Legislature(2013 - 2014)SENATE FINANCE 532
04/09/2014 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB278 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 119 | TELECONFERENCED | |
| += | HB 278 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
April 9, 2014
9:33 a.m.
9:33:45 AM
CALL TO ORDER
Co-Chair Kelly called the Senate Finance Committee meeting
to order at 9:33 a.m.
MEMBERS PRESENT
Senator Pete Kelly, Co-Chair
Senator Kevin Meyer, Co-Chair
Senator Anna Fairclough, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Michael Hanley, Commissioner, Department of Education and
Early Development; Grey Mitchell, Assistant Commissioner,
Department of Labor and Workforce Development; Angela
Rodell, Commissioner, Department of Revenue; Senator John
Coghill.
SUMMARY
SB 119 BUDGET: CAPITAL
SB 119 was SCHEDULED but not HEARD.
CSHB 278(FIN) am
EDUCATION: FUNDING/TAX CREDITS/PROGRAMS
CSHB 278(FIN)am was HEARD and HELD in committee
for further consideration.
CS FOR HOUSE BILL NO. 278(FIN) am
"An Act increasing the base student allocation used in
the formula for state funding of public education;
relating to the exemption from jury service for
certain teachers; relating to the powers of the
Department of Education and Early Development;
relating to high school course credit earned through
assessment; relating to school performance reports;
relating to assessments; establishing a public school
and school district grading system; relating to
charter schools and student transportation; relating
to residential school applications; relating to tenure
of public school teachers; relating to unemployment
contributions for the Alaska technical and vocational
education program; relating to earning high school
credit for completion of vocational education courses
offered by institutions receiving technical and
vocational education program funding; relating to
schools operated by a federal agency; relating to a
grant for school districts; relating to education tax
credits; establishing an optional municipal tax
exemption for privately owned real property rented or
leased for use as a charter school; requiring the
Department of Administration to provide a proposal for
a salary and benefits schedule for school districts;
making conforming amendments; and providing for an
effective date."
9:35:21 AM
MICHAEL HANLEY, COMMISSIONER, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT, spoke to a sectional analysis (copy on
file) of the bill and related that certain components of
the legislation were specific to the Department of Labor
and Workforce Development (DOL) and the Department of
Revenue (DOR). He stated that Section 1 of the bill
consisted of clean-up language and that it allowed for jury
service exemptions for certain teachers in low-performing
schools.
Co-Chair Kelly requested that Commissioner Hanley skip over
conforming-language sections of the bill and speak to the
sectional portions that were the meat of the legislation.
Commissioner Hanley responded in the affirmative.
Vice-Chair Fairclough inquired which sectional analysis was
being presented. Co-Chair Kelly noted that the sectional
analysis in his packet was different.
Vice-Chair Fairclough requested a brief at ease.
9:37:12 AM
AT EASE
9:38:05 AM
RECONVENED
Co-Chair Kelly stated that the document that the committee
would be working with was notated in the lower right-hand
corner and was prepared by M. Herman on 4/8/14; it was in
landscape format.
Commissioner Hanley continued to speak to the sectional
analysis of the bill and related that Section 2 required
school districts to allow high school students to prove
their proficiency and gain credit by testing out of a
course; the current language in the bill allowed for
testing out of any subject. He explained that the governor
had originally had language in the bill that required
districts to have assessments in the core areas of math,
language arts, science, social studies, and world
languages. He offered that some subjects that were
experiential in nature did not lend themselves to an
assessment. He stated that Section 4 of the bill prohibited
the Department of Education and Early Development (DEED)
from entering into a contract that would cede its authority
over its standards and assessments. He explained that there
had been a perception that the department had given
something away when it had joined the Smarter Balanced
Assessment Consortium and that the language in Section 4
restricted DEED from giving up its autonomy and authority
over its standards.
Commissioner Hanley continued to speak to a sectional
analysis of the bill and related that Section 5 was a
report to DEED from school districts and added another
component to the information that was garnered from school
districts; the report included information for students who
have parents in the active military. He reported that
Section 6 on page 5 established a new accountability system
for Alaska's schools. He explained that as a result of the
waver received from the No Child Left Behind Act, there had
been a new accountability system implemented to get away
from the adequate yearly progress (AYP) that was no longer
adequate or an accurate measurement of schools; DEED had
moved to the Alaska School Performance Index (ASBI) and
used a 5-star rating system. He stated the other night, the
House added language to the bill that would require DEED to
grade its schools on an A though F basis; Section 8
established the definitions of what that A through F
criteria would be. He stated that Section 9 of the bill
added integrity to the local process of applying for a new
charter school. He explained that charter schools were
operated within school districts and needed to go to the
local school board; language had been added in Section 9
that specified that the answer from that school board
needed to be in writing and be based on findings of fact
and conclusions of law. Section 9 also allowed for appeal
to commissioner of DEED if there was a denial from a school
board.
