Legislature(2017 - 2018)SENATE FINANCE 532
04/02/2018 03:00 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Regulatory Commission of Alaska Appointee Dr. Anthony Scott | |
| SB216 | |
| SB104 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 286 | TELECONFERENCED | |
| + | SB 216 | TELECONFERENCED | |
| += | SB 104 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 216
"An Act relating to the calculation of state aid for
schools that consolidate; relating to the
determination of the number of schools in a district;
and providing for an effective date."
3:35:46 PM
Senator Micciche MOVED to ADOPT the committee substitute
for SB 216, Work Draft 30-LS1483\N (Laffen 3/30/18).
Co-Chair MacKinnon OBJECTED for discussion.
SENATOR VON IMHOF, SPONSOR, explained the legislation. She
stated that the bill was created when the Anchorage School
District presented to the Anchorage legislators. She shared
that she was previously a member of the Anchorage School
Board. She stated that there was a school capacity study,
that found that there was migration and movement within the
Anchorage elementary schools that left some schools over
capacity and some schools under capacity. She noted that
there was some halting of state aid, so there were some
schools that delayed some renovation and reconstruction.
She stated that in the last fall the Anchorage School
District had done calculations to evaluate different
scenarios of consolidating older elementary schools with
excess capacity, and moving students to nearby elementary
school with excess capacity; and the hypothesis of closing
an elementary school. It was found that when there was a
school of approximately 250 students, there was a certain
school-size cost factor of the average daily membership
that was greater than moving students to a larger school.
It was found that the revenue did not exceed the costs
saved for closing that school. It was suggested that there
be an allowance for an adjustment in the intent of the
school.
3:40:07 PM
Co-Chair MacKinnon requested the changes in the committee
substitute. Co-Chair MacKinnon deferred to Mr. King.
3:40:24 PM
JONATHAN KING, STAFF, SENATOR NATASHA VON IMHOF, discussed
the Explanation of Changes (copy on file):
Page 3, line 14 and Page 5, lines 5, 9, 11, 12: All
references to "state aid" within subparagraphs (H) and
(I) are changed to read "basic need" to properly
define the section of statute that this bill is
affecting.
Page 5, lines 22-24: Section (M) is reworded to
clarify the information that would need to be
submitted by school districts to the Department of
Education to calculate the consolidation transition.
Instead of the more generic "appropriate calculations"
the bill specifies "schools and corresponding ADM."
Page 5: Section (N), which defined "community," was
deleted. This term is already appropriately defined in
the Department of Education's funding formula
regulations.
Co-Chair MacKinnon WITHDREW the OBJECTION.
3:43:00 PM
AT EASE
3:43:25 PM
RECONVENED
Mr. King discussed the presentation, "SB 216: School
Consolidation Transition" (copy on file). He looked at
slide 2, "Alaska's School Size Factor Adjustment." He
stated that the school size adjustment was a component of
the broader school financing calculation contained in AS
14.17.410, that adjusted the average daily membership based
upon the size of the school. He noted that moving from left
to right on the curve showed that the amount of adjustment
declined as the school increased in size. He stated that
every individual student counted less toward funding the
school. He shared that it incentivized districts to create
smaller schools and made a challenge for schools to
consolidate schools.
3:45:00 PM
Mr. King highlighted slide 3, "Effect of the School Size
Factor on Consolidation Example 1." The distribution of
dots was the distribution of schools within the Anchorage
School District. He noted that the left hand vertical axis
showed the school size factor, with was the multiplicative
factor used in determining school funding. The bottom
showed the actual enrollment as a proxy for average daily
memberships. He stressed that there was a downward sloping
curve, which meant that as the school grew there was a
smaller coefficient that was used in the funding formula.
Mr. King addressed slide 4, "What the Bill Does":
Section 1
Section 1 removes a disincentive to school
consolidation:
? Four-year transition period for consolidating
schools
? Years 1 and 2 preserve 100 percent pre-
consolidation per student funding.
? Year 3 provides standard funding plus 66
percent of pre/post difference.
? Year 4 provides standard funding plus 33
percent of pre/post difference.
? After Year 4 provide standard funding per AS
14.17.410.
Senator Micciche asked for a restatement of the last two
bullets. Mr. King replied:
? Year 4 provides standard funding plus 33
percent of pre/post difference.
? After Year 4 provide standard funding per AS
14.17.410.
3:50:21 PM
Mr. King highlighted slide 5, "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 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.
Mr. King discussed slide 6, "What the Bill Does":
Section 2
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.
3:54:28 PM
Co-Chair MacKinnon queried information about slide 9. He
stated that it was an expected savings using a previous
example he noted that on slide 8 there was an example where
a district with a cost factor of 1 consolidates 5 schools
into 4 schools. The slide covered the total state aid and
the total savings attributable to the treasury associated
with consolidation. He explained that slide 9 showed that
if there were five schools totaling 1,720, the base year
would contribute $15.07 million in state aid to the local
school district. He shared that consolidating the schools
to four schools would result in state aid of $14.42
million.
