HOUSE BILL NO. 317 "An Act increasing the special needs funding and base student allocation for public schools, and extending the adjustment for student transportation funding; and providing for an effective date." REPRESENTATIVE PAUL SEATON, SPONSOR, explained that the bill is intended to continue the policy direction thr state has taken the last three years. One of the main purposes of the bill is to prevent the rounds of teacher lay-offs that have been occurring. It was the mechanism designed by the Joint Legislative Education Funding Task Force to provide budget information to school districts. Representative Seaton related that Section 1 extends the inflation adjustment for pupil transportation that was established in 2008 through 2014. Those adjustments would reflect any increases in consumer price increases. It would ensure that if there was a negative adjustment, it would not take place. Representative Seaton explained that Section 2 of the bill increases the block grant funding, which is 20 percent of the amount a school district receives for the purposes of special education, gifted and talented, vocational, and bi- lingual education. The increase is 1.5 percent. Representative Seaton referred to a Letter of Intent which explains the goal of stimulating more spending and access for the 70 percent of students that don't go to college. It is directed to encourage vocational education across the state. It is not category funding. Individual districts have the ability to use funds as needed. Representative Seaton said that Section 3 provides for the same amount - 1.5 percent - the following year. Sections 4 and 5 increase the base student allocation (BSA) by $125 for each of the following years - FY 2012 and FY 2013. The legislature originally provided for three years, but the Task Force decided not to do that due to mid-session timing. He explained the effective dates in the bill. 2:42:22 PM Representative Doogan questioned the FY 2012 cost of $45 million. He wondered how much would be special needs funding and how much would be BSA. Representative Seaton responded that $30 million is the $125 BSA increase and $14.7 million would be the intended vocational increase. Vice-Chair Thomas asked if any consideration is being given to the dropout rate of between 30 percent and 40 percent. Representative Seaton mentioned a number of solutions, such as aligning curriculum. The Anchorage School District is working on an advisor/advocate program for at risk students and has increased the graduation rate by 5 percent. Six schools on the Kenai Peninsula have also gone to advisor programs and have increased the graduation rate by 12-15 percent. The BSA increase has allowed school districts to accomplish the goal of decreasing dropout rates. There is also another bill which looks at improving the rigor of the high school curriculum. Representative Seaton reported on successes in reducing the dropout rate, but noted that there are still some problems in some districts. He emphasized a need for more vocational education, which the Letter of Intent directs. Vice-Chair Thomas inquired why the Task Force is only concentrating on the Anchorage and Kenai area and not the entire state. He opined it should be shared statewide. He spoke of dropout rates in his district. He wondered if there were funds available for schools that did not qualify for the Governor's Performance Scholarship (GPS) fund. 2:49:01 PM Representative Seaton pointed out that efforts were taking place in the Chugiak School District and in Prince William Sound, which now has a 98 percent graduation rate. There are successes in rural locations, as well as in urban locations. The use of traveling teachers is also being considered. He pointed out that the bill emphasizes vocational education as a solution to increasing graduation results. He spoke of another bill that would coordinate efforts between models used in various districts. He invited everyone to attend an upcoming Joint Education Committee meeting regarding Moore vs. Alaska. 2:51:39 PM Co-Chair Stoltze appreciated Representative Seaton's work on the bill and on the GPS. Representative Fairclough asked if the Education Committee has taken on the issue of Continuing Learning Credits; aligning them with curriculum and teachers across Alaska. Representative Seaton inquired if Representative Fairclough was referring to teacher education. She said she was referring to required continuing learning credits. Representative Seaton reported that the University of Alaska has presented a report to the legislature on that topic. The committee is looking at aligning and promoting those credits. The goal is to improve teachers in education, not just in subject matter. Representative Fairclough heard that teachers could choose to get credits in subjects other than the ones they were teaching. She asked how the committee was implementing strategies outlined by the Task Force. She noted that all of the money had been implemented, but thought many issues remained. Representative Seaton related that most of the issues have been addressed. Representative Seaton explained that the questions were given a written response. 2:55:52 PM Representative Fairclough requested more information about a planned committee whose task it was to address Task Force issues. She offered to meet at a later date to discuss it. Representative Seaton reported that an interim commission was drawn up and the members have recently been appointed. 