Education Minutes for Meeting December 6 and 7, 2005

"Draft Only - Approval Pending"

M I N U T E S

Select School Finance Committee and

Joint Education Interim Committee

Herschler Building December 6 and 7, 2005

Room 1299 Cheyenne, Wyoming

PRESENT: SELECT SCHOOL FINANCE COMMITTEE

Senator Hank Coe, Cochairman;

Representative Jeff Wasserburger, Cochairman;

Senators John Hines, Kit Jennings, Rae Lynn Job and Phil Nicholas;

Representatives Ross Diercks, Debbie Hammons, Owen Petersen and Lorraine Quarberg.

JOINT EDUCATION INTERIM COMMITTEE

Senators Tex Boggs, Robert Peck and Chuck Townsend;

Representatives Patrick Goggles, Steve Harshman, Becket Hinckley, Del McOmie and Mark Semlek.

Other Legislators in Attendance: Representative Mick Powers.

Legislative Service Office: Dave Nelson, Brenda Long, Joe Rodriguez and Matt Sackett.

Others: See attached Appendix A.

ABSENT: Representative Kurt Bucholz.

* * * * *

Tuesday December 6, 2005

Representative Jeff Wasserburger, Committee Cochair, convened the joint meeting of the Select School Finance Committee and Joint Education Interim Committee at 8:35 a.m. Roll call of member attendance followed, with no Select Committee members absent and one Joint Education Committee member absent. A copy of the tentative agenda is attached at Appendix B.

Cochair Wasserburger began the meeting by discussing the proposed increase in funding of the current recalibration efforts and that spreadsheets of resources generated by the recalibration proposals, broken down by school district, will be released during meeting deliberations.

Cochair Coe requested Senator Boggs, Private School Licensing Subcommittee Cochair, to proceed with the Subcommittee Report to the Joint Education Interim Committee.

Private School Licensing Subcommittee Report.

Senator Boggs began the discussion with a working draft bill (06LSO-0063.W3) containing private school licensing amendments. The proposed bill is included as Appendix C. Senator Boggs explained how private school licensing currently operates and how the bill would change the role of the Wyoming Department of Education in this process.

Senator Boggs indicated that any post secondary education institution would need to be registered, which would also require accreditation by a United States Department of Education and Wyoming Department of Education approved accrediting organization. Senator Boggs added that the bill would be effective immediately so that the Department of Education could promulgate rules and regulations to allow institutions to register and start the accreditation process by July, 2006.

Senator Boggs noted that accreditation may take up to five years, but a post secondary education institution is required to be registered and in the accreditation process to be allowed to operate in Wyoming; this is defined as candidacy status, or an accreditation candidate.

Senator Boggs continued with the discussion of the proposed bill and explained the bill relieves the Department of Education of responsibilities for which it is not staffed, or designed to undertake, as well as allows institutions to prove themselves as accredited post secondary schools.

The Committee discussed several points of clarification in the bill, which Senator Boggs responded in detail. Senator Boggs recommended the Joint Education Committee approve the proposal for introduction as a Committee bill and work the bill as necessary to require accreditation as specified in the final version of the bill.

The Committee discussed specialty schools and the licensing of new schools. The Committee then requested public comment on the measure.

Mr. Saltman, Kennedy-Western Chief Executive Officer and President, spoke in support of accreditation. Mr. Saltman explained that candidacy status is the first big step in accreditation and accreditation would ensure the integrity of the education being provided by post secondary education institutions in Wyoming. Mr. Saltman distributed two documents to the Committee regarding accreditation abroad and the media coverage of Wyoming accreditation legislation from 2005. These handouts can be found as Appendix D and Appendix E respectively.

Cochair Wasserburger thanked Mr. Saltman for his comments and asked Travis Jordan and John Hughes, the Associated Students of the University of Wyoming (ASUW) Director of Affairs and President respectively, to proceed with their comments.

Mr. Hughes indicated that ASUW, representing the concerns of the University of Wyoming students, was in full support of accreditation for post secondary degree granting institutions. Mr. Hughes continued that students are worried enough about finding employment after graduation without worrying about increased scrutiny because of alleged diploma mills. Mr. Hughes added that ASUW unanimously approved and supported accreditation and requested that action be taken against non-accredited institutions.

