Legislature(2017 - 2018)BUTROVICH 205

01/25/2017 08:00 AM EDUCATION

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08:03:16 AM Start
08:03:49 AM Overview: K - 12 Foundation Formula
09:10:05 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Testimony <Invitation Only> --
+ Overview of the K-12 Foundation Formula TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE EDUCATION STANDING COMMITTEE                                                                             
                        January 25, 2017                                                                                        
                           8:03 a.m.                                                                                            
                                                                                                                                
                                                                                                                              
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Shelley Hughes, Chair                                                                                                   
Senator Cathy Giessel                                                                                                           
Senator John Coghill                                                                                                            
Senator Tom Begich                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Gary Stevens                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW: K-12 FOUNDATION FORMULA                                                                                               
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
MINDY LOBAUGH, School Finance Specialist II                                                                                     
Department of Education and Early Development (DEED)                                                                            
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented information on the K-12 Foundation                                                              
Formula.                                                                                                                        
                                                                                                                                
MICHAEL JOHNSON, Ph.D., Commissioner                                                                                            
Department of Education and Early Development (DEED)                                                                            
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions about the Foundation                                                                   
Formula.                                                                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:03:16 AM                                                                                                                    
CHAIR SHELLEY HUGHES called the Senate Education Standing                                                                     
Committee meeting to order at 8:03 a.m. Present at the call to                                                                  
order were  Senators Giessel, Begich,  and Chair  Hughes. Senator                                                               
Coghill arrived shortly thereafter.                                                                                             
                                                                                                                                
^OVERVIEW: K - 12 FOUNDATION FORMULA                                                                                        
               OVERVIEW: K-12 FOUNDATION FORMULA                                                                            
8:03:49 AM                                                                                                                    
CHAIR HUGHES announced  that the only order of  business would be                                                               
a presentation  by Department of Education  and Early Development                                                               
(DEED) on  the K-12 Foundation  Formula. She noted that  the K-12                                                               
formula is about  $1.3 billion, and she thought  it important for                                                               
the  committee  to understand  the  details.  She requested  that                                                               
members' questions be held until the end of the presentation.                                                                   
                                                                                                                                
8:06:31 AM                                                                                                                    
At ease due to technical problems.                                                                                              
                                                                                                                                
8:06:41 AM                                                                                                                    
MINDY  LOBAUGH,  School  Finance  Specialist  II,  Department  of                                                               
Education and Early Development  (DEED), presented information on                                                               
the K-12 Foundation Formula.                                                                                                    
                                                                                                                                
8:06:59 AM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
8:08:18 AM                                                                                                                    
CHAIR  HUGHES   noted  that  members   could  view   the  written                                                               
presentation.                                                                                                                   
                                                                                                                                
MS. LOBAUGH  began by  provided the history  of the  state public                                                               
school funding  formula. It was  established under SB 36  in 1998                                                               
and implemented in 1999. It is defined in Alaska Statute 14.17.                                                                 
                                                                                                                                
She provided an outline of her presentation:                                                                                    
                                                                                                                                
     1. October count and Average Daily                                                                                         
     Membership (ADM).                                                                                                          
                                                                                                                                
     2. Calculations of Adjusted Average Daily Membership                                                                       
     (AADM).                                                                                                                    
                                                                                                                                
     3. Calculation of Basic Need.                                                                                              
                                                                                                                                
     4. Funding Components of Basic Need ~ (Who Pays)                                                                           
                                                                                                                                
     5. Additional Funds above Basic Need                                                                                       
                                                                                                                                
8:09:58 AM                                                                                                                    
MS. LOBAUGH  discussed average  daily membership  (ADM) reporting                                                               
requirements:                                                                                                                   
     ADM is the number of enrolled students during the 20                                                                       
     school-day count period ending on the fourth Friday of                                                                     
     October.                                                                                                                   
                                                                                                                                
     Reports are due within two weeks after the end of the 20                                                                   
     school-day count period.                                                                                                   
                                                                                                                                
     Projected student count reports are due November 5.                                                                        
                                                                                                                                
MS. LOBAUGH  addressed who  qualifies as  a student  and reviewed                                                               
the eligibility for state foundation funding:                                                                                   
                                                                                                                                
