Legislature(2017 - 2018)BUTROVICH 205
03/28/2018 08:00 AM Senate EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| SB216 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 216 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 216-SCHOOL FUNDING FOR CONSOLIDATED SCHOOLS
7:58:45 AM
CHAIR STEVENS announced the consideration of SB 216.
7:59:11 AM
JONATHAN KING, Staff, Senator Natasha von Imhof, Alaska State
Legislature, presented the sectional analysis for SB 216. He
said SB 216 is a bill that encourages the efficient use of
facilities through consolidation in urban areas and by
encouraging rural areas to maximize the use of available
capacity.
Section 1: AS 14.17.410(b)
Adds new language to AS 14.17.410(b)(1) to provide a
"consolidation transition" that allows a school
district to gradually move from their current state
aid amount to a lower state aid amount after
consolidation of schools and describes how and when
the consolidation transition can be used.
(H) Specifies how state aide during the
transition period will be calculated. The
"pre-consolidation" and "post-consolidation"
formula remains the same; the bill will only
change how quickly the "post consolidation"
amount is instituted:
(H)(i)
Consolidation Years 1 & 2: The district will
receive the same
funding as if the
consolidated
school was still
separate schools.
(H)(ii)
Consolidation Year 3: The district will
receive 66% of the
difference between
funding from
preconsolidation
and post-
consolidation.
(H)(iii)
Consolidation Year 4: The district will
receive 33% of the
difference between
funding from pre-
consolidation and
post-
consolidation.
8:01:21 AM
Subsections (I) (L) specify conditions where
the "consolidation transition" may not be used.
(I) When the "transitional" state aid amount
would result in lower funding than under the
traditional funding formula.
(J) When a school district is already receiving
additional state aid due to the Hold Harmless
Clause in AS 14.17.410(b)(1)(E).
(K) If a new facility was constructed in order to
consolidate schools.
(L) If the school was reopened and reconsolidated
within the past seven years.
(M) Requires the district to provide the necessary
information and calculations for the Department of
Education and Early Development for verification,
including a student count by school for the
schools involved in the consolidation.
8:03:53 AM
Mr. King said subsection N defines "community" as an organized
municipality or an unincorporated area with a population of less
than 2,000 to clarify which schools can be consolidated. He
mentioned that committee members were notified yesterday that
Department of Education and Early Development (DEED)and school
districts have asked them to remove this subparagraph because
they have their own definition of community.
8:04:27 AM
Section 2: AS 14.17.905 Adds a new subsection that
allows a school that services grades K-12 in a single
building and has an average daily membership (ADM)
greater than 425 to be considered two separate schools
for calculating state aid.
8:05:05 AM
Section 3: AS 14.17.410(b) Makes this Act applicable
to schools which consolidate on or after the effective
date of this bill.
Section 4: Effective Date Provides for an immediate
effective date.
8:05:20 AM
CHAIR STEVENS said he did a great job explaining fiscal issues,
but equally important is how this improves the educational
experience for students. He asked how students are better off
attending a school of 1,500 instead of a school of 750. He wants
on record the value it brings to the student experience.
8:05:55 AM
MR. KING said that in this cash-strapped time, school districts
are spread thin. School districts lack support staff. They lack
the ability to spread services across schools. Consolidating
schools concentrates resources to improve the experiences of
students. Staff do not have to shuttle back and forth between
buildings. For example, a music teacher split between multiple
schools can be stationed at a school full time and be a resource
in the building.
8:07:31 AM
SENATOR GIESSEL referenced Mr. King's statement that DEED has
its own definition for community. She asked what that definition
is and why it is so radically different.
8:08:02 AM
MR. KING responded that DEED initially asked them to use the
word "community." He went back to Legislative Legal and said
they needed to use the word "community," in part to not create
an incentive in very rural areas for districts to close schools
in single school communities. Schools are the lifeblood of these
communities. They didn't want to see consolidation just for the
purpose of saving money that could have such a drastic impact.
They included this definition of "community." It turns out that
the definition they selected does not serve that purpose and the
language about an organized municipality makes it difficult for
school districts to do the consolidation because there are
school districts that cover multiple municipalities, such as the
Kenai Peninsula Borough School District. DEED suggests that the
fix is to use its definition of community. He said DEED's
representatives could explain it further.
