Legislature(2017 - 2018)BUTROVICH 205
03/26/2018 08:00 AM Senate EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearings: Professional Teaching Practices Commission | |
| SB216 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | SB 216 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 216-SCHOOL FUNDING FOR CONSOLIDATED SCHOOLS
8:14:09 AM
CHAIR STEVENS announced the consideration of SB 216 and stated
his intention to hear and hold the bill.
8:15:46 AM
SENATOR VON IMHOF, Alaska State Legislature, sponsor of SB 216
said that when she served on the Anchorage School District
board, they did a consolidation study of the 60 elementary
schools. When they looked at consolidating schools with excess
capacity with nearby schools, they saw the cost savings was not
there because of the school size cost factor. The calculation
would go down as a school's average daily membership went up.
Districts who may want to consolidate schools find that any
savings through reduced labor and operating costs are offset
through the reduced income a district receives when students are
absorbed into a larger school due to the drop in the school size
factor calculation.
8:17:12 AM
SENATOR VON IMHOF said the Anchorage School District abandoned
the idea at that point. This fall Anchorage did a comprehensive
presentation to the legislature. One topic proposed was a step
down or hold harmless for a few years to allow the district to
keep revenue at the same level for a period of time, allowing
for the district to plan for school consolidation without a
sudden drop in what may be hundreds of thousands of dollars if
not millions for a particular school. They studied the issue,
working with many senators and school districts, and found a
compromise that allows for districts that want to consolidate to
maintain their school size cost factor for the two schools for
two full years and then the third year it will be 66 percent of
the original cost. The fourth year will be 33 percent and for
the fifth year, it will be the new school size cost factor.
8:18:35 AM
SENATOR VON IMHOF said the goal of the bill in this time of
budge reductions and revenue deficits is to encourage districts
to utilize existing infrastructure. The legislature suspended
the reimbursement factor to maintenance and upgrades and even
building new schools. That's another hardship districts are
facing. They are trying to find ways to utilize existing
infrastructure to its highest capacity.
8:19:33 AM
JONATHAN KING, Staff, Senator Natasha von Imhof, Alaska State
Legislature, presented SB 216. He drew the committee's attention
to the Alaska's School Size Factor Adjustment AS 14.17.150 (a)
chart in his presentation. The issue is that as a school's
average daily membership goes up, the value of students goes
down in terms of the state funding formula. At a small school,
one student can be worth twice as much or even four times as
much as a student in a very large school. If districts combine
two schools or redistribute students to other schools, that
brings the average daily membership in the other schools up.
Those students count less for funding.
8:21:02 AM
MR. KING presented a slide that showed the distribution of all
the schools in Anchorage with the following caption:
A school district is evaluating whether to combine the
two schools in green on the left to create a single
school in an existing building. The smaller schools
have a combined population of 1,533 students with
individual School Factor between 1.05 and 1.06.
Combined state aid excluding intensives is $11.8M per
year. When combined, the red dot, the school factor
drops to 0.95 and state aid is $10.6M; a 10% drop in
funding. In addition, the district would lose up to
$0.27M in local funding match. Unless the savings of
combining schools is greater than $1.47M there's a net
operational loss to the district associated with
consolidating.
He said the district receives less in this scenario on the
presumption that it costs less to run one school than two. The
hurdle to save with consolidation is $1.47 million. The
districts say they save by reducing some support staff and a
principal. They still need all the teachers. The operating costs
are less, but their buses need to drive farther because they are
serving a larger area. Districts have said their savings are
less than what they lose in funding. It is a net loss. The
intent is to provide a transition between pre-consolidation and
post-consolidation over the course of four years. That gives the
districts time to find the efficiencies necessary for cost
savings.
8:24:09 AM
MR. KING spoke to what the bill does:
Section 1 removes a disincentive to school
consolidation:
• Four-year transition period for consolidating
schools
• Years 1 and 2 preserve 100% pre-consolidation per
student funding
• Year 3 provides standard funding plus 66% of
pre/post difference
• Year 4 provides standard funding plus 33% of
pre/post difference
• After Year 4 provide standard funding per AS
14.17.410.
