ALASKA STATE LEGISLATURE
HOUSE EDUCATION STANDING COMMITTEE
February 19, 2010
8:04 a.m.
MEMBERS PRESENT
Representative Paul Seaton, Chair
Representative Cathy Engstrom Munoz, Vice Chair
Representative Bryce Edgmon
Representative Wes Keller
Representative Peggy Wilson
Representative Robert L. "Bob" Buch
Representative Berta Gardner
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 310
"An Act extending the deadline for authorizing school
construction debt reimbursed by the state."
- BILL HEARING CANCELED
HOUSE BILL NO. 311
"An Act providing the Alaska State Council on the Arts the
authority to adopt regulations relating to its statutory powers
and duties; and providing for an effective date."
- MOVED HB 311 OUT OF COMMITTEE
OVERVIEW: ALASKA VIRTUAL ACADEMY
- HEARD
HOUSE BILL NO. 350
"An Act relating to the local contribution to public school
funding; and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 297
"An Act establishing the governor's performance scholarship
program and relating to the program; establishing the governor's
performance scholarship fund and relating to the fund; relating
to student records; making conforming amendments; and providing
for an effective date."
- HEARD & HELD
HOUSE BILL NO. 206
"An Act establishing a career assessment requirement in public
schools; and relating to postsecondary courses for secondary
school students."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 311
SHORT TITLE: STATE COUNCIL ON THE ARTS; REGULATIONS
SPONSOR(s): REPRESENTATIVE(s) JOHANSEN
01/21/10 (H) READ THE FIRST TIME - REFERRALS
01/21/10 (H) EDC
02/17/10 (H) EDC AT 8:00 AM CAPITOL 106
02/17/10 (H) Heard & Held
02/17/10 (H) MINUTE(EDC)
02/19/10 (H) EDC AT 8:00 AM CAPITOL 106
BILL: HB 350
SHORT TITLE: PUBLIC SCHOOL FUNDING: LOCAL CONTRIBUTION
SPONSOR(s): EDUCATION
02/17/10 (H) READ THE FIRST TIME - REFERRALS
02/17/10 (H) EDC, FIN
02/17/10 (H) EDC AT 8:00 AM CAPITOL 106
02/17/10 (H) <Bill Hearing Rescheduled to 02/19/10>
02/19/10 (H) EDC AT 8:00 AM CAPITOL 106
BILL: HB 297
SHORT TITLE: POSTSECONDARY SCHOLARSHIPS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/19/10 (H) READ THE FIRST TIME - REFERRALS
01/19/10 (H) EDC, FIN
02/03/10 (H) EDC AT 8:00 AM BARNES 124
02/03/10 (H) Heard & Held
02/03/10 (H) MINUTE(EDC)
02/12/10 (H) EDC AT 8:00 AM CAPITOL 106
02/12/10 (H) Heard & Held
02/12/10 (H) MINUTE(EDC)
02/15/10 (H) EDC AT 8:00 AM CAPITOL 106
02/15/10 (H) Heard & Held
02/15/10 (H) MINUTE(EDC)
02/17/10 (H) EDC AT 8:00 AM CAPITOL 106
02/17/10 (H) Heard & Held
02/17/10 (H) MINUTE(EDC)
02/19/10 (H) EDC AT 8:00 AM CAPITOL 106
BILL: HB 206
SHORT TITLE: HIGH SCHOOL ASSESSM'T/POSTSECONDARY CLASS
SPONSOR(s): EDUCATION
03/25/09 (H) READ THE FIRST TIME - REFERRALS
03/25/09 (H) EDC, FIN
03/27/09 (H) EDC AT 8:00 AM CAPITOL 106
03/27/09 (H) Heard & Held
03/27/09 (H) MINUTE(EDC)
04/03/09 (H) EDC AT 8:00 AM CAPITOL 106
04/03/09 (H) Heard & Held
04/03/09 (H) MINUTE(EDC)
04/15/09 (H) EDC AT 8:00 AM CAPITOL 106
04/15/09 (H) Heard & Held
04/15/09 (H) MINUTE(EDC)
01/20/10 (H) EDC AT 8:00 AM CAPITOL 106
01/20/10 (H) Heard & Held
01/20/10 (H) MINUTE(EDC)
02/01/10 (H) EDC AT 8:00 AM CAPITOL 106
02/01/10 (H) Scheduled But Not Heard
02/05/10 (H) EDC AT 8:00 AM CAPITOL 106
02/05/10 (H) Heard & Held
02/05/10 (H) MINUTE(EDC)
02/10/10 (H) EDC AT 8:00 AM CAPITOL 106
02/10/10 (H) Heard & Held
02/10/10 (H) MINUTE(EDC)
02/12/10 (H) EDC AT 8:00 AM CAPITOL 106
02/12/10 (H) Scheduled But Not Heard
02/15/10 (H) EDC AT 8:00 AM CAPITOL 106
02/15/10 (H) Heard & Held
02/15/10 (H) MINUTE(EDC)
02/19/10 (H) EDC AT 8:00 AM CAPITOL 106
WITNESS REGISTER
REPRESENTATIVE KYLE JOHANSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Responded to questions at the hearing on HB
311, as prime sponsor of the bill.
CODY CLAVER, Vice President
Business Development, K12 Inc.
Herndon, Virginia
POSITION STATEMENT: Co-presented the K12 Inc., Alaska Virtual
Academy (AKVA) program being implemented in the Wrangell school
district.
LORNA BRYANT, Senior Director
Business Development, K12 Inc.
