Legislature(1999 - 2000)
03/31/1999 01:38 PM Senate HES
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* first hearing in first committee of referral
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SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE
March 31, 1999
1:38 p.m.
MEMBERS PRESENT
Senator Mike Miller, Chairman
Senator Pete Kelly, Vice-Chairman
Senator Gary Wilken
Senator Kim Elton
MEMBERS ABSENT
Senator Drue Pearce
COMMITTEE CALENDAR
SENATE BILL NO. 105
"An Act determining the facilities constituting a school for
purposes of public school funding; and providing for an effective
date."
-HEARD AND HELD
PREVIOUS SENATE COMMITTEE ACTION
SB 105 - See HESS Committee minutes dated 3-22-99
WITNESS REGISTER
Mr. John Kimmel, Staff Aide
Senator Robin Taylor
Alaska State Capitol
Juneau, AK 99811-1182
POSITION STATEMENT: Presented SB 105
Senator Robin Taylor
Alaska State Capitol
Juneau, AK 99811-1182
POSITION STATEMENT: Presented SB 105
Senator Lyda Green
Alaska State Capitol
Juneau, AK 99811-1182
POSITION STATEMENT: Commented on SB 105
Mr. Eddy Jeans, Manager
School Finance Section
Department of Education
801 W. 10th St. Ste. 200
Juneau, AK 99801-1894
ACTION NARRATIVE
TAPE 99-16, SIDE A
Number 001
SB 105-PUBLIC SCHOOL FUNDING
CHAIRMAN MILLER called the Senate Health, Education and Social
Services (HESS) Committee to order at 1:38 p.m. and brought up SB
105.
MR. JOHN KIMMEL, Staff Aide to Senator Taylor, presented the
sponsor statement on SB 105 which has been introduced to address
inequities that occurred in the passage of the 1998 education
foundation formula.
He said the Petersburg School District had an enrollment of 752
students last October when student counts were done to determine
funding levels. Today, Petersburg estimates an enrollment of 747
students which, under the current formula, would lose Petersburg
$200,000 in funding because its ADM has fallen below the present
750 ADM benchmark.
Lowering the ADM to 450 would also provide equity for other school
districts that saw a 40-year pattern of funding 3 school units
change to where only 2 school units were funded. Wrangell and
Petersburg each have three separate school buildings.
Section 2 of the bill deals with inequities under current statute
requiring enrollment levels of at least 200 students for
alternative, correspondence and charter schools to be counted as a
separate school, even though the school may have the full
complement of services. Currently most correspondence schools
receive only 80% of the funding allocated to other separate
schools.
Number 072
SENATOR ROBIN TAYLOR, on line from Anchorage, explained the changes
in the proposed CS. It eliminates provision (B) in Section 1 in
the original draft. Senator Taylor worked with the drafter to
ensure the change occurred in the formula, which is accomplished by
leaving in the initial number shift from 750 to 450. By including
the additional definitive language in the original bill, it
inadvertently picked up three more school districts, Kuspuk, Haines
and Metlakatla who didn't object to the old formula, and had
additional funds flow to them out of SB 36, which would have been
increased by adding this language.
In addition, there was a technical change in Section 2 on page 2
lines 14-15. It changes the definition of a correspondence school
and adds the words "counted as a separate school if". This change
was made to provide some additional savings within this formula.
SENATOR TAYLOR admitted discomfort in presenting Section 2 to the
committee because it would primarily address concerns that occurred
in SB 36 in the Mat-Su and Kenai districts affected by the 80%
funding levels given to alternative and charter schools. These
districts also expressed concerns about the correspondence schools.
Unfortunately the fiscal note reflects a shift within the formula
or a net add-on to the formula of about $16 million. He was
concerned that the language contained in Section 2, because of the
broad sweep in raising correspondence schools from 80% to 100%,
conveys an additional $2.9 million in the fiscal note to the Galena
School District which has an aggressive correspondence program
statewide. Some of the students lost on student counts to the
Petersburg School District were lost to the Galena School District
on their correspondence program. Each of those were unintended
consequences of the old formula, and probably not appropriately
addressed in the new formula.