     A child who is 6 years of age before September 1, and under                                                                
     the age of 20, and has not completed the 12th grade.                                                                       
                                                                                                                                
     A child who is 5 years of age before September 1, may enter                                                                
     kindergarten.                                                                                                              
                                                                                                                                
     A child with a disability and an active Individualized                                                                     
     Education Program (IEP) may attend school if at the age of                                                                 
     3 or if under the age of 22 by July 1.                                                                                     
                                                                                                                                
She listed  the six steps  to the  district adjusted ADM  used to                                                               
calculate entitlement:                                                                                                          
                                                                                                                                
     Step 1. Adjust: ADM for School Size                                                                                        
     Step 2. Apply: District Cost Factor                                                                                        
     Step 3. Apply: Special Needs Factor                                                                                        
     Step 4. Apply: Vocational & Technical Factor (CTE)                                                                         
     Step 5. Add: Intensive Services Count                                                                                      
     Step 6. Add: Correspondence Student Count                                                                                  
                                                                                                                                
8:11:56 AM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
8:12:43 AM                                                                                                                    
CHAIR HUGHES noted the presence  of Commissioner Johnson from the                                                               
Department of Education and Early Development (DEED).                                                                           
                                                                                                                                
8:13:19 AM                                                                                                                    
MS.  LOBAUGH reviewed  Step 1  of the  ADM adjustment  for school                                                               
size. She noted that a community with an ADM of:                                                                                
     Under 10 is added to the smallest school with an ADM                                                                     
     greater than 10.                                                                                                           
     10 through 100 in Grades K-12, the ADM is combined and                                                                   
     adjusted  once; adjusted as one school.                                                                                    
     101 through 425 - ADM for grades K-6 and 7-12 are adjusted                                                               
     separately; adjusted as two schools.                                                                                       
     Greater than 425 - the ADM of each facility administered                                                                 
     separately as one school is adjusted.                                                                                      
                                                                                                                                
She addressed  how the  ADM is  adjusted for  alternative schools                                                               
and charter schools:                                                                                                            
                                                                                                                                
     Alternative school with an ADM of 175 or greater and                                                                     
     administered as a separate facility the ADM will be                                                                        
     adjusted separately, unless:                                                                                               
                                                                                                                                
     1. It is in the first year of service with                                                                                 
     ADM between 120 to 175 receives an adjustment                                                                              
     of 1.33; OR                                                                                                              
                                                                                                                                
     2. It had an ADM of 175 or greater in the prior year                                                                       
     but drops below 175 in the current fiscal year it                                                                          
     will receive an adjustment of 1.33; OR                                                                                   
                                                                                                                                
     3. It has an ADM of less than 175 it shall be counted as                                                                   
     a part of the school in the district with the highest                                                                      
     ADM.                                                                                                                       
                                                                                                                                
     Charter school with an ADM of 150 or greater is adjusted                                                                 
     as a separate facility unless:                                                                                             
                                                                                                                                
     1. It is in the first year of service with ADM                                                                             
     between 75 to 150 it receives an adjustment of                                                                             
     1.45; OR                                                                                                                 
                                                                                                                                
     2. It had an ADM of 75 or greater in the prior year                                                                        
     but drops below this in the current fiscal year it                                                                         
     will receive an adjustment of 1.45; OR                                                                                   
                                                                                                                                
     3. It continues to stay below 75 ADM then it receives an                                                                   
     adjustment of 1.18.                                                                                                        
                                                                                                                                
She showed  an example of the  projected FY2017 ADM for  the Nome                                                               
Public  Schools.  She  detailed  the adjustment  by  school  size                                                               
parameters and described  the calculations for grades  K-6 and 7-                                                               
12.                                                                                                                             
                                                                                                                                
8:18:35 AM                                                                                                                    
MS. LOBAUGH  described how  it would work  for the  Anvil Charter                                                               
School,  a youth  facility, and  the total  school size  adjusted                                                               
ADM.                                                                                                                            
                                                                                                                                
8:19:25 AM                                                                                                                    
MS.  LOBAUGH   reviewed  the  hold  harmless   provision.  It  is                                                               
available up  to three years,  provided the district  stays below                                                               
the base  year. She  compared the differences  by year.  She said                                                               
understanding the base year is key for districts.                                                                               
                                                                                                                                