Herndon, Virginia
POSITION STATEMENT: Co-presented the K12 Inc., Alaska Virtual
Academy (AKVA) program being implemented in the Wrangell school
district.
KATY KOESTER, Staff
Representative Paul Seaton
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 350 on behalf of the House
Education Standing Committee, sponsor by request, chaired by
Representative Seaton.
EDDY JEANS, Director
School Finance and Facilities Section
Department of Education and Early Development (EED)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 350.
ACTION NARRATIVE
8:04:42 AM
CHAIR PAUL SEATON called the House Education Standing Committee
meeting to order at 8:04 a.m. Representatives Seaton, Keller,
Buch, Gardner, and Wilson, were present at the call to order.
Representatives Munoz and Edgmon arrived while the meeting was
in progress.
HB 311-STATE COUNCIL ON THE ARTS; REGULATIONS
8:05:06 AM
CHAIR SEATON announced that the first order of business would be
HOUSE BILL NO. 311, "An Act providing the Alaska State Council
on the Arts the authority to adopt regulations relating to its
statutory powers and duties; and providing for an effective
date."
8:07:10 AM
CHAIR SEATON pointed out that the committee has received one
communication, from Homer, in support of HB 311, since the first
hearing, and asked the sponsor whether his office was in receipt
of other comments for consideration.
REPRESENTATIVE KYLE JOHANSON, Alaska State Legislature, stated
that his office has received no additional comments on this
bill.
8:08:48 AM
REPRESENTATIVE P. WILSON moved to report HB 311 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, announced HB 311 was reported
from the House Education Standing Committee.
^OVERVIEW: Alaska Virtual Academy
OVERVIEW: Alaska Virtual Academy
8:09:48 AM
CHAIR SEATON announced that the next order of business would be
an overview from the Alaska Virtual Academy (AKVA) based in
Wrangell and the products and services provided to the school by
the company known as K12 Inc. (K12).
8:12:16 AM
The committee took an at-ease from 8:12 a.m. to 8:13 a.m.
8:13:10 AM
LORNA BRYANT, Senior Director, Business Development, K12 Inc.
(K12), explained that AKVA is a fully managed school program
offered through the Wrangell Public School District, as a public
school offering delivered in the home. It is open to students
statewide to offer a comprehensive all encompassing school.
AKVA is fully staffed with certified teachers working fulltime
with the students, not supplemental instruction. Further,
participants in the K12 program have access to a large school
community of enrollees. She said an online system, referred to
as "The Big Think," allows the enrollees to interact with each
other, which has proven particularly helpful to military
families.
8:14:24 AM
MS. BRYANT continued the power point presentation to describe
K12 as the largest provider of online curriculum for public
virtual schools, with more than 70,000 students, in 26 states,
and additional e-learning programs internationally. She said
the creation of the program involved some of the finest minds in
education, including cognitive scientists, reading specialists,
biologists, mathematicians, artists, and others. It was
designed and developed for online delivery from the outset, as a
self-paced learning environment that will help each child reach
true potential. Additionally, administrative assistance is also
offered through a customer care and technology support line.
8:15:33 AM
MS. BRYANT listed what AKVA provides participating students and
families: leadership, support, and guidance from teachers and
AKVA staff; books, workbooks, hands-on materials, maps, art, and
science supplies, as well as other supplies necessary to
complete each lesson; interactive and engaging lessons with
comprehensive assessments; planning and progress tools; online
community features and events; and special education services
8:16:56 AM
CHAIR SEATON interjected that the full 40 slide presentation
will not be presented today, but will be available to the
committee online.
8:17:48 AM
MS. BRYANT elaborated on the special education services offered,
which include: contracting services for speech therapy, or
other specialists, and ensuring that every teacher is trained in
RTI (response to instruction/intervention), a process of
diagnosing where students are in the program and working to
bring them up to grade level.
8:19:06 AM
REPRESENTATIVE P. WILSON asked how the program rates in regards
to meeting Alaskan standards.
MS. BRYANT replied that the curriculum is aligned with national
standards, and then tailored to each state.
REPRESENTATIVE P. WILSON pointed out that the cultures
represented in Alaska are unique among the rest of the nation.
MS. BRYANT said the school superintendent's staff, in Wrangell,
has worked with K12 to help incorporate culture aspects germane
to Alaska.
8:20:26 AM
CHAIR SEATON asked how long the program has been involved with
the Wrangell School District.
MS. BRYANT responded this is the first year, and the
relationship has been positive.
8:20:58 AM
REPRESENTATIVE MUNOZ inquired how many students are being
served.
MS. BRYANT answered that eight students are in the program. As
the program grows, a fulltime head of school will be positioned
in Wrangell, but for now it receives regular visits from an
administrator.
REPRESENTATIVE MUNOZ asked if the program is part of the
Wrangell School District, or an alternative program.
MS. BRYANT said AKVA is offered through the school district.
8:21:47 AM
REPRESENTATIVE BUCH noted the K12 business as being in Virginia,
and asked whether the program is incorporated throughout the
nation, and, if so, the enrollment numbers.
CODY CLAVER, Vice President, Business Development, K12 Inc.
(K12), said the corporate headquarters are in Virginia, with
virtual academies in 26 states, serving over 70,000 students,
and stated his home base as Boise, Idaho.
8:22:46 AM
CHAIR SEATON referred to the statement that AKVA provides
leadership, support, and guidance, to ask how the leadership
component is addressed, via the internet.
