North Dakota Commission on Education Improvement
Commission Meeting Minutes
June 8, 2006
Roughrider Room - State Capitol
The fifth meeting of the North Dakota Commission on Education Improvement was called to order at 9 a.m. by the commission's chair, Lt. Gov. Jack Dalrymple.
Commission members in attendance included Lt. Gov. Jack Dalrymple, Warren Larson, Jack Maus, Martin Schock, Mark Lemer, Doug Johnson, Paul Stremick, Sen. Tim Flakoll, Wayne Sanstead, Sen. David O'Connell, Rep. Rae Ann Kelsch and Rep. David Monson. Gloria Lokken with the North Dakota Education Association attended as a designee for Joe Westby and Bev Nielson with the North Dakota School Boards Association attended as a designee for Jon Martinson.
Lt. Gov. Dalrymple presented a revised executive order from Gov. John Hoeven (2006-01.1), amending a previous executive order issued on January 10, 2006, that created the Commission on Education Improvement. The original executive order was amended to acknowledge that Paul Stremick no longer represents schools of K-12 districts having more than 220 but less than 1,000 students as a result of his resignation as superintendent of Grafton Public Schools. The revised executive order also named Jack Maus, the new superintendent of Grafton Public Schools, as Paul Stremick's replacement on the commission. Paul will continue to serve on the commission as a non-voting member.
Lt. Gov. Dalrymple called for discussion and approval of the minutes from the April commission meeting in West Fargo and the May meeting in Williston. The April minutes were not approved at the May meeting as a result of suggestions made by commission members, so both minutes were reviewed for approval at the June meeting. There was no discussion regarding the minutes. Rep. David Monson made a motion to approve the April minutes and Mark Lemer seconded the motion. Sen. David O'Connell made a motion to approve the May minutes and Wayne Sanstead seconded the motion. Both the April and May minutes were approved.
There was no additional commission business.
Mark Lemer, facilitator for the subcommittee reviewing the main formula and equalization payments, presented that subcommittee's proposed framework for a new funding formula, as well as an equalization formula. Mark reported that earlier in May, he met with Paul Stremick, Dan Huffman and Lt. Gov. Dalrymple to review data compiled by Jerry Coleman with the Department of Public Instruction and began crafting a framework for the proposed funding and equalization formulas. The full subcommittee met May 31 in Valley City to review and further develop the framework.
The framework presented by Mark Lemer and subcommittee members was designed to be compatible with the current funding formula, with the intent that the equalization formula may eventually be discontinued once its objective has been achieved, and the focus would move to a more adequacy-based system. The subcommittee discussed what should be included in the additional $60 million proposed by Gov. Hoeven, and that reductions cannot be made in other areas because school districts would be required to cover the losses. They also discussed normal versus manipulated increases in tuition apportionment and whether those increases should be considered new money. According to Mark's report, subcommittee members agreed that normal increases in tuition apportionment would be included in the $60 million, but any additional funds to be distributed, such as investments, would not be included.
The proposed funding formula would be calculated on the number of students each school district has the year prior only; the system would no longer use the higher number between prior year ADM and fall enrollment. Each student grades 1-12, attending school for the full year, will be counted as 1, each kindergarten student will be counted as ½, and each preschool special education student will be counted as 1 if they meet the state definition of full time. If a school district has a large increase in enrollment from one year to the next, they can request a special advance payment through the Department of Public Instruction that would be funded from cash flows until the next year when the increase would be included in the funding formula.
In addition to the base student count, Mark Lemer presented additional factors that would be calculated to accommodate special populations of students. Alternative high schools would receive an additional factor of .25 for each student because alternative schools are more costly to operate.
School districts would receive an additional factor of 0.07 times Base ADM for special education costs.
Currently, school districts are required to fund any summer programs that they offer, so perhaps a factor of .7 would provide an incentive for more districts to offer summer school, resulting in more equity among school districts. Education programs for refugees, migrants and immigrants are funded under a state program, and the proposed funding formula would continue to fund refugees, migrants and immigrants at the same level.
Mark Lemer reported that under the proposed funding formula framework, at-risk students would be factored at 0 and would not be funded as part of the 2007 Legislative Session, but could possibly be included in 2009 or 2011. Today, at-risk students are defined as students who need free or reduced meals. Commission members suggested that the definition be expanded to also include students that are academically challenged, but would need to be defined so it wouldn't become a reverse incentive for school districts.
