went to
the school board and suggested they do something about the sixth
graders in middle schools.
Number 1166
MIKE MORGAN, Manager, Facilities Section, Education Support
Services, DOE, came forward to testify. He explained that the bill
started out in a directed fashion looking at middle schools. Last
year the DOE provided a definition for middle schools that really
gave districts the maximum flexibility to put any grade
configuration they wanted to together, and they didn't expand it
beyond the middle school concept, because that is where the sponsor
started out. They can certainly look at language changes that will
accommodate the other K-8 or K-12 facilities.
REPRESENTATIVE GREEN asked if Mr. Morgan saw any problem with the
change to include K-8 and K-12.
MR. MORGAN didn't believe it will cause any problems, but it would
cost more.
Number 1279
REPRESENTATIVE GREEN asked if they don't make the change, would
there be a chance they would be hammered for preferentially
selecting these students over those students.
MR. MORGAN agreed that this does provide disproportionate funding
to a very small element because primarily middle schools right now
occur in large urban areas. The smaller districts have gone to
unified facilities rather than splitting the facilities up so they
could qualify for additional funding.
CO-CHAIRMAN COGHILL asked if the word "shall" on page 3, line 20,
was a prohibition to those districts who choose not to put sixth
graders in middle school.
Number 1346
MR. MORGAN commented that what is often misunderstood about the
DOE's current space guideline regulations is that they are not
recommendations; they are a maximum that is going to be available
for funding. There is a range of space allocation per facilities
but the DOE doesn't tell the district how to use their total space
allocation. The way the districts combine their students is up to
the districts. The DOE is only saying there is a maximum they will
fund up to. The districts don't have to choose to build to that
maximum. That is what the space guidelines are doing. There could
be a ripple effect if districts decided to move the sixth graders
out of K-6 schools into secondary schools to qualify for more
space; the K-6 schools could have excess space and then the high
schools would be overcrowded, and that is the most expensive space
to build.
CO-CHAIRMAN DYSON asked Mr. Campbell if these questions have come
up in the Senate.
Number 1485
MR. CAMPBELL answered that some have come up, and the general
discussion is that it is not the intent, other than to allow
flexibility. He has not heard the intent of increasing the dollars
available for construction. Once the DOE makes the allocation, the
school district can pick and choose and try to get more flexibility
in their options.
Number 1512
CO-CHAIRMAN DYSON made a motion to move HB 195 from the committee
with individual recommendations and attached fiscal notes.
Number 1523
REPRESENTATIVE BRICE objected because of concerns in his school
district.
CO-CHAIRMAN DYSON asked if they waited to move it out on Tuesday
would that give him enough time to work on it.
Number 1546
REPRESENTATIVE BRICE said yes, and if not he will try to deal with
it in the Finance Committee.
Number 1570
CO-CHAIRMAN DYSON announced they would hold HB 195 until Tuesday.
[HB 195 was heard and held.]
HB 115 - USE OF UNIVERSITY OF ALASKA APPROPRIATION
Number 1578
CO-CHAIRMAN COGHILL announced the next order of business as House
Bill No. 115, "An Act relating to the University of Alaska; and
providing for an effective date."
Number 1621
REPRESENTATIVE CON BUNDE, Alaska State Legislature, sponsor, came
forward to present HB 115. He indicated that the essence of SB 36,
which was passed last year on the foundation formula for funding
public schools, is that they need to allocate the educational
resources effectively and fairly. He believes that once the monies
are allocated fairly, that will beget more money. It is unlikely
that there would be additional funds put into a system that was
unfair in the view of the majority of the residents of the state.
House Bill 115 asks that the state investment in the university
system be distributed equitably, and that it be distributed based,
much like SB 36, on student population. Many other states do this.
House Bill 115 also provides for additional funding for the
university on page 2, section 2 (1) allocate for each campus 2
percent inflation factor. The university has been concerned for a
number of years that they have not been adequately funded based on
an inflation factor. He used a chart of student-teacher ratios to
show why he believes the funds are not fairly allocated:
Faculty Full Time Equivalent Head Count
(FTE)
University of Alaska
Anchorage 321 7,127 13,559
Teacher/Student Ratio: 22 to 1 42 to 1
University of Alaska
Fairbanks 376 3,181 5,110
Teacher/Student Ratio: 8 to 1 13 to 1
University of Alaska
Southeast 54 1,037 2,604
Teacher/Student Ratio: 19 to 1 48 to
Number 1844
REPRESENTATIVE BUNDE said this bill encourages the allocation of
the university's investment on a per student basis. He believes
this will encourage greater funding for the university because
people are more supportive when they feel their monies are being
used fairly and equitably. He would like to see the university
have the opportunity to grow in total funds and have increases for
inflation.
