Legislature(2007 - 2008)BUTROVICH 205

02/28/2007 08:00 AM Senate SPECIAL COMMITTEE ON EDUCATION


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Audio Topic
08:03:17 AM Start
08:04:00 AM Consideration: Repeal of Requirement That 70 Percent of Education Funds Be Spent on Instruction
08:54:34 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Consideration: Repeal of requirement
that 70% of education funds to be spent
on instruction.
                    ALASKA STATE LEGISLATURE                                                                                  
             SENATE SPECIAL COMMITTEE ON EDUCATION                                                                            
                       February 28, 2007                                                                                        
                           8:03 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Gary Stevens, Chair                                                                                                     
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Bettye Davis                                                                                                            
Senator Donny Olson                                                                                                             
Senator Gary Wilken                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
Overview: Consideration of repeal of requirement that 70 percent                                                                
of education funds be spent on instruction.                                                                                     
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                              
No previous action to record.                                                                                                   
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                              
Eddy Jeans, Director of School Finance                                                                                          
Department of Education &                                                                                                       
 Early Development                                                                                                              
        th                                                                                                                      
801 W 10 St.                                                                                                                    
Juneau, AK  99801-1894                                                                                                          
POSITION STATEMENT: Presented overview                                                                                        
                                                                                                                                
PJ Ford Slack, Superintendent                                                                                                   
Delta-Greely School District                                                                                                    
Delta Junction, AK                                                                                                              
POSITION STATEMENT: Participated in overview                                                                                  
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  GARY  STEVENS  called  the  Senate  Special  Committee  on                                                             
Education meeting to order at 8:03:17  AM. Present at the call to                                                             
order  were Senators  Olson, Huggins,  Davis,  Wilken, and  Chair                                                               
Stevens.                                                                                                                        
                                                                                                                                
    ^CONSIDERATION: REPEAL OF REQUIREMENT THAT 70 PERCENT OF                                                                
            EDUCATION FUNDS BE SPENT ON INSTRUCTION                                                                         
                                                                                                                              
8:04:00 AM                                                                                                                    
                                                                                                                                
EDDY  JEANS, Director  of School  Finance for  the Department  of                                                               
Education & Early  Development, said that the  Board of Education                                                               
has  been struggling  with the  70 percent  requirement for  many                                                               
years.   The requirement  was put in  place as  an accountability                                                               
measure, but the  No Child Left Behind  (NCLB) act's requirements                                                               
take the place of this measure and are more appropriate.                                                                        
                                                                                                                                
He showed the committee a  spreadsheet detailing size and student                                                               
populations  for different  school districts,  and said  that the                                                               
requirement has  been implemented  since 1999.  He said  that two                                                               
types of  failures have been  identified over the  years: schools                                                               
with a budget of three million  or less, and those with operation                                                               
and maintenance budgets  that take more than 20  percent of their                                                               
funding, such as rural schools.                                                                                                 
                                                                                                                                
He referenced  another page of  the handout to show  summaries of                                                               
the percent of change by  category, and said that the requirement                                                               
has  done  some  good  for   school  districts  and  the  state's                                                               
progress,   and  this   year   29  districts   are  meeting   the                                                               
requirement.   However, very little  change has been seen  in the                                                               
last  few  years,  so  the  threshold has  been  reached  in  the                                                               
effectiveness of this exercise.                                                                                                 
                                                                                                                                
8:10:41 AM                                                                                                                    
                                                                                                                                
SENATOR  OLSON  asked  for clarification  on  recent  improvement                                                               
numbers and the concept of a plateau.                                                                                           
                                                                                                                                
MR. JEANS said that he believes  that a certain number of schools                                                               
will  never achieve  the 70  percent goal,  and this  is why  the                                                               
situation has reached a standstill.                                                                                             
                                                                                                                                
8:12:16 AM                                                                                                                    
                                                                                                                                
SENATOR  HUGGINS  said  that  the trend  of  meeting  70  percent                                                               
appears to be rising still.                                                                                                     
                                                                                                                                
