Legislature(2001 - 2002)
05/01/2001 09:41 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
May 01, 2001
9:41 A.M.
TAPES
SFC-01 # 91, Side A
SFC 01 # 91, Side B
CALL TO ORDER
Co-Chair Pete Kelly convened the meeting at approximately 9:41 A.M.
PRESENT
Senator Dave Donley, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Jerry Ward, Vice Chair
Senator Loren Leman
Senator Lyda Green
Senator Gary Wilken
Senator Alan Austerman
Senator Lyman Hoffman
Senator Donald Olson
Also Attending: REPRESENTATIVE FRED DYSON; REPRESENTATIVE PEGGY
WILSON; WES KELLER, Staff, Representative Fred Dyson; EDDY JEANS,
Manger, School Finance and Facilities Section, Department of
Education and Early Development; DENNY DEWITT, Staff,
Representative Eldon Mulder.
Attending via Teleconference: From Soldotna: LARRY SEMMENS,
Chairman of the Academic Policy Committee, Aurora Borealis Charter
School; From Kenai: GENE PALM, Aurora Borealis Charter School.
SUMMARY INFORMATION
HB 101-CHARTER SCHOOLS
Following discussion, HB 101 was HELD in Committee.
HB 203-SPECIAL APPROP: SCHOOL DIST. COST FACTORS
Following discussion, HB 203 was HELD in Committee.
HB 250-OPERATING BUDGET MISSIONS AND MEASURES
Following discussion, HB 250 was HELD in Committee.
SENATE CS FOR CS FOR HOUSE BILL NO. 101(HES)
"An Act relating to charter schools; and providing for an
effective date."
REPRESENTATIVE FRED DYSON noted that HB 101 was similar to previous
legislation passed from the Senate Finance Committee, however, is
accompanied by have a significant fiscal note. He acknowledged
that there had been much discussion in the House regarding the
fiscal note. HB 101 is intended to extend and strengthen the
existing Alaska Charter School Law. The current law is scheduled
to sunset on July 1, 2005, which means that any new charter school
cannot be approved for the allowable five-year charter. Existing
charter schools are having a difficult time securing facility
purchase and lease agreements because their remaining contracts are
less than 4.5 years and cannot be extended.
The legislation would make the following changes to the existing
charter school law:
· Would eliminate the July, 2005 sunset clause;
· Would extend the allowable contract length from 5 to 10
years;
· Would eliminate the geographic distribution requirements;
· Would double the cap from 30 to 60 charter schools;
· Would clarify that charter schools are not exempt from
competency testing;
· Would allow Charter Schools to be counted as separate a
school if the ADM is over 150 (reference AS 14.17.905);
· Would provide a one-time "start-up" grant; and
· Would allow for charter school use of safe public
buildings with District Superintendent approval.
Senator Wilken asked about the one-time startup of a $6000 grant
scheduled to be given to three cyber schools.
WES KELLER, Staff, Representative Fred Dyson, explained that
establishing a charter school does cost a lot of money for
computers and other start up essentials.
Senator Wilken referenced Page 3, Line 13, and the safety standards
applicable to public buildings. He suggested that the standards be
lowered for the charter schools.
Senator Austerman assumed that all the existing charter schools
would make the application for the start-up grant. He questioned
why the one-time grant continued into the future.
Co-Chair Kelly explained that not all of the charter schools
qualify for the grant.
Senator Austerman would expect to see a balloon payment in the
first year for the current schools.
Representative Dyson explained that the fiscal note represents the
Department's guess of what the costs would be. He believed that
the fiscal note was optimistic.
Senator Austerman noticed that there were two fiscal notes which
would further explain his query.
Representative Dyson noted that the on-going $609,000 would be
delegated for the schools that receive more money because the
threshold was changed.
Senator Austerman understood that the grant program was for
$170,000 per year.
Representative Dyson explained that the Department would use the
$170,000 for a position and support staff to take care of the needs
associated with the charter schools.
EDDY JEANS, Manger, School Finance and Facilities Section,
Department of Education and Early Development, stated that the
confusion results from the two fiscal notes. The $609,000 note is
the reoccurring cost from dropping the threshold from 200 students
to 150 students. That is why that costs have been extended. The
second fiscal note indicates the fiscal costs for that position,
which the Department is requesting in order to adequately address
the legislation. The legislation will institutionalize the charter
school program. At this time, it is a pilot program slated to
sunset in 2005. The grant program is indicated on that note in the
amount of $1.4 million dollars. There is no projection for fiscal
costs in the out-years because the Department does not know how
many new charter schools will be coming-on-board or the size of
those schools.
