Legislature(2009 - 2010)BELTZ 105 (TSBldg)

04/09/2010 08:00 AM Senate EDUCATION

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08:00:56 AM Start
08:01:16 AM SB313
08:38:22 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Bills Previously Heard/Scheduled
Moved SB 313 Out of Committee
Bills Previously Heard/Scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE EDUCATION STANDING COMMITTEE                                                                             
                         April 9, 2010                                                                                          
                           8:00 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Kevin Meyer, Co-Chair                                                                                                   
Senator Joe Thomas, Co-Chair                                                                                                    
Senator Bettye Davis, Vice Chair                                                                                                
Senator Charlie Huggins                                                                                                         
Senator Donald Olson                                                                                                            
Senator Gary Stevens                                                                                                            
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 313                                                                                                             
"An Act relating to the Alaska Challenge Youth Academy."                                                                        
     - MOVED SB 313 OUT OF COMMITTEE                                                                                            
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 313                                                                                                                  
SHORT TITLE: YOUTH ACADEMY FUNDING/REPORT                                                                                       
SPONSOR(s): EDUCATION                                                                                                           
04/05/10       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/05/10       (S)       EDC, FIN                                                                                               
04/09/10       (S)       EDC AT 8:00 AM BELTZ 105 (TSBldg)                                                                      
WITNESS REGISTER                                                                                                              
JOMO STEWART, Staff                                                                                                             
Senator Kevin Meyer                                                                                                             
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Introduced SB 313.                                                                                       
BRIGADIER GENERAL THOMAS KATKAS, Commissioner                                                                                   
Department of Military and Veterans' Affairs                                                                                    
Fort Richardson, AK                                                                                                             
POSITION STATEMENT:  Testified in  support of SB 313; the current                                                             
level of state funding for  the Alaska Challenge Youth Academy is                                                               
MCHUGH PIERRE, Deputy Commissioner                                                                                              
Department of Military & Veterans Affairs (DMVA)                                                                                
Fort Richardson, AK                                                                                                             
POSITION STATEMENT:  Testified in  support of SB 313; the current                                                             
level of state funding for  the Alaska Challenge Youth Academy is                                                               
EDDIE JEANS, Director                                                                                                           
School Finance                                                                                                                  
Department of Education and Early Development                                                                                   
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Provided supporting testimony for SB 313.                                                                
ACTION NARRATIVE                                                                                                              
8:00:56 AM                                                                                                                    
CO-CHAIR  KEVIN  MEYER  called   the  Senate  Education  Standing                                                             
Committee meeting  to order at 8:00  a.m. Present at the  call to                                                               
order  were Senators  Olson, Huggins,  Davis, Thomas,  and Meyer.                                                               
Senator Stevens arrived during the course of the meeting.                                                                       
              SB 313-YOUTH ACADEMY FUNDING/REPORT                                                                           
8:01:16 AM                                                                                                                    
CO-CHAIR MEYER announced consideration of SB 313.                                                                               
8:01:51 AM                                                                                                                    
JOMO STEWART,  Staff to Senator  Meyer, said that SB  313 changes                                                               
the way the  Alaska Challenge Youth Academy  ("Youth Academy") is                                                               
funded. He explained  that this is a  very successful residential                                                               
high school for students who  have withdrawn from school prior to                                                               
graduating. Currently the Youth  Academy receives funding that is                                                               
equal to  the base student  allocation (BSA) multiplied by  7 for                                                               
each residential  student and the  BSA multiplied by .6  for each                                                               
nonresidential student, minus the  amount received by the program                                                               
in federal matching grant funds.                                                                                                
Under SB  313 the Youth  Academy would receive a  flat allocation                                                               
of $11,990 for each fulltime  student, which effectively locks in                                                               
the state  funding at the  current level. Federal funds  are held                                                               
SENATOR  HUGGINS  referenced  the sponsor  statement  that  says,                                                               
"However,  as  the BSA  has  grown  over  the  years -  to  cover                                                               
retirement  costs  and other  increases  in  education -  it  has                                                               
resulted in a  windfall that is no longer reflective  of the true                                                               
cost of the program."  and said  at some point  he'd like to know                                                               
if this changes that.                                                                                                           
8:03:35 AM                                                                                                                    
SENATOR  OLSON  asked  how they  justify  funding  a  residential                                                               
student at the same rate as a nonresidential student.                                                                           
MR. STEWART deferred  the question to the  Department of Military                                                               
