SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE April 10, 2000 1:50 p.m. MEMBERS PRESENT Senator Mike Miller, Chairman Senator Pete Kelly, Vice-Chairman Senator Gary Wilken Senator Drue Pearce Senator Kim Elton MEMBERS ABSENT None COMMITTEE CALENDAR CS FOR HOUSE BILL NO. 191(FIN) "An Act relating to charter schools." -MOVED SCS CSHB 191(HES) OUT OF COMMITTEE CONFIRMATION HEARINGS: University of Alaska Regent - Josh Horst Alaska Mental Health Board Members - Tom Hawkins, Susan Labelle, Phil Younker and Caren Robinson Alaska State Board of Education Members - Ernie Hall, Paula Paulowski, and Sally Rue PREVIOUS SENATE COMMITTEE ACTION HB 191 - See HESS minutes dated 3/27/00 and 4/05/00. Confirmation Hearings - No previous Senate action. WITNESS REGISTER Representative Fred Dyson Alaska State Capitol Juneau, AK 99801 POSITION STATEMENT: Sponsor of HB 191 Josh Horst No address provided Juneau, AK 99801 Tom Hawkins 1820 E. 24th Anchorage, AK 99508 Susan LaBelle 4330 Shelikof St. Anchorage, AK 99507 Phil Younker 121 Spruce Fairbanks, AK 99709 Caren Robinson PO Box 33702 Juneau, AK 99833 Ernie Hall 4770 W 84th Ave Anchorage, AK Paula Paulowski 3300 Balchen Drive Anchorage, AK 99507 Sally Rue 7083 Hendrickson Road Juneau, AK 99801 ACTION NARRATIVE    TAPE 00-16, SIDE A Number 001 CHAIRMAN MILLER called the Senate Health, Education and Social Services (HESS) Committee to order at 1:50 p.m. Present were Senators Wilken, Pearce, Elton, and Chairman Miller. The first order of business to come before the committee was HB 191. 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." There being no further testimony on HB 191, CHAIRMAN MILLER announced the committee would take up confirmation hearings. He asked Mr. Josh Horst to give committee members a thumbnail sketch of himself and to explain why he wants to serve on the Board of Regents. MR. JOSH HORST stated he is a student at the University of Alaska Southeast (UAS). He moved to Juneau from California about three years ago and decided to get involved in student government. He served as the student government president at UAS last year and found that job to be very rewarding. He enjoyed being in a position where he could make changes and see tangible results of the work he put in. He chose to run for the seat of student regent so that he could continue that work on a statewide level. SENATOR PETE KELLY asked Mr. Horst if he supports the University lands bill [SB 7]. MR. HORST said, "That's a tough question. We're definitely supportive of an opportunity to have long term financing for the University, and in that regard, certainly so. However, the nature of the bill itself - I'm not positive where I stand on it." SENATOR PETE KELLY asked Mr. Horst what his concern is with the nature of the bill. MR. HORST replied that he wonders how the University is going to be seen as the steward of that land from the students' perspective. Students are typically a little more on the environmental side, so he wonders how that will affect his position between the students and the Board of Regents. He stated that he thinks the idea is a good one. SENATOR PETE KELLY asked Mr. Horst if he supports the bill [SB 7]. MR. HORST replied, "With the understanding that I have so far of the lands bill, yes, I am supportive of it, however I don't claim to be an expert on that bill. I have not read the whole bill myself." SENATOR PETE KELLY remarked that one of the problems that the University has had over the years is that many of the students have come to the Legislature on other than University-related issues and spoke with an anti-development voice. He noted that Mr. Horst would be in a position of advocating for those students. He asked Mr. Horst if he would be advocating against development and for the voices of the students who are environmentalists or whether he would advocate for more development. MR. HORST said he feels strongly that he is the spokesperson for the Coalition of Student Leaders. The Coalition will be representative of the beliefs of the students on each campus. He will represent that decision to the Board. SENATOR ELTON commented that he thought Mr. Horst did a good job. He pointed out that one of the things that has impressed him about Mr. Horst's service so far is that he must walk a fine line when speaking to the lands bill and that most students who visited Juneau and expressed opposition to the lands bill were opposed because they believe the University needs additional funding immediately. The students asked legislators to not use the passage of the lands bill as an excuse for not providing additional money right away. Number 1574 SENATOR PETE KELLY commented that Senator Elton was referring to different legislation. He noted he has been disappointed