SB 58-FUNDING FOR CORRESPONDENCE PROGRAMS  9:46:33 AM CHAIR HOLLAND announced the consideration of SENATE BILL NO. 58 "An Act relating to funding for correspondence programs; and providing for an effective date." He asked Commissioner Johnson to introduce the bill. 9:46:52 AM MICHAEL JOHNSON, Ph.D., Commissioner, Department of Education and Early Development (DEED), Juneau, Alaska, said Alaska currently offers a multitude of public education options for families, including traditional brick and mortar schools, correspondence programs, and charter, vocational, alternative, residential schools. Offering this educational variety recognizes student learning needs, creates ways to diversify, enhances the vibrancy of communities, and is critical to the state's economic future. Currently, the state funds students differently based on how they choose to engage with a public school. Correspondence students are funded at 90 percent of the Base Student Allocation (BSA) without going through the formula. This means that under current law, the district does not receive the full value of an Average Daily Membership (ADM) for correspondence students, nor the extra funding that is part of the ADM multipliers, such as funding for special needs students and career and technical education (CTE). This school year, 2020-2021, the state saw a 92.3 percent increase in correspondence students from the previous year, largely due to the pandemic, but beyond that, over the last ten years, from FY11 to FY20, correspondence students counts have increased at an average rate of 3.6 percent every year. 9:49:44 AM COMMISSIONER JOHNSON said some students will return to their neighborhood schools, but a significant number may not or may take a couple of years to do so. More likely, some families will want to explore hybrid models where students remain connected to their neighborhood schools and teachers yet have flexibility in scheduling, calendars, and content. COMMISSIONER JOHNSON said the bill has three specific benefits. One is that it provides long-term stability for school districts. The best way to stabilize the impact of shifting enrollment that the state has seen this year and will probably continue is to recognize that the cost of educating a student remains no matter where a student is enrolled. This conversation started before the pandemic as students began participating in online learning and remote learning in the last decade. Districts asked about how to count a student who took one or more classes online but also took courses at the local school. If students participate in a class remotely, is that home school or regular school for funding. SB 58 moves in the direction of recognizing all students and the cost of their education. 9:51:14 AM COMMISSIONER JOHNSON said the second benefit is that it provides flexibility and funds innovation for educators. The formula uses multipliers to reflect the cost of education. The typical correspondence students in the past are different from today. There is no special ed factor for correspondence students, yet more and more special needs students participate in correspondence. There is no factor for vocational ed, which has a growing need for using distance and remote technology to expand opportunities for voc-ed. The funding allows educators to innovate outside of the traditional classroom walls. The third benefit is flexibility. This bill gives opportunity to school districts and schools without correspondence programs. It provides enough funding so that district can develop programs based on the needs and desires of families, even with only a few correspondence students. In addition to those benefits, this provides a pathway for families to remain connected to local neighborhood schools or districts. It will take a while for families to sort out how the pandemic has affected their lives and routines. Families value their local schools and want them to be funded. This bill gives them the assurance that they can remain connected to public educators and schools while also adjusting how they remain connected. It appears that telework and other changes in societal routines will remain for many families. That will likely result in families wanting more options and flexibility in education routines and funding that supports those opportunities for schools and districts. 9:54:08 AM SENATOR BEGICH clarified that when the commissioner said there has been an increase of 3 percent a year in the number of correspondence students, but that does not mean an increase of 3 percent of the total student population. COMMISSIONER JOHNSON responded yes. Director Teshner has the exact numbers. Before this year, about 10 percent of the students in the state were correspondence students, but that has been steadily growing. SENATOR BEGICH asked why the funding was set at 90 percent. He asked if it was because correspondence schools do not provide some of the services provided within the schools, such as counseling services and the ability to work as readily with special ed students. He asked why that changed, if those were the reasons. 