Legislature(2017 - 2018)BUTROVICH 205
02/03/2017 08:00 AM EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: School District Overview and Cost Drivers | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE EDUCATION STANDING COMMITTEE
February 3, 2017
8:00 a.m.
MEMBERS PRESENT
Senator Shelley Hughes, Chair
Senator Gary Stevens
Senator Cathy Giessel
Senator John Coghill
Senator Tom Begich
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
PRESENTATION: SCHOOL DISTRICT OVERVIEW AND COST DRIVERS
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
LISA SKILES PARADY, Ph.D.
Executive Director
Alaska Council of School Educators (ACSA)
Alaska Superintendents Association (ASA)
Alaska Association of Secondary School Principals (AASSP)
Juneau, Alaska
POSITION STATEMENT: Presented information on Education Cost
Drivers.
AMY LUJAN, Executive Director
Alaska Association of School Business Officials (ALASBO)
Juneau, Alaska
POSITION STATEMENT: Presented information on Education Cost
Drivers.
ANGELA WASHINGTON, Vice President
Northwest Arctic Borough School District (NWABSD)
Secretary Treasurer
Association of Alaska School Boards (AASB)
Kotzebue, Alaska
POSITION STATEMENT: Presented information about Education Cost
Drivers for Alaska School District.
ACTION NARRATIVE
8:00:08 AM
CHAIR SHELLEY HUGHES called the Senate Education Standing
Committee meeting to order at 8:00 a.m. Present at the call to
order were Senators Begich, Giessel, Coghill, Stevens, and Chair
Hughes.
^PRESENTATION: SCHOOL DISTRICT OVERVIEW AND COST DRIVERS
PRESENTATION: SCHOOL DISTRICT OVERVIEW AND COST DRIVERS
8:00:43 AM
CHAIR HUGHES announced that the only order of business would be
a presentation on Education Cost Drivers. She stated:
As we continue to look how we can provide a better
education for our children, we need to understand what
areas are causing the most financial strain for school
districts. Once we know where the major cost drivers
are, we can start to figure out what the legislature
can do help districts keep costs down in order to
focus on teaching our kids.
8:01:42 AM
LISA SKILES PARADY, Ph.D., Executive Director, Alaska Council of
School Educators (ACSA), Alaska Superintendents Association
(ASA), Alaska Association of Secondary School Principals
(AASSP), presented information on Education Cost Drivers. She
referred to a handout showing the diverse organizations ACSA
works with. She noted that ACSA also administers the Alaska
Staff Development Network (ASDN).
DR. PARADY referred to a handout entitled "2017 Joint Position
Statements (JPS)." The aforementioned members rotate chairing
the JPS, which lists unified positions.
8:04:12 AM
DR. PARADY discussed the recent ACSA Survey of Districts in
order to be responsive to the committee's request to present on
school district cost drivers. She related that 28 of 54
districts responded and all questions were open-ended with
response/comment answers. She felt the answers were very
representative of what districts are feeling. She noted she will
be providing the committee with the full results of the survey.
8:04:47 AM
DR. PARADY began with school district budget areas that have
been increasing the fastest or the most. She showed that the top
area was salaries, which, she added, Dr. Paramo calls "people
costs." Subsets of salaries are health care and workers
compensation. Dr. Parady emphasized that health care costs are
the biggest cost drivers. She said the legislature can help by
trying to get control of health care.
8:05:58 AM
CHAIR HUGHES asked why health insurance and health care costs
are separated.
DR. PARADY agreed that combined, they would be the largest area.
8:07:00 AM
DR. PARADY shared rough numbers on the district responses: 89
percent cited health insurance/ health care costs, 46 percent
maintenance, 29 percent worker's compensation or insurance, 28
percent PERS/TRS retirement. Other costs cited included
broadband/technology, logistics, special education, food
service, housing, recruiting, and transportation.
8:08:09 AM
DR. PARADY provided examples of cost increases due to health
insurance and workers compensation. She also cited employee
costs and internet access costs.