8:09:50 AM
SENATOR BEGICH noted that Mr. King had mentioned a mistake in
the sectional about five years vs seven years. He sees that on
page five, line 20 of the bill it says seven years in subsection
L. He asked if there was a reason for the change.
8:10:11 AM
MR. KING responded that originally it was five years. Then it
was suggested that it might be good to have a length of time
that extended beyond the transition cycle. The transition cycle
from pre-consolidation to post-consolidation is five years.
Seven years provides stability so that schools do not
continually go through the consolidation cycle.
8:10:46 AM
SENATOR BEGICH said, in reference to the impact on education, in
rural areas so much cost is consumed by energy. In the past,
when schools had to spend 70 percent of funds on instruction,
districts appealed that because so much was consumed by energy
costs. The money was taken from teachers for energy. This allows
more money in teaching instead of consuming and paying for
energy in two different plants. He asked if that is another way
the bill would benefit education.
8:11:34 AM
MR. KING said that with Section 2, by reducing the incentive to
build a new school once enrollment is above 425, it does exactly
what he is saying. If districts continue using schools that have
capacity above 425, it doesn't cost more to heat those schools.
The more they can use that physical plant efficiently and have
economies of scale, the more there will be money for teaching
resources.
8:12:27 AM
SENATOR HUGHES said with consolidation of urban high schools,
high schools can offer more foreign languages. Course offerings
for students might expand through consolidation.
CHAIR STEVENS said he understands a school cannot be reopened
after consolidation until five years later. He asked if that
will be a problem if a sudden increase in enrollment occurs.
MR. KING said the bill says a district may not reopen and
reconsolidate a school. There is an "and" in there. A district
can reopen a school. A district cannot reconsolidate it and take
advantage of Section H for the purpose of increasing funding.
Nothing prevents a district from reopening a school.
8:14:21 AM
HEIDI TESHNER, Administrative Services Director, Department of
Education and Early Development (DEED), testified on SB 216. She
said the definition of "community" is in regulation 4 AAC
09.990(a)2: "community" means an incorporated city; a unified
municipality; or a place that is not incorporated as a city or a
unified municipality and that has a school enrollment of at
least 10 full-time equivalent students. This definition is used
for the full foundation formula; it doesn't make sense to have a
separate definition of community. Furthermore, the definition
that was chosen for the bill speaks to a population of less than
2,000 people. That negates Anchorage, for example, from being
able to consolidate because it has a population of more than
2,000.
8:16:12 AM
SENATOR HUGHES asked about the reopening and reconsolidating
issue. Two schools consolidate. By year five the district is
receiving less money than operating as two schools. She asked
what safeguards against a district reopening a school again for
more money but not to reconsolidate.
8:17:32 AM
SENATOR VON IMHOF, Bill Sponsor, Alaska State Legislature,
testified on SB 216. She said the bill as is can be interpreted
that in seven years a school district may have the option to do
that. They tried to avoid that with the seven-year clause; a
school cannot just be reopened to receive the higher funding.
Population influx can be a game changer and a district might ask
for extenuating circumstances, but the purpose of the bill is
not to allow that behavior.
8:18:47 AM
SENATOR HUGHES asked if a requirement that a school cannot
reopen unless enrollment has increased should be added to the
bill.
SENATOR VON IMHOF said the bill language has safeguarded against
it, but she cannot speak with absolutely certainty. She will ask
and get back with a more definitive answer.
8:19:39 AM
BRITTNAY HARTMAN, Staff, Senator Anna MacKinnon, Alaska State
Legislature, testified on SB 216. She said to safeguard against
Senator Hughes' concern, if a district consolidates two schools
into one, they receive the previous state aid for two years.
And then for seven years districts cannot reopen and
reconsolidate. The intent and language of bill prevents that
from happening. They could consider going beyond seven years,
but the bill has multiple safeguards to prevent that from
happening.
8:20:56 AM
SENATOR HUGHES said she doesn't see how it protects against just
the reopening, whether it be in year five, six, seven, eight, or
nine. She did not think they would want a school to reopen if
student enrollment has not gone up. Perhaps Senate Finance could
consider a safeguard related to student enrollment.
