SENATE BILL NO. 132 An Act relating to judicial review of decisions of school boards relating to nonretention or dismissal of teachers. CS FOR HOUSE BILL NO. 217(L&C) am(efd fld) An Act relating to teacher tenure, teacher layoff and rehire rights, public access to information on public school collective bargaining, and to the right of tenured teachers to judicial review of decisions of nonretention or dismissal; and relating to retirement for certain employees of school districts, regional resource centers, the state boarding school, and regional educational attendance areas. Co-chairman Halford directed that SB 132 be brought on for consideration and noted a teleconference link to Anchorage. ROB PFISTERER, President, Anchorage Education Association, spoke via teleconference. He advised that the association represents 2,900 teachers in Anchorage. Speaking to the bill, he said that he failed to see any redeeming features in the legislation. He questioned need to lengthen the time to achieve tenure to five years, suggesting that if the committee is concerned about inadequate teachers achieving tenure, lengthening the time they can remain in the classroom is not the remedy. Evaluation is the proper cure. In the Anchorage district, eight to ten teachers are counseled out of the profession each year. That has no relation to two or five years of service. It is strictly related to how they perform in the classroom. Five years would provide a longer time for inadequate teaching to occur. Layoff of tenured teachers due to decreased revenue or to better meet program needs would allow districts to fire experienced teacher with skills and expertise and hire inexperienced, cheaper teachers. Mr. Pfisterer questioned the security available to teachers when community politics is allowed to determine what will be taught. The impact would be loss of academic freedom should a teacher say something community leaders do not want to hear and loss of job security because "some number cruncher in the ad building determines I am worth one and a half times the cost of an inexperienced teacher." Mr. Pfisterer termed "mandatory public bargaining" the "teacher bashing segment of this bill." It will do nothing to help districts and employee bargaining units come to a fair settlement. He noted that no other entities (municipalities, ARCO, BP) bargain in public. None feel that public negotiations are beneficial. Speaking to repeal of duty-free lunch time, Mr. Pfisterer suggested members visit schools for a few days. In many instances, lunch is the only time a teacher is able to visit the restroom. Referencing loss of de novo trial rights, Mr. Pfisterer noted that school boards have no investigatory standing. An employee who may lose his or her job and economic future should have an impartial review of his or her termination. If a school board wishes to fire someone, How can it be viewed as impartial? Addition of the retirement incentive to the bill is insulting to 2,900 teacher in Anchorage and all educational employees across the state. There are no positive educational items in the proposed bill. Alaska's children and the dedicated educational employees who serve them deserve better from our democratic system. Senator Randy Phillips noted that the teaching profession is the only segment of society that has de novo trial provisions in law. He then asked why teachers are covered when other professions are not. Mr. Pfisterer voiced his understanding that, in the past, politics has entered into how teachers are removed from their jobs. It is a particular problem in rural areas. Sometimes school boards seek termination without the teacher having adequate representation or proper review of the facts. Senator Rieger noted arguments that federal protection of employment in teaching and other forms of employment has expanded to cover freedom of speech and political termination. Since these areas are protected elsewhere, there is no further need to protect them under tenure. He asked that Mr. Pfisterer respond to those arguments. Mr. Pfisterer questioned whether the foregoing is true and advised that he would have to review specific citations to determine the accuracy of the above-mentioned argument. He advised that Alaska has a number of instances in smaller communities where "the powers that be" have a problem with what is being said in the classroom. Academic freedom is thus questionable. Redress through the federal courts is not the way to address this problem. Mr. Pfisterer cited the example of a teacher who has a disagreement with someone in the community, and the school board subsequently advises that due to program changes the teacher is no longer needed. That is a highly questionable method of dealing with academic freedom. Mr. Pfisterer queried members regarding how changes in the proposed bill would improve the quality of instruction in Alaska. Co-chairman Halford said that improvement is the underlying intent of the bill. Senator Phillips noted that he had a problem with the change of tenure from two to five years and would prefer that that provision not be part of the bill. He voiced support for lay-off provisions and said he continued to have questions regarding de novo trial. The Senator advised