02/27/2009 09:00 AM Senate FINANCE

SENATE BILL NO. 57                                                                                                            
                                                                                                                                
     "An Act relating to charter school funding."                                                                               
                                                                                                                                
9:17:10 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  indicated that there has  been interest in                                                                    
a potential amendment for the legislation.                                                                                      
                                                                                                                                
SENATOR JOE THOMAS, SPONSOR,  explained that the legislation                                                                    
would support  school choice  and do  away with  the charter                                                                    
school  penalty.  Under  the existing  school  funding  law,                                                                    
charter schools that enroll fewer  than 150 students receive                                                                    
30  to 45  percent  less state  funding  than similar  sized                                                                    
neighborhood schools.                                                                                                           
                                                                                                                                
Senator Thomas  pointed to  two handouts,  "The Role  of the                                                                    
'Adjusted  Student Count'  in School  Funding" and  "Example                                                                    
Adjusted Student  Count Calculations" (Copies on  File) that                                                                    
help break  down the  complex formula.  There is  a dramatic                                                                    
decrease  in funding,  around $500,000  to $700,000,  when a                                                                    
charter  school's enrollment  drops even  one student  below                                                                    
150.  The count  period  is  the majority  of  the month  of                                                                    
October; even  if a  school surpasses the  150 limit  by the                                                                    
end  of the  count period,  the  count used  is the  average                                                                    
taken over the count period.                                                                                                    
                                                                                                                                
Senator Thomas reported that the  root of the problem is the                                                                    
way the foundation formula  calculates the "adjusted student                                                                    
count"  for  charter  schools versus  neighborhood  schools.                                                                    
Almost all  regular schools  have their  enrollment adjusted                                                                    
upward  by  a  formula;  a different  formula  that  adjusts                                                                    
downward  is  used by  charter  schools.  The multiplier  is                                                                    
explained  on the  handout "Example  Adjusted Student  Count                                                                    
Calculations."  The process  provides too  little money  for                                                                    
charter schools to survive.                                                                                                     
                                                                                                                                
Senator Thomas  explained that SB  57 funds  charter schools                                                                    
with fewer  than 150 students  at the same per  student rate                                                                    
as a neighborhood school with  400 students. Charter schools                                                                    
have to be significantly  more efficient than other schools,                                                                    
but  the funding  level  is manageable.  He  added that  the                                                                    
legislation contains a one-year  hold harmless provision for                                                                    
charter  schools that  are  either in  their  first year  of                                                                    
operation or  had more than  150 students one year  and then                                                                    
subsequently  dropped  below   that  number.  The  provision                                                                    
reduces  the  financial  harm  to   the  district  from  the                                                                    
unexpected decrease  in their student count  adjustment. The                                                                    
bill  is  supported  by the  Alaska  Association  of  School                                                                    
Boards. Many  superintendents have  testified in  support of                                                                    
the  legislation. He  listed other  sponsors and  noted wide                                                                    
support by legislators.                                                                                                         
                                                                                                                                
9:21:38 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  asked for more information  about the 1.18                                                                    
multiplier.  Senator  Thomas  replied that  there  had  been                                                                    
discussions  previously considering  a  range  from 1.08  to                                                                    
1.27. The  number selected is  a compromise between  the two                                                                    
numbers.                                                                                                                        
                                                                                                                                
Senator  Huggins asked  the number  of charter  schools that                                                                    
are  affected. He  pointed  out that  some  schools are  not                                                                    
going  to  get  bigger  than 150  students.  Senator  Thomas                                                                    
answered that  there are  four schools in  the state  at the                                                                    
borderline count;  those schools  numbers were  not expected                                                                    
to change dramatically.                                                                                                         
                                                                                                                                
Senator Elton acknowledged Senator  Huggins' role in solving                                                                    
the funding issue on an annual basis in the past.                                                                               
                                                                                                                                
