Legislature(2009 - 2010)CAPITOL 106
01/28/2009 08:00 AM House EDUCATION
| Audio | Topic |
|---|---|
| Start | |
| Overview(s): Education Funding Formula 101 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE EDUCATION STANDING COMMITTEE
January 28, 2009
8:03 a.m.
MEMBERS PRESENT
Representative Paul Seaton, Chair
Representative Cathy Engstrom Munoz, Vice Chair
Representative Wes Keller
Representative Peggy Wilson
Representative Robert L. "Bob" Buch
Representative Berta Gardner
MEMBERS ABSENT
Representative Bryce Edgmon
COMMITTEE CALENDAR
OVERVIEW(S): EDUCATION FUNDING FORMULA 101
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to report
WITNESS REGISTER
EDDY JEANS, Director
School Finance and Facilities Section
Department of Education and Early Development (EED)
Juneau, Alaska
POSITION STATEMENT: Provided a power point presentation on the
education funding formula.
ACTION NARRATIVE
8:03:55 AM
CHAIR PAUL SEATON called the House Education Standing Committee
meeting to order at 8:03 a.m. Representatives Seaton, Munoz,
Keller, Wilson, Gardner, and Buch were present at the call to
order. Representative Edgmon was excused.
8:04:23 AM
^OVERVIEW(S): EDUCATION FUNDING FORMULA 101
CHAIR SEATON announced that the only order of business would be
the Department of Education and Early Development (EED) overview
- Education Funding Formula 101.
8:05:50 AM
EDDY JEANS, Director, School Finance and Facilities Section,
Department of Education and Early Development (EED), informed
the committee that Alaska has 53 school districts: 19 regional
education attendance areas (REAA's); 34 city and borough school
districts, which are either first class cities or organized
boroughs; and one state operated school, Mt. Edgecumbe in Sitka.
In total, Alaska's public school system serves approximately
130,000 students. The REAAs typically serve multiple
communities within a region. He illustrated this point by
drawing the committee's attestation to the projected map, area
32, representing the Lower Yukon School District. The Lower
Yukon district is comprised of eleven communities, serves
approximately 2,000 students, and encompasses about 19,000
square miles. He contrasted this image with the island of Kake,
which is a first class city, has one school, 95 students, and
encompasses one square mile. In the Anchorage area 55,000
students are served throughout the municipality. Emphasized the
diverse variety of geographic/political districts throughout the
state, and said that districts in unorganized areas do not have
the authority to impose a school tax; relying on state support
via the impact data program.
8:09:10 AM
MR. JEANS described the diversity of the districts and added
that, in the eleven communities of the Lower Yukon, student
populations range from as few as 42 to as many as 400. In
response to a request from Chair Seaton, he agreed to provide
the committee with a chart of these demographics.
8:09:48 AM
CHAIR SEATON asked whether all of the REAA's serve multiple
schools or if any single school sites are under this category.
MR. JEANS responded that Chevak, on the central coast of the
Yukon-Kuskokwim Delta, in the Kashunamiut School District, is
the sole example. The next smallest, the Yupiit district,
serves three schools [Akiachak, Akiak, and Tuluksak]. He
explained that both of these districts were the last schools
transferred to the state from the Bureau of Indian Affairs
(BIA), in 1985. He approximated that 50 schools in the state
serve less than 100 students, of the 500 schools in the state.
He agreed to provide a chart to illustrate the population
categories. On Chair Seaton's request, it will also include
schools that have a population of 15 and under.
REPRESENTATIVE KELLER expressed interest in having the teacher
student ratios per community made available, particularly for
the smaller schools, and Mr. Jeans said he could have that data
made available to the committee, also.
8:14:05 AM
REPRESENTATIVE MUNOZ asked what occurs when a school population
falls below 10, and is there a process that allows the school to
regain population rather than face closure.
MR. JEANS clarified that the state does not the schools, as it
is incumbent on the local school board to make that
determination. Additionally, there is a hold harmless
provision, set in statute by HB 273, which provides transition
funding to any district that has a school(s) with low
enrollment. A district may elect to use this funding to keep a
school open for an additional year, as an opportunity for the
school to boost student population.
8:16:11 AM
CHAIR SEATON inquired how 10 [students] became the minimum
enrollment number.
