JLSC ON OUTCOME BASED EDUCATION

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ARIZONA STATE LEGISLATURE

Fiftieth Legislature – First Regular Session

JOINT LEGISLATIVE STUDY COMMITTEE ON

OUTCOME-BASED EDUCATION FUNDING

Minutes of Interim Meeting

Wednesday, June 22, 2011

House Hearing Room 3 -- 10:00 a.m.

CoChairman Crandell called the meeting to order at 10:00 a.m. and attendance was noted by the secretary.

Members Present

Senator Allen, CoChairman Representative Crandell, CoChairman

Susan Carlson Representative Pancrazi

Dr. Debra Duvall Stacey Morley

Chuck Essigs Duane Tomlinson

Linda Honsinger Vince Yanez

Members Absent

Senator Lopez Wiley Popovich

Janice Palmer

Introduction of Members

Introductions were made by Members of the Committee.

Brooke Olguin, Majority Research Analyst, Education Committee, introduced the staff members: Paul Benny, Assistant Research Analyst; Fareed Bailey, Senate Assistant Research Analyst, and Chris Kotterman, Democratic Staff.

Explanation of Committee Charge

Ms. Olguin related that the charge of the Committee is to develop legislation for consideration during the Fiftieth Legislature, Second Regular Session, that will transition public school funding from a system based on instructional hours to a system based on student achievement and that includes consideration of:

· The interaction of current voter-approved revenue sources and spending requirements with the new proposed system of public school funding.

· The entities that will be responsible for the determination of appropriate student outcomes on which the new proposed system of public school funding will be based.

Ms. Olguin added that the Committee shall submit a report regarding the Committee’s activities and recommendations for legislative action on or before December 31, 2011 to the Governor, the President of the Senate, the Speaker of the House of Representatives and the Secretary of State.

Discussions

Current Model of K-12 Funding

CoChairman Crandell stated that K-12 education funding is currently based on seat time, so as long as a student is in his/her seat for four hours per day for 180 days, the school district receives money for the student, and the budget is built on those funds. One of the key factors is that each student must have 93 percent attendance.

Ms. Morley acknowledged that 93 percent is the average, but adjustments can be made for special circumstances. Mr. Essigs commented that in elementary or unified school districts, there is a penalty if a 5.6 percent absence rate is exceeded.

CoChairman Crandell continued that the current funding system is very cumbersome for school districts:

· There are variances in elementary schools as to how much time is required and in the high schools as to how much attendance constitutes a full-time average daily membership (ADM) to be able to receive funding.

· There are many different funds in which the state deposits money that are accessible to school districts.

· The Student Accountability Information System (SAIS) at the Arizona Department of Education (ADE) is antiquated and, in his opinion, does not keep an accurate count of student enrollment and attendance.

· Several different entities work with school districts, such as joint technological education districts (JTED) and K-12 at regular school districts, and there is always a battle among participating districts as to which receives what funding for attendance.

Free Enterprise Model of K-12 Funding

He said he would like to look at simplifying the process by funding the K-12 education system based on a free enterprise model where school districts contract for certain performance outcomes and funding is received as those outcomes are met. Items that need to be discussed include:

· What constitutes outcomes.

· How outcomes will be assessed.

· When assessments should be done.

CoChairman Crandell opined that there are many advantages to a free enterprise model. Arizona has charter schools, and many things have been done to promote competition in the education system, assuming that it will bring about better results. Charter schools have less regulation, and if that creates a better learning environment for students, he questioned why the entire state is not moving in that direction. The argument is that charter schools receive less funding than
K-12 public schools, but if charter schools are helping students meet required goals, everyone should be funded at the same level. He envisioned that with a free enterprise model, every school district would become a laboratory in determining how to help students reach the designated outcomes that Arizona taxpayers should be paying for.

CoChairman Crandell remarked that students begin school at five or six years of age in kindergarten, but not every student learns at the same level. Ms. Honsinger agreed, noting that in first grade, a little difference is seen, but in high school, there is a huge span.

CoChairman Crandell stated that students should be able to move at their own rate of learning. With a free enterprise model, some students would rapidly meet the outcomes and some would move slower. Funding would be received for those who meet the outcomes quicker, which could then be used to pay for students who are somewhat behind. Some people will argue that this involves grouping of students, but school districts have the ability to use different curriculum and the technology to accommodate all students in the same classroom.

