Legislature(2017 - 2018)SENATE FINANCE 532
02/16/2017 01:30 PM Senate FINANCE
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| Audio | Topic |
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| Start | |
| Department of Education and Early Development Fy 18 Operating Budget Overview | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
February 16, 2017
1:33 p.m.
1:33:30 PM
CALL TO ORDER
Co-Chair Hoffman called the Senate Finance Committee
meeting to order at 1:33 p.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Mike Dunleavy
Senator Peter Micciche
Senator Donny Olson
Senator Natasha von Imhof
MEMBERS ABSENT
None
ALSO PRESENT
Michael Johnson, Commissioner, Department of Education and
Early Development; Heidi Teshner, Director, Administrative
Services, Department of Education and Early Development.
SUMMARY
^DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT FY 18
OPERATING BUDGET OVERVIEW
1:36:06 PM
MICHAEL JOHNSON, COMMISSIONER, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT, introduced himself.
HEIDI TESHNER, DIRECTOR, ADMINISTRATIVE SERVICES,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, introduced
herself.
Commissioner Johnson discussed the PowerPoint, "Alaska
Department of Education and Early Development FY2018
Governor's Budget Overview Senate Finance Committee" (copy
on file). He addressed slide 2, "Alaska State Constitution
-Alaska Statutes":
Alaska Constitution Section 7.1 -Public Education
To establish and maintain a system of public schools.
Department Mission: To ensure standards-based
instruction to improve academic achievement for all
students.
Key Functions: Fund, provide oversight and support,
set standards, assess students towards standards.
State Education Policy -AS 14.03.015
It is the policy of this state that the purpose of
education is to help ensure that all students will
succeed in their education and work, shape worthwhile
and satisfying lives for themselves, exemplify the
best values of society, and be effective in improving
the character and quality of the world about them.
Governing Statutes -Alaska Statutes Title 14
Commissioner Johnson looked at slide 3, "Alaska's Mission
and Vision for Public Education":
Mission Statement
An excellent education for every student every day.
Vision Statement
All students can succeed in their education and work,
shape worthwhile and satisfying lives for themselves,
exemplify the best values of society, and be effective
in improving the character and quality of the world
about them. AS 14.03.015
Commissioner Johnson highlighted slide 4, "State Board of
Education and Early Development's Strategic Priorities":
1. Amplify student learning
2. Inspire community ownership of educational
excellence
3. Modernize the education system
4. Ensure excellent educators
5. Promote safety and well-being
Commissioner Johnson discussed slide 5, "Organizational
Chart." He noted that he was currently working through
recommendations which included revisions to the
organization structure.
Ms. Teshner addressed slide 6, "FY2018 Governor's Budget."
She remarked that the slide showed a breakdown between the
formula programs and agency operations.
Co-Chair MacKinnon requested a breakdown of agency
operations.
Ms. Teshner continued to discuss slide 6. She noted that
the UGF funding was 80 percent of the entire department's
funding; but 97 percent of its UGF were the K-12 formula
programs. She stated that all the K-12 formula programs
were "pass through" grants to school districts and other
grantees. She remarked that the slide showed the
department's budget by fund source: 82 percent were general
funds, 15 percent were federal funds, and 4 percent were
other funds.
1:42:18 PM
Ms. Teshner looked at slide 7, "FY2018 Governor's Budget."
The slide showed the K-12 formula programs broken up by
their results delivery units and the components associated
with those units. She stated that there was UGF, federal
funding, and the $20 million in other funds [Public School
Trust Fund] within the foundation formula.
Senator von Imhof remarked that there was a concern about
how the minimum wage had affected the transportation. She
noted that the funding stream had remained relatively
stable, but the minimum wage provided a "jump up." She
wondered if that issue would be addressed in the
presentation. Ms. Teshner replied that the presentation did
not address that specific issue. She remarked that the
minimum wage was affecting the districts who entered into a
new contract or renew their contract.