9:24:20 AM                                                                                                                    
                                                                                                                                
EDDY   JEANS,  DIRECTOR,   SCHOOL  FINANCE   AND  FACILITIES                                                                    
SECTION,  DEPARTMENT  OF  EDUCATION  AND  EARLY  DEVELOPMENT                                                                    
(DEED),  reported that  the  legislation  would affect  four                                                                    
charter schools.                                                                                                                
                                                                                                                                
Mr. Jeans  said the  formula number 1.18  was arrived  at by                                                                    
running a school of 400  through the formula and dividing it                                                                    
by the adjusted  daily membership (ADM). He  referred to the                                                                    
fiscal note for  $714,300 to cover the  charter schools that                                                                    
need stable funding.                                                                                                            
                                                                                                                                
Co-Chair Stedman  asked for the  names of the  four schools.                                                                    
Mr. Jeans listed the schools:                                                                                                   
                                                                                                                                
   • Effie Kokrine Charter School, Fairbanks                                                                                  
   • Juneau Community Charter School                                                                                          
   • Fireweed Academy, Home                                                                                                   
   • Anvil City Science Academy, Nome                                                                                         
                                                                                                                                
Co-Chair Stedman queried the position of      on         the                                                                    
legislation. Mr.  Jeans answered  that DEED was  neutral. He                                                                    
stated that from  his point of view as  Finance Director, it                                                                    
made good sense.                                                                                                                
                                                                                                                                
9:27:04 AM                                                                                                                    
                                                                                                                                
Senator Huggins  told the committee that  losing one student                                                                    
could  cost  a  charter  school  hundreds  of  thousands  of                                                                    
dollars.  He  called  the  previous  measure  draconian.  He                                                                    
thought the proposed legislation was a prudent approach.                                                                        
                                                                                                                                
Co-Chair Stedman opened public testimony.                                                                                       
                                                                                                                                
SAMUEL  SHIELDS, BOARD  MEMBER,  AYAPRUN ELITNAURVIK  SCHOOL                                                                    
BOARD,   AND  VICE-CHAIR,   BETHEL   SCHOOL  BOARD,   BETHEL                                                                    
(testified  via teleconference),  spoke  in  support of  the                                                                    
legislation. He reported that the  Bethel school at one time                                                                    
had  dipped  to   a  149  student  count,   resulting  in  a                                                                    
substantial decrease in funding.  He witnessed the affect of                                                                    
the decrease on the school.  The school was able to recover;                                                                    
current enrollment  is approximately 180  students. However,                                                                    
there are only 6,000 people in Bethel.                                                                                          
                                                                                                                                
9:30:20 AM                                                                                                                    
                                                                                                                                
MIKE FISHER,  CHIEF FINANCIAL OFFICER, FAIRBANKS  NORTH STAR                                                                    
SCHOOL  DISTRICT (testified  via  teleconference), spoke  in                                                                    
support of the legislation. The  district is keenly aware of                                                                    
how  the bill  will help  charter schools  provide important                                                                    
educational  choices for  families. Fairbanks  currently has                                                                    
three charter  schools, with a  new one starting  next year.                                                                    
Two of the operating schools  and the new school have target                                                                    
enrollments  of about  155 students.  This year  one of  the                                                                    
schools just  missed the average  daily membership  over the                                                                    
count  period,  even  though  over  150  students  ended  up                                                                    
enrolling, which  cost the district  around $680,000  out of                                                                    
an  expected $1.4  million budget.  He said  the bill  would                                                                    
help address the catastrophic impact  of a school failing to                                                                    
meet the count threshold.  He thought the funding compromise                                                                    
was  fair  and provided  incentive  for  schools to  get  to                                                                    
targeted enrollments.                                                                                                           
                                                                                                                                
JANET STOKESBURY, CHIEF  FINANCIAL OFFICER, ANCHORAGE SCHOOL                                                                    
DISTRICT  (testified via  teleconference), spoke  in support                                                                    
of the legislation. The district  views the bill as ensuring                                                                    
stability for charter schools. They  also supported the one-                                                                    
year held harmless provision.                                                                                                   
                                                                                                                                
