MINUTES OF THE JOINT SUBCOMMITTEE MEETING OF SENATE COMMITTEE ON FINANCE AND ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session April 11, 1995 The joint subcommittee meeting 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 Raymond D. Rawson at 8:15 a.m. on Tuesday, April 11, 1995, in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. SENATE COMMITTEE MEMBERS PRESENT: Senator Raymond D. Rawson, Chairman Senator William J. Raggio Senator Bob Coffin Senator Dean A. Rhoads ASSEMBLY COMMITTEE MEMBERS PRESENT: Mrs. Jan Evans, Chairman Mr. Lynn Hettrick, Chairman Mrs. Vonne Chowning Mr. Joseph E. Dini, Jr. Mr. Dennis L. Allard Ms. Sandra Tiffany STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Mark Stevens, Fiscal Analyst Jeanne L. Botts, Program Analyst Sue Parkhurst, Committee Secretary OTHERS PRESENT: Douglas Thunder, Director, Fiscal Services, State Department of Education Keith Rheault, Deputy Superintendent, Instructional, Research and Evaluative Services, State Department of Education Don Hataway, Chief Assistant Budget Administrator, Budget Division, Department of Administration Mary L. Peterson, Superintendent of Public Instruction, State Department of Education State Department of Education Jeanne L. Botts, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), provided background information and explained the technical adjustments and staff recommendations pertaining to the education budgets in the Executive Budget as presented in the budget closing action packet (Exhibit C). The distributive school fund, class size reduction and school improvements budgets were not addressed at this hearing. Education State Programs - Page 165 Ms. Botts said regarding adjustments to this budget, the out-of-state travel for two State Board of Education members has been moved from category 4 in the base budget for the Education State Programs into the travel category for the board of education, category 16. All hiring of positions has been deferred until October 1, 1995 unless a pressing need exists for earlier hiring, Ms. Botts stated. The savings resulting from the deferred hiring of three positions are reflected as reductions in the General Fund appropriations for those positions. They are the Deputy Superintendent for Administrative and Fiscal Services in decision unit E-128, the .50 FTE (full-time equivalency) Program Assistant III in decision unit E-250 and the .25 FTE Management Assistant in E-252. Senator Raggio questioned the need to fill the deputy fiscal position in E-128 at this time. Ms. Botts provided background information and reminded the committee that during the 1991-1993 biennium, there were several position cuts and a freeze on hiring that prevented the department from filling positions that were vacated, whether the positions were funded by the state or the federal government. In the 1993 legislative session the Budget Division was under direction from a letter of intent from the 1991 Legislature to reduce the federally funded education positions and pass the funds through to school districts to the greatest extent possible. The budget director in 1993 cut 19 positions, which consisted primarily of federally funded consultants. In the budget closings in 1993 the Legislature reorganized the budget, reinstating some of the professional positions that had been cut and reducing the number of clerical positions to provide a better mixture of clerical-to-professional support. Ms. Botts said the position in question, the Deputy for Administration and Fiscal Services in E-128, was one of the casualties of the 1993 position cuts. Senator Raggio further questioned the need to reinstate the positions recommended for this budget, the elimination of which resulted in savings of federal funds received by local school districts. He suggested the positions have apparently not been truly necessary. Senator Raggio noted the duties of the deputy fiscal position include oversight of local school districts' accounting and fiscal practices, and he inquired as to the role played by the education department in the White Pine School District (WPSD) fiscal crisis that has existed for 2 years. He emphasized his concern regarding the position recommendations. Assemblywoman Jan Evans said while she shares some of Senator Raggio's concerns in this area and does not favor wholesale reinstatement of positions that were cut, she supports restoring the Deputy Superintendent for Administrative and Fiscal Services position because of the need for good fiscal oversight. She suggested too much responsibility has been vested in a single individual performing the accounting, fiscal oversight and auditing functions in connection with the education state programs. Stressing the need to be "at strength" in terms of fiscal oversight, she attributed part of the WPSD fiscal problems to insufficient involvement of the education department with the local school districts. Mrs. Evans said she would support restoration of the Deputy Superintendent for Administrative and Fiscal Services position in an effort to strengthen this particular function in the department. Senator Coffin said he has attended many hearings on the budgets for the education department and has not previously heard opposition by committee members to restoration of the deputy fiscal position. He said the committee has known the incumbent is currently performing two jobs. Senator Coffin echoed Mrs. Evans' opinion the fiscal crisis in the White Pine School District may have been caused by insufficient staff to provide oversight in that situation. He voiced his support for this position while indicating the other positions were not as critical to him. Senator Rawson pointed out this is the first work session the subcommittee has held for the purpose of discussing these issues. Senator Raggio stated some of his comments are in response to remarks made by Mrs. Evans. Noting the presence of representatives from the State Department of Education, Senator Raggio inquired as to the department's position and involvement with respect to the fiscal difficulties that have been ongoing in the White Pine School District since the last legislative session. He said the problems are critical. Douglas Thunder, Director, Fiscal Services, State Department of Education, responded. He said during the time the deputy superintendent position was vacant he has been attempting to fulfill as many of the responsibilities and functions of that position as possible while performing his other duties. With regard to the White Pine situation, he stated, the department was aware of the bonding difficulty that was an issue during the last legislative session, when the sale of the bonds resulted in a tax rate that exceeded the $3.64 limit. A serious problem now exists in that the actual cash flow appears to make it impossible for the school district to meet its current obligations and debt service, Mr. Thunder continued. Senator Raggio commented the White Pine School