     The Hold Harmless provision was established for those                                                                      
     districts experiencing a reduction in enrollment. To                                                                       
     determine eligibility, the district's sum total of the                                                                     
     School Size Adjustment is compared against the prior fiscal                                                                
     year. If a decrease of 5% or greater has occurred, then the                                                                
     prior fiscal year will become the base.                                                                                    
                                                                                                                                
     It is available up to 3 years provided district stays below                                                                
     the base year.                                                                                                             
                                                                                                                                
     1st year 75% of difference to the base year is retained.                                                                   
     2nd year 50% of difference to the base year is retained.                                                                   
     3rd year 25% of difference to the base year is retained.                                                                   
                                                                                                                                
8:21:40 AM                                                                                                                    
She  again  used Nome  Public  Schools  to demonstrate  the  hold                                                               
harmless provision.                                                                                                             
                                                                                                                                
MS. LOBAUGH  turned to Step 2  - the district cost  factors which                                                               
are  specific to  each school  district and  range from  1.000 to                                                               
2.116. The  formula is to  multiply the school size  adjusted ADM                                                               
by the district cost factor.                                                                                                    
                                                                                                                                
She showed how it applies to Nome.                                                                                              
                                                                                                                                
She  related  that Step  3  involves  special needs  funding.  It                                                               
includes   special  education   (except  intensive),   vocational                                                               
education, gifted/talented,  and bilingual/bicultural.  These are                                                               
block funded at 20 percent.                                                                                                     
                                                                                                                                
She showed how it would work in Nome.                                                                                           
                                                                                                                                
8:24:05 AM                                                                                                                    
MS. LOBAUGH  explained Step 4, vocational  and technical funding.                                                               
Career  & Technical  Education (CTE)  is  funded at  a factor  of                                                               
1.015. It  is intended  to assist  districts in  providing career                                                               
and technical education  services in grades seven  through 12. It                                                               
excludes  costs  associated   with  administrative  expenses  and                                                               
instruction in  general literacy, mathematics, and  job readiness                                                               
skills.                                                                                                                         
                                                                                                                                
She showed how it would be figured for Nome.                                                                                    
                                                                                                                                
MS.  LOBAUGH  explained that  Step  5  is funding  for  intensive                                                               
services. A school  district will  receive funding  for intensive                                                               
services students that:                                                                                                         
                                                                                                                                
     1. Are receiving intensive services and;                                                                                   
     2. Enrolled on the last day of the 20-school-day count                                                                   
     period and;                                                                                                                
     3. Meet intensive qualifications for each intensive                                                                        
     services student.                                                                                                          
                                                                                                                                
She pointed out  that (Intensive Student Count) x  13 = Intensive                                                               
Student  Funding  and  an Intensive  Services  student  generates                                                               
$77,090.                                                                                                                        
                                                                                                                                
Nome  Public Schools  has  five students  that  qualify, and  she                                                               
showed the calculations.                                                                                                        
                                                                                                                                
MS. LOBAUGH turned to Step  6, correspondence programs. Districts                                                               
offering  correspondence programs  receive  funding  based on  90                                                               
percent of  the correspondence  ADM. The  formula is  to multiply                                                               
the correspondence  ADM times  .90 to get  the level  of funding,                                                               
and each correspondence ADM generates $5,337.                                                                                   
                                                                                                                                
The Nome Public Schools reported  10 correspondence students. She                                                               
showed  how  Basic Need  for  Nome  is calculated:  multiply  the                                                               
district  adjusted  ADM  by  the   BSA  to  get  the  Basic  Need                                                               
entitlement.                                                                                                                    
                                                                                                                                
8:27:58 AM                                                                                                                    
MS.  LOBAUGH summarized  all  steps  as they  apply  to the  Nome                                                               
Public School District's Basic Need summarized.                                                                                 
                                                                                                                                
8:28:58 AM                                                                                                                    
MS. LOBAUGH turned to the  components of Basic Need and addressed                                                               
who pays. It  consists of a required  local contribution, federal                                                               
impact aid, and state aid.                                                                                                      
                                                                                                                                