AT EASE 9:55 AM/9:57AM
Co-Chair Kelly inquired the funding mechanism, which will be used
for size determination.
Mr. Jeans advised that the section, which the bill affects, is AS
14.17.905, school size adjustment. Section B of that statute
states that alternative programs serving less than 200 students
would be counted. The legislation does allow for charter schools
that serve up to 150 students be counted as a separate school.
Co-Chair Kelly questioned if those schools would receive the same
amount per student.
Mr. Jeans explained that the legislation would allow the schools
the funding for the school size adjustment table as an independent
school.
Mr. Jeans added that there are three break points:
· Communities serving less than 100 count as one school;
· Communities serving students between 750 counting as two
schools; and
· Beyond that 750 students, each school in the district
counts as an independent school unless it is an
alternative school. The Department has classified
alternative schools are charter schools.
Senator Leman asked about the start-up grants versus the $500
dollars per student that some of the schools would be receiving.
Representative Dyson replied that all of the schools are
financially "on the ropes". He emphasized that this issue was one
of fairness.
Senator Leman questioned what he would be able to say to those
charter schools that have less than 150 students. He suggested
that the bill does not reach far enough.
Representative Dyson reminded members that he had requested that
the bill be pulled last year from the Senate floor because the
extra financial help had been amended out. He understood that the
federal government was undertaking measures that would also help
the situation. He noted that he had been trying to make some
strategic decisions regarding help to the charter schools to keep
them alive and still address the fiscal note concerns.
Co-Chair Kelly understood that the intention of creating the
charter schools would be that they could act as incubators for new
methods of educating students and that the larger school districts
would be able to then incorporate some of those techniques which
work well. However, he commented that it appears that they are
producing better students. Any time there is a situation in which
there are fewer students and a requirement for a high level of
parental participation, it is no surprise that there are better-
educated students resulting from these schools. The public schools
cannot mandate parental involvement nor can they drop the number of
students in each classroom. He questioned if the charter schools
were really providing a greater benefit.
Senator Green reminded Senator Kelly that the charter schools are
public schools.
Representative Dyson commented that the passage of the bill would
help the charter schools by providing them a little "financial
breathing room" so that they could accomplish more than being in
survival mode. He stressed that the private and charter schools
are not sweeping the "cream" off the top of the student population.
Co-Chair Kelly interjected that the bill would be brought before
the Committee at a later date.
Senator Austerman commented that the discussion had reinforced his
concerns that the charter schools would eventually weaken the
public school system. He noted that there exists a problem in the
public schools that needs fixing and that the State should not be
contributing other sources that drain the current public school
system. He reiterated his reservations for the legislation.
Senator Green emphasized that charter schools are public schools
and should be viewed as an adjunct to public education.
Senator Olson voiced support of the bill. He encouraged that
action be taken sooner rather than later.
LARRY SEMMENS, Chairman of the Academic Policy Committee, Aurora
Borealis Charter School, testified via teleconference from Soldotna
that his school has a successful program and that they have a
waiting list of over 200 students. He added that the school's test
scores are the highest in the district.
Mr. Semmens emphasized that he hoped that the Committee's goals
were like his own and that the concern was for better-educated
students, and not with only saving money. He testified in complete
support for HB 101. The charter schools are separate and yet they
are being penalized in their funding by the alternative school
limit.
GENE PALM, Teacher, Aurora Borealis Charter School, testified via
teleconference from Kenai in support for the legislation. He urged
that the Legislature feed the programs that are meeting some
students with success. He added that his school wants to further
develop their programs, which currently is being done on the
teachers off time. He reiterated the need for the "extra staff".
Co-Chair Kelly reported that HB 101 would be HELD in Committee.
SENATE CS FOR CS FOR HOUSE BILL NO. 203(HES)
"An Act making an appropriation to the Legislative Budget and
Audit Committee for a study of school district cost factors;
and providing for an effective date."
REPRESENTATIVE PEGGY WILSON explained that Alaska has a
constitutional obligation to provide a full education for all
students. The challenge inherent in the mission is to account for
diverse geographic, cultural, and economic conditions.
