Legislature(2005 - 2006)HOUSE FINANCE 519
01/13/2005 03:00 PM House FINANCE
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* first hearing in first committee of referral
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HOUSE FINANCE COMMITTEE
January 13, 2005
3:01 p.m.
CALL TO ORDER
Co-Chair Chenault called the House Finance Committee meeting
to order at 3:01:50 PM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Eric Croft
Representative Richard Foster
Representative Mike Hawker
Representative Jim Holm
Representative Reggie Joule
Representative Mike Kelly
Representative Bruce Weyhrauch
MEMBERS ABSENT
Representative Carl Moses
ALSO PRESENT
Representative Bob Lynn; Roger Sampson, Commissioner,
Department of Education and Early Development; Eddy Jeans,
Manger, School Finance and Facilities Section, Department of
Education and Early Development
GENERAL SUBJECT(S):
INFORMAL PRESENTATION ON FORMULA FUNDING FOR EDUCATIONAL
PURPOSES
The following overview was taken in log note format. Tapes
and handouts will be on file with the House Finance
Committee through the 24th Legislative Session, contact 465-
6814. After the 24th Legislative Session they will be
available through the Legislative Library at 465-3808.
TIME SPEAKER DISCUSSION
3:02:07 PM Co-Chair Co-Chair Chenault introduced the
Chenault committee members and Eddy Jeans from
the Department of Education.
3:03:14 PM EDDY JEANS, Presented a power point presentation,
MANGER, SCHOOL an Alaska Public School Funding Formula
FINANCE AND Overview (copy on file.) He explained
FACILITIES that SB 36 established the current
SECTION, public school funding formula and
DEPARTMENT OF reviewed the five components of the
EDUCATION AND funding formula: Calculation of
EARLY Adjusted Average Daily Membership
DEVELOPMENT (ADM), Calculations of Basic Need
(Entitlement), Components of Basic Need
(Who Pays), Additional Funds above
Basic Need, and Components of State
Aid.
3:05:41 PM Mr. Jeans Mr. Jeans discussed ADM Reporting
Requirements contained in the power
point presentation. He explained that
school districts are required to report
student information through the Online
Alaska School Information System
(OASIS), and reviewed student
eligibility requirements for state
foundation funding. He described the
five steps used to calculate
entitlement.
3:08:47 PM Representative Asked if the charter school authority
Weyhrauch passed after SB 36 had been adopted.
Mr. Jeans replied that he thought they
were passed concurrently.
Representative Weyhrauch inquired how
charter schools factor in the ADM
adjustment.
3:09:25 PM Mr. Jeans Discussed charter school requirements.
In response to a question by
Representative Weyhrauch, Mr. Jeans
explained that charter schools
operations are governed by statute. He
noted that the statues were passed in
1998 and revised a few years later.
3:10:29 PM Mr. Jeans Listed the steps used to adjust the ADM
for school size. He spoke about the
requirements for alternative schools
and charter schools.
3:11:48 PM Representative Asked why alternative schools are
Weyhrauch counted as a part of the largest school
in the district rather than the
smallest. Mr. Jeans observed that the
calculations were set out in SB 36.
3:12:16 PM Vice-Chair Asked what the Department of
Stoltze Education's position was during the
drafting of SB 36. Mr. Jeans explained
that the Department's concern, at the
time, was to try to prevent smaller
schools from popping up in larger
communities for the purpose of size
adjustment.
3:13:08 PM Mr. Jeans Explained the number and types of
schools and their programs, including
correspondence schools, in Alaska.
3:14:08 PM Mr. Jeans Reviewed school size adjustments, using
Nome City Schools as an example.
3:16:35 PM Vice-Chair Asked if the statutes require a strict
Stoltze adherence regarding school size
variance. Mr. Jeans answered that
there is no variance requirement
through regulation.
3:17:15 PM Mr. Jeans Explained Nome City Schools' adjusted
ADM.
3:17:29 PM Representative Asked if there is a provision for
Croft adding a small alternative school's
numbers to a smaller regular school's
numbers. Mr. Jeans replied that there
is a provision in the statute for a
school with fewer than ten students to
be added to the smallest school.
3:18:08 PM Mr. Jeans Explained the district cost factors and
how they are determined. He explained
special needs funding.
3:18:57 PM REPRESENTATIVE Inquired how the cost factors are
BOB LYNN determined and what the incentive is to
reduce costs. Mr. Jeans answered that
it wasn't just that higher costs
produce a higher cost factor, but that
the higher cost to do business in a
region produces a higher cost factor.
He pointed out that the foundation
statute requires the Department of
Education to renew and update the
district cost factors. The McDowell
Group's model was intended to be used
for this purpose, but was not used.
