Legislature(2015 - 2016)Anch LIO AUDITORIUM
07/22/2015 09:30 AM House LEGISLATIVE BUDGET & AUDIT
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| Audio | Topic |
|---|---|
| Start | |
| Presentation of the Public Education K-12 Funding Study: Review of Alaska's School Funding Program | |
| Report Status Update - School Design and Construction | |
| Report Status Update - Evaluation of Salary and Benefits Schedule for School Districts | |
| Other Committee Business | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
LEGISLATIVE BUDGET AND AUDIT COMMITTEE
Anchorage, Alaska
July 22, 2015
9:36 a.m.
MEMBERS PRESENT
Representative Mike Hawker, Chair
Senator Anna MacKinnon, Vice Chair
Representative Kurt Olson (via teleconference)
Representative Lance Pruitt
Representative Steve Thompson
Representative Sam Kito
Senator Lyman Hoffman
Senator Cathy Giessel
Senator Pete Kelly (alternate)
MEMBERS ABSENT
Senator Bert Stedman
Senator Click Bishop
Representative Mark Neuman
COMMITTEE CALENDAR
PRESENTATION OF THE PUBLIC EDUCATION K-12 FUNDING STUDY
"Review of Alaska's School Funding Program"
REPORT STATUS UPDATE - School Design and Construction
REPORT STATUE UPDATE - Evaluation of Salary and Benefits
Schedule for School Districts
OTHER COMMITTEE BUSINESS
PREVIOUS COMMITTEE ACTION
NO PREVIOUS COMMITTEE ACTION
WITNESS REGISTER
JUSTIN SILVERSTEIN, Vice President
Augenblick, Palaich and Associates (APA) Consulting
Denver, Colorado
POSITION STATEMENT: Co-presented results of a review of school
funding in Alaska, with a focus on recommendations.
AMANDA BROWN, Senior Associate
Augenblick, Palaich and Associates (APA) Consulting
Denver, Colorado
POSITION STATEMENT: Co-presented results of a review of school
funding in Alaska, with a focus on the study approaches taken by
APA to examine Alaska's school finance structure.
ELIZABETH SWEENEY NUDELMAN, Director
School Finance & Facilities
Department of Education & Early Development (DEED)
Juneau, Alaska
POSITION STATEMENT: Presented a brief update on a construction
report.
DIANE HIRSHBERG, Director
University of Alaska Anchorage (UAA)
Center for Alaska Education Policy Research (CAEPR)
Anchorage, Alaska
POSITION STATEMENT: Presented an update regarding salary and
benefit schedules for school districts.
LIZ BROOKS, Research Analyst
Division of Personnel & Labor Relations
Department of Administration (DOA)
Juneau, Alaska
POSITION STATEMENT: Introduced the study related salary and
benefit schedule for school districts.
ACTION NARRATIVE
9:36:28 AM
CHAIR MIKE HAWKER called the Legislative Budget and Audit
Committee meeting to order at 9:36 a.m. Senators Giessel,
Hoffman, Kelly, and MacKinnon, and Representatives Kito, Olson
(via teleconference), Thompson, Pruitt, and Hawker were present
at the call to order. Also in attendance were Senator Stevens
and Representatives Edgmon (via teleconference), Johnson,
Reinbold, Tarr, and Vazquez.
The committee took an at-ease from 9:37 a.m. to 9:40 a.m.
CHAIR HAWKER announced that a quorum had been met without the
alternate, and he reminded members that as outlined in AS
24.20.165, the alternate members only vote when necessary to
provide a quorum.
CHAIR HAWKER announced that the committee would not hear an item
on the agenda: the Procurement of the Medicaid Reform and
Expansion Consultant. He emphasized the agenda item was
different from anything related to Governor Bill Walker's
executive order in determining that he would unilaterally accept
additional Medicaid funding. He said the committee had publicly
noticed that it would not be taking up the governor's RPLs or
any requests regarding the decision to implement expanded
Medicaid. He explained that at the last minute, following a
review, a request was made for more time to consider a couple
matters that may have affected the outcome of the proposal
evaluation.
^PRESENTATION OF THE PUBLIC EDUCATION K-12 FUNDING STUDY:
Review of Alaska's School Funding Program
PRESENTATION OF THE PUBLIC EDUCATION K-12 FUNDING STUDY:
Review of Alaska's School Funding Program
9:42:46 AM
CHAIR HAWKER announced that the committee would hear a
presentation of the public education K-12 funding study, "Review
of Alaska's School Funding Program." He directed attention to
documents pertaining to presentation [included in the committee
packet].
9:44:53 AM
JUSTIN SILVERSTEIN, Vice President, Augenblick, Palaich and
Associates (APA) Consulting, began a PowerPoint presentation.
As shown on slide 2, he relayed that APA is a Denver-based
education policy consulting firm, founded in 1983, that had
worked in all 50 states to review school finance issues and
suggest improvement to systems. He said APA had a broad
knowledge of how states around the country addressed various
types of student needs. He said the committee would see about
45 slides depicting highlights of information included in the
135-page report. He thanked the legislature, staff, and school
districts across the state for their cooperation and turned the
PowerPoint presentation over to his colleague, Amanda Brown.
9:47:06 AM
AMANDA BROWN, Senior Associate, Augenblick, Palaich and
Associates (APA) Consulting, directed attention to information
shown on slide 3 of the PowerPoint presentation, which outlined
what the committee would hear, beginning with an overview of the
study and followed by information about: the interviews APA
conducted with school district leaders; reviews performed of
funding system components; an equity analysis; a study of the
relationship between performance, student need, and
expenditures; a consideration of fiscal sustainability; and
APA's recommendations.
MS. BROWN directed attention to slide 4, which showed that the
study was focused on reviewing the structure of the current
funding system. She explained that APA was not asked to
consider the total number of dollars that would be adequate to
ensure the success of all students or to determine whether
specific adjustments in the formula were correct. The
consultants were focused on whether something should be part of
the current funding system, rather than recalculating district
cost factors. She said APA knew about the current lawsuit in
Ketchikan considering the constitutionality of having a local
contribution requirement, but APA was tasked with looking at the
current system and governing structure; therefore, the issue in
Ketchikan was outside its purview.
MS. BROWN directed attention to slide 5, which showed that APA's
objectives were a strong education funding system, which was
equitable; responsive to the needs of students, schools, and
districts; adequate and efficient in the resources it provided;
and flexible - giving local control to districts to determine
how best to use resources. She said APA believed that these
resources were a reasonable starting point for examining any
state system. She noted that while adequacy was a key
component, it was not the focus of the study.
9:50:17 AM
MS. BROWN turned to slide 6, which showed that APA undertook the
study from late February through July, during which time APA:
reviewed Alaska's current funding structure; conducted
interviews with district stakeholders to understand how the
current school finance structure affects individual districts;
examined other states' approaches to school funding; examined
the equity of the current system, looking at both district and
taxpayer equity; analyzed student performance across Alaska,
including the relationship between performance and student need;
examined the state's sources of revenue; and developed
recommendations for the State of Alaska to consider.
