The Joint Subcommittee on Human Resources/K-12 of the Senate Committee on Finance and the Assembly Committee on Ways and Means was called to order by Chairman Joseph E. Dini, Jr., at 6:30 p.m., on Wednesday, May 19, 1999, in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

SENATE COMMITTEE MEMBERS PRESENT:

Senator Raymond D. Rawson, Chairman

Senator William J. Raggio

Senator Bob Coffin

Senator Bernice Mathews

ASSEMBLY COMMITTEE MEMBERS PRESENT:

Mr. Joseph E. Dini, Jr., Chairman

Ms. Sheila Leslie, sitting as an alternate for Ms. Jan Evans

Mr. David E. Goldwater

Mr. Lynn C. Hettrick

Mr. David Parks

ASSEMBLY COMMITTEE MEMBERS ABSENT:

Ms. Jan Evans (Excused)

STAFF MEMBERS PRESENT:

Johnnie L. Willis, Committee Secretary

OTHERS PRESENT:

Chairman Dini noted there was a quorum on both sides and requested program analyst Jeanne Botts review the handout titled "Joint Subcommittee on K-12 Education Hearing on Distributive School Account and Class-size Reduction Trust Fund" (Exhibit C).

Distributive School Account – Budget Page K12 ED-81 (Volume 1)

Budget Account 101-2610

Jeanne L. Botts, Senior Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, stated the first page summarizes changes to revenues and provides technical cleanup adjustments to expenditures. She pointed out that approximately a third of the way down the page, "Total Revenue" increases $16,448,808 in the first year and almost $17,000,000 in the second year. Ms. Botts remarked these increases are largely due to new revenue projections from the Economic Forum of the revenue expected from local school support tax and also the property tax on the basis of the new assessed valuation numbers prepared by the Department of Taxation. In regard to expenditures Ms. Botts noted:

I made some technical adjustments to special education unit funding to round up to a whole dollar amount per unit, whole numbers of units and to have an exact 2 percent roll-up cost, and the same growth rates for special education enrollment as in regular enrollment.

Ms. Botts stated that in item No. 2, similar adjustments were made for the Adult High School Diploma Program to "equal" a 2 percent roll-up cost and the same growth rate as regular enrollment. She mentioned she was apprised by the State Department of Education that the Lyon County School District special transportation costs had increased above the base. There was also an adjustment necessitated by the district’s transportation costs having been counted twice in the Distributive School Account (DSA) because they had not been removed and then were added back in. Ms. Botts remarked this resulted in net revenue available for schools of $16,379,442 in the first year of the biennium and $16,843,732 in the second year. She emphasized this did not include the $8,000,000 recommended by the Governor for school improvement programs identified by the Legislature.

Ms. Botts stated that on the second page of Exhibit C, titled "List of ‘Adds,’" the top four items totaling $8,000,000 for school improvement programs had been decided in a previous meeting. The improvements include remediation, professional development for teachers, and the assessment programs of the State Department of Education.

SENATOR RAWSON MOVED TO ADD $1,000,000 TO EACH YEAR OF THE BIENNIUM FOR ITEM NO. 1, THE REMEDIATION PROGRAM, AND TO ADD LANGUAGE THAT WOULD ALLOW AT LEAST $1,000,000 OF THE $4,300,000 TO BE USED FOR AFTER SCHOOL, INTERSESSION, AND SUMMER SCHOOL PROGRAMS.

MR. GOLDWATER SECONDED THE MOTION.

Senator Coffin inquired how this meshes with other changes on the sheet, explaining that he was hoping to gain an understanding of, "whether this was the lion’s share or a small portion of it." He asked, "Approximately how much is there to play with that isn’t on the paper?" Chairman Dini replied approximately $16,000,000-plus for each year was on the table. He further stated the committee had already agreed to the $8,000,000 in each year; this is an add-on out of the approximately $16,000,000. Mark Stevens, Assembly Fiscal Analyst, indicated the$8,000,000 is within the school improvement program and does not count in the approximately $16,000,000 that is included on the previous page of Exhibit C.