9:55:56 AM COMMISSIONER JOHNSON said he not sure what the rationale was. It used to be 80 percent and then the legislature increased that to 90 percent. In the past a typical correspondence student got the packet, did the assignments, and put the coursework in the mail. A typical correspondence student 20 years ago is very different from today because of advances in technology, advances in society and the economy. Correspondence programs in the state are exciting. They offer all those services now and serve students with all needs, not just students who are high achievers. Some correspondence schools are serving students who didn't do well in traditional schools. The correspondence programs serve those students with counseling and extra academic support and connections to the local school district. The conversation to increase funding started several years ago because correspondence schools are now offering many, if not all, of the same services as traditional schools. SENATOR BEGICH said that answer is what he perceived as true. The commissioner mentioned it will only affect 32 of 54 districts. He is wondering if the other 22 school districts are mostly rural or semiurban or urban. He asked how the state addresses those districts so as not to create more inequity. 9:58:47 AM COMMISSIONER JOHNSON replied that he doesn't have a list of which districts don't have programs. This incentivizes districts because any district can have a correspondence program if it wants. Funding correspondence students at 90 percent of the BSA without going through the formula makes it financially difficult for districts to start a program for a few students in a way that will attract families, especially like the large programs. This bill provides districts the incentive and opportunity and resources to develop their own programs and connect with local families that may be considering the hybrid model of engagement with local schools. Even if a district had 10 students initially, it would be enough funding to develop the program and be innovative and enhance the existing programs. 10:00:16 AM SENATOR HUGHES said she is aware of current correspondence programs because Mat-Su Central School, a correspondence program, is the largest school in the Mat-Su district. Mat-Su Central shares space with a Legislative Information Office. That is a busy parking spot with families coming and going. It might be helpful for the committee to perhaps hear from a school about different services. She doesn't know if they have a school nurse, organized field trips, access to libraries, etc. It would be helpful to understand how correspondence schools have evolved and what they offer because it is a growing trend. She has heard from some families who plan to continue with that after the pandemic because it did work for their children. Other families are eager to have their back children back in brick-and-mortar schools. The committee needs to understand what the programs are offering. COMMISSIONER JOHNSON responded that Mat-Su Central Principal John Brown would be fantastic to have in front of the committee. He has suggested some programs to hear from to the chair. Mat-Su Central has a library, a study area, counseling, and many other services in the facility. That is great example of how correspondence programs have evolved because parents want some of those expanded opportunities, but they want to remain connected to public educators in their public schools. Principal John Brown would be a fantastic person to share that information. 10:03:17 AM SENATOR MICCICHE asked whether home school is 1.9 students per ADM vs. the .9 for correspondence students. COMMISSIONER JOHNSON answered that sometimes home school is used and sometimes correspondence, but they are the same thing. Correspondence or homeschool students are .9 of the BSA. The terms are used interchangeably and a better term is needed. SENATOR MICCICHE said he must have misunderstood that they were double counted. CHAIR HOLLAND said that is if districts lose 5 percent of their recruitment and get 75 percent because of hold harmless that winds up being about 1.6 for the first year. That is what Senator Micciche may be thinking of. SENATOR HUGHES said that within a district, during the pandemic, if a student moves from a brick-and-mortar school and goes to correspondence, the districts are asking that they get paid as though the child was in a brick-and-mortar school and also get the .9, so it is the 1 plus the .9. CHAIR HOLLAND commented that with hold harmless, attendance has to drop five percent for that to kick in. 10:05:40 AM HIEDI TESHNER, Director, Finance and Support Services, Department of Education and Early Development (DEED), Juneau, Alaska, presented the sectional analysis: Section 1 amends AS 14.17.410(b)(1)(C), the public school funding, by moving the correspondence student ADM up in the foundation formula after the district cost factors and before the special needs and technical instruction funding multipliers. Section 1 further amends AS 14.17.410(b)(1)(D) by removing the correspondence student calculation from the end of the formula adjustments when determining basic need. Section 2 amends AS 14.17.430, the state funding for correspondence study, by removing the 90 percent factor for a correspondence student and clarifying that the new funding allocation for a correspondence program is calculated by using the ADM report as recorded under AS 14.17.410(b)(1)(C), essentially counting a correspondence student as a full ADM. Section 3 establishes the effective date of July 1, 2021, the start of FY2022. 10:07:45 AM MS. TESHNER said the committee has three documents. The first document is labeled Foundation Funding Formula. The first page shows the steps of the current funding formula as set out in statute. The page shows the factors and the statewide totals for projected FY22 for each of the elements in the formula. The correspondence ADM is applied at the end of the formula, right before determining the district-adjusted ADM. As the commissioner noted, based on current law a district does not receive the full value of a correspondence student or the extra funding formula factors for special needs and vocational education. 