03/15/2010 08:00 AM House EDUCATION

                                                                                                                                
              HB 413-YOUTH ACADEMY FUNDING/REPORT                                                                           
                                                                                                                                
8:28:34 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON announced  that the next order of  business would be                                                               
HOUSE  BILL NO.  413, "An  Act relating  to the  Alaska Challenge                                                               
Youth Academy."                                                                                                                 
                                                                                                                                
8:28:49 AM                                                                                                                    
                                                                                                                                
KATIE KOESTER,  Staff, Representative  Paul Seaton,  Alaska State                                                               
Legislature,  paraphrasing  from  a prepared  sponsor  statement,                                                               
which read as follows [original punctuation provided]:                                                                          
                                                                                                                                
     The  Alaska Challenge  Youth Academy  is a  residential                                                                    
     high  school  for  students who  have  dropped  out  of                                                                    
     regular school.  The Academy  is highly successful with                                                                    
     a  70%  graduation  rate and  works  closely  with  the                                                                    
     National  Guard following  a  strict  model that  gives                                                                    
     students  structure, challenge,  and  discipline.   The                                                                    
     Academy is located in Anchorage  and has two sessions a                                                                    
     year where students  live on campus for  5 months while                                                                    
     going  through  the  rigorous   program.    After  they                                                                    
     graduate  from the  program, staff  continues to  track                                                                    
     their behavior  through a mentorship  program. Students                                                                    
     are  considered a  success if  a year  after graduation                                                                    
     they  are  enrolled  in a  postsecondary  program,  the                                                                    
     military, or in full time employment.                                                                                      
                                                                                                                                
     Funding  for   the  Academy  is  based   the  following                                                                    
     formula:  7 times  the  Base  Student Allocation  (BSA)                                                                    
     times all  residential students plus  .6 times  the BSA                                                                    
     times all non-residential students.   When this formula                                                                    
     was constructed  in 2002 it reflected  the dollars they                                                                    
     needed to operate.  However,  as the BSA has grown over                                                                    
     the  years   to  cover   retirement  costs   and  other                                                                    
     increases in education this has  resulted in a windfall                                                                    
     and is  no longer  reflective of the  true cost  of the                                                                    
     program.                                                                                                                   
                                                                                                                                
     HB 413 would  set a per child amount  for state dollars                                                                    
     in statute, $11,990 and multiply  that by the number of                                                                    
     residential  and   non-residential  students  enrolled.                                                                    
     The Academy  and the Department of  Education and Early                                                                    
     Development both agree this  would give them sufficient                                                                    
     dollars  to  run  the  program.     Under  HB  413  the                                                                    
     projected  total state  dollars they  would receive  in                                                                    
     fiscal year  2011 would be approximately  $5.2 million,                                                                    
     within  $300 of  the amount  they would  get under  the                                                                    
     current formula.   Alaska  Military Youth  Academy also                                                                    
     receives  separate federal  funds that  supplement this                                                                    
     amount ($2.7 million for FY2011).                                                                                          
                                                                                                                                
     The  Academy is  a valuable  alternative that  requires                                                                    
     higher  funding as  a residential  program for  at-risk                                                                    
     youth than  other boarding schools.   HB 413 identifies                                                                    
     an  appropriate  and  transparent   way  to  fund  this                                                                    
     important educational institution.                                                                                       
                                                                                                                                
8:30:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MUNOZ asked whether  the allocation for the Alaska                                                               
Military Youth Academy (Academy) would  be adjusted if the BSA is                                                               
adjusted in the future.                                                                                                         
                                                                                                                                
MS. KOESTER  answered that the  legislature would need  to change                                                               
statute if the BSA rate is adjusted.                                                                                            
                                                                                                                                
8:31:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER  recalled the legislature has  been trying                                                               
to avoid  "locking in" rates  in other  bills and works  to allow                                                               
flexibility for  funding changes.   She asked  how the  figure of                                                               
$11,990 was determined.                                                                                                         
                                                                                                                                