Cochair Wasserburger thanked Mr. Jordan and Mr. Hughes for their comments and asked Dr. Jerry Haenisch, Chancellor and Chief Executive Officer of Preston University, to proceed with his comments.

Dr. Haenisch explained his opinion that the proposed legislation will hinder Wyoming higher education in the long term. Dr. Haenisch continued by saying international education is a valuable opportunity that could be lost because accrediting agencies will not accredit international post secondary degree granting institutions.

Dr. Haenisch explained that South Dakota passed a similar bill to the one proposed in Wyoming and now South Dakota is trying to attract students because private schools left the state. Dr. Haenisch indicated there are alternative ways to prevent degree mills and urged the Committee to consider the actions and consequences of this bill.

Cochair Wasserburger thanked Dr. Haenisch for his comments and asked Dr. Jim McBride, Superintendent of Public Instruction, to proceed with his comments.

State Superintendent McBride indicated the Wyoming Department of Education is in full support of the proposed bill requiring accreditation. All post secondary schools are not the same and Dr. McBride stated the proposed bill allows time to meet the individual needs of each school. Dr. McBride added that the Department will promulgate the rules and regulations necessary for program administration in open meetings to allow for successful implementation in the state.

Cochair Wasserburger thanked State Superintendent McBride for his comments and with no further persons wishing to provide commentary, the Committee proceeded with working of the bill.

Senator Boggs provided one amendment to page 6 of the proposed legislation (Appendix C) which allows new post secondary education degree granting institutions to come into Wyoming and comply with statute. The proposed amendment is included as Appendix F. Cochair Coe moved the approval of the proposed amendment which Senator Jennings seconded. The motion carried.

Cochair Coe motioned to sponsor the proposed bill (Appendix C) as a Joint Education Interim Committee bill and to make it a Senate File. Representative Quarberg seconded. Roll call vote was taken and the motion carried with 12 ayes, 1 no, and 1 excused. The roll call vote is attached at Appendix G.

Department of Audit Report.

Cochair Wasserburger requested Pam Robinson and Rich Cummings from the Department of Audit to present their report, which is included as Appendix H.

Mr. Cummings began by stating the audit function is focused on funding model data and making sure the data is accurate and reliable. Mr. Cummings continued with an explanation of what districts have been audited in the 2-year auditing period and in what areas the Department of Audit focused on. Mr. Cummings indicated that the lack of documentation as to why a certain number or data element existed was the major problem found in all areas. Mrs. Robinson added that was especially true in the 100 percent reimbursement areas.

Cochair Coe inquired about staffing levels and if there was enough staff in the smaller districts to handle the reporting requirements. Mr. Cummings responded that the most common complaint he has heard is that staff are being pulled away from their duties for training purposes.

Mr. Cummings continued by informing the Committee of what to expect moving forward and of the three additional elements in the model to be audited. Mr. Cummings also explained the audit appeals procedure and the likely consequences of an incorrect audit consisting of a recommendation for an assessment by the Department of Education to retrieve or pay additional monies.

With no additional questions, Cochair Wasserburger thanked the Department of Audit for their report and moved on to the Wyoming Department of Education report on teacher advancement programs and other professional development programs. The report is included as Appendix I.

Department of Education Teacher Advancement Program (TAP) Report.

Kay Post, Wyoming Department of Education, Director of the Accountability and School Improvement Unit, discussed the Teacher Advancement Program (TAP) as well as the other professional development programs that were implemented as pilot programs with the $400,000 appropriation authorized under 2005 Laws, Chapter 178, Section 4. Mrs. Post continued with an explanation of the use of the funds and what the professional development program components entail. Mrs. Post also discussed which schools in which districts had submitted applications to be part of the pilot program.

The Committee then discussed the notion that there are professional development resources in the proposed recalibrated model and funding this separately would essentially be over funding professional development. Mrs. Post agreed but added that resources in the model are left to the discretion of districts, but amounts within the Department's budget for the TAP program would be restricted to professional development programs. The Committee generally agreed that funding issues would be determined at a later time.

Dr. McBride spoke in favor of TAP funding by expressing support for programs addressing student improvement and by pointing out that the TAP program is a good program creating much excitement for many school districts and for the Department.