2:56:43 PM Representative Kelly asked what happens to the BSA after the three-year plan and the meeting requirements have been met. He requested the incremental cost. Representative Seaton thought it was about $17 million, or 1.5 percent, but offered to get back with the exact number. Representative Kelly inquired how the carry forward was reflected on the $17 million. Representative Seaton asked if he was referring to reducing the intensive needs funding. Representative Kelly reworded his question. Representative Seaton explained that it is mostly reflected in the 1.5 percent increase to the BSA for vocational technical education. He added that education was seen as an intensive needs piece that was accomplished. The piece that is lacking is vocational education. About 70 percent of students will not go through a college curriculum; therefore, more efforts should be spent on vocational course work. 3:00:46 PM PETER HOEPFNER, SCHOOL BOARD MEMBER, CORDOVA SCHOOL DISTRICT (via teleconference), read a statement from Superintendent Jim Nygaard. The letter emphasized that the bill is critical to vocational programs, staffing, and equipment needs in Cordova. He spoke in support of the forward funding provided in the bill. Mr. Hoepfner supported the bill and future funding. It would help with special needs, as well as with the gifted and learning program which has been lost. 3:03:50 PM Vice-Chair Thomas asked if the last three years' increase in BSA has seen any success in decreasing the dropout rate. Mr. Hoepfner noted that the dropout rate in Cordova was not very high. He pointed out that dropouts tend to be the more gifted students and that may be due to the elimination of the Gifted and Talented Program. He appreciated the funding of computers. 3:05:39 PM LON GARRISON, PRESIDENT, SITKA SCHOOL BOARD (via teleconference), testified in support of HB 317 and the continued good work of the Education Task Force. The block grant, increased BSA, and intensive-needs multiplier are extremely important to Sitka and other coastal communities. He spoke of reduced funding sources in Sitka which would have a negative impact on schools. He appreciated the funding predictability contained in HB 317. He noted that Sitka has a low drop-out rate of only 5 percent. He hoped to continue to engage students with the assistance of multi-year funding. 3:08:59 PM KAREN MARTINSEN, CO-CHAIR, VOCATIONAL TECHNICAL EDUCATION PROVIDERS, SITKA (via teleconference), reminded the committee that recently the Department of Education and the Department of Labor have combined efforts to create a statewide Career and Technology Education (CTE) Plan. She opined that the bill would begin to meet the need to turn around the decline of a qualified workforce. She emphasized that CTE is one of the fourteen best practices to prevent dropouts. Rural schools have a strong network of regional training centers throughout the state. She spoke in strong support of the bill. STEVE BRADSHAW, SUPERINTENDENT, SITKA SCHOOL DISTRICT (via teleconference), responded to the dropout question. Sitka School District has been involved in a dropout prevention grant, along with Juneau and Ketchikan, in order to attempt to add a cultural awareness piece to the curriculum. At a meeting with the Departments of Education, Justice, Labor, and Health and Human Services in the Governor's Office, there was discussion about how to enforce student attendance. He spoke in support of the bill and thanked the House Education Committee for their work. He spoke of a history of cuts in vocational education. 3:14:43 PM CARL ROSE, EXECUTIVE DIRECTOR, ASSOCIATION OF ALASKA SCHOOL BOARDS, spoke in support of HB 317. The operational stability of school districts depends on knowing what kind of funding there will be. There needs to be a smooth teacher retention transition from year to year. He responded to the dropout issue by stating that there are 53 school districts in the state and each one experiences a different school climate. There is improved student performance in schools where students feel safe and cared for. School partnerships with communities also make a difference. Students need to be engaged to be successful. The Consortium for Digital Learning shows that attendance increases when students are engaged. Digital Learning will improve school achievement. Many school districts are also offering additional instruction. Mr. Rose related that he served on the Funding Task Force, which addressed a number of issues. The bill extends the task force's work for two years, addresses career technology through the block grant, ensures increases in the Consumer Price Index (CPI), but not decreases in transportation, and is an opportunity to increase funding for FY 2012 and FY 2013. 3:20:40 PM Representative Doogan asked if the BSA amount the three previous years was $100. Mr. Rose said that was correct. Representative Doogan requested an explanation for the necessity to increase that amount to $125. Mr. Rose recalled discussion of that decision. He thought that $125 was an appropriation amount. He pointed out that there had not been an increase in the block grant since SB 36 in 1998. Representative Doogan wondered if there was another reason to move from $100 to $125 for the next two years. Mr. Rose answered that the amount was $100 per year the last two years and for the current year. It was recognized that there are intensive needs, where actual cost per child can run from $75,000 to $500,000. As costs continue to increase, the goal was to try to keep up with those costs. 