Commissioner Hanley continued to address a sectional
analysis of the bill and related that Section 10 allowed
the commissioner of DEED to review a charter school's
appeal on the findings of fact and conclusion of law; the
commissioner could remand the decision back for further
consideration, suggest an approval to the state board, or
agree with the denial. He added that a reconsideration of
the appeal needed to be conducted within 90 days. He stated
that Section 11 of the bill continued to focus on equity
for charter schools and spoke to charter schools having the
first right of refusal to lease space from the district in
which they reside; the section also allowed charter schools
to negotiate a lease agreement for true operational costs.
He explained that a charter-school budget was defined and
shall not be less than the amount generated by the students
enrolled in that charter school. He recalled that David
Teal, who was the director of the Legislative Finance
Division, had spoken the previous day to the amount that
was generated by students, which included things like the
base student allocation (BSA), the geographic-cost factor,
the special education component, and the vocational
technology education; Section 12 specified that the budget
for a charter school could not be less than the amount that
its students generate in that formula minus the
administrative fee that the district could retain for the
work that it did on behalf of a charter school. He added
that Section 12 limited the administrative fee to 4
percent.
Commissioner Hanley continued to address the sectional
analysis and related that Section 13 was new and was added
in the House Finance Committee; the section allowed for
charter schools that were starting out to apply for start-
up funding in the amount of $500 per student that was
enrolled in the charter school. He explained that the
start-up money was a one-time funding source for start-up
costs. He stated that Section 15 was similar to the
language in Section 4 of the bill that prevented DEED from
giving up its authority with its assessments and standards;
Section 15 prevented DEED from spending any money on the
implementation of the common-core standards. He explained
that common-core standards were developed by the National
Governors Association and the Council of Chief State School
Officers and noted that 46 states have adopted the
standards. He pointed out that Alaska had referenced the
common-core standards, but that it had its own set of
standards that were comparable and equal in rigor.
9:44:47 AM
Commissioner Hanley continued to address the sectional
analysis. He explained that the State Board of Education
provided an annual report to legislature that was typically
presented to both the House and Senate Education Committees
and that Section 16 added another component to the report
that included recommendations to the legislature around
educational spending and efficiencies. He observed that new
a reporting component was added in the House side and
opined that the language seemed a little outside of the
statutory purview of the State Board of Education. He
offered that board was a policy entity more than a fiscal
board and thought that the idea that it would recommend
methods of spending to the legislature seemed to be beyond
its purview; regardless, the idea was that the board would
at least come to the legislature with recommendations on
education. He stated that Section 17 was created for
recognizing some equity in funding for charter schools and
pointed out that transportation was a separate formula that
was also generated by students. He explained that districts
received funding for transportation based on its number of
students and that Section 17 designated that a charter
school had to have a minimal level of funding for
transportation along routes that it currently served. He
directed the committee's attention to line 7 on page 11 of
the bill and quoted the minimum level of responsibility for
school districts to provide for transportation:
at a minimum, provide transportation services for
students enrolled in the charter school on a space
available basis along the regular routes that the
students attending schools in an attendance area in
the district are transported
Commissioner Hanley continued to address a sectional
analysis of the bill. He related that the intent behind
Section 17 was that charter-school students generated
funding for the school and that they should also receive
services, including transportation. He reported that
Section 18 included the state's boarding schools like Mt.
Edgecombe in the requirement to provide opportunities for
students to test out of the courses that previously had
been spoken to at the beginning of the meeting. He stated
that in order for a district to apply to open a residential
school, it needed to do so during an open-application
period. He explained that the commissioner of DEED could
currently open an application as deemed appropriate and
recalled that he opened one the prior year; he did not
think that any open-application periods had been opened
prior to that by a commissioner. Section 19 specified that
the application period shall be opened annually, but did
not require the commissioner to approve new schools. He
thought that the opportunity should be there for schools
and districts to apply for residential schools. He noted
that one thing that was missing from Section 19, which that
had been in governor's original bill, was the increase in
boarding stipends; this component was currently a part of
SB 113. He noted that SB 113 had been considered by the
legislature the previous year and that the legislature had
increased the funding for boarding stipends, but not to the
extent that was requested in the bill. He stated that the
numbers were the same in the current year and that the idea
behind increasing the stipends was to come close the actual
cost of housing students in the residential schools.