Co-Chair MacKinnon wondered whether the model had been
stress tested on different sizes of schools with
consolidation numbers. Mr. King replied that slide 3 showed
an example of a stress test for a larger school. He noted
that the consolidation of two larger schools would save the
state approximately $1 million. He noted the stress test
for the elementary school showed a savings of between
400,000 and $600,000 per year depending on the original
size of the schools, and how many schools would be
distributing those children over.
3:59:00 PM
Senator Stevens wondered how the bill would benefit the
children. Mr. King replied that the finances matter, but
the primary purpose of the educational system was to
educate children. He noted that many of the elementary
schools had half-time or third-time special subject
teachers, who spent time shuttling between clusters of
schools. He felt that consolidating the schools would
result in that teacher being in residence at a single
school.
Senator Stevens wondered whether the districts had any
negative response to the legislation. Mr. King replied that
he had not heard any negative feelings, but stated that
there may be some in public testimony.
Senator von Imhof added that it would be a voluntary
program.
Senator Micciche surmised that there would be less dollars
for infrastructure, and more dollars in the classroom. Mr.
King agreed.
4:03:49 PM
JIM ANDERSON, CHIEF FINANCIAL OFFICER, ANCHORAGE SCHOOL
DISTRICT (via teleconference), stated that he had worked
closely with the sponsor. He shared that when there was an
initial examination of the declining student population,
there was a calculation. He shared that, currently, if a
school was closed for consolidation there was a significant
number of students who would need transportation. He noted
that taking students from one school would result with the
distribution among many schools. He noted that there would
be a loss of $500,000 dollars for any closed school.
Senator Stevens queried the impact on the Anchorage School
District. Mr. Anderson replied that that a consultant had
been hired to establish a plan. The initial brief to the
school board would be more than one school.
Senator Micciche requested a copy of that analysis on the
associated costs with school consolidation. Mr. Anderson
agreed to provide that information.
Co-Chair MacKinnon CLOSED public testimony.
4:08:42 PM
HEIDI TESHNER, DIRECTOR, FINANCE AND SUPPORT SERVICES
DIVISION, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT,
stated that she had worked with the bill sponsor to provide
feedback. She felt that the conversations had been
incorporated into the committee substitute, and allowed for
the calculations to work for the districts.
Co-Chair MacKinnon queried a position on the bill. She
wondered whether school districts would benefit from the
policy. Ms. Teshner replied that Department of Education
and Early Development (DEED) was supportive of additional
tools for districts, and the bill was seen as an additional
tool to maximize their facilities.
Co-Chair MacKinnon queried the benefit of the bill for
rural communities.
4:10:29 PM
MINDY LOBAUGH, SPECIALIST, SCHOOL OF FINANCE AND FACILITIES
SECTION, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT,
looked at Section 2, which was an unintended consequence.
She shared that originally the formula had initially an
adjustment of 750, so a community under 750 received the
appropriate adjustments for the single site. She shared
that when there was a change in 2001, there was the
possibility of a fix to a community, but there was not an
opportunity to revisit the issue. She shared that Hooper
Bay was part of that issue, so the language would put the
formula on a stronger track.
Co-Chair MacKinnon asked for more information about the
fiscal note.
Ms. Teshner explained the fiscal note.
Senator Micciche explained the fiscal note.
4:15:15 PM
Senator Micciche felt that the fiscal note had some
reflection of the reduced eventual payout from the state to
the districts. He wondered how that reduced funding would
be assessed, so there could be a philosophical
understanding of a reduction associated with consolidation.
Ms. Teshner replied that, because there was an unknown of
what schools would come forward, but there would be a
reduction in year three.
Senator Micciche wondered whether the primary purpose of
the bill was for consolidation to not adversely impact
school districts, but noted that there would be a reduced
costs to the state. Ms. Teshner replied in the affirmative.
Co-Chair MacKinnon announced that amendments would be due
the following day.
SB 216 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 216 School Consolidation Presentation-Senate Finance.pdf |
SFIN 4/2/2018 3:00:00 PM |
SB 216 |
| SB 216 Sponsor Statement.pdf |
SFIN 4/2/2018 3:00:00 PM |
SB 216 |
| SB 216 Sectional Analysis-Sen Fin.pdf |
SFIN 4/2/2018 3:00:00 PM |
SB 216 |
| SB 104 SFIN Request - Special Education Plan Benefits.pdf |
SFIN 4/2/2018 3:00:00 PM |
SB 104 |
| SB 104 Position 3-18.pdf |
SFIN 4/2/2018 3:00:00 PM |
SB 104 |
| SB 216 Lower Yukon School District Support Letter.pdf |
SFIN 4/2/2018 3:00:00 PM |
SB 216 |