MR. JEANS answered that when the funding formula was rewritten
in 1998, the legislature established the policy of 10 as the
minimum number. Prior to 1998, local school boards were
operating schools with only two or three students.
8:17:26 AM
MR. JEANS directed attention to slides 1 and 2 to explain that
SB 36, implemented in 1999, defines the public school funding
formula under AS 14.17, and to set forth the five points to be
presented in the overview: 1) calculation of adjusted average
daily membership (ADM), 2) calculations of basic need
(entitlement), 3) components of basic need (who pays), 4)
additional funds above basic need, and 5) components of state
aid.
8:18:14 AM
MR. JEANS projected slide 3, setting out the ADM reporting
requirements. The ADM is the number of enrolled students during
the 20-school-day count period ending on the fourth Friday of
October; it is not related to attendance. The reports are due
to EED within two weeks after the end of the count period, and
projected student count reports are due on November 5. He said
that typically, schools file these reports simultaneously. The
projected count is used by the department to create the
following year's budget, as presented to the legislature each
January. Responding to a committee question, he stated that,
for the first nine months, each school district receives 1/12 of
the total entitlement, from the previous year's projections, and
the final three months are funded based on the actual ADM
provided in October. He also clarified that average daily
attendance (ADA) us used for a different purpose, but the ADM is
utilized for budget purposes. To a follow-up question he said
that the ADA may be used for federal reports such as the food
service program. Unlike some states, Alaska does not use the
ADA to calculate state aid.
8:22:03 AM
MR. JEANS moved on to slide 4 bulleting the statutes and
definition of who qualifies as a students: 1) a child who is 6
years of age before September 1, and under the age of 20, and
has not completed grade 12, AS 14.03.070, 2) a child who is 5
years of age before September 1, following the beginning of the
school year, may enter kindergarten, AS 14.03.080(d), and 3) a
child with a disability and an active individualized education
program (IEP) may enter school at the age of 3 and under the age
of 22, AS 14.30.180 (1). He elaborated on the first eligibility
point, that for a student to graduate, they must have met the
requirements of completing 21 high school credits and passes a
three part high school qualifying examination. When a high
school has a student who returns for classes to support their
efforts to graduate, they are not usually full time students and
are counted as part-time for funding purposes.
8:23:11 AM
REPRESENTATIVE GARDNER stated her concern for the percentage of
high school graduates who are entering college requiring
remedial classes. She asked if there needs to be recourse on
the high school from which they graduated. Should it not be
incumbent on the high school to offer appropriate classes for
college preparation, she conjectured, stipulating that a recent
graduate should not be held monetarily responsible for remedial
class tuition.
MR. JEANS responded that EED, under Commissioner Larry LeDoux,
is interested in the concept of middle colleges. He pointed out
that the high school exam is to establish a competency level for
graduation. It is a minimal proficiency test, not a college
readiness test, which he suggested, could be replaced.
REPRESENTATIVE GARDNER restated that her concern is for an
accomplished student expecting to enter college freshman level
classes. She opined that the student would be within bounds to
assume that attaining a high school diploma would ensure that
they possess adequate skills to enter college, and not be
burdened with the cost of remedial classes. She asked whether
requirements need to be placed on high schools to assure college
readiness, or if a middle college is a good option.
MR. JEANS expressed his understanding that the middle college
level would help with the high school-college transition, and
the intent is that the expense would be borne by the public K-12
system.
8:26:56 AM
REPRESENTATIVE KELLER offered his understanding that despite a
student having 21 credits and passing the qualifying exam, if
they are not over 20 years of age, they could take additional
high school classes, in preparation for college. He stated his
belief that many senior students are attending high school, on
this status, across the state.
MR. JEANS clarified that many seniors take credits beyond the
requirement; however, a student who is over the age of 18 that
has completed their senior year with at least 21 credits, and
has passed the qualifying exam, would not be welcomed back into
the K-12 system.
8:28:21 AM
REPRESENTATIVE WILSON asked if a time line has been established
for a middle college approach. She shared the same concerns for
providing students appropriate preparation for college, and said
it is an embarrassment to the state when a diligent student
arrives at college and is required to take remedial classes.
MR. JEANS said that the department is not in a position to
address this topic fully in the coming year; however, it is on
the agenda for the near future.
CHAIR SEATON pointed out that the University of Alaska regional
and main campus administrators are scheduled to address the
committee, and the question of providing standards for post
secondary education will be a topic for discussion.