9:48:28 AM
Commissioner Hanley continued to address a sectional
analysis of the bill. He spoke to Sections 20, 21, and 22
and pointed out they were BSA components. He stated that
the governor had put in $85 in order to get discussion
started regarding increasing the BSA. He stated that the
House had increased the $85 to $185 and had kept the
amounts of $58 and $58 in subsequent years that the
governor had recommended. He noted that at the end of the
bill, the House had also included $30 million as one-time
funding that would be distributed using the formula. He
related for comparison to the $30 million that providing a
$185 BSA represented about a $46 million cost. He stated
that Section 23 discussed tenure for teachers in Alaska and
moved the tenure period from 3 years to 5 years. He
observed that the change in tenure was added in the house,
but that he was unsure how it would improve scores or the
education system; however, it was determined that holding
off on tenure for an additional 2 years would be a better
route. He observed that Section 24 allowed smaller
communities that had less than 5,500 people to provide
tenure for their teachers in 2 years less than the
standard. He explained that if the current tenure in the
bill stayed at 5 years, Section 24 would allow these
smaller communities to offer tenure at 3 years.
GREY MITCHELL, ASSISTANT COMMISSIONER, DEPARTMENT OF LABOR
AND WORKFORCE DEVELOPMENT, spoke to the sectional analysis
of the bill and directed the committee's attention to
Section 25 and in particular to page 14, lines 15 through
31 of bill; the main change was located on line 17 and
extended the Technical and Vocational Education Program
(TVEP) through June 30 of 2017. He explained that the
governor's version of the bill had originally established a
sunset state of 2024 and that the administration would
prefer that sunset date to allow the regional training
centers more stability to develop training programs in
light of large projects on the horizon; additionally, it
would allow them to more effectively meet industry needs.
He spoke to Section 26 and in particular to page 15, lines
1 through 28, which added performance requirements for TVEP
recipients to establish and document duel credit
articulation agreements with school districts to allow for
high school students to get school credit for technical and
vocational training.
9:51:45 AM
AT EASE
9:52:34 AM
RECONVENED
Mr. Mitchell continued to speak to a sectional analysis of
the bill and related that Section 26 also removed former
Sections 4 and 5 from the bill; Sections 4 and 5 of the
previous version of the bill had dealt with student and
employer related satisfaction related to the training. He
concluded that Sections 4 and 5 had been removed because
they were subjective measures and were not viewed in the
same categories as the other performance measures;
paragraph 6 was added to Section 26 to allow DOL to collect
performance and financial information or develop
regulations to collect performance and financial
information from TVEP participants. He spoke to Section 27
and in particular to lines 29 through 31 on page 15 and
lines 1 through 4 on page 16. He stated that Section 27 was
amended to require institutions receiving TVEP funding to
establish and maintain at least one articulation agreement
for duel credit for high school students who were taking a
vocational education course; furthermore, it allowed the
DOL to establish a penalty of 20 percent of the TVEP
funding in the following year if a participant did not
comply with the performance or reporting requirements. He
directed the committee's attention to Section 28 on page 16
and in particular to lines 5 through 12; this section
established the definitions for what an articulation
agreements and duel credits were.
9:54:53 AM
ANGELA RODELL, COMMISSIONER, DEPARTMENT OF REVENUE,
addressed a sectional analysis of the bill and related that
Section 29 gave municipalities the expressed authority if
they chose to exempt property used for charter schools from
their local property tax. She stated that Sections 30-41
all related to tax credits that were offered for donations
and noted that the tax credits were replicated based on the
individual tax that the credit was allowed to be applied
to; some sections applied to the corporate income tax, the
fisheries tax, the fisheries resource landing tax, and the
mining tax, which was why the same language was replicated
over the course of Sections 30 through 41. She stated that
Section 30 had originally been for a tax credit for
instruction research and educational support for the
University of Alaska, as well as two and four year
colleges; this had been extended to also include public and
private non-profit elementary and secondary schools. She
reported that the ability of a donation for an
intercollegiate sports tournament had been removed from the
bill as an eligible qualifier for the tax credit. She
continued to speak to Section 30 and related that funding
for scholarships had been added for the cost of duel-credit
courses, tuition and text books, registration, on-campus
room and board, transportation costs, and other program
costs. She stated that the construction of residential
housing, childhood early learning and development programs
that were provided by non-profit corporations, as well as
science, technology, engineering, and math programs that
were provided by a non-profit or a school district were all
added as eligible uses for the tax-credit donations;
donations to any of those programs throughout the state
would qualify for a tax credit under the corporate income
tax, the state's fisheries tax, fishery resource landing
tax, and the mining tax.
9:57:30 AM
Commissioner Hanley clarified that the residential
facilities were for the state's proved residential schools
and a tax credit would be provided because there was no
other way to fund the schools.