She   addressed   the  full   and   true   value/  local   effort                                                               
calculations. The current  year full and true  value, as provided                                                               
annually by  the State Assessor's  Office, is multiplied  by 2.65                                                               
mils for  the purposes of  calculation the required  local effort                                                               
for foundation funding.                                                                                                         
                                                                                                                                
8:30:13 AM                                                                                                                    
She   described  the   calculations   required   for  the   local                                                               
contribution and used Nome as an example.                                                                                       
                                                                                                                                
8:30:52 AM                                                                                                                    
MR. LOBAUGH addressed  the Title VII Federal  Impact Aid payments                                                               
which are received from March 1  through the last day of February                                                               
and are  used as  payment for  Basic Need.  The state  must first                                                               
deduct  out the  federal  funding for  special education  (SPED),                                                               
1/5th Native lands, and construction funds.                                                                                     
                                                                                                                                
She described how it worked for Nome.                                                                                           
                                                                                                                                
8:31:55 AM                                                                                                                    
She explained impact aid percentage.  The formula for that is the                                                               
required  local  contribution  divided   by  the  budgeted  local                                                               
contribution. The  budgeted local contribution, for  the purposes                                                               
of  calculating  the  impact  aid percentage,  is  found  in  the                                                               
budgets submitted  on July 15  of each  year and may  consist of:                                                               
appropriations, investment earnings,  in-kind services, and other                                                               
local funding.                                                                                                                  
                                                                                                                                
She worked the formula for the Title VII percentage for Nome.                                                                   
                                                                                                                                
8:33:01 AM                                                                                                                    
She  figured  out  the  impact aid  calculations  for  Nome.  She                                                               
pointed  out that  regional educational  attendance areas  do not                                                               
require  the  42.1  percent. Their  eligible  amount  is  applied                                                               
against 90 percent.                                                                                                             
                                                                                                                                
8:34:20 AM                                                                                                                    
MS.  LOBAUGH summarized  the  state aid  for  Nome, resulting  in                                                               
$8,803,771.                                                                                                                     
                                                                                                                                
She noted  there are  additional funds above  Basic Need  such as                                                               
additional local contributions and Quality Schools Grants.                                                                      
                                                                                                                                
She  showed how  the  calculation is  done  for additional  local                                                               
contribution  for Nome  and the  maximum  local contribution  for                                                               
Nome.                                                                                                                           
                                                                                                                                
8:36:36 AM                                                                                                                    
MS. LOBAUGH  described the Quality  Schools Grant  as established                                                               
in AS  14.17.480. The  grant equals  the districts'  adjusted ADM                                                               
times  $16. This  grant costs  the  state about  $4 million.  She                                                               
calculated what it would be for Nome's total state aid.                                                                         
                                                                                                                                
She  pointed  out   that  if  the  amount   appropriated  by  the                                                               
legislature is  insufficient to meet  the total amount  of public                                                               
school funding  authorized, then  all districts' Basic  Need will                                                               
be reduced pro rata.                                                                                                            
                                                                                                                                
She showed a  one-page summary of the  Foundation Funding Formula                                                               
- FY2018 projection,  a snapshot of the bottom  line totals going                                                               
through the formula.                                                                                                            
                                                                                                                                
8:38:59 AM                                                                                                                    
SENATOR   GIESSEL   expressed   appreciation  for   a   well-done                                                               
presentation. She  suggested numbering the slides  next time. She                                                               
inquired if correspondence funding is "per student."                                                                            
                                                                                                                                
MS. LOBAUGH  clarified that correspondence funding  is 90 percent                                                               
times the ADM.  She added that two students can  equal one ADM if                                                               
they are both part time.                                                                                                        
                                                                                                                                
SENATOR GIESSEL used an example  of a homeschooled student who is                                                               
enrolled  in  the Anchorage  School  District  for orchestra  and                                                               
asked how the ADM would be calculated.                                                                                          
                                                                                                                                
MS. LOBAUGH explained that the  orchestra class would be reported                                                               
as .25 ADM and the correspondence classes would be .75 ADM.                                                                     
                                                                                                                                