DR. PARADY reported that in an earlier survey, districts
reported an 18 percent increase in health insurance from FY 13
to FY 17. She added that 17 districts had increases in excess of
30 percent over the same period. She quoted Bob Crumley of
Chugach, "The best conclusion I can draw quickly is that in the
same period in which costs have increased by 18 percent,
benefits have remained static or decreased to contain costs."
8:09:25 AM
DR. PARADY addressed a survey question regarding what districts
have done to control these costs. She reported that 82 percent
cited reducing health insurance costs by increased cost sharing
with employees, increasing deductibles and co-pays, and re-
bidding with insurance carriers. She said 36 percent cited
reducing personnel, hours, and staff ratios; 39 percent cited
energy efficiencies; and others cited reducing travel, limiting
tech purchases, and outsourcing.
8:10:56 AM
DR. PARADY provided specific examples of health care reductions,
workers compensation reform, subsistence level broadband use,
and having a cost cutting environment at the same time as trying
to recruit quality educators. She noted ACSA is convening a
health care cost containment committee and intend to go out to
bid for a new plan. Other ideas are to make reductions in
utility use, reduce staff ratios, and increase the use of
technology.
8:12:59 AM
DR. PARADY addressed what the legislature can do to help
districts lower administrative costs. She noted that districts
reported unfunded mandates as problematic and 32 districts cited
reducing unfunded mandates as a solution. She said 25 percent
cited lowering health care cost with a statewide insurance pool.
Others suggested workers compensation reform. She noted that
ACSA is working close with the Department of Education and Early
Development (DEED) on reducing reporting requirements. Districts
want to see E-rate grants kept strong, increased support to
education service agencies, and the hiring of a statewide
engineer to help reduce utility costs. Districts suggested to
continue funding for AS 14.14.115 - to incentivize collaboration
between districts.
8:15:25 AM
She detailed a request to stop costly unfunded mandates.
8:16:07 AM
DR. PARADY spoke of challenges districts have, such as employee
turnover, inadequate broadband, and energy, transportation and
travel costs. She shared data about Alaska's high staff turnover
rates; 21 percent of total staff. Rural remote sites had a 34
percent turnover. She provided an example of how that would
affect a business.
8:17:56 AM
DR. PARADY showed a slide of superintendent turnover from 2009
to 2013. Only nine superintendents have remained working during
that time. She stated that 32 of 54 districts, or 59 percent,
saw at least one new superintendent during 2012 - 2016.
8:19:22 AM
DR. PARADY showed charts with data on school budget size and
superintendent salary. She pointed out that Alaska
superintendents are on the lower end of the national scale and
are struggling to be competitive.
8:20:07 AM
AMY LUJAN, Executive Director Alaska Association of School
Business Officials (ALASBO), presented information on Education
Cost Drivers. In answering questions regarding school operating
and administrative costs, she turned to a handout by the
Department of Education and Early Development (DEED) on general
fund (School Operating Fund) expenditures, available on DEED's
website. She began with administrative costs, both for district
administration - the superintendent and the board, and for
district administration support - the business office.
When asked about human resources costs, she noted that less than
half of the districts have dedicated human resources staff.
Those costs are shown between functions 510 and 550. She said
very few districts have dedicated public relations staff.
8:23:30 AM
MS. LUJAN explained that administrative costs relative to total
cost statewide are 5.3 percent of expenditures and transfers,
which she opined is cost effective.
She addressed secretarial staff costs listed under function 450.
This includes secretarial staff and clerks and copy machines.
That totals about 2.6 percent of expenditures and transfers.
8:25:07 AM
MS. LUJAN turned to operations and maintenance costs, which
include all the energy costs, under object 435, coded to
function 600. These areas total 3.3 percent of expenditures and
transfers.
8:26:11 AM
MS. LUJAN shared IT and other technology costs, most of which is
not considered administrative costs. It is coded to function 100
- instruction and to 350 - support services instruction.
8:26:31 AM
DR. PARADY pointed out that technology is no longer an add-on,
but is considered best practice and is an instructional tool.
