Legislature(2003 - 2004)

04/09/2003 01:45 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 171                                                                                                            
     An Act repealing the charter school grant program; and                                                                     
     providing for an effective date.                                                                                           
EDDY JEANS,  MANGER, SCHOOL  FINANCE AND FACILITIES  SECTION,                                                                   
DEPARTMENT  OF  EDUCATION AND  EARLY  DEVELOPMENT,  explained                                                                   
that the HB  171 would eliminate charter school  grants.  The                                                                   
State grant  program implemented  in FY2002, allocates  money                                                                   
per  ADM  for each  new  charter  school.   The  funding  was                                                                   
intended  to  supplement  the  federal start  up  grants  for                                                                   
charter schools.                                                                                                                
The Alaska Department  of Education and Early  Development is                                                                   
working  closely   with  U.S.  Department  of   Education  to                                                                   
increase  the  level  of  start-up  grants  provided  by  the                                                                   
federal  government therefore  eliminating the  need for  the                                                                   
State supplemental  grant program  beginning in FY  2005. The                                                                   
State will  allocate to new  charter schools $150,000  a year                                                                   
for the  first three  years and  $45,000 in  the forth  year,                                                                   
totaling $495,000  dollars start  up funds  over a  four year                                                                   
The  bill  becomes  effective  July 1,  2004.    The  delayed                                                                   
implementation   will  allow   the  State   to  fulfill   its                                                                   
commitment  of  start-up  grants   to  the  existing  charter                                                                   
schools.  Any  new charter schools approved to  operate in FY                                                                   
2004 would be eligible for the federal grant funds.                                                                             
Co-Chair  Harris asked  if the  State  could anticipate  more                                                                   
federal  money.   Mr.  Jeans  replied  that was  the  "bottom                                                                   
Co-Chair Harris  asked what would  happen without  the money.                                                                   
Mr.  Jeans  advised that  with  the  one-year delay,  if  the                                                                   
federal funds  do not come  through, the Department  would be                                                                   
back before  the Legislature requesting reinstitution  of the                                                                   
program.   However, he added  that every indication  from the                                                                   
federal government  indicates that the grant  request will be                                                                   
looked upon favorably.                                                                                                          
Co-Chair Harris  asked the  benefits of  a charter  school to                                                                   
students  and the  State  of Alaska.    Mr.  Jeans noted  the                                                                   
amount  of parental involvement  in those  schools.   Charter                                                                   
schools are "grass  root movements" and the  parents are very                                                                   
involved   in  the   classrooms.     Charter   schools   have                                                                   
flexibility in their regulations;  however, they are required                                                                   
to  follow  the  same  assessments   as  the  regular  public                                                                   
schools.   Charter  schools  are public  schools  and have  a                                                                   
contract  with their  local school  district  to operate  the                                                                   
Co-Chair  Harris inquired  how  much the  State provides  for                                                                   
each  student in  the charter  school.   Mr. Jeans  explained                                                                   
that  would vary  depending  on  the program.    Some of  the                                                                   
charter school  programs are correspondence programs  and are                                                                   
funded at 80%.  The main difference  results from the student                                                                   
population of  the charter  school.  If  there are  less than                                                                   
150 students,  the current  foundation statute requires  them                                                                   
to  be   added  to  the   local  school  in   that  district.                                                                   
Therefore,  their funding  would be  reduced.   If they  have                                                                   
over 150 students, they are allowed  to go through the school                                                                   
size  adjustment  table just  as  any  public school  in  the                                                                   
Co-Chair Harris  asked if there  were less than  150 students                                                                   
in  the charter  school, would  they  then get  added to  the                                                                   
regular  school  system  and  counted  as such.    Mr.  Jeans                                                                   
explained  that in  statute is  the  "school size  adjustment                                                                   
table",  which  adjusts for  the  student economy  of  scale.                                                                   
Within that section  of statute, it stipulates  that before a                                                                   
charter school is counted as a  separate, independent school,                                                                   
there must  be more  than 150  students.   If there  were not                                                                   
that many students,  it would be added to the  largest school                                                                   
for funding  purposes.   Mr. Jeans  reiterated that  if there                                                                   
are over  150 students,  they are then  counted as  their own                                                                   
separate school.                                                                                                                
Co-Chair  Harris noted  that  the correspondence  program  is                                                                   