Co-Chair MacKinnon queried the definition of "special
schools." Ms. Teshner replied that special schools
component included the Special Education Services Agency,
including the Alaska School for the Deaf and Providence
Heights School.
Ms. Teshner continued to discuss slide 7. She pointed out
that, aside from the foundation program, the K-12 formula
program were within UGF. The total formula funding was $1.3
billion.
Co-Chair Hoffman queried the most recent rewrite in the
foundation formula. Ms. Teshner replied that it was in
1999.
Senator Micciche queried the source of the "other funds."
Ms. Teshner replied that it was the Public School Trust
Fund.
Ms. Teshner displayed slide 8, "FY2018 Governor's Budget."
She noted that the slide showed the education support
services, results delivery unit, and the teaching and
learning support.
Ms. Teshner highlighted slide 9, "FY2018 Governor's
Budget." She stated that the results delivery units on the
slide were the commissions and boards: The Professional
Teaching Practices Commission and the Alaska State Council
on the Arts. The slide also showed the Mt. Edgecumbe
Boarding School; State Facilities Maintenance; and the
Laska State Libraries, Archives and Museums.
1:47:21 PM
Senator Dunleavy queried the current student population of
Mt. Edgecumbe. Ms. Teshner responded that the current
population of Mt. Edgecumbe was approximately 400 students.
Ms. Teshner looked at slide 10, "FY2018 Governor's Budget."
She stated that the slide concluded the list of the
breakdown of the department. The slide was the Agency and
Operations portion of the budget. She noted that the slide
showed the Alaska Postsecondary Education Commission,
Alaska Performance Scholarship Awards, and the Alaska
Student Loan Corporation.
Ms. Teshner addressed slide 11, "FY2018 Governor's Budget
by Structure." The slide was a visual representation of the
department's budget by structure. She noted that the large
blue portion was the formula programs, at 80.3 percent of
the overall budget.
Ms. Teshner highlighted slide 12, "FY2018 Governor's Budget
by Line Item." She stressed that 95 percent of the overall
budget of $1.6 billion were grants. The grants included
Foundation; Pupil Transportation; Boarding Home; Statewide
Residential; Special Schools; Youth in Detention; Title I;
Title II; Title III; 21st Century; Special Education; Carl
Perkins; Child Nutrition Services; Head Start; Best
Beginnings; Parents as Teachers; Pre-Kindergarten; and
other non-formula grant programs.
Ms. Teshner discussed slide 13, "FY2018 Governor's Budget
by Line Item (All Funds)." The slide represented a
breakdown of the personal services. She remarked that $11.5
million was the K-12 administrative support: Education
Support Services (ESS) and Teaching and Learning Support
(TLS). The green portion represented the $9.8 million for
the Alaska Commission on Postsecondary Education (ACPE).
Ms. Teshner looked at slide 14, "FY2018 Governor's Budget
by Line Item (UGF Only)." She shared that 98 percent of the
UGF were pass-through grants; 1 percent were personal
services; and 1 percent were other lines.
Ms. Teshner highlighted slide 15, "FY2018 Governor's Budget
by Line Item (UGF Only)." The slide represented a breakdown
of the personal services. She remarked that approximately
46 percent was the K-12 administrative support; 44 percent
was the Library, Archives and Museums; 8 percent was Mt.
Edgecumbe; and 2 percent for the Alaska State Council on
the Arts.
Ms. Teshner looked at slide 16, " FY2018 Governor's
Budget." The slide provided information on the budgeted
position. The left side showed that the governor's budget
would employ 298 Alaska in full-time, part-time, and non-
permanent positions. She noted that there was a reduction
of 18.8 percent of the workforce, equating to approximately
69 positions, since the FY 13 Management Plan. The right
side of the slide showed the graphical representation of
the budget for the FY 18 positions.