In addition, Section 1 includes a number of provisions
designed to put sideboards around districts' abilities
to take inappropriate advantage of the consolidation
transition.
MR. KING pointed out that there are no intrinsic changes to the
school funding formula itself. They are creating a new
subsection within statute that would allow school districts to
take advantage of consolidation in a transitional manner.
8:26:01 AM
SENATOR VON IMHOF said schools cannot be consolidated more than
once in five years. Districts cannot consolidate and then
unconsolidate and then consolidate and then unconsolidate in
order to get this increased rate. That is an example of a
sideboard.
8:26:25 AM
MR. KING spoke to what the bill does not do:
Section 1
The Bill does not:
• Change the school size formula (AS 14.17.450);
• Change state aid calculations (AS 14.17.410) for
any school or district that is not involved in a
consolidation;
• Encourage districts to close schools in single
school communities;
• Encourage districts to build new schools for the
purposes of consolidating existing schools;
• Allow schools to reopen and reconsolidate schools
in order to take inappropriate advantage of the
consolidation transition.
8:27:39 AM
MR. KING spoke to what the bill does:
Section 2 provides an incentive for single community
schools to fully utilize the capacity of K-12 school
buildings in rural Alaska.
• Corrects a provision in AS 14.17.905 where
communities with a single K-12 schools lose
funding when their average daily membership (ADM)
exceeds 425 even when the facility's capacity
exceeds 425.
Under the current provision, schools in this
circumstance are treated as 2 facilities when their
ADM is 425 and below, but when they reach 426 they are
treated at one facility for funding purposes. This
switch lowers state aid by hundreds of thousands of
dollars and could increase the incentive to build
another facility to recapture lost funding.
8:28:56 AM
SENATOR VON IMHOF said that during their research for this bill,
they ran across a community in this situation, which is why they
brought up this section. The purpose is to disincentivize the
community to build another school. This community and
potentially others like it do have capacity above 425, but this
bill shines a light on this issue. It will behoove the state to
continue funding at the lower size of 425 rather than build
another school. The school that is there now is fine and has
capacity.
8:30:08 AM
SENATOR HUGHES asked if there are any communities where they
have K-12 separated because if they are in one building they
would exceed 425. In other words, could this provision help a
community decide to consolidate K-12 under one roof.
8:30:31 AM
SENATOR VON IMHOF said that is possible if one school has the
capacity to hold all the students. This bill has the sideboards
where a new school cannot necessarily be built. The question
remains whether a new wing could be built. As communities
reassess their situation, they will look at unique circumstances
to come up with good solutions.
8:31:08 AM
CHAIR STEVENS said Alaska has its ups and downs. He asked what
would happens if there were a sudden increase in population. He
asked if closed schools can be reengaged and what happens to
closed schools.
8:31:45 AM
SENATOR VON IMHOF said, to answer the second question first,
each school will have its own unique story. Depending on how old
the school is, where it is located, a school might be given to a
charter school, it might be demolished and repurposed to a
developer to build houses in a neighborhood. A school could be
leased out. Any and all of those options are available. The
district, the board, and building committee will decide that. If
there is a significant uptick in population, that is a new set
of issues to address at that time. The question is will the bill
create unintended consequences where they lack the ability to
accommodate students. They don't know where the population will
settle. Each community will have its own story and its own way
to fix that. Maybe at that point they would so flush with cash
they can build a new school.
8:34:16 AM
SENATOR HUGHES referred to the scenario where the district would
lose $1.47 million by consolidating two schools. That abrupt
loss would be difficult to handle and there would be additional
busing costs, so there would be no net saving to the district.
She asked, to play devil's advocate, how the district would be
better able to handle the loss in the fourth year than in the
first year.
8:35:44 AM
MR. KING said that is a question they hoped invited testifiers
would be able to address. The genesis of the bill came from
school districts. The structure reflects what they proposed to
them. Yes, they will have to find additional efficiencies. There
is no guarantee that by year four or five that school districts
will not be in a net loss position. They are trying to give them
a reasonable certainty that they can attempt a transition. The
districts will have to find those savings. It will be an
individual district decision to do the calculation and decide if
it makes sense.