10:09:02 AM MS. TESHNER said page two of that documents shows the change under SB 58. The green box shows where correspondence would lie in the formula. There are two changes to correspondence under this bill. The first is that a correspondence student will be one full ADM, not 90 percent, and the ADM for correspondence students would be included in the formula after the district cost factors and before the special education, vocation education, and special education intensives factors are applied. MS. TESHNER said that through SB 58 more financial resources would be available to school districts to help cover the cost of provide special ed services to correspondence students and would provide more resources so that correspondence students would have a larger allotment to pursue career and technical education opportunities. Since the proposed change would provide more financial resources to districts, it could be assumed that the allotment provided to students for their education should go up, affording students more educational options and opportunities. 10:10:54 AM SENATOR HUGHES observed that the document shows a difference of $35 million. She asked if that is the estimated cost to the state for FY22 if SB 58 were to pass. MS. TESHNER answered yes; it is about a $35 million cost to the state under the proposed legislation. 10:11:25 AM SENATOR BEGICH commented that this represents a $35 million state investment in enhanced correspondence to meet the needs of students. He noted that the committee has had a number of conversations about SB 42 and SB 8, bills that enhance reading and prekindergarten. Those bills at best, over time, would offer an additional $17 million to the formula funding. If the state is going to invest $35 million, and he is supportive of full count for correspondence programs, the state should make sure it gets a return on its investment. If the state is going to do this level of investment, then it absolutely should do a level of investment in prekindergarten and the reading opportunities to ensure that the state is not just throwing $35 million out into the wind. It is important to make sure the $35 million is an investment in education because it has been backed up by a strong reading program and a strong prekindergarten program. He asked if his numbers are right, and if she believes that will make a difference in educating children in Alaska. 10:13:20 AM MS. TESHNER stated that those two numbers are correct; $35 million under SB 58 and $17.1 million under SB 42 or SB 8. COMMISSIONER JOHNSON said that regarding a return on money invested, the evidence is that money invested in correspondence programs have a great return. Those students compare well to students in brick-and-mortar schools. The administration has a high degree of confidence that the return will be great and the state will see innovation. The pandemic has had an impact and will continue to have an impact. The bills the committee are considering, reading bills, virtual education, this bill, all can work well in tandem to shape the public education system coming out of the pandemic and into the future in a way that meets families' needs. 10:14:52 AM SENATOR HUGHES asked if there is any chance of using some federal COVID funds for the $35 million if this were to pass, given that correspondence picked up during the pandemic and it is not totally eradicated. COMMISSIONER JOHNSON said that federal money comes in different buckets. The largest bucket goes directly to school districts with wide discretion about how to use the money. They could choose to use it that way. The department cannot direct them about how to use the funds. Other buckets include the set aside that goes to the department. He looks forward to working with the committee on how to move the education bills forward and possibly using those funds with other projects the department is working on. That is a yes, it is possible, but it is a conversation to have with the committee. CHAIR HOLLAND asked if DEED cannot direct the funds, is there any control over the districts to ensure this money would go to correspondence schools. 10:17:04 AM COMMISSIONER JOHNSON replied that funding amount is based on student counts and locally elected school boards allocate that. A brick-and-mortar school, based on its student count, may generate more funding than it spends and the school board decides how to allocate that funding around the district. The school board may choose to have a more expensive program at one school and also balance out the money between elementary and high school. There is not a way to say the money could only go to the school that generates it based on the count, but that is usually how school districts allocate the money. 10:18:28 AM SENATOR BEGICH said that is a wonderful clarification for Senator Hughes; the bill in the U.S. Senate today has a substantial amount of money for summer and other remedial programming for education directly, billions of dollars, and thanks to the state's Senate delegation, there is an increased amount of flexibility for small-population states, including a substantial amount of money for broadband and other issue like that. There should be a lot more resources coming into the state. For the last few years, the legislature has provided money outside of the BSA, $20 or $30 million or even more to schools. These various concepts, whether correspondence schools or prekindergarten or the reading program, actually target the money instead of just tossing it out there. A comprehensive package is here, combined with those federal resources as well, that could be useful for all of them. COMMISSIONER JOHNSON said that he will work with the committee on funding sources. 10:20:08 AM CHAIR HOLLAND held SB 58 in committee.