8:41:16 AM                                                                                                                    
SENATOR   GIESSEL  asked   how  independent   home  schools   are                                                               
calculated.                                                                                                                     
                                                                                                                                
MS. LOBAUGH  said they  are not  calculated; only  public schools                                                               
are funded.                                                                                                                     
                                                                                                                                
SENATOR GIESSEL noted that there  are schools that are completely                                                               
correspondence. She asked how many schools like that there are.                                                                 
                                                                                                                                
MS. LOBAUGH  referred to page  8, column  L in the  public school                                                               
funding  document   that  shows  which  schools   are  using  the                                                               
correspondence process.                                                                                                         
                                                                                                                                
8:42:40 AM                                                                                                                    
CHAIR HUGHES noted the arrival of Senator Coghill.                                                                              
                                                                                                                                
SENATOR GIESSEL  asked how  many districts  receive funds  at the                                                               
local contribution cap.                                                                                                         
                                                                                                                                
MS. LOBAUGH offered to provide that information.                                                                                
                                                                                                                                
SENATOR GIESSEL thought Juneau funded to the cap.                                                                               
                                                                                                                                
MS. LOBAUGH believed that was true.                                                                                             
                                                                                                                                
8:44:05 AM                                                                                                                    
SENATOR BEGICH asked why Anchorage is used as the base.                                                                         
                                                                                                                                
MS. LOBAUGH  recalled a  district cost factor  study done  in the                                                               
early 2000s. She offered to provide information about it.                                                                       
                                                                                                                                
SENATOR BEGICH  said he  is asking  for information  purposes. He                                                               
wondered  if  Anchorage  School District  still  has  the  lowest                                                               
costs.                                                                                                                          
                                                                                                                                
MS. LOBAUGH  said yes; the  Yukon Flats District has  the highest                                                               
costs.                                                                                                                          
                                                                                                                                
SENATOR  BEGICH asked  if the  cost study  is done  on a  regular                                                               
basis.                                                                                                                          
                                                                                                                                
MS. LOBAUGH said  the last one was done in  2005 by the Institute                                                               
of Social and Economic Research  (ISER). The cost factors did not                                                               
get  completely  implemented  until  FY2013  and  have  not  been                                                               
revisited since then.                                                                                                           
                                                                                                                                
8:46:27 AM                                                                                                                    
CHAIR HUGHES asked for the history of BSA adjustments.                                                                          
                                                                                                                                
MS. LOBAUGH  offered to provide  that information in  chart form.                                                               
She related that the  BSA was $5,380 in 2008 and  it is $5,930 in                                                               
2017, an increase of $550.                                                                                                      
                                                                                                                                
8:47:38 AM                                                                                                                    
SENATOR BEGICH asked  if any of the districts qualify  for the 45                                                               
percent local contribution.                                                                                                     
                                                                                                                                
MS. LOBAUGH  said there  are three districts  with 45  percent of                                                               
prior Basic Need:  North Slope, Skagway, and  Valdez, largely due                                                               
to the pipeline or tourism, in Skagway's case.                                                                                  
                                                                                                                                
8:48:28 AM                                                                                                                    
CHAIR  HUGHES said  she was  impressed by  the presentation.  She                                                               
asked  how kindergarten  is counted  and  why the  word "may"  is                                                               
used.                                                                                                                           
                                                                                                                                
MS. LOBAUGH replied that kindergarten  is counted. The word "may"                                                               
is  there because  children  are not  required  to attend  school                                                               
until the age of 6, but they may attend at age 5.                                                                               
                                                                                                                                
CHAIR  HUGHES  asked  about  advantages   of  small  schools  not                                                               
merging, such as receiving more funding as two schools.                                                                         
                                                                                                                                
MS. LOBAUGH  thought it depended  on the student count  and other                                                               
factors.  She provided  an example  of a  combined school  of 110                                                               
students, which has  an advantage over one  50-student school and                                                               
one 60-student school.                                                                                                          
                                                                                                                                
8:51:05 AM                                                                                                                    
CHAIR  HUGHES  she  cautioned   not  to  disincentivizing  school                                                               
consolidation,  considering the  fiscal gap  and the  amount that                                                               
goes toward education.                                                                                                          
                                                                                                                                