to see University students testify against projects that might bring the state more money when the Legislature is struggling to find ways to fund programs. He stated it is also disturbing to him that the University is producing students with a larger voice against development. SENATOR WILKEN agreed with Senator Kelly and remarked that just last week he had three people from the University in his office complaining about the lands bill. His impression was that the three people opposed the bill but knew nothing about it. He showed them on a map how much land 250,000 acres would represent in relation to the entire state which surprised them. SENATOR WILKEN asked Mr. Horst if he believes the University of Alaska system will ever be defined by discipline, by campus. MR. HORST stated he hopes so and that some initiatives will be presented to the University that propose a better fit. Obviously an Arctic research program is more appropriate in Fairbanks. He imagines as the University continues to graduate students from those fields and they pursue careers and become donors to the University, those campuses will become better known for their strongest attributes. He does not suspect that the University of Alaska Southeast will become the marine fisheries institute of the University system anytime in the near future. SENATOR WILKEN asked if Mr. Horst thought that is something to work for over a generation's time. MR. HORST thought that time frame was realistic. SENATOR WILKEN noted that he has had the pleasure of working with Mr. Horst and has found him to be hardworking and to have a good sense of where the University has been and where it wants to go. CHAIRMAN MILLER thanked Mr. Horst and said the committee would forward his name to the full Legislature for consideration. He asked Mr. Hawkins to brief the committee on his background and ideas for the Alaska Mental Health Trust Authority (AMHTA). Number 1774 MR. TOM HAWKINS informed committee members that he served four years on the AMHTA Board and co-chaired its Asset Management Committee. He enjoyed his service on the board and believes he did a good job with the asset base of the AMHTA. He would appreciate the opportunity to continue doing that work. There were no questions of Mr. Hawkins, so CHAIRMAN MILLER asked Susan LaBelle to testify. MS. SUSAN LABELLE stated that she has been serving on the AMHTA for 2½ years. That experience has given her the opportunity to learn about the system and the enormous tasks before the AMHTA. She was born and raised in the village of Port Graham so she brings a rural perspective to the board. Her background is in the field of social work which she has done for over 20 years. She feels fortunate that the AMHTA is focusing on issues of the elderly, such as assisted living homes. There being no questions of Ms. LaBelle, CHAIRMAN MILLER asked Phil Younker to testify. MR. PHIL YOUNKER said he has also served on the AMHTA for 2½ years. As the co-chair of the Finance Committee with Mr. Hawkins, he is proud of the work the AMHTA and staff has done in developing something from nothing. Proper management of assets and a spending policy that initiates long term protection of AMHTA's asset base, both on the cash side and the natural resource side, has worked to develop change in the system. Staff and committee efforts have been a catalyst for changes to the Alaska Psychiatric Institute in pushing for a new facility. The AMHTA has a lot of work ahead of it but it is assisting both the legislature and the Governor so that the AMHTA moves in the right direction. He looks forward to serving another five years. MS. CAREN ROBINSON informed committee members that she has served on the AMHTA for three years. She was elected chair in June which has been quite an honor. Some of the AMHTA's top priorities for the next few years are the Alaska Psychiatric Institute (API). The AMHTA is working hard to get the API issue settled by getting into a smaller building and getting community based services into the Anchorage area. The AMHTA is also spending a tremendous amount of time looking at ways to continue services it believes are important, such as the assisted living program. It is working to partner with both the legislature and the Governor to implement some important changes. The AMHTA hopes to implement a two-year budget cycle so that it can do longer range planning and do larger projects that can be funded for a longer period of time. That will enable the AMHTA to get a handle on whether projects are actually doing what they were intended to do. SENATOR ELTON noted that he served on the Finance Subcommittee for the HESS budget and he thinks the AMHTA has done a tremendous job in stepping forward to help fill holes in services in the State. He