CO-CHAIRMAN DYSON commented that most inflation provisions are tied
into something like the wholesale price index. He asked what was
Representative Bunde's thinking on making it a flat 2 percent as
opposed to tied to some national standard on inflation.
Number 2064
REPRESENTATIVE BUNDE commented that the normal growth of government
is 1.5 to 2 percent so that is why he factored it in there. The
other is the safety valve. It may not be possible for the state to
inflation-proof the university at 10 or 12 percent. This
anticipates the growth in other state services and the philosophy
that something is better than nothing.
Number 2113
REPRESENTATIVE BRICE clarified that HB 115 has very little to do
with SB 36, in that SB 36 was a funding formula, and HB 115 is an
allocation formula. The 2 percent on page 2, lines 13-15 does not
mean there will be a 2 percent increase in the university's budget.
There is nothing in HB 115 that requires the legislature, or even
suggests to the legislature, that the allocation that they make to
the university increase which is unlike a foundation formula that
generates an expected funding level. This does not generate an
expected funding level. It creates a division table that divides
the appropriation the legislature makes to the university, and then
tells the university how to make that allocation. They are not
talking about incorporating a 2 percent increase in the university
budget. They would be requiring 2 percent in the allocation which
would become null and void if the legislature has to cut the
university's budget.
REPRESENTATIVE BUNDE said that the university could certainly use
this, if HB 115 became law, to say they must fund them because they
have asked that they provide this increase. None of this funding
is sacrosanct; they could all be changed by a future legislature if
that were necessary.
Number 2254
WENDY REDMAN, Vice President, Statewide University Relations,
University of Alaska, came forward to testify. She supports the
spirit that has initiated this legislation. It has been borne of
some deep frustration on the part of Representative Bunde about a
difficult funding situation, particularly in Anchorage. The decade
of the 90s should have belonged to UAA [University of Alaska
Anchorage]. It is a booming campus, their enrollments have been
going up, and they have not gotten any kind of increases except a
$2 million increase in 1993. The UAA has been flat during a time
of incredible growth. It has been extremely frustrating. However,
the answer is not to try to take money from other campuses to
enhance Anchorage; they need new money for Anchorage, and they have
enough data to support that.
MS. REDMAN referred to an article in their packet on formulas by
Mary McKeown which concludes that states are abandoning the use of
formulas at this time. Ms. McKeown says formulas will never solve
the resource allocation problems in higher education. Formulas
cannot recognize the full range of objective and subjective
differences among institutions, nor can they anticipate changes in
the missions of institutions, such as those changes that will come
about with the advent of virtual universities. Ms. Redman said
formulas have played an important role in many states in building
up the base budgets, particularly in those states where the
individual campuses are not part of a system.
TAPE 99-44, SIDE B
Number 2359
MS. REDMAN continued saying that formulas in many of those states
have been helpful in bringing an equity to the base of those
budgets. However, formulas are not very helpful when the budgets
are flat or declining. Most states are beginning to move off of
the formulas that are derived from the numbers of students and
moving to more accountability and productivity types of formulas.
That is the direction the University of Alaska is looking at
internally. The formula that is included in Representative Bunde's
bill is actually a formula similar to one in use in Idaho, which is
a valid formula. Representative Bunde and his staff have worked
hard to try to accommodate the concerns that they have expressed
over the years about the differences in discipline which are very
real. This formula does not work in Alaska because of the very
different types of institutions and the location of institutions.
For example, UAA's annual physical plant expenditure is about $6
million per year, and UAF's annual physical plant expenditure is
about $19 million per year. It is not just in the square footage,
although there is more square footage in Fairbanks, but the weather
makes a tremendous difference in how those campuses are run and how
much it costs to do things. The cost differential in Fairbanks is
significant.