8:23:04 AM
MS. BRYANT explained that leadership refers to the resource
staff that are experts in their respective fields, and who
essentially guide the components of K12. To a follow-up
question he said the teachers are Alaska certified.
8:23:48 AM
REPRESENTATIVE EDGMON asked how the program is financed, the
source of the funding, how it relates to the state's funding
formula, and for a cost comparison to a brick and mortar school.
MS. BRYANT replied that it is funded the same as other
correspondence programs, at the 80 percent level. She said it
would be difficult to compare costs to other systems.
8:25:19 AM
REPRESENTATIVE EDGMON directed attention to the committee
packet, and the communication received from Tim Scott, dated
2/18/10, addressed to the committee. As a principal of the
Frontier Charter School, Mr. Scott believes that programs, such
as K12, create competition for students between districts, and
raises other concerns. He paraphrased from the final paragraph
of the e-mail, which read [original punctuation provided]:
I have heard it argued that a program such as K12 will
help alleviate some curricular holes that might exist
in the Governor's proposed scholarship program. I
have appreciated this committee's due diligence in
discussing the Governor's proposed scholarship program
and the advantage that a virtual consortium might
bring to the table in helping carry out a fair and
equitable plan. The Commissioner of Education's
passion to create success opportunities for students
through leveraging and connecting virtual programs and
resources throughout the state is to be commended. I
do not think that it is necessary for students to
enroll outside of their own districts to take
advantage of such a plan. In fact, I believe that
leaving the choice option up to the locally elected
and empowered schools boards potentially will create
strong relationships between districts that take part
in creating a virtual consortium. A virtual
consortium consisting of offerings created by and for
Alaskans, particularly online synchronous courses, is
a brilliant idea! Currently, many of the nationally
marketed programs are cost prohibitive and/or not
specifically designed by and for Alaskans.
8:26:38 AM
MR. CLAVER responded that K12 is a business from outside of the
state, and could be likened to a text book publisher, but as far
as competition for students, the program is run through the
local district. The teachers involved will be Alaska certified,
and the eventual head of school will reside in Wrangell, making
this a local program.
REPRESENTATIVE EDGMON followed-up stating that the company is
not here to offer an altruistic program, it is an Outside
business, and asked on what premise does the company operate.
8:28:17 AM
CHAIR SEATON clarified that the funding available is at 80
percent of the BSA (base student allocation), to Wrangell, which
in turn contracts through K12 to provide services; no additional
public funds are expended.
MR. CLAVER concurred.
8:29:11 AM
CHAIR SEATON pointed out that various web based programs are
currently being accessed in other districts; using BSA funding.
8:30:10 AM
REPRESENTATIVE P. WILSON stated her understanding that every
school district uses correspondence programs, and the decision
for which program to use is made locally.
REPRESENTATIVE KELLER offered that the school districts exercise
local control, and have the authority to spend their budget on
the curriculum deemed appropriate to meet state standards.
8:32:08 AM
MS. BRYANT continued with the presentation to review the
curriculum. It is integrated and planned out for students to
follow. Regarding other correspondence courses in Alaska, she
said it is often difficult for families to plan and provide
appropriately challenging course work for their student. Using
K12 there is no need for lesson planning, because it is a self
directed program, and the curriculum is individualized.
Assessments are provided directly to the enrollee. The teacher
assists throughout the lesson progression, implementing a
curriculum specifically designed to meet or exceed state
standards. She said K12 is accredited by AdvancEd (formerly
called CITA), has a 97 percent satisfaction rating among the
70,000 nationwide users, and ships all learning materials
directly to the student's home. Six subjects are offered at all
grade levels, which are: language arts, math, science, history,
art, and music; foreign language is also an option. In
Wrangell, K12 offers a K-8 program. She stressed that it is an
individualized mastery-based program, utilizing research based
content. The teachers encourage families to spend more
instructional time on difficult objectives. Each student is
recognized for their individuality, and helped to discover the
appropriate level and pace for study. To ensure mastery, every
objective is assessed. Wrangell oversees this program, as an
aspect of their district.
8:35:40 AM
CHAIR SEATON asked how grades are assigned.
MR. CLAVER said grades are assigned in conjunction with a
district's local policy.
8:36:27 AM
CHAIR SEATON posed a hypothetical situation of a student seeking
to gain a high school science credit, and receives a K12
assessment of mastery. Does a district teacher then assign a
grade based on that assessment, or is the student re-assessed by
the district.
MR. CLAVER underscored that the K-8 program, as exists in
Wrangell, is handled differently than high school level courses,
which are based on a semester system and include finals tests.
The K-8 participant may be rated based on a percentage of
progress gained towards an individual objective, and a grade may
be attached. The grade would be assigned by the local school
district.
CHAIR SEATON surmised that the communication between the parent
and the school will allow adequate understanding of a student's
progress in the K12 program.
MR. CLAVER concurred.
8:39:56 AM
MS. BRYANT explained that the teachers are highly qualified.
She acknowledged that there's a perception that teachers are
absent in distance education. However, many of the teachers and
the families feel they have a tremendous amount of personal
connection with the teachers. The families, she noted, have
quite a bit of say in how much interaction they have with their
teacher. The program also includes Elluminate sessions, which
are live online interactive class sessions in which students can
have face-to-face formal instruction from their teachers. She
noted that web cameras aren't built into the computers.
8:41:26 AM
MS. BRYANT specified that the reference to the learning coach
represents the parent, who is a very important part of this
process, particularly in the lower grades.