MS. KOESTER  responded that the  figure was based on  seven times                                                               
the BSA for  FY 11 and divided  by the number of  students at the                                                               
Academy.                                                                                                                        
                                                                                                                                
8:32:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MUNOZ  for  the  reason that  statute  change  is                                                               
necessary if the $11,990 is close to the BSA amount.                                                                            
                                                                                                                                
MS. KOESTER replied  that establishing a fixed  number is statute                                                               
is  more   reflective  of  the  actual   services  received,  but                                                               
maintains the  allocation through  the foundation  formula, which                                                               
allows for automatic contributions from the department.                                                                         
                                                                                                                                
8:33:25 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  added that  the question which  has arisen  is that                                                               
the base student allocation increases  and the academy receives a                                                               
seven  times multiplier  to calculate  the state's  contribution.                                                               
Additionally,  the  program  receives  a  substantial  amount  of                                                               
federal funding.  He explained the  desire to keep the program in                                                               
the realm of education instead of  moving it to the Department of                                                               
Military & Veterans' Affairs.   This maintains the program in the                                                               
Department of Education and Early Development.                                                                                  
                                                                                                                                
8:35:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BUCH asked  how  many  times funding  adjustments                                                               
have been requested for this program.                                                                                           
                                                                                                                                
MS. KOESTER answered  that since the inception of  the program in                                                               
2002, that this is the first  request for a funding adjustment to                                                               
the program.                                                                                                                    
                                                                                                                                
8:36:14 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON opened public testimony on HB 413.                                                                                 
                                                                                                                                
8:36:20 AM                                                                                                                    
                                                                                                                                
MCHUGH  PIERRE, Deputy  Commissioner, Chief  of Staff,  Office of                                                               
the  Commissioner/Adjutant  General,  Department  of  Military  &                                                               
Veterans' Affairs (DMVA),  said HB 413 is a priority  of the DMVA                                                               
and the department supports this  bill.  The AMYA was established                                                               
in 1996 and the formula  for the current funding structure, seven                                                               
times  the  BSA, was  established  in  2002.   He  reported  that                                                               
previously  40 to  50 cadets  graduated  per class  and with  the                                                               
funding formula increase the number  of cadets increased to about                                                               
100 cadets per class.   Due to the $2500 increase  in the BSA the                                                               
DMVA received  a substantial increase  and it has  become evident                                                               
that the  amount received  from the  state was  in excess  of the                                                               
need.   He  stated the  department supports  the change  the bill                                                               
makes.  The  bill would "freeze" the $11,990  per student figure.                                                               
He offered his  belief that if the AMYA  needs additional funding                                                               
the legislature will  respond appropriately.  He  stated that the                                                               
BSA was increased to cover  some of the Teacher Retirement System                                                               
(TRS) obligation.  The DMVA decided  to offset some of the Public                                                               
Employee  Retirement System  (PERS) costs.   While  the DMVA  has                                                               
used  the  funding  appropriately, sufficient  funding  has  been                                                               
received  to meet  cadet needs.   He  explained that  the federal                                                               
funding is provided based on  benchmarks.  He anticipated federal                                                               
funding will  continue to  increase as the  program expands.   He                                                               
reported  that the  AMYA  is  one of  the  best  programs in  the                                                               
nation, in part, due to the state contributions to the program.                                                                 
                                                                                                                                
8:39:29 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BUCH  asked for the  number of times  between 1996                                                               
and 2002  that the DMVA has  asked for funding increases  for the                                                               
AMYA.                                                                                                                           
                                                                                                                                
MR. PIERRE  indicated that he  was not  certain.  He  stated that                                                               
any  department requests  for additional  funding have  been made                                                               
based on an increase the number of cadets in the program.                                                                       
                                                                                                                                
MR. JEANS clarified  that HB 413 would remove the  direct link to                                                               
the  BSA and  place  a "per  student" amount  in  statute in  the                                                               
amount of  $11,990.  He said  that the AMYA will  need to justify                                                               
further increase requests.                                                                                                      
                                                                                                                                