Commissioner Hanley continued to speak to the sectional
analysis of the bill and noted that Section 42 repealed a
statute that was noticed by the House; the statute was no
longer in effect and mostly spoke to the Bureau of Indian
Affairs' schools and the absorption of those school
districts. He stated that Section 43 removed a sunset for a
provision that allowed Alaska to apply for federal grants
for starting up charter schools; Alaska had received some
of those grants about six or seven years prior, but had not
received any recently. Section 43 allowed the state to
continue to at least have the opportunity to apply for
those federal grants as they became available. He stated
that Section 44 contained the applicability language
related to the teacher-tenure provisions and that Section
47 required the Department of Administration (DOA) to
submit a written report to the legislature on January 1 of
2016 in regards to implementing a state-wide salary and
benefits service for school districts. He stated that
Section 48 contained the $30 million in one-time funding
that was added by the House and would be distributed by the
adjusted average daily membership; the remaining sections
contained effective dates.
Co-Chair Kelly requested that Commissioner Hanley pretend
that there were parents in the room and explain how the
bill made education better for Alaskans. Commissioner
Hanley replied that the legislation did several things; one
was that it included additional funding for the state's
schools and districts that actually went to the schools and
districts as opposed to things that didn't reach the
schools. He explained that the bill also removed a few
barriers and added new opportunities for students. He spoke
about the opportunity to test out of a class He recalled
previous testimony that some of the state's charter schools
were struggling with funding and finding leases; the bill
removed some of the barriers on charter schools, created
equity, clarified what funding generated by students really
was, and provided opportunities for charter-school students
to have transportation like other students in the district.
He noted that the bill also provided incentives for
Alaska's public entities to join with the state in
increasing educational opportunities. He stated that
Alaska's residential schools were proven models that had
been very effective for students in rural and urban Alaska;
the bill provided an annual opportunity for school
districts to open new residential schools. He hoped that
eventually, the bill would support residential schools to a
greater extent.
10:01:57 AM
Senator Hoffman directed the committee's attention to
Section 47, which required DOA to conduct a statewide
salary and benefit report by January 1 of 2016. He inquired
if the study would include a cost of living adjustment
(COLA) element as it related to rural teachers.
Commissioner Hanley replied that the component was added in
the House and that he would have to check regarding the
intent on how DOA would conduct the report. He added that
the section in question had not been part of the governor's
original bill and was only added recently.
Senator Hoffman thought that if the section did not contain
a COLA adjustment for rural teachers, it would be difficult
to hire teachers in those areas. He observed that rural
districts continued to have problems regarding hiring and
that one of the ways that they were able to hire competent
teachers was to have a different salary structure than
urban schools.
Vice-Chair Fairclough commented that the committee had
already gone through a process to evaluate benefits other
than salary for school districts in a survey that was
conducted for an insurance pooling issue. She wanted to
make sure that as the Senate reviewed the survey, the
committee did not ask for duplicate information or
something that was already collected. She wondered what the
administration would do differently in acquiring the data
on the health and benefit side of the equation.
10:04:16 AM
Senator Hoffman wondered if Commissioner Hanley was ready
to give a comparison between what level of funding the
Senate had provided in the operating budget versus the
level of funding that the House provided in HB 278.
Commissioner Hanley responded that he could give a general
comparison of the 2 levels. He reported that in the House,
the $185 in the BSA translated to about $46 million and
that including the $30 million appropriation, the House had
provided about $75 million to $76 million; part of that was
a one-time allocation, while part was in the BSA. He stated
that the Senate had added a $100 million, which translated
to about a $400 increase to the BSA and that House's
funding level translated to about $300 BSA increase. He
noted that another difference was that the Senate had all
of the funding as a one-time appropriation.
10:05:36 AM
AT EASE
10:07:28 AM
RECONVNED
10:07:41 AM
Vice-Chair Fairclough noted that there had been a question
about broadband before the AT EASE and stated that the
Legislative Budget and Audit Committee had been working
with Senator Olson's office on broadband and the necessity
of taking a closer look at how the state's schools were
setup in their ability to communicate electronically. She
noted that there was a survey done on schools and that the
committee was trying to ascertain what those actual
hardware positions were that was specific to individual
districts, what options and abilities there were to connect
those areas, and what the required level would be to carry
data. She noted that the issue on broadband for schools was
unresolved for the Senate and that she did not think it
would be resolved in the current session. She understood
that broadband survey would not be completed until the
following session.
Co-Chair Kelly requested Commissioner Hanley to comment on
the E-Rate legislation and thought it should be discussed
along with broadband. Commissioner Hanley stated that he
could give a high level overview, but that it had been
several days since he had reviewed the bill. He stated that
the idea behind the E-Rate bill was simply to bring all of
the state's schools up to a minimum level of 10 megabits
per second of bandwidth; additionally, it would increase
the bandwidth 10 percent for those schools that were
already at the minimum level. He stated that the bill would
set a floor for expectations of broadband across the state.
Co-Chair Kelly inquired if the fiscal note on the E-Rate
bill was around $13 million. Commissioner Hanley responded
that it was somewhere in that area, but that it increased
in the out-years.