District was overspending its budget and was therefore in actual violation of the law. Mr. Thunder pointed out this situation occurred only within the last year. He said the department knew problems existed and became aware of the over-expenditure, officially, only upon receipt of the school district's audit. The audit was unfortunately about 3 months late, he stated. Continuing, Mr. Thunder said in preparation for the current legislative session, beginning in April and May of 1994, the State Department of Education normally requests and receives information from all of the school districts that is used to compile the department's biennial budget requests. He said the attempts to obtain such information from the White Pine School District at that time were "very painful," and the department began pleading for this information last May. While some information was secured from the school district, Mr. Thunder stated, the district had no idea what its ending fund balance would be. The department continued to pressure the school district to provide the needed information. The next deadline to be met by the department was in November 1994 when a statutorily mandated report was due, Mr. Thunder continued. At that time the school district was asked to provide the required information by November 1, if at all possible, to meet the department's deadline of November 15. The department persisted in its attempts to obtain the information, but did not receive it until November 17 or 18. Mr. Thunder equated the problems experienced by the education department with those experienced in the Department of Taxation with respect to requests for information not being fulfilled or being received late. With regard to the audit report, Mr. Thunder said it is due in the offices of both the taxation and education departments no later than November 30. Even though the Department of Taxation extended the deadline to December 30, Mr. Thunder stated, the education department still did not receive the report until February 28. Mr. Thunder said the department, lacking the deputy position and having another vacancy as well, simply did not have the staff to work with the White Pine School District. He said the only sanctioning power the department has when reports are not filed is to withhold Distributive School Account (DSA) payments, but the department is reluctant to take such action because of the probability it will make matters worse. Senator Rawson said in the last legislative session there was discussion regarding an accreditation plan and the possibility of authorizing the State Board of Education to be able to declare a school district out of compliance with proper standards or procedures and to assume control of such a district. He inquired if anything has come of this proposal. Mr. Thunder replied this has not occurred, to his knowledge, although it is a practice used in other states. He said the current situation involving the White Pine School District is the most serious situation of this kind the education department has experienced in the 9 or 10 years he has been with the agency. Mr. Thunder said he personally would like to ensure this situation can be addressed without having to create an entirely new level of requirements for all of the districts, most of which have not experienced problems of this kind. Senator Rawson stated the need for legislative remedies that would provide the State Department of Education with the authority to deal with situations such as the one in White Pine County. He requested the education department representatives return to the committee with a proposal to that effect. He instructed the fiscal analysis staff to obtain information from the Research Division of the Legislative Counsel Bureau (LCB) regarding the manner in which similar situations are handled in other states. Senator Rawson said the current Legislature should provide the department with the ability to address such situations in the future. Keith Rheault, Deputy Superintendent, Instructional, Research and Evaluative Services, State Department of Education, noted the department did conduct, through its auditors, an official count of students in the school districts last September. He indicated the audit findings were in line with the reports of the school districts. He said the department became fully aware of the problem in the White Pine School District in November when the taxation department reported "the $300,000 loan switch to a lease agreement." Department representatives met with Superintendent Cahill on December 15 to offer assistance and to provide the names of fiscal personnel the district could contact. The representatives also contacted the district's counsel and provided the same information. Nothing was done at that time, Mr. Rheault stated. He said the department suggested ways the district could use some of the federal grant funds that could be shifted for the purpose of providing assistance with administrative duties, but none of the recommended actions were taken. When the reports were received in February 1995, it was too late, Mr. Rheault said. Senator Raggio said the perception, even within the Department of Taxation, has been that there has been a disinclination on the part of the State Department of Education to involve itself in the White Pine situation. He said the White Pine School District crisis should have had a very high priority, because the system for all intents and purposes is now bankrupt. He pointed out the state is now going through the process of allowing the school district to obtain a large loan, and the state must pledge over a 5-year period the district's receipts from the DSA. He predicted it will be a difficult time for the school district. Senator Raggio returned to his original premise that it does not appear the State Department of Education took sufficient interest in the White Pine crisis. He said the answer that "we did not have this position" is unacceptable, and if that is the answer being proffered, he regards it as an alibi rather than as justification because of the department's duty with respect to oversight. Mr. Thunder replied the education department has been working with the taxation department. In a meeting with taxation officials in January, and in prior conversations regarding their ability to obtain the necessary information from the White Pine School District, the education officials learned the taxation department was also unable to obtain the information. Mr. Thunder further stated the education department expressed to the taxation department its full intent to do whatever was within its power to assist in addressing the White Pine situation. He said one auditor from the department spent a week working with the district's representative, beginning in the last week of February, to attempt to determine the extent of the problem at that time. Mr. Thunder said if there is indeed a perception that the State Department of Education has not