8:27:15 AM
MS. LUJAN commented that in larger districts there are IT
departments, but they function as instruction or support
services.
8:28:05 AM
MS. LUJAN turned to administrative travel coded to 400 - 780.
She said much is spent on recruiting and traveling around the
district for maintenance or meetings.
8:29:05 AM
MS. LUJAN addressed employee benefits expense. It is a huge cost
- about 40.9 percent of expenditures and transfers. She provided
examples of employee benefits and how health insurance is
related. In order to show the high cost of benefits, she gave an
example from the Fairbanks North Star Borough School District.
DR. PARADY noted there are also lost costs, such as training due
to the high turnover rate.
MS. LUJAN said workers compensation looks like a small
allocation, but it is growing at an alarming rate.
8:30:56 AM
SENATOR STEVENS asked for examples of mandates that could be
considered expendable and should be done away with.
8:31:48 AM
DR. PARADY offered to provide the committee of a list of
mandates and districts' recommendations for removal.
SENATOR STEVENS asked for one example.
DR. PARADY responded that there are numerous state-mandated
trainings, and some may not be the best fit for educators.
SENATOR STEVENS asked which specific one should be removed. It
is easy to blame the legislature for mandating them; it is the
schools' responsibility to say which ones should be removed.
DR. PARADY said they are not blaming the legislature. Over a
period of time the mandates have been layered and they take time
and money away from the classrooms. She offered to provide
examples of mandated training that are recommended for removal.
SENATOR STEVENS stated that the legislature needs to know that
information from the schools.
DR. PARADY referred to mandate repeals included in HB 156 last
session.
CHAIR HUGHES said she is looking forward to receiving that
information to disburse to the committee.
8:34:55 AM
SENATOR COGHILL asked what issues are rising to the top that are
driving workers compensation utilization and costs.
8:35:23 AM
MS. LUJAN responded that falls are frequently seen in workers
compensation claims. She said claims are pretty much from common
injuries. She referred to the 2017 Joint Position Statements
that suggested adopting medical treatment guidelines, improved
management of claims, and improved re-employment benefits
process. She said they are going to be working on this issue.
School districts are behind making changes to save costs.
8:36:20 AM
SENATOR COGHILL concluded that nothing extraordinary was
happening like more violence or dangerous behavior.
MS. LUJAN said it is nothing like that.
8:36:59 AM
DR. PARADY named two things the state could look at - other
states' employer directed care, time limits, and medical review.
8:37:35 AM
SENATOR GIESSEL appreciated the responses. She said having
worked in the North Slope Borough she understands turnover
issues. She provided an example of enthusiastic teachers from
Alabama who left because they were not prepared for Alaska. She
asked for information about in-state teacher education programs
leading to higher retention of local teachers.
8:38:55 AM
DR. PARADY replied that teacher turnover is a critical problem
at a critical time. She related that University of Alaska (UA)
president, Dr. Johnsen, is focused on Strategic Pathways, one of
which emphasizes teacher preparation and the need to produce
additional Alaskan teachers.
She read from the 2017 Joint Position Statements:
"Alaska's teacher shortage makes the need to better
align the state's K-12 system with the University of
Alaska paramount. Innovative pathways are needed to
attract leadership talent to the education profession
and address unique circumstances. Alternative
qualifications, retire/rehire provisions and teacher
retirement incentives must be considered."
She opined that there is a heightened awareness at UA and she
gave credit to school districts for providing robust training to
support new teachers in their transition. She pointed out that
the country is not producing enough new educators, but Alaska is
feeling it more. There needs to be a focus on teacher retention
in multiple ways.
8:42:36 AM
SENATOR GIESSEL spoke of the term teacher training and wished to
change the word "training" to "educating." She referred to a
successful recruitment program at UA for Alaska Native nurses
called Recruitment of Alaska Native Nurses (RRANN).
She asked if moving costs are included for new teachers moving
to Alaska.
8:44:03 AM
DR. PARADY did not think so.