10:09:46 AM
Senator Olson noted that the bill converted DEED from an A
through F system for grading its schools as opposed to the
star system and inquired what the reason was for that
change. Commissioner Hanley replied that DEED had behaved
very intentionally when it received its waiver to move to a
star system; he related that the star system was similar to
rating system for a hotel and represented a place for
improvement. He recalled that going to the star system was
a hugely public process and that there had been a lot
feedback from people across the state. He stated that the A
through F system had been introduced in the House, but
opined that an F still denoted failing. He was unsure how
the A through F system would motivate students, particular
in small rural areas, where there were no other schools in
town; he added that a student could not really directly
impact a school's score. He opined that the A through F
system seemed to have detrimental consequences rather than
providing motivation. He understood that the sponsor of the
amendment in the House believed that having an A through F
system would motivate students in schools, as well as
parents.
Senator Olson surmised that Commissioner Hanley was not in
favor of language that changed DEED to the A through F
system. Commissioner Hanley responded in the affirmative
and explained that the department had been acting
intentionally when it had gone to the star system.
10:11:50 AM
Senator Olson noted that Section 24 on page 14 discussed
rural school districts and requested clarification on what
the definition of a small borough was. He noted that he had
two boroughs in his Senate district that had populations
that may or may not go above the threshold of 5,500 people.
Commissioner Hanley understood that any borough that had
less than 5,500 people was considered small; he did not see
any other criteria offered and did not have any further
insight into the subject.
Senator Olson surmised that Commissioner Hanley was not
necessarily in favor of that distinction of what a small
borough was. Commissioner Hanley understood that the intent
behind having a shorter tenure for rural Alaska was to
incentivize teachers to work in those areas, but was unsure
if that was the intent of tenure. He stated that tenure was
not designed as an incentive, but that it could be if used
in that way. He noted that tenure was designed to give
administrators and teachers an opportunity to prove their
effectiveness before being provided with additional
security in their job.
Senator Olson expressed concern about how the bill's tenure
change might affect his district. He noted that if an
educator went from the Nome public-school system, which was
a single site school district, as opposed to the Bering
Strait School District and then moved the Northwest Artic
Borough School District, it would be unclear what exactly
applied regarding tenure. Commissioner Hanley responded
that the different districts in question could potentially
have different tenure systems under the bill.
Senator Olson pointed to Section 47 on page 28, lines 10
through 15. He noted that it appeared that the state was
attempting to establish a salary schedule in the section,
but observed that the employees being affected were not
state employees but were essentially employed by the school
district. He noted that salaries and retirement were
important to people and wondered if that those aspects
should be left up to districts in collective bargaining
rather than being mandated in statute. Commissioner Hanley
responded that the section did remove the authority to set
salaries for teachers at the local level and moved that
authority to the state level. He did not believe that the
intent was to make the teachers state employees, but to
determine their salaries at the state level. He thought
that that Senator Olson was correct that the intent of that
particular section was to look at a statewide-salary
schedule.
10:15:32 AM
Senator Olson interpreted that DEED was not in favor of the
change and that it wanted to continue with local control
for the schools. Commissioner Hanley responded that the
department was relatively neutral on the change and that it
had not really seen what it would like yet; the change
represented a plan to provide a recommendation to the
legislature.
Co-Chair Kelly thought that one of the vexing things about
education costs in Alaska was that most people were not
satisfied with the education product that the state was
getting. He added that Alaska had some great schools,
students, and programs, but that, in general, people did
not think that the state was getting the product it wanted
from its education system. He expressed frustration that
superintendents or other school district people complained
about rising costs, but thought that there had not been a
lot of effort by the school districts to control labor
costs. He noted that some costs could not be controlled,
but that there was some ability to have control over labor
costs; the reason for the state-wide salary structure was
because the districts did not, in general, seem to want to
control those costs.
Senator Dunleavy inquired what the genesis of the 5-star
rating system had been. Commissioner Hanley replied that
one of the requirements for the waiver was that DEED needed
to put in a separate accountability system. He explained
that if AYP was scrapped, something needed to be
implemented to measure schools and school districts with;
this was what had driven DEED to create a different system.
Senator Dunleavy inquired what the goal of the star rating
system was and how it would manifest itself in the state.
