04/02/2010 01:30 PM House FINANCE

HOUSE BILL NO. 317                                                                                                            
                                                                                                                                
     "An Act  increasing the special needs  funding and base                                                                    
     student  allocation for  public schools,  and extending                                                                    
     the adjustment for  student transportation funding; and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
REPRESENTATIVE  PAUL  SEATON,  SPONSOR, explained  that  the                                                                    
bill is intended to continue  the policy direction thr state                                                                    
has taken the last three years.  One of the main purposes of                                                                    
the bill is  to prevent the rounds of  teacher lay-offs that                                                                    
have been  occurring. It was  the mechanism designed  by the                                                                    
Joint Legislative  Education Funding  Task Force  to provide                                                                    
budget information to school districts.                                                                                         
                                                                                                                                
Representative  Seaton related  that Section  1 extends  the                                                                    
inflation  adjustment  for  pupil  transportation  that  was                                                                    
established in  2008 through  2014. Those  adjustments would                                                                    
reflect any increases in consumer  price increases. It would                                                                    
ensure that  if there  was a  negative adjustment,  it would                                                                    
not take place.                                                                                                                 
                                                                                                                                
Representative Seaton  explained that Section 2  of the bill                                                                    
increases the  block grant funding,  which is 20  percent of                                                                    
the amount  a school district  receives for the  purposes of                                                                    
special education, gifted and  talented, vocational, and bi-                                                                    
lingual education. The increase is 1.5 percent.                                                                                 
                                                                                                                                
Representative Seaton  referred to a Letter  of Intent which                                                                    
explains the  goal of stimulating  more spending  and access                                                                    
for the 70 percent of students  that don't go to college. It                                                                    
is  directed to  encourage vocational  education across  the                                                                    
state.  It is  not  category  funding. Individual  districts                                                                    
have the ability to use funds as needed.                                                                                        
                                                                                                                                
Representative Seaton  said that Section 3  provides for the                                                                    
same amount -  1.5 percent - the following  year. Sections 4                                                                    
and 5  increase the  base student  allocation (BSA)  by $125                                                                    
for each of  the following years - FY 2012  and FY 2013. The                                                                    
legislature  originally provided  for three  years, but  the                                                                    
Task  Force  decided  not  to do  that  due  to  mid-session                                                                    
timing. He explained the effective dates in the bill.                                                                           
                                                                                                                                
2:42:22 PM                                                                                                                    
                                                                                                                                
Representative  Doogan questioned  the FY  2012 cost  of $45                                                                    
million.  He  wondered  how  much  would  be  special  needs                                                                    
funding and how much would be BSA.                                                                                              
                                                                                                                                
Representative  Seaton responded  that  $30  million is  the                                                                    
$125 BSA  increase and $14.7  million would be  the intended                                                                    
vocational increase.                                                                                                            
                                                                                                                                
Vice-Chair Thomas asked if any  consideration is being given                                                                    
to the  dropout rate of  between 30 percent and  40 percent.                                                                    
Representative Seaton mentioned a  number of solutions, such                                                                    
as  aligning curriculum.  The Anchorage  School District  is                                                                    
working on an advisor/advocate  program for at risk students                                                                    
and  has increased  the graduation  rate by  5 percent.  Six                                                                    
schools on  the Kenai  Peninsula have  also gone  to advisor                                                                    
programs  and have  increased the  graduation rate  by 12-15                                                                    
percent. The  BSA increase has  allowed school  districts to                                                                    
accomplish the  goal of decreasing  dropout rates.  There is                                                                    
also another bill which looks  at improving the rigor of the                                                                    
high school curriculum.                                                                                                         
                                                                                                                                
Representative Seaton reported on  successes in reducing the                                                                    
dropout rate, but  noted that there are  still some problems                                                                    
in some districts. He emphasized  a need for more vocational                                                                    
education, which the Letter of Intent directs.                                                                                  
                                                                                                                                
Vice-Chair  Thomas  inquired  why  the Task  Force  is  only                                                                    
concentrating on  the Anchorage and  Kenai area and  not the                                                                    
entire state.  He opined  it should be shared  statewide. He                                                                    
spoke  of dropout  rates  in his  district.  He wondered  if                                                                    
there were funds available for  schools that did not qualify                                                                    
for the Governor's Performance Scholarship (GPS) fund.                                                                          
                                                                                                                                