One-Time Bonus Money Report.

The Department of Education presented a report to the Committee on use of the One-Time Bonus Money enacted by the Legislature (2005 Laws, Chapter 191, Section 342), a copy of which is attached at Appendix J. Fred Hansen, WDE, introduced the members of the Data Advisory Group and explained the report and the various statistics available for each school district. Mr. Hansen continued by saying that overall, school districts spent more than the $22 million appropriation, so they supplemented the bonus monies with district resources.

Meeting of the Select School Finance Committee.

There being no questions from the Committee, Cochair Wasserburger announced the conclusion of that portion of the joint meeting agenda devoted to matters before the Joint Education Interim Committee. The Select Committee on School Finance was called to order.

Dave Nelson then called roll for the Select Committee on School Finance. All members were present.

Senator Jennings moved to approve the minutes of the meeting of October 31, 2005, and November 1, 2005. The motion was seconded by Representative Peterson and the motion carried.

Dr. Larry Picus and Dr. Allan Odden.

The Final Report by Lawrence O. Picus and Associates dated November 30, 2005, was distributed to members of the Committee, which is included as Appendix K. This report includes final proposals for recalibration of the Wyoming school finance model and model design.

Dr. Odden began by discussing the salary report which is included as Appendix "F" of the final report. The salary report was prepared by Michael Wolkoff, based on Wyoming salary data. In summary, Dr. Odden explained that in Michael Wolkoff’s report, teachers gained real spending power, the teacher labor market was shown to be a regional not national market, and Wyoming’s average teacher salary schedules exceeded all other schedules for regional states except Colorado for the highest salary levels.

The Committee then discussed various measures of salaries, including starting salary and average salary and also noted that benefits must be included for total compensation. The Committee also requested comparisons of Wyoming teachers with other employee classifications. Dr. Odden replied that Mr. Wolkoff had found that teachers do very well when compared to private sector workers in Wyoming.

Senator Nicholas asked if it is possible to have numbers available by school district so that the Committee, as well as school district personnel, would have a chance to review the model outcomes. Dr. Picus replied that these numbers are available but suggested the Committee address several undecided issues prior to discussing funding distributions.

Committee discussion involved the data used for teacher salaries, the proper years of data analysis and the actual years used for the analysis. Dr. Picus explained the data issues associated with teacher salaries, that Wyoming data is very likely the most current data available because of the efforts and resources devoted by the state to gather this data, and that even though Wyoming is collecting data relatively quickly, a lag time continues in estimating salary levels.

Dr. Picus then explained how the average salary works functionally within the model and how each school district's education and experience average affect the school district's average salary compared to the statewide average.

Senator Job inquired as to the difference between the number of teachers generated by the model and the number of actual teachers. Dr. Picus responded that the number of teachers should be based on the requirements and costs to provide the basket of goods and not on expenditures. Dr. Picus continued by stating that the nature of a block grant is that the resources are provided and each school district has the discretion to pay fewer teachers a higher salary or a larger number of teachers at a lower salary. Dr. Odden added it appears historically that Wyoming has made the tradeoff between lower salaries and smaller class sizes. School districts must decide how to approach this tradeoff.

Several Committee members inquired as to increasing teacher salaries and the need to do so to attract high quality teachers. Dr. Odden responded that research generally indicates teacher quality is best addressed through high quality professional development programs. Dr. Picus added that school districts have the ability to pay higher salaries, but that would probably require larger class sizes. Dr. Picus continued by indicating that if Wyoming class sizes were increased, then Wyoming would most likely rank much higher in average salary on a national level. Dr. Picus reiterated the inherent tradeoff between small class sizes and lower salaries or large class sizes and higher salaries.

Health Insurance Report.

Ralph Hayes, Department of Administration and Information, presented a report previously made to the Joint Appropriations Committee as to the Employees’ and Officials’ Group Insurance Program and a study as to the cost comparison for Wyoming school districts and the state employees’ group insurance plans. The report is presented in accordance with 2005 Laws, Chapter 121, Section 2(d) and is included as Appendix L.