MS. BROWN discussed the interview process, as shown on slides 7
and 8. She said APA provided the opportunity for leaders from
all districts to provide input for the study through: a public
listening session, which allowed for feedback; group phone
interviews, with districts broken into categories, such as
rural, urban, distant, and single-site; a series of in-person
interviews conducted by two teams covering 11 districts; and
follow-up individual interviews by phone. She said leaders from
31 school districts participated. She said APA also interviewed
other stakeholders, including Alaska Department of Education and
Early Development (DEED) staff. All of the interviews focused
on gaining a better understanding of the current funding system
and its impact on school districts, as well as Alaska's unique
context. She said the interviewees were generally happy with
the current funding system and its components of the formula,
although there was concern that any changes to the current
structure would be part of a "zero sum game," which meant that
without additional dollars available, to give additional dollars
to one district would mean taking it from another. She said the
interviewees understood the complexity of funding in Alaska, and
"they thought that the system was doing a good job really
thinking through that complexity."
9:53:10 AM
MS. BROWN directed attention to slide 9, which reviewed the
funding system components. She said APA examined each component
of the current funding system by: gathering feedback from
interviewees; comparing the component to funding approaches used
in other states; and analyzing relevant data. She said the
results of the review would be discussed in the context of the
recommendations.
MS. BROWN turned to slide 10, entitled, "Alaska's School Funding
Program" and stated that under the current formula, a district's
funding - its "basic need" - was determined by multiplying the
base student allocation (BSA) by the [district adjusted average
daily membership (DAADM)]. She said that figure is calculated
through a series of adjustments, shown across one line on the
slide as: the average daily membership of the district, based
on the size of its schools and taking into consideration the
size of the community; the district cost factor, which accounts
for differences of location and remoteness and can range from
1.0 in Anchorage up to "over 2 in other locations;" a special
needs factor of an additional 20 percent to account for four
categories of students - vocational/career & technical, non-
intensive special education, bi-lingual/bi-cultural, and gifted
& talented; and a vocational and technical (VT) adjustment of
1.5 percent. She explained that "each of the adjustments in the
first line is multiplied against the preceding." She noted
there were two student counts: the intensive services student
count, where each student is counted as 13; and the
correspondence student count, which counts every student as .9
for the purposes of funding. Outside of this funding formula
was the funding for transportation and capital.
MS. BROWN directed attention to slides 11-14, regarding equity
analysis. She said that in the equity analysis, the data
examined included demographics, wealth, revenues, and
expenditures of districts. The APA study team focused on:
horizontal equity with regard to how equally resources are
allocated to districts or students in similar situations;
vertical equity measured how well the school finance system
takes into account varying student needs; and fiscal neutrality
assessing the link between local wealth and the amount of
revenue available to support a school district. She remarked
that it was challenging to consider the equity of Alaska's
current system due to extreme variations of size and remoteness
of districts, and there were significant adjustments in the
current system to account for those differences. She indicated
that one determination of equity was made based upon property
wealth; however, because only city and borough districts in
Alaska have local wealth, APA had to create a wealth proxy to
take into account the impact data available to include all
districts in the state. She noted that APA also used some
weighted student counts to account for student differences and
those differences due to size and location that the current
system is picking up. She indicated they did the best they
could to get every district on an even playing field to compare
against each other.
9:57:14 AM
MS. BROWN stated that APA found a high level of variation in
horizontal equity findings across Alaska, which means various
districts were funded differently, and it was expected as the
coefficient of variation measured the difference. In general,
an excepted coefficient of variation would be approximately .10,
but APA discovered the variation in Alaska was between .32 and
.40. She said APA looked at both total and instructional
expenditures. In terms of vertical equity findings, Ms. Brown
reported that APA wanted to determine how much of the spending
differences across districts could be accounted for by the needs
of the students, the size, or location of the district. The
consultants found that after accounting for student need, there
were still high levels of variation. She added, "They were
reduced from what we saw when we didn't consider that, but they
were still higher than what would be a generally acceptable
standard for either total or instructional expenditure." With
regard to fiscal neutrality findings, she stated that the common
benchmark was set at a .50 correlation between wealth - or in
this case the wealth proxy - and how much money was available
locally. She reported that Alaska's current system was below
the .50 metric, which means it meets the fiscal neutrality
threshold.
CHAIR HAWKER noted that Ms. Brown was giving the committee a
"high level abstract" of a detailed report included in the
committee packet.
MS. BROWN confirmed that was correct.
10:00:13 AM
MS. BROWN returned to the PowerPoint presentation, slides 15-17,
regarding data analysis of performance, expenditures, and
student need. She indicated that the analysis examined the
relationship between student need - demographics including how
many students had language issues, such as Alaska Native
students or special education students - and performance. She
said APA used linear regression to determine whether a
district's demographics had a significant relationship to
overall performance. Three demographic variables with a
relationship were: students with disabilities, limited English
proficiency (LEP) students, and Alaska Native students. She
said, "So what this means [is] that ... as the percentage of
students in these population groups increased within the
districts, their performance on the [standards-based assessments
(SBA)] decreased, so it was a negative relationship between the
two." She said the analysis also found a high degree of
variation in the percentages of students in those categories
between districts.
SENATOR MACKINNON asked Ms. Brown to clarify whether she was
saying that the more resources an area received, the more
negative the results were.
MS. BROWN clarified that APA was not looking at the associated
expenditures, rather at the relationship between existing
demographics and performance. In other words, she explained,
the higher number of students in the aforementioned categories
meant a decrease in performance.
MS. BROWN said the study team next examined the relationship
between performance and expenditures and pointed out that a
regression analysis examined the relationship between
proficiency levels and both instructional expenditures and total
expenditures. She said total expenditures included several
operational expenses not necessarily related to instruction.
CHAIR HAWKER asked Ms. Brown to clarify how APA determined which
expenditures were instructional.
10:02:39 AM
MS. BROWN answered, "The instructional expenditures were a
reporting line of [EED's] data; it's the instructional services
category of expenses." As shown on slide 16, Ms. Brown said,
APA found that higher instructional expenditures showed a
statistically significant, positive relationship with
performance. There was not a relationship between total
expenditures and performance, but that was not unusual
considering the total expenditures included operational
expenditures, she pointed out. Ms. Brown stated that the last
data analysis performed examined the relationship between
student need and the current adjustments within the funding
system. She explained that even though the special needs
adjustment was 20 percent for all districts, because it was
multiplied against the district's size and cost factor, there
was an "imputed" weight for each district. She explained that
the additional ADM generated after the special needs, divided by
the original ADM, equals a unique adjustment for each district.
For example, in one district with a size adjustment factor
equivalent to 1.10 and a district cost factor of 1.44 would
result in an imputed special needs adjustment of approximately
32 percent, she said. Another district with a higher size
adjustment of 1.2 and a higher district cost factor of 1.8 would
end up with a 43 percent adjustment for special needs, as a
result of "that multiplying nature of the first set of
adjustments in the formula."
SENATOR MACKINNON asked whether APA noted a higher investment in
operating expense dollars versus instructional expense dollars,
in regard to the aforementioned three demographic variables,
[students with disabilities, limited English proficiency (LEP)
students, and Alaska Native students].