Commissioner Hanley replied that the waiver was totally
optional and that there was no compulsion to get one;
however, if the state had stayed with AYP under a component
of the No Child Left Behind Act, about 98 percent of the
state's schools would have been deemed as failing. He
reported that if DEED has stayed with AYP, it would have
had to reach 100 percent efficiency in the current year and
that it would have to be implementing school improvement
plans and interacting with schools as if there were
failing, even if a school might have a 85 percent success
rate. He added that DEED felt like the AYP was an erroneous
model and that getting out from under it represented an
opportunity to build a better system. He reported that he
was very happy with the Alaska School Performance Index and
the new star rating system and explained that the feedback
from superintendents and principals had been good. He
offered that new system allowed school districts to have
greater control and ownership over their scores, which had
not happened with AYP or the No Child Left Behind Act and
explained that the prior system had not provided a way to
fix things within the system. He added that the new rating
system also allowed DEED to provide resources to help the
1-star schools, which had been designated as a priority; it
also provided the department with a chance to recognize
some of its 5-star schools for their good work. He thought
that the motivation for switching rating systems was the
need for an honest system that reflected how Alaska's
schools were doing.
10:20:19 AM
Vice-Chair Fairclough thought that it was difficult when
America was falling behind in the rankings in the world
education market. She knew that teachers were working hard
and had many new challenges in the classroom, but pointed
out that America was losing ground in terms of how its
students would compete in the world market. She recalled
attending education conferences and trying to attend
educational meetings in an effort to understand the
perspective of what was happening. She thought that she was
informed enough to know that some systems were exclusive
and some were inclusive and that America was taking on more
than other than others it might be compared to. She was
trying to find footing in looking at Alaska's system for
rural and urban students. She thought that Alaska was not
facing that America was losing ground on education and that
that aspect had nothing to with Alaska. She wanted the
tools to identify why groups were gaining ground in front
of America on education and needed to know that America's
students could still compete in a global market. She noted
what the federal government setting for hurdles for Alaskan
students played into how Commissioner Hanley was
responsible for setting a bar for Alaskan students to
cross. She was unsure if an A through F system was the
right way to go or whether the star system was; however,
she thought that if Alaska had F or failing schools, it
seemed that it was important for the state to know that and
be able to act to change it. She acknowledged that she was
not a teacher and had not been a school administrator and
that she looked to Commissioner Hanley to provide
leadership in how Alaska's students competed. She thought
that maybe an F rating would make the state look a little
bit harder at an area than a star rating. She understood
concerns regarding how an F rating would help people in
smaller communities, but wondered what the state's
responsibility was if it was labeling a school as a 1-star
school when it really had an F rating.
Co-Chair Kelly did not think that the committee or any
legislator should be concerned about the self-esteem of a
community. He stated that a community needed to know if a
school was failing and should be outraged if that was the
case. He did not want to implement a system that made
people feel better about their school failing. He thought
that a lot of people in the committee room were former
teachers or administrators. He noted that self-esteem
worked on children and that the state should be concerned
about it; however, adults who were supposed to do their
jobs were being discussed. He thought that if a school was
failing and the adults who were required to make it succeed
were failing, he wanted people to know about it;
furthermore, a community should be outraged if they have a
failing school and demand a better one. Commissioner Hanley
agreed and thought that the state had not been honest with
its kids in the past; He thought that the state needed to
be honest with its students. He recalled that students had
graduated high school, but had not been ready for the
university and needed to take remedial classes. He noted
that some students had graduated high school in Alaska, but
had not ready for careers or had not been able to pass the
written exam to get into the military. He did not have any
desire to continue the past and noted that the Alaska
needed to be honest with its communities, schools, and
kids. He stated that DEED believed that the system that was
in place, whether it was called a star or an F, was a way
to look at deficiencies, strengths, and how to fix
problems. He reported that DEED focused and prioritized 1-
star schools and that the department would help those
schools fix those deficits; the star system would allow the
department to put responsibilities on schools to address
deficits and was not hiding anything. He did not know that
designating a school as a failure added to the conversation
in a positive way and thought that the goal was honesty and
addressing the current needs.
Commissioner Hanley responded to Co-Chair Kelly's comments
and expressed concerns that the A through F system as it
was listed in the bill was strictly based on progress. He
wondered how an A through F system would affect schools
that were at the 99th percentile and how these high-
achieving schools would get adequate progress. He noted
that a 99th percentile schools would get 5-stars in the
current system, but could receive an F in the other system
because it did not make enough progress; he was unsure how
much progress could be achieved by a school that was
already at the 99th percentile. He was unsure about the
definitions of the A through F system, but stated that
DEED's intent was to address needs in communities and not
to try and hide them anymore.
10:27:41 AM
Co-Chair Kelly expressed appreciation that Commissioner
Hanley had pointed out a nuance in the A through F system
and thought that the commissioner's explanation had been a
reasonable one.
Senator Bishop noted that the discussion was using general
statements regarding what a failing school was versus a
passing school, but that there had been little discussion
about the kids and issues like bullying. He agreed that
adults could take an A, B, C, D, or F, but that it could
negatively affect some children that were transferring from
one school to the next. He expressed strong feelings on the
issue. He recalled that the commissioner had stated that a
99th percentile school could still be an F school under the
A through F system. He recalled taking two 17-year-olds to
a school to register for an apprenticeship program and that
both kids had been stuck at a 3rd grade reading and math
level. He stated that today, those two individuals were
journeymen operators making $80,000 per year; he inquired
if they were considered failures.