Mr. Hayes first indicated that the Department has received updated information from several school districts so there would be some minor changes to the report, but overall the big picture will not be changed. Mr. Hayes informed the Committee that the current block grant allows for wide variation in benefits and large school districts seem to benefit because of economies of scale. Mr. Hayes continued that large districts can secure more favorable rates because of a larger insurance risk pool. Mr. Hayes added that because of the large number of small risk pools and each school district administering their own program, the administrative costs are much higher than with the state employee group program.

Mr. Hayes next discussed the pros and cons of school district participation in the state of Wyoming health insurance program either within the same risk pool or as a separate group being administered by the state. Several Committee members inquired as to different options such as allowing school districts to opt into the program but not requiring it. Mr. Hayes indicated that to be fair to both the state employees and school district employees it should be done on an all or nothing basis. If school district participation was allowed but not required, it would open the state program to receipt of costly programs of school districts, which would not be fair to state employees.

The Committee also discussed the fact that there are resources in the proposed recalibrated model for each school district to administer their own health and benefits plan and if it was funded through the state plan, then this component could be removed from the model. Mr. Hayes responded that there were various methods in which funding for the program could be accomplished.

Dr. Larry Picus and Dr. Allan Odden-continued.

Cochair Wasserburger directed the meeting back to the continuation of the recalibration discussion with Dr. Picus and Dr. Odden. Dr. Picus and Dr. Odden began by distributing a printout of total district revenue distributions, copies of which are included as Appendix M. Dr. Picus explained the different columns of the spreadsheet printout for the different years and comparing the current funding model to the proposed recalibrated model. Dr. Picus also explained that the spreadsheet breakdown was based on the hedonic index for the regional cost adjustment.

Continuing, Dr. Picus distributed a second spreadsheet, attached at Appendix N, which uses the Wyoming Cost of Living Index as the basis for the regional cost adjustment. Finally, Dr. Picus distributed a third spreadsheet which provides a distribution based upon the WCLI as the basis for the regional cost adjustment but eliminates Teton County School District # 1 from the analysis.

Recess.

At 4:55 p.m., Cochair Wasserburger resolved the joint meeting of both Committees into executive session.

Wednesday December 7, 2005

Senator Coe, Committee Cochair, reconvened both Committees at 8:45 a.m. Roll call of member attendance followed, with no Select Committee members absent and one Joint Education Committee member absent.

Dr. Larry Picus and Dr. Allan Odden-continued.

Dr. Picus and Dr. Odden resumed discussion of model recalibration. Dr. Picus distributed a comparison of the actual Wyoming school revenue per ADM compared to the Consumer Price Index (CPI). This chart is included as Appendix P.

Senator Nicholas initiated discussion of public release of the proposed recalibrated model and suggested public release of the electronic spreadsheet for use by school districts prior to receiving district comments on the proposed model. Senator Nicholas added the model requires scrutiny by school districts and by peers to understand recommended funding at the school level. Cochair Wasserburger added his preference that the Legislature continue recalibration efforts in an open environment with school districts to enhance success of recalibration efforts.

Senator Nicholas made a motion to release the proposed model spreadsheets developed to date, using 2004-2005 data, by January 3, 2006, with a disclaimer that the model data on which components are based will be subsequently updated to reflect 2005-2006 base year data. The motion was seconded by Cochair Wasserburger.

The Committee discussed the process for release of model spreadsheets and the requirements necessary to implement this release. Dr. Picus indicated it would be possible to post the spreadsheet on the Legislative website for anyone to download within the proposed timeframe subject to specified limitations.

Several Committee members inquired about the capability of school districts to operate and understand the model spreadsheets without hands-on guidance and if a basic set of instructions could be assembled for model operation and a capability included for district assistance. Dr. Odden agreed a large volume of questions would be generated on model operation and functionality, and suggested the Legislative Service Office or the Wyoming Department of Education develop some capability to address district questions and to provide some guidance to districts on model usage.

Dr. McBride, State Superintendent of Public Instruction, responded the Department and LSO could cooperatively develop this capability, sort out the details and establish a process to work with consultants in responding to district inquiries and need for assistance. Following this discussion, the original motion of Senator Nicholas carried.

Dr. Picus and Dr. Odden responded to Committee inquiry as to model component interaction by displaying model spreadsheets and providing examples of basic model input changes and the subsequent impact of changes throughout the model. Relationships between model components were examined in detail and consequences of component modifications were clearly depicted and discussed.