10:05:42 AM
MR. SILVERSTEIN answered that APA did not make that
consideration as the analysis was focused on two data points on
expenditure and regressing those data points against
characteristics of the district in order to figure out which of
the demographic variables showed "statistically significant
impacts" on student performance. He indicated that it would be
difficult with the data gleaned by APA to know the expenditures
related to certain populations, because that was not part of the
funding system.
SENATOR MACKINNON clarified she was asking about operating
expense, not the instructional dollar. She stated, "[If] the
operating expense of the facility is not variable, they should
be fixed numbers, and if you pull out the instruction
[component] - I don't know if it's as simple as that - you would
come up with an operating [cost] for a particular item. And
where I'm driving to is if there's fixed cost and other
communities aren't able to invest in instruction, I'm wondering
if it has an impact on the overall system because we've had that
conversation at this committee and others whether we should look
at fixed cost. So, my follow-up question then, looking at fixed
costs and how they're different, by district, depending on
what's happening, is whether you considered, under those fixed
cost expenses of your overall spend for a district, the
additional one-time money that we've provided for at least six
if not ten years, under the leadership of Chairman Hawker and
others - energy cost equalization, basically; we were trying to
provide one-time funding for those districts - and so that's why
I posed the question: If, in fact, the instructional dollar
going into the classroom has a benefit for the students in our
population, but the challenge for the district is their fixed
cost, it's important for us to know that. And the Senate did
have, under the leadership of Senator Dunleavy, quite extensive
conversations about the fixed costs."
MR. SILVERSTEIN responded that during the interviews conducted
by APA, "that point was highlighted frequently." He said that
as operating expenditures become a higher percent of total
expenditures, it can drive dollars away from instruction. He
said this was of particular concern to districts with declining
enrollment but with similar fixed structures. He said APA did
not do a data analysis on the issue posed by Senator MacKinnon.
10:08:52 AM
MS. BROWN continued with slide 17. She said APA examined
whether the imputed weights were correlated with student need
levels in districts and a high correlation was not found. She
directed attention to slides 18 and 19, regarding fiscal
sustainability. She said Alaska had a very high reliance on oil
revenues, which could be a sustainability issue with falling oil
revenues. She said Alaska was one of only seven states that did
not have an income tax and one of only five states that had no
state sales tax. Other states more reliant on oil revenue had
either a state sales tax or income tax as a buffer. Alaska had
the highest percentage reliability on [oil revenues] at 83
percent, with approximately 12 percent in corporate income or
property tax; however, a majority of those taxes were still
being levied on oil and gas and noted the information source was
the U.S. Census Bureau. Ms. Brown said APA observed that Alaska
was relatively wealthy, in terms of annual personal income,
slightly higher than the national average, but is among the
lowest in local taxes. She said APA reviewed Alaska's revenue
stream between 2005 and 2012 and found it had been more volatile
than the national average. She said Alaska had two potential
sources of revenue to help stabilize funding until additional
revenue sources were available, and she deferred to Mr.
Silverstein to delve into further details regarding APA's
recommendations for the State of Alaska.
10:12:25 AM
MR. SILVERSTEIN advised he would attempt to incorporate the
information gleaned from the aforementioned interviews conducted
by APA into the recommendations. He emphasized that the intent
of recommendations is to strengthen the current formula and
ensure that the system is equitable, responsive, efficient, and
flexible. He said APA would not recommend specific levels of
funding as that would be the responsibility of the legislature
to determine; however, APA focused on adjustments the State of
Alaska could make to its structure and would cover what APA
heard and saw, in addition to covering the recommendations.
CHAIR HAWKER asked Mr. Silverstein to reiterate his
"appreciation for the fiscal sustainability relationship to
this" and how he may recognize the difficulty the State of
Alaska is currently facing.
MR. SILVERSTEIN, in response, moved to slide 21. He said any
change APA may recommend must take into account the current
fiscal environment. He indicated that interviewees expressed
concern that "if you make a change in a zero-sum environment,
then there's by definition a winner and a loser." He said APA
analyzed whether Alaska's structure was sound, considering the
differences it faced as a state; therefore, there were
recommendations that could have fiscal impact. He said APA
understood the current construct and the difficulty of "trying
to implement within that zero-sum game." Mr. Silverstein said
he thought the best news was that overall, APA thought the
current structure of Alaska's funding system is strong taking
into account student and district needs. He specified that the
vast majority of recommendations are for changes within the
current structure, not changes to the structure; therefore,
although the type of adjustments the state is making are sound,
APA suggested the state may want to address the how the
adjustments are being made to better serve students.
SENATOR MACKINNON asked whether other components were used in
other states that Alaska had not considered and whether those
components would be shown during the presentation.
MR. SILVERSTEIN answered that APA did look at what other states
were doing. He indicated that the recommendations to adjust
Alaska's current plan would expand the plan, which would then
include more of what other states did.
MR. SILVERSTEIN, as shown on slide 21, related that the formula
adjusted for variations in needs across the state through:
school size adjustment (SSA), district cost factor (DCF), hold
harmless, special needs funding, vocational career and technical
education (CTE) funding, intensive services funding, and
correspondence program funding. He said there would be other
general recommendations, including those related to capital and
transportation.
10:18:20 AM
MR. SILVERSTEIN directed attention to slide 22. He said there
were a couple of spots in Alaska's current formula that APA
described as cliff points, where small changes in student
enrollment could lead to a large change in funding. He
reiterated that the standards based assessment (SBA) performance
data showed that a district's student characteristics, including
its percentage of special education, LEP, and Alaska Native
students, was an indicator of the district's SBA proficiency
levels and the higher the number of students in those
categories, the lower the district's performance would be. Mr.
Silverstein pointed out that compared to other states, Alaska's
funding system does not differentiate on a student basis. He
acknowledged that it was called a student-based formula;
however, he emphasized that the funding system did not fund any
specific students, such as the aforementioned groups of
students, "at the student level." He said that brings back the
point that the special needs weight of .20 was applied the same
across all districts, regardless of the number of students in
those categories. He explained that other states with special
needs funding is tied to actual student numbers or percentages.
MR. SILVERSTEIN, as shown on slide 23, said a couple of the
formula's existing adjustments for student characteristics had
not been addressed in many years, school size in almost two
decades and district cost factor in approximately a decade. He
said APA has equity concerns that arise around the difficulty in
comparing wealth across districts. He explained that regional
education districts, and city and bureau districts, having
different tax, policy, and structure, creates a barrier to
evaluating equity especially at the fiscal tax payer equity
level. Finally, he said, revenues from oil taxes have declined
and predicted to remain lower than previous projections, which
creates issues for fiscal sustainability.
10:22:14 AM
MR. SILVERSTEIN directed attention to slide 24, which showed
APA's first recommendation that Alaska should consider not using
school size adjustment (SSA) in larger districts. He said other
states often adjust for "necessarily small schools" - those
schools in a setting where they are the only population of
schools. He added, "And so, if there is a small school, it's
there; it's the only school that's going to be able to serve the
students, and so, you're going to adjust for size." He advised
that as they get into larger districts, they don't tend to
adjust as frequently for small schools, whereas in larger
setting where there may be more capacity to build through
operations and some economies of scale. Mr. Silverstein
clarified that APA was not saying that funding for Alaska's
largest districts should "go down at the school size adjustment
level," but rather that there could be some intrinsic incentives
to building smaller schools because there would be more dollars
per student with a smaller school population. He said there are
also students in larger schools of larger districts that are
actually being funded at the school size adjustment level below
1.0. He said APA recommends that Alaska take into account the
cost structures needed in the larger districts, while making
sure not to provide incentives to have capital campaigns to
build certain sizes of schools that are not necessarily
efficient or effective school sizes in a larger district.