8:41:50 AM
REPRESENTATIVE P. WILSON surmised that parents new to home
schooling or correspondence may have a learning curve. She
questioned whether there's any method to increase the
communication between the parent, teacher, and child when it's
lacking.
MR. CLAVER said K12 has proposed policies and procedures that a
school could implement to help families engage. The role of the
teacher is critically important in terms of engaging the student
and his/her family. Having engaged parents is a very high
priority, he said. Therefore, the teachers are responsible for
student learning and engaging the families as well in the
learning process.
8:43:52 AM
MR. CLAVER paraphrased from the presentation slide describing
the role of the ADVA Teacher, which read: certified and
experienced partners in education; first point of contact;
responsible for checking student progress and attendance; leads
Elluminate instructional and tutoring sessions; resource for
curriculum issues, coaching tips, and questions about school
policies; conducts phone conferences every two weeks; and
provides feedback on submitted work samples. He followed with
the bulleted points on the slide "Role of the Parent," which
read: fulfill attendance requirements; report attendance on a
daily basis; work with student towards continuous progress with
the K12 curriculum; prepare for student's school day;
participate in regular teacher conference calls; submit regular
work samples as required by the school; and ensure student
participation in state testing program.
8:45:55 AM
MR. CLAVER moved to the "Attendance" slide bulleted points,
which read: students are expected to login every school day to
complete school work; parents must notify the teacher when
students are absent from school (i.e., the student does not log
into the OLS and complete lessons); when needed, teachers and
parents work together to create flexibility in student
schedules; students can generally be expected to complete an
average of 4-6 hours per day of instructional time.
8:46:20 AM
MS. BRYANT interjected that the six hour day commitment is a
departure from the structure of a standard school day to allow
flexibility, and to enable students to work on challenging
areas. It is important to note that families utilize the
program in a non-traditional way many times, scheduling it into
various times of the day.
8:47:49 AM
MR. CLAVER read the "Academic Accountability" points: meet and
maintain adequate progress; students must participate in the
state's testing program; students must participate in pre- and
post- testing; 100 percent completion of all course work is
encouraged.
8:48:33 AM
CHAIR SEATON, regarding the pre-testing required, posed the
situation of a 4th grade student with a 6th grade math ability,
but a 3rd grade English skill, and asked how K12 would measure
that type of mastery and growth.
MR. CLAVER indicated that this is where the flexibility of the
program enters strongly. A student is not placed more than one
year behind their expected grade level, however, the skill set
is matched to be in pace with the student. If remediation is
required, an accelerated pace may be employed, however, it would
be up to the teacher and parent to determine appropriate grade
placement.
8:51:35 AM
REPRESENTATIVE P. WILSON, posing a similar scenario, of a 6th
grade student with 9th grade math abilities, but 3rd grade
reading skills, and surmised that, if the policy is to not place
them further back than one grade, the student would be placed in
the 5th grade, and given a remedial reading course.
MR. CLAVER said it is important to understand that 3rd grade
materials would probably not be suitable for a 5th grade
student. Thus, it becomes a matter of finding the activities
that will suit the student, and assist them in achieving age
appropriate skill levels.
8:52:55 AM
REPRESENTATIVE P. WILSON pointed out that currently schools have
students graduating who do not have good reading skills. She
asked about the reading skill success rate among the K12 program
graduates.
MS. BRYANT, in response to Chair Seaton's question, said
diagnostic tools are used to establish appropriate milestones
for each student. The curriculum provides materials that can be
tailored to specific needs. Further, she said the longer a
student stays in the program, the better they tend to perform
because of the ability for diagnosis and benchmark goals that
are employed. She opined that the program is successful in
bringing students who enter the program a year or two behind, up
to grade level. Additional data will be made available to the
committee to indicate success in this area.
8:55:25 AM
REPRESENTATIVE GARDNER cited the emphasis for today's students
to have real world experience through group activities and team
projects, and asked how K12 accomplishes similar learning
possibilities via the internet.
MS. BRYANT said that virtual group work can bring students
together. She pointed out that the modern work place often
finds people working remotely connected via the internet. The
students use the Big Think website to interact and collaborate
on long term projects with students on a global scale.
8:57:37 AM
MR. CLAVER directed attention to the next slide "State Testing
and Assessments," to indicate that the AKVA students participate
in all state testing. The Scantron Diagnostic Assessment is
used to benchmark student progress through the curriculum
throughout the course of the year.
8:58:22 AM
MR. CLAVER presented actual computer screen images of the K12
Online School (OLS) Daily Plan, which allows a parent to work
with the student to establish what studies will be covered each
day.
MS. BRYANT interjected how time management is inherent in the
program, as a student learns to make a daily plan.
8:59:11 AM
MR. CLAVER continued with the screen images to indicate the
broad scope of the OLS: Plan Week View; Tracking Your Success;
and the Progress Overview. He indicated that the Progress
Overview screen provides the easiest means for tracking a
student's efforts, with a clear breakout, by subject, of the
progress attained. It can easily be seen which areas a student
may need help with for further development, and which are coming
easily.
9:00:47 AM
REPRESENTATIVE KELLER, highlighting the effectiveness of this
type of course tracking, offered a personal anecdote about his
grandson. As a 5th grader, Vincent Sloan Sanderson, was being
challenged in the area of math, and family members feared he was
falling behind. However, through a similar online system,
ALEKS, within 20 hours, or two weeks of study, Mr. Sanderson's
math skills were improved, and family concerns alleviated.
9:02:03 AM
CHAIR SEATON asked whether the overview tracks the different
levels that a student has attained.