2:49:01 PM                                                                                                                    
                                                                                                                                
Representative Seaton  pointed out that efforts  were taking                                                                    
place in the  Chugiak School District and  in Prince William                                                                    
Sound, which  now has  a 98  percent graduation  rate. There                                                                    
are  successes  in rural  locations,  as  well as  in  urban                                                                    
locations.  The  use of  traveling  teachers  is also  being                                                                    
considered.  He   pointed  out  that  the   bill  emphasizes                                                                    
vocational education as a  solution to increasing graduation                                                                    
results.  He spoke  of another  bill  that would  coordinate                                                                    
efforts  between  models  used   in  various  districts.  He                                                                    
invited  everyone  to  attend an  upcoming  Joint  Education                                                                    
Committee meeting regarding Moore vs. Alaska.                                                                                   
                                                                                                                                
2:51:39  PM                                                                                                                   
                                                                                                                                
Co-Chair  Stoltze appreciated  Representative Seaton's  work                                                                    
on the bill and on the GPS.                                                                                                     
                                                                                                                                
Representative Fairclough  asked if the  Education Committee                                                                    
has  taken  on the  issue  of  Continuing Learning  Credits;                                                                    
aligning them with curriculum and teachers across Alaska.                                                                       
                                                                                                                                
Representative Seaton inquired  if Representative Fairclough                                                                    
was  referring  to  teacher  education.  She  said  she  was                                                                    
referring   to   required   continuing   learning   credits.                                                                    
Representative  Seaton  reported   that  the  University  of                                                                    
Alaska has  presented a  report to  the legislature  on that                                                                    
topic. The  committee is looking  at aligning  and promoting                                                                    
those  credits.   The  goal  is   to  improve   teachers  in                                                                    
education, not just in subject matter.                                                                                          
                                                                                                                                
Representative Fairclough  heard that teachers  could choose                                                                    
to get  credits in  subjects other than  the ones  they were                                                                    
teaching.  She  asked  how the  committee  was  implementing                                                                    
strategies outlined  by the Task  Force. She noted  that all                                                                    
of the money  had been implemented, but  thought many issues                                                                    
remained.                                                                                                                       
                                                                                                                                
Representative Seaton  related that most of  the issues have                                                                    
been  addressed. Representative  Seaton  explained that  the                                                                    
questions were given a written response.                                                                                        
                                                                                                                                
2:55:52 PM                                                                                                                    
                                                                                                                                
Representative Fairclough  requested more  information about                                                                    
a planned committee whose task  it was to address Task Force                                                                    
issues. She offered  to meet at a later date  to discuss it.                                                                    
Representative  Seaton reported  that an  interim commission                                                                    
was drawn up and the members have recently been appointed.                                                                      
                                                                                                                                
2:56:43 PM                                                                                                                    
                                                                                                                                
Representative  Kelly asked  what happens  to the  BSA after                                                                    
the three-year  plan and the meeting  requirements have been                                                                    
met.  He  requested  the  incremental  cost.  Representative                                                                    
Seaton thought  it was  about $17  million, or  1.5 percent,                                                                    
but offered to get back with the exact number.                                                                                  
                                                                                                                                
Representative  Kelly inquired  how  the  carry forward  was                                                                    
reflected on  the $17  million. Representative  Seaton asked                                                                    
if  he  was  referring   to  reducing  the  intensive  needs                                                                    
funding.                                                                                                                        
                                                                                                                                
Representative Kelly  reworded his  question. Representative                                                                    
Seaton  explained that  it is  mostly reflected  in the  1.5                                                                    
percent  increase  to  the   BSA  for  vocational  technical                                                                    
education. He added that education  was seen as an intensive                                                                    
needs  piece  that  was  accomplished.  The  piece  that  is                                                                    
lacking  is  vocational  education.   About  70  percent  of                                                                    
students  will   not  go   through  a   college  curriculum;                                                                    
therefore,  more  efforts  should  be  spent  on  vocational                                                                    
course work.                                                                                                                    
                                                                                                                                
3:00:46 PM                                                                                                                    
                                                                                                                                
PETER   HOEPFNER,  SCHOOL   BOARD  MEMBER,   CORDOVA  SCHOOL                                                                    
DISTRICT  (via   teleconference),  read  a   statement  from                                                                    
Superintendent Jim  Nygaard. The letter emphasized  that the                                                                    
bill  is  critical  to vocational  programs,  staffing,  and                                                                    
equipment  needs in  Cordova.  He spoke  in  support of  the                                                                    
forward funding provided in the bill.                                                                                           
                                                                                                                                
Mr.  Hoepfner  supported the  bill  and  future funding.  It                                                                    
would help  with special needs,  as well as with  the gifted                                                                    
and learning program which has been lost.                                                                                       
                                                                                                                                