been interested in the White Pine situation or inclined to treat it as a priority, he wished it to be known that from the perspective of the department this is a misperception. He said the department regrets the misperception and intends to do whatever it can from this point forward. Senator Rawson requested the department representatives to follow through on his request for proposals to provide authority in such situations. Returning to discussion of the Deputy Superintendent for Administrative and Fiscal Services, Senator Rawson invited comments from the education representatives regarding justification for the position. Mr. Thunder responded there are five or six specific duties assigned to this position by statute, and while they need to be done and should be done, unfortunately there are always more pressing, day-to-day activities that need to be addressed. In his particular position as director of fiscal services, Mr. Thunder continued, very often he must focus on the day-to-day activities and simply does not have the time to address the more broadly sweeping kinds of activities. As further justification for this position, Mr. Thunder noted LCB audits of the department over the past several years indicate that, from the point of view of the superintendents of the various school districts throughout the state, the department has been performing well. However, many of the superintendents, especially those in the smaller school districts, indicated in interviews with the auditors they need someone at the State Department of Education with whom they can consult and discuss problems. He said since he has been with the department there is probably only one superintendent who is still in the same position he was in when Mr. Thunder joined the department 9 or 10 years ago. Several of the districts have had new superintendents and many have also had changes in their fiscal staffs, he continued, and these are areas that present a tremendous opportunity for the department to consult and work with the school district personnel to help them lay the foundation for sound accounting practices and financial management. The time required for such activity has simply not been available, however, since in essence the two positions have been merged. Senator Raggio asked what recommendations Mr. Thunder could offer, should the position be restored, as to expanding or changing the duties prescribed in the Nevada Revised Statutes (NRS) 385.310 and NRS 385.315 to deal with the kind of situation under discussion. Mr. Thunder replied his recommendation, which could probably be construed to be covered within the statutes, would be to emphasize the orientation, the education and the need to work with new personnel as well as reviewing the activity of existing personnel in the fiscal offices. Further, he recommends that the deputy fiscal superintendent also be available to the superintendents. He pointed out that in some districts, especially the smaller ones, the superintendent and the financial administrator are one and the same. In such cases it would be very important for the department to be able to work with the district's financial personnel, possibly conducting annual workshops and providing orientation for new personnel. Mr. Thunder said he wished to stress this element. Senator Raggio said NRS 385.310 requires the person holding this position to develop a uniform system of budgeting and accounting, which system when approved by the state board is mandatory for all public schools in the state and must be enforced as provided in subsection 2 of the next section, NRS 385.310. Subsection 2 requires the deputy fiscal position to inspect the record books and accounts of boards of trustees and to enforce the uniform method of keeping the financial records and accounts of school districts. Senator Raggio voiced the opinion the authority exists with respect to the position of Deputy Superintendent for Administrative and Fiscal Services. He asked if anything further is required to specify the duties of the position. Mr. Thunder answered that "within the broad construct of [the statutes]," the recommendations he has made are certainly possible and desirable. He suggested that perhaps in some capacity other than the duties of the position in question it might be advisable, in making provisions for dealing with cases similar to what has occurred in the White Pine School District, to provide the department with greater authority in cases where certain thresholds are met. He said as he interprets the statutes it appears the department does not have a significant amount of authority or power other than that of collegiality, working together and consulting. Stating this is what he is having difficulty with, Senator Raggio said the statute also requires the position to inspect school fund accounts and report the conditions of the funds of any school district to the board of trustees. He asked whether, if the position is restored, the State Department of Education can assure the Legislature the duties that are statutorily required can be carried out. Mr. Rheault offered assurance the duties mandated by statute can be carried out if the Deputy Superintendent for Administrative and Fiscal Services position is funded. He said the department can develop policy manuals, inspect records and follow up when problems are detected, under the statutory authority cited by Senator Raggio. Senator Raggio remarked there is no point in funding the position if it is not able to carry out the duties for which it was created. SENATOR RAGGIO MOVED TO RECOMMEND RESTORATION OF THE DEPUTY SUPERINTENDENT FOR FISCAL AND ADMINISTRATIVE SERVICES POSITION IN DECISION UNIT E-128 (EXHIBIT C, PAGE 1) AND APPROVAL OF THE TECHNICAL ADJUSTMENTS MADE BY STAFF. SENATOR COFFIN SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED. (MS. TIFFANY WAS ABSENT FOR THE VOTE.) SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Regarding decision unit E-250, Ms. Botts said approval of the recommendations for an Education Technology Consultant, the part-time Program Assistant III and the computer hardware to implement the department's side of the Statewide Management of Automated Record Transfer (SMART) Plan should be contingent upon passage of Senate Bill (S.B.) 204. The measure contains an $11.2 million one-shot appropriation to supply work stations, networking and electronic mail capacity, and student information system software for all schools and school district offices. SENATE BILL 204: Makes appropriation to department of education for development of statewide system of reports and analyses of information concerning pupils. Senator Rawson suggested further consideration of this decision unit be held pending action on S.B. 204. Mrs. Evans said in that case the budget could not be closed at this time. Mark Stevens, Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, explained there are three ways to deal with the situation: (1) Hold this budget