REPRESENTATIVE GARDNER stressed her continued concern that
college be an option for as many students as possible,
particularly in light of current nation wide statistics.
8:32:48 AM
MR. JEANS continued explaining slide 4, stating that all of the
public schools offer a non-required, full time, kindergarten
program to any child who has a fifth birthday prior to the cut
off date of September 1.
CHAIR SEATON inquired what percentages of eligible children
attend kindergarten.
MR. JEANS responded that the percentage has not been tracked,
however, it appears that the majority of eligible families
choose to take advantage of the program.
8:34:16 AM
MR. JEANS moved to the final point on slide 4, stipulating that
an individual with an IEP may attend public school between the
ages of 3-22. Schools are required to perform child finds to
assist in identifying children with disabilities who require
services. Slide 5 lists the 5 steps used to calculate a
district's adjusted ADM: 1) adjustment for school size, 1a)
review eligibility for hold harmless standing, 2) apply the area
cost differential or district cost factor, 3) apply any special
needs factor, 4) add intensive services counts, and 5) add
correspondence student counts. He stated that each of these
steps would be explained in detail as well as applied
practically using Nome as an example.
8:35:40 AM
CHAIR SEATON queried how alternative initiatives are
counted/considered, and if they relate in any way to
correspondence schools.
MR. JEANS explained that a correspondence school is defined as
less than three hours per week of face to face interaction with
a certified teacher. Charter schools may be correspondence
schools, and home school support programs are classified as
correspondence schools under state statute.
8:36:31 AM
MR. JEANS brought up slide 6 to explain the first step for
adjusting a districts ADM; adjusting for school size. He
explained that the student population is determined within the
community. In a community with a student count between 10 and
100 grade K-12 students, the ADM for grade and high school are
combined and run through the size adjustment table one time;
adjusted as one school. If the student population is 101-425,
the K-6 and 7-12 counts are segregated and run through the table
twice; adjusted as two schools. In a community with an ADM
greater than 425, each of the school facilities are adjusted
through the table independently. Alternative schools, with an
ADM of less that 200, are counted as a part of the school in the
district with the highest ADM. If the alternative school has an
ADM of greater than 200, and is administered as a separate
facility, the ADM will be adjusted separately. He pointed out
that typically, the alternative programs are specialized and
located in larger communities. A charter school is required to
have an ADM of 150 or greater to be adjusted as a separate
facility.
8:37:57 AM
REPRESENTATIVE BUCH requested that Mr. Jeans provide improvement
comments, throughout the presentation.
8:38:52 AM
REPRESENTATIVE MUNOZ questioned the funding levels for charter
schools of under 150 versus over 150.
MR. JEANS said it was a policy call on the part of the
legislature to establish ADM minimums for alternative and
charter schools. Statute allows up to 60 charter schools to
exist in Alaska, and it was deemed more cost efficient, when
considering economies of scale, to mandate a minimum size
requirement. To a further question, he responded that there are
22 charter schools throughout the state.
REPRESENTATIVE MUNOZ described the local charter school and
proceeded to discuss operational funding issues.
MR. JEANS stated that EED is aware of the funding concerns
surrounding charter schools, that a Senate Bill has been
introduced on the subject, and he stated his belief that the
committee would be reviewing that subject at length. Then he
directed attention to slide 7 to begin the practical example of
calculating Nome city school entitlement, utilizing actual
projected numbers for FY 10.
8:42:15 AM
MR. JEANS pointed out that the Nome elementary school has 355
students, and the High School has 255. Additionally, Nome has a
charter school with 44 and a youth detention facility program
with 14. Continuing to slide 8, showing that the alternative
Nome school ADM is added to the school with the highest ADM in
the district, the grade school in this example, arriving at a
figure of 399. A school with a population of under 10 would be
added to the smallest school in the district. The resulting
number is referenced to the table, on slide 9, where student
count translates as school size. Reference 1, on the table
indicates that a school with an ADM of 10-[19.99] students will
be funded at the formula weighted average daily membership level
of 39.60. For a school of 20-[29.99] students, the formula
calls for a funding level of 39.60 + 1.62 for every child over
20.
CHAIR SEATON asked for clarification/genesis of the variable
multipliers used in the formula.