3:03:50 PM                                                                                                                    
                                                                                                                                
Vice-Chair Thomas  asked if the  last three  years' increase                                                                    
in BSA has seen any  success in decreasing the dropout rate.                                                                    
Mr. Hoepfner noted that the  dropout rate in Cordova was not                                                                    
very high. He pointed out that  dropouts tend to be the more                                                                    
gifted students  and that may  be due to the  elimination of                                                                    
the Gifted and Talented  Program. He appreciated the funding                                                                    
of computers.                                                                                                                   
                                                                                                                                
3:05:39 PM                                                                                                                    
                                                                                                                                
LON   GARRISON,   PRESIDENT,   SITKA   SCHOOL   BOARD   (via                                                                    
teleconference),  testified in  support  of HB  317 and  the                                                                    
continued good work  of the Education Task  Force. The block                                                                    
grant,  increased BSA,  and  intensive-needs multiplier  are                                                                    
extremely important to Sitka  and other coastal communities.                                                                    
He spoke  of reduced  funding sources  in Sitka  which would                                                                    
have  a  negative  impact on  schools.  He  appreciated  the                                                                    
funding predictability  contained in  HB 317. He  noted that                                                                    
Sitka has  a low drop-out rate  of only 5 percent.  He hoped                                                                    
to  continue  to  engage students  with  the  assistance  of                                                                    
multi-year funding.                                                                                                             
                                                                                                                                
3:08:59 PM                                                                                                                    
                                                                                                                                
KAREN  MARTINSEN, CO-CHAIR,  VOCATIONAL TECHNICAL  EDUCATION                                                                    
PROVIDERS,   SITKA   (via  teleconference),   reminded   the                                                                    
committee that recently the Department  of Education and the                                                                    
Department  of  Labor  have combined  efforts  to  create  a                                                                    
statewide Career  and Technology  Education (CTE)  Plan. She                                                                    
opined that  the bill would begin  to meet the need  to turn                                                                    
around the decline of a  qualified workforce. She emphasized                                                                    
that CTE  is one of  the fourteen best practices  to prevent                                                                    
dropouts. Rural  schools have a  strong network  of regional                                                                    
training centers  throughout the state. She  spoke in strong                                                                    
support of the bill.                                                                                                            
                                                                                                                                
STEVE BRADSHAW,  SUPERINTENDENT, SITKA SCHOOL  DISTRICT (via                                                                    
teleconference),  responded to  the dropout  question. Sitka                                                                    
School District  has been involved  in a  dropout prevention                                                                    
grant, along with Juneau and  Ketchikan, in order to attempt                                                                    
to add  a cultural awareness  piece to the curriculum.  At a                                                                    
meeting with  the Departments of Education,  Justice, Labor,                                                                    
and  Health and  Human  Services in  the Governor's  Office,                                                                    
there   was  discussion   about  how   to  enforce   student                                                                    
attendance. He spoke in support  of the bill and thanked the                                                                    
House  Education Committee  for their  work. He  spoke of  a                                                                    
history of cuts in vocational education.                                                                                        
                                                                                                                                
3:14:43 PM                                                                                                                    
                                                                                                                                
CARL ROSE, EXECUTIVE DIRECTOR,  ASSOCIATION OF ALASKA SCHOOL                                                                    
BOARDS,  spoke  in  support  of   HB  317.  The  operational                                                                    
stability of  school districts depends on  knowing what kind                                                                    
of  funding  there will  be.  There  needs  to be  a  smooth                                                                    
teacher  retention   transition  from   year  to   year.  He                                                                    
responded to the dropout issue  by stating that there are 53                                                                    
school districts  in the  state and  each one  experiences a                                                                    
different   school  climate.   There  is   improved  student                                                                    
performance in  schools where students  feel safe  and cared                                                                    
for.  School  partnerships  with  communities  also  make  a                                                                    
difference. Students  need to be  engaged to  be successful.                                                                    
The Consortium  for Digital  Learning shows  that attendance                                                                    
increases when  students are engaged. Digital  Learning will                                                                    
improve school  achievement. Many school districts  are also                                                                    
offering additional instruction.                                                                                                
                                                                                                                                
Mr. Rose related  that he served on the  Funding Task Force,                                                                    
which addressed  a number  of issues.  The bill  extends the                                                                    
task   force's  work   for  two   years,  addresses   career                                                                    
technology  through the  block grant,  ensures increases  in                                                                    
the  Consumer  Price  Index  (CPI),  but  not  decreases  in                                                                    
transportation, and  is an  opportunity to  increase funding                                                                    
for FY 2012 and FY 2013.                                                                                                        
                                                                                                                                