SENATOR MACKINNON noted that when Alaska took over the
educational responsibilities from the federal government, there
was an issue regarding equitable funding, which she specified
was different from equal funding. She said the state is trying
to reach its "highest compliance" with federal requirements in
regard to students. She asked, "This does not violate the
equitable clause?" She said APA's comments were accurate in
that larger cities with taxing capacity want to tax at a higher
rate. She said, "And so, we've fixed what they could tax on
themselves to try to make sure that we kept this equitable issue
in the forefront of our thoughts."
MR. SILVERSTEIN responded that APA did consider the issue of
equity and the impact of "that federal lens" more in terms of
the overall funding system and when looking at "those caps on
the ... additional local - that can be provided." He stated
that most of APA's recommendations were targeted to student
need, and stated that being equitable really was about "serving
students at their level of need." He said these adjustments are
used across the country and had been, in general, accepted as a
way to achieve an equitable formula. He continued, "And so for
us there was a little bit of a separation between when we're
looking at the funding side and ensuring ... the 25 percent
differential on expenditure but that wasn't ... or on revenue.
That didn't play into this specific recommendation, but as we
put in our recommendation about how to fund districts, they're
all about equity of students - how best to serve the differences
of students or schools or districts across the state."
10:26:42 AM
MS. BROWN added that before the State of Alaska adopted any of
APA's recommendations to make changes to any of the adjustments,
it would need to run an equity test allowing the state to use
its federal impact aid, to ascertain that the difference between
districts had not exceeded what she recalled was 23 percent.
She said, "We didn't evaluate that test on each of them
independently, because you may be using one from here, one from
there, and combined they would have different impacts."
SENATOR MACKINNON said if the state passed the federal bar, it
still had issues such as the aforementioned Ketchikan lawsuit,
and she opined that no one would win in that scenario because
everyone would receive less if cities or areas with wealth were
unable to contribute and the state continued to face an economic
downturn. She expressed concern that if the formula was changed
the state may have to stand against lawsuits from other
districts.
MR. SILVERSTEIN moved on to slide 25. He said the next
recommendation was that districts should be allowed to pick
which school the students in a community under 10 are applied.
He explained that in a community with under 10 students, those
students were added to the next smallest school in the district,
for funding purposes, before they were run through the school
size adjustment table. He said that an unfunded school under 10
students would be added to the next smallest school; thereby,
raising the enrollment total and thus lowering the amount
received per pupil, once a threshold of approximately 40
students was met. He said APA recommended allowing districts
the freedom to decide where to add their smallest schools in
order to find the school that would be the most efficient for
them. He said APA did not know whether any district would make
a different decision, but had heard enough times that districts
desire flexibility.
10:30:18 AM
MR. SILVERSTEIN directed attention to slide 26, showing that
APA's recommendation for school size adjustment (SSA) was that
Alaska should create an average formula for schools affected by
the community size cliffs at 100 and 425 students. He gave an
example, as follows: "The example we use a lot in the report
is: 101 students, as school is funded really as two schools -
so, there's K-6 and 7-12 are both run separately through the
school size table. At 100 - one less student - they're run
through the single site. And that difference is around 18 ADM
at that one time. If you then add on the ... multiplicative
issue that you have - where ... after you do your school size
adjustment, you're also doing a district cost factor, you're
also applying special needs and a CTE adjustments - that can get
closer like 40 students of change in funding based on ... one or
two students." Mr. Silverstein said this was probably not
happening every year and everywhere, but APA heard during
interviews there were shifts from 102 students one year to 98
students the next year with a considerable shift to funding of
the district, but the district would not be changing its
structure dramatically because it lost or gained four students.
He acknowledged that the recommendation to track this
information in order to average it over time would add a level
of complexity for DEED. He remarked that during the
presentation he will discuss declining enrollment and use a
similar approach to smooth out the differences when schools are
consistently at "these cliff points." He said APA tried to run
other options where "you could smooth these curves," but found
it would not be sensible or worth the effort for the cost.
MR. SILVERSTEIN directed attention to slide 27, which showed
that SSA was first created in 1998, and it may be time to update
the adjustment and emphasized the importance of setting the
intent of the base student allocation. He said it was not
reasonable to expect the smallest districts in the state to
provide the exact same program as the largest, but deciding upon
a general program for every student to receive. He said that as
school size adjustments were set considerations could be made as
to what was being purchased.
10:33:33 AM
MR. SILVERSTEIN moved to slide 28, regarding "Hold Harmless."
He said APA's recommends that Alaska create a true declining
enrollment adjustment to replace the current hold harmless
provision to be applied to all districts to ensure greater
funding stability. He said APA's study of Alaska's current hold
harmless provision showed that it functioned like a declining
enrollment adjustment. A classic hold harmless provision, as it
applies to school finance, ensures that a district has the same
total level of funding going forward, he explained. He said a
study performed by Temple University, reviewing all the hold
harmless provisions and climbing enrollment adjustments across
the country, showed that Alaska's hold harmless provision was
something of a misnomer as it was really a climbing enrollment
provision due to the way it functioned.
MR. SILVERSTEIN indicated that the second piece with the hold
harmless provision was that it was a second area where there
might be a cliff. He continued, "Because you have an absolute
targeted amount - 5 percent reduction of students in a year,
reduction of your school size adjusted population in a year -
you could have a district that has 4.9 percent and a district
that has 5.0. One is going to be getting this ... what we
really say is kind of a stabilizing of this decrease over time,
and the other won't. And you can, again, mathematically find
situations where you can have a district losing far more
students over a two or three year period than ... and not be
getting this hold harmless provisions, than a district who hits
this 5 percent in one year but let's say then flattens out. And
so, it has some real effects on funding, again, if it were to
happen. This is math and just trying to look at places where
cliffs exist, and we go through some of those numbers in the
report."
MR. SILVERSTEIN said many approaches were used by other states
in terms of climbing enrollment, such as looking at prior year
funding or weighted averaging. With those types of formulas, he
said, "any growing district isn't going to be capturing their
growth" in any given year. He said APA recommended a best of
three years averaging approach. He said APA heard frequently
from districts that they had uncertainty around budgeting. He
said the districts relied on estimates for their October count,
and each year they faced concern regarding that count. He
explained that if the numbers were off, districts could lose
larger numbers of staff than they could "absorb." He stated,
"And so, this sort of declining enrollment adjustment would keep
everybody a little bit steadier over time."
SENATOR MACKINNON asked which states used the best three-year
averaging approaches and how those states compared to Alaska in
similarity.
MR. SILVERSTEIN answered that the State of Colorado used a
multi-year average combining more than three years. He said,
"Where you often see these are in states with smaller, more
rural settings where you have a large amount of decline, and
that decline as a percentage can be pretty large year to year."