MS. BRYANT explained that the overview indicates progress in the
program, and the diagnostic tracks advancement through the
levels.
9:03:00 AM
MR. CLAVER said additional screen images show the actual
lessons, which he encouraged committee members to review at
their convenience.
MS. BRYANT interjected that there is also a speaker series
available.
9:03:27 AM
CHAIR SEATON inquired about availability of the program on a
part-time basis. If a Wrangell high school student needed a
foreign language credit, would they be able to contract with K12
for a course in French.
MS. BRYANT responded that students must be enrolled fulltime.
9:04:36 AM
REPRESENTATIVE KELLER stated his enthusiasm, and expressed
admiration, to the Wrangell School District for making this
program available, and stressed his belief that learning options
are important for today's students.
9:06:28 AM
REPRESENTATIVE BUCH asked for details of the K12 Company
including: how the presenters personally came to represent
70,000 students, the actual size of the company, and about
competition in the industry.
MR. CLAVER responded that to produce a program of this
magnitude, at the K-8 level is no small undertaking, and
requires intensive resource and product development. Other
companies are working to develop educational programs, but K12,
being established for ten years, has a history to demonstrate
its success. He offered praise for the forward thinking of
Alaska's school districts.
REPRESENTATIVE BUCH asked how many are employed by the K12
Company.
MR. CLAVER answered approximately 1,000, including
administrative staff, product developers, and teachers.
CHAIR SEATON thanked the presenters for the discussion.
HB 350-PUBLIC SCHOOL FUNDING: LOCAL CONTRIBUTION
9:10:11 AM
CHAIR SEATON announced that the next order of business would be
HOUSE BILL NO. 350, "An Act relating to the local contribution
to public school funding; and providing for an effective date."
9:11:08 AM
KATY KOESTER, Staff, Representative Paul Seaton, Alaska State
Legislature, presented HB 350, explaining that it will change
the required local effort, which is the minimal amount that
municipalities are mandated, through statute, to allocate for
education, and is determined by assessing the taxable real and
personal property of a district. Directing attention to the
committee packet, and the charts labeled "History of How
Required Local Effort Works" and "How Required Local Effort
Works Under HB 350," Figures 1 and 2 respectively, she provided
an illustrated, theoretical example of local effort, using Craig
and the Kenai Peninsula Borough (KPB).
9:12:30 AM
CHAIR SEATON asked if the examples use actual mill rates.
MS. KOESTER explained that the idea is to illustrate how actual
mill rates would be effected by HB 350. She offered the
disclaimer that the examples are for illustrative purposes only
and do not reflect actual shifts in property values or current
mill rates.
9:14:13 AM
REPRESENTATIVE MUNOZ noted 4 mills as the minimum required local
contribution, and asked about the allowed maximum contribution.
MS. KOESTER said that would constitute funding to the cap, and
deferred to the Department of Education and Early Development
(EED).
9:15:24 AM
MS. KOESTER addressed Figure 1, comparing the computation of
local effort based on two homes, one located in Craig and one in
KPB, equally valued at $100,000. Local effort was determined in
1990, by applying the 4 mill rate to the two year previous
assessment. In this case, $100,000 for both homes held a 1988
value of $100,000, resulting in a local contribution requirement
of $400 in both communities. For 2001, the example indicates no
change in Craig, but since 1988 the KPB did experienced growth
and the home value increased to $200,000. Thus, applying the 4
mill rate, based on the prior two year assessment, the
contribution level remains at $400 in Craig, but increases to
$800 in KPB. The legislature realized the disparity that
communities were experiencing, based on growth versus non-growth
areas, and passed SB 174, in 2001, to freeze the assessed values
at the 1999 level, for local effort computation purposes. The
new formula uses the 1999 assessment as a base, plus any value
increase over two years, at the 50 percent level. Execution of
the new formula finds the KPB example home, valued in 1999 at
$200,000. By using a two year assessment look-back factor of 50
percent, $50,000, and applying the 4 mill rate, the resulting
local effort contribution is $1,000; equating to a 3.3 mill
rate. Without the SB 174 formula, the local effort contribution
would have been $1,200. The actual mill rate in areas
experiencing growth since 1999 is steadily decreasing, and will
continue on this path, as property values increase. The
committee is attempting to determine if this is fair to all
areas of the state.
9:19:30 AM
MS. KOESTER turned to Figure 2, and explained how HB 350 changes
the computation of local effort to bring equality to the same
scenario. The bill sets a uniform mill rate of 2.7, applies a
temporary tax break in areas experiencing growth, and uses a
shorter look-back. The new formula uses the value difference
between the two year and one year look-back assessment. The
home values for 2008 are $100,000 in Craig $300,000 in KPB. In
2009, the Craig home remains valued at $100,000, but, due to
municipal growth, the KPB home is $320.00. With the passage of
HB 350, the 2010 local effort for the Craig property, with no
growth to track, would be valued at 2.7 mills, or $270.00.
However, the KPB home shows an increase between the two and one
year look-back assessment values. Calculation begins with the
$300,000 base, add the $10,000 for the 50 percent value increase
differential, and applying the 2.7 mill rate, for a local effort
contribution result of $837.00. The HB 350 formula provides an
equal contribution for all municipalities with a built in
temporary break for areas experiencing grown.
9:22:02 AM
REPRESENTATIVE MUNOZ asked what the loss of revenue would be, if
the bill were implemented.
MS. KOESTER directed attention to the fiscal note, and said the
state picks-up the difference in the mill rates. The department
has supplied a chart in the fiscal note to indicate the
increased state aid of $19 million.