1:51:47 PM
Ms. Teshner addressed slide 17, " FY2018 Governor's Budget
Highlights":
Foundation -Fully funded at the statutory Base
Student Allocation (BSA) of $5,930; Total:
$1,217,257.6
Pupil Transportation -Funding maintained at the
FY2017 funding level of $72,619.8 (this is $6,409.8 or
8.8 percent below the estimated statutory formula)
Administrative Services -Transfer 1 PFT position
to Department of Administration for Shared Services of
Alaska Implementation
$9.5 Other decrement -savings from Shared
Services of Alaska Implementation
Information Services -$110.0 Other decrement to
reduce uncollectible inter-agency receipt authority
and delete 1 PFT position
Transfer 1 PFT position to Department of
Administration for Centralized Office of Information
Technology Implementation
State System of Support -$250.0 UGF one-time
increment request for the Innovative Best Practice
Initiative
Alaska State Council on the Arts -Transfer 1 PFT
position to Department of Administration for Shared
Services of Alaska Implementation
$6.6 decrement [$2.1 Fed; 4.5 G/F Match] -savings
from Shared Services of Alaska Implementation
Ms. Teshner addressed slide 18, " FY2018 Governor's Budget
Highlights":
Mt. Edgecumbe High School (MEHS) -$100.0 UGF
increment request for the warm storage and maintenance
costs for the new MEHS Aquatic Center
Library Operations -Transfer 2 PFT position to
Department of Administration for Shared Services of
Alaska Implementation
$25.6 UGF decrement -savings from Shared Services
of Alaska Implementation
Vice-Chair Bishop queried the reference for the annual
operating cost. Ms. Teshner replied that the $583,000 was
the projected annual operating cost for the pool.
Co-Chair MacKinnon remarked that the administration had
shut down most mega projects in Alaska, and reprioritized
spending. She noted that there was another pool within one
or two miles of the Mt. Edgecumbe pool. She stressed that
the legislature was told that the state would pay zero
maintenance costs for the pool. Commissioner Johnson
replied that there was an exploration of partnerships for
the operation of the Mt. Edgecumbe pools, so there did not
need to be an operations budget request. He deferred to Ms.
Teshner.
1:56:42 PM
Ms. Teshner furthered that that the current pool had been
in operation for 40 years, so it was reaching the end of
its life. She stated that there would be costly renovations
to bring the current pool up to standards. She shared that
there were conversations to help identify revenues to go
toward the operations and maintenance of the new pool.
There was only about $100,000 to $200,000 identified
depending on whether the city decided to maintain the older
pool.
Co-Chair MacKinnon wondered whether it would be prudent to
halt work on the pool to ensure underlying support for the
new pool. She felt that the pools would be in competition
with each other for a revenue source. Ms. Teshner replied
that the city had reached out to Department of
Transportation and Public Facilities (DOT/PF) about the
operations and maintenance of the pool. She shared that
there may be an agreement with the city during the
construction of the pool.
Senator Micciche looked at page 9, and the total Mt.
Edgecumbe budget was $11.14 million with 400 students. Ms.
Teshner agreed.
Senator Micciche surmised that the per student cost at Mt.
Edgecumbe was $27,500. He wondered how that compared with
other Alaska students on an average basis. Ms. Teshner
replied that she did not have that information currently.
She stated that, of the $11 million, one-half was for the
residential component of Mt. Edgecumbe. The foundation
funding was from the other funds of $6 million.
Senator Micciche felt that the state was offering a
substantial amount of high-cost services to the students of
Mt. Edgecumbe, and spending approximately $27,500 per
student. He felt that even with separating the residential
costs, Mt. Edgecumbe was a high-cost facility. He wanted to
bring those costs down. He queried the status of the
construction of the new facility. Ms. Teshner replied that
she did know the status, except that construction was
moving forward. She shared that she had visited the site in
December, and there were base walls and a roof.
2:02:14 PM
Senator Olson wondered whether there was an issue with
scheduling some students into the municipal pool. Ms.
Teshner replied that she was not aware of that issue.
Senator Olson asked whether the new pool was the same size
of the existing pool. Ms. Teshner replied that the Mt.
Edgecumbe Aquatic Center was larger than the existing pool.