MR. JEANS said that the formula was developed by a study group,
in 1998, it was determined that funding based only on enrollment
numbers; number of students multiplied by a certain number of
dollars. An economy of scale occurs, as a school grows. The
larger the school the less expensive it becomes to operate per
student served. The sliding scale was established to create a
base level of funding for the minimum ADM, with adjustment for
population increases. The weighting for additional students
above 20 is a sliding scale beginning at 1.62 down to 0.84.
8:45:39 AM
REPRESENTATIVE BUCH emphasized that the formula is based on a
per student ratio, regardless of the geographic region.
MR. JEANS concurred, and said it is an economy of scale
adjustment. Clarifying further, he said that for a school with
over 750 students, the number above 750 would be multiplied by
0.84, and that product added to the product of the base formula
793.6 times 750. He directed attention back to slide 9, and the
example showing how the school size for Nome resulted in an
adjusted ADM product of 841.18. Responding to comments from the
committee, he pointed out that the same formula factors are used
for elementary and secondary schools, and, if Nome had a
separate middle school, the calculation would be run three
times, because Nome has an ADM above 425.
8:50:42 AM
REPRESENTATIVE WILSON noted that with an ADM of 425, every
building is counted, but if the ADM is under 425 only two
buildings are considered. She asked how many communities come
under the category of having multiple buildings that are not
counted, because of the way the numbers fall.
MR. JEANS offered to provide these statistics to the committee.
8:51:30 AM
CHAIR SEATON asked how the REAA's (rural education attendance
areas) are calculated.
MR. JEANS replied that the REAA's are considered by community,
and calculated individually.
8:52:48 AM
MR. JEANS moved to slide 10, to explain step 1A, the Hold
Harmless provision adjustment. House Bill 273, enacted in 1998,
established a Hold Harmless provision to support districts
experiencing a reduction in enrollment. To determine
eligibility, the district's sum total of the school size
adjustment is compared against the prior fiscal year, to see if
a decrease of 5 percent or greater has occurred. If there is a
decrease of 5 percent, the prior fiscal year becomes the base.
Hold Harmless funding is provided to the district for up to
three years, should the enrollment numbers remain below the base
year. The funding is paid with yearly incremental decreases, he
explained: the first year 75 percent, the second year 50
percent, and the third year 25 percent. The Nome example, slide
11, indicates that the FY 09 size adjusted ADM was 965.08, and
in FY 10 it fell to 841.18; a difference of 123.90 or 12.84
percent triggering the hold harmless provision. In this case 75
percent of the difference, 92.93 is added to the FY 10 school
size ADM to equal 934.11. He stressed the importance of noting
that 2010 becomes Nome's base year for future Hold Harmless
calculations.
8:54:53 AM
REPRESENTATIVE WILSON inquired if there appears to be a
relocation trend of students moving from rural to urban
settings, causing the Hold Harmless provision to trigger.
MR. JEANS explained that this is the first year the Hold
Harmless rule has been in place. The old funding formula had a
similar provision that was dropped some time ago.
8:56:30 AM
CHAIR SEATON asked what would happen should the enrollment
numbers increase, possibly to 940.
MR. JEANS responded that the district would then be funded at
the 940 level.
8:57:35 AM
REPRESENTATIVE WILSON clarified that the funds would be
available for three years, even if the enrollment did not
continue to drop.
MR. JEANS concurred, and explained that the initial trigger year
becomes the base for the following years.
REPRESENTATIVE KELLER asked whether another 5 percent loss would
initiate a new trigger for the Hold Harmless provision.
MR. JEANS said that it did happen that way under the old
formula. Today the department calculates the provision using
both formulas, and pays the amount that will be the most
beneficial to the district.
REPRESENTATIVE KELLER inquired how many districts qualify for
the hold harmless provision, and how much money is involved.
MR. JEANS will provide the committee with that information. He
pointed out that the example utilizes projected ADM's but when
the final calculation is done, actual ADM's are used.
8:59:07 AM
REPRESENTATIVE MUNOZ asked whether schools that fall below 10
are eligible for site funding under the Hold Harmless provision.
MR. JEANS replied no, the Hold Harmless funds are paid to the
school district as a whole, not to an individual school.