he was against public bargaining provisions and that he needed additional information regarding the "brain drain" and cost savings to be achieved by early retirement incentives. He further noted that he would be offering an amendment at page 7, lines 28 through 8 to delete contracts relating to the University of Alaska. Referencing mandatory public bargaining, Co-chairman Halford stressed need to encourage school districts to include constituencies. He spoke against a mandatory system that encourages positioning and discourages the compromise necessary to achieve a solution. Senator Phillips voiced his belief that the school board is the authority that should be communicating with constituents. Problems in doing so should be handled at the local level rather than by the legislature. Co-chairman Halford concurred and noted that proposed language relating to public bargaining does not encourage solution. Speaking to the question of tenure, Co-chairman Halford acknowledged proposals ranging from two to five years. Testimony indicates that whatever the time frame, continuous review should be part of the process. He voiced need for analysis of tenure laws, nationwide, and suggested a four- year term with review the first, second, and third years. Co-chairman Halford next pointed to concern regarding the duty-free lunch provision and voiced his understanding that the sponsor's intent was to remove the limitation on hours rather than to deny teachers a lunch period. Repeal would eliminate the requirement that the period fall between 11:00 a.m. and 1:00 p.m., particularly in instances of double shifting. Trial de novo provisions, incorporated within a draft for comparable House legislation, deal with mandatory advisory arbitration. Provisions guarantee review by an impartial third party, and both sides have to agree to arbitration. Co-chairman Halford remarked on need to ensure that early retirement provisions are both economically feasible and feasible to the retirement system. Senator Phillips stressed need to review the evaulation process relating to tenure. He voiced his belief that evaluation, rather than the timing of tenure, is the problem. Senator Rieger noted need to address the question of career progression for teachers, suggesting that the mechanism is not sufficiently merit based. He voiced his belief that there are both over and under paid teachers at the top of the pay scale. Progression is presently based on longevity and continuing education rather than performance in the classroom and ability to teach. Co-chairman Halford referenced an amendment which he said would eliminate the 11:00 a.m. to 1:00 p.m. time period for duty-free time. He stressed that the amendment would merely eliminate the fixed time period rather than the provision for duty-free time for teachers. Senator Zharoff, who had only recently arrived at the meeting, voiced his intent to completely eliminate Sec. 19 of the bill. He also stressed that the intent of the legislation is not to harm teachers but to allow school boards to curtail or contain costs incurred as a result of limited flexibility due to tenure. He suggested that provisions also be included that give school boards control over contracts with administrative personnel. The Senator noted that teacher contracts generally run from year to year. In instances where the school board faces reduced funding, the board should have the ability to review and shorten administrative contracts that cover a number of years. Senator Rieger MOVED for adoption of draft Amendment No. 1 (9-LS0838\K.4, Cramer, 4/12/95). Co-chairman Halford reiterated that the amendment would leave language relating to duty-free time in statute but would remove the requirement that it be provided between 11:00 a.m. and 1:00 p.m. No objection having been raised, Amendment No. 1 was ADOPTED. Senator Randy Phillips referenced Page 3, lines 23-27, and MOVED for deletion of Sec. 7, relating to mandatory public bargaining. Senator Rieger voiced support for the amendment, saying that he feared public bargaining would lead to posturing. He then inquired regarding the status quo. Co-chairman Halford voiced his understanding that the statutes are silent on whether bargaining should be public or private. Executive session provisions of the public meetings' act allow for negotiations in private. Senator Phillips voiced his belief that school boards represent the public interest. It is the board's duty to communicate information on negotiations and positions taken by the board. Co-chairman Halford agreed that the currently proposed provision for public bargaining should be removed from the bill. He also referenced prior testimony in support of the provision, and he stressed need to encourage districts to make more negotiating information public. The Co-chairman then called for objections to deletion of Sec. 7. No objection having been raised, the motion CARRIED and Sec. 7 was DELETED. Referencing Sec. 2 of the bill, relating to acquisition of tenure, Senator Phillips MOVED to delete the proposed five years and revert back to current statutes which provide for a two-year period. Senator Sharp OBJECTED for discussion purposes. Co-chairman Halford said he could not support the motion