9:33:13 AM                                                                                                                    
                                                                                                                                
SHANNA   MALL,   PRINCIPAL,  WINTERBERRY   CHARTER   SCHOOL,                                                                    
ANCHORAGE (testified  via teleconference), spoke  in support                                                                    
of the  bill. She  relayed the  difficult experience  of the                                                                    
school falling  below the cutoff  number. People  worked 90-                                                                    
day  weeks  without pay  and  the  community took  risks  to                                                                    
support the school. Staff was  severely cut and a deficit of                                                                    
$180,000 was carried over to  the next year. The program and                                                                    
children's safety were compromised.                                                                                             
                                                                                                                                
9:35:44 AM                                                                                                                    
                                                                                                                                
BRENDA TAYLOR,  PARENT, AND PRESIDENT,  ACCREDITATION POLICY                                                                    
COUNCIL, JUNEAU COMMUNITY  CHARTER SCHOOL, JUNEAU, testified                                                                    
in support of  the legislation. She thought  the bill solves                                                                    
many of  the concerns  of charter  schools. She  stated that                                                                    
the Juneau school district supports  the bill and the Juneau                                                                    
charter  school, but  does not  want the  charter school  to                                                                    
have  enrollment  over 150  because  of  negative impact  on                                                                    
other schools.  The Juneau charter  school will  not survive                                                                    
without  additional  funds.  They  are unable  to  make  the                                                                    
school  accessible to  more families  due to  transportation                                                                    
limitations.                                                                                                                    
                                                                                                                                
Co-Chair Stedman  acknowledged the  presence of  15 students                                                                    
observing online in Homer.                                                                                                      
                                                                                                                                
9:38:29 AM                                                                                                                    
                                                                                                                                
KIKI ABRAHAMSON,  TEACHER, FIREWEED ACADEMY,  AND PRESIDENT,                                                                    
ALASKA  CHARTER  SCHOOL  ASSOCIATION, HOMER  (testified  via                                                                    
teleconference),   spoke  in   support  of   the  bill   and                                                                    
introduced her  students, who gave  a cheer for  the finance                                                                    
committee.                                                                                                                      
                                                                                                                                
Ms.  Abrahamson expressed  concerns  of  the charter  school                                                                    
association about public perception of  SB 57 in the current                                                                    
economic  climate. She  stressed  that the  bill  was not  a                                                                    
request for add-on  funding, but a request to  fix a statute                                                                    
that has  handicapped the  development of  innovative public                                                                    
charter  schools in  Alaska  and  has discriminated  against                                                                    
schools of choice  in small and rural  communities. In 1992,                                                                    
the first charter  school opened in St.  Paul, Minnesota; 16                                                                    
years later there are over  4500 schools serving 1.3 million                                                                    
students in 40 states.                                                                                                          
                                                                                                                                
9:41:05 AM                                                                                                                    
                                                                                                                                
TODD  HINDMAN, LEAD  TEACHER,  ANVIL  CITY SCIENCE  ACADEMY,                                                                    
NOME  (testified via  teleconference), spoke  in support  of                                                                    
the legislation  on behalf of the  Academic Policy Committee                                                                    
of Anvil  City Science  Academy (ACSA)  and the  Nome Public                                                                    
School Board of  Education. He stated that  a larger charter                                                                    
school  could  have  an  adverse   affect  on  other  public                                                                    
schools.   He  felt the  small size  of ACSA  is one  of its                                                                    
strengths.   Students   have   a  more   flexible   learning                                                                    
experience  and   are  more   closely  connected   with  the                                                                    
community.                                                                                                                      
                                                                                                                                
Co-Chair Stedman closed public testimony.                                                                                       
                                                                                                                                
Senator  Huggins noted  that the  challenge the  legislation                                                                    
was  addressing was  not just  financial. The  ripple effect                                                                    
through  a school  district when  the count  goes below  the                                                                    
cutoff is dramatic. He pointed  out that alternative schools                                                                    
have the same challenge.                                                                                                        
                                                                                                                                
Co-Chair Stedman referred to an amendment being formed.                                                                         
                                                                                                                                
SB  57  was   HEARD  and  HELD  in   Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
9:45:06 AM