She asked how portable intensive  needs funding is when a student                                                               
move to another school mid-year.                                                                                                
                                                                                                                                
8:51:57 AM                                                                                                                    
MS. LOBAUGH  provided an example of  a student who was  funded in                                                               
one district  and moves  to another  district. That  funding does                                                               
not follow  the student. If  the move  was within a  district, it                                                               
does.                                                                                                                           
                                                                                                                                
CHAIR HUGHES  asked if  there has been  any discussion  of fixing                                                               
that. She opined that it needs to be addressed.                                                                                 
                                                                                                                                
MS. LOBOUGH did not know.                                                                                                       
                                                                                                                                
8:52:57 AM                                                                                                                    
SENATOR BEGICH  asked whether the  eight school  size adjustments                                                               
were created  to address the  question of nuances in  school size                                                               
and an  attempt to  avoid duplication  and "student  hopping." He                                                               
thought the categories  were made to disincentivize  abuse of the                                                               
formula.                                                                                                                        
                                                                                                                                
MS. LOBOUGH thought that was a reasonable assessment.                                                                           
                                                                                                                                
SENATOR BEGICH recalled the Augenblick  study commissioned by the                                                               
Legislative  Budget  and  Audit  Committee two  years  ago,  that                                                               
indicated  that the  school size  adjustments for  students in  a                                                               
school building were perhaps a  disincentive to districts and may                                                               
be unfair due to being  inflexible. The study suggested that even                                                               
more categories may be needed to allow students more variety.                                                                   
                                                                                                                                
MS. LOBAUGH agreed.                                                                                                             
                                                                                                                                
SENATOR  BEGICH used  Juneau as  an  example of  a district  that                                                               
chose  not to  split  the  schools for  many  years  in order  to                                                               
maintain sports teams.                                                                                                          
                                                                                                                                
8:56:20 AM                                                                                                                    
MS. LOBAUGH  said ultimately Juneau  split into two  high schools                                                               
and now it  works better for them in the  formula calculation. On                                                               
the other  hand, Anchorage's ADM  adjustments in the  school size                                                               
table  decreases their  benefits because  they are  such a  large                                                               
district.                                                                                                                       
                                                                                                                                
8:57:23 AM                                                                                                                    
CHAIR HUGHES  asked whether most  high schools take  advantage of                                                               
the vocational technical adjustments and, if so, how many.                                                                      
                                                                                                                                
MS.  LOBAUGH  explained  that  how   those  funds  are  used  are                                                               
determined  by the  schools. The  department is  aware that  most                                                               
districts have  career and technical education  and are utilizing                                                               
that funding source.                                                                                                            
                                                                                                                                
CHAIR  HUGHES  asked  if  there  is  an  adjustment  for  use  of                                                               
technology.                                                                                                                     
                                                                                                                                
MS. LOBAUGH said  the formula does not apply  to technology. That                                                               
is  covered  through the  Career  and  Technical Education  (CTE)                                                               
adjustment  at  the  high  school/middle  school  level.  At  the                                                               
elementary  level, the  Quality  Schools Grant  can  be used  for                                                               
technology.                                                                                                                     
                                                                                                                                
8:59:10 AM                                                                                                                    
CHAIR HUGHES asked  if there are federal funds  that might become                                                               
available for technology use in the schools.                                                                                    
                                                                                                                                
MS. LOBAUGH did not know.  She suggested asking the federal grant                                                               
specialist.                                                                                                                     
                                                                                                                                
SENATOR COGHILL  said technology has  a huge impact  on districts                                                               
depending on location and size.                                                                                                 
                                                                                                                                
9:00:38 AM                                                                                                                    
CHAIR HUGHES understood  that when the formula  was adjusted, the                                                               
topic of teacher retention was  brought up. It was suggested that                                                               
the  formula  might need  to  be  adjusted  in order  to  provide                                                               
salaries that  might draw and  retain teachers to  districts. She                                                               
pointed out  that there is  still a serious problem  with teacher                                                               
recruitment and retention.  She asked if there  was an adjustment                                                               
made and if Ms. Lobaugh has retention data.                                                                                     
                                                                                                                                
MS. LOBAUGH said she does not have that information.                                                                            
                                                                                                                                