8:37:10 AM
SENATOR HUGHES said she wants this to work and wants to provide
the chance. She looks forward to hearing from testifiers that
they can do this.
8:37:39 AM
SENATOR GIESSEL asked why a school district would not have
planned for contingencies before consolidating a school, like a
business would if it were going to consolidate sales locations.
She asked why it would take five years to make that adjustment.
8:38:12 AM
SENATOR VON IMHOF responded that they initially asked for five
years then dropped it to four. Some schools will be harder to
dispose of or be more difficult to repurpose than others. It is
a compromise. It is not an abrupt funding drop at year four.
They want some schools off the capital bonding list. Some are
very old and inefficient. It may not take them four years. Four
years with a stepdown is a fair compromise based on everything
they heard.
8:39:23 AM
SENATOR BEGICH said the Augenblick study [Review of Alaska's
School Funding Program prepared for the Alaska State Legislature
by Augenblick, Palaich and Associates] identified that the cap
was a disincentive for consolidation. He asked if the bill's
intent is that there not be a dramatic loss of income so that
the transition can be made.
8:39:55 AM
SENATOR VON IMHOF responded yes.
8:39:59 AM
SENATOR BEGICH asked if anyone is opposing the bill.
8:40:10 AM
MR. KING said no one has come forward yet. The response has
ranged from being glad that someone is tackling this to this
doesn't affect us and we are not opposed.
8:40:34 AM
SENATOR BEGICH said he understands that Superintendent [Rob]
Picou [of Lower Yukon School District] would benefit from this
bill with a school that has capacity beyond the 425.
8:41:51 AM
MR. KING presented Consolidation Example 2 for five elementary
schools with 1,720 students and $15.1 million in state aid. If
the district consolidates five schools into four schools, the
effect of school size factor means that under current statute,
state aid will be $14.42 million for the same number of
students. With the loss of local funding, $798,000 is the total
loss. Taking into account cost savings, the net loss of
consolidation is $500,000.
8:44:53 AM
MR. KING showed that after five years, the state aid would go
from $15.07 million to $14.42 million per year for the 1,720
students, a savings of $.65 million for the state.
8:46:08 AM
CHAIR STEVENS said they had been talking about finances and
economics, but he asked what impact the bill will have on
students. He would appreciate hearing the answer at another
hearing.
8:46:35 AM
DEENA BISHOP, Ph.D., Superintendent, Anchorage School District,
supported SB 216. She said she was superintendent of the fastest
growing school district. During her tenure in Mat-Su, over ten
new buildings were built. She understands funding formula and
school size factor very well. Building a new school created new
revenue. The opposite happens when a building is taken offline.
She quoted from the sponsor statement that inside the funding
formula is a school size factor, which currently disincentivizes
school districts from consolidating because they would abruptly
lose revenue from the state. In the Anchorage School District,
they are working diligently to identify and implement
efficiencies. The costliest issue in education relates to
staffing and compensation. While the need for teachers will
continue, a smaller support staff will be necessary by combining
student populations, along with the capital costs of ongoing
operations with schools, it makes sense to allow a
"deratcheting" of the formula.
8:48:47 AM
DR. BISHOP said the immediate loss is difficult to sell
internally and externally. They are taking off-line a school
that has a tradition of educating children in a community. In
order to work with a community, they need an incentive to move
forward. Within the four years proposed in the bill, they do
look for additional efficiencies. They are going to figure out
how to combine staff and share resources with occupational
therapists and speech therapists. The teachers will still be
there. All the additional supports will change. The primary
thing in Anchorage is that 40 percent of the schools were built
in the 40s, 50s, and 60s. They are embarking on the useful life
of a building without selling new bonds. They are on a hiatus
till 2020 for school bonding. This bill isn't just for Anchorage
or Lower Yukon. It is supportive of efficiencies in the entire
state. If Anchorage did need to redo these facilities knowing
they are undercapacity, they will need major maintenance and
capital costs to keep them safe and running for students. They
would do this by asking voters to pass bonds locally, which
would impact local taxes. They would impact capital construction
in the entire state. They are simply asking for a time to
reevaluate where they are to provide the best education they
can.