appreciates the way the AMHTA worked with the subcommittee. SENATOR PETE KELLY agreed. There being no further comments, CHAIRMAN MILLER announced that all names on the list for reappointment to the AMHTA would be forwarded to the full legislature for consideration. He stated the committee would hear from the appointees to the Alaska State Board of Education. Number 2079 MR. ERNIE HALL informed committee members that he is a new appointee to the Board of Education. All three of his children attended the Anchorage public school system and he currently has four grandchildren in that system. The future of Alaska depends on the education that we give to its children. It is critical that Alaska provide the highest quality education it is able to. SENATOR WILKEN congratulated Mr. Hall on his appointment. MS. PAULA PAULOWSKI told committee members she is seeking reappointment. She was asked to fill a vacancy on the Board of Education when Abbie Hensley left. Much to her surprise, she found that her background as a military dependent gave her the opportunity to drop in and out of other education systems which will be helpful to Alaska. When living on the East Coast, she was involved, at the local high school, with the group from Brown University on the Coalition of Essential Schools. That group was doing the same thing a decade ago that Alaska is doing now, regarding teachers, the business community, and parents working as partners for standards, exit exams and benchmarks. That experience will help her to do a better job this time around. In July, the Board of Education will focus on early childhood development issues, which she is passionate about and looks forward to. There being no questions, CHAIRMAN MILLER asked Sally Rue to testify. MS. SALLY RUE stated she has two children who have attended both the Anchorage and Juneau public school systems. She has been actively involved in their education since preschool. She served on the Juneau school board for six years. She finds she continues to have a passion for education and would be honored to serve on the Alaska State Board of Education. Three issues are important to her. First, the commitment to establishing higher standards must be followed through, along with supplying each student with the tools necessary to achieve those standards. Second, the Board's new role in early childhood development is extremely important. Third, reducing the drop-out rate in Alaska and increasing the number of students who go on to some type of postsecondary training is important. SENATOR WILKEN asked Ms. Rue to comment on where Alaska is at on the exit exam. MS. RUE remarked that is where some of the "bumps in the road" are going to be felt. The bar for the standards-based education project need to be set high, which will create unhappiness when students do not meet it immediately. If students meet it right away, however, the bar is set too low. More important are the third, sixth, and eighth grade benchmarks because those benchmarks will reveal whether students are on track to graduate. She is concerned that the state is putting high stakes on a test when some students only have a few years to prepare. She thinks it is important to ensure that all students are provided with an equal opportunity which will be a tough issue. SENATOR PETE KELLY asked if the bar will ever be set high enough. He wonders if communities have the will to require of the students what they are capable of. He has had the pleasure of meeting some exchange students and the one thing he found the most disturbing is that three of four of those students thought Alaska's education system was a joke. TAPE 00-16, SIDE B SENATOR KELLY said the exchange students are juniors and were taking mathematics classes they had taken in the seventh and eighth grades elsewhere. He said he thinks the exit exam is the only way Alaska can get on track for the standards that students will need. He again asked whether Alaskan communities will have the will to set the bar high enough. MS. RUE said that she certainly hopes they will, and that one of the ways to do that is to set clear standards so that students understand what they are expected to know and do. That is a long process and she is concerned that Boards and school district administrations change so the State Board has to have the fortitude to stay on track until results can be seen. She saw in her daughter's education in Juneau a very clear demonstration of how standards work. CHAIRMAN MILLER thanked participants and announced that all names of appointees would be forwarded to the full legislature for a confirmation vote. He announced the committee would meet on Wednesday to deal with the last of the priority pieces of legislation. He then adjourned the meeting.