SENATE BILL NO. 57 "An Act relating to parental involvement in education; adjusting pupil transportation funding; amending the time required for employers to give tenured teachers notification of their nonretention; and providing for an effective date." TIM LAMKIN, STAFF, SENATOR GARY STEVENS, spoke to the legislation. He related that the bill accomplished three objectives. The first objective contained in Section 1 of the legislation encouraged increased parental involvement in developing children's reading skills. Under the state's direction, the school districts would publish information regarding the importance of parental involvement in developing reading skills in kindergarten through third grade. The second section and objective of the bill involved pupil transportation. The legislation realigned the funding for pupil transportation by annually matching the Consumer Price Index (CPI) for Anchorage. He explained that the school districts contracted with transportation providers. The contracts contained a 3 percent adjustment for inflation according to the Anchorage CPI. Currently, the state provided a 1.5 percent annual adjustment for pupil transportation funding for the next two years. Most districts were forced to subsidize pupil transportation costs at the expense of education programs. He indicated that the third objective found in Section 3 was referred to as the "pink slip" section. He pointed out that historically March 16 was established as an arbitrary date to provide notification of layoff or retention. Section 3 moved the notification date forward to May 15th when school districts funding levels were known. He added that Section 4 of the legislation repealed the current pupil transportation funding provisions. Lastly, Section 5 allowed existing contracts with teachers and faculty to expire before the legislation took effect. Senator Hoffman inquired why the bill used Anchorage as the CPI base and wondered whether there were other indexes for higher costs areas. Mr. Lamkin related that other indexes existed but that using the Anchorage CPI was a "policy call." Senator Hoffman thought that it would be fair to consider a higher index for Fairbanks and other high index areas of the state. Senator Bishop inquired about the difference in the CPI between Fairbanks and Anchorage. Mr. Lamkin offered to provide the information. Co-Chair Meyer cited Section 3 and inquired whether the provision only applied to tenured teachers. Mr. Lamkin confirmed that Section 3 only applied to tenured teachers. He added that subsection (b) of the statute referred to non-tenured teachers which required notification by the end of the school year. Co-Chair Meyer wondered why the bill was structured with two separate notification dates. Mr. Lamkin replied that notification was a policy decision which was established many years ago. Vice-Chair Fairclough speculated that due to the nature of tenure, a tenured position deserved as much layoff notification as possible[BSW3]. Senator Olson remarked that the March 15th date offered as much notification as possible, which was more helpful to a person facing a layoff. Vice-Chair Fairclough ascertained that the pink slips were issued before the budget cycle for the state was completed and the school districts funding levels were known. Mr. Lamkin concurred. He added that unnecessarily issuing pink slips caused teacher stress that could affect the classroom. He voiced that it was a matter of fairness and transparency. Senator Dunleavy commented that things were done backward from the school districts' point of view. He noted that the districts were legally compelled to enter into contracts before budgets were known. He believed the change placed the notifications in line with the budget process. 9:44:50 AM Co-Chair Meyer relayed that he had heard comments on Section 2 of the bill on both sides of the issue. Indexing was not a typical budget practice and might set an unwelcome precedent. The alternative of dealing with pupil transportation increases each year was also not ideal. He preferred supporting the legislation. Mr. Lamkin communicated that the issue was a policy question. He pointed out that the cost was real. He deferred to school district financial officers for further discussion. Senator Hoffman believed that in this particular case, the additional expenses would "diminish" classroom funding and was the core of the argument. Vice-Chair Fairclough OPENED public testimony. AMY LUJAN, EXECUTIVE DIRECTOR, ALASKA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS, spoke in favor of SB 57. She offered that the Anchorage CPI was the standard for contracts, recommended by the Department of Education and Early Development (DEED) statewide. Contracts in Fairbanks and even Nome use the Anchorage CPI. The costs were real and increasing. Authorizing the Anchorage CPI budget increase keeps pace with the actual cost. She discussed Section 3 and agreed with the comments of Senator Dunleavy. She mentioned the unnecessary stress caused by issuance of the premature notification and keeping the pink slips in line with the state and municipal budget processes. Senator Olson inquired whether it would be fairer to use a higher CPI. Ms. Lujan reminded the committee that the contracts were based on the Anchorage CPI and was the standard. Senator Olson suggested moving the notification date up to May 1, which corresponds to the boroughs budgets. Ms. Lujan observed that the dates vary according to the borough and opined that May 15 might be a safer date. DEENA PARAMO, SUPERINTENDENT, MAT-SU BOROUGH SCHOOL DISTRICT, MAT-SU (via teleconference), spoke in support of SB 57. She referenced increased parental involvement and related that tools and resources made available to parents enriched education. She restated that all school district's contracts were based on the Anchorage CPI. She shared that when school districts budgets were developed "global big picture thinking" was balanced with financial realities. She believed that the current factor of 1.5 percent was not sufficient to fully support pupil transportation costs. She based that assessment on the 's Anchorage CPI's 2.6 percent five--year average. The funding shortfall reduced instruction funding. She stated that the Matanuska-Susitna borough school district was preparing to subsidize transportation funding with its general fund at $1.5 million in FY 2014 with impacts to classroom instruction funding. The amount was the equivalent to 15 teacher positions. The bill reduced the shortfall by approximately $500 thousand. Ms. Paramo turned to non-retention notification. She related that under the year to year funding structure enacted (HB 273) by the state in 2008, funding levels were not known before statutorily mandated timelines required contract renewal and non-retention notification. She relayed the Matanuska-Susitna Borough School District's support of the notification date change and furthered that the contract dates should be changed as well. The Matanuska-Susitna Borough School District thought that the timeline was a "prudent and responsible fiscal policy." She thanked the committee and urged for support of the legislation. 9:56:08 AM Senator Hoffman inquired how Mat-Su derived the $1.5 million figure which contrasted with the DEED fiscal note FN2 (EED). LUKE FULP, CHIEF BUSINESS OFFICER, MAT-SU BOROUGH SCHOOL DISTRICT, MAT-SU (via teleconference), replied that he was not certain how the fiscal note was developed. He stated that the borough developed the budget using the CPI five-- year average of 2.6 percent in relation to the 1.5 percent increase instituted in SB 182 last year. DAVE JONES, ASSISTANT SUPERINTENDENT, Kenai Peninsula BOROUGH SCHOOL DISTRICT, KENAI (via teleconference), testified in support of SB 57. He concurred with all of the previous testimony. He added that DEED's standardization of school district contracts to the Anchorage CPI was an attempt to rein in costs and attract more contractors. The increase to the Anchorage CPI in SB 57 helped stabilize transportation funding; not at the expense of education funding. He discussed the notification issue. He related that the current system left teachers to wonder whether they had a job and the district in the situation that they will find another job and not be available if their jobs were retained. Senator Dunleavy commented that the May 15th date was minimal in light of the possibility that the legislature could end in special session on any given year. BRUCE JOHNSON, EXECUTIVE DIRECTOR, ALASKA COUNCIL OF SCHOOL ADMINISTRATORS, supported the legislation. He shared that school districts took lying off teachers and school district employees seriously. He agreed with Mr. Jones and did not want to lose teachers who sought and gained other employment due to premature notification. Rural districts commonly issued contracts to staff in February, especially in schools with high turnover in order to develop recruitment strategies for the next year. Most of the teachers were issued contracts well before the May 15th deadline. He appreciated the flexibility of the later date and believed it was more advantageous to have a stable employment force. Vice-Chair Fairclough CLOSED public testimony. SB 57 was HEARD and HELD in committee for further consideration. 10:05:35 AM