at this point. He noted that prior testimony indicated that the five-year provision would include Alaska with only four other states. He reiterated need to examine tenure provisions, nationwide, to determine an average and stressed need for a review process regardless of the tenure term. Senator Phillips concurred in suggested review and voiced his belief that two years is adequate for tenure. Senator Sharp noted his lack of support for the motion and concurred in need for review of nationwide provisions regarding tenure. Senator Salo noted that Senate HESS spent two years discussing the tenure issue. A proposal was put forward that contained compromise language "worked on by lots of people." Senator Sharp asked that Senator Salo provide that information to committee, along with associated backup materials. She agreed to do so. She then voiced support for Senator Phillips' amendment. She further noted that interest in a teacher's capability is as strong throughout the instructor's career as it is during the years that tenure is attained. She stressed need to find "that thing that keeps a person rejuvenated throughout their entire career." Senator Sharp acknowledged that prior work in Senate HESS indicated there were more problems with teachers who had been tenured for a long time and had reached a burnout stage. There is no way to reach the problem other than self-discipline by the administration to counsel staff. There are probably more problems there than with new teachers attempting to attain tenure. Co-chairman Halford called for a show of hands on the amendment to return tenure provisions to the statutory status quo. The motion FAILED on a vote of 2 to 3. Senator Sharp directed attention to proposed Amendment 1-A (9-LS0838\K.1, Cramer, 4-11-95). He explained that he had agreed to offer the amendment on behalf of another Senator. The amendment would delete "by regulation adopted" at page 2, line 19, and thereafter insert language relating to conditions on rehire and ability to stay on rehire status. While provisions do not guarantee rehire, they maintain teachers on standby status to be offered reemployment with the caveat that the district may select according to skills needed for the particular job opening. Rehire would not be dictated by seniority. The Senator acknowledged that while language makes the process more rigid, it also lessens opportunity for regulations to "set up something more onerous." It reflects middle ground and meets concerns of both sides in a layoff situation. Senator Sharp admitted that the language would dictate terms already contained within most collective bargaining agreements. Senator Randy Phillips attested to prior concern that "by regulation adopted" was too open ended. New language would provide guidelines for regulations. Senator Rieger advised that he could not support the amendment. He stressed that school districts should have the ability to bargain "these kinds of provisions" and questioned foreclosure of ability to bargain layoff and rehire decisions. In an attempt to develop compromise language, Senator Sharp directed attention to page 3, lines 9 through 14, and suggested that language at line 9 be replaced with "Notwithstanding AS 14.21.060 the following terms are set in statute." In that way, if there are other areas set by regulations, they would have to be patterned after "these items." Co-chairman Halford advised that he would be voting for the amendment, but he expressed need to bring the bill before committee at a later time for discussion with representatives of NEA-Alaska, school boards, and the Dept. of Education. Senator Sharp concurred. He stressed need for input from the Dept. of Education in terms of the intent of current regulations and what might be needed for future regulatory ability. He said he did not wish to totally shut down that function. Senator Salo concurred, advising that this portion of the bill has the greatest potential for misuse. It is legitimate to want to give school districts authority to lay off during certain circumstances, but "What you don't want to do is create a way to avoid the dismissal policy." Senator Salo suggested that, under proposed language, there would never be another legitimate dismissal of a teacher "because it would be far too easy to just do this--just lay them off." While on layoff status, teachers generally leave the area and/or profession. Co-chairman Halford voiced his understanding that in order to effect layoffs, it must be necessary for the district to reduce the number of teachers. The necessity of reduction is an entry level screen. He acknowledged the complexity of the issue and need to deal with legal questions. End: SFC-95, #33, Side 1 Begin: SFC-95, #33, Side 2 Senator Zharoff echoed concerns expressed by Senators Rieger and Salo. He then voiced support for bringing all parties associated with the issue before committee. Senator Sharp stressed that the proposed amendment would not change layoff provisions at page 3, lines 2 through 8. Those provisions stand on their own. Once a teacher is in layoff, the proposed language provides tenure protection and accrued benefits. It assures teachers they will be approached for rehire on a priority basis (based on