& Veterans Affairs (DMVA) because  the legislation was introduced                                                               
at their request.                                                                                                               
8:04:11 AM                                                                                                                    
BRIGADIER  GENERAL  THOMAS  KATKAS, Commissioner,  Department  of                                                               
Military and Veterans' Affairs,  explained that the current state                                                               
funding  for the  Youth Academy  is adequate;  this is  simply an                                                               
attempt  to stabilize  the method  for getting  that funding.  He                                                               
deferred to Mr. Pierre to explain the mechanics.                                                                                
MCHUGH  PIERRE, Deputy  Commissioner,  Department  of Military  &                                                               
Veterans  Affairs (DMVA),  explained  that as  the BSA  increased                                                               
from about $3,000 to almost  $6,000, the Youth Academy allocation                                                               
was a 7X multiplier. When  the Legislature added $500 per student                                                               
to the BSA,  the Youth Academy received $3,500  more per student.                                                               
While this growth was unintentional,  it did allow DMVA to expand                                                               
the program.  Mr. Pierre  informed the  committee that  when DMVA                                                               
received  an additional  $1.5 million  for the  Youth Academy  in                                                               
FY05, they  moved $1  million to capital  and used  the remaining                                                               
$.5 million to pay the PERS costs for their employees.                                                                          
MR.  PIERRE said  Eddie  Jeans, the  finance  director for  DEED,                                                               
worked on  the original  formula for the  Youth Academy  and DMVA                                                               
worked closely with  him to develop this new  formula to maintain                                                               
the current level  of state funding. For  simplicity they decided                                                               
to use just  one formula to match the current  budget. The intent                                                               
was not  to decrease  the state funding  because that's  what has                                                               
made  this such  a  successful  program. In  fact,  the State  of                                                               
Alaska funds the Youth Academy at  a higher rate than any similar                                                               
academy in the  nation. He said the current rate  is perfect, but                                                               
if  they do  need more  money  in future  years they  want to  be                                                               
treated like other schools and be able to ask for it.                                                                           
8:08:27 AM                                                                                                                    
CO-CHAIR MEYER  asked how  they arrived at  the flat  $11,990 per                                                               
student allocation.                                                                                                             
MR. PIERRE replied  the idea was to maintain  the current funding                                                               
level and this was a simple way to achieve that goal.                                                                           
CO-CHAIR MEYER asked  if he's comfortable that  the current level                                                               
of funding will provide sufficient funding for the program.                                                                     
MR. PIERRE answered it's perfect  to maintain the current program                                                               
and allow comfortable growth.                                                                                                   
8:09:29 AM                                                                                                                    
SENATOR HUGGINS  mentioned the threshold number  to be considered                                                               
a site and asked what the site number is for the Youth Academy.                                                                 
MR. PIERRE  said replied they  have to maintain  different levels                                                               
for the federal funding.                                                                                                        
SENATOR HUGGINS asked what the number  is to conform to the state                                                               
MR. PIERRE  deferred the question  to Mr. Jeans and  continued to                                                               
express  confidence  that  enrollment won't  fall  below  265-270                                                               
cadets. Currently the  Youth Academy has 186 beds  and is getting                                                               
ready to expand to  225 beds. The goal is to  be able to graduate                                                               
close to 500  cadets per year and this  formula accommodates that                                                               
goal. We  really don't  anticipate a drop  off in  enrollment, he                                                               
8:11:09 AM                                                                                                                    
SENATOR DAVIS  asked what makes  him think that moving  away from                                                               
the  BSA and  instead  asking  for flat  funding  of $11,990  per                                                               
student is going to be  stabilizing, particularly in light of the                                                               
push to  increase enrollment from  the pool of students  who have                                                               
dropped  out of  school. If  your numbers  doubled you'd  have to                                                               
return to the Legislature and ask for more money, she said.                                                                     
MR. PIERRE replied  they will still provide a  student count each                                                               
October and they  will be funded for that number  of students. As                                                               
enrollment  increases they'll  receive more  money, so  the Youth                                                               
Academy  will be  adequately  funded to  meet  student needs.  He                                                               
reiterated  that  DMVA  believes  that  $11,990  per  student  is                                                               
sufficient  to  deliver  optimum  services  for  residential  and                                                               
nonresidential students.                                                                                                        
8:14:04 AM                                                                                                                    
SENATOR  DAVIS clarified  that it's  the funding  she's concerned                                                               
about, not the program. She  asked what the federal/state funding                                                               
ratio is right now.                                                                                                             
MR. PIERRE  replied it's  about 75 percent  state and  25 percent                                                               
SENATOR DAVIS asked if the federal  money is based on a flat rate                                                               
or a per student basis.                                                                                                         
MR. PIERRE replied  it's based on a per student  basis and as the                                                               