Senator Rawson clarified that the first four items had already been approved by the joint subcommittee. The motion would cover an addition to item No. 1 and would be specifically earmarked for the purposes indicated: after school, intersession, and summer school programs for all grades.

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Ms. Botts next addressed item No. 5, continuation of the Statewide Management Automated Records Transfer (SMART) begun in 1995. This is Phase III of the SMART Program. She said:

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Ms. Botts testified item No. 6 includes the priority items of the Commission on Educational Technology. She said No. 6a relates to the purchase of user licenses for databases for research in public school libraries of $500,000 over the biennium, which could be broken into $250,000 each year if necessary. Ms. Botts explained 6b is $5,500,000 for repair, replacement, and software maintenance contracts. Item No. 6c would cost $2,700,000 over the biennium to bring the remaining schools up to level one as defined by the commission; that is, one computer per classroom or the equivalent number in a computer laboratory. She advised that some of the schools were old buildings in which there was difficulty getting the wiring and cabling installed and so they were unable to reach level one with the 1997 appropriation.

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Ms. Botts stated item No. 7 is a request to continue the satellite downlink project that started in the 1997 Legislative Session. She advised that $577,000 had been allocated to the Clark County School District to do this program statewide. However, the district was unable to do that because there were more schools than had been planned for. Ms. Botts indicated the Clark County School District had requested a total of approximately $1,200,000 over the biennium, which she divided into approximately $644,000 each year. She said this amount would be transferred to the Clark County School District’s Channel 10 to implement the program. Channel 10 would also record class course work to send throughout the state.

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Ms. Botts addressed item No. 8, saying that for the past 4 years, school districts have received $2 million a year in state funds for the School-to-Careers program in addition to the 5-year federal grant of $11.5 million. She remarked this represents a scaled-down request that the department supplied in response to the subcommittee’s suggestion of $1 million a year for the School-to-Careers program. This money would be allocated to school districts and community colleges as in the past.

Senator Raggio asked whether the $1 million add-on would be appropriated to the State Department of Education or added to one of the budgets. Ms. Botts replied that in the past there has been a one-shot appropriation housed in budget account 2678. She said that since budget account 2678 is closed, the add-on could be handled as part of the school funding bill in an appropriation to the department, and then the department would book it into budget account 2678. Senator Coffin mentioned the program is now approximately 20 percent of its original size. Ms. Botts remarked it is half its original size. Responding to a question from Senator Coffin, Ms. Botts replied the federal money would continue through December 2001. Senator Coffin inquired whether, since the administration has reduced the amount of the program by a considerable sum and the program can no longer earn its place in the budget free of federal funds, it would be advisable to take that money and use it elsewhere in programs that are meant to continue. He queried, "Why put money into something that someone says is not working

?" Mr. Dini answered that some of the counties are using this program; it has been useful and has proven itself in many areas. He also noted that Ms. Evans started the program and considers it a priority, and the Chamber of Commerce supports it because it gives training to students who do not plan to attend college.

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Mr. Dini mentioned the next item to be addressed was item No. 10. Ms. Botts stated that in the current biennium, early childhood education programs have been funded by the state at $828,000 a year, and the department supplied details on a scaled-down plan of $500,000 in each year. She pointed out there is also federal money for early childhood programs.

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Mr. Dini stated item No. 11 was being handled in another manner. He indicated the next item to be addressed was item No. 12. Ms. Botts advised item No. 12 was a onetime advance to convert school districts from an estimated to an actual basis for revenue from net proceeds of minerals. The cost in the first year of the biennium only would be $3,072,750. She remarked, "This is a low point in terms of projections of revenue from net proceeds." Ms. Botts stated this would allow districts to receive an increased allocation to equal this amount to make up for the fact the specified share of property tax from net proceeds would be reserved by the school districts for expenditure in the succeeding fiscal year. Mr. Dini explained this program is a "one-shot deal" to get the counties that depend on the net proceeds of mines on a basis where they do not have a cash-flow problem.