Funding Sources for K-12 Funding

CoChairman Crandell apprised the Members that in 30 years of working in education, he noticed that every election year someone running for public office makes reforming education their first or second campaign priority. He would like to look at moving to a designated funding source so education funding is not a “political football”, it is not provided by the General Fund and it is not one of the items used to balance the state budget. A vote of the people would be necessary to protect that funding source so it could not be swept by the Legislature.

Performance Outcomes

CoChairman Crandell commented that people question how a free enterprise model will correlate with No Child Left Behind (NCLB) and other items; however, NCLB compares reading, math, social studies and science levels. In looking at outcomes, it is necessary to determine what students should be able to do upon graduation from high school.

Ms. Carlson conveyed that the Arizona Business and Education Coalition (ABEC) did some work on school finance. ABEC representatives and Mr. Essigs visited eight communities in the state to demonstrate the funding formula, how to build an elementary and high school budget, the differences between charter school and district school funding, etc. Citizen leaders were asked if the present model is efficient, adequate and transparent. The answer was that they do not know if it is efficient because the system is so complex it is not understandable, nor do they know the relationship between funding and results because the system is not transparent enough to find the information. Almost everyone said it is not adequate. ABEC then convened a committee of educators and business leaders who developed five guiding principles for a comprehensive public school finance system that were used to develop a set of proposals that she would like to present to the Committee at the next meeting. The model crafted was taken back to those communities to ask if it makes sense and if it is more transparent, and much feedback was obtained. The information is available on ABEC’s website, www.azbec.org.

Dr. Duvall mentioned that expected outcomes by grade and subject have been identified to some degree with the requirement to pass the Arizona’s Instrument to Measure Standards (AIMS) test. In order to determine whether the outcomes identified are actually met, an assessment device is needed as well as a process for relaying that information to the system that provides funding.

CoChairman Crandell stated that one of the charges of the Committee is to determine how to evaluate outcomes so school districts can be paid. Teachers use different assessments to evaluate grade level in reading. The only problem is that evaluating and actually assessing reading level is done in third or fourth grade. When students reach high school, it is assumed that students are reading at grade level, but when he hears from parents that their student excelled on the AIMS reading test, but could not pass the placement test for community college, there is a disconnect someplace. There is a lot of speculation and talk about teacher or school district manipulation of tests, but with a free enterprise model perhaps ADE could administer assessments.

CoChairman Crandell commented that it is necessary to determine what a student should be able to do upon completion of his/her educational experience and which assessment should be used, such as portfolios, checkboxes of experiences a student should have or assessments for reading level provided by reputable companies like ACT, which is what colleges use. There are four systems of education in Arizona that do not communicate with each other. If seniors pass AIMS, it is assumed that they are ready for college, but statistics show that is not true. Whatever senior assessment is chosen should be equal to college entrance. He said one of the items he would like to know is what type of math or math level is needed for jobs in Arizona, which should be the baseline, and then a bonus could be paid for those going into engineering or science for high tech jobs.

Ms. Morley advised that ADE joined a consortium of 24 states to develop a new assessment for the academic standards to be implemented in about two years. ADE is considering different scores, such as college and career ready. There is currently a tenth grade competency requirement in statute for high school graduation; however, ADE is considering testing more often throughout the year and in tenth and eleventh grades so that when students graduate, they will know if they are ready to move on to college or a career path.

CoChairman Crandell stated that if students can be taught how to read and comprehend through high school, more will be accomplished than what is currently occurring where only 40 percent of eighth graders are reading at grade level. The practice of teachers being judged on performance, based on how students progress, would be eliminated with a free enterprise model because everyone would be at the same level entering the classroom. He said he understands why the state is moving to the common core standards, but he is not sure using those core standards accomplishes being able to pay on a contract basis.

Mr. Essigs acknowledged that everyone appreciates the magnitude of this problem, which all
50 states have been tackling. It is difficult for public schools in Arizona to find a system that is fair, adequate and provides the services all of the students need when there are over 1 million students who range from gifted to very severely handicapped, and all categories in between.

Representative Pancrazi submitted that every child can learn, but not every child learns in the same way at the same time. Children entering kindergarten are expected to be at a specific level and teachers are supposed to move the students to a certain level, which is a fantasy with all the developmental ranges. It is difficult to put a price on whether or not someone is performing unless their growth is measured, and not their performance, on a standardized test.

CoChairman Crandell agreed. He indicated that under the current system, students on the lower end are moving through the system and getting further behind because they never reached the level they needed to be when they moved a grade level, so when those students reach high school, they are far behind. Those students are then out on the street without an adequate education to perform in society, and then schools are criticized.

Representative Pancrazi apprised that she supported Move on When Ready out of the third grade because in K-3 children are taught the skills that are needed to attain knowledge (reading, writing and math), and if those skills are not achieved, the students fall further and further behind. Some mandates could be eliminated; for example, at one time she was supposed to teach Spanish in second grade, but she only taught reading, writing and math so the children would have the skills that are needed to begin fourth grade where social studies and science are introduced and they would be able to retain knowledge. Also, parents are not being incorporated when they have a huge impact on whether or not a child goes to school prepared.

CoChairman Crandell stated that the performance outcome will have to be verifiable and usable because it will be the basis for funding.

Mr. Essigs recommended that the Committee look at the work done by ABEC, as well as a study by the Rodel Charitable Foundation of Arizona, Lead With Five, that was done a few years ago about items that are known to help students learn. CoChairman Crandell replied that the Members need to look at what has already been done, but the concept is a free enterprise model of going to contract services with each school district becoming an independent contractor.

Ms. Morley commented that unless most of the schools want to stop receiving federal money, that is probably not possible. CoChairman Crandell pointed out that NCLB measures reading, writing and arithmetic at grade level. He speculated that if it can be demonstrated that all of the federal mandates are met, except for possibly special education, through whatever assessment is chosen, there may not be a problem with the federal government.

Dr. Duvall suggested that it may be beneficial for the Committee to hear about the assessment tool mentioned by Ms. Morley in order to have an idea what kind of information may be obtained from the assessment tool and timing of the information.

Mr. Yanez agreed with Dr. Duvall’s suggestion, noting that even when the new academic standards are implemented, there will not be standardized test data at every grade level. AIMS data is not currently available for kindergarten, first, second, ninth, eleventh and twelfth grades, so there are huge gaps. While there are many good assessments systems available, the method of measuring outcomes should be standardized as much as possible.

CoChairman Crandell agreed and noted that if education funding is no longer based on attendance and ADE staff works on SAIS, ADE could move into an assessment role and assess the individual contractors for outcomes. Another item to consider is that in 2013, schools can opt into Move On When Ready for which the state school board is already compiling criteria using a board exam, which the Committee should review. One of the items measured on a daily basis is how many students can read and perform math at grade level, which is used for statistics, but he does not believe it is taught as a skill from the third grade on up. He asked Mr. Tomlinson about seniors’ attitudes toward accelerated reading (AR).

Mr. Tomlinson stated that in his classroom, maybe five percent of the students take it seriously and try to excel. The rest of the students consider a “D” passing and the means to play sports thereafter. CoChairman Crandell stated that emphasis is not placed on how important it is for students to be able to read, or to write.

Ms. Carlson stated that since ADE went through a transition in the data system, it would be helpful for the Committee to see what it can and is anticipated to be able to do. Also, the Career and Technical Education (CTE) Department at ADE has done a lot of work with the business community on what skill level is needed in the community, which would be helpful to the Committee Members.

CoChairman Crandell indicated that if outcomes are paid for, school districts could determine what needs to be done to help teachers assist students to achieve the outcomes, such as providing raises for teachers, etc., but that should not be a problem for the state; it should be managed by the school district. A good job is presently being done of keeping students in the seat, because that is what school districts are currently paid for. He added that a better job needs to be done in the area of career exploration for students.

CoChairman Allen recommended that the Committee focus on different components in future meetings, such as ideas for reforming education funding and implementing a free enterprise system.