tenure) if they teach primary or secondary school, and there is an opening at their level. The intent is to offer some protection. Co-chairman Halford called for a show of hands on adoption of Amendment 1-A. The amendment was ADOPTED. Co-chairman Halford distributed a proposed amendment relating to judicial review and explained that it contains an alternative to trial de novo in that it provides for a non-aligned third party as an arbitrator and subsequent appeal to the court system on a combination of the initial record and the arbitration record. It represents an effort to find middle ground between trial de novo and trial on the record. Senator Salo said that the educational community has problems with the legislation because it is built on a faulty premise that the educational community is substandard. There is no evidence to suggest that. Alaska has above average standardized test scores. Students often win national competitions, and the state has the lowest drop-out rate in the nation. Alaska has the highest rate of 25-year olds with high school diplomas. And an Alaskan teacher has been selected national teacher of the year. The state educational system does not really have a problem, yet the legislature is embarking upon "a pretty broadly based fix, here." A fix that is considered to be a slap in the face to every good and hardworking teacher in Alaska. While the legislature takes exception to the term "teacher bashing," the effect of the legislation is to significantly reduce the rights of teachers and increase the power of school administrators. That is the main impact of the bill as currently written. Those school administrators are not following current evaluation law, partly because they are overworked and partly because they simply have not done so. Co-chairman Halford assured Senator Salo that representatives of educational interests would jointly appear before committee for detailed discussion before the bill moves from committee. The Co-chairman directed attention to the amendment and explained that it would amend language within Sec. 6 at page 3, lines 15 through 22. It provides for mandatory advisory arbitration conducted by a neutral third party. If the decision of the school board remains unfavorable, judicial review follows. It answers part of the objection to removal of trail de novo provisions and responds to objections regarding costs and time consumed in the process. Discussion followed regarding the process of selecting an arbitrator. In response to a question from Senator Rieger, Co-chairman Halford explained that both the initial administrative record as well as the arbitration record would go forward to judicial review. Senator Salo voiced need to ensure access to judicial review to both parties (school district and teachers). Co-chairman Halford concurred. Senator Rieger suggested deletion of "if the decision of the school board remains unfavorable to the teacher" and subsequently recommended addition of "either party is entitled to subsequent" at line 4 of the amendment. Senator Sharp suggested that the amendment might speed up the process in that a teacher could waive administrative review and proceed directly to an arbitrator. Senator Rieger formally MOVED for adoption of the foregoing rewording as an amendment to the amendment. Co-chairman Halford called for objections. No objection having been raised, the amendment to the amendment was ADOPTED. Senator Phillips then MOVED for adoption of the amendment. No objection having been raised, the amendment relating to judicial review was ADOPTED AS AMENDED. Senator Rieger next referenced amendments relating to retirement incentive portions of the bill and explained that they are more technical than substantive in nature. Addressing Amendment No. 4, effecting changes at page 7, line 17, Senator Rieger said that it would clarify that the 10% penalty on the 110% indebtedness is a penalty on top of foregone earnings of the pension fund during the period of time between when the employee took retirement and returned to the system. Administratively, that it how it is currently done. Existing language, however, is unclear. The new language clarifies actual practice by the department. BOB STALNAKER, Director, Division of Retirement and Benefits, Dept. of Administration, came before committee. He concurred in comments by Senator Rieger and acknowledged that the department charges interest on the indebtedness and penalty that is assessed. Senator Rieger MOVED for adoption of Amendment No. 4. No objection having been raised, Amendment No. 4 was ADOPTED. Senator Rieger next referenced Amendment No. 3. He explained that, at the present time, the administrative rate of interest on indebtedness is lower than the actuarial earnings of the fund. A person with an outstanding indebtedness enjoys arbitrage earnings in his or her favor where the cost of indebtedness is less than the accrued value of gain in retirement benefit. The language change would equalize the two so that there is no cost to the system. The system is then indifferent as to when a person who reenters the system pays back an indebtedness. Mr. Stalnaker voiced concurrence with the proposed amendment. The current interest rate on indebtedness is 7%. The