MS. REDMAN explained it is important to look at the type and
mission of the institution. At UAF, 50 percent of their faculty
are research faculty who do not teach classes; they do have
academic rank so they show up in the data as faculty, but they are
not funded with general funds. They are not hired to teach; they
are hired to do research and generate money. If you look at UAF,
which is designated as a research 1 institution, about 65 percent
of their faculty are full time. Anchorage is designated as a
comprehensive master's institution, an urban institution, and their
full-time faculty right now are about 35 percent. They would like
to get them up to 45 percent which would be more appropriate for
their type of institution. As they do that, the costs are going to
rise. More full-time faculty, the higher that cost per student.
Right now UAA's cost per student are artificially low because of
the high number of adjunct faculty there, but that is not the best
situation for the student.
MS. REDMAN indicated that because of the differences in the types
of institutions, about 70 percent of UAF's students are full-time,
and in the FY 1998 academic year, close to 50 percent of their
credits were at the upper division level. About 35 percent of
UAA's students are full time, and about 30 percent of their credits
are the upper division level. They have different profiles.
Anchorage is changing more than Fairbanks; Fairbanks has been very
stable over time. Anchorage is moving from the community college
model and is beginning to add many more full-time students to their
institution, and that is the largest growing element in Anchorage.
Those numbers begin to shift as they turn out more baccalaureate
majors, and they want to encourage that. It is important to
understand that it is not as simple as taking the total budget, or
even the total instructional budget, and dividing it by the number
of students. Representative Bunde's bill makes a stab at trying to
differentiate between that based on the disciplines.
MS. REDMAN suggested that it doesn't really get into the other two
elements which are the type of institution and the level of
enrollment. Those are two important things to look at in a
formula. Anchorage is able to generate large classes because of
their large population. The whole issue of the impact of the size
also comes into play when they look at instructional models.
Number 2159
MS. REDMAN mentioned that last year the university formed a
committee that was chaired by the Anchorage chancellor Gorsuch, and
they worked all last summer on looking at formulas for the
allocation of the instructional resources. They spent many hours
going over detailed data trying to find where the differences are,
and if there are major differences between the campuses once they
strip away the things that are unique. For instance, UAF has a
huge public service responsibility because of the Cooperative
Extension Service, the Marine Advisory Program, things that UAA
does not have. The University of Alaska Anchorage is not the
land-grant institution, and it doesn't have those responsibilities.
Anchorage has other responsibilities that UAF doesn't have. It has
a much greater part-time and adult population; a much larger
traditional community college type population that brings a lot of
other issues. They tried to separate the differences out and the
committee found that there are some differences in some key program
areas. They were very small compared to what people were expecting
to see, but they were significant in some areas.
MS. REDMAN noted that those are the areas they are attempting to
address now. The areas where they saw the big differences were in
programs that are in the core curriculum: English, speech and
history where they saw that UAF had many more faculty FTE per
student than they had in Anchorage. They then compared them with
the national averages. It is not that Fairbanks is over where they
should be; but that Anchorage is so far under where they need to
be. It is not in anybody's best interest to now make UAF under
where they should be to increase Anchorage. They are trying to
shift the resources as they become available so as UAF and UAA have
faculty vacancies, they are trying to gather those in a way that
they can allocate them out. Unfortunately, they haven't been able
to hire back many of the faculty vacancies, so they are trying to
focus the hiring on the areas that are the most underserved.
MS. REDMAN said this bill follows the national formula which is
applied to new money. It is not that the legislature is attempting
to go in and re-allocate the existing base but trying to direct the
appropriation of new monies into the priority areas. She likes the
fact that there is real money attached to this bill. On the other
hand, she believes that it really is the Board of Regents
responsibility to try to make these decisions. There is no way
that this particular formula can cover the kinds of issues they
need to cover. This formula only measures where they are today; it
doesn't provide any model to aspire to which is part of what the
legislature is trying to do with new monies: to help a campus
build toward something that it can be. The legislature will see in
this year's budget request new program initiatives in Anchorage
because they are building the new logistics program and the new
health care programs. Those are things that they couldn't
calculate into a formula like this because there is nothing there
now. She understands the motive, and appreciates the frustration
that led to this, but she believes that the Board of Regents are in
a better position to try to determine where new resources should go
in the university. They are the only ones who have the time and
the responsibility to be looking at the needs of the whole state
within the higher education system context.
