Legislature(2003 - 2004)
03/24/2003 05:02 PM Senate HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 10-EDUCATION FUNDING:INSTRUCTIONAL COMPONENT
CHAIR DYSON announced SB 10 to be up for consideration.
SENATOR GUESS, sponsor of SB 10, stated that she introduced this
bill when she was in the House and agrees with the chairman that
it should be held as this is its first hearing and there is a
broader philosophical and policy call the legislature should
make. She has already had good conversations with Senator Wilken
about it.
When the legislature decided to use 70% for the instructional
component minimum for the state, she always had an issue with
the approach. It was not because she didn't think it was
correct, but because there was no changing of that 70% for
economies of scale. So Sitka, which has a very dense population
and should be able to put more money into the classroom, is
compared with the Lower Kuskokwim, which is a more dispersed
district and has more overhead costs. She has worked hard to
find the best economies of scale proxy. One could look at
density as the number of students per square mile.
Unfortunately, if they use that with Juneau, given the park that
is behind us, the community wouldn't show the correct density.
The best proxy she could find was the number of kids per school.
If the school districts have greater economies of scale, they
should be able to be more efficient with their overhead and be
able to put more money in the classroom.
She worked with the department today on which schools count and
which schools don't and how to do the counting. It becomes more
complex when you look at Anchorage, which has three students at
Charter North. So, that really doesn't count as a school. If
this bill moves, she would move for a 10-student minimum -
schools or correctional facilities.
SENATOR GREEN asked if in preparing her list of where schools
fell, she considered having a column for the number of years a
waiver has already been issued and established. She also wanted
to know if there were any incentives for the anomalies.
SENATOR GUESS responded that she is wed to the intent of this
bill. The numbers were created from looking at what the
distribution is right now. She freely admitted there wasn't a
lot of science behind them except for looking where natural
breaks occurred. She didn't look at schools that had waivers,
but she thought there was an issue with schools that are 70% and
under right now that are continually getting waivers. She hoped
as the discussion went forward, they would consider what is good
policy and if the waiver situation is good policy or if energy
costs of schools will ever reach the 70%. She purposely didn't
deal with the low end, because her issue was more with the
economies of scales, which looks at the more dense school
districts.
CHAIR DYSON asked if the existing formula altered or takes into
account the number of special needs kids.
SENATOR GUESS replied that the current foundation formula
adjusts for intensive needs kids, which are a very small
population, but not special needs in a more general sense. There
is a 20% addition in the formula to encompass the former gifted
and talented and bilingual programs.
CHAIR DYSON said the bill's 5% increase in money spent on the
mission as opposed to administration adds 100 more students and
that seems ambitious to him, but he would bow to her experience
and education.
SENATOR GUESS said he made a good mathematical point and she
often looks at things that are linear. Most things are natural
log curves, so it goes down a little differently with each step.
She thought they should continue to keep that in mind if they
are going to continue with the 70% mark.
5:25 p.m.
MR. EDDIE JEANS, School Finance Manager, Department of
Education, said he had been working all day with Senator Guess
on the analysis and would provide a spread sheet that details
the department's analysis along with the fiscal note, which will
be zero, because they are currently doing the work that is
required under the minimum instruction percentage requirement.
This bill would simply expand that to a different rate for
different schools, as Senator Guess described. He added that at
the 70% level, there are still 27 school districts that require
a waiver statewide, although they have made tremendous progress
over the years. He stated, "We, too, believe the more money
directed to instruction, the better."
SENATOR WILKEN asked if there were any issues with any school
district in the state ascribing to the standard chart of
accounts.
MR. JEANS replied that the department continues to work with
school districts to follow the chart of accounts and this
process goes well with that. If a district comes in under 70%,
they have serious discussions with the district about why it was
beyond the district's control to not meet the 70% requirement.
SENATOR WILKEN asked if all 53 districts are following the chart
of account categories and subcategories and if they are, are
they just being creative in their definitions among the levels
and sublevels of expenses.
MR. JEANS replied that all 53 school districts are required to
follow the chart of accounts. Creative classification was a
problem, but they have given school districts clearer direction
on where to classify expenditures so there is more uniformity in
the expenditures being reported to the department.
SENATOR WILKEN asked if he still has one or two staff that are
helping school districts align themselves to the chart of
accounts.
MR. JEANS replied they have those two positions.
SENATOR WILKEN asked if federal funds are considered with the
70%.
MR. JEANS replied they measure that against the school operating
fund, which includes federal impact aid. He pointed out:
It's the discretionary money, but it does not include
all the other categorical federal funds, which many
districts would argue in many cases are instructional
expenses.
SENATOR WILKEN said in 2001, his school districts received about
$96.6 million in federal money. He continued:
So, a portion of that would be impact aid money and
the other portion would be something other than impact
aid. So, you're saying we would consider the impact
aid money, but not the other what I think to be about
$40 million. Is that correct? Is there some federal
money outside the 70% calculation?