separate.  Mr. Jeans acknowledged  that was correct, pointing                                                                   
out  that there  are a  couple  charter schools  funded as  a                                                                   
correspondence  program.   Those programs  will be funded  at                                                                   
Vice-Chair  Meyer  inquired if  there  had been  a  statewide                                                                   
increase  in   the  charter  school  programs.     Mr.  Jeans                                                                   
acknowledged  that   charter  schools  are  on   an  increase                                                                   
statewide.   That is directly  related to legislation  passed                                                                   
in 2001,  which expanded  the  number from  30 to 60  charter                                                                   
schools in the  State that can be operated by  districts.  He                                                                   
added that  the State Board  of Education just  approved four                                                                   
new charter  schools for this  upcoming year; (1)  in Mat-Su,                                                                   
(2) in Anchorage and (1) in Ketchikan.                                                                                          
Vice-Chair  Meyer  asked how  much  additional  money does  a                                                                   
charter school  receive.  Mr.  Jeans explained that  there is                                                                   
not an  easy answer and  that it does  depend on the  size of                                                                   
the student  population.  The  formula adjusts  for economies                                                                   
of scale.  If there is a small  school of 150 students, there                                                                   
will  be fixed  costs associated,  which  would increase  the                                                                   
amount.  The formula adjusts for the economies of scales.                                                                       
Representative  Croft  pointed  out that  the  State  expects                                                                   
money  for  the  FY05  budget,  not this  year.    Mr.  Jeans                                                                   
corrected Representative  Croft pointing  out that  the State                                                                   
expects to receive  the money this year.  The  effective date                                                                   
is  FY04 because  the Department  is attempting  to make  the                                                                   
districts that  are under the current State  program "whole".                                                                   
That request is  in the FY04 budget.    Mr.  Jeans added that                                                                   
once the federal grants are closed,  they cannot be reopened.                                                                   
All  new  charter  schools  will be  under  the  new  federal                                                                   
allocation for charter school start up.                                                                                         
Representative Croft asked about  moving the State system and                                                                   
shifting  it over  to  the federal  area.    He inquired  why                                                                   
language should be repealed.                                                                                                    
Representative  Croft voiced  concern  about the  possibility                                                                   
that only part of the federal  money might come through.  Mr.                                                                   
Jeans  explained  that  the Department  does  not  intend  to                                                                   
continue operating  the State grant program.   If the federal                                                                   
money does  not come through,  the Department will  come back                                                                   
to the Legislature  to determine if they want  to reinstitute                                                                   
the State grant program.  He noted  that Senator Dyson shared                                                                   
that  concern as  well  and put  contingent  language in  the                                                                   
Senate  version   of  the  bill,  which  would   address  the                                                                   
Representative Croft  maintained that if the  State can fully                                                                   
utilize federal money  now, the statute should  remain on the                                                                   
books in case the  federal funds are not guaranteed.   He did                                                                   
not understand the need for the legislation.                                                                                    
Mr.  Jeans  advised  that  the  reason  that  the  Department                                                                   
submitted  the bill  is that  under the  proposal before  the                                                                   
federal government, the State  will be able to allocated more                                                                   
money to  the school  districts through  the federal  program                                                                   
than they receive  for both programs currently  combined.  If                                                                   
the State statute remains on the  books, the State allows the                                                                   
entitlement program to remain  on the books for districts and                                                                   
schools  to continue  to apply  in the future  for the  State                                                                   
grant.   That would send a  clear message that  the intention                                                                   
is  to  transition  from  the combined  system  to  a  single                                                                   
Co-Chair Harris asked  why the fiscal note does  not indicate                                                                   
federal revenues.   Mr. Jeans understood that  there would be                                                                   
sufficient   federal  authorization   in  the  Teaching   and                                                                   
Learning Division to absorb the grant request.                                                                                  
Representative  Foster   MOVED  to  report  HB   155  out  of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal.                                                                                                            
There being NO OBJECTION, it was so ordered.                                                                                    
HB  171  was reported  out  of  Committee  with  "individual"                                                                   
recommendations and with fiscal  note #1 by the Department of                                                                   
Education & Early Development.                                                                                                  
TAPE HFC 03 - 55, Side B                                                                                                      

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