Senator Rawson pointed out to the committee that if this was going to be done, there would never be a better year than this year, since the proceeds are currently down "to their lowest point."

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Ms. Botts indicated item No. 13 was a suggestion to remove the vacancy savings factor that was budgeted in The Executive Budget of $2.2 million in the first year and $2.3 million in the second year.

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According to Ms. Botts, item No. 14 adds inflation increases for the following items: textbooks, library books, instructional supplies, and software. She said the inflation was being calculated at 4 percent per year and the totals for those four items are approximately $1.6 million in the first year and $3.3 million in the second year. Ms. Botts recalled that in the Governor’s budget there was additional funding for these four line items for growth in the number of pupils, but not for inflation. Senator Raggio mentioned there had been discussion in previous meetings regarding the appropriate amount for inflation.

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Ms. Botts advised that item No. 17 was a suggestion to add 5 special education units dedicated specifically for gifted and talented students’ participation in the StarGATE Program. She remarked that since the special education unit is approximately $29,000, the amount for each year of the biennium is $144,147.

Mr. Goldwater inquired whether the State Department of Education would have discretion as to where in the state the award could be used. Mr. Dini answered any school district could apply for one or more of the units.

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Ms. Botts stated item No. 20 is a need for a second supplemental appropriation for the class-size reduction program in the current fiscal year and is listed as $4,200,000. However, she mentioned, there is an additional $836,000 that is owed to the districts for the first year of the current biennium, bringing the total to approximately $5,000,000. She did not have the exact figure. Ms. Botts indicated this would have to be appropriated out of the current year because it has to be paid before June 30, 1999.

Mr. Dini inquired when staff could have the exact figure that is owed and was told he would have it the first thing the next morning (May 20, 1999).

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Mr. Dini stated he had a list of unresolved issues. Regarding item A, he read, "Should funding for special ed[ucation] be consolidated into the per-pupil basic support or continue to be allocated on the basis of special education units?" Ms. Botts referred to her handout titled "Percentage of Enrollment Identified as Children with Disabilities" (Exhibit D) and said pupils with disabilities are not uniformly distributed among all other pupils. She advised that the districts had largely testified they wanted to continue to have special education money allocated on a special unit education basis. Ms. Botts offered an example using the first line of Exhibit D, Carson City School District. She mentioned this school district has 2.69 percent of the pupils in the state but has 3.64 percent of the special education students. Ms. Botts explained that the difference of .96 percent of the state’s enrollment equates to 20 units if that difference is applied to the state units. She concluded there are significant differences if this money is not distributed in a special education unit allotment based upon past use and needs identified and met through the State Department of Education’s discretionary units. Ms. Botts recalled that the Governor had recommended the special education money be consolidated and distributed through the per-pupil basic support.

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The second unresolved issue, item B, concerned the definition of a special education unit that is in statute, Ms. Botts said. She mentioned school districts requested that the definition be expanded to include not only special education teachers and speech therapists but also school psychologists, physical therapists, and so forth. Ms. Botts advised there was an issue as to whether or not teacher aides could be covered by the definition of a special education unit. She pointed out this is set forth in statute and would, therefore, need to be defined.

Mr. Hettrick recalled testimony that if teacher aides were included, it would divide the special education units because the teacher aide salary is not the same. It was Mr. Hettrick’s opinion that since the committee decided not to consolidate in item A, they should leave teachers aides separate also.

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Ms. Botts stated issue C is whether funding for the class-size reduction program should be consolidated into the Distributive School Account or maintained in the separate trust fund for class-size reduction. She recalled the committee had already agreed the money would still be allocated along the same formulas that have been used in the past to ensure the districts with the greatest need for class-size reduction teachers have sufficient funding to maintain the ratio set forth in law. She reiterated the issue that was unresolved last time the committee met was whether that funding should be handled through the Distributive School Account or maintained in the trust fund.

Senator Raggio remarked that after consulting several colleagues, he was of the opinion the following action would meet everyone’s concerns and achieve a more accountable method.