Committee members discussed the ramifications of increasing teacher salaries above recommendations contained within the recalibration report. Dr. Picus pointed out most other states have higher class sizes than Wyoming has established, which if modified by Wyoming to the higher level would free up resources to allow for an increase in teacher salary levels. Dr. Odden added historically it appears Wyoming has consciously chosen to have smaller class sizes and lower salaries. Dr. Picus added that with the nature of the block grant, the decision of teacher salary versus class size continues to be a school district-level decision.

Select Committee Action.

Senator Nicholas made a motion to accept the November 30, 2005, final report submitted by consultants on model recalibration, and that the Select Committee forward the proposed model which in general achieves report proposals as agreed to by the Select Committee, and that the Select Committee officially forward the report and model to the Joint Education Interim Committee for finalization of legislative recommendations to be submitted in the 2006 Budget Session. The motion was seconded by Cochair Wasserburger. Roll call vote was taken with 10 ayes. The roll call vote is attached at Appendix Q.

The Joint Education Interim Committee was officially called back to order by Cochair Coe for purposes of receiving Select Committee reports and recommendations. Cochair Coe indicated his preference that Select Committee members attend future meetings of the Joint Education Interim Committee and requested staff to advance this request to the Management Council for approval. A component of this request was to seek approval for Select Committee reimbursement for future Education Committee meeting attendance. Dave Nelson, Legislative Service Office, acknowledged the request.

06LSO-0180.W4, "School finance amendments."

Cochair Coe directed attention to draft legislation prepared by Committee staff which implements recommendations contained within the adopted recalibration report. Cochair Coe pointed out no action would be taken on the proposed legislation at this time, but components would be summarized. Mr. Nelson began the explanation of draft legislation by indicating the proposal describes the recalibrated model and model components assembled by the consultant. The working draft of the bill, 06LSO-0180.W4, is included as Appendix R.

Mr. Nelson stated under the draft, the Department of Education is directed to administer the model using model spreadsheets adopted by the Legislature and maintained in accordance with procedures specified by agency rules and regulations to allow the model to operate in a current and up-to-date manner. Mr. Nelson continued by stating the bill draft defines the parameters for corrections of technical errors to model spreadsheets by the Department of Education, which language is being reworked and fine-tuned with the Department to sort out the details but to maintain legislative intent.

Mr. Nelson explained model documents and spreadsheets will be filed with the Wyoming Secretary of State, but in practice will also be maintained on the Legislative website for viewing and downloading. Mr. Nelson explained Section 2 of the bill containing repealed statutes, which primarily relates to adjustments under the current block grant model that are superseded by proposals contained within the recalibrated model.

Mr. Nelson continued by explaining the operation of law under a model which is school based in comparison to the current model which is based upon a district dollar per ADM amount. Mr. Nelson explained schools will be configured as they currently exist in school year 2005-2006, and any subsequent changes from this year of configuration requires review by the State Superintendent, which may approve or deny the change based on specified parameters.

Mr. Nelson described future areas of study directed within the recalibration report, a list of which is attached at Appendix S. Mr. Nelson expanded upon one area of future study which was a proposed study of allocation and use of resources in Wyoming schools. Mr. Nelson explained the purpose of this proposed study would be to ascertain the allocation and use of resources by each school district and compare use to strategies on which block grant resources are based. A description of this proposed study is attached at Appendix T.

Following Committee discussion of this proposed study, Cochair Wasserburger suggested the matter be addressed at the next Committee meeting. Cochair Wasserburger announced the Committee will hold a public hearing on recalibration proposals on January 10, 2006, in Casper at the UW Outreach building commencing at 8:30 a.m.

Future Meetings.

Cochair Coe announced the next meeting of the Joint Education Interim Committee is scheduled for Thursday, February 2, and Friday, February 3, 2006, in Cheyenne at the State Capitol Building, at which recalibration recommendations will be finalized.

Adjournment.

There being no further business, Cochair Coe adjourned the Select Committee and the Joint Education Interim Committee at 11:50 a.m.

Respectfully submitted,

_________________________________ _________________________________

Senator Hank Coe, Representative Jeff Wasserburger,

Select Committee Cochair Select Committee Cochair