Mark continued that small, isolated elementary and high schools would receive a .25 factor for each student, in addition to a 1.25 weighting factor for small schools. Commission members discussed a need to further define criteria for identifying and qualifying small and isolated schools.
Because most reorganizations make school districts larger, resulting in lower weighting factors and payments, a reorganization incentive would allow a grace period for calculating weighting factors at the district's original enrollment. Currently, the state offers a 6-year grace period for such reorganizations. Commission members reiterated their concern about possibly creating disincentives for merging.
The reciprocity factor for North Dakota students attending schools in Montana or South Dakota and out-of-state students attending North Dakota schools was recommended by the subcommittee to remain the same as it is calculated today, with a .25 scale factor.
All factors for additional costs are intended to reflect the current level of funding support for each program.
Mark Lemer pointed out that when the funding system becomes more adequacy weighted, this proposed framework would still be applicable. Lt. Gov. Dalrymple added that factors for at-risk students, isolated schools, reorganization incentives and out-of-state reciprocity need more review and discussion, and that the others were pretty well defined. Sen. Tim Flakoll suggested looking at a 5-year rolling average for determining value behind each student to stabilize the numbers.
Lt. Gov. Dalrymple added that the funding formula framework presented by Mark Lemer and the subcommittee is comprehensive and adaptable, and is flexible enough to deal with issues that might arise in the future.
Mark Lemer then presented the subcommittee's proposed framework for the equalization formula, stating that equalization payments would be provided to districts that can't raise adequate money locally for educational programs. The framework included:
- Valuation per Pupil is Taxable Valuation divided by "Scaled" ADM of preschool through grade 12.
- Each school district's Valuation per Pupil is compared to the state average.
- If a school district is below the state average, the "missing" valuation is computed by subtracting the school district's Taxable Valuation per Pupil from the state average Valuation per Pupil. This difference is multiplied by the school district's "Scaled" ADM.
- The missing valuation is multiplied by the district's general fund levy, up to a maximum of 185 mills. This amount is reduced by any tuition or mineral income.
- The school district's local effort is computed by multiplying its taxable valuation by its general fund mill levy.
- The amount in line 4 is compared to the amount in line 5, and the school district is paid no more than the amount in line 5.
Commission members suggested that a preferred scenario would include funding all school districts that qualify for equalization payments at 100 percent of the amount calculated in the formula. If there aren't enough funds to accomplish that, the system should fund the poorest districts first and work up until the dollars are depleted.
Mark Lemer added that under the proposed system, the current supplemental payment plan would no longer exist. The new system is designed to include more school districts than are currently covered under the supplemental payment plan. Sen. David O'Connell expressed concern about school districts qualifying for supplemental payments because of large amounts of property that are tax exempt.
Warren Larson, facilitator for the subcommittee reviewing weighting factors, a sparsity factor and career and technical education, presented his report regarding the subcommittee's discussions and decisions at its meeting May 22 in Bismarck. Warren presented commission members with a weighting factors scenario that included three tiers and a more graduated scale for school districts within Tier 2.
K-12 Weighting Factors - High School:
| Tier | ADM | Factor |
|---|---|---|
| 1 | 0-185 | 1.25 |
| 2 | 185-900 | 1.24 - 1.01 |
| 3 | Over 900 | 1.00 |
K-8 Weighting Factors - Elementary:
| Tier | ADM | Factor |
|---|---|---|
| 1 | 0-125 | 1.25 |
| 2 | 125-200 | 1.17 |
| 3 | Over 200 | 1.00 |
Warren Larson reported that these weighting factors are set to be flexible and shouldn't require much change, and that they are defined to address equity among school districts, not declining enrollment. Once equity has been addressed, the state will design a framework for addressing adequacy issues.
Commission members discussed whether or not to include a grace period for schools that consolidate, since such a reorganization would more than likely move them into a higher tier, resulting in a lower weighting factor. A suggestion was made for a 6-year grace period. The Legislature has repealed language for consolidation incentives except for weighting factors.