8:59:57 AM
MR. JEANS continued with slide 12, step 2, to calculate the
district cost factors. The department monitors district cost
factors and submits a report to the legislature on January 15
every other fiscal year, since January 2001. He explained that
last year the legislature adopted the cost factors recommended
by ISER (Institute of Social and Economic Research), to be
phased in over a five year period. At that time a resolution
was also passed establishing a task force to address geographic
cost differentials. Any recommended changes that effect the
cost differential will come through the committee, not the
department, he pointed out. The lowest cost factor in the state
is 1.000 and the highest is 1.948. The next step in the
formula, he continued, is to multiply the district's cost factor
with the school size adjusted ADM. For the Nome example it is
934.11 x 1.402 arriving at the product of 1,309.62. He added
that the regional cost factors are to adjust for regional cost
differences identified by ISER; such as getting fuel to an area,
hiring/retaining qualified teachers in various regions, and
shipping costs.
9:01:47 AM
MR. JEANS directed attention to slide 13, step 3, to calculate
special needs funding. Programs included under this 20 percent
block grant are: special education, save intensive, vocational
education; gifted/talented programs; and bilingual/bicultural
programs. Each district files a plan with the department, to
indicate special needs services that will be provided. He
indicated slide 14 to demonstrate multiplying Nome's adjusted
ADM, 1,309.62, by the special needs factor of 1.20 to arrive at
the product of 1,571.54. He pointed out the note, at the bottom
of the slide, which refers to the hand out titled "Public School
Funding Program Overview, Updated January 1009," and where this
product is found in that overview.
9:02:55 AM
CHAIR SEATON asked for an opinion on how the block funding is
working, how it ties in with federal fund programs, and for
suggestions to assure appropriate distribution in each
educational category.
MR. JEANS contrasted the ease of tracking the combined
categories using the previous funding formula, compared with how
it is now handled. He opined that vocational education funding
has suffered under the No Child Left Behind Act (NCLB), where
the focus is to provide achievement levels in reading, writing,
and arithmetic.
9:06:18 AM
REPRESENTATIVE KELLER referred to step 5, and asked whether it
is policy to assume that the correspondence students do not
qualify under the special needs funding block.
MR. JEANS responded that it was not a policy call, stating
"That's just where it fell out in the formula, when we were
discussing the new funding formula." The policy call at the
time was that, under the previous formula, correspondence was
treated and funded like a school. The legislature recognized
that these programs did not have the same associated
building/operational costs, and the policy call that occurred
was to fund these program at the 80 percent level.
CHAIR SEATON mentioned that the committee would be reviewing
school policy issues in detail.
9:10:10 AM
REPRESENTATIVE GARDNER remembered that, at one time, each
element of the special education category was funded
independently. The advocates who worked in the field could
easily track specific portions of the funding. She conjectured
that the enactment of NCLB has influenced, altered, and possibly
complicated the process.
MR. JEANS opined that NCLB has not had an adverse effect on
services provided to the special education children. He said
that the special education students each receive an IEP for
services required, effectively a contract, and the district is
bound to provide the services regardless of the cost. He
clarified that the categorical funding, as had existed, covered
vocational, bilingual/bicultural, and special education. These
were not categorical expenditure requirements: the districts
were not required to spend the funds for the programs, and they
became a means to generate funding. Educational trends of the
1980's, spawned concern that students were being inappropriately
identified for special education and bilingual/bicultural
programs, which stimulated the move to block funding. In 1998,
he reported that he conducted a review of the cost effectiveness
for funding these programs to compare the two methods. The
results indicated the funds that school districts receive using
the current formula is slightly more than with the original
method, but with significant variance between districts. Some
states use a system of categorical expenditure requirements he
explained, "You generate so much money for this purpose, you
need to spend it there, and if you don't the excess comes back
to the state." Alaska does not ascribe to this method.
REPRESENTATIVE GARDNER mentioned that her office has received
reports that special education students, in her district, are
not receiving an appropriate share of the funding or effective
services.
9:15:06 AM
REPRESENTATIVE MUNOZ asked if the Architecture Construction
Engineering (ACE) academy, at [Juneau Douglas High School],
would be considered vocational and funded under the 20 percent
guideline, or under the ADM calculation.
MR. JEANS pointed out that individual programs are not
considered, and said that as the presentation unfolds it will
become apparent how that mechanism is figured in. Through
further panel discussion of how the 20 percent is determined, he
pointed out that the component is a mechanism to provide
additional state resources to assist in the three specified
areas; it's up to local school boards to determine how to
deliver those services.