REPRESENTATIVE MUNOZ asked what affect lowering the required
local effort would have on the ability of communities to
contribute beyond the minimal amount; would the percentage
decrease.
MS. KOESTER deferred to EED.
9:23:50 AM
REPRESENTATIVE GARDNER asked how the 2.7 mill rate was derived.
MS. KOESTER said 2.7 is the lowest mill rate being applied in
any district, and implementing it prevents any municipality
suffering the hardship of having a sudden rate increase.
9:24:46 AM
CHAIR SEATON confirmed that the Mat-Su, St. Maries, and Hoonah
districts are taxed at the 2.7 rate. He stated his belief that
the bill incorporates a means for the committee to bring a level
of fairness to the situation. The 50 percent look-back is
included, because with growth comes the need for further
infrastructure, and communities need funds to compensate
expansion. He opined that problems stem from the static 1999
baseline, causing some communities to always have a higher mill
rate than others, and speculated that a law suit may be
forthcoming if some action is not taken by the legislature.
9:27:39 AM
REPRESENTATIVE KELLER reflected on the communities he
represents, the typical demographic profile, and the lack of
control that residents have over rapidly changing property
values. He asked if there is precedent for a unified mill rate.
REPRESENTATIVE BUCH reported varying mill rates exist within the
municipality of Anchorage, depending on the availability of
services, such as fire and rescue.
CHAIR SEATON pointed out that the bill responds to the question
of whether the state is requiring the local effort of some
communities to be a higher percentage of the assessed evaluation
than others. He opined that, there are real equity problems as
assessments rise in some areas, and not others.
9:30:44 AM
REPRESENTATIVE P. WILSON noted that as people migrate to an
area, infrastructure needs are increased. She said it is one
thing to have taxes reflect the services provided, however the
schools are required to provide the same education to everyone.
According to the current formula, it is more difficult on the
areas that aren't growing than it is on the areas that are
experiencing growth. She opined, that the [SB 174] formula does
not appear to be fair.
9:32:53 AM
CHAIR SEATON clarified that the assessment has nothing to do
with the direct tax a homeowner on their house. It is a tax
contribution provided by the borough as a whole, calculated on
the property assessments of the area. The vehicle by which the
borough derives the funds is variable, and may include taxes on
sales, property, or other means.
9:34:13 AM
REPRESENTATIVE KELLER said the bill ultimately reduces the local
contribution burden, and increases the load on the state general
fund. A property tax in general is an unfortunate method of
paying for schools, he opined, as it tends to penalize, and
inhibit, owners from property improvement.
CHAIR SEATON explained that by continuing to use the base year
of 1999, more of a load will be placed on the state, and the
general fund contribution will become more disproportionate over
time, effectively reducing the actual value of the 4 mill
percentage.
REPRESENTATIVE KELLER requested a long range projection graph to
better understand the presumptions, of how HB 350 will
ultimately effect local effort and state contributions.
9:38:03 AM
REPRESENTATIVE EDGMON indicated his interest to receive further
information regarding all "the moving pieces that fit into
required local contribution, above and beyond just the mill rate
itself."
9:41:47 AM
EDDY JEANS, Director, School Finance and Facilities Section,
Department of Education and Early Development (EED), directed
attention to the committee packet, and referred to the EED chart
titled Mill Equivalent Change. He pointed out the column
labeled [Projected] FY 11, which lists the district mill rates,
and said 2.7 is the lowest mill equivalent on the full and true
value of a community, for that year. No district would
experience an increased contribution under HB 350. He referred
to Representative Munoz's previous question regarding the
meaning of local required effort, and said it relates to the
basic need aspect of the foundation formula. Basic need is the
entitlement allowed under the formula, and once calculated a
determination is made for the derivation of the funds utilizing
three sources of revenue. The required local contribution is
combined with federal impact aid, and any remaining entitlement
is made up from state funds. He said:
This particular piece of legislation impacts that
piece within basic need: who pays. It doesn't impact
the amount of additional local contribution above
basic need. The additional local contribution is the
equivalent of 23 percent of basic need in the current
year. ... The required local effort is based on mill
equivalents, applied to the full and true value, as
set by the state assessor for all municipalities
around the state.
MR. JEANS explained that full and true value is established by
assessing all real and personal taxable properties in a
community, including boats, cars, stores, and construction
companies. Certain communities may allow exemptions, at the
local level. For instance, Juneau does not tax boats, however,
the value of the boats in Juneau would be included in the full
value established by the state assessor, as part of the uniform
application for all communities. Referring again to the Mill
Equivalent Change chart, he indicated that in the first year of
the implementation of SB 174 nearly every district contributed
either 4 or 3.9 mills. He recalled that the intent of SB 174
was to provide municipalities, which were experiencing quick
economic growth, a tax break; the compounding factor was not
intended. Directing attention to the chart titled "State Cost,"
he pointed out that in FY 02, the basic need contribution by the
state was $3.6 million; a figure which might otherwise have come
from municipalities. Since the establishment of a base year,
and the inclusion of only 50 percent of the annual growth in
communities from 1999 forward, the effects of SB 174 on state
contributions to basic need, become apparent, and he read the
chart yearly totals, in millions: FY 03 - $9; FY 04 - $12.5;
and FY 05 - 18.8. He said:
When I realized what was happening ..., I brought this
to the Legislature's attention, because I didn't think
that was the intent of the legislation. But as you
can see the numbers start building pretty quick, and I
would say there was a sense of reluctance to remove
this state support out of the foundation program.