8:51:27 AM
DR. BISHOP said she does not see the quality of education
decreasing. Finding efficiencies and working together
collaboratively is exciting. They would like time to
consolidate. They would need time to sell that to the community
and have them understand that it would actually save in their
personal taxes as well. This is a good thing for the state of
Alaska as well as the Anchorage community. The bill is a win-
win.
8:52:27 AM
SENATOR BEGICH said last year when considering SB 96, Senator
Hughes produced a list of underutilized schools in Anchorage.
Many of them are in his district, which has some of the poorer
parts of Anchorage and many of the older buildings. The east
side of his district has fewer vehicles per house than any other
part of Anchorage, so there are significant transportation
issues. He asked if she would consider factors such as
transportation and poverty rates when consolidating schools.
8:53:45 AM
DR. BISHOP said yes, they are doing another [consolidation]
study. Some indicators are schools where affordable housing is
present. Those schools, especially some of their walking
schools, are not set to be the most efficient to close. They are
looking at an equity issue in the Anchorage School District.
They are keeping an eye on student outcomes and achievement. The
preliminary work is not just going after the oldest schools or
schools in lower socioeconomic areas that maybe need the most
capital. They will continue to take care of Anchorage schools.
With over 100 buildings, they could have a school and bond a
year and it would take 100 years to renovate. She spoke with the
assembly and school board and assured them that the look into
this is more than simply economics. It also involves student
outcomes.
8:55:22 AM
SENATOR BEGICH asked if she would provide a copy of the study to
the committee.
8:55:38 AM
DR. BISHOP said it will be delivered to the school board April
26. It will be public then and they will send it to the
committee.
8:56:04 AM
SENATOR HUGHES said that for consolidating elementary schools,
parents would be concerned about the change in the busing. She
asked if she is confident that kindergarteners or first graders
will not have long bus rides.
8:56:50 AM
DR. BISHOP said she is 100 percent confident that elementary
schools will not increase their busing time.
8:57:25 AM
DAVID NEES, Representing Self, suggested changes to SB 216. He
said this is one factor they looked at in the House Sustainable
Education Task Force. When the McDowell group did their report,
they were concerned about schools with under 100 students. They
set the formula up to benefit schools under 100, but the schools
above 100, the last four numbers on the school size factor
chart, gained money. They incentivized school districts to build
schools between 150 and up to 750. There is a detriment to any
above 750. In the Anchorage School District, a lot of schools
are between 250-400 students. They will get more money if they
have under 250 students and less if they have over 750. The
districts game the system. Anchorage is turning the King Career
Center turning into a high school because it gains the school
district a $1,000,000. He likes the idea of consolidating. In
the formula they should look at equity per student in the last
four tables to get rid of the problem of people deciding which
school should be at 50 percent capacity and which one at 90. In
2001 the McDowell Group said the idea behind the school size
formula factor was to help schools with under 100 students. They
suggested looking at that factor again for any school above 100.
Changing the last four school size formula factors from the 150-
250 to 150-750 factor will do exactly the same thing.
9:00:10 AM
KATHLEEN PLUNKETT, Clerk, Anchorage School Board, supported SB
216. She said Anchorage has been reviewing efficiencies since
she has been on the board because that is best for students
because it means they can put more towards their students.
Talking about changing schools and school boundaries requires a
huge community dialogue. People are near and dear to the schools
they belong to. It can be done. It is more efficient in the long
run for the school district, their local community, and state.
King Career Center becoming a high school is good for students
because they can stay for a full day with no bus time. That is
their goal. What is best for students.
ACTING CHAIR COGHILL held SB 216 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| PTPC_Confirmation_Packet_26March2018.pdf |
SEDC 3/26/2018 8:00:00 AM |
Confirmation Hearing - Professional Teaching Practices Commission - March 26, 2018 |
| SB216_School Consolidation_Presentation_SEDC_26March2018.pdf |
SEDC 3/26/2018 8:00:00 AM |
SB 216 |
| SB216_SchoolConsolidation_BillPacket_26March2018.pdf |
SEDC 3/26/2018 8:00:00 AM |
SB 216 |