9:01:31 AM                                                                                                                    
CHAIR  HUGHES  asked if  there  is  anything  in the  formula  to                                                               
accommodate rapidly growing districts.                                                                                          
                                                                                                                                
MS. LOBAUGH replied that there are only school size adjustments.                                                                
                                                                                                                                
CHAIR HUGHES noted the difficulty of keeping up with the growth.                                                                
                                                                                                                                
9:02:22 AM                                                                                                                    
SENATOR  BEGICH said  that the  growth in  Mat-Su is  one of  the                                                               
reasons he brought  up the BSA. He asked what  impact having Mat-                                                               
Su  as the  base  would have  on the  amount  of money  Anchorage                                                               
receives.                                                                                                                       
                                                                                                                                
MS. LOBAUGH  said she cannot  speak to  that, but the  cost study                                                               
would be a good resource  for that information. She recalled that                                                               
the first cost study put Mat-Su as the base.                                                                                    
                                                                                                                                
SENATOR BEGICH asked for a  copy of that information. He referred                                                               
to the  Augenblick study which  concluded that Alaska has  one of                                                               
the  fairest and  most well-adjusted  foundation formulas  in the                                                               
country.   The  study   identified   three   areas  of   concern:                                                               
underfunding  special needs,  poverty, and  minority populations.                                                               
He wondered if Ms. Lobaugh recalls those findings.                                                                              
                                                                                                                                
MS. LOBAUGH said she does not recall that information.                                                                          
                                                                                                                                
SENATOR BEGICH wondered if Commissioner  Johnson recalls. He said                                                               
he brings  it up  because he  wonders if  the state  is providing                                                               
enough resources for those special populations.                                                                                 
                                                                                                                                
9:06:11 AM                                                                                                                    
MICHAEL  JOHNSON, Ph.D.,  Commissioner,  Department of  Education                                                               
and  Early  Development  (DEED),  answered  questions  about  the                                                               
foundation formula.  He said it has  been some time since  he has                                                               
read the  study, but thinks  that Senator  Begich's recollections                                                               
are correct. He offered to provide more information on it.                                                                      
                                                                                                                                
SENATOR BEGICH  recalled that teacher  retention was a  factor in                                                               
the Moore  lawsuit, and not as  a part of the  foundation formula                                                               
discussion.  It led  to a  settlement  with DEED  and the  state.                                                               
Teacher  retention was  recognized  by the  court  as a  critical                                                               
component in  providing a  constitutional and  adequate education                                                               
for Alaskans. He asked Commissioner Johnson if that was correct.                                                                
                                                                                                                                
COMMISSIONER  JOHNSON  said  it   was,  including  principal  and                                                               
superintendent  retention  and, currently,  is  one  of the  five                                                               
priorities  the  Governor outlined  in  the  State of  the  State                                                               
address,.                                                                                                                       
                                                                                                                                
9:07:54 AM                                                                                                                    
SENATOR  COGHILL  asked to  review  court  cases related  to  the                                                               
foundation formula and consent decrees the state is under.                                                                      
                                                                                                                                
CHAIR HUGHES agreed that teacher  retention was part of the Moore                                                               
lawsuit, but clarified that teacher  retention was also a part of                                                               
the foundation formula revisions.                                                                                               
                                                                                                                                
MS.  LOBAUGH  thanked  the  committee   for  the  opportunity  to                                                               
present.                                                                                                                        
                                                                                                                                
CHAIR HUGHES said  the department could answer  more questions as                                                               
they arise from committee members.                                                                                              
                                                                                                                                
9:09:32 AM                                                                                                                    
CHAIR HUGHES  noted the next  meeting would address  the baseline                                                               
for broadband access in rural schools.                                                                                          
                                                                                                                                
9:10:05 AM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair Hughes  adjourned the  Senate Education  Standing Committee                                                               
at 9:10 a.m.                                                                                                                    

Document Name Date/Time Subjects
1-25-17 SEDC Presentation FY17 Foundation (002).pdf SEDC 1/25/2017 8:00:00 AM
DEED
1-25-17 Funding Program Overview 2017 eff9-2016.pdf SEDC 1/25/2017 8:00:00 AM
DEED