He said in some mid-size districts, losing 100-200 students, for
example, meant losing a large amount of funding. He continued,
"And in the report is a number; it wasn't as large as I would
actually ... as you would think - the amount of change that it
would take. It would be ... to implement this would be a big
impact on the districts currently on the 5 percent threshold,
but overall it's not actually a huge change in ADM in any one
given year."
10:38:24 AM
MR. SILVERSTEIN, in response to Senator MacKinnon, said APA did
not look at all 50 states, but looked at states that did similar
things and the information about other states using declining
enrollment is in APA's report.
REPRESENTATIVE KITO asked whether it is the best of three years
of actual students in the classroom before adjustments.
MR. SILVERSTEIN responded that hold harmless was applied after
the school size adjustment was made, and that was when the best
of the three year average was taken "from the October count."
MR. SILVERSTEIN moved to slide 29, regarding district cost
factor (DCF). He said APA believed Alaska's current DCF was
both strong and the most appropriate approach for the state. He
said there were a few states that actually use any type of cost
of living adjustment, and "they differ from what we would call
cost of living adjustments or cost of education adjustments."
He said Alaska would consider its cost of education adjustments
and review whether those factors impact the cost of education in
the state. He said some states considered cost of living, such
as what it cost their employees to live in certain areas, but
not the cost to provide education services. For example,
Virginia applied cost of living adjustments only to those
districts closest to Washington, D.C. He named Maryland and
Colorado as two other states that use this type of adjustment.
MR. SILVERSTEIN said given it had been 10 years since the last
update of the DCF, it may be time to update the information in
the DCF study to ensure it was responsive to current district
needs. Based upon concerns expressed by school district
leadership around the state during the interviews, he said the
study team believed that all current DCF cost areas should
remain in the formula. He said two additional areas of cost
that could be considered were: the cost of student activities
as some schools have to spend more to provide experiences for
students; and the cost of travel for education specialists,
which can be much higher for special education teachers in
remote areas of Alaska. He emphasized the importance that all
cost areas be evaluated in order to be efficient and provide
educational dollars, which were linked to higher student
performance.
10:42:50 AM
MR. SILVERSTEIN directed attention to slide 30, regarding
special needs funding. He stated that Alaska's current special
needs funding did not fund for special needs on specific
students, but was a "block grant" model. He said APA's
recommendation was that the state move toward a series of
adjustments for special needs that were student population-
specific and need-differentiated. Further, he advised, the
state should consider providing an adjustment for at-risk
students. He said data analysis in the report showed a wide
variation in the following: LEP students, special education
students, low-income or at-risk students, and Alaska Native
students. He indicated there were large concentrations of those
students throughout Alaska's 53 districts and most states
applying an LEP adjustment or at-risk adjustment do it more on a
student basis. In terms of special education, he said some
states applied a "fences-based" approach, which was more like
Alaska's block grant model by assuming every district had the
same level of need and the same distribution of students.
However, LEP or at-risk or low-income groups were far more
student-based, and the differences in districts were funded in
such cases in order that had "the equitable dollars to be able
to provide differentiated services." He said APA considered a
number of different approaches for Alaska to consider and
offered that Alaska could use weights when considering special
needs funding and be in line with other states today, and the
numbers in the long term would not differ greatly from what
Alaska was currently providing in its special needs adjustment.
He said this would disconnect Alaska's special needs funding
from other adjustments.
10:45:47 AM
SENATOR MACKINNON asked whether APA's analysis reflected
consideration of the litigation that Alaska school districts
were facing in attempting to meet special needs. Further, she
asked if APA had compared that to other states that may have
other levels they provide in terms of special needs.
MR. SILVERSTEIN answered that APA had not looked at any specific
litigation as it was focused on how much differentiations there
were in the student need setting at the district level. He
said, "Districts look very different when you think about the
type of students who are walking through the door, based on the
demographic data that we were using."
SENATOR MACKINNON opined that compared to the State of
Washington, Alaska's services to special needs students is
different. She said Alaska wants an integrated classroom where
people with disabilities are able to function. She said she had
heard that other states provide less, which pertains to the
instructional dollar providing services for special needs
students.
MR. SILVERSTEIN replied that as shown at the bottom of slide 30,
the first place Alaska districts cover with special needs
funding was their non-intensive special education students and
additional funding goes toward intensive special needs students.
He said, "When there are dollars ... other dollars, they're
going to look at vocational and gifted and talented and ... bi-
lingual/bi-cultural, but right now with the way it is, if you
have a very high concentration of students - especially your
non-intensive special [education] - most of those dollars are
going to go to that population because it's this block grant,
and it's not differentiated by need."
MR. SILVERSTEIN moved to slide 31, regarding Career and
Technical Education CTE funding, and he related that APA
recommended that Alaska leave its CTE adjustment in place;
however, when funding was available the state should consider
whether it was possible to increase the level of funding and
fund actual CTE student counts. He said the CTE funding was
done on a block grant model applied to K-12 populations, and
then used for 7-12 student populations. He said APA heard from
districts that the current weight had done well in helping those
districts provide CTE education support. In a state where there
are a number of jobs that require technical skills but do not
require a higher level of education, the expansion of CTE
education was very important, he said. He said the underlying
question was whether to make it more student specific, so "if
you have more of those populations, you would get more funding."
One consideration, he said, was that some district would say it
was more difficult to provide a more robust program in some of
the smaller settings.
10:49:55 AM
MR. SILVERSTEIN directed attention to slides 32 and 33, which
addressed intensive services funding, and said that Alaska
should not make any major changes to the current intensive
services adjustment. He pointed out that Alaska currently funds
its intensive services students at a 13 weight, which is higher
than other states.
The committee took an at ease from 10:50 to 11:05 a.m.
MR. SILVERSTEIN returned to the discussion of intensive services
funding. With regard to the high weight, he explained Alaska
did not provide extraordinary aid funding that many other states
provide, wherein the state picked up the full cost or some
percentage of the cost of students over a certain threshold. He
advised, "Your approach does not do that but it does have higher
weight, so we think the current structure is a good structure."
Mr. Silverstein said another recommendation was that if Alaska
reexamined the DCF, it should examine the additional costs of
providing related services for intensive special education
students in remote and/or isolated areas. He clarified that APA
was not recommending that the state should apply the DCF to the
intensive services funding. He continued:
What we're hearing, and what ... we think should be
examined if there is a look at the district cost
factor again, is that there are some services provided
by therapists who have to travel from more urban areas
to very remote settings, and to provide the same level
of service to a student with the same disability in a
very remote or isolated area might cost substantially
more than it would in the more urban setting.
SENATOR MACKINNON noted that Mr. Silverstein had said APA was
hearing feedback from districts and surmised that was an
indication those districts were "bringing people in to help."
She related that in the past she had been involved with the K-12
education budget, and [the legislature] embedded within the
Department of Education & Early Development the funding for that
travel. She asked whether Mr. Silverstein was telling her that
districts were being charged, that the travel funds had somehow
been removed. She asked, "Can you tell me specifically how
districts have been affected by that?"
11:07:53 AM
MS. BROWN responded that APA did not hear districts talk about
"the state picking up those costs," but was told about the high
cost of bringing [specialists] to the district, both in paying
for the actual travel and the time spent in travel, the latter
of which stretched longer because of weather delays.