Instead, a report by the American
Institute of Research was used, but not
yet adopted by the legislature.
Institution of Social and Economic
Research (ISER) is doing a peer review
of that report now, Mr. Jeans
explained. He added that the cost
factors should be reviewed and updated
on a periodic basis, but have not been
since 1999.
3:21:10 PM Mr. Jeans Continued to explain how the Department
of Education was planning to provide
special needs funding. He noted that
school districts must file a plan with
the department. Using Nome schools as
an example he explained special needs
funding.
3:22:01 PM Mr. Jeans Outlined the intensive services funding
and used Nome as an example.
3:23:07 PM Mr. Jeans Highlighted correspondence program
funding.
3:24:18 PM Mr. Jeans Reviewed spreadsheets contained in the
handout: Public School Funding Program
Overview (copy on file.) He discussed
page 7, which dealt with Nome's
adjusted ADM and basic needs and talked
about who pays for basic need.
3:25:35 PM Mr. Jeans Reviewed requirements under SB 174 and
explained Nome's full and true value.
He discussed the required local
contribution, for Title VIII Federal
Impact Aid Payments and how they are
calculated. He referred to the impact
AID percent contained on page 9, column
E, of the spreadsheet and explained how
the percentages are derived.
3:30:19 PM Mr. Jeans Referenced column G on page 9 to
explain state aid. He also discussed
funds above basic need (including
additional local contribution), quality
schools grant, and the supplemental
funding floor.
3:32:01 PM Representative In response to a question by
Croft Representative Croft, Mr. Jeans
explained federal law as it applies to
the cap on what local municipalities
can contribute. Representative Croft
asked about federal funding to the
school districts. Mr. Jeans replied
that the formula could be adjusted and
explained state aid and how it was
derived.
3:33:59 PM Mr. Jeans Provided details about the quality
schools grant. He explained how the
supplemental funding floor was
established specific to Nome's school
district. Nome's transition to the new
formula was clarified. Mr. Jeans gave
several examples of supplementary
funding floor adjustments.
3:36:49 PM Representative Asked if the McDowell Group model
Weyhrauch allowed for inflation. Mr. Jeans said
that it did not. He added that it only
addressed "need". How the state pays
for that need is left up to legislative
discussion. Representative Weyhrauch
asked what the annual rate of inflation
was in 1998. Mr. Jeans replied that he
could get that information.
3:38:07 PM Mr. Jeans Explained how Nome City School's
"floor" was established.
3:39:11 PM Mr. Jeans Reviewed the components of state aid
and how it is prorated.
3:40:17 PM Representative Asked about district cost factors. Mr.
Foster Jeans referred him to page 8, column P
of the handout. He indicated that
Commissioner Sampson would continue
with the slide presentation.
3:41:00 PM ROGER SAMPSON, Shared information about Governor
COMMISSIONER, Murkowski's educational funding
DEPARTMENT OF proposal by highlighting a national
EDUCATION AND trend regarding a shortage of teachers.
EARLY He referred to a graph showing the
DEVELOPMENT number of teachers who attended a
recent Alaskan job fair, which was a
smaller number than ever before. He
emphasized the importance of timing in
regards to funding education, so as not
to lose more teachers. He emphasized
the need to keep the teachers that we
have and pointed out that this is a
national issue, not just Alaskan. He
encouraged early and forward funding of
education because of the shortage.
3:44:46 PM Representative Asked if all jobs would be able to be
Joule filled in all districts, given the
shortage.
3:45:38 PM Commissioner Replied no. He observed that districts
Sampson are often unable to fill particular
kinds of positions with candidates who
hold the qualifications needed. He
pointed out that current and past
legislatures have taken action to
broaden the pool potential to fill
those positions.
3:46:06 PM Representative Asked what the dropout rate is and if
Joule there would be enough classrooms if
there were no dropout rate.
3:46:33 PM Commissioner Replied that he needed to look at the
Sampson numbers in order to answer that
question. He added that Alaska fits a
national pattern in turnover; in the
first 5 years of teaching, 50 percent
of teachers choose to leave the
profession.
3:47:16 PM Representative Asked if there would be enough
Joule classroom space and qualified teachers
if the dropout rate decreased.
3:47:40 PM Commissioner Emphasized that providing a known level
Sampson of funding is one part of solving the
problem.
3:48:13 PM Representative Agreed that it was a disturbing trend
Croft and suggested that a good retirement
package is an important component of
attracting and retaining teachers. .
He questioned whether it is a good time
for the Administration to add a tier
three level to the retirement package.
3:48:56 PM Commissioner Replied that national data indicates
Sampson that salary and benefits are not the
main reasons teachers leave. The top
two reasons are because teachers do not
feel supported and lack feedback about
their competence. He mentioned the
Alaska teacher mentor program as a
possible solution to retaining more
teachers.