Number 1920
CO-CHAIRMAN DYSON agreed that the argument of the UAF faculty
devoted to research is a valid one. He wondered how close do they
come to paying for themselves.
MS. REDMAN said the faculty that they hire to do research must pay
for all of themselves. There are research faculty, who must cover
their own salary, and instructional faculty. Instructional faculty
can buy out of some instruction by bringing in research money so
they can get let off of a teaching load to do research.
Number 1877
CO-CHAIRMAN DYSON asked if non-teaching staff and facilities are
included in the research budget at UAF.
MS. REDMAN replied yes plus: They spend about $12 million a year
in state money that is supportive of research, which about three
quarters of that is in Fairbanks, and about one quarter is in
Anchorage. The state return is $4.50 for every dollar that goes
in. Research is generating, not only the full cost of the
research, but they get research overhead in direct cost recovery,
which is calculated by the federal government, and that provides
additional income to heat the buildings and do the accounting and
so on.
CO-CHAIRMAN DYSON inferred that the research programs in Fairbanks
are actually subsidizing the educational program.
Number 1816
MS. REDMAN answered it is about a quarter out of every four dollars
that they calculated to be a subsidy. It is a good deal, and it is
why they are trying to push more research in Anchorage. Research
does provide a subsidy on the facilities side.
CO-CHAIRMAN DYSON commented that she may have suggested that if
there is no new money, there is going to be no addressing of the
inequities of the present allocations of the university's financial
resources.
Number 1750
MS. REDMAN denied that was her intent. Even with no new resources,
they are attempting to deal with that issue. They just make
smaller steps when they are dealing with reductions instead of
increases. The ability to make changes is much less.
CO-CHAIRMAN COGHILL asked if the properties throughout the state
that the university is managing for income is worked through the
UAF campus or is it done in the different campuses.
Number 1711
MS. REDMAN said that is done centrally, but it doesn't show up in
the UAF budget; it shows up in a statewide administration budget.
They do not use any general fund money to manage their land; it is
all income from the lands themselves.
CO-CHAIRMAN DYSON mentioned that U.S. Senator Murkowski is trying
to get unallocated federal lands allocated to the university. He
asked Ms. Redman if they thought it likely to happen, if it did,
will it be easy and practical for the university to convert those
lands to income producing property or some kind of investment
account, and how quickly it could happen.
Number 1648
MS. REDMAN indicated that she gives it about a fifty-fifty chance
of getting through Congress. She believes that they could make
money, and there are some possibilities that actually have some
potential money. It would be well into the future. Land is just
not going to solve a problem in this decade. It could take 10 to
20 years at best.
CO-CHAIRMAN COGHILL asked if there is a problem in the formula
trying to make an even distribution given that certain schools are
going to have different pieces of that.
Number 1545
MS. REDMAN said the difficulty is not necessarily a problem; it is
only half the picture. They need to add to the formula the whole
issue of the type of institution it is, the size of the institution
and the mission. If they took the community colleges and put them
up one-on-one against the university, the community colleges would
get all the money. They are extremely efficient because they
operate primarily with adjunct faculty, offer only lower division
classes and have huge classes that generate a lot of income. That
is why they just can't look at them that way. This formula
attempts to get at part of that, but it doesn't get at the mission
issue, which is the more subjective analysis that they have to go
through.
The Committee took an at-ease from 12:50 p.m. to 12:59 p.m.
Number 1445
REPRESENTATIVE BUNDE commented that in his 25 years working there,
there has never been year when the university had enough money or
too much money. He began there when there wasn't a campus in
Anchorage, and they couldn't get one because the legislature gave
the money to the regents, and the regents in their wisdom chose not
to build a campus in Anchorage, knowing full well when they did,
there was going to be a demand for funds there, and Fairbanks would
have competition. For years the state put money into the regent's
hands, and Anchorage said it is only fair, give us our turn. As
Ms. Redman said, the 90s was UAA's decade, and they didn't get it,
because the current system allocates money in part on political
considerations. The notion that they would put more money into a
system that distributed the money in what some people might think
an unfair fashion is a little bit politically naive. The majority
in the legislature is from Anchorage. He asks that the university
ask themselves if they expect the legislature to support the
university, they would work diligently to assure them, that the
money would be distributed in a fair and equitable fashion. The
university has been promised those things before, and they haven't
occurred. Maybe there is hope for the future, and behavior will
change.