SENATOR MACKINNON said districts could have specialized teaching
staff they send out to other schools in their region, but the
state had been providing education specialists to go to
districts in need of assistance. She said the state had taken
on that responsibility based on a previous lawsuit and it would
be interesting to consider the matter more.
MR. SILVERSTEIN highlighted the last recommendation regarding
Individualized Service Funds (ISF), that Alaska should collect
data on the movement of intensive special education students
into and out of districts throughout the year to understand the
potential cost impact for districts due to this mobility. He
said APA was unable to do this as part of its study. He related
that the type of intervention services needed for special needs
students varies with each student; therefore, even if one
student begins school and another leaves the school mid-year,
there still could be unfunded costs that year as a result of
that varied need. He said the data should include student
movement and types of services being provided.
MR. SILVERSTEIN directed attention to the issue of
correspondence programs, on slides 34 and 35. He said Alaska
was unique in its approach to provide a publicly funded
homeschool option as few other states did so. He specified that
APA considered only publicly funded homeschool programs. He
said APA recommended that if a new system was put in place to
fund for actual counts of special needs students, then Alaska
could consider adjusting for the special needs of correspondence
students by identifying what types of special needs were present
and what services were needed. He said, "We've heard about
students who have these types of needs, where the funding ...
isn't provided because correspondence funding is outside of the
formula where the block grant is for special needs."
MR. SILVERSTEIN said another of APA's recommendations related to
correspondence programs was that if blended learning programs
grew, then as they grew Alaska should examine the cost of the
programs and the methods for counting blended learning students.
He explained that when blended learning programs are fully
implemented, it meant students undertook part of their learning
offsite and part onsite. He said there were factors in Alaska's
system that would allow someone taking a course to be counted as
a part-time student. He relayed that APA heard concern from
districts that the current system did not quite address "the
structure where you're having students come in, but they're not
necessarily in classes, right; they're coming to the school to
have support in a blended learning environment, but that's not
necessarily in a class." The cost structure of Alaska's
correspondence funding did not necessarily align to the blended
learning movement. He indicated that because the trend is
growing across the country, APA wanted Alaska to take a look at
it; however, he emphasized that APA was not making a specific
recommendation for it.
11:12:55 AM
MR. SILVERSTEIN directed attention to slide 36, regarding
transportation. He said APA did not recommend changes to
Alaska's current transportation funding system, and suggests
that districts continue to be allowed to use transportation
funding for intra-district transportation. He said
transportation funding varied widely across the country as there
were a number of approaches. In Alaska, transportation funding
was funded on a per pupil amount based on actual district costs.
He said that most districts expressed satisfaction with the
current system, but there was repeated mention that without
competition, pursuing contracts could be problematic. Regarding
intra-district transportation, he said there was mention that
there was new accounting based on various types of
transportation. He said the evaluation was different for moving
students to and from school as compared to moving students from
program to program within a district. He explained that many
districts have a career technical education center, and they use
transportation to bring students to and from that center. He
said districts wanted to ensure that within the funding
structure that would still be allowed. He added, "They feel
that ... if you got rid of that, that cost is going to have to
come from somewhere if you want to keep as effective an approach
for those programs."
11:14:28 AM
MR. SILVERSTEIN turned to slide 37, regarding capital. He said
APA was making no specific recommendations around capital. He
relayed that funding varied widely across the country, with some
states picking up large shares of the cost and others picking up
little to no cost of capital. He said districts with declining
enrollment with the same structures to maintain were concerned
with the growing costs of maintenance of buildings and the
decreasing condition of the buildings. He said districts were
concerned about the elimination of the debt reimbursement
program is an issue as it was one way districts could leverage
support from the community. He concluded that any loss of
capital funding was an issue for districts over time.
MR. SILVERSTEIN directed attention to slides 38-40, regarding an
equity study. He invited the committee to read the numerous
metrics, analyses, and statistics, in the equity section of the
full report. He said there were structured approaches to
looking at what is equitable in terms of horizontal, vertical,
and fiscal neutrality. He said the APA team recommended that
Alaska revisit its special needs adjustment to ensure that it
accounted for differences in concentrations of special needs
students, especially at-risk students, across districts. When
looking at vertical equity across districts, he said, once the
adjustment for special needs has been met even when adjusting
for current factors in Alaska's school finance formula, there
remains "an equity issue." He said that meant that all the
additional dollars "coming on top" outside of the mandated local
match created equity issues that were not necessarily related to
student need. One way to do that, he said, was "through the
characteristics."
MR. SILVERSTEIN said APA's next recommendation related to equity
was that Alaska should conduct further analysis of the
differences in the amount of local revenues contributed to
districts and explore approaches for either equalizing access to
additional revenues beyond state foundation funding for low
wealth districts, or further limiting the amount of local
funding that may be contributed to districts. He indicated this
would create greater horizontal equity between districts.
MR. SILVERSTEIN said APA's final recommendation related to
equity was that Alaska should consider creating a consistent
measure of local capacity for supporting districts that may be
used across all district types. He said APA attempted to create
a wealth proxy, which was explained further in the report. He
said finding a way to discuss the local fiscal capacity of
districts included discussion of what was equitable, especially
in terms of what fiscal neutrality for tax payers looked like.
He said, "With the split between your [REAA] districts and your
city & bureau districts, it becomes difficult to make that
comparison currently."
11:18:37 AM
MR. SILVERSTEIN directed attention to the recommendation for
fiscal sustainability, on slides 41-45. He stated that over the
long term, it may be in the state's best interest to begin
moving toward reducing its reliance on oil revenues because both
demand and production would likely begin a permanent downward
trend. He said in order to reduce its 80-90 percent reliance on
oil revenues, the state would need to put revenue streams in
place. He said APA recommended the state could temporarily use
funds from its constitutional budget reserve (CBR) fund or
permanent fund earnings reserve account, both of which APA
observed had billions of dollars as of the beginning of fiscal
year 2016 (FY 16).
CHAIR HAWKER noted that APA had not attempted to recommend a
fiscal policy solution for Alaska, but was just "pointing out
the obvious."
MR. SILVERSTEIN confirmed that was true.
MR. SILVERSTEIN said the next recommendation related to fiscal
sustainability was that since Alaska pays for a relatively high
state share of K-12 funding, the state should explore equitable
approaches to adjusting the local share of that funding. He
said APA recognized that there was ongoing litigation through
the Ketchikan lawsuit, which was not part of APA's purview and
would change the discussion dramatically. He said currently
Alaska funded 64.8 percent of K-12 funding and the national
average was approximately 45 percent. He said the state could
consider removing that cap to allow districts to provide "a
higher percentage of their total education pot."
11:21:20 AM
REPRESENTATIVE KITO said that recommendation seemed counter to
an earlier recommendation to provide more compressed funding to
equalize on the horizontal side. He explained, "So, if you're
allowing for more local contribution, then there are some
districts that can't provide that additional local contribution,
which means it would push them outside that horizontal equity."
MR. SILVERSTEIN clarified that in this case, APA was addressing
the 45 percent cap required on local contribution. If a
district produced more than 45 percent of its total basic need,
it would be capped, "they don't have to go to the 2.65." He
continued, "This is on the required amount, not on the
additional amount that can come above. So, the total pot of
dollars between state and local would stay the same when you're
just thinking about the basic aids calculation, it's just that
more would be coming from the local. It would reduce the state
share, and it would increase the local share. So, it isn't the
additional dollars above."
MR. SILVERSTEIN stated another recommendation related to fiscal
sustainability was that the state could consider creating a
floor for the Impact Aid Percent applied to city and bureau
(C&B) districts making an effort above the required level, which
would lower the amount of state aid provided to these districts.
He paraphrased the remaining information on slide 44, which read
as follows:
Currently C&B districts that provide local funding
above the minimum required local effort are rewarded
with a decrease in the Impact Aid Percent used to
calculate the amount of impact aid that offsets state
funding.
By creating a floor for this reduction the state would
reduce the cost of state basic aid and possibly
improve funding equity across districts.
MR. SILVERSTEIN turned to the last recommendation related to
fiscal sustainability, and read as follows:
As noted in the equity study recommendations, the
state should also consider formally defining and
measuring the local fiscal capacity of all districts.
MR. SILVERSTEIN said that in order to understand what was
happening at the local level, a comparison was necessary.
11:24:46 AM
MR. SILVERSTEIN directed attention to slides 46 and 47, which
showed recommendations not specific to any one component of the
funding system, but were issues that arose when APA conducted
its full study. First was APA's recommendation that Alaska
should undertake an examination of the state's current school
district governance structure to ensure it was the most
efficient and effective approach to serving students. He said
APA's study focused on the current school finance formula and
its application within the current school district governance
structure in the state. The findings reflected a replication of
district-level services, and APA recommended this as something
to be evaluated. Although, he indicated, one possible barrier
was differing tax structures. The last recommendation was that
Alaska should examine student enrollment trends through the
year, which he indicated was relevant to the concern about
declining enrollment. He said there was some question as to
whether October was the best month in which to count students.
He explained this was because there was a varied behavior
pattern in communities in October as a result of [tribal]
gatherings, end of seasonal work, and receipt of the Alaska
permanent fund dividend (PFD). Because APA did not have student
counts for multiple points during the school year, it was not
possible to substantiate the anecdotal information. He said
Alaska should consider whether the October count is the most
helpful.
REPRESENTATIVE PRUITT asked when the state should count
students.
MR. SILVERSTEIN answered that without the data it is difficult
to answer. Each state counts students differently and he gave a
couple of examples. He said the goal was to determine the
number of students the state would have to serve in the
education system over time, and he reiterated that Alaska should
figure out whether or not October was the best month for the
most representational student count.
REPRESENTATIVE PRUITT questioned whether Alaska would find
unique challenges any other time of year than October. He asked
whether there was a better way to come up with a number beyond
just a 20-day snapshot. He clarified that he was not interested
in placing a burden on small districts, but questioned whether
there may be "other mechanisms in other states." He ventured
that Alaska would have to devise a different system.
MR. SILVERSTEIN reiterated that APA was unable to look at that
part of the issue - whether October was a one-time "blip" or
whether there was never an opportune time for the student count.
One factor, he said, was what kind of reporting system was in
place. He concurred with Representative Pruitt about not
wanting to put any additional burden on districts to track when
"the marginal cost is higher than the marginal gain for
anybody."
CHAIR HAWKER noted that Alaska was not able to give APA the U.S.
Census information to use; therefore, APA's recommendations were
for the state to begin by collecting that Census data.
MR. SILVERSTEIN responded that's correct.
11:31:04 AM
REPRESENTATIVE KITO noted that the October count allowed the
legislature to have the most recent numbers before entering into
its budget cycle. If counts were brought in from the previous
year, a district could have a different affect, but not
accurately reflect what was happening in the school for that
[emphasis on "that"] year. The legislature, he said, was
already competing its budget process by the time the school year
ended; therefore, it was "a difficult thing to adjust." He
stated, "I didn't come up with a reasonable solution. The
further back we go, the further away from the actual student
population that we end up with as we're looking at ... our
budget."
CHAIR HAWKER stated that the documents presented were now public
and available on the committee's web site. He noted there was
limited time with the folks from APA, and he thanked all the
school districts that participated in the study and the efforts
of APA to get as much information and diversity of opinion as
possible.
^REPORT STATUS UPDATE - School Design and Construction
REPORT STATUS UPDATE - School Design and Construction
11:34:14 AM
CHAIR HAWKER announced that the committee would hear a brief
update regarding two ongoing studies, under House Bill 278,
placed under the purview of the Legislative Budget and Audit
Committee that include a school design and construction report
and a salary and benefit schedule for school districts report.
11:35:04 AM
ELIZABETH SWEENEY NUDELMAN, Director, School Finance &
Facilities, Department of Education & Early Development (DEED),
said she would discuss the language in House Bill 278, provide a
glimpse of the scope and process of the report, talk about the
contractor undertaking the report, and provide a progress
update.
MS. NUDELMAN stated that House Bill 278, passed into law in
2014, and included Section 53, which had the requirement for the
school design and construction report. She read the directive
as follows:
The Department of Education & Early Development shall
prepare and submit a report to the legislature no
later than June 15, 2015, on the benefits and
disadvantages of using coded typical designs for
school construction in both the railbelt and rural
areas of the state.
MS. NUDELMAN said the department began a request for proposal
(RFP) process to begin the study. She said the Department of
Education & Early Development (DEED) sought a multi-disciplined
team of engineers, energy experts, contractors, and building
maintenance people as it was not looking solely for an academic
review of publications. The department also directed the
contractor to seek stakeholder input and include those people in
the study familiar with the buildings. Further, DEED suggested
the contractor consider six climate regions. She said the RFP
was on the state's web site as a public document. Ms. Nudelman
relayed that subsequent to the RFP and procurement process, the
contract was awarded to Envision Architecture and DeJong-
Richter. She stated that the contractor's methodology
encompassed both a review of national publications, serving
school districts, and breaking the area into six regions. They
visited the schools in the regions and spoke to school staff,
stakeholders, parents, and students in Barrow, Bethel, Juneau,
Anchorage, Fairbanks, Kodiak, and Matanuska-Susitna (Mat-Su), in
March 2015. She noted that Envision Architecture was based in
Anchorage, and DeJong-Richter was an education planning entity.
There were also participants from multiple firms across Alaska,
some attended meetings and other developed surveys and conducted
research. She advised that the research team was comprised of
five engineers, two contractors, one project manager, and one
building maintenance expert.
MS. NUDELMAN said the department received the first draft from
the contractor prior to June 15. She said time had run out, but
the contractor wanted to "take it back again" to the expert
research team; therefore, the department decided the best
decision was to extend the timeline to approximately December 1,
2015.
REPRESENTATIVE KITO asked whether the contractor also considered
the smaller communities within the six regions.
MS. NUDELMAN said she did not have the exact areas the
contractors visited; however, she opined the contractor sought
existing research to "flesh that out to include the smaller
areas that they did not go out to in person."
11:42:57 AM
SENATOR MACKINNON said the Senate Finance Committee had
expressed that if the state placed architects, engineers, and
contractors in the position of a review team, then each one of
them could benefit from individual construction. She said the
concern was who on the team would be advocating for the state to
save money, which was the purpose of evaluating individual
design in communities. She offered an example of the state's
huge investment in Kivalina. She indicated that what would cost
$14 million in another area has been allocated for $42 million.