until S.B. 204 is decided, which might not occur until the end of the session and would probably therefore be impractical in terms of closing the budgets; (2) approve the position contingent upon approval of S.B. 204, and if it does not pass the position could be removed accordingly; or (3) remove the position from the budget and insert it into S.B. 204, in which case the position would "flow with" the bill. In the interests of simplification and to facilitate budget closure, Senator Rawson proposed linking approval of the positions under discussion with passage of S.B. 204. The committee indicated agreement with this proposal. The next decision unit in this budget considered by the committee was E-252, which calls for the addition of a new Science Consultant and a part-time Management Assistant I position. Ms. Botts explained Nevada's Science Standards Committee has been meeting since October 1993, and new science standards and assessments are expected to be piloted and presented to the State Board of Education in 1997. The staff recommends reducing the General Fund appropriations for these positions by the addition of any federal funds available. Senator Raggio inquired if federal funds are available for the Science Consultant position. He noted in the Executive Budget the only source of funds indicated are from the state General Fund. Mr. Rheault responded the only source of federal funds for science education and technology was through a Department of Energy grant received by the State Department of Education during the past year, but the 1-year grant is for teacher training and was in the amount of approximately $32,000. Ms. Botts indicated federal funds are available for use in science education from Title II (formerly the Eisenhower Math and Science Program) and Chapter 2 for school improvement. Mr. Rheault responded funding is provided in the Title II grant for science, math and technology. Approximately 80 percent is distributed to the local school districts or "sub-granted" for their benefits; of the remaining 20 percent the education department is allocated 5 percent for administrative purposes and 15 percent for statewide program improvement. Mr. Rheault said currently the department uses some of the available funds for the math consultant position, and the administration portion has probably already been spent. Senator Raggio asked if the Science Consultant position has already been filled. Mr. Rheault replied no. The senator requested justification for this position and the services that would be provided by the consultant to the various school districts. Mr. Rheault responded that he relates the science consultant position closely to the math consultant position that was filled 2 years ago. He said it is one of the four core courses that every school must teach. The availability of a science consultant would enable hundreds of teachers currently teaching science to receive better in-service training and up-to-date materials. Mr. Rheault said the hiring of the math consultant indicates what could be accomplished through hiring a science consultant. Through the math consultant position the department now has a 5-year plan for the development of math standards and training as well as other math program enhancements. Mr. Rheault said this will not occur with respect to science education until a person is hired to perform the work required. Senator Raggio remarked he does not think the case has been made to fund the position in question, especially if the only funding source is the General Fund. Assemblyman Joseph E. Dini, Jr. inquired if any part of the science consulting function is currently being performed by someone else. Mr. Rheault replied some science education duties have been assigned to another consultant on staff "just to keep some of the things moving in the science area," but the quality of the program is not what it should be to meet the needs of students in courses that all elementary and secondary students are required to take. Mr. Dini asked whether, should the decision be made not to approve the science consultant position, science education in Nevada will be relegated to a secondary position rather than being promoted and enhanced. Mr. Rheault replied that would have to be the case because all other positions in the department are assigned specific duties based upon the sources (federal or state) of funding that support their positions. While attempts could be made to "piecemeal" the science education program, science would not be able to attain the status of the other core requirements without the consultant position. Mr. Dini asked how the State of Nevada ranks in the nation in terms of its science education program and the quality of courses provided. Mr. Rheault replied Nevada ranks among the lowest with respect to the percentage of students who take advanced science courses. He attributed the problem, in part, to the need for more technical and in-service training for the teachers of science, and the need to interest students in science. He said the science consultant could assist in this area. Mr. Rheault said Nevada is probably the only state in the nation that does not have a science consultant at the state department level. Assemblywoman Sandra Tiffany stated she does not support funding the Science Consultant position because there does not appear to be sufficient need for it and because there is a lack of clarity regarding the positions requested within this budget. Assemblyman Lynn Hettrick inquired if it would be possible to transfer the math consultant position to the science area since the 5-year math program has already been developed. Mr. Rheault replied the 5-year plan is contingent upon continued monitoring and development by the math consultant and therefore the position is indispensable to implementation of the plan. However, since the math consultant has participated in the entire process of developing a 5-year plan and knows what is involved, some of the information garnered from the work that has been done in the math program can be transferred to the science program and therefore save time in creating a similar plan. He reiterated there is still a need in the math program for someone to oversee, supervise and manage development and implementation of the program, and therefore it would not be advisable to transfer the math consultant to the science area. SENATOR RAGGIO MOVED TO RECOMMEND REMOVAL OF THE GENERAL FUND APPROPRIATION FOR THE SCIENCE CONSULTANT IN DECISION UNIT E-252 AND TO AUTHORIZE THE POSITION TO THE EXTENT FEDERAL FUNDING IS AVAILABLE. SENATOR RHOADS SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED. (MRS. EVANS VOTED NO.) SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * There was consensus among the subcommittee members to recommend transferring the Education Consultant position in decision unit E-900 to the Proficiency Testing budget. ASSEMBLYMAN HETTRICK MOVED TO RECOMMEND APPROVAL OF THIS BUDGET