Number 1282
CO-CHAIRMAN DYSON made a motion to move HB 115 out of committee
with individual recommendations and attached fiscal note.
Number 1261
REPRESENTATIVE BRICE objected.
Number 1256
REPRESENTATIVE WHITAKER commented that his commitment is not to UAF
but rather to excellence. "If the resources are simply not there
to provide for excellence throughout the system, then let's focus
and provide excellence where we can, and then try to raise the
level throughout to a level of excellence. By lowering the level
throughout, I think we do not serve ourselves well. The other
major concern that I have with regard to this legislation is that
we are now putting ourselves in the position of dictating to the
regents how to spend the money that we allocate. I think that is
problematic. It alludes to micro-management, and that is not our
charge. Our charge is to set policy. Our policy should be to
demand excellence throughout, and then be willing to fund at a
level that will allow for the achievement of that excellence. For
those reasons, and not for the notion that this is UAF as opposed
to UAA, I simply cannot vote for this."
Number 1160
REPRESENTATIVE BRICE echoed that his commitment is to excellence as
well. "My blood oath is to the UA system, not to UAF. During my
tenure in this body, I have voted consistently for Anchorage
dormitories and other programs that helped UAA. I think that UAA
is a very important part just as is UAF and UAS [University of
Alaska Southeast] is a very important part. I think that is my
problem with [HB] 115, it is a step towards what I would like to
see which would be a foundation formula approach to funding the
university." He would like the legislature to show the university
the same commitment and faith shown to public K-12 education in
establishing a funding level and fund it as the needs grow. He
would love to see a foundation formula for the funding, not
necessarily the allocation. They need to address the needs of a
certain area of the state. He believes they need to look at how
they do that, and the foundation formula is a way to doing that,
not an allocation formula.
REPRESENTATIVE GREEN commented that if they continued with that
line of reasoning then they would still be in Sitka rather than in
Juneau. Through the wisdom of the people in that age, they moved
from that area to this area and of course there are a lot of people
who think it should move again. He pointed out that they have the
university on one end and the capital on the other end, but the
growth of this state has been in southcentral. If they are saying
that that is a fine situation, but they want to keep the
institutions on the extremities and let the people in the middle to
what they want, he believes that works against the entire premise
that they are trying to do what they can for the best of the
majority of the people of the state. To reject this is not in the
best interest of all the people in the state. It may be to
maintain an excellent university in one part of the state, but does
it adequately serve the majority of the people in another part of
the state. "I have to do what I think is the best for the majority
of the people so I have to support the recommendation to move it."
Number 952
REPRESENTATIVE WHITAKER said if they are to serve the majority of
the people, for them to "parochialize" that is a disservice to
maintain excellence in a geographic area is really irrelevant to
the access to that excellence. It is there for all. Now if they
want to create an excellent community college in Anchorage, he will
stand on the table and clap his hands. He agrees that Anchorage
should have the finest community college in the state of Alaska.
Number 0905
CO-CHAIRMAN COGHILL commented that he is resistant to the idea of
formulating without being able to get an understanding of the
mission beyond the core curriculum that was lined out in the last
part of this. He is a little torn because he likes the concept of
equity, but he also understands in the university system that they
have built in Alaska has created diversity that defies a formula at
this point. He is going to have to think on how that can fit into
this particular concept.
Number 0817
A roll call vote was taken. Representatives Green and Dyson voted
in favor of moving the bill. Representatives Whitaker, Morgan,
Brice and Coghill voted against it. Representative Kemplen was
absent. Therefore, HB 115 failed to move from the House Health,
Education and Social Services Standing Committee by a vote of 4-2.
Number 0831
CO-CHAIRMAN COGHILL recommended that they bring it up for
reconsideration. He is open to any thoughts the sponsor might have
on the recommendations for the diversity of the university.
ADJOURNMENT
Number 0797
There being no further business before the committee, the House
Health, Education and Social Services Standing Committee meeting
was adjourned at 1:13 p.m.
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