Senator Dunleavy commented that there had been a lot of
discussion in the current year about school choice, much of
it housed in the private school concept. He wondered
whether a child could move from a 1-star school to a 4 or 5
-star public school with the assistance of the state or
whether they were destined to remain in that school until
it was fixed. Commissioner Hanley responded that there was
not currently a system where the state would pay for a
student to move to another community to attend a different
school. He stated that in areas where there were more than
one school, DEED was seeing more and more districts
providing totally open enrollment in allowing students to
move around within the district; however, there was not
currently anything in place to support students moving from
a small community to a large community.
10:32:00 AM
Senator Dunleavy thought that the state did have something
like that in place. He noted that Mt. Edgecombe was
directly under DEED and inquired if the state paid for kids
to attend Mt. Edgecombe. Commissioner Hanley responded in
the affirmative and added that it was a public school.
Senator Dunleavy noted that there were funds and a system
already in place that allowed children to go to Mt.
Edgecombe who might be in smaller communities; he inquired
if this process could be reviewed to allow children from 1-
star or 2-star school to have first dibs at Mt. Edgecombe,
another regional boarding school, or anywhere. He noted
that he was not trying to put the commissioner on the spot,
but wanted his thoughts on the issue of school choice
within the public school system. He wondered if someone
really had school choice if they had no assistance to go.
Commissioner Hanley thought that it would be a valuable
thing to consider regarding the application process and
that the only school that the department had any authority
over in that regard was Mt. Edgecombe; although the state
did have other residential schools, they were operated by
local schools districts. He thought that adding criteria
that factored in where a student came from could be a part
of the application process.
Co-Chair Meyer was interested in how the BSA, the $30
million outside of cap, and how TRS was dealt with in the
bill. He noticed that the House had included testing out of
classes in the bill and expressed concern that in the case
of larger schools, testing out of hundreds of classes could
be very expensive. He inquired what Commissioner Hanley's
thoughts were on the issue. Commissioner Hanley responded
that testing out of classes had also been in the governor's
bill, but that the governor's version had language added
that had specifically had in mind that it could be a burden
for districts to have to develop an assessment for every
subject. The part that had been removed from the bill was
the specific language around the courses; currently, the
bill stated that any subject could be tested out of. He
reported that DEED preferred that only the core areas of
math, language arts, science, social studies, and world
languages be included for testing out.
10:35:18 AM
Co-Chair Meyer agreed and thought that allowing for testing
out of the core courses would be achievable, but that it
would be expensive and cumbersome to do so for all of the
courses.
Co-Chair Meyer inquired if the committee had discussed
charter schools and how they were dealt with in the
legislation. Commissioner Hanley noted that charter schools
were addressed in Section 9 of the bill and that it
contained two components. He reported that one component
was the removal of barrier and allowing an appeal process;
the other component was to provide some equity for charter
schools. He explained that the integrity of the local
process allowed an appeal that required a district to say
no to new charter schools based on fact and conclusion;
furthermore, this needed to put into writing. He thought
that the new appeal system brought integrity to the process
and noted that it allowed for an appeal to come to the
commissioner of DEED. He reported that if a commissioner
felt that a districts' decision was not based on fact and
law, they could send the decision to the state board for a
final review. He added that there was also some language
that the governor had originally put in and some additions
regarding treating charter schools equitably and explained
that charter schools had a different structure than other
schools; they were run by an advisory policy committee that
consisted largely of parents. He reported that the in
current language of the bill, the funding for a charter
school could not be less than the funds generated by the
students in that school. He explained that the equity part
of the bill stated that the funds generated by students in
a charter school included the special education, vocational
and technical education components, but also required the
consideration of transportation by the school district.
Commissioner Hanley continued to address Co-Chair Meyer's
question and related that language had been added to the
bill that allowed charter schools the first right-of-
refusal for lease space. There was language that allowed
municipalities to remove a private building that was being
leased by charter schools from the tax rules; there was
also language that added a $500 per student grant to
charter schools for startup money.
10:38:17 AM
Co-Chair Meyer inquired the $500 per student grant was in
the governor's bill or whether it had been added in the
House. Commissioner Hanley replied that the component was
added in the House Finance Committee. Co-Chair Meyer
inquired if it was something he supported. Commissioner
Hanley responded that the only negative part would be the
responsibility for the fiscal component, which he thought
was about $168,000 based on passed trends. He thought that
it was a way to help charter schools get on their feet and
would equate to about $75,000 to $100,000 depending on the
school's size.
Co-Chair Kelly inquired if school districts were not
required to pass on money from the BSA to charter to
schools. Commissioner Hanley replied that was incorrect.