actuarial assumed earnings rate is 8%. There is thus a 1% difference. The indebtedness rate is reviewed by the board periodically. Co-chairman Halford called for objections to adoption of Amendment No. 3. In response to a question from Senator Zharoff, Senator Rieger explained that the proposed amendment would result in a benefit to other participants in the teachers' retirement system in that they would no longer be subsidizing the retirement entitlement of a person who took early retirement and then decided to reenter the system. No objection to Amendment No. 3 having been raised, it was ADOPTED. Senator Randy Phillips directed attention to Amendment No. 7. He explained that under the proposed bill, an individual could retire from the University system and then return through a personal services contract for teaching or research. He voiced his belief that the practice amounts to "double dipping" and negates the purpose of a retirement incentive program. Co-chairman Halford asked the sponsor of the amendment if he would object to an individual retiring from an unrelated entity such as a school district and then accepting a research contract through the University. Senator Phillips stressed that a retirement incentive program represents an attempt to reduce the work force. Allowing an exemption merely replaces one person with another. Once an individual RIPs from the system, he or she should not return. Senator Rieger said that his concern regarding retirement incentive programs has always been financial. If return of a former employee through contract with no fringe benefits represents a sound financial decision, there should be no problem. Senator Phillips advised that his objection would not be so strong if the position from which the individual retires is not filled. In many cases the person who retires is replaced by another worker, and the retiree thereafter secures a contract for teaching or research. That is subject to much abuse. He cited the Dept. of Public Safety and University as examples. Senator Rieger voiced his understanding that positions would be filled as individuals retire. Proposed retirement incentive programs in both TRS and PERS represent reductions in salaries rather than reductions in force. Co-chairman Halford noted that a retired individual could be the best person to provide the service, several years after retirement. He voiced dislike for situations in which individuals take early retirement and "immediately move over to a personal services contract." That is a different level of abuse. The Co-chairman questioned the benefit of excluding teachers who have taken early retirement from "ever coming back to provide any benefit of their experience under any kind of a contract." He suggested a one or two-year prohibition from return. Further discussion of potential for abuse and benefits to be received from returning expertise followed. Mr. Stalnaker spoke to situations where a school district seeks to bring back a retired principal to fill the void until a new principal is on the job. Problems in present statutes arise when the individual comes back to a position requiring TRS coverage. The individual must be taken off retirement and reinstated in TRS. That costs the school district additional moneys. A retired principal is generally willing to come back on a short-term contract basis, take a lower salary, and help fill the void. Unfortunately, restrictions exist in statute. School district are facing these kinds of issues. Flexibility can be advantageous to both parties. Senator Sharp stressed need to close the loophole. He referenced situations where individuals take early retirement, return on a personal services contract, and collect both retirement and contractual pay. He suggested that prohibiting the individual from returning via contract to work for the agency from which he or she retired would avoid "a lot of sweetheart deals being made at the time of retirement." That is where much of the problem exists. Co-chairman Halford advised that while he could support some form of the amendment, he would not support Amendment No. 7. He then called for a show of hands on adoption. The motion failed on a vote of 2 to 3. Senator Zharoff referenced Amendment No. 2, relating to administrative contracts. He explained that it would amend language at AS 14.20.130 to state that "The contract for a superintendent or other school administrator may not be for more than one school year." At the present time the amendment lacks a triggering mechanism allowing the provision to become available should the district have to cut back to a certain level of funding. The Senator said he would continue to work on language to bring before committee at a later time. He reiterated his earlier comments that if districts must look to teachers for cost savings, they should also look to administrators. Co-chairman Halford reiterated need for discussion with representatives of teachers, school boards, and the Dept. of Education. He then directed that amendments adopted at the present meeting be incorporated within a working draft committee substitute. RECESS Subject to a call of the Chair, the meeting was recessed at 11:20 a.m. for attendance at the Senate Floor Session.