3:20:40 PM                                                                                                                    
                                                                                                                                
Representative  Doogan asked  if  the BSA  amount the  three                                                                    
previous years  was $100.  Mr. Rose  said that  was correct.                                                                    
Representative  Doogan  requested  an  explanation  for  the                                                                    
necessity  to  increase  that  amount   to  $125.  Mr.  Rose                                                                    
recalled discussion  of that decision. He  thought that $125                                                                    
was an appropriation  amount. He pointed out  that there had                                                                    
not  been an  increase in  the block  grant since  SB 36  in                                                                    
1998.                                                                                                                           
                                                                                                                                
Representative Doogan  wondered if there was  another reason                                                                    
to move from  $100 to $125 for the next  two years. Mr. Rose                                                                    
answered  that the  amount was  $100 per  year the  last two                                                                    
years  and for  the  current year.  It  was recognized  that                                                                    
there are intensive  needs, where actual cost  per child can                                                                    
run  from   $75,000  to  $500,000.  As   costs  continue  to                                                                    
increase, the goal was to try to keep up with those costs.                                                                      
                                                                                                                                
3:23:04 PM                                                                                                                    
                                                                                                                                
Representative Gara  commented on keeping school  funding up                                                                    
with  inflation.  He did  not  feel  obligated to  keep  the                                                                    
funding  at $100  because  the task  force  left the  amount                                                                    
unresolved.  He  spoke  of  an  increase  in  special  needs                                                                    
funding  and in  the  cost differential.  He voiced  concern                                                                    
about schools  not being able to  keep up and having  to dip                                                                    
into other  money. The Anchorage CPI  inflation increase for                                                                    
2008 was  4.6 percent and for  2009 it was 1.2  percent. The                                                                    
last  three-year   average  was  roughly  2.7   percent.  He                                                                    
concluded  that $125  for two  years would  result in  a 2.2                                                                    
percent increase  and not keep  up with inflation.  He asked                                                                    
Mr. Rose to comment.                                                                                                            
                                                                                                                                
Mr. Rose replied  that there is concern  about inflation and                                                                    
there  has been  talk of  inflation-proofing the  foundation                                                                    
formula and transportation.                                                                                                     
                                                                                                                                
Representative Gara reported  that schools received benefits                                                                    
the last two years in the  form of special needs funding and                                                                    
area  cost  differential.  He  asked   if  his  analysis  of                                                                    
inflation was correct and if  special needs funding and cost                                                                    
differential funding would be used to combat inflation.                                                                         
                                                                                                                                
Mr. Rose  responded that regular instruction  funds would be                                                                    
used to  cover special  needs programs, which  are mandated.                                                                    
The  students who  generate  the majority  of  the money  in                                                                    
regular  instruction  are  supplementing  the  rest  of  the                                                                    
budget. With  the increase in  the block grant and  with the                                                                    
Letter  of  Intent  that  looks   at  career  and  technical                                                                    
education,  special   education  will   still  need   to  be                                                                    
subsidized. There are unmet needs  everywhere. He saw HB 317                                                                    
as a means of being able to plan ahead.                                                                                         
                                                                                                                                
Representative  Gara asked  if  Mr. Rose  could recommend  a                                                                    
number   that   would  prevent   the   need   to  dip   into                                                                    
instructional costs. Mr. Rose said he could not.                                                                                
                                                                                                                                
3:28:57 PM                                                                                                                    
                                                                                                                                
MARY    FRANCIS,   EXECUTIVE    DIRECTOR,   ALASKA    SCHOOL                                                                    
ADMINISTRATORS ASSOCIATION  (ASAA), recalled  her experience                                                                    
as a  former superintendent and praised  forward funding for                                                                    
school  districts.  She said  she  represents  a group  that                                                                    
supports  HB 317.  She mentioned  that the  additional money                                                                    
for  Career and  Vocational  Education is  much needed.  The                                                                    
Alaska  Staff Network,  a division  of ASAA,  offers dropout                                                                    
preventions  symposiums throughout  the year.  She spoke  in                                                                    
support of the bill.                                                                                                            
                                                                                                                                
Representative  Gara  asked  Ms.  Francis  if  she  has  any                                                                    
concern about the level of the  BSA proposed in the bill not                                                                    
keeping  up  with  inflation. Ms.  Francis  shared  concerns                                                                    
about  keeping  up with  inflation  and  stated support  for                                                                    
inflation-proofing the BSA.                                                                                                     
                                                                                                                                