Senator Olson queried a comparison of the operating
expenses between the two pools. Ms. Teshner replied that
the existing pool's operating costs were approximately
$240,000. She stressed that the pool was connected to the
middle school, so there was a shared wall.
Senator Olson asked whether there was a comparison with
other pools in the state. Ms. Teshner agreed to provide
that information.
Senator Olson wondered whether Ms. Teshner was familiar
with the other pools in the state. Ms. Teshner responded
that she was not familiar with the other pools in the
state.
Vice-Chair Bishop queried a breakdown of the actuals on the
$500,000 operating costs for the pool. Ms. Teshner agreed
to provide that information.
Co-Chair MacKinnon stressed that not much work had been
done on the project. She wondered if expending the capital
funds was the best option. She felt that halting the
project was the most prudent option from a finance
perspective. She wondered if there was a way to lower the
cost upon completion of the project. Commissioner Johnson
replied that he had asked similar questions. He stressed
that he was new to his job, so there may be some that know
more about the history of the pool. He stated that he did
not have the authority to halt that construction, because
it was part of a Go Bond. The pool was not a request from
either DEED or Mt. Edgecumbe. He agreed to examine the pool
costs.
Ms. Teshner furthered that $100,000 would maintain the
facility without water.
Co-Chair MacKinnon asked for clarification of that
information. Ms. Teshner replied the $100,000 UGF request
was for operational expenses without water.
Co-Chair MacKinnon remarked that the annual maintenance
operational costs for the pool was $583,000. She wondered
whether that was included in the budget, or only the
$100,000 for the pool without water. Ms. Teshner stated
that the $100,000 was the only amount in the budget used
toward the $583,000.
Co-Chair MacKinnon surmised that the $100,000 would be a
recurring cost to maintain the unfilled pool. Ms. Teshner
agreed.
2:10:08 PM
Ms. Teshner continued to discuss slide 18:
Program Administration and Operations (Alaska
Commission on Postsecondary Education) -$625.1 Other
decrement and delete 7 positions (4 PFT and 3 NP)
$125.0 DGF increment request for the Alaska
Education Grants, which is a needs-based grant program
that is set in statute to equal half the amount
allocated to the APS
Transfer 1 PFT position to Department of
Administration for Shared Services of Alaska
Implementation
$7.8 Other decrement -savings from Shared
Services of Alaska Implementation
WWAMI Medical Education -$106.0 DGF increment
request to cover program contractual increases
Alaska Performance Scholarship (APS) Awards -$250.0
DGF increment request to cover the expected demand
increases
Senator Olson noted that there had been discussions
regarding eliminating the WAMII program. He wondered what
would occur with the receipts, with elimination of the
program. Ms. Teshner responded that the designated receipts
would remain the Higher Education Fund.
Senator Olson stated that $106 million would remain in the
Higher Education Fund. Ms. Teshner agreed.
Senator Olson wondered what would happen with the $3
million on page 10. Ms. Teshner responded that the $3
million would remain in the fund for appropriation.
Senator Dunleavy remarked that the slide represented fund
source shifts. Ms. Teshner replied that the fund sources
currently noted on slide 18 were currently in the FY 17
budget. The WAMII program was paid through the Higher
Education Fund in FY 17, with an increase in FY 18.
Ms. Teshner discussed slide 19, "Department of Education
and Early Development." The slide provided a comparison
from FY 15 through FY 18. She noted that the top chart was
for all funds, between formula and non-formula programs.
She stated that the formula program showed a $79.4 million
decrease from the FY 15 management plan to the FY 18
governor's proposal. This was due to the removal of the
one-time funding from the previous legislature's HB 278.
2:15:35 PM
Senator von Imhof wondered whether the department examined
all the school district's budgets and compared how the they
managed their funds. Ms. Teshner replied in the
affirmative.
Senator von Imhof asked whether there were reports that
showed trends, and identified personnel benefit costs. Ms.
Teshner replied that the data was available, and agreed to
provide that information.