8:44:23 AM
SENATOR BEGICH noted examples of programs, such as in the Yupiit
School District, to attract teachers. They bring teachers in for
two weeks to see if they fit in. The district also has a "grow
your own program" in their strategic plan.
He asked whether there was a breakdown for rural and urban
energy costs. He noted unbearable high energy costs in rural
areas are causing reductions in educational programs. He
wondered if that relates to the state engineer cost saving
suggestion.
DR.PARADY offered to break out that data for the committee.
8:46:03 AM
ANGELA WASHINGTON, Vice President, Northwest Arctic Borough
School District (NWABSD), Secretary Treasurer, Association of
Alaska School Boards (AASB), presented information about
Education Cost Drivers for Alaska School Districts. She related
that Alaska public schools are funded through a combination of
federal, state, and local revenues distributed through a formula
established in law that accounts for variations in enrollment,
student needs, and cost of living.
She shared recent trends and costs for school districts. She
provided data for personnel costs which showed average teacher
pay increased by 6.3 percent over the last five-year period.
Teacher salaries statewide average $65,950, according to
preliminary calculations by districts responding to an AASB
survey. She listed other teacher-related costs such as travel
and insurance.
8:48:50 AM
MS. WASHINGTON addressed the state's cost of recruiting teachers
and administrators and the high rate of turnover - 20 percent -
in rural districts. Research shows a direct link between teacher
turnover and a lower graduation rate. She provided an example of
a very effective program for new teachers in rural Alaska that
led to a low turnover rate.
8:50:17 AM
She related information about energy costs. Heating oil and
gasoline prices in 100 communities surveyed by the Division of
Community and Regional Affairs showed a decline in average
retail prices from 2015 to 2016. Districts are continuing to
work on energy conservation and alternative energy production to
reduce the consumption of fossil fuels.
8:51:29 AM
MS. WASHINGTON brought up the cost of housing teachers in rural
Alaska where districts must provide housing for teaching staff.
She addressed the variety of professional development costs,
depending on location and mandates.
She noted costs for education across the state are a challenge
in that they vary depending on location and access to various
programs.
8:53:46 AM
MS. WASHINGTON concluded that districts are exploring ways to
provide equitable, quality education for students, such as
having hybrid learning for distance education for those that
have adequate bandwidth, short-term boarding programs, and a
teacher training program for local citizens. These ideas may
also produce cost savings.
CHAIR HUGHES requested a document of her presentation.
8:54:27 AM
SENATOR GIESSEL asked about flying in specialists to the school.
She recalled being on a plane to a rural area with a physical
therapist from the East Coast. She asked for data regarding who
the specialists are and where they come from.
MS. WASHINGTON offered to provide that information.
8:56:25 AM
CHAIR HUGHES commented on the benefits of the E-rate program
which adds funds for infrastructure for districts. She asked if
NWABSD has applied for those funds.
8:57:14 AM
MS. WASHINGTON said the district makes good use of E-rate. She
said GCI is setting up extra towers that cost $40,000 per site
in order to improve connectivity. Latency is currently a
challenge for the district.
8:58:18 AM
SENATOR STEVENS brought up the 20 percent rural teacher turnover
rate and said he thought that wasn't so bad if the teachers are
moving to another district in the state. He asked how many
teachers are actually leaving the state.
MS. WASHINGTON said it varies. Locally, the cost is the same no
matter where they move.
SENATOR STEVENS asked what the percentage is of rural teachers
who leave the state.
9:00:17 AM
MS. WASHINGTON said she could provide only NWABSD data. She
noted an entire school turned over about five years ago. A
disgruntled employee can affect a whole school. She said she
could provide the committee specific data.
SENATOR STEVENS asked if the AASB could provide that data.
9:01:32 AM
CHAIR HUGHES suggested that Dr. Parady might be able to provide
that data. She commented on the issue of new teachers not being
capable right away. She said that effects the quality of
education, as well.
She spoke of the Every Student Succeeds Act (ESSA) and a return
to more control at the local level. She asked if there would be
any relief expected from unfunded federal mandates.