8:21:40 AM
SENATOR VON IMHOF said that in the next committee of referral
they will look at those provisions closely and have appropriate
responses.
8:21:58 AM
SENATOR BEGICH said a district wouldn't even consider
consolidation unless it was to the long-term benefit of the
school district. A superintendent wouldn't consider it if no
money would be saved at the end of the road. There is no
incentive to reopen a school without a dramatic change in the
community.
8:22:42 AM
SENATOR VON IMHOF said that is correct. Keep in mind that in
year four they are only getting 33 percent of the average daily
membership calculation. In years five, six, seven, three full
years, they are receiving the larger school population but lower
average daily membership calculation. Since a school cannot open
a school for three years, school districts must plan seven years
out. If the population does change, that's a different set of
circumstances. If the population does not change, she does not
think the bill allows them to do that.
8:23:31 AM
SENATOR BEGICH said a superintendent has a capital plant that is
costing this much money and wants to reduce capital plant costs.
This is a tool to reduce capital costs with incentives instead
of disincentives. The superintendent is willing to take the
lower average daily membership down the road because the overall
savings to the school district are considerable. This bill makes
sense because of the built-in protocols that prohibits someone
from being a bad actor. He asked if that is accurate.
8:24:17 AM
MS. HARTMAN responded that he is correct. The bill removes
disincentives to consolidate because districts would be losing
so much money. The bill provides a glide path. Instead of losing
hundreds of thousands of dollars instantly when going from two
schools to one, they ease into it, so they can figure out how to
make it effective.
8:25:19 AM
Rob Picou, Ph.D., Superintendent, Lower Yukon School District,
supported SB 216. He said Hooper Bay is a growing community with
1,275 residents and 449 students. Scammon Bay, Hooper Bay, and
Chevak are almost like three suburbs. Kids go back and forth
between those communities. Enrollment in Hooper Bay tends to be
quite high. It's a large school in rural Alaska. Every school in
Alaska gets funded by average daily membership. Hooper Bay is
the only school that gets penalized for growth under current
statute. That's not right for the Lower Yukon School District
community. The loss in revenue of $1,000,000 would have a very
negative impact on the school district. This bill would hold
them harmless for the unintended consequence of the legislation
written in 2001. Back in 2001, they recognized the potential
impact of the language on Hooper Bay, which was mentioned in
that 2001 bill. They are being asked to solve a problem that has
been sitting there since 2001.
8:28:17 AM
DEENA BISHOP, Ph.D., Superintendent, Anchorage School District,
supported SB 216. She wanted to address the question of whether
the system can be gamed to gain money for the district. There is
no money to be gained where they are sitting today. Frankly, how
they utilize the buildings today maximizes their state and local
revenue. They are in support of a bill that would reduce the
state and local share to the Anchorage School District to build
efficiencies while keeping quality of education at a high
standard. The simple ask is to allow the transition from the
present revenue structure to a new revenue structure. Keeping
all buildings open maximizes funding through the base student
allocation and average daily membership. The board,
administration, and community are looking at facilities,
understanding the capital costs that go into them, and balancing
the differences in loss of students over time. They literally
get the most money by keeping buildings open. With SB 216, they
are operating smartly. Their community and the state of Alaska
have asked them to look for efficiencies. This is no revolving
door. It is quite a bit of work to consolidate. It is not an
easy task. Leaving it alone is not the best thing for the future
of Alaska. This is a good thing for the state and students and
schools and local taxpayers.
8:32:01 AM
CHAIR STEVENS closed public hearing.
8:32:13 AM
SENATOR COGHILL moved SB 216, Version 30-LS1483\R, from
committee with attached fiscal note.
8:32:20 AM
CHAIR STEVENS found no objection and SB 216 moved from the
Senate Education Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB216_SchoolConsolidation_FN1_DEED_Foundation.pdf |
SEDC 3/28/2018 8:00:00 AM |
SB 216 |
| SB216_SchoolConsolidation_FN2_DEED_Capitalization.pdf |
SEDC 3/28/2018 8:00:00 AM |
SB 216 |