Co-Chair Kelly inquired if schools districts were required
to pass on funding to charter schools that was appropriated
outside of the BSA. Commissioner Hanley that theoretically,
that was true. He stated that the idea was that the charter
schools were funded in the same manner as other schools in
the district.
Co-Chair Meyer noted that there was a lot interest in
charter schools and that Commissioner Hanley thought that
the $500 per student grant was manageable from a fiscal
perspective. He inquired if there was a cap on charter
schools. Commissioner Hanley responded that there was no
longer a cap. Co-Chair Meyer inquired if the cap was
removed. Commissioner Hanley replied in the affirmative.
Co-Chair Meyer inquired how the high school exit exam was
addressed in the bill. Commissioner Hanley replied that the
removal of high school exit exam had been taken out of the
governor's version of the bill, but that it had been the
focus of the administration. He understood that HB 220 was
currently being considered by the Senate and that the bill
repealed the exit exam. He did not believe that issue
needed to be addressed in HB 278, but that DEED felt
strongly that the time had come to repeal the high school
exit exam.
Co-Chair Meyer agreed with Commissioner Hanley and was
unsure if the SAT/ACT testing or WorkKeys was the right
mechanism. Commissioner Hanley commented that the SAT/ACT
was simply added as a choice; currently, Alaska's 11th
graders were required to take WorkKeys, which was an
assessment that gave people an idea of how they would fair
in their career. He stated that the governor's intent in
adding ACT/SAT testing was not to replace the exit exam,
but to provide a choice for students; furthermore,
WorkKeys, the ACT, and the SAT all qualified students for
the Alaska Performance Scholarship.
10:42:14 AM
Co-Chair Meyer voiced frustration that the state was
picking up a lot more of the share of the education
funding, but that it was not getting credit for it. He
recalled that 2 years prior, the legislature had changed
the mill rate from 4.0 to 2.65, which meant that the state
was picking up a larger share of the funding, while the
municipalities were taking a smaller share. He thought that
the mill rate could be discussed, but that the change had
given cities extra money to use for other purposes. He
noted that with school construction, the state funded 70
percent and that the municipalities picked up 30 percent if
they could pass the bond. He noted that it was troublesome
that the state had no control over the bonding of
municipalities and that if one passed a school construction
bill, the state automatically funded 70 percent; he added
that he was not saying this was right or wrong, but noted
that the state could not control or plan for this. He
inquired if Commission Rodell had any thoughts on the
issue. Commissioner Rodell thought that there were things
that the state could do to the School Debt Reimbursement
Program that would fulfill the goals and capital needs of
the school districts while still bringing the state more
control over its match and debt costs. She recalled that
DOR had heard from communities that might want to cash fund
some of their capital costs instead of debt funding them;
she thought that this was something that DOR might want to
respect, but that there was currently no mechanism in place
under school debt reimbursement for a community to cash
fund some of its capital costs. She thought that DOR would
be receptive to looking at different ways to amend the
School Debt Reimbursement Program that allowed the state to
have more control over its costs associated with that
program without impacting the school districts' ability to
fund the capital needs that were required.
Co-Chair Meyer noted that he would like to work on the
issue further with Commissioner Hanley and Commissioner
Rodell. He observed that he had many other questions, but
yielded his time to other members in the recognition that
there would more hearings on the bill.
10:45:24 AM
Senator Hoffman recalled having several discussions with
Commissioner Hanley regarding the quality of education in
rural Alaska and that he had the same discussions with
three or four of the previous commissioners of DEED. He
stated that the school district that had been discussed
most intensely was the Yupiit School District and noted
that DEED had taken oversight over that district. He
wondered how that oversight had improved education in those
three communities, as well as how the legislation would
help the district and other like communities provide a
better education to their students. Commissioner Hanley
responded that a little over a year prior, he had worked
with Willie Kasayulie, Mike Williams, and others on the
Yupiit School Board and had determined that having a
trustee there was not the best methodology; the trustee had
been removed for over a year. He noted that DEED had
provided resources directly to the Yupiit School District
and that they had made some huge gains. He was really
excited about the direction that the district was going and
stated that the DEED had provided additionally funding and
that the district had requested for opportunities to
empower its advisory committees in each community and
empower its teachers; DEED had paid for some of training
for that. He thought that the Yupiit School District was on
an upward swing and that things had changed extensively
over the last year and a half. He thought that the bill did
not focus on rural or urban schools, but that it would
raise all boats and would have an impact statewide. He
concluded that the bill should benefit the Yupiit School
District.
10:47:55 AM
CSHB 278(FIN) am was HEARD and HELD in committee for
further consideration.
SB 119 was SCHEDULED but not HEARD.
ADJOURNMENT
10:48:02 AM
The meeting was adjourned at 10:48 a.m.