8:41:10 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MUNOZ asked how the  funding for the AMYA compares                                                               
to  other  residential programs,  such  as  Mount Edgecumbe  High                                                               
School.                                                                                                                         
                                                                                                                                
MR. JEANS  responded that it  is comparable overall.   He offered                                                               
that the AMYA has a  component that other residential programs do                                                               
not  currently  have, which  is  the  "student tracking"  for  an                                                               
additional year.                                                                                                                
                                                                                                                                
CHAIR SEATON  asked whether he  was indicating the  state funding                                                               
or the federal funding for the AMYA.                                                                                            
                                                                                                                                
MR. JEANS clarified that the  state funding is comparable to what                                                               
is provided for Mt. Edgecumbe,  Nenana Academy of Higher Learning                                                               
(NAHL) and Galena Interior Learning Academy (GILA).                                                                             
                                                                                                                                
8:42:07 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER asked for  clarification on whether Nenana                                                               
and Galena also receive federal funding.                                                                                        
                                                                                                                                
MR. JEANS answered  no, they do not.  He  explained that Nenana's                                                               
NAHL and Galena's GILA obtain  their educational funding from the                                                               
foundation program.   Several years  ago, the  legislature passed                                                               
"boarding   school  funding"   so   the   schools  receive   some                                                               
residential funding.   Mt. Edgecumbe  High School is  operated by                                                               
the  state   and  receives  instructional  funding   through  the                                                               
foundation program and their residential  component is within the                                                               
Department of Education and Early Development (DEED).                                                                           
                                                                                                                                
8:42:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER  asked for  the rationale for  funding the                                                               
AMYA differently than the other programs in the state.                                                                          
                                                                                                                                
MR.  JEANS explained  that the  AMYA is  not part  of the  public                                                               
school system,  but is operated by  the DMVA.  In  2002, the DMVA                                                               
asked for a funding formula to  support them in a fashion similar                                                               
to  public schools,  including the  residential  facilities.   At                                                               
that time  the DEED  developed the formula  and increases  to the                                                               
BSA were targeted  for specific reasons.  The  big increases came                                                               
from the  increases to  the PERS  and Teachers  Retirement System                                                               
(TRS) contributions.   The  TRS increased at  a rate  much higher                                                               
than the  PERS rate.   Thus,  increases in the  BSA were  made to                                                               
help districts offset  the additional costs.   The DMVA employees                                                               
are PERS employees  so their rate of  contribution was increasing                                                               
at a  smaller rate.  This  did not necessarily equate  to needing                                                               
seven times BSA multiplier each time  the BSA was increased..  He                                                               
noted that the AMYA funding has  been highlighted for a number of                                                               
years during the  budget process and the funding  for the program                                                               
contained in HB 413 is a "little simpler" method.                                                                               
                                                                                                                                
8:44:46 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BUCH   inquired  as   to  whether   the  tracking                                                               
mechanism of students is a useful tool for the DMVA.                                                                            
                                                                                                                                
MR. JEANS answered yes.                                                                                                         
                                                                                                                                
REPRESENTATIVE BUCH related  that post-graduation information has                                                               
been identified  as valuable information.   He asked  whether the                                                               
legislature  might  consider  expanding  the  tracking  to  other                                                               
student programs in the future.                                                                                                 
                                                                                                                                
8:45:38 AM                                                                                                                    
                                                                                                                                
MR.  JEANS stated  that  the unique  student  identifier in  K-12                                                               
education  will   become  a  means  for   tracking  throughout  a                                                               
student's career,  including trend analysis.   He stated  that it                                                               
may also apply to pre-Kindergarten programs, as well.                                                                           
                                                                                                                                
8:46:42 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON, after  first  determining no  one  else wished  to                                                               
testify, closed public testimony on HB 413.                                                                                     
                                                                                                                                
8:47:00 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MUNOZ moved  to report  HB 413  out of  committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.   There being no objection,  HB 413 was reported  from the                                                               
House Education Standing Committee.