Legislature(2009 - 2010)SENATE FINANCE 532

04/01/2009 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 57 CHARTER SCHOOL FUNDING TELECONFERENCED
Moved CSSB 57(FIN) Out of Committee
+ HB 109 EDUC. LOANS: SUPPLEMENTAL & FAMILY TELECONFERENCED
Heard & Held
+ HB 172 STATE INVESTMENT IN EDUCATION FUND TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 57                                                                                                            
                                                                                                                                
     "An Act relating to charter school funding."                                                                               
                                                                                                                                
9:05:36 AM                                                                                                                    
                                                                                                                                
Senator Joe  Thomas, Sponsor, explained that  the legislation                                                                   
corrects  a flaw  in  school funding  law  as  it applies  to                                                                   
charter  schools  with  fewer  than 150  students,  which  he                                                                   
called the  "charter school  penalty." He  read parts  of the                                                                   
Sponsor Statement (Copy on File):                                                                                               
                                                                                                                                
     Current law  results in these charter  schools receiving                                                                   
     30 to  45 percent less  state funding than  neighborhood                                                                   
     schools of  their same size.  SB 57 funds  these charter                                                                   
     schools at  a per-child rate closer to  that of average,                                                                   
     urban elementary schools.                                                                                                  
                                                                                                                                
     Charter   schools  are  public   schools  that   provide                                                                   
     valuable  education  options  to Alaska  families.  They                                                                   
     increase  learning  opportunities and  encourage  parent                                                                   
     and  community  involvement   in  our  schools.  Charter                                                                   
     schools  are  designed  and  managed  by  parent-elected                                                                   
     boards,  under contracts  with  local school  districts.                                                                   
     They  create  school  choice within  the  public  school                                                                   
     system.  The process  of  choosing  engages parents  and                                                                   
     gives  them a  feeling  of ownership,  which  encourages                                                                   
     student achievement.                                                                                                       
                                                                                                                                
     In  1995,   the  legislature  passed   Alaska's  initial                                                                   
     charter school law. SB 57  solves the funding problem in                                                                   
     an  equitable,  fiscally  responsible  manner.  It  will                                                                   
     support our schools and districts  as they carry out the                                                                   
     legislature's  intent  in  creating the  charter  school                                                                   
     law.                                                                                                                       
                                                                                                                                
     The  root  of the  problem  is  the way  the  foundation                                                                   
     formula  calculates  the  "adjusted student  count"  for                                                                   
     charter schools versus neighborhood schools.                                                                               
                                                                                                                                
     Charter  schools with  an  enrollment of  less than  150                                                                   
     students  are not  treated as separate  schools  for the                                                                   
     purpose of the adjusted student  count calculations. The                                                                   
     impact  of this system  on charter  schools is  shown in                                                                   
     the attached  graph. The  consequences are that  the law                                                                   
     provides  an  inadequate  amount of  money  for  charter                                                                   
     schools  with fewer  than 150 students  to survive,  and                                                                   
     there  is dramatic  decrease in  funding when a  charter                                                                   
     school's  enrollment  drops from  150  to 149  students.                                                                   
     School districts  can be  penalized for allowing  school                                                                   
     choice.                                                                                                                    
                                                                                                                                
     SB 57  states that charter  schools with fewer  than 150                                                                   
     students will  have their student count  adjusted by the                                                                   
     same per-student  rate as neighborhood schools  with 400                                                                   
     students.  It also  contains  a one-year,  hold-harmless                                                                   
     provision for  charter schools that are  either in their                                                                   
     first  year  of  operation  or who  had  more  than  150                                                                   
     students the  previous year. These schools  will receive                                                                   
     95  percent  of  the per-student  rate  of  neighborhood                                                                   
     schools with 150 students.                                                                                                 
                                                                                                                                
9:09:04 AM                                                                                                                    
                                                                                                                                
Senator Huggins MOVED to ADOPT Amendment 1, 26-LS0238\E.2,                                                                      
Mischel, 4/1/09:                                                                                                                
                                                                                                                                
     Page 1, line 1, following "charter":                                                                                     
          Insert "and alternative"                                                                                            
                                                                                                                                
     Page 2, following line 6:                                                                                                  
          Insert a new subsection to read:                                                                                      
          "(e) If an alternative school has a student count                                                                     
     of more than 120 but less  than 175 for the current year                                                                   
     and is in the first year  of operation, or had a student                                                                   
     count of 175 or more in the  previous year of operation,                                                                   
     the  adjusted  student count  for  the school  shall  be                                                                   
     calculated  by  multiplying  the  student  count  by  95                                                                   
     percent  of the  student rate  for a school  that  has a                                                                   
     student count of 175."                                                                                                     
                                                                                                                                