SENATOR TAYLOR said these matters more directly impact Senator
Green's and Senator Torgerson's district, and he deferred to them
to present their concerns about Section 2 of the bill.
Number 146
SENATOR LYDA GREEN agreed that there were unintended consequences,
particularly with the Mat-Su charter school, alternative school and
correspondence school. The correspondence school tops 700, and the
charter schools total about 250-300 students, with their enrollment
growing. She said it caused angst last year when the funding was
not at 100% as it had been for years. The correspondence school is
a well-run, fully staffed and implemented building, with oversight
and two dozen teachers who work with the kids. She asked the
committee to consider how to assist the negatively impacted
districts.
SENATOR ELTON recalled that in the debate last year Alyeska Central
School was getting 60% while other correspondence schools were
getting 100% and the data suggested the right amount was somewhere
in between the two. He pointed out that correspondence schools are
somewhat different and lack sports facilities and libraries. He
asked Senator Green what has changed in the data over the past
year.
SENATOR GREEN replied she would not compare the correspondence
school in Mat-Su to Alyeska. Mat-Su is hands-on and Alyeska is
mostly by mail. Mat-Su has a large number of students.
SENATOR ELTON asked if Mat-Su provides a gymnasium, track and field
facilities, music rooms, or libraries. SENATOR GREEN answered it
does not.
SENATOR WILKEN recalled that 80% was the best number at the time.
Galena was at 65% and others were at 100%, so 80% became a
negotiated number last year to move the bill on. The Fairbanks
School District took more than a $300,000 hit as a result, and he
suggested that if this is going to be fixed, it should be fixed for
everybody.
He asked if the language is too broad in Section 2, lines 6-7,
where it includes correspondence school or charter school or
alternative school. A correspondence school differs from a charter
school, which could have a gym and everything a school has, but
with a different focus. He offered for the committee's
consideration, addressing correspondence schools in one section of
the bill and charter schools in another.
Number 218
SENATOR GREEN explained that the charter and alternative schools in
her district have more of the facilities in common with a
traditional school.
Her district correspondence school was very negatively impacted by
the reduction. She suggested that the name "correspondence school"
may be inaccurate because there are so many students enrolled who
are not attending the high schools or the elementary schools. It
has been a great back up for those people who need curriculum
assistance, testing and a more traditional education than home-
schooling provides.
SENATOR WILKEN asked Senator Taylor where the number 450 came from.
SENATOR TAYLOR explained it was primarily selected to make certain
the problem would not recur again in the near future if enrollments
decline further. Wrangell and Petersburg were the only two schools
omitted by the shift in the formula. He has worked with Mr. Jeans
on it, and it would not have a statewide impact.
Number 266
SENATOR TAYLOR followed up on Senator Wilken's recommendation for
Section 2, noting the large fiscal impact, the unintended shifting
of a tremendous amount of money to Galena, and the unique
characteristics of the correspondence program in the Mat-Su.
He suggested a tighter definition for Mat-Su, and removing
"correspondence school" from that paragraph to direct the funding
100% back to the charter and alternative schools. A sub-definition
of "correspondence school" could be drafted. SENATOR TAYLOR said
this might accomplish the purpose of cleanup without having a
statewide impact that would drive the numbers out of sight. He
deferred to Senator Wilken who has spent a lot more time on it than
himself.
CHAIRMAN MILLER invited the department to participate in the
discussion.
MR. EDDY JEANS, Manager of School Finance for the Department of
Education, stated he would answer questions.
CHAIRMAN MILLER noted the fiscal note of $17 million is mostly
contained in Section 2 of the bill. He asked for a breakdown of
how much would go to correspondence schools, and how much to
charter schools because of the different definitions of schools.
MR. JEANS replied he did not break it down between the
correspondence and alternative schools. Section 2 "grandfathers
in" every charter, alternative and correspondence school in the
state serving more than 10 students to go through the school size
adjustment table. He found a couple correspondence programs were
not serving 10 students, and therefore would still fall under the
existing provisions.