3:31:21 PM                                                                                                                    
                                                                                                                                
ANDI STORY,  VICE PRESIDENT, JUNEAU SCHOOL  BOARD, testified                                                                    
on behalf  of the board and  in support of HB  317. The bill                                                                    
helps schools plan efficient budgets,  lays out a foundation                                                                    
of  stability, and  maximizes  resources  for students.  She                                                                    
spoke of  the difficulties  small districts  experience when                                                                    
they are not able to plan  ahead. She pointed out that it is                                                                    
important  to   remember  that  the  block   grant  has  not                                                                    
increased since 1998. She shared  information about the four                                                                    
levels covered  by the  block grant.  There is  an increased                                                                    
need for a highly skilled  workforce in Alaska at this time.                                                                    
She  informed the  committee that  Juneau's graduation  rate                                                                    
has increased to  77 percent, an increase of  7 percent. She                                                                    
spoke in strong support of  the bill because it will benefit                                                                    
students every day.                                                                                                             
                                                                                                                                
3:35:33 PM                                                                                                                    
                                                                                                                                
DAVE  JONES,   ASSISTANT  SUPERINTENDENT,   KENAI  PENINSULA                                                                    
BOROUGH  SCHOOL  DISTRICT,  testified   in  support  of  the                                                                    
forward  funding   provided  in  HB  317.   He  thanked  the                                                                    
committee for  forward funding in the  three previous years,                                                                    
which  enabled  the  Kenai  Schools  to  have  a  long-range                                                                    
educational plan called  Programmatic Staffing. This program                                                                    
increased  staffing  in  targeted  areas with  the  goal  of                                                                    
improving  the graduation  rate. At  Monday's board  meeting                                                                    
non-tenured  contracts will  be issued  - the  earliest date                                                                    
ever in the Kenai District.                                                                                                     
                                                                                                                                
Co-Chair Stoltze asked what the  tenure length is. Mr. Jones                                                                    
replied that it  was three years and one day.  He added that                                                                    
HB  317  would allow  the  district  to  move along  in  the                                                                    
program and  continue to improve  in the areas  targeted. He                                                                    
noted  that federal  health care  reform will  have a  major                                                                    
affect on school board budgets.                                                                                                 
                                                                                                                                
3:40:42 PM                                                                                                                    
                                                                                                                                
Representative Doogan  observed that  there would  have been                                                                    
no  problems with  pink slips  for non-tenured  teachers, if                                                                    
people  had  supported  a  previous  bill  that  would  have                                                                    
changed school funding deadlines.                                                                                               
                                                                                                                                
3:41:55 PM                                                                                                                    
                                                                                                                                
AMY LUJAN, EXECUTIVE DIRECTOR,  ALASKA ASSOCIATION OF SCHOOL                                                                    
BUSINESS  OFFICIALS, testified  in support  of past  forward                                                                    
funding for  schools. She shared  her experience  with being                                                                    
able to  plan budgets  in schools.  Adding certainty  to the                                                                    
funding process  helps schools lessen the  dropout rate. She                                                                    
spoke in support of HB 317.                                                                                                     
                                                                                                                                
EDDY  JEANS,  DIRECTOR,   SCHOOL  FINANCES  AND  FACILITIES,                                                                    
DEPARTMENT  OF EDUCATION  AND EARLY  DEVELOPMENT, introduced                                                                    
himself. He took questions to be answered at a later date.                                                                      
                                                                                                                                
Representative  Kelly wanted  information  about the  higher                                                                    
education CPI.                                                                                                                  
                                                                                                                                
Representative  Joule  wanted  to  hear why  Alaska  is  not                                                                    
participating in the Race for the Top.                                                                                          
                                                                                                                                
Representative   Kelly  requested   information  on   school                                                                    
graduation rates.                                                                                                               
                                                                                                                                
Representative Gara  asked for  statistics on  inflation and                                                                    
how BSA might meet inflation increases.                                                                                         
                                                                                                                                
Mr.   Jeans  replied   that  the   only  component   in  the                                                                    
department's budget  that is adjusted  for inflation  is the                                                                    
Pupil Transportation Grant program,  which uses a three-year                                                                    
average.                                                                                                                        
                                                                                                                                
3:47:01 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Thomas inquired  if  there was  anything in  the                                                                    
bill which  addresses the Moore  vs. Alaska case.  Mr. Jeans                                                                    
reported  that there  would be  a Joint  Education Committee                                                                    
meeting to present the department's side of the Moore case.                                                                     
                                                                                                                                
HB  317  was  HEARD  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
3:48:44 PM