MR. JEANS  said that the  effort has  been worthy, but  he thinks                                                               
the number  of school  districts to reach  the requirement  is at                                                               
its maximum.                                                                                                                    
                                                                                                                                
8:14:23 AM                                                                                                                    
                                                                                                                                
CHAIR  STEVENS said  that the  requirement has  been an  enormous                                                               
success,  and he  asked if  removing the  requirement would  make                                                               
things worse.                                                                                                                   
                                                                                                                                
MR. JEANS said  that he can not guarantee  continued success, but                                                               
that the  state wants to  move into  a new system  where students                                                               
meet standards  without necessarily spending a  certain amount of                                                               
money.                                                                                                                          
                                                                                                                                
CHAIR STEVENS said  that the public may not be  happy about doing                                                               
away with the  requirement and the ensuing  possibility that less                                                               
money may be spent on instruction.                                                                                              
                                                                                                                                
8:17:00 AM                                                                                                                    
                                                                                                                                
SENATOR OLSON asked if there  was another factor that contributed                                                               
to the schools' success.                                                                                                        
                                                                                                                                
MR. JEANS  replied that  additional staff  led to  improvement in                                                               
the school finance  reporting system, which accounts  for some of                                                               
the difference.                                                                                                                 
                                                                                                                                
CHAIR STEVENS asked if changes  in school district reporting have                                                               
been made.                                                                                                                      
                                                                                                                                
MR. JEANS  said that any  change in  the chart of  accounts would                                                               
have been  very minor.  Over time the  increased scrutiny  of the                                                               
school finance system led to the improvement.                                                                                   
                                                                                                                                
He  referenced  a  McDowell  group  study  to  explain  that  the                                                               
analysis found that  70 percent of funding should  go to schools,                                                               
teachers,  and  the instructional  program.  He  said that  other                                                               
costs, such  as administration,  vary widely in  different areas.                                                               
The way  that the  percentages were calculated  was by  using the                                                               
adjusted membership, which was then averaged by district.                                                                       
                                                                                                                                
MR. JEANS said that he  calculated the ratio of non-instructional                                                               
to instructional  costs state-wide,  and only  23 percent  of the                                                               
Anchorage School District's  budget is non-instructional. Because                                                               
the  state-wide  requirement  was  an  average,  each  district's                                                               
individual   costs  vary   and   thus   render  the   requirement                                                               
ineffectual.                                                                                                                    
                                                                                                                                
8:27:30 AM                                                                                                                    
                                                                                                                                
SENATOR  WILKEN  said  that  in 1997,  funds  allocation  to  the                                                               
classroom  was dismal  in many  schools and  there was  no common                                                               
chart of accounts.  The 70 percent requirement was  and remains a                                                               
good number,  and although the  department says it's  unneeded it                                                               
remains  an effectual  guideline. His  concern is  that repealing                                                               
the  rule would  allow schools  to  slip back  into poor  funding                                                               
allocation;  he  understands the  need  for  a different  way  of                                                               
reporting, but the requirement should remain.                                                                                   
                                                                                                                                
He referenced a newspaper article  showing that other states have                                                               
a similar problem with school  funding allocation and have signed                                                               
similar bills into law.                                                                                                         
                                                                                                                                
8:33:24 AM                                                                                                                    
                                                                                                                                
CHAIR STEVENS said that he sensed  a reluctance to do away with a                                                               
rule  that  appears to  be  working,  but  the committee  is  not                                                               
unwilling to consider a new approach.                                                                                           
                                                                                                                                
He  asked Mr.  Jeans to  comment  on any  connection between  the                                                               
requirement and the state employee retirement system.                                                                           
                                                                                                                                
MR. JEANS replied that retirement  funding is generally unrelated                                                               
to this requirement.  In the next few years,  however, there will                                                               
be a spike  in retirement funding, which  counts as instructional                                                               
funding,  so  some  schools'  spending  levels  may  be  inflated                                                               
without any actually classroom improvement.                                                                                     
                                                                                                                                