     Reletter the following subsection accordingly.                                                                             
                                                                                                                                
     Page 2, line 7:                                                                                                            
          Delete "(c) and (d)"                                                                                                  
          Insert "(c) - (e)"                                                                                                    
                                                                                                                                
     Page 2, line 10:                                                                                                           
          Delete "AS 14.17.905(b)"                                                                                              
          Insert "AS 14.17.905"                                                                                                 
                                                                                                                                
     Page 2, following line 10:                                                                                                 
     Insert new material to read:                                                                                               
          "Sec. 14.17.905. Facilities constituting a school.                                                                  
     (a) For purposes of this chapter, the determination of                                                                     
     the number of schools in a district is subject to the                                                                      
     following:                                                                                                                 
               (1)  a community with an ADM of at least 10,                                                                     
     but not more than 100, shall be counted as one school;                                                                     
               (2)  a community with an ADM of at least 101,                                                                    
     but not more than 425, shall be counted as                                                                                 
                    (A)  one elementary school, which                                                                           
          includes those students in grades kindergarten                                                                        
          through six; and                                                                                                      
                    (B)  one secondary school, which                                                                            
          includes students in grades seven through 12;                                                                         
          (3)  in a community with an ADM of greater than                                                                       
     425, each  facility that  is administered as  a separate                                                                   
     school shall be counted as  one school, except that each                                                                   
     alternative  school with an ADM  of less than  175 [200]                                                               
     shall  be  counted  as  a  part of  the  school  in  the                                                                   
     district with the highest ADM."                                                                                            
                                                                                                                                
Co-Chair Stedman OBJECTED for discussion.                                                                                       
                                                                                                                                
Senator  Huggins  described  past   experience  with  charter                                                                   
schools  in   the  Matanuska-Susitna   (Mat-Su)  Valley.   He                                                                   
commented  that the original  charter school  law was  put in                                                                   
place  in  a  different  era and  the  provisions  can  cause                                                                   
schools  to lose  significant funding  when the  loss of  one                                                                   
student  changes the  count  from  150 to  149.  He has  been                                                                   
supportive  in  the  past  of  financial  correction  to  the                                                                   
situation and he wanted the change to be put into statute.                                                                      
                                                                                                                                
Senator  Huggins  described similar  issues  for  alternative                                                                   
schools  and  noted  a resolution  from  the  Mat-Su  Borough                                                                   
School District  ("Resolution No. 09-002," Copy  on File). In                                                                   
the  same way  charter schools  must  have a  minimum of  150                                                                   
students,  alternative schools  must have  a minimum  of 200.                                                                   
Alternative schools suffer from  the same funding problems if                                                                   
they lose a  single student below the minimum.  The amendment                                                                   
would address the issue for alternative schools.                                                                                
                                                                                                                                
9:11:24 AM                                                                                                                    
                                                                                                                                
JODY  SIMPSON,  STAFF,  SENATOR   CHARLIE  HUGGINS,  SPONSOR,                                                                   
addressed the  mechanics of Amendment  1. She  explained that                                                                   
the threshold  for alternative schools would  be lowered from                                                                   
200 to  175 students.  Alternative schools that  consistently                                                                   
have fewer  than 175 students  will continue to be  funded as                                                                   
if their students  attended the largest in the  district, and                                                                   
will  not get  the  1.18 rate  that SB  57  gives to  charter                                                                   
schools. The amendment also puts  in place the one-year hold-                                                                   
harmless  provision for  alternative schools  with more  than                                                                   
175 students the  previous year or schools in  the first year                                                                   
of operation. Alternative schools  will receive 95 percent of                                                                   
the per-student  rate for the 175 count.  Alternative schools                                                                   
will have  to submit  a plan for  the hold-harmless  year and                                                                   
work with their school board to  determine a course of action                                                                   
if  enrollment projections  are  not met  and  the school  no                                                                   
longer  qualifies   for  the  hold-harmless   provision.  She                                                                   
stressed that the  measure is a legislative  priority for the                                                                   
Mat-Su School Board.                                                                                                            
                                                                                                                                
EDDY  JEANS,   DIRECTOR,  SCHOOL   FINANCE  AND   FACILITIES,                                                                   
DEPARTMENT  OF  EDUCATION AND  EARLY  DEVELOPMENT,  expressed                                                                   
support for the amendment. He  pointed out that the amendment                                                                   
addresses the problem that occurs  when an alternative school                                                                   
falls below the 200 student mark.                                                                                               
                                                                                                                                