MR. JEANS replied, "There's a whole bunch of money outside the
70%."
SENATOR WILKEN said the special revenue funds in 2001 equaled
about $115 million. He asked if those were considered as part of
the 70% calculation.
MR. JEANS replied no, "The statute specifically says school
operating fund expenses."
SENATOR GUESS asked as he is transitioning into the new system,
he is finding districts that are under 70% are striving to get
to 70%.
MR. JEANS replied yes, although there are a few small school
districts in the state where 70% is going to be impossible. He
noted, "Some districts are very dispersed with small populations
which are going to have high fixed operational costs. They will
never meet the 70%."
However, he thought those were the extremes and if they get down
to a small number of school districts that require the waiver on
an annual basis, he thought they had done well.
SENATOR GUESS said that certain districts never had to strive
and if they raise the bar to an appropriate level, she asked if
people would try to reach that level.
MR. JEANS replied that his experience is that no school wants to
ask for a waiver. "They all strive to meet the requirement no
matter what it is."
5:35 p.m.
SENATOR WILKEN suggested for the smaller school districts,
rather than raising the bar, they should consider whether there
is a way to consolidate their administrative functions that
weigh so heavily on their overhead. He thought that was the way
out of the 70% mark.
SENATOR GUESS clarified that was not her intent. She is trying
to take it from the top end.
CHAIR DYSON suggested that it was fair to use the 70% to give
people a standard to measure themselves with.
MR. JEANS agreed.
CHAIR DYSON asked if it would be wise to lower the 70%
requirement for the smaller schools.
MR. JEANS replied they had not had that discussion at the
department level.
CHAIR DYSON asked if he had pushed the folks to use the standard
chart of accounts and there reports and audits of their budgets.
MR. JEANS replied that all 53 school districts are required to
file an audited financial statement with the department on an
annual basis.
SENATOR WILKEN added, "That report is given annually to the
Legislative Budget and Audit Committee, whose responsibility it
is to do something with it."
MR. CARL ROSE said they didn't have a position on SB 10, but did
have one on minimum expenditures. The governor's proposed budget
is not adequate in the area of education and there are the
mandates of No Child Left Behind, IDEA and current reductions to
consider. He elaborated:
If we're looking at about a $33 million reduction, and
I hope that that does not take place, and there's
evidence that there is a change of heart, at least
we're not focusing on the same number in the
legislature from what I see proposed from the
governor. Nevertheless, we are still looking at the
issue of adequacy and that's a critical issue. If we
lack the funding and we don't get all of the money we
need...that money comes directly out of the classroom.
That's an increased burden on the local appropriation.
That in light of the concern that we would reduce
municipal assistance and revenue sharing, the cost we
pass on to the local communities for those who do
taxing is a continued burden.
MR. ROSE said he supports the standard chart of accounts and
believes in the improved quality of data they get from it. It is
important to be able to meet the federal mandates as well as our
own quality initiatives, but he sees inadequate levels of
funding across the state. He would like districts to have a shot
at being successful. He is not in favor of the bill as is, but
he understands they are trying to get accountability.
MS. MARY FRANCIS, Executive Director, Alaska Council of School
Administrators, supported the intent of SB 10 and definitely
supported more resources going to the classroom and said:
As previous speakers pointed out, rising fuels costs,
rising insurance costs, the possibility of having to
pay for people transportation, the possibility of
including community schools...would mean that some of
those expenses would go into one's budget and a great
percentage of the budget would not go directly to the
classroom.
CHAIR DYSON asked if she knew how to get better numbers than
Senator Guess had and the valid targets would be to ask schools
to meet.
MS. FRANCIS said she would bring her experience as a
superintendent to Senator Guess to help figure it out.
CHAIR DYSON asked Senator Guess what she wanted to do with this
bill.
SENATOR GUESS replied that this is where the policy work of
education needs to be done in the HESS Committee. She believes
they are trying to treat all school districts alike and she
didn't think that's correct. She has always been willing to
examine the details of that with the communities and their
representatives and she wouldn't mind taking direction from this
committee on certain work that needs to be done.
She thought the discussion needed to be in a broader context of
funding and the foundation formula and changing some of the
unintended consequences that happened in SB 36.
MR. JOHN ALCANTRA, Director, Government Relations, National
Education Association (NEA) Alaska, supported Senator Guess's
efforts and Mr. Rose's good comments about No Child Left Behind
and exit exams. He applauded the effort to get more dollars into
instruction and wanted to help them work on something that would
works for all 53 school districts throughout Alaska.
CHAIR DYSON thanked him and said they would hold this bill for
further work.
TAPE 03-12, SIDE B
CHAIR DYSON adjourned the meeting at 5:50 p.m.
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