3:51:03 PM Representative Asked if Commissioner Sampson was
Joule suggesting that teachers could be paid
less and given fewer benefits and be
encouraged to stay in teaching through
other mechanisms.
3:51:28 PM Commissioner Replied there is a need to provide more
Sampson incentives than dollars and benefits.
Representative Joule asked if Alaska
now pays less for salaries and
benefits. Commissioner Sampson replied
that Alaska used to rank very high in
salaries compared to other states but
that some other states are paying more
now and that inflation is a factor. He
pointed out that Alaska is still in the
top 5 percent for beginning teacher
salaries.
3:52:29 PM Co-Chair Mentioned that the trend is not new and
Chenault not only an Alaskan problem.
3:53:14 PM Co-Chair Meyer Asked if there was a graph that showed
the projection of student growth in the
next five years.
3:53:28 PM Commissioner Replied that student growth in Alaska
Sampson is quite stable now with the exception
of a few areas. Co-Chair Meyer asked
if the number of home-schooled students
is about 5 percent and if that number
is also steady. Commissioner Sampson
said that number was on the increase
until a year ago. In 2004, there was a
decline in enrollment. He added that
he has no data on home-schooled
students that do not receive funding
from the state. Co-Chair Meyer asked
how student money is transferred from
one district to another. Commissioner
Sampson explained that the count period
establishes where the dollars go. Co-
Chair Meyer asked Mr. Jeans whether a
cost study was being done. Mr. Jeans
referred to the ISER study and the
corrections being made to it.
3:56:49 PM Representative Related that his wife retired from
Holm teaching because of a lack of district
support regarding class size. He noted
that class size is a big issue for
teachers. He asked what the university
system was doing to support the numbers
of teachers needed in Alaskan school
districts.
3:58:18 PM Commissioner Replied that the state and the
Sampson university systems are working closely
together to try to increase numbers in
the teacher preparation programs, but
are still falling short of numbers.
Only 20 percent of needed teachers are
being produced, he added.
3:59:17 PM Representative Asked what lack of support means.
Lynn Commissioner Sampson clarified that it
indicates lack of support from the
district, community, parents, and
principal; a combination of actions by
others as well as needs not met.
4:01:26 PM Representative Said that as a teacher he noted that
Lynn some problems such as inclusion go
beyond the local level and need to be
solved on the federal level. He
emphasized that class size and special
education issues are a national
problem.
4:04:17 PM Commissioner Agreed that teachers become frustrated
Sampson with these problems.
4:04:56 PM Representative Observed that the Governor wants to
Weyhrauch have educational funding addressed
early in the legislature and pointed
out that it is the first subject before
the Committee.
4:05:49 PM Co-Chair Agreed with the importance of education
Chenault funding.
4:06:06 PM Vice-Chair Referred to home school issues and
Stoltze questioned the Administration's
position regarding home schooling and
additional regulations.
4:06:56 PM Commissioner Pointed out that the Administration is
Sampson pro-choice in regards to education
options. He added the caveat that the
Governor wants levels of
accountability.
4:07:42 PM Vice-Chair Asked if new regulations were being
Stoltze considered.
4:08:31 PM Commissioner In response to a question by Vice-Chair
Sampson Stoltze, explained that regulations for
monitoring of statewide correspondence
classes have been enacted.
4:09:32 PM Representative Noted the level of commitment, but
Hawker questioned the level of accountability
in regards to the Governor's K-12
funding plan. `
4:10:35 PM Commissioner Noted that the federal government has
Sampson required accountability through the No
Child Left Behind program. The
department is working on a growth
model. Performance will be reported
yearly.
4:11:35 PM Representative Summarized that testing is part of the
Hawker accountability factor. He stressed that
there needs to be a demonstration of
what is being paid for.
4:12:17 PM Representative Asked if FY05 increases would be
Joule compared to FY06 in terms of
accountability.
4:12:48 PM Commissioner Pointed out that Alaska is a local
Sampson control state and districts show
different levels of accountability.
Different districts have different
priorities.
4:13:40 PM Representative Referred to special student categories
Kelly and questioned the percentage of
students in each compared to the cost
for each. He added a personal story of
a teacher that left the profession. He
noted that discipline is also a factor.
4:15:04 PM Mr. Jeans Noted that special education funding is
provided as a block grant. He said that
part of it has to do with the state
allocation of the funding. He said it
made sense to go to a block allocation.
4:16:39 PM Co-Chair Meyer Gave a heads up about showing up front
the needs for budget purposes. Mr.
Jeans replied that Co-Chair Meyer would
be happy when he sees the budget.
ADJOURNMENT
The meeting was adjourned at 4:19 PM
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