Lt. Gov. Dalrymple distributed a handout from the South Dakota Department of Education regarding their general education funding formula for state aid to grades K-12. South Dakota's plan is very similar to North Dakota's. School districts in South Dakota are currently suing the State of South Dakota over education funding, but there doesn't appear to be a lot happening legislatively. A synopsis of the handout revealed that the amount of state aid provided to local school districts for general K-12 education is based on an equitable formula that starts with the same amount of funding per student. Small schools receive more money per student.
Warren Larson continued his report by addressing the subcommittee's work on a sparsity factor for the state. He reported:
- Subcommittee members agreed to keep the sparsity factor system simple for now to assist school districts with funding, and possibly look at bigger issues down the road. It was recommended by the subcommittee to keep the proposed plan similar to the current system.
- Subcommittee members discussed how sparsity factors could be factored into the mission of JPAs. The state could provide transportation funding to isolated schools in the 2007 Legislative Session and provide more services and funding options through JPAs in the 2009 session.
- Subcommittee members agreed to refer the sparsity issue to the transportation subcommittee and work with them to provide funding in the short term, and propose a long-term strategy for addressing broader issues in the future.
Warren Larson then addressed the issue of career and technical education and how subcommittee members discussed whether or not it should be included in Foundation Aid. Mark Lemer said that if the state rolls CTE funding into Foundation Aid, it could lose federal funding. He suggested that as the commission moves forward, CTE could be used as a factor in the main formula for those school districts that provide such programs. Lt. Gov. Dalrymple added that he didn't think it was feasible to merge CTE into the formula by this session and that the commission wasn't hearing a lot of suggestions on how to proceed with CTE funding.
Warren continued that the subcommittee discussed ways to possibly merge CTE with JPAs and provide virtual CTE centers to service areas of the state that do not currently have access to CTE programs, especially western North Dakota. Warren added that not a lot could be addressed for the 2007 Legislative Session, but that broader ideas could be proposed for subsequent sessions.
Joe Morrissette, budget analyst for the Office of Management and Budget, presented a memorandum regarding the governance and authority of multi-district special education units, area career and technology centers, and educational associations governed by Joint Powers Agreements. Lt. Gov. Dalrymple added that the commission was not recommending a major merger of the three entities, but rather making regions more compatible so that efficiencies and partnerships could be developed in the future.
In Jon Martinson's absence, Bev Nielson with the North Dakota School Boards Association reported on the progress of the subcommittee reviewing JPAs, capital construction and transportation. She reported:
- At the subcommittee's meeting May 22 in Bismarck, members discussed the possibility of bringing CTE and special education under the governance of JPAs and their respective boards. Centralizing JPAs, CTE and special education would streamline administrative costs and free up funding for programs that directly impact students.
- The subcommittee discussed whether or not additional JPA funding should be included in the $60 million proposed by Gov. Hoeven and determined that since JPAs provide equity and adequacy to school districts, any additional funding should be included as new money.
Rep. Rae Ann Kelsch asked the question of whether or not JPAs actually do address equity when not all schools belong to JPAs. Tom Decker with the Department of Public Instruction responded that more than 94 percent of all North Dakota students attend a school that is a member of a JPA, and that the number will soon increase to 98 percent. Rep. Kelsch also asked that since all schools - rich and poor - receive the same amount of funding, is it really equitable.
Mark Lemer added that larger schools in a JPA often times provide programs and services to smaller schools, so even though they are receiving the same amount of funding, richer schools are providing services to poorer schools. So equity in services is being provided even though the distribution of funds may not be considered equitable. Dan Huffman with Fargo Public Schools commented that Fargo belongs to a JPA and has many exciting things planned for the summer, including student programs and teacher development.
Rep. Rae Ann Kelsch said that English language learners and other programs would be applied through a weighting factor, which is equitable, but JPA funding would not, so it wouldn't be equitable since each school receives the same amount. Mark Lemer responded that maybe the commission could look at weighting JPAs based on whether they are a rich or poor JPA. Rep. Kelsch added that JPAs don't want state management or control, and under a weighted funding formula, the state would be more involved, resulting in regional school districts. Lt. Gov. Dalrymple stated that the state was a long way from establishing regional districts.
Warren Larson said that the state needs to address equity and adequacy first and that he is not eager to take money from the $60 million to fund JPAs. He continued that JPAs do provide equity and that regional service centers do work and should be expanded, but the commission's primary objective is to make schools equitable.