Senator Rawson suggested adding flexibility to the line item. Ms. Botts agreed and suggested allowing use of the appropriations in either year. Mr. Dini also suggested stating the bill would outline that the class-size funds would be distributed to the school districts according to the current distribution formula. Senator Raggio affirmed that was correct and added that the motion in no way impairs the existing ratios or requirements which are otherwise in the law for the class-size reduction program.

Mr. Goldwater mentioned there is federal interest in the class-size reduction program and asked whether by obtaining flexibility or changing the methodology the committee would be putting at risk any federal subsidy or supplanting any state money. Ms. Botts answered that if the district received federal money it would not be allowed to supplant the state funds which have been allocated. Regarding how the federal regulators might view the fact the committee had provided flexibility, she noted the committee has been doing that with the third-grade money for 3 years now and said she did not foresee a problem. She deferred to Mary Peterson for further comment.

Mary L. Peterson, Superintendent of Public Instruction, State Department of Education, testified the federal class-size reduction funds do have a "supplement, not supplant" provision. She said if the committee approves flexibility, the department will work closely with school districts to ensure they did not use federal dollars to supplant what has been provided by the state. Mr. Goldwater inquired whether Senator Raggio’s motion would make it more difficult to handle class-size reduction (CSR) funds. Ms. Peterson replied that as she understood the motion it would not make handling the CSR funds more difficult. Senator Coffin pointed out one of the problems evident to him is that this is a program which desperately needs accountability. He noted the experimental phase of the program was nearing an end. In Senator Coffin’s opinion if the message were sent to the districts that "it is just another line item like heating and utilities," the districts would be "off the hook" in terms of proving that the program is working. He feared this would cause the districts to become lax in reporting information which would prove valuable "further down the road" regarding what happened during the first 8 years of the program.

Senator Rawson requested the maker and seconder of the motion clarify the language that evaluation and reporting would still be required. He also stated he would like the rules and procedures associated with class-size reduction to follow this. Senator Raggio stated that was inherent in the motion. He suggested the districts are sophisticated enough to understand this does not detract in any way from the class-size reduction program or remove its identity. Senator Raggio reiterated the reporting requirement is inherent and will continue. Mr. Dini asked whether Senator Raggio wanted his statements included in the bill. Senator Raggio answered affirmatively.

Mr. Goldwater mentioned the original reason for the motion was to accurately report Nevada’s cumulative per-pupil expenditures for the purpose of education. He indicated the committee should urge the department, when it reports the cumulative education support from the State of Nevada, to report everything, even if it is outside the Distributive School Account. Senator Raggio asserted the state expects all of its funding to be reported, not just guaranteed pupil support but the total funding per pupil, so that the reader does not get "apples to oranges" when comparing Nevada to other states. He stated that includes, "for all purposes," even the amount the state pays for retirement on teachers' salaries.

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Ms. Botts testified item D was requested by the Elko County School District. It seeks authority to implement a pilot program wherein a pupil-teacher ratio of 22:1 is established in grades kindergarten (K) through 5 in order to eliminate team teaching. She further explained an evaluation of the program would be required to be presented to the year 2001 Legislature.

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Ms. Botts stated item E had been handled and the totals would be run the next day (May 20, 1999). Item F, according to Ms. Botts, concerns whether or not pupils attending school part-time should be counted as less than one full pupil for purposes of apportioning state aid. She said Senate Bill (S.B.) 213, as amended, provides a method of counting for apportionment purposes pupils who are enrolled in private schools, charter schools, or home schools, but attend public schools part-time.

Ms. Botts remarked the question asked was, "Should all pupils be counted based on the portion of time they attend school rather than as one full pupil?"

Senator Rawson pointed out that the committee had not had enough time to study this issue and recommended directing it to the interim committee on education.

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Mr. Dini adjourned the meeting at 7:20 p.m.

RESPECTFULLY SUBMITTED:

Jo Greenslate,

Committee Secretary

APPROVED BY:

Senator Raymond D. Rawson, Chairman

DATE:

Assemblyman Joseph E. Dini, Jr., Chairman

DATE: