CS FOR SENATE BILL NO. 57(FIN) "An Act relating to charter and alternative school funding." 6:36:20 PM SENATOR JOE THOMAS, SPONSOR, read from the Sponsor Statement (Copy on File). He explained that the legislation was about supporting school choice by extinguishing the charter school penalty. He shared that charter schools are public schools, open to all children free of charge. Charter Schools must comply with state laws and employ state certified teachers, who are employees of their local school district. The schools are managed by a parent- teacher board of directors, which determine school curriculum and teaching methods, within the guidelines of state statute. Current law results in carter schools with fewer than 150 students receiving 30 to 45 percent less state funding than neighborhood schools of comparable size. He referred to the chart, "Adjusted Student Count for Charter Schools vs. Neighborhood Schools" (copy on file). He stated that the legislation would provide charter schools, with fewer than 150 students, a student count adjustment equal to that of neighborhood schools with 400 students. The bill would also address the problem created for school districts when charter and alternative schools unexpectedly enroll fewer students than is required by the state to fund them as separate schools. Presently, the number of students a charter school must have enrolled in order to be funded as a school is 150, an alternative school must have 200. When these schools fall one student below the threshold, the state cuts funding by $500,000 to $700,000. This is detrimental not only to the school but to the district as well. CS for SB 57 contains a one year "hold harmless" provision for schools that unexpectedly fall below the threshold in their first year of operation, or were above the threshold the previous year and then fell below. For one year the schools would receive 95 percent of the per student rate that they would have received at the threshold. During the "hold harmless" year the school would be required to submit a budget to their local school board laying out the plan for the following year if their enrollment does not rise. Finally, the CS lowers the separate schools threshold for alternative schools from 200 to 175 students. He shared that Alaska has a serious problem with school achievement and high school graduation, and that what works well for one student may not work best for all students. Charter schools and alternative schools offer parents choice within the public school system. The legislation has been shown strong support by school districts throughout the state. He expressed concern that the school funding system has limited communities in their ability to create and sustain innovative programs and urged committee support for the bill. 6:40:35 PM Representative Gara wondered if the legislation would affect the funding of traditional schools. Senator Thomas answered no. EDDY JEANS, DIRECTOR, SCHOOL FINANCES AND FACILITIES, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, introduced himself. Representative Gara reiterated his concerns that the legislation could negatively impact funding for traditional K-12 schools. Mr. Jeans replied that, provided the fiscal note was passed along with the bill, the funding of other schools in the state would not be affected. SENATOR CHARLIE HUGGINS, WASILLA, shared that he assisted in opening the first two charter schools in Mat-Su. He discussed the commonalities between charter schools and alternative schools, which at one time had the same minimum student count. He explained that when a charter school drops from 150 to 149; alternative school 200 to 199, the school incurs a loss of $500,000 to $700,000. Both are schools of choice. The difference between the two programs is stark. Charter schools traditionally have a strong support system, alternative schools do not. For many, alternative schools are usually the last stop before dropping out of school. He stated that charter and alternative school programs throughout the state face multiple challenges. 6:45:23 PM Senator Huggins described agreement worked out between proponents of alternative schools and proponents of charter schools. He stated that he thought the measure was rational and urged the committee to support the legislation. Vice-Chair Thomas asked how many charter schools were in the Haines district. Mr. Jeans replied that there were none. Vice-Chair Thomas wondered if passing the measure would encourage all schools to expect more money. Mr. Jeans replied that he could not make the assurance that schools would not ask for increased funding in the future. He believed that the legislation addresses the problem by allowing schools that are on the verge of losing funding to transition to a new funding level should their enrollment decrease, instead of being forced to shut down. 6:49:28 PM Senator Huggins noted that the number of students required for adequate funding in neighborhood schools is dramatically different than charter or alternative schools. Vice-Chair Thomas reiterated concerns about increased expectations for funding from traditional schools. Senator Thomas referred to the chart, "Adjusted Student Count for Charter Schools vs. Neighborhood Schools"(copy on file). He shared that the traditional schools have less participation in enrollment. Representative Gara wondered what the student count for traditional school funding was based on. Mr. Jeans explained the Rule of 10. He said that traditional schools do not lose funding at 10 students, but the funding is substantially reduced. He pointed out that that policy was put in place by the legislature in 1998, to encourage small schools in the state to close. Representative Gara stated that he supported the legislation. 6:51:57 PM Co-Chair Hawker opened public testimony. 6:52:09 PM TODD HINDMAN, TEACHER, ANVIL CITY SCIENCE ACADEMY, NOME, testified via teleconference, related that small charter schools are vital in order to provide specific educational needs in both rural and urban communities in the state. The small size of charter schools allows for flexibility to provide unique educational opportunities for students. Teachers are able to develop and implement lessons in which students can use the community and their environment as educational resources. He furthered that the small school size creates a culture around family values, ensuring student success through daily engagement of parents. He concluded that charter schools are identifying and meeting specific needs within Alaskan communities. 6:53:56 PM RAY DEPRIEST, DIRECTOR OF CARREER TECHNICAL EDUCATION, MATSU SCHOOL DISTRICT, testified via teleconference, in support of the bill. He stated that there are four charter schools and three alternative schools within the district, which enroll 1500 students. He believed that the bill would correct the funding problem in an impartial and fiscally dependable manner. He relayed that in 2008, the district suffered a loss of $780,000, when the enrollment numbers of one alternative school in the district unexpectedly dropped from 200 to 194. He spoke in strong support of the "hold harmless" provision contained in the legislation. KIKI ABRAHAMSON, PRESIDENT, ALASKA CHARTER SCHOOL ASSOCIATION testified via teleconference, She spoke in favor of the legislation. She pointed out that innovation; alternatives and accountability were necessities in education, to meet the changing needs of the workforce, financial situations, and communities. She strongly urged committee support for the bill. 6:58:05 PM Co-Chair Hawker closed public testimony. 6:58:15 PM Mr. Jeans detailed the fiscal notes. The second page of the fiscal notes highlights the impact of the funding changes for carter school with less than 150 students. The third page illustrates the impact of the "hold harmless" provision on the Mid-Valley Alternative High School in Mat-Su. 6:58:43 PM Co-Chair Stoltze clarified for the committee that charter schools are public schools. 6:59:20 PM Co-Chair Stoltze MOVED to report CSSB 57 (FIN) out of Committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSSB 57 (FIN) was REPORTED out of Committee with a "do pass" recommendation and with fiscal note #2 by the Department of Education and Early Development. 7:01:00 PM