3:23:04 PM Representative Gara commented on keeping school funding up with inflation. He did not feel obligated to keep the funding at $100 because the task force left the amount unresolved. He spoke of an increase in special needs funding and in the cost differential. He voiced concern about schools not being able to keep up and having to dip into other money. The Anchorage CPI inflation increase for 2008 was 4.6 percent and for 2009 it was 1.2 percent. The last three-year average was roughly 2.7 percent. He concluded that $125 for two years would result in a 2.2 percent increase and not keep up with inflation. He asked Mr. Rose to comment. Mr. Rose replied that there is concern about inflation and there has been talk of inflation-proofing the foundation formula and transportation. Representative Gara reported that schools received benefits the last two years in the form of special needs funding and area cost differential. He asked if his analysis of inflation was correct and if special needs funding and cost differential funding would be used to combat inflation. Mr. Rose responded that regular instruction funds would be used to cover special needs programs, which are mandated. The students who generate the majority of the money in regular instruction are supplementing the rest of the budget. With the increase in the block grant and with the Letter of Intent that looks at career and technical education, special education will still need to be subsidized. There are unmet needs everywhere. He saw HB 317 as a means of being able to plan ahead. Representative Gara asked if Mr. Rose could recommend a number that would prevent the need to dip into instructional costs. Mr. Rose said he could not. 3:28:57 PM MARY FRANCIS, EXECUTIVE DIRECTOR, ALASKA SCHOOL ADMINISTRATORS ASSOCIATION (ASAA), recalled her experience as a former superintendent and praised forward funding for school districts. She said she represents a group that supports HB 317. She mentioned that the additional money for Career and Vocational Education is much needed. The Alaska Staff Network, a division of ASAA, offers dropout preventions symposiums throughout the year. She spoke in support of the bill. Representative Gara asked Ms. Francis if she has any concern about the level of the BSA proposed in the bill not keeping up with inflation. Ms. Francis shared concerns about keeping up with inflation and stated support for inflation-proofing the BSA. 3:31:21 PM ANDI STORY, VICE PRESIDENT, JUNEAU SCHOOL BOARD, testified on behalf of the board and in support of HB 317. The bill helps schools plan efficient budgets, lays out a foundation of stability, and maximizes resources for students. She spoke of the difficulties small districts experience when they are not able to plan ahead. She pointed out that it is important to remember that the block grant has not increased since 1998. She shared information about the four levels covered by the block grant. There is an increased need for a highly skilled workforce in Alaska at this time. She informed the committee that Juneau's graduation rate has increased to 77 percent, an increase of 7 percent. She spoke in strong support of the bill because it will benefit students every day. 3:35:33 PM DAVE JONES, ASSISTANT SUPERINTENDENT, KENAI PENINSULA BOROUGH SCHOOL DISTRICT, testified in support of the forward funding provided in HB 317. He thanked the committee for forward funding in the three previous years, which enabled the Kenai Schools to have a long-range educational plan called Programmatic Staffing. This program increased staffing in targeted areas with the goal of improving the graduation rate. At Monday's board meeting non-tenured contracts will be issued - the earliest date ever in the Kenai District. Co-Chair Stoltze asked what the tenure length is. Mr. Jones replied that it was three years and one day. He added that HB 317 would allow the district to move along in the program and continue to improve in the areas targeted. He noted that federal health care reform will have a major affect on school board budgets. 3:40:42 PM Representative Doogan observed that there would have been no problems with pink slips for non-tenured teachers, if people had supported a previous bill that would have changed school funding deadlines. 3:41:55 PM AMY LUJAN, EXECUTIVE DIRECTOR, ALASKA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS, testified in support of past forward funding for schools. She shared her experience with being able to plan budgets in schools. Adding certainty to the funding process helps schools lessen the dropout rate. She spoke in support of HB 317. EDDY JEANS, DIRECTOR, SCHOOL FINANCES AND FACILITIES, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, introduced himself. He took questions to be answered at a later date. Representative Kelly wanted information about the higher education CPI. Representative Joule wanted to hear why Alaska is not participating in the Race for the Top. Representative Kelly requested information on school graduation rates. Representative Gara asked for statistics on inflation and how BSA might meet inflation increases. Mr. Jeans replied that the only component in the department's budget that is adjusted for inflation is the Pupil Transportation Grant program, which uses a three-year average. 3:47:01 PM Vice-Chair Thomas inquired if there was anything in the bill which addresses the Moore vs. Alaska case. Mr. Jeans reported that there would be a Joint Education Committee meeting to present the department's side of the Moore case. HB 317 was HEARD and HELD in Committee for further consideration. 3:48:44 PM