REPRESENTATIVE MUNOZ asked whether a school must demonstrate a
need, via a specific number of students, in order to qualify for
the 20 percent special needs funding.
MR. JEANS said no, and reiterated that the district, as a whole,
receives the 20 percent adjustment, which is why it is called
block funding. The district can then determine how many, and by
what means programs for gifted/talented and bilingual/bicultural
will be offered. However, a special education IEP is a
contract, and schools must comply.
REPRESENTATIVE BUCH commented on how an entire community can be
encumbered, in order to provide for certain students.
9:19:29 AM
MR. JEANS continued with, slide 15, step 4, titled "Intensive
Services Funding," enumerating the three requirements for an
intensive, multi-need student. He pointed out that these
students are also counted in the base ADM. The funding per
child in FY 09 is $49,320, with an increase in FY 10 to $61,380,
and the projection for FY 11 is approximately $75,000. In this
category, Alaska has just below 2,000 student's state wide.
9:20:47 AM
CHAIR SEATON asked if these students are tracked when they move
between districts.
MR. JEANS said that typically this population doesn't move, as
families attempt to provide continuous community services, and a
stable environment. Further, he mentioned that the increased
funding for the intensive students, serves to free up funding
for districts to apply to other programs/services.
9:22:36 AM
REPRESENTATIVE MUNOZ asked about accountability, and what system
is used to assure that a district has met the criteria for
intensive student funding.
MR. JEANS explained that every new intensive claim is
scrutinized. He is requesting additional funding to allow his
department to perform 100 percent review on an annual basis. It
will require a $150,000 budget increase to contract with a
special education retirees to perform these duties.
9:23:24 AM
REPRESENTATIVE WILSON questioned what occurs when a student
holding an IEP moves between districts.
MR. JEANS responded that the contract accompanies the student to
the new district, but it is subject to review.
REPRESENTATIVE WILSON asked about the impact of a student
relocating from an urban setting, with readily available
services, into a rural area.
MR. JEANS answered that the state is still bound to fulfill the
stipulations of the IEP, and the services of the Special
Education Service Agency (SESA) are often employed. SESA is a
state funded agency, he pointed out.
9:25:11 AM
MR. JEANS continued with the Nome calculation of Step 4, on
slide 16. The increase percentage, for the intensive services
funding between the fiscal years, becomes the multiplying
factor. In this case, the increase is 11 percent. Thus, the
intensive student count is multiplied by 11 and added to the
adjusted ADM, from step 3. He reported that Nome has 5
intensive students, times the factor of 11, equals 55. The 55
is added to the adjusted ADM, 1,571.54, for a new total of
1,626.54. Step 5, slides 17 and 18, show the adjustments for
the correspondence programs. Districts offering these programs
receive funding based on 80 percent of the correspondence ADM.
Each correspondence student generates $4,464 as of FY 10.
Relating this to the example, Mr. Jeans indicated that Nome
claims 8.5 correspondent students, multiplied by .80 percent
factor, arriving at a product of 6.80. The adjusted ADM is
combined with the 6.80 for a sum of 1,633.34. The final
product, the basic need entitlement, is arrived at by
multiplying the district adjusted ADM by the base student
allocation (BSA). The FY 10 BSA is $5,580, applied to the
factor of 1,633.34 to arrive at Nome's entitlement of
$9,114,037.
9:26:22 AM
REPRESENTATIVE WILSON inquired whether the correspondent
students were previously counted in the ADM.
MR. JEANS stipulated that correspondence programs are only
factored in at the end of the equation, with the 80 percent
calculation.
9:27:14 AM
CHAIR SEATON requested information regarding correspondence
students who may also meet special education, or other program,
requirements.
MR. JEANS agreed to make the information available to the
committee, and clarified that, in many cases, the district that
a child resides in will claim them as a .25 full time equivalent
(FTE), to provide special education services, and the
correspondence district claims them for the remaining .75 FTE;
requiring coordination between districts.
9:29:20 AM
MR. JEANS continued with slide 20, a one page summary of the
equation as applied to Nome, to arrive at the basic need final
figure. He reviewed each step for clarity.