Public Testimony

Dan Adams, Payson, submitted that the most important item for the Committee to determine is what the state wants out of its K-12 system. He said that having had a lot of experience with incentive plans with a large company and as a volunteer consultant overseas after retiring, one thing for sure is that “whatever you pay for is what you will get.” It is also important for the Committee to set the goal and let school districts plan how to reach it, but school districts should not make their own scoring system. He conveyed that it is necessary to keep an eye on other things going on in the state. Some Members are working on a program to take money away from the state universities and community colleges and give it to students to go where they want, which, if it can be done, should be factored in as well. He added that the final testing should not be done at the level of the people who train the students, but at the level of who will receive the students, which will take a lot of emphasis on cheating out of the equation. He added that the Committee is off to a great start and he will continue watching.

Discussions (continued)

Ms. Morley stated that reforming school finance is overwhelming; there have been conversations about doing this for many years and the Committee has a lot to consider.

Mr. Tomlinson indicated that he is glad people are working together to develop a better system. He is concerned about labeling students, but it may be beneficial in determining where to focus more attention. He said he appreciates the discussion and looks forward to future meetings.

Mr. Yanez stated that he has a page full of questions and issues that need to be addressed at some point. He agrees with CoChairman Allen’s recommendation to figure out a structure for the meetings because there are only five months in which to accomplish the Committee’s goal and the system is very complicated.

CoChairman Allen noted that federal money is an issue, but unless an attempt is made to reform the system, it will not happen. She outlined three issues the Committee is working on:

· Reforming education funding.

· Changing the system from seat time to outcomes.

· Implementing a free enterprise model and determining the outcomes.

Representative Pancrazi emphasized the need to review research already done so the Committee does not duplicate efforts. She indicated that much emphasis should be placed in the early grades so children obtain the skills that are needed to perform later in life. She has no problem with reforming school financing because it is unbelievably complicated.

Ms. Carlson said she is thrilled that the Committee is addressing this important issue, which ABEC started looking into. Many people questioned why anyone would want to take on such a task because the system is so complicated, but if the Members do not start someplace, the system will never be reformed.

Dr. Duvall noted that the state has already embarked on a number of initiatives the Committee should review, such as Move On When Ready and the assessments ADE is working on developing as part of the consortium mentioned by Ms. Morley.

Mr. Essigs recommended looking at national trends in school finance and suggested that someone from one of the universities or an organization address the Committee.
CoChairman Crandell noted that during the 2010 Session he asked staff to conduct research on contract systems that are being used, but there is no research available. All states are still basing reform on seat time and enrollment, but it would be beneficial to review more of what may be happening in other states.

Ms. Honsinger indicated that as a first grade teacher, she agrees with looking at the beginning of school because with Move On When Ready, if students are not ready to read in third grade, they will continue to fail in the following grades; maybe it should even be in first grade. Perhaps outcomes in what students are expected to do should be changed because everyone in high school is not going to go to college even though everyone is expected to attain the level needed to be college bound.

CoChairman Allen advised that her two sons struggled in their early years at school but a book called Better Late Than Early, that talked about how boys develop, was very helpful. She had to take the pressure off her youngest son because he was not ready to be in the education system. Her sons really improved in third and fourth grade, so a system that allows children to learn along with their development will allow students to grasp learning in about third grade. Both sons graduated with very good grades and have done well in life. She added that it is critical not to label children and not to give up on them.

The Committee Members agreed to meet during the first and last weeks of each month. CoChairman Crandell pointed out that the next meeting will be held the second week in July due to the July 4^th holiday. He asked Ms. Carlson and Ms. Morley to provide information to
Ms. Olguin to email to the Members.

Mr. Tomlinson noted that when school resumes, it will be difficult for Members who are teachers who travel a lengthy distance to make a turnaround trip in the middle of the week. He asked if meetings can be held toward the end of the week. CoChairman Crandell indicated that can be done, noting that input from teachers on the Committee is very valuable since they produce the product. CoChairman Allen pointed out that Mr. Tomlinson can always participate via conference call.

The Members agreed to review research material and assessments at the next meeting to be held on July 13, 2011 at 10:00 a.m.

Without objection, the meeting adjourned at 11:14 a.m.

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Linda Taylor, Committee Secretary

June 28, 2011

(Original minutes, attachments and audio on file in the Chief Clerk’s Office; video archives available at http://www.azleg.gov)

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JLSC ON OUTCOME-BASED

EDUCATION FUNDING

June 22, 2011

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