HB 23-CLASS SIZE REDUCTION GRANTS 9:24:23 AM CHAIR SEATON announced that the final order of business would be HOUSE BILL NO. 23, "An Act establishing a grant program to support voluntary class size reduction." 9:24:36 AM REPRESENTATIVE HARRY CRAWFORD, Alaska State Legislature, paraphrased from his sponsor statement that this process began in about 2003. He stated that the dropout rate was bad then but is worse now. He opined that Alaska is failing its children and has a dropout rate nearly double the national average that leads to a number of negatives. He offered that students who complete high school earn an average of $290,000 more in their lifetime. He related that non-graduates are 68 percent more likely to rely on public assistance and graduates are 20 percent less likely to commit violent crimes. He stated that according to a 2002 U.S. Government Accountability Office study nearly 80 percent of inmates were high school dropouts. The average cost of incarceration to the State of Alaska in 2002 was $36,730 per year. Alaska ranks as ninth in the number of students who will earn a university Bachelor's degree in 10 years. 9:26:45 AM REPRESENTATIVE CRAWFORD related that HB 23 would give a grant of $8,000 to any school district that will commit to class sizes of 15 or under. He explained that the class size of 15 was chosen because the Project STAR, a Tennessee based study, tested three class sizes, and saw a dramatic increase in performance in class sizes of 13-17 students. Other studies, such as one in California in which class sizes were reduced to 20 showed some improvement, but did not demonstrate the dramatic improvement that smaller class sizes showed. 9:28:23 AM ERIC CROFT stated that as a past legislator, he had previously introduced similar legislation. He stressed the many things can be done to help the school system, but the single most important thing is to have students enter school with appropriate skills. Additionally, it is important to have a qualified teacher with time to teach. Despite technological advances, it remains that the two most important things are to enter school ready to learn and to have a teacher who has time to teach his/her students, he stated. He indicated that particularly in the K-3 classes the class size is important. He characterized this bill as an antidote to one-size fits all testing model of the "No Child Left Behind" testing model. He further opined that by adding testing requirements without providing states with the additional resources does not do the school systems justice. He mentioned that the bill would not dictate what the district must do, but if the school districts decide to implement the grant program, the program can be completed at their own time and speed. He pointed out that California tried to implement class size reduction as a requirement but could not hire enough teachers or find that many buildings in a year or two. MR. CROFT related that the state can provide the incentives, the "road map", and the funding to address two of the most important aspects of education. 9:33:33 AM CHAIR SEATON inquired as to whether school would need to address all classes from kindergarten through third grade (K-3) in order to qualify for funding. 9:34:11 AM REPRESENTATIVE CRAWFORD explained that the intent of HB 23 is to make this funding as flexible as possible and have it apply for classes K-3. However, a school may need to begin with kindergarten and add classes as possible. 9:35:39 AM CHAIR SEATON directed attention to the sectional analysis titled "House Bill No. 23 - Voluntary Class Size Reduction Sectional Summary", to Section 2 that read: "Only schools maintaining a class size of no more than 15 in grades kindergarten through three would be eligible for grants." REPRESENTATIVE CRAWFORD answered that his intention is to make it more flexible than that. In further response to Chair Seaton, Representative Crawford answered that he was not certain how to enforce the commitment that each school district participate for a minimum of five years to provide data on the efficacy. He offered his belief that class size will reap benefits. 9:37:16 AM CHAIR SEATON inquired as to what measure of achievement will be used to track the academic progress and achievement levels. Chair Seaton further inquired if the language in the sectional analysis that states the definition for "child with a disability" has the meaning in AS 14.30.350, which refers to special education students. REPRESENTATIVE CRAWFORD said he did not know. In further response to Chair Seaton, Representative Crawford agreed that the $8,000 funding will go through the current foundation formula funding. 9:40:07 AM REPRESENTATIVE KELLER pointed out that the title states that it is to support class size reduction, but he recalled that the criteria for the grant would require a commitment to that size. He related his understanding that half of the schools in the state could not meet that class size. REPRESENTATIVE CRAWFORD related his understanding that many schools statewide have small class sizes but have other problems. The funding would also act as an incentive for those classes to do a better job, he stated. REPRESENTATIVE KELLER maintained his belief that the title of the bill needs to be altered to include a commitment to reduce class size versus requiring a reduction in class size. 9:42:12 AM REPRESENTATIVE MUNOZ referred to the fiscal note. She pointed out that the fiscal note is for $118 [million] but in calculating the five year grants the totals to about $38 million. CHAIR SEATON asked to hold questions on the fiscal note for Mr. Jeans. 