HB 191-CHARTER SCHOOLS  SENATOR WILKEN moved to adopt Version X of HB 191 as the working draft of the committee. CHAIRMAN MILLER objected for the purpose of discussion. SENATOR WILKEN explained the changes made in Version X. On page 2, lines 11 and 12, of the previous version (Version W) the words, "including the itemized cost of administrative and other services to be provided" were deleted. Also, on lines 27 through 31, the following provision was deleted: a clause providing that the charter school's budget shall be increased to reflect operating cost savings achieved by the charter school; in this paragraph, "operating cost savings" means the estimated value of educational or related services provided by the district to all schools in the district that are not provided to the charter school; The effect of that removal is to minimize the discussion that will occur on an annual basis among the local school boards and the charter school advocates. He believes that discussion will create a conflict. Requiring school districts to reflect operating cost savings means they will have to set up new accounting systems for a relatively few amount of students. Senator Wilken said that provision will set up an ongoing conflict between charter school advocates and the local school boards because those terms are nebulous. Version X will eliminate that conflict. SENATOR WILKEN noted the third change occurred on page 3. Lines 8 through 13 of Version W was deleted. Local school boards were mandated by law in 1995, and in the education rewrite in 1998, to fund charter schools at a minimum level. The provision that was removed tells the school board what it shall allocate to charter schools - a decision that is a function of the elected community officials and a function of the contract negotiated under statute. It sets charter schools apart from other schools, including alternative schools. Senator Wilken said he objects to the legislature telling school districts how to fund charter schools. SENATOR WILKEN noted the charter school issue was set forth with a set of agreements about how they would be operated in 1995. The funding level was also agreed to. HB 191 attempts to change those agreements. Version X contains some provisions that are important to the sponsor: it increases the allowable number of charter schools to 60; it removes the geographical restriction; and it allows charter schools to operate in public buildings that do not meet fire codes for public schools as long as the fire marshal's approval is obtained. SENATOR WILKEN repeated his motion to move Version X as the working document of the committee. SENATOR PETE KELLY asked Senator Wilken for a recap of what Version X will do. SENATOR WILKEN said two provisions bother him most and those provisions revolve around the fact that school boards in Alaska are made up of elected officials who are responsible for the education of K-12 in their local areas. School board members are the voice of the people. The charter school experiment was set forth in statute in 1995 but, now, because some charter schools feel they've been slighted, they are now coming to the legislature to change the charter school system rather than going to their local elected officials to make the changes. In this time of tight funds, the legislature is being asked to spend more money on a fewer amount of children. He believes that is a decision to be made by the local elected officials. The funding component requires school districts to give a certain amount of money to charter schools. That amount should be decided by local school boards. The second bothersome component is the nebulous accounting method that is required as it will create tension every year between charter school advocates and the people who are responsible for all K-12 students in the district. That tension will not be productive for the district. SENATOR PETE KELLY asked if Version X eliminates, and does not make adjustments to, the funding and accounting provisions in Version W. SENATOR WILKEN replied yes, but Version X contains everything else. Number 598 REPRESENTATIVE DYSON, sponsor of HB 191, noted the same issues were discussed on the House side. He stated that when the charter school legislation was passed in 1995, it was viewed by some of the experts in this area as the weakest charter school bill in the nation. Several legislators said, at the time, that it would need to be revisited because charter schools would never survive with that legislation. Some considered that legislation to be a cruel hoax because it gave false hope that parent- directed schools could make it. The charter school issue is at a nexus: charter schools either need more assistance or they will fold. REPRESENTATIVE DYSON said nothing in Version W changes the fact that school boards will remain in control. The process is not one of negotiation; Version W only "opens up the books" so that discussions can go forward. The charter school advocates are coming to the local government with nothing to negotiate. They are supplicants only. The issue of the local contribution has been controversial. His reading of the 1995 law is that the legislature intended that each charter school would get their fair share of all of the allocations - federal, state and local money. There is some evidence that some school districts do not feel they need to give the charter schools any portion of the local contribution over four mils. Version W makes clear that charter school students should get treated like any other students and that they receive the same allocation of the local contribution over four mils. REPRESENTATIVE DYSON noted the section that deals with estimated cost only says if the charter school saves the school district money because the district does not have to provide it with the same services, then the charter school will have a chance to receive that money. For example, if the charter school does not require snow plowing services and saves the district money, then the charter school can get that money. The language on page 2, lines 11 and 12, does not really require anything different than what the law already says. It only asks for some itemization. Some school districts claim that they do not have that information but Commissioner Cross of the Department of Education believes they do, and that if they do not, they should have it. He repeated that Version W does not change local control. SENATOR ELTON stated support for Version X because it liberalizes some provisions, such as contract duration, lifts the geographical component, and lifts the cap on the number of schools. He, like Senator Wilken, is bothered by the provision that tells local school districts how they must deal with charter schools. What he finds particularly offensive is the provision that allocates the specific local contribution. He agrees with Senator Wilken that that provision sets a floor and a ceiling and gives the local districts no latitude at all. He believes those kinds of decisions are best made at the local level rather than at the legislative level. That will put in law a special provision for charter schools that is not available for public schools. CHAIRMAN MILLER noted that objection was maintained to the adoption of Version X so a roll call vote was taken. The motion to adopt Version X failed with Senators Pete Kelly, Pearce, and Miller voting "nay," and Senators Wilken and Elton voting "yea." CHAIRMAN MILLER stated that Version W was before the committee. SENATOR ELTON moved to amend Version W by deleting Section 4 on page 3 which reads as follows. Sec. 4. AS 14.03.260 is amended by adding a new subsection to read: (e) In addition to the amount provided to an approved charter school in the annual program budget under (a) of this section, a charter school budget must include an allocation equal to the amount determined by dividing the amount of local revenues contributed under AS 14.17.410(c) by the average daily membership of the district and multiplying that number by the average daily membership of the charter school. The motion to delete Section 4 carried with Senators Elton, Wilken, and Pete Kelly voting "yea," and Senators Pearce and Miller voting "nay." SENATOR PEARCE moved SCSHB 191(HES) from committee with individual recommendations. SENATOR WILKEN objected. The motion to move SCSHB 191(HES) out of committee carried with Senators Elton and Wilken voting "nay," and Senators Pearce, Pete Kelly, and Miller voting "yea."