He added  that there  has always  been a  chart of  accounts, but                                                               
that  prior to  1998  districts  were not  forced  to follow  the                                                               
guidelines.                                                                                                                     
                                                                                                                                
8:38:07 AM                                                                                                                    
                                                                                                                                
SENATOR  WILKEN  said  that  he did  not  understand  Mr.  Jeans'                                                               
comments regarding  percentage allocation, and said  that schools                                                               
appear to have control over their own allocations.                                                                              
                                                                                                                                
MR. JEANS  said that districts  were missing the  requirement not                                                               
because  of state  allocation but  because of  the way  they were                                                               
spending their own  funds. He referenced a paper  showing how the                                                               
70  percent spending  requirement  is  calculated, and  commented                                                               
that the process is not particularly difficult.                                                                                 
                                                                                                                                
8:40:29 AM                                                                                                                    
                                                                                                                                
SENATOR DAVIS said that the  requirement has made a difference in                                                               
funding allocations  and she does  not want  to do away  with it,                                                               
but  that it  may  need some  adjusting. She  said  she has  been                                                               
hoping for  other recommendations  from the school  district. The                                                               
requirement can  be suspended, she suggested,  and then monitored                                                               
to  see  how the  districts  respond.  She  asked Mr.  Jeans  for                                                               
another way to implement the requirement.                                                                                       
                                                                                                                                
MR. JEANS said  that the state board is asking  for the repeal of                                                               
the resolution, and that they're  frustrated with the demands for                                                               
waivers from  the same districts  not meeting  requirements every                                                               
year. He said  that he could develop a tiered  system for systems                                                               
with  difficulties, or  a  cap could  be  set for  administrative                                                               
costs, but that wouldn't necessarily have the same efficacy.                                                                    
                                                                                                                                
SENATOR   HUGGINS  said   that   external   budget  factors   and                                                               
evaluations  are  two  things that  change  a  school  district's                                                               
process, and  while he is  willing to  accept part of  Mr. Jeans'                                                               
explanation  of the  frustration with  the requirement,  he finds                                                               
that ultimately it's more useful than not.                                                                                      
                                                                                                                                
8:47:36 AM                                                                                                                    
                                                                                                                                
CHAIR STEVENS said  that frustration is apparent  all around, and                                                               
the issue should be revisited in another meeting.                                                                               
                                                                                                                                
PJ   FORD-SLACK,  Superintendent   of  the   Delta-Greely  School                                                               
District, said that  the NCLB act now  provides an accountability                                                               
system that can take the place  of the requirement. She said that                                                               
Alaska,   as  a   largely  rural   state,  has   inherently  high                                                               
administrative and facility costs, and  if the requirement is not                                                               
to be eliminated, it should be adjusted.                                                                                        
                                                                                                                                
SENATOR  DAVIS  said  that  she  thinks  further  information  is                                                               
needed, and added that she has asked  for a bill to be drafted to                                                               
spur further discussion.                                                                                                        
                                                                                                                                
SENATOR OLSON asked Mr. Jeans what  sort of action the DEED takes                                                               
when schools do not meet the requirement.                                                                                       
                                                                                                                                
MR. JEANS replied  that interventions are only  made when schools                                                               
do not meet NCLB requirements.                                                                                                  
                                                                                                                                
SENATOR  OLSON  asked for  the  administrative  costs of  private                                                               
schools.                                                                                                                        
                                                                                                                                
MR. JEANS replied that he did not know.                                                                                         
                                                                                                                                
CHAIR  STEVENS   said  that  the   issue  needs  to   be  further                                                               
considered, and thanked  Mr. Jeans for his  presentation.  Seeing                                                               
no  further  business  before the  committee,  he  adjourned  the                                                               
meeting at 8:54:34 AM.                                                                                                        

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