9:30:23 AM
REPRESENTATIVE KELLER commented on the complexity of the formula
and asked if it is available to the public on the department's
web sit.
MR. JEANS assured the committee that it is accessible to the
public via the EED site.
9:31:30 AM
MR. JEANS said that, having established the basic
need/entitlement the funding responsibility must be determined.
Calculations are made to arrive at independent contribution sums
from each of the three sources, listed on slide 21: 1) required
local contribution, 2) Federal Impact aid, and 3) state aid. He
referred to the previous presentation [EDC meeting 1/26/09] that
set forth how the required local contribution is formulated, and
briefly reviewed the contributing factors on slides 22 and 23.
9:32:09 AM
MR. JEANS reviewed slide 24, to illustrate how the local
contribution calculation is applied in the model for a product
totaling $955.700; Nome's required local contribution. He
pointed out that every organized area is required to contribute
in some way towards local education, either via property tax or
by figuring 45 percent of the prior year basic need. In areas,
such as North Slope, Valdez, and Skagway, where property taxes
are high, the 4 mill rate would far exceed 45 percent of basic
need and those districts use the alternate calculation.
9:33:15 AM
MR. JEANS reviewed the eligibility of Title VIII Federal Impact
Aid, which includes those residing on military bases, Alaska
Native Claims Settlement Act (ANCSA) lands, or in a National
Forest. These dwellers are non-taxable for this purpose.
Slides 25 and 26 address this deduction.
9:33:54 AM
CHAIR SEATON clarified that the students must reside on federal
or ANCSA land.
MR. JEANS concurred, and continued with slide 26, applying the
Federal Impact Aid payments to the Nome model; $81,920 eligible
for education. As indicated on slide 27, the federal law
requires the state to calculate the contribution ratio. The
formula is that the required local contribution is divided by
the budgeted local contribution. Budgeted local contribution,
for the purposes of calculating the Impact Aid percentage, is
th
found in the budget, as submitted on July 15 of each year, and
may consist of: appropriations, investment earnings, in-kind
services, or "other local." For Nome, the required local
contribution of $955,700 is divided by the budgeted local
contribution of $1,905,874 to equal a ratio of 50.14 percent.
9:35:10 AM
MR. JEANS moved to slide 29, to illustrate how the ratio is
applied in the example: eligible Impact Aid/$81,920 is
multiplied by the Title VIII ratio/50.14 percent and finally
multiplied by 90 percent to equal the total deductible Impact
Aid product of $36,967. He pointed out that the legislature is
responsible for establishing the deduction multiplier of 90
percent.
CHAIR SEATON asked if all eligible districts apply for these
funds.
MR. JEANS replied no. When a district only generates a couple
thousand dollars, it is not cost effective to go through the
process of verifying the land status and the paperwork involved
in order to apply. If the figure to be gained is $50,000 or
more, this deduction is being claimed.
9:37:29 AM
REPRESENTATIVE BUCH pointed out, that in the Nome example, of
the basic $9,114,037 need, the federal Impact Aid contributes
only $36,967.
MR. JEANS agreed, and stipulated that this figure only
represents the Nome district. On a state wide basis it is a
substantial amount, approximately $56-59 million of the $1
billion dollar total funding formula.
9:38:35 AM
MR. JEANS reviewed the summary of the Nome city school
calculation on slide 30: the basic need is $9,114.037, less the
calculated required local contribution of $955,700, and less the
federal Impact Aid of $36,967, to arrive at the state aid total
of $8,121,370. Additional funds, above the basic need, as
indicated on slid 31 are: additional local contributions, and
the Quality Schools grant.
9:39:15 AM
MR. JEANS explained that, in order to count the federal Impact
Aid dollars, it is necessary to have an equalized funding
formula. Federal law dictates that the disparity between the
richest and poorest districts of the state cannot exceed 25
percent. Hence, the state imposed the local contribution cap.
The state allows a district to contribute up to 23 percent of
the basic need above the required local contribution. Slide 32
indicates that 23 percent of Nome's basic need is $2,096,229.
As shown on slide 33, this amount is added to the required local
contribution of $955,700, to arrive at the maximum contribution
the Nome city schools can receive from the city - $3,051.929.
If this amount is exceeded, either the state aid is reduced or,
as is the norm, funds are returned to the city coffers.