enrollment  increases   they  anticipate  that  the   ratio  will                                                               
approach 50/50.                                                                                                                 
8:16:06 AM                                                                                                                    
CO-CHAIR MEYER  expressed concern  about becoming  more dependent                                                               
on federal money and asked if this is a risk to the state.                                                                      
GENERAL  KATKAS said  there's  a lot  of  interest nationwide  in                                                               
keeping youth academies  going so he doesn't see this  as a risk.                                                               
Compared to  the programs  in the  other states  and territories,                                                               
the Alaska Challenge Youth Academy  clearly enjoys the best state                                                               
8:17:22 AM                                                                                                                    
SENATOR STEVENS joined the meeting.                                                                                             
CO-CHAIR  MEYER  admitted  that the  committee  is  uncomfortable                                                               
agreeing to  give less  money to  a program  that is  obviously a                                                               
great success.   Typically, a  program would ask for  and receive                                                               
more, he said.                                                                                                                  
MR.  PIERRE said  he'd like  to  dispel the  notion that  capping                                                               
funding  prevents a  program from  growing  and flourishing.  The                                                               
Youth Academy doesn't need to  receive any more money per student                                                               
than it  currently receives. He  reiterated that  they've reached                                                               
the optimum  amount and as  more students enroll  they'll receive                                                               
more money to address the needs  of those students. "When we need                                                               
more money we truly will need it  and when we don't need more you                                                               
understand that  we're doing great  and we won't need  more money                                                               
and we will be open and honest with you," he said.                                                                              
CO-CHAIR THOMAS said  you're smart enough to figure  out what you                                                               
do  and  don't need,  but  we're  being redundant  is  expressing                                                               
concern because this is a fairly unique request.                                                                                
GENERAL KATKAS assured the committee  that they have thought this                                                               
through   and   believe   they've  reached   equilibrium.   We're                                                               
reasonable people and it would  be unreasonable to accept funding                                                               
above the current level, he said.                                                                                               
8:21:09 AM                                                                                                                    
SENATOR  HUGGINS asked  what the  pupil/teacher ratio  is at  the                                                               
Youth Academy.                                                                                                                  
MR. PIERRE  replied they have  10-12 teachers for each  cadet and                                                               
each class has 15-18 cadets. In  total about 90 staff work at the                                                               
SENATOR HUGGINS asked if the teachers are state certified.                                                                      
MR.  PIERRE said  no; some  of  the teachers  are certified,  but                                                               
that's not a requirement in private schools.                                                                                    
SENATOR  HUGGINS  asked  if  they  have  a  continuing  education                                                               
program for teachers.                                                                                                           
MR. PIERRE explained  that they encourage their  teachers to take                                                               
advantage  of the  opportunity to  take college  courses and  get                                                               
reimbursed,  but  it is  not  the  same  as for  state  certified                                                               
teachers working in public schools.                                                                                             
8:23:47 AM                                                                                                                    
SENATOR OLSON  asked if the cadets  have to pass the  high school                                                               
exit exam to graduate.                                                                                                          
MR.  PIERRE  answered  yes. They've  partnered  with  local  high                                                               
schools in  the Anchorage  and Mat-Su  school districts  to offer                                                               
the exit  exam, but  there's also  a process  for cadets  to earn                                                               
credits at the academy and then  return to public school and work                                                               
to receive their diploma.                                                                                                       
8:25:13 AM                                                                                                                    
CO-CHAIR  MEYER asked  Mr. Jeans  what  he thinks  about the  new                                                               
formula that is being suggested.                                                                                                
EDDIE JEANS, Director of School  Finance, Department of Education                                                               
and Early Development (DEED), said it's a wonderful formula.                                                                    
CO-CHAIR MEYER asked how they arrived at the number.                                                                            
MR. JEANS said  he would first provide some  context. The current                                                               
funding  formula, which  was adopted  in 2002,  provides for  the                                                               
Youth Academy  to receive  the BSA multiplied  by 7  for resident                                                               
students and the  BSA multiplied by .6  for nonresident students.                                                               
When this statutory  formula was adopted, the BSA  was $3,940 and                                                               
the  Youth Academy  received  about $27,000  per  student in  the                                                               
residential program. Today the BSA  is $5,680 per student and the                                                               
Youth Academy is receiving $39,700 per student.                                                                                 
Over  the years  when the  Legislature increased  the BSA  it was                                                               
oftentimes   to  help   school   districts   address  their   TRS                                                               
liabilities.  But the  Youth Academy  employees  are hired  under                                                               
PERS  so the  increased funds  were used  to benefit  the program                                                               
rather  than  paying  down  a  teacher  retirement  system  (TRS)                                                               
liability. What  they're saying today  is that they've  reached a                                                               
comfortable funding  level for ongoing operations  and they don't                                                               
need more.                                                                                                                      
MR. JEANS  explained that to  arrive at $11,990 they  divided the                                                               
total  state aid  that the  Youth Academy  receives today  by the                                                               
total number of students at the  Youth Academy. He noted that the                                                               
DEED  budget this  year reflected  a $600,000  reduction for  the                                                               
Youth  Academy based  on increased  federal aid;  as federal  aid                                                               
increases state aid decreases. What  DMVA is proposing is to drop                                                               
the BSA and  freeze the per student state funding  at the current                                                               
level. Then  if they  receive more  federal aid  those additional                                                               
resources can be used to expand their program.                                                                                  
MR. JEANS  said he's talked  about this with  Deputy Commissioner                                                               
Pierre a  number of times and  he firmly believes this  amount is                                                               
adequate to  fund the program for  possibly the next 5  years. If                                                               
they  believe  at some  point  that  they need  additional  funds                                                               
they'll  return to  the  Legislature  to ask  for  more. For  now                                                               
they're comfortable,  DEED is comfortable, and  it simplifies the                                                               
8:29:59 AM                                                                                                                    
SENATOR OLSON  suggested they re-appropriate  the surplus  to the                                                               
general fund  because relying  on increasing  federal funds  is a                                                               
volatile foundation.                                                                                                            
MR. JEANS  pointed out that  they aren't asking to  give anything                                                               
back  and  they aren't  asking  for  more.  They are  asking  the                                                               
Legislature to  freeze their state  funding at the  current level                                                               
and DEED is perfectly comfortable with the request.                                                                             
SENATOR  OLSON asked  when the  Youth  Academy decided  it had  a                                                               
stable foundation.                                                                                                              
MR.  JEANS replied  he  believes that  this  discussion has  been                                                               
ongoing for a number of years  in this body; it's mainly centered                                                               
on  the  fact that  there  isn't  a direct  relationship  between                                                               
increases in  the foundation  program and  the 7X  increases that                                                               
the Youth Academy has received.                                                                                                 
8:32:33 AM                                                                                                                    
SENATOR OLSON  asked if he thinks  the bill will make  it through                                                               
when it's so late in the session.                                                                                               
MR. JEANS replied  that is in legislators'  hands. Continuing, he                                                               
offered  the  opinion  that  DMVA  should  be  given  credit  for                                                               
developing such a  stable program that can continue  to thrive at                                                               
the current  level of  state funding. They're  doing a  great job                                                               
and I applaud them for stepping forward, he said.                                                                               
8:34:15 AM                                                                                                                    
CO-CHAIR MEYER  noted that  this bill moves  to finance  next and                                                               
there's also has a companion bill in the other body.                                                                            
8:34:31 AM                                                                                                                    
CO-CHAIR THOMAS asked  if the statutory change  would be specific                                                               
to the Youth Academy or if it would impact other schools.                                                                       
MR. PIERRE  replied the  Alaska Challenge  Youth Academy  has its                                                               
own  statutory  funding scheme  so  this  bill only  affects  the                                                               
8:35:28 AM                                                                                                                    
CO-CHAIR MEYER closed public testimony.                                                                                         
8:36:18 AM                                                                                                                    
CO-CHAIR MEYER asked Mr. Jeans to explain the fiscal note.                                                                      
8:36:58 AM                                                                                                                    
MR.  JEANS said  the fiscal  note shows  a $300  increase in  the                                                               
current year over what's in the  FY11 budget. In future years the                                                               
Youth  Academy will  submit  their student  count  and DEED  will                                                               
calculate  the entitlement,  which will  be part  of DEED  future                                                               
budgets that the Legislature considers on an annual basis.                                                                      
CO-CHAIR MEYER commented  that the $300 fiscal note  results in a                                                               
finance committee referral.                                                                                                     
8:38:07 AM                                                                                                                    
CO-CHAIR  THOMAS  moved to  report  SB  313 from  committee  with                                                               
individual  recommendations and  attached  fiscal note(s).  There                                                               
being no objection, SB 313 moved from the Senate Education                                                                      
Standing Committee.                                                                                                             
8:38:22 AM                                                                                                                    
There being no further business to come before the committee,                                                                   
Co-Chair Meyer adjourned the Senate Education Standing Committee                                                                
hearing at 8:38 a.m.                                                                                                            

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