AS AMENDED ABOVE. SENATOR RAGGIO SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Education Gift Fund - Page 185 ASSEMBLYWOMAN CHOWNING MOVED TO RECOMMEND APPROVAL OF THIS BUDGET AS RECOMMENDED BY THE GOVERNOR. ASSEMBLYMAN HETTRICK SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * ESEA Chapter 1 - Page 187 Ms. Botts said the only technical change in this budget recommended by staff is to adjust transfers of funds into this account to match transfers out of four other accounts to support the payroll costs of the Director of Federal Programs and his secretary. She said a decision is required as to whether a half-time Education Consultant position should be reclassified as Assistant Director of Federal Programs (from grade 39 to grade 40) and what revenues should support the position. Senator Rawson requested further explanation regarding reclassification of the above position. Ms. Botts said there is currently a person filling a half-time position in the Chapter 1 account and a half-time position in the Discretionary Grants account in the National Diffusion Network program, which provides a small grant of approximately $75,000 for local school districts to adopt exemplary programs that have proven successful in other states. Evidently, she continued, this person has been assigned additional supervisory duties. The reclassification request was submitted to the Department of Personnel, which approved the reclassification and upgrade. Ms. Botts pointed out the reclassification does not appear in the Executive Budget or in the agency's budget request, but was done outside the budget process. She said the committee should determine whether or not the Budget Division has made a final decision on the position. If the position is approved, Ms. Botts continued, the legislators should examine the programs being supervised to determine whether the salary costs of the position should be funded by those programs rather than by the Chapter 1 and National Diffusion Network. Senator Rawson asked Mr. Hataway if the Budget Division has made a decision regarding the reclassification request. Don Hataway, Chief Assistant Budget Administrator, Budget Division, Department of Administration, replied it was his position the reclassification is not justified, and he has recommended denial of the request. He said the 5 percent special adjustment to salaries, which is allowed under the personnel rules, would be more acceptable to the Budget Division. He supports the recommendations of the fiscal analysis staff to obtain salary support for the position from the programs served by the position. Mr. Rheault said the education department has received notice from the Budget Division that the reclassification will not be approved. He said part of the current duties assigned to the person in this position include supervising some of the Goals 2000 work being performed by the department, and it is possible to fund the position from Goals 2000 funds using the "5 percent, temporary additional duties pay" option. He noted most other branches of the department do not have assistant directors. Mr. Rheault indicated the reclassification denial is acceptable to the department. ASSEMBLYMAN HETTRICK MOVED TO RECOMMEND ADOPTION OF STAFF ADJUSTMENTS AND RECOMMENDATIONS IN THIS BUDGET (EXHIBIT C, PAGE 4). ASSEMBLYMAN DINI SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Ms. Botts said staff will work out the funding for the additional 5 percent salary commensurate with temporary increased duties in connection with the Goals 2000 program. ASSEMBLYMAN DINI MOVED TO RECOMMEND APPROVAL OF THIS BUDGET AS AMENDED ABOVE. ASSEMBLYMAN HETTRICK SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * National Origin/Race Desegregation - Page 191 Ms. Botts explained the technical adjustment made by staff, which transfers funds from this account into the ESEA Chapter 1 account to help fund the position of Director of Federal Programs and associated clerical support. SENATOR RAGGIO MOVED TO RECOMMEND APPROVAL OF THIS BUDGET AS ADJUSTED BY STAFF (EXHIBIT C, PAGE 5). ASSEMBLYWOMAN CHOWNING SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Discretionary Grants - Page 195 Ms. Botts said this budget account contains several small federally funded programs. As indicated in the remarks from staff in the budget closing action sheets (Exhibit C, page 6), "Upon closing, the budget needs to be adjusted for indirect costs, rent and intra-fund transfers and any cost allocation plans to properly match expenditures to revenues." SENATOR RAGGIO MOVED TO RECOMMEND AMENDMENT OF THIS BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS (EXHIBIT C, PAGE 6) AND CONSISTENT WITH THE COMMITTEE'S ACTIONS WITH RESPECT TO BUDGET ACCOUNT 101-2712, ESEA CHAPTER 1, AND TO APPROVE THE BUDGET AS AMENDED. ASSEMBLYMAN HETTRICK SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Other State Educational Programs - Page 199 In explanation of decision unit M-200, Ms. Botts noted the federal funds received by Nevada for the Byrd Scholarship Program cannot be spent for administration of the program. The administrative funds are appropriated from the General Fund and are contained in this budget account. Ms. Botts said now that this program offers a 4- year scholarship instead of the 1-year awards that were previously provided, the department will be responsible for tracking recipients throughout their undergraduate years, verifying student eligibility each year and recovering any funds improperly awarded. Since no federal funds are provided to administer this program, the decision needs to be made whether or not to approve the recommended General Fund appropriations of approximately $4,000 for each year of the biennium to cover the costs of increased activity in connection with this program. Decision unit E-251 poses the question of whether the state should provide matching funds to train teachers in geography. Ms. Botts said this decision unit provides a General Fund appropriation of $50,000 each year to match an equal amount that would be provided by the National Geographic Society to support the Geographic Alliance in Nevada (GAIN), which conducts teacher workshops on geography. Senator Rawson commented that even though there are some problems associated with the Byrd Scholarship Program, it would be a disservice to make the scholarship funds unavailable due to lack of resources needed to administer the program. ASSEMBLYMAN DINI MOVED TO RECOMMEND APPROVAL OF THIS BUDGET AS RECOMMENDED BY THE GOVERNOR. SENATOR COFFIN SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED. (MR. ALLARD AND MS. TIFFANY VOTED NO.) SENATE: THE MOTION CARRIED. (SENATOR RHOADS VOTED NO.) * * * * * ESEA Chapter 2 - Page 202 Ms. Botts said the Chapter 2 program contains federal funding for at-risk students, library and instructional materials, school-wide improvements and "effective schools" programs. Regarding decision unit E-900, Ms. Botts said the technical adjustments increase