9:40:37 AM
MR. JEANS reviewed how the Quality Schools grant program
component is calculated; slide 34. Established under AS
14.17.480, this allows a district to receive a grant not to
exceed the district's adjusted ADM multiplied by $16. He
explained that this grant was conceived to provide intervention
that is now being taken up via other means, and as such, the
program may have served its purpose and is no longer as
effective as when it was established. Additionally, the amount
calculated tends to be minimal. The Nome example shows the
district adjusted ADM of $1,633.34 multiplied by $16 for a
contribution product of [$26,133.44].
9:41:54 AM
REPRESENTATIVE WILSON questioned the property tax contribution
and the way in which communities comply with the mill rate.
MR. JEANS said that the 50 percent provision for the required
local effort has resulted in the state paying $75 million that
should be coming from local sources. Referring to the schedule
in the committee packet, he said that the state aid total would
$75 million less had the provision not passed. The required
local effort is not based on the number of inhabitants but the
value of the property, he stressed.
REPRESENTATIVE WILSON pondered whether communities should be
allowed to pay extra to attain their cap, when the state is
paying additional due to the adjustment.
9:44:31 AM
CHAIR SEATON inquired if there is an effect on the amount a
community can contribute if property values have increased, and
is the cap lowered when this occurs.
MR. JEANS said that it does lower the cap, because the state is
paying a portion of the required local effort. Whatever portion
of the required local effort the state is paying would have been
added to the cap. He offered an example using Nome, to
illustrate this point.
9:46:01 AM
REPRESENTATIVE WILSON continued to question how the local caps
are effected when the state pays a portion of the local
contribution.
MR. JEANS reiterated his concern, that, within a couple of
years, there will be some districts with local tax revenue
available to contribute to education, but the cap is going to be
lower than anticipated. He predicted that when this occurs, the
legislature will be looked to for relief. The reason that the
cap is lower is due to the current state subsidies to the local
contribution.
9:47:05 AM
REPRESENTATIVE KELLER requested a bar graph to allow the
committee to compare contributions by community.
CHAIR SEATON requested that the percentage of where the
districts fall in regards to respective caps be included.
REPRESENTATIVE WILSON suggested that the graph include a per
student contribution.
MR. JEANS said that this information is available on an annual
basis, and easily generated for the committee.
9:48:58 AM
REPRESENTATIVE GARDNER returned to slide 34, the Quality Schools
grant slide, and asked for further understanding of the program.
MR. JEANS said that this is a distinct separate component within
the foundation program, intended to provide interventions to
assist struggling students.
9:49:58 AM
MR. JEANS directed attention to slide 35, to illustrate that
Nome's total state entitlement is the sum of the calculated
state aid, at $8,121.370, plus the Quality Schools grant of
$26,133, equaling $8,147,503. If insufficient funds are
appropriated by the legislature to meet the total entitlement,
then all components of the public school funding formula program
will be reduced by the same percentage, as stipulated under AS
14.17.400 (b).
CHAIR SEATON referred to the formula rewrite of last year, which
was to ensure an equality of funding versus costs, and to allow
every district to receive the same amount of funding per
student. He inquired how the energy grant, instituted at the
time, was handled.
MR. JEANS said it was also factored in and distributed under the
adjusted ADM.
9:52:08 AM
REPRESENTATIVE GARDNER returned to the IEP topic, and asked
whether a contract would be written differently if cost were not
a factor and only the needs of the student were being
considered.
MR. JEANS suggested that the question be held for when the
department's special education administrator's are before the
committee [February 13, 2009].
9:52:58 AM
REPRESENTATIVE WILSON asked if there are any other per student
program calculations not included in the district cost factor
other than the Quality Schools grant.
MR. JEANS responded that nothing else is factored independently.
9:53:25 AM
CHAIR SEATON responded to a committee member's question, stating
that he was part of the education funding task force, held in
the summer of 2008. The recommendations from that meeting were
adopted by the governor and implemented by EED.
9:55:21 AM
ADJOURNMENT
There being no further business before the committee, the House
Education Standing Committee meeting was adjourned at 9:55 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Education Funding presentation |
HEDC 1/28/2009 8:00:00 AM |
|
| Education Funding presentation.pdf |
HEDC 1/28/2009 8:00:00 AM |
|
| Public School funding Program Overview - for Wednesday.pdf |
HEDC 1/28/2009 8:00:00 AM |