Senator von Imhof wondered whether districts were connected
with each other to share information. Ms. Teshner responded
that DEED annually examined the districts' operating
budget, and their actual audits. The department tried to
spot anomalies within each district, and there was an
examination to see what may have caused the change.
Ms. Teshner continued to highlighted slide 19. She noted
the $21.6 million decrease. She noted that the department
had eliminated programs such as the Alaska Native Science
and Engineering Program (ANSEP) funding; the Alaska
Learning Network (ALN); and the statewide mentoring
programs. There were reductions in the content specialists
and travel.
Ms. Teshner highlighted slide 20, "Alaska K-12 Funding."
The slide showed the chance in the Base Student Allocation
(BSA) over time.
Ms. Teshner addressed slide 21, "Average Daily Membership
(ADM) History." The chart showed the regular ADM and the
correspondence ADM.
Co-Chair MacKinnon looked at slide 20, and wondered whether
the outside money was fuel triggers. Ms. Teshner replied
that the one-time moneys were funds that either was for
security within districts or money for the adjusted average
daily membership.
2:20:18 PM
Vice-Chair Bishop wondered where the charter schools would
be included in the ADM. Ms. Teshner replied that charter
schools would be within the regular ADM count.
Senator von Imhof queried the annual AMP testing.
Commissioner Johnson replied that the process for selecting
a new state assessment was begun the previous summer. He
stated that there was a question of why the state would be
involved in testing. He shared that there were three
primary reasons for the state testing: 1) to inform
parents, policy makers, and public on how the schools were
performing; 2) data for school improvement; and 3) to
ensure equitable access to a quality public education. The
chosen test should maximize that purpose, and minimize the
amount of time students would be away from instruction to
take the assessment. An assessment called "PEAKS" was
chosen in partnership with the Data Recognition Corporation
(DRC) who had previously provided standards based
assessments. The district test coordinators were meeting
with department staff to prepare for the administration of
the test in March and April.
Senator von Imhof wondered whether the assessment would be
through pen and paper or electronic submission.
Commissioner Johnson replied that the districts would make
that choice.
Co-Chair MacKinnon looked at slide 21, and noted that there
was more downward trend until a 2016 increase followed by a
decrease in 2017 and 2018. She queried a change for the
calculation on ADM that may have impacted 2016. Ms. Teshner
replied that there was no change to the calculation of the
ADM. The counts were provided by the district, and there
were more students gravitated toward the correspondence ADM
versus a brick and mortar ADM.
Co-Chair MacKinnon wondered why there would be a growth in
ADM with the low unemployment rate. She asked whether
students could possibly be counted twice. Ms. Teshner
replied that there was a rigorous duplication to ensure
that the counts were not duplicated.
2:25:27 PM
Co-Chair Hoffman stressed that examining the UGF provided
very little flexibility for the committee.
2:29:27 PM
Senator Dunleavy looked at slide 21. He noted the downward
trend in student enrollment. Commissioner Johnson did not
understand the concern.
Senator Dunleavy felt that there was a slow decline in
student population in the state, as the state population
was aging. He noted that there may be a migration to
alternative schools, but noted the increase in costs.
Co-Chair MacKinnon echoed that the state was facing a $3
billion deficit, so there was help needed from all
Alaskans.
Vice-Chair Bishop shared the same concerns as Commissioner
Johnson.
Senator von Imhof stressed that the budgets of the school
districts was important to examine.
2:34:45 PM
Senator Olson shared that his family prioritized education.
He noted that some of the committee members had small
children, so there was a personal concern with education.
Commissioner Johnson shared that the governor had expressed
that the state needed to rethink Alaska's public education
system. The process would include the legislature. The
process was not another study of the problem, but the
process of prioritizing the solutions.
2:39:13 PM
AT EASE
2:39:16 PM
RECONVENED
Co-Chair Hoffman discussed the following day's agenda.
ADJOURNMENT
2:39:53 PM
The meeting was adjourned at 2:39 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 021617 DEED SFC Budget Overview.pdf |
SFIN 2/16/2017 1:30:00 PM |
Operating Budget FY18 |