Currently, JPAs receive $1 million from the General Fund and $1 million from unspent Foundation Aid, for a total of $2 million. To meet the proposal developed by JPA leadership, a total of $6.3 million would be needed. Sen. Tim Flakoll commented that getting the full $6 million from the Legislature would be difficult. Rep. Rae Ann Kelsch stated that $2 million would again be the base and that any new money for JPAs would need to be included in the $60 million. Lt. Gov. Dalrymple concurred that additional JPA funding would be included in the $60 million because the agreement included new money.
Warren Larson added that the focus needs to be on what is best for the elementary and secondary students. If the package totals $61.2 million, we shouldn't argue over $1.2 million; we need to look at the overall package and make sure it is appropriate, whether it totals $60 million or more.
Lt. Gov. Dalrymple suggested a proposed time table and plan for reducing CTE and special education units to nine regional centers. Rep. Rae Ann Kelsch expressed concern about reducing special education units from 31 to nine, and suggested that 18 special units might be a more appropriate goal. Jack Maus added that nine centers are not too many if they are structured with one director and several coordinators. The commission agreed to have the special education subcommittee take the lead on structuring special education units.
The commission broke for lunch at 12 noon and reconvened at 1:05 p.m.
Bev Nielson continued her report on the subcommittee's discussions regarding capital construction and improvements. Lt. Gov. Dalrymple presented a handout outlining a possible capital improvement assistance program for discussion purposes only. He asked the question of whether or not the state could afford a statewide capital assistance program. Since the resources aren't available in the proposed $60 million to cover all schools, the state would need to incorporate a needs based program with the objective of providing equity.
The Department of Public Instruction has a current program for determining eligibility for schools; that system could be used for evaluating need. The question was raised whether the state could borrow money from the Coal Development Trust Fund or the Bank of North Dakota. Lt. Gov. Dalrymple added that the state needs to focus on schools with low valuation and difficulty in raising local dollars to fund capital construction needs. Sen. Tim Flakoll asked if this was the best use of general fund dollars.
Lt. Gov. Dalrymple also proposed a "Schools for the Future" incentive program that would provide assistance to two or more schools reorganizing and making joint capital investments. Sen. Tim Flakoll brought up the idea of a trust fund and referenced resolution HCR 3044, and stated that the Foundation Aid Stabilization Fund could possibly be used to fund capital improvement loans.
Bev Neilson reported that the subcommittee decided to leave transportation funding as is for now and refer the issue to Doug Johnson and the North Dakota Council of Educational Leaders for further review and development. Rep. David Monson said the recommendation to continue the existing plan is a good one and said that Oklahoma doesn't provide transportation funding, but instead covers the costs through sparsity funding. Doug Johnson added that it is a good idea to include the sparsity factor with transportation, and that other states are looking at public school transportation as an option. Lt. Gov. said that the commission needs to remain focused on equity and adequacy and that transportation is not considered part of education. The commission decided to recommend that transportation funding remain the same, unless the NDCEL suggests a factor.
Warren Larson updated the commission on the special education and English language learners subcommittee. The group has not yet met because they are waiting on the final report from the consultant retained by the Department of Public Instruction to evaluate North Dakota's special education programs. They were expecting the report in mid-June.
Mark Lemer said that special education payments might be made as an ADM payment or based on a child count of those requiring special education programs, similar to the federal model. No matter what model the consultant recommends, the proposed funding formula should be designed to accommodate it.
English language learner will continue to have a factor, but more discussion is needed to identify criteria for determining proficiency levels and what will be funded.
At 2 p.m., several members of the public, as well as representatives from school districts and interested organizations provided comments during a public input period.
Lt. Gov. Dalrymple discussed next steps for the commission and a plan for unveiling the commission's proposal. The Governor's budget is due November 1, 2006, and so the commission's work will be concluded in October. At the August 9 meeting in Devils Lake, the commission will need to have decisions made and a proposal drafted. In September, Lt. Gov. Dalrymple and commission members will meet with legislative committees to present and discuss the commission's proposal.
The next commission meeting will be held July 6 in the library on the Minot High School Campus in Minot. The meeting will begin at 9 a.m. The next scheduled meetings include: August 9 in Devils Lake and September 6 in Grand Forks.
The meeting was adjourned at 2:45 p.m.