Representative Wilson stated the formula currently employed, while
well intentioned, has unintentional consequences. HB 203 will
provide factual answers and will propose an independent study of
school cost differentials to be contracted by the Legislative
Budget & Audit Committee at the cost of $350,000 dollars.
Senator Austerman commented that in the past, there have been
similar studies based on what is spent in schooling rather than on
the actual costs. He questioned if it was the intent of the bill
to include cost factors.
Representative Wilson referenced Page 1, Line 10: "The cost should
be based on cost providing education in each school district". She
continued, the cost should include the cost of classroom
instruction and administrative support.
EDDY JEANS, Manger, School Finance and Facilities Section,
Department of Education and Early Development, spoke on behalf of
the Department in support of the proposed legislation. The
Department is required to make recommended changes every other year
to the cost differentials as passed in SB 36. The Department
fulfilled its requirement this year and attempted to use the
McDowell methodology, used in establishing the current cost
differentials. He noted that the Department found the methodology
"flawed" and did not work for the updating. The Department request
that there be funding provided for a study.
Senator Austerman asked about the changes made in the House Finance
version of the legislation.
Senator Wilken replied that there has been an attempt to measure
the cost of education as compared to the cost of living.
Senator Austerman stated that the cost of keeping a teacher in a
remote area will differ from other places, which will have a direct
cost link to the budget.
Senator Wilken understood that the study would take into
consideration variable issues throughout the State.
Co-Chair Kelly suggested that the cost of the teacher's salary
should be included in the cost of education.
Senator Wilken agreed. He provided a history of the process.
Senator Wilken pointed out that there have only been two studies.
One was undertaken in 1982, a cost of living study. Another study
was done in 1987.
SFC 01 # 91, Side B 10:31 AM
Senator Wilken continued that the 1987 study adjusted the 1982
study. That information is what was used until SB 36 passed. At
that time, there was not a uniform chart and accounts being done
for the entire State. The McDowell study undertaken in 1997 & 1998
updated all the costs of education information for the State of
Alaska. He hoped that within ten years, the State would have a
"rolling model" which constituents could trust.
Co-Chair Donley noted that HB 203 would be HELD in Committee.
Representative Wilson pointed out that there are only five states
in the lower 48 that use some kind of a cost differential study.
Each one is different. She acknowledged that this is not an easy
process. She added that the cost of living in some districts is
important because some districts have to provide housing. Some
districts have no electricity or water. No teacher would be
willing to go to a school district like that without adequate
housing needs being provided for them.
CS FOR HOUSE BILL NO. 250(FIN)
"An Act relating to missions and measures to be applied to
certain expenditures by the executive branch of state
government and the University of Alaska from the state
operating budget for the fiscal year ending June 30, 2002; and
providing for an effective date."
DENNY DEWITT, Staff, Representative Eldon Mulder, explained that HB
250 was the missions and measures bill complied by the
subcommittees from both the House and Senate Finance Committees.
The bill started with last year's missions and measures and has
been worked through making the necessary adjustments. That
information was complied into a draft bill, which was distributed
to each of the Senate Finance subcommittees.
Mr. DeWitt pointed out that the only significant amendment to the
bill was in the initial draft on Page 2, Lines 15 and 16, "The
average time taken to respond to complaints and questions that have
been elevated to the Commissioner's office". That language was
added to the final draft from the House Finance Committee version
in order to determine how the departments were handling the
consumer complaints and concerns. He noted that the Department of
Revenue used it last year and that found it to be simple to respond
to using the measure last year.
Senator Wilken asked if it was intended that the mission and
measures would be consolidated at some point to a book-form for
each department to have on hand.
Mr. Dewitt explained that last year; both the operating budget bill
and the missions and measures bill were included together in one
stapled edition. This year, the departmental order has been
reorganized to mirror the operating budget bill.
Co-Chair Donley pointed out that the House has been working on the
bill for nearly four months. He asked if there was anything
essential which must be addressed this year, or would it be
reasonable to undertake the concerns of the bill over the interim.
Mr. Dewitt stressed that it was important that the bill move this
budget year, as these missions and measures match the operating
budget for FY02.
Co-Chair Donley stated that HB 250 would be HELD in Committee for
further consideration.
ADJOURNMENT
Co-Chair Dave Donley adjourned the meeting at 10:40 A.M.
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