9:03:08 AM
MS. WASHINGTON said it is difficult to choose one mandate to get
rid of. She pointed out that Alaska tomorrow must be in full
operation.
9:04:26 AM
SENATOR BEGICH commented about the relationships between
families, children, and teachers and how broken trust affects
those relationships, no matter where the teacher who leaves ends
up.
He pointed out that the state no longer provides content
specialists. He asked how the loss of that capacity has affected
the NWABSD.
MS. WASHINGTON did not know, but offered to find out.
CHAIR HUGHES suggested Dr. Parady could provide that
information.
9:06:17 AM
CHAIR HUGHES referred the retention factor and asked how it
compares nationally.
9:06:42 AM
DR. PARADY spoke to the national situation. She said the
majority of states have umbrella organizations that are
reporting that all schools nationally are having issues with
retention due to a nationwide shortage of educators. Alaska is
also struggling with professionals like accountants and is in
the worst position due to its geographical location. Job fair
numbers have declined drastically. There are very small pools of
teacher applicants to choose from.
9:08:43 AM
CHAIR HUGHES clarified that she wishes to know the teacher
retention comparison nationally.
DR. PARADY said she would provide that information. She noted on
February 22 there would be a presentation to the Joint Education
Committees on just this topic.
9:09:27 AM
CHAIR HUGHES noted that there is a cost factor and an education
factor related to teacher loss. She stressed that students are
affected by teachers leaving; it affects their desires, goals,
and competence.
9:10:17 AM
SENATOR GIESSEL pointed out a positive suggestion on the 2017
Joint Position Statement and she read, "We strongly encourage
action to ensure that quality mental health services are
available to support all of our schools." She related that this
is being piloted at Begich Middle School by having mental health
clinicians in the school. There has been a significant impact on
students' ability to learn. She encouraged the committee to get
more information about that.
9:11:46 AM
SENATOR STEVENS spoke of a serious reduction in the Department
of Education and Early Development (DEED) and whether the state
is prepared to support school districts and ESSA.
DR. PARADY agreed that DEED reductions have affected schools.
The Alaska Staff Development Network has tried to provide
additional services. She opined that Commissioner Johnson is
attempting to focus on critical areas and that the state will
prioritize its resources. She said ACSA supports the Education
Challenge Initiative. She stated that there are incredible
"pockets of prosperity" all over Alaska and many technology
advances, but the state can do better and, hopefully, ESSA will
allow the state to address some of the areas that need
improvement.
9:15:18 AM
SENATOR STEVENS assumed ESSA would provide more federal funding.
DR. PARADY could not guess what will happen in the current
federal climate. She did not assume that there will be more
money, but that Title funds and federal grants would continue.
9:16:22 AM
SENATOR BEGICH noted an audit that describes DEED as reduced in
services to such an extent that it is almost just a monitoring
agency. He commended Commissioner Johnson and his staff for
trying to do their best. He requested information about where
teacher salary and benefits rank nationally from 1972 until now.
He pointed out that they used to be at the top of the nation,
which is one of the reasons high quality teachers were attracted
to the state.
SENATOR BEGICH noted he runs a scholarship program for those who
want careers as teachers. One person returned the award because
she did not see a future in teaching in Alaska.
9:18:29 AM
SENATOR STEVENS asked about an item on the 2017 Joint Position
Statement regarding ESSA: "We encourage legislators to eliminate
discretionary funding caps, to allow adequate investment in
education." He asked whether that referred to a city and borough
cap.
9:19:02 AM
MS. LUJAN explained that it addresses federal issues, such as a
federal funding cap for ESSA.
9:19:47 AM
There being no further business to come before the committee,
Chair Hughes adjourned the Senate Education Standing Committee
at 9:18 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2017 02 01 ACSA SenEd CommFINAL.pdf |
SEDC 2/3/2017 8:00:00 AM |
|
| 2015-2016 Administrator Salary_Benefits Report FINAL.pdf |
SEDC 2/3/2017 8:00:00 AM |
|
| FY15 Audited Expenditures.xls |
SEDC 2/3/2017 8:00:00 AM |