aid to schools to meet the 90 percent minimum pass-through required under federal law. This was accomplished by adjusting the Exemplary Programs category so it meets the federal requirement that 5 percent be reserved for these programs. Decision unit E- 900 also includes the transfer of the Title II Math and Science Program and its half- time Education Consultant from budget account 2708 into this account, as recommended in the Executive Budget. Ms. Botts said evidently at the federal level a plan is underway to combine the two programs, and the Budget Division recommended consolidating the two accounts to reduce the number of accounts in the education department. SENATOR RAGGIO MOVED TO RECOMMEND APPROVAL OF THIS BUDGET AS ADJUSTED BY STAFF (EXHIBIT C, PAGE 8). ASSEMBLYWOMAN EVANS SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Title II ESEA - Page 205 Ms. Botts noted decision unit E-900 transfers this program and its half-time Education Consultant to the Chapter 2 budget account. She said separate expenditure categories should be maintained for Aid to Schools and Exemplary Programs to facilitate tracking in the future, unless the federal government merges the Title II Math and Science Program into the Chapter 2 program. The staff recommendation is for approval of the Governor's recommendations ASSEMBLYMAN HETTRICK MOVED TO RECOMMEND APPROVAL OF THIS BUDGET AS RECOMMENDED BY THE GOVERNOR. SENATOR RAGGIO SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Education for Handicapped Act (IDEA) - Page 209 Ms. Botts said the director of special education has provided up-to-date revenue estimates for the biennium, and most of the adjustments in this account reflect these estimates. Additionally, the fiscal analysis staff proposes that all of the federal funds from the Individuals with Disabilities Education Act (IDEA) flow into this account and a category be established to transfer the amount from this account into budget account 2670 (Education of Handicapped, Chapter 395 of NRS, page 215) for tracking purposes. Concerning decision unit M-200, Ms. Botts said at least 75 percent of the funds in this account must flow through to the local school districts. With the adjustments made for the latest revenue estimates, it is calculated the pass-through amount will be between 81 and 82 percent each year of the biennium. Ms. Botts said the Budget Division is recommending, in decision units E-900 and E- 901, that two other separate, federally funded accounts for special education be rolled into this account. These are the Early Childhood Special Education Program, budget account 2700, and the Special Education Teacher Training Program, budget account 2717. Two positions are transferred into this account. Ms. Botts voiced the opinion there should be no problem with combining the three accounts. In addition to the technical adjustments, Ms. Botts continued, decision unit E-250 raises the question of whether or not a new Special Education Consultant and a .50 FTE clerical position should be added to this program. The two federally funded positions were requested to expand the availability of services provided to pupils with disabilities who are taught in regular classrooms in line with the process of "inclusion," or mainstreaming. Ms. Botts said the new clerical position is budgeted to start 3 months earlier (July 1, 1995) than the new professional position (October 1, 1995), and she recommends leaving the budget recommendation intact because the director of special education has indicated the clerical position will be needed early to support the existing special education consultant in the Las Vegas office. The latter position currently has no clerical support. ASSEMBLYMAN HETTRICK MOVED TO RECOMMEND APPROVAL OF THIS BUDGET IN ACCORDANCE WITH STAFF ADJUSTMENTS AND RECOMMENDATIONS (EXHIBIT C, PAGE 209). ASSEMBLYWOMAN EVANS SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator Raggio requested clarification as to resolution of the M-200 decision unit. Ms. Botts said she recommends the percentage of the IDEA funds to be passed through to local school districts be held at the existing 81 to 82 percent level. Education of Handicapped (Chapter 395 of NRS) - Page 215 There are basically two technical adjustments made by staff in this budget account, Ms. Botts stated. With respect to the first adjustment, staff recommends that all federal IDEA funds for special education flow through budget account 2715 and then be transferred to this budget account (2670). The adjustments to the revenue section (Exhibit C, page 12) are displayed as transfers from another account rather than as federal funding deposited into this account. The second adjustment is in the expense category. Ms. Botts said in budgeting the funds for out-of-district placements, the Budget Division had allocated 25 percent to the State Department of Education and 75 percent to the Division of Child and Family Services (DCFS). The fiscal analysis staff recommendation is that the expenditures in this category instead be distributed according to a 38/62 percent ratio, with an increase in funding for education placements and a corresponding decrease in funding for DCFS placements. Ms. Botts said if the needs of DCFS prove to be greater, or vice versa, the ability exists to transfer funds between the two accounts. Senator Raggio stated his desire to reopen the question as to the dual authority that exists over the placements of handicapped students. He said he is inclined at this time to restore the placements to the State Department of Education rather than continuing the dual authority shared by the department and DCFS that now exists. The reason, he explained, is that the reports the Interim Finance Committee has been receiving regarding DCFS placements have been substantially lacking in credibility. The senator invited comment from the education department representatives regarding the desirability of maintaining the status quo versus returning the placements to the department. Mary L. Peterson, Superintendent of Public Instruction, State Department of Education, said the department is willing to cooperate with the Legislature should it decide to restore responsibility for all out-of-state placements to the department. Senator Rawson inquired as whether the department is able to work well with the human resources agency. Ms. Peterson said she believes so, based on past history. She said the major issue regarding the out-of-state placements is that they are very expensive, and the cost factor will always be very volatile because the costs are difficult to predict or project. She reiterated the willingness of the education department to cooperate with any decision to return the placements to the department. Senator Raggio said his reason for raising the issue is that the projections the Legislature has received primarily from the DCFS have been very unrealistic. He said in fairness it has been difficult to predict the costs in this area; however, he continued, when the State Department of Education handled the placements there was a great deal more consistency in the projections. He noted the funds ultimately are approved by the education department. He expressed the opinion the Legislature needs to be more fully apprised of what is being done in this area. Mr. Hataway addressed the senator's concern, pointing out there were two primary reasons for the recommendation made by the Budget Division to split the placement authority between the two agencies. The first reason was that the education department was performing poorly at the time with respect to providing the out-of- state placements. It was therefore recommended the placements be split between the education department and the child and family services division according to the nature of the handicap. Mr. Hataway said the Budget Division at this time does not strongly support or oppose restoring the out-of-state placements to the education department. He said a decision by the Legislature to do so would require a statutory amendment. Senator Coffin recalled that the disagreements on this issue in the past revolved around the former budget director's determination the State Department of Education was being too liberal in its interpretation of which students would be placed out-of- state and which ones would be placed within the state. He said it was obviously more expensive for the children to be placed out-of-state, and the previous budget director was concerned whether the education department was making a significant effort to keep the placements in-state. Senator Coffin said he had sided with the Budget Division's contention there was a lack of determination to keep the children within the state, or at least to resist the parents' efforts to have them placed out-of-state. He said the Legislature needs to be assured the department is willing to resist the parents in these efforts to the fullest extent possible under the law, although he acknowledged federal law may cause difficulties in this regard. He observed that parents seem to be in control of the situation, and therefore the education department must be able to argue its case strongly in dealing with the parents. Senator Coffin said the view of the budget office was that the department was lacking in its efforts to resist pressure from parents for out-of-state placement. He asked if the education department is willing to strongly argue its position regarding in-state versus out-of-state placements. Ms. Peterson concurred with Senator Coffin's observations regarding the pressure by parents to obtain out-of-state placements for their children. She said the department currently works with such parents and will continue to do so. Further, the department will continue its efforts to reduce the costs of these placements as much as possible, she stated. Ms. Peterson inquired as to the nature of the guarantee being requested by Senator Coffin. The senator said he is seeking assurance the department will exercise its rights to the maximum extent allowable under the applicable statutes. Senator Rawson asked Ms. Peterson if the department would regard it as desirable to participate in a joint committee with the DCFS to review some of the placements, rather than to entirely sever the relationship with the agency. Ms. Peterson responded affirmatively. Ms. Botts pointed out that at the time the placement authority was divided between the education department and the DCFS, it was perceived the human resources agency was not reserving placements for education in their in-state facilities because of a belief that the education department could afford the out-of-state placements. In conversations with the director of special education, Ms. Botts continued, she has learned that shared responsibility worked very well the first 2 years. One positive outcome of the new arrangement was the fact the DCFS became more understanding of the need to make in-state placements available. She suggested a joint advisory committee might facilitate the education department's handling of the placements. Ms. Botts observed that when the former budget director initiated this plan her intention was that more in-state beds would be made available. Senator Rawson proposed that, should the placements be restored to the State Department of Education, the department should be required to report to the Interim Finance Committee at least quarterly to permit legislative oversight of the situation. He asked if there is anything else that should be included in the recommendations for this budget. Ms. Botts said the flexibility in expending funds for this program in either year of the biennium should be provided as it historically has been. ASSEMBLYMAN DINI MOVED TO RECOMMEND AMENDMENT OF THIS BUDGET TO PROVIDE THAT ALL FUNDS FOR OUT-OF-DISTRICT PLACEMENTS BE TRANSFERRED TO THE STATE DEPARTMENT OF EDUCATION; THAT THE STAFF RECOMMENDATIONS (EXHIBIT C, PAGE 12) BE IMPLEMENTED, INCLUDING SENDING A LETTER OF INTENT; THAT A BILL DRAFT BE REQUESTED TO ENABLE THE TRANSFER OF FUNDS BETWEEN THE FISCAL YEARS, AND THAT A JOINT ADVISORY COMMITTEE BE ESTABLISHED AS RECOMMENDED. THE MOTION INCLUDES THE RECOMMENDATION TO APPROVE THE BUDGET AS AMENDED. SENATOR RAGGIO SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Early Childhood Education - Page 219 ASSEMBLYMAN DINI MOVED TO RECOMMEND APPROVAL OF THIS BUDGET IN ACCORDANCE WITH THE GOVERNOR'S RECOMMENDATIONS. ASSEMBLYWOMAN EVANS SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Education for the Handicapped - Teacher Training - Page 223 ASSEMBLYMAN HETTRICK MOVED TO RECOMMEND APPROVAL OF THIS BUDGET IN ACCORDANCE WITH THE GOVERNOR'S RECOMMENDATIONS. SENATOR COFFIN SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Nutrition Education Programs - Page 227 Ms. Botts said the Governor is recommending that four part-time positions in the Nutrition Program be increased. Decision unit M-200 proposes that two half-time Nutrition Consultants be increased to full time, a half-time Management Assistant I be increased to .75 FTE, and a Program Assistant I be reclassified to a Management Assistant I, but increased from .25 to .50 FTE. This would result in a net increase of 1.5 positions, Ms. Botts stated. Continuing, Ms. Botts said the committee requested and received a report regarding the overtime hours worked by the positions in this program. She said the hours were much lower in FY 1993 and FY 1995 year-to-date but much higher in FY 1994-1995. Because most of the overtime is attributable to the Summer Food Program, it is recommended by staff that the coordinator of this program, position 301, be increased to full-time and the .25 FTE clerical position (position 12) be increased to .50, but that the other two positions remain unchanged and the savings be passed on to local school districts through the School Lunch Programs. Ms. Botts further stated that since these positions handle the Summer Food