MR. JEANS explained there was a lot of discussion last year about
"in-district correspondence" and "out of district correspondence."
Under the old foundation formula, correspondence children were
rolled into the largest school in the district and received the
size and area cost differential adjustments associated with a
school. SB 36 recognized that there are two separate costs to
provide educational services: those directly related to a child
attending a school facility on a daily basis with fixed costs; and
a program providing educational services either through the mail,
electronically, or over the Internet. He said the latter costs
don't deserve the adjustment for school size as well as cost
factor.
SB 36 clearly developed two pots of money - one to cover the cost
of a facility and housing children on a daily basis, and another
for other educational services. MR. JEANS said "that's how I
believe we arrived at the 80%." All correspondence programs would
be funded the same whether state-operated or district-operated.
MR. JEANS continued, the department is concerned that language
"grandfathering in" alternative schools and charter schools would
promote small, inefficient schools, and encourage the districts to
create more small schools. This will be an issue in the larger
school districts. The threshold for efficiency was set at 200 for
those schools, which the Legislature can amend, but the department
understood that 200 was set to promote efficiency.
CHAIRMAN MILLER asked if only Section 1 was retained, what kind of
fiscal note it would carry.
MR. JEANS said, based on the amended language, Section 1 would be
almost $765,000.
SENATOR ELTON asked for explanation of the next two pages of the
spread sheet. The impact of Section 2 is $20.7 million, but on the
next page the combined impacts of Sections 1 and 2 drops to $17.1
million.
MR. JEANS answered the exhibit is on page 2; in Section 2 the piece
missing is the change in the funding floor. Because these districts
are receiving an increase in basic need, their funding floor is
going to be decreased.
SENATOR ELTON added up the numbers on page 2 of the spreadsheet
with the impact of Section 2. He said it reveals about one half of
the money would go to the urban districts, and about 3/4 of it
would go to the urban districts and Galena. Galena really stands
out, and he asked, do they need another $5 million? Is the
department comfortable with the number of correspondence students
and the student/teacher ratio?
MR. JEANS replied the Galena issue is a concern and the reason 80%
was considered a sufficient allocation in the debate last year.
Under the old law prior to enactment of SB 36, Galena was entitled
to the school size adjustment, and last year the department
negotiated with them and did not pay them for their area cost
differential.
SENATOR ELTON asked Mr. Jeans how the department feels about
Section 1, and the fix for the Petersburg and Wrangell problem.
MR. JEANS answered "The department will have a problem with this
bill any way it goes." DOE is in the first year of implementing
the new formula, and in the department's opinion "it's premature to
try to isolate little pieces someone believes are out of whack."
In fact, SB 36 required the department to prepare a number of
reports for the Legislature that are due in 2001. One analysis
will compare funding communities versus the new school table.
Number 385
SENATOR WILKEN asked regarding Section 1 if Petersburg and Wrangell
are both single-site school districts. MR. JEANS said that is
correct. He asked if they both meet the 60% instruction
requirement. MR. JEANS said he couldn't answer that, but he would
be happy to find out.
CHAIRMAN MILLER stated his intent to adopt the CS, hold it and do
further work on the definitions. He stated "the $17 million fiscal
note certainly shocks me and it will certainly shock the Finance
Committee." He suggested reducing it.
SENATOR WILKEN moved CSSB 105(HES) Version M Ford 3/26 be adopted
in lieu of the original bill. Without objection, it was so
ordered.
CHAIRMAN MILLER announced his intent to take up SB 105 next
Wednesday, April 7 after working out some of the concerns. The
Board of Regents confirmations would come before the committee
later on, and he asked the committee to review the confirmation
packet and determine if there are other individuals they would like
to appear before the committee, either in person or by
teleconference. On April 7, the committee would take up SB 71 and
SB 97, and the following week Senator Ellis's bill and several
minority bills would be heard. The meeting adjourned at 2:05 p.m.
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