9:43:08 AM REPRESENTATIVE GARDNER provided a district scenario that might pose a problem with respect to special education children such that a district has 14 children but the next child is a special education child. She opined the district would lose funding allocation since the class size would exceed 15:1. REPRESENTATIVE CRAWFORD stated that if the special education child is counted as two, that the class would be divided into two entities to maintain the small size. 9:44:14 AM REPRESENTATIVE KELLER inquired as to how many new teachers and classrooms would be required if this bill passed and was implemented. REPRESENTATIVE CRAWFORD related that the fiscal note includes all classrooms that would be eligible statewide, if all classes participated. However, he pointed out it would not be realistic to implement statewide. 9:44:59 AM CHAIR SEATON referred to the sectional again, and read, "A parent of a child may file a complaint in court to require a district to comply with and enforce the class size requirements of this Act." He inquired as to whether Representative Crawford thought that the bill refers to voluntary class size when it seems to him as though at least one parent would file a lawsuit to force the school district to enforce the smaller class size. REPRESENTATIVE CRAWFORD answered that provision would apply once the school district agrees to the small class size to ensure that the class size was maintained. He stated that the school would not be forced to make the commitment to reduce class sizes. CHAIR SEATON suggested that the sponsor should request a legal opinion on this point. He opined that a court challenge could come to the fore, given the existing language. 9:47:01 AM REPRESENTATIVE KELLER offered his belief that nothing prevents a school district to choose to have a low teacher to student ratio on its own. REPRESENTATIVE CRAWFORD, in response to Chair Seaton, answered that the grant would fund certified/qualified teachers and not teacher aides. 9:47:51 AM REPRESENTATIVE WILSON stated that every single school that could get a teacher would apply since this would help the school obtain additional funding. REPRESENTATIVE CRAWFORD said that that would be the intent, for each school to implement this as quickly as possible. 9:48:47 AM REPRESENTATIVE WILSON related that classroom facilities would be an issue. REPRESENTATIVE CRAWFORD offered that the intent of the bill is not to make small classrooms mandatory but to get smaller classes in place as quickly as possible. The results for small classes have been demonstrated. He said, "I just don't think we can afford not to do this." Alaskan children are being failed and something needs to change, he added. He opined that the state will spend a lot of money to try to fix problems with education. He further opined that directing attention to the early grades will garner results throughout a student's career. He again said, "College begins in pre-school." 9:50:17 AM CHAIR SEATON asked what percentage of districts would automatically qualify for this program since some classes already have less than 15 students. REPRESENTATIVE CRAWFORD deferred to Mr. Jeans. 9:51:14 AM REPRESENTATIVE WILSON related her understanding that the impact in funding could be considerable. REPRESENTATIVE CRAWFORD addressed the fiscal note regarding the Wrangell schools. He opined that the schools in Wrangell would receive almost $244,000 in additional funding. 9:52:59 AM CHAIR SEATON inquired as to whether Representative Crawford has reviewed the base student allocation. REPRESENTATIVE CRAWFORD recalled that the fiscal note was based on 1.5 times the base student allocation. 9:54:30 AM CHAIR SEATON related his understanding that the intent of the bill is to provide an additional $2,500 per student for kindergarten through third grade. If a school district were able to make the change for kindergarten and first grade that the bill would only apply to classes for 15 students or less. 9:56:23 AM EDDY JEANS, Director, School Finance and Facilities Section, Department of Education and Early Development (DEED), stated that the DEED prepared a fiscal note for HB 23. He directed attention to Page 2 of the fiscal note. He explained that the DEED reviewed the total number of students enrolled in K-3, by district, and assumed that every district would apply for the grant if they do not automatically qualify for the grant by default since many of the schools already have a ration of people teacher ratios (PTR) below 15:1. He related that the fiscal note was based on a school size adjustment of .97, which represents the adjustment that schools would receive from the school size adjustment table from 250-450 students. He stated that he could have picked another adjustment, but that is the one selected for this purpose. He further explained that geographic cost differentials were added to the adjustment as well as 20 percent for special needs funding. Thus, the overall cost was $118 million statewide, he stated. MR. JEANS opined that the DEED interpreted the costs as supplemental grants above the base student allocation (BSA). He reviewed the calculation which he said was applied that to the adjusted attendance area and average daily membership (ADM). He explained that for 2011-2015 the same adjustment was used. He mentioned that an additional $7,476 is added for each year to adjust for the consumer price index (CPI). 