Program, the increased time for the two positions should be effective July 1, 1995. SENATOR RAGGIO MOVED TO RECOMMEND ADOPTION OF THE ADJUSTMENTS AND RECOMMENDATIONS MADE BY STAFF (EXHIBIT C PAGE 15), AND APPROVAL OF THE BUDGET AS AMENDED. ASSEMBLYMAN DINI SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * In discussion on this motion prior to the vote, Senator Coffin noted substantial increases have been budgeted for the Nutrition Education Program. He raised the question of whether some of the school lunch funds might be rescinded by Congress and therefore whether contingency plans should be made in the event the state does not receive the $21 million budgeted each year, since the positions in the budget are partly contingent on these funds. Ms. Peterson addressed Senator Coffin's question and said the rescissions made by the U.S. House of Representatives are now being considered by the U.S. Senate. In March, the school lunch programs were capped by the House at a growth rate of 4.5 percent. Apparently no decline in administrative funds for the program is projected, she continued; however, the education department will not know the exact situation until the Senate has acted on the House recommendations. Ms. Peterson said if the funding levels should decline, the department will inform the Legislature. She reiterated it is not anticipated there will be a decrease in the administrative funds. Senator Coffin responded both parties in the Senate apparently have agreed to a rescission of $2 billion less than the amount recommended by the House of Representatives. He said he does not know whether or not the Senate agreed to restore the funds to the School Lunch Program. Mr. Rheault said the budgets are based on 20 percent projected growth over the biennium. He further stated the nutrition funds are to be sent to the states in the form of a block grant that is capped at a 4 percent increase. The department's projections indicate the state would therefore receive approximately 15 percent less funding if the block grant plan is implemented, he said. Senator Coffin inquired if the figures in the budget are realistic, under the circumstances. Mr. Hataway addressed the question, pointing out the Authorizations Act always mandates the Budget Division to automatically revise budgets based upon current information. Therefore, if events occur before this legislative session ends that significantly impact this budget, the Legislature can revisit the budget. If such events were to occur after the Legislature adjourns, the budget office would automatically implement work program revisions to adjust the budget as needed. Senator Coffin asked if this would apply to administrative positions as well. Mr. Hataway replied the Budget Division would need to revisit the Nutrition Education Program budget, which would be done in coordination with the Fiscal Analysis Division. Senator Rawson commented it is clear at this point the issue does not entail 93,000 children going without lunch, but merely a slowing of the growth in the nutrition program. He said the motion to recommend closure of this budget could be done with the understanding future work program changes may be required to make any adjustments that would be necessitated by a decrease in federal funds for the program. Occupational Education - Page 233 Ms. Botts said in order to meet a federal maintenance-of-effort requirement, the state must contribute at least $565,206 per year to this program. She said the Governor's budget, as recommended, does not meet the requirement, and it is therefore necessary to add $52,322 in FY 1996 and $43,608 in FY 1997. Ms. Botts further stated the Governor recommends appropriating $168,750 each year of the biennium to replace federal Carl D. Perkins Vocational Education funds in the apprenticeship program. However, she said, this addition would permanently increase the state's maintenance- of-effort by over $100,000 per year. Continuing, Ms. Botts said the committee needs to decide at this time which of several options to pursue. She stated that as previously discussed by the subcommittee, one option is to increase the maintenance-of-effort in accordance with the recommendations in the Executive Budget by providing General Fund support for the apprenticeship training programs. Another option considered earlier by the subcommittee was to continue to use federal funds for the apprenticeship program for 1 additional year since the funds can be used for 5 years and the program is currently in its 4th year. This option would reduce General Fund costs in the first year of the biennium, Ms. Botts noted; however, because the Carl D. Perkins Vocational Education funds are essentially restricted to special populations, it is becoming more difficult for the apprenticeship programs to qualify for the funds because the programs do not serve the special populations to a significant extent. Ms. Botts said the subcommittee also discussed appropriating the funds directly to the University and Community College System of Nevada (UCCSN) to avoid an impact on this budget that will permanently increase the maintenance-of- effort required by the state in this program. Another suggestion made recently, she stated, is that unused SLIAG (State Legalization Impact Systems Grant) funds could be used to help support the program. Senator Raggio asked how the current level of maintenance-of-effort can best be maintained. Ms. Botts said if the preferred option is to maintain the current level of funding for apprenticeship programs at $320,000 per year, the state will be permanently increasing its maintenance-of-effort since all funds will be appropriated from the General Fund. This option would, however, maintain the apprenticeship program's funding at a stable level. Senator Rawson asked Ms. Botts if her suggestion is that the funding be maintained at a stable level and the balance of the funds be appropriated directly to the UCCSN. Ms. Botts replied this is one possible option. She said if the concern is that at some point the funding should be discontinued, a mechanism such as appropriating the funds to the community colleges or using SLIAG funds to reduce the General Fund appropriation is an option. Senator Raggio stated his preference would be to keep the funds available without increasing the state's maintenance-of-effort requirement, and he asked Ms. Botts if one of the mechanisms she had suggested would facilitate this. Ms. Botts replied yes. The senator expressed support for this option. He inquired as to the amount of SLIAG funds currently available. Mark Stevens, Fiscal Analyst, responded, stating the estimated amount of SLIAG funds to be reverted at the close of the fiscal year is currently being calculated. He said the funds could theoretically be balanced forward into the 1995-1997 biennium and utilized, but this option would need to be further explored before the funds could be committed to the suggested use in connection with the