9:14:16 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  asked how many schools would  be covered by                                                                   
the  bill  before the  amendment  and  how many  schools  had                                                                   
between 175  and 200  students. Mr.  Jeans answered  that the                                                                   
original  bill addressed  four charter  schools with  student                                                                   
counts   below  150.   The   amendment   would  address   one                                                                   
alternative  school.  A  total   of  five  schools  would  be                                                                   
affected.                                                                                                                       
                                                                                                                                
Senator  Olson   requested  the  Sponsor's  opinion   of  the                                                                   
amendment. Senator  Thomas replied that he was  supportive of                                                                   
the amendment.                                                                                                                  
                                                                                                                                
Co-Chair  Stedman  WITHDREW  his OBJECTION  to  Amendment  1.                                                                   
There being NO further OBJECTION, Amendment 1 was adopted.                                                                      
                                                                                                                                
9:15:43 AM                                                                                                                    
                                                                                                                                
Mr. Jeans  referred to  the fiscal  note and emphasized  that                                                                   
page 2 lists the four charter  schools that would qualify for                                                                   
the additional  funding for small  schools. The  schools with                                                                   
enrollment under 150  would be funded at the  1.18 rate. Page                                                                   
3 of the note  shows the fiscal impact of the  amendment. One                                                                   
school  would  generate  an additional  $600,000.  The  total                                                                   
fiscal note is $1,314,300.                                                                                                      
                                                                                                                                
Co-Chair Stedman  asked if the fiscal note  would change from                                                                   
the draft version. Mr. Jeans did not expect a change.                                                                           
                                                                                                                                
Co-Chair Stedman opened public testimony.                                                                                       
                                                                                                                                
KIKI  ABRAHAMSON,   TEACHER,  FIREWEED  ACADEMY   and  ALASKA                                                                   
CHARTER    SCHOOL   ASSOCIATION,    HOMER   (testified    via                                                                   
teleconference),  testified in  support  of the  legislation.                                                                   
She emphasized the importance  of providing equitable funding                                                                   
for educational alternatives.                                                                                                   
                                                                                                                                
9:18:22 AM                                                                                                                    
                                                                                                                                
Senator Ellis  thought the  legislation addressed  unfinished                                                                   
business  and  stated support  for  the improvements  to  the                                                                   
bill.                                                                                                                           
                                                                                                                                
Senator  Huggins informed  the  committee that  his wife  was                                                                   
employed by the Mat-Su school district.                                                                                         
                                                                                                                                
Senator  Olson spoke  for constituents  in  his district  who                                                                   
support the bill, particularly the Nome Charter School.                                                                         
                                                                                                                                
Senator  Ellis noted the  presence of  Juneau charter  school                                                                   
students in the audience.                                                                                                       
                                                                                                                                
9:19:52 AM          AT EASE                                                                                                   
9:20:31 AM          RECONVENED                                                                                                
                                                                                                                                
BRENDA TAYLOR,  PRESIDENT, ACADEMIC POLICY  COMMITTEE, JUNEAU                                                                   
COMMUNITY CHARTER  SCHOOL, introduced four students  who were                                                                   
present in the room. The group supported the legislation.                                                                       
                                                                                                                                
Co-Chair Stedman  commended the  students for taking  part in                                                                   
the legislative  process. Ms. Taylor told the  committee that                                                                   
the students were  representing other students  who wanted to                                                                   
be there but were unable to attend.                                                                                             
                                                                                                                                
Co-Chair Stedman closed public testimony.                                                                                       
                                                                                                                                
Senator Thomas  MOVED to report  SB 57 out of  Committee with                                                                   
individual recommendations and  the accompanying fiscal note.                                                                   
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
CS SB 57(FIN) was REPORTED out  of Committee with a "do pass"                                                                   
recommendation   and  with  attached   fiscal  note   by  the                                                                   
Department of Education and Early Development.                                                                                  
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
Amendment 1 Version E 2.pdf SFIN 4/1/2009 9:00:00 AM
SB 57
articles and back-up.pdf SFIN 4/1/2009 9:00:00 AM
HB 109
Letters of Support SB57.pdf SFIN 4/1/2009 9:00:00 AM
SB 57
SB57-EED-ESS-amendment_3-31-09Fiscal NoteDraft.pdf SFIN 4/1/2009 9:00:00 AM
SB 57
HB172 DOR GeFONSI.pdf SFIN 4/1/2009 9:00:00 AM
HB 172
Briefing on ASLC Liquidity Issues and Proposed Paln of Action.pdf SFIN 4/1/2009 9:00:00 AM
HB 109
Chart from ACPE website explaining loans that are affected by Hb 109.pdf SFIN 4/1/2009 9:00:00 AM
HB 109
HB 109 sponsor statment.pdf SFIN 4/1/2009 9:00:00 AM
HB 109