9:59:02 AM CHAIR SEATON related his understanding that the basis for the fiscal note is $118 million and the other funds are estimated for Consumer Price Index (CPI) adjustment, but the $118 million is the base amount since it represents the beginning of the program. MR. JEANS agreed. He stated that once the funds are in the base funding and the additional years would be adjusted for the CPI. 9:59:37 AM REPRESENTATIVE MUNOZ related that the fiscal note is $118 million plus the CPI for the five years. She inquired as to whether any cost is included for additional space that might be needed to implement the smaller classroom sizes. MR. JEAN answered no. However, he noted that typically the larger urban schools would need additional space. However, he explained that if HB 23 were to pass, that would be taken into consideration when the department considered space eligibility to allow municipalities to request additional money to expand their facilities. 10:00:46 AM CHAIR SEATON returned to his question regarding the ratio of schools whose PTR is below 15 for K-3 classrooms. MR. JEANS offered to provide an estimate for the committee. The larger urban areas have a ratio that is over 1:15 with most reporting classroom sizes of 17 to 18 PTR. He explained that the way that this bill would work is to provide additional funding on a per child basis. 10:01:48 AM CHAIR SEATON expressed concern that the bill would not provide enough funding to incrementally implement the program. He posed several instances in which a school might have to split a classroom or hire additional teachers. MR. JEANS offered to provide the information. However, Mr. Jeans opined that the fiscal note for HB 23 would provide enough funding to hire the teachers the schools would need to hire. He posed a scenario in which Glacier Valley School has 2 classes for each grade from K - 3. He related that if the school has a 17:1 ratio, that probably only two additional children would be in each of the six classes so one or two additional classes would be created to fulfill the smaller class ratios. He further opined that the smaller schools already meet the requirements but would gain additional revenue under the bill. He opined that many small schools are operating at a 10:1 or less PTR ratio. 10:04:15 AM MR. JEANS addressed Representative Gardner's question that adding an extra special education child to the class would put the school over the ratio of 15:1 PTR. He responded that the child would not be counted as two students, except when applying the formula to generate revenue, and not for the PTR ratio. 10:04:42 AM REPRESENTATIVE WILSON inquired as to what would happen if the student count was 15 and an additional child was added to the class. MR. JEANS explained that scenario would trigger subsection (d) which is where the child's parents or the state would petition the court to enforce the smaller classroom size. He indicated that this subsection is the enforcement aspect of the bill for compliance. He emphasized that if a school district gave its assurance that it would maintain a smaller classroom size, the mechanism exists for the parents or the state to force compliance. 10:05:43 AM CHAIR SEATON maintained his concern regarding the legal aspect, such that a parent could assert that funding is available, his/her school district is opting to offer a lesser quality education than is available statewide. MR. JEANS answered that he understood Chair Seaton's concern. 10:07:23 AM MR. JEANS, in response to Representative Wilson, explained that the fiscal note reflects the changes over the prior year. Once the change has occurred, it becomes part of the base. Thus, the $118 million is the base and is carried forward, he noted. 10:07:50 AM REPRESENTATIVE WILSON related her understanding that the cost is actually higher since the fiscal note costs are cumulative. MR. JEANS reiterated that implementing HB 23 would require and additional $118 million from this point forward, plus adjustments for each additional year. 10:08:20 AM REPRESENTATIVE WILSON asked how much more will the cost be for a five year period. MR. JEANS answered that it would cost approximately $600 million over a five-year period. 10:08:58 AM CHAIR SEATON inquired as to whether a $100 increase in the base allocation amounted to about $20 million. MR. JEANS agreed that the increase would range from $20-22 million. MR. JEANS, in response to Chair Seaton agreed that is a fair assessment that the cost of implementing HB 23 would represent a base allocation increase of $500 statewide