She said she would look at the upcoming report through a lens to
determine who was benefiting.
MS. NUDELMAN responded:
The department relied on the charge which was the
disadvantages and benefits of prototypical study. And
in our RFP we cued up the contractors who would ...
apply for that work, with questions, and we had quite
a few questions. Because as we looked at it, we
didn't see the contractor bringing a solution to the
legislature, we saw them bringing information to the
legislature, and specifically the benefits and
disadvantages.
So, I would concur that there will be lenses to view
the information. The department goal was to get good
information over a wide range of topics to be
discussed.
SENATOR MACKINNON said she would be looking for "mobilization
and demobilization costs in the structure that it's supporting
individual design, as well as long-term maintenance consequences
for individual systems that are individually set up that require
the state to invest differently in each design." She explained
those would be the two lenses she would use to determine whether
a prototypical school design had been fairly evaluated.
CHAIR HAWKER thanked Ms. Nudelman for her update.
^REPORT STATUS UPDATE - Evaluation of Salary and Benefits
Schedule for School Districts
REPORT STATUS UPDATE - Evaluation of Salary and Benefits
Schedule for School Districts
11:46:38 AM
CHAIR HAWKER announced the committee would hear an update
regarding a salary and benefit schedule for school districts.
11:47:15 AM
DIANE HIRSHBERG, Director, University of Alaska Anchorage (UAA)
Center for Alaska Education Policy Research (CAEPR), noted that
Dr. Matt Burman (ph), an economist from the Institute of Social
and Economic Research was available for questions, and
introduced Liz Brooks, a research analyst from the Department of
Administration who would give an explanation about the genesis
of the study.
11:48:06 AM
LIZ BROOKS, Research Analyst, Division of Personnel & Labor
Relations, Department of Administration (DOA), stated that the
Department of Administration (DOA) was tasked to present a
written proposal for a salary and benefits schedule for school
districts, including an evaluation of and recommendations for
teacher tenure. She said the department sought a partnership
with the Center for Alaska Education Policy Research (CAEPR)
through a memorandum of understanding (MOU).
MS. HIRSHBERG related that the study was running behind its
timeline due to unanticipated data challenges. She said the
team was using a lot of data gathered by a number of state
agencies, and there were missing values and inconsistencies.
She said it took time to make corrections, and initial analysis
had to be made before doing so and opined that the issues had
been resolved. She said a draft report had been prepared, and
productive discussions had taken place between DOA and DEED,
particularly with Department of Administration Commissioner
Sheldon Fisher not just on how the analyses had been garnered,
but also better to present the report. Currently, the team was
tweaking the data to make more sense to a broader audience, she
explained.
MS. HIRSHBERG said the goal was to put the report out for public
comment by the next week in order to receive feedback. She
offered to give more details on specific aspects of the study,
in terms of what the team had done.
11:52:03 AM
CHAIR HAWKER asked when the final study would be concluded and
ready for presentation.
MS. HIRSHBERG related the hope was to have a draft available in
the next week; however, the team wanted the commissioner to be
comfortable with that. Following would be a two-week public
comment period, after which both the final report and
accompanying public comment would be shared. She indicated
there may be feedback added, but said the study has received
positive feedback from DEED; therefore, she did not anticipate
any major changes. She said the emphasis was on providing the
most accurate picture to the legislature.
CHAIR HAWKER said he was comfortable with the update on the
status, but asked the committee members if they wanted further
details at present.
SENATOR MACKINNON asked if the committee could expect to see the
study by September 1, 2015.
MS. HIRSHBERG answered yes.
^OTHER COMMITTEE BUSINESS
OTHER COMMITTEE BUSINESS
11:53:51 AM
CHAIR HAWKER asked if there was other committee business.
SENATOR MACKINNON stated that Medicaid was an issue that many
people were passionate advocates for, and many people had
contacted her office in opposition to the governor's executive
order. She requested a meeting for the opportunity to vote on
that issue.
CHAIR HAWKER stated that as chair of the Legislative Budget and
Audit Committee, he had distributed to the entire legislature
two legal opinions, both of which conclude that no matter how
the committee would recommend the governor proceed, it had no
voice in his decision to implement expanded Medicaid. If the
legislature did not respond to the governor's RPLs, he had 45
days from the day he issued them to wait, and then he could
proceed regardless of any action. Any hearing and subsequent
vote by the committee regarding the RPLs would trigger the
governor's ability to pursue his actions under those RPLs.
Chair Hawker said Governor Walker had stated, both publicly and
privately, that he was not going to take the legislature's
counsel into consideration; he had made a firm and final
decision and "there's frankly nothing of substance for this
committee to accomplish." He mentioned policy bills in both the
House Finance Committee and Senate Finance Committee, and he
opined that it would be more appropriate for those committees to
take up a policy discussion so there could be a substantive
outcome. He stated that by statute, the Legislative Budget and
Audit Committee was not a policy committee and was not allowed
to speak on policy decisions on behalf of the entire
legislature, and he did not want to give any impression to the
public that the committee had greater authority or
responsibility than it, in fact, had. He reemphasized that the
committee had no ability to change the outcome of the governor's
resolve.
11:56:49 AM
SENATOR GIESSEL stated that as a separate but equal branch of
government, the opportunity to review the documents was the
committee's purview, and she would appreciate the opportunity to
do so even though the statute authorizes the governor to act
unilaterally.
SENATOR MACKINNON opined that "the process by which this is
coming down" was part of the committee's responsibility. She
offered her understanding that the money involved to the state
would be about $148 million dollars. She said she had read the
legal opinion to which Chair Hawker had referred, and said it
had ambiguity of the governor's ability to "change the structure
statutorily on expansion of an eligible group of recipients."
She stated her belief that having someone present to explain the
executive order and the ability of the committee to ask
questions, as well as deny or reduce the appropriation amount
the governor would be placing as a fiscal responsibility of the
state, was in the purview of the committee. She said she
respectfully requested that the governor's executive order was
scheduled on the committee's calendar for consideration.
CHAIR HAWKER said he would take the request under advisement;
however, he said the entire legislature had already voted and
was on record as saying "we do not want him to do this." He
said:
We have the entire legislature on record. That was
done very clearly in the budgets that we passed in the
... legislative process during the legislative
session. That is the appropriate vehicle for the
legislature to express itself, not one or two people
on this committee to attempt to create the appearance
that we are speaking on behalf of the entire
legislature.
Notwithstanding that, Chair Hawker reiterated that he would take
the request of the committee members under advisement.
11:59:28 AM
ADJOURNMENT
There being no further business before the committee, the
Legislative Budget and Audit Committee meeting was adjourned at
11:59 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Agenda_LBA_22July15_updated.pdf |
JBUD 7/22/2015 9:30:00 AM |
|
| APA_Review of Alaska's School Funding Program_Final Report.pdf |
JBUD 7/22/2015 9:30:00 AM |
|
| APA Presentation to LB&A 7.22.15.pdf |
JBUD 7/22/2015 9:30:00 AM |
|
| Medicaid RPL Legal Opinon.pdf |
JBUD 7/22/2015 9:30:00 AM |