MR. JEANS, directing attention to HB 350, said the bill retains
the concept of providing municipalities a one year break.
Turning to the fiscal note, page 2, he explained the effect of
dropping all areas to a 2.7 mill rate, a cost to the state of
$18.7 million. The 50 percent one year look-back would also
cost the state $2.5 million. Subsequent years will realize
similar numbers, but the break is rolled forward each year into
the new base.
9:49:49 AM
CHAIR SEATON clarified:
You count 50 percent of that increase for one year,
but then the next year you pickup that other 50
percent, so then you're back to looking at that year
as being the base year of 100 percent of the assessed
evaluation, times the 2.7 [mill rate].
MR. JEANS concurred.
9:50:26 AM
REPRESENTATIVE KELLER asked what happens if there is a decline
in values.
MR. JEANS said the full 2.7 mills would be required. He pointed
out that, as indicated on the chart, some communities have not
seen growth since 2002, but are still paying 4 mills.
9:51:30 AM
CHAIR SEATON directed attention back to the fiscal note, and
said there would be an initial $21 million dollar base hit, of
which $18 million will occur, because the 50 percent factor is
being counted for the previous year only, and does not include
all the years back to 1999.
MR. JEANS agreed, and added that the look-back to 1999 is being
deleted, and the calibration is based on 2.7 mills.
9:52:17 AM
REPRESENTATIVE P. WILSON inquired whether the fiscal note, for
HB 350, includes the previously compounded figures.
MR. JEANS answered that HB 350, and the fiscal note, eliminate
the compounding factor, and 1999 base year. Communities will
realize the benefit of the 50 percent reduction for one year.
9:53:03 AM
REPRESENTATIVE P. WILSON acknowledged that the state will
continue to pay more, and more, under SB 174, and asked if the
chart shows the savings the state will realize by enacting HB
350.
MR. JEANS said it is not shown in the fiscal note. He pointed
out how the multi-year analysis assumptions from 3-4 years ago
did not prove to be accurate. A new model could be built, which
may not prove to predict the economy with any more assuredness.
The charts provided in the packet, and the fiscal note, provide
a mechanism to calculate the amounts, and indicate the fiscal
responsibilities for each portion of the state funding formula.
9:55:11 AM
REPRESENTATIVE P. WILSON cautioned that when the bill is
referred to the finance committee there may need to be a means
to further illustrate the point.
MR. JEANS replied that the best example is the state cost sheet,
which indicates that from FY 02-11, the state will have picked
up $77 million in local contribution for municipalities because
of SB 174. Comparing FY 10-11, the increase is only $4 million,
but from FY 08-09, the increase is $16 million. He stressed
that it is not possible to predict as accurately as it is to
illustrate what has occurred.
9:57:02 AM
REPRESENTATIVE MUNOZ noted that many communities fund beyond the
minimum contribution, to the cap, and asked about the effects of
HB 350 on these areas.
MR. JEANS pointed out that the districts benefiting, from the
2.7 mill, and HB 350 enactment, are reflected in the fiscal
note; listed by community. The education basic need burden is
being shifted from the local effort to the state, because
"somebody has to pay." However, the required local effort is
outside of the basic funding formula, a number that doesn't
change. Thus, municipalities will still be able to contribute
additional local revenue, above the basic foundation formula.
CHAIR SEATON interjected that federal regulations impose
limitations which restrict local contribution, as a means for
avoiding "rich districts." Additionally, he pointed out that
situations in districts are subject to change, and economic
growth, or student growth, remains subjective, and he requested
that the department submit further information, regarding
changing school needs, to the committee.
9:59:08 AM
CHAIR SEATON announced that HB 350 would be held over.
HB 297-POSTSECONDARY SCHOLARSHIPS
10:00:27 AM
CHAIR SEATON announced that the next order of business would be
HOUSE BILL NO. 297, "An Act establishing the governor's
performance scholarship program and relating to the program;
establishing the governor's performance scholarship fund and
relating to the fund; relating to student records; making
conforming amendments; and providing for an effective date."
10:00:37 AM
CHAIR SEATON stated his intent to have the additional amendments
to HB 297 moved before the committee and tabled, in order to
facilitate having them posted on the committee website for
public access. They will be handled in the same manner in which
amendments were brought to the February 17, 2010, meeting;
continuing in consecutive order.
10:00:53 AM
CHAIR SEATON moved Amendment 8, labeled 26-GH2771\A.16, Mischel,
2/18/10, which read [original punctuation provided]:
Page 3, line 14, following "established":
Insert "for the purpose of ensuring that a
rigorous curriculum is available in all high schools
in the state and"
Page 4, line 16, following "opportunities":
Insert ";
(9) providing a rigorous curriculum in all
high schools in the state"
REPRESENTATIVE P. WILSON objected for discussion.
CHAIR SEATON, without further objection, announced Amendment 8
was tabled.
10:01:24 AM
REPRESENTATIVE GARDNER moved Amendment 9, labeled 26-
GH2771\A.10, Chenoweth, 2/17/10, which read [original
punctuation provided]:
Page 10, line 1, following "error":
Insert "less any scholarship award payments
previously expended if the error in the award of the
scholarship was not due to any fault of the student"
CHAIR SEATON objected for discussion.
CHAIR SEATON, without further objection, announced Amendment 9
was tabled.
10:02:02 AM
REPRESENTATIVE GARDNER moved Amendment 10, labeled 26-
GH2771\A.17, Mischel, 2/18/10, which read [original punctuation
provided]:
Page 3, lines 16 - 19:
Delete "The program includes a merit-based academic
scholarship and a merit-based career and technical
school scholarship. The merit-based academic
scholarship consists of three levels of awards. The
merit-based career and technical school scholarship
consists of one level of award."
Page 5, line 17:h
Delete "an academic"
Insert "a performance"
Page 5, line 18:
Delete "academic"
Insert "performance"
Page 5, line 21:
Delete "academic"
Insert "performance"
Page 5, lines 29 - 30:
Delete "academic scholarship"
Insert "scholarship award"
Page 6, lines 2 - 3:
Delete "academic scholarship"
Insert "scholarship award"
Page 6, lines 3 - 4:
Delete "university or college in this state"
Insert "postsecondary institution as described in
AS 14.43.835"
Page 6, line 8:
Delete "university or college"
Insert "postsecondary institution"
Page 6, line 11, through page 7, line 15:
Delete all material and insert:
"Sec. 14.43.825. Maximum awards. (a) Subject to (b) -
(f) of this section, the maximum awards under the
program are
(1) for a student who demonstrates very high academic
achievement, the cost of approved tuition for a full-
time student in school year 2009 through 2010 at the
qualified postsecondary institution at which the
student intends to enroll;
(2) for a student who demonstrates high academic
achievement, 75 percent of approved tuition for a
full-time student in school year 2009 through 2010 at
the qualified postsecondary institution at which the
student intends to enroll;
(3) for a student who demonstrates moderate academic
achievement, 50 percent of approved tuition for a
full-time student in school year 2009 through 2010 at
the qualified postsecondary institution at which the
student intends to enroll."
Page 7, line 16:
Delete "(3) a"
Insert "(b) A"
Reletter the following subsections accordingly.
REPRESENTATIVE P. WILSON objected for discussion.
CHAIR SEATON, without further objection, announced Amendment 10
was tabled.
10:02:28 AM
REPRESENTATIVE BUCH moved Amendment 11, labeled 26-GH2771\A.18,
Mischel, 2/18/10, which read [original punctuation provided]:
Page 5, lines 22 - 27:
Delete all material and insert:
"(1) the four-year core academic curriculum that
the student must have completed in high school; the core
academic curriculum must include one of the following:
(A) a combination of
(i) four years of mathematics;
(ii) four years of language arts;
(iii) four years of science; and
(iv) four years of social studies, one year of
which may include a foreign language, Alaska Native
language, fine arts, or cultural heritage; or
(B) a combination of
(i) three years of mathematics;
(ii) four years of language arts;
(iii) three years of science;
(iv) four years of social studies; and
(v) two years of a foreign language, Alaska
Native language, fine arts, or cultural heritage;"
Page 6, lines 17 - 22:
Delete all material and insert:
"(1) the four-year core academic curriculum that
the student must have completed in high school; the core
academic curriculum must include one of the following:
(A) a combination of
(i) four years of mathematics;
(ii) four years of language arts;
(iii) four years of science; and
(iv) four years of social studies, one year of
which may include a foreign language, Alaska Native
language, fine arts, or cultural heritage; or
(B) a combination of
(i) three years of mathematics;
(ii) four years of language arts;
(iii) three years of science;
(iv) four years of social studies; and
(v) two years of a foreign language, Alaska
Native language, fine arts, or cultural heritage;"
REPRESENTATIVE P. WILSON objected for discussion.
CHAIR SEATON, without further objection, announced Amendment 11
was tabled.
10:03:47 AM
CHAIR SEATON stated that HB 297 would be held for further
consideration.
HB 206-HIGH SCHOOL ASSESSM'T/POSTSECONDARY CLASS
10:04:54 AM
CHAIR SEATON announced that the final order of business would be
HOUSE BILL NO. 206, "An Act establishing a career assessment
requirement in public schools; and relating to postsecondary
courses for secondary school students."
CHAIR SEATON offered Amendment 1, labeled 26-LS0765\P.1,
Mischel, 2/16/10, which read [original punctuation provided]:
Page 3, line 18:
Delete "The"
Insert "Except as provided in AS 14.17.610(d) and
(e), the"
Page 3, line 23, following "(d)":
Insert "and (e)"
Page 4, line 2:
Delete "a new subsection"
Insert "new subsections"
Page 4, line 8, following "AS 14.17.500.":
Insert "A recomputation under this subsection
shall take into account the supplement received by a
district under (e) of this section and include the
remaining balance owed in state aid for the increase
in the current year student count that was the basis
for the supplement if, at the end of the 80-day count
period, the increase in the current year student count
is the same or higher for the entire count period."
Page 4, following line 10:
Insert a new subsection to read:
"(e) Before a recomputation is made under (d) of
this section, a district may request supplemental
state aid by providing satisfactory proof on a form
provided by the department that the student count
conducted in the first 20 days of the 80-day student
count period in the current fiscal year is more than
10 percent above the count made in the 80-day student
count period for the preceding fiscal year. The
department shall provide an eligible district
supplemental state aid before the recomputation period
in an amount that is equal to 80 percent of the state
aid owed for the difference in the student counts.
Nothing in this subsection requires a district to seek
supplemental state aid before a recomputation is made
under (d) of this section."
REPRESENTATIVE P. WILSON objected for discussion.
CHAIR SEATON, without further objection, announced Amendment 1
was tabled, and that HB 206 would be held for further
consideration.
10:05:54 AM
ADJOURNMENT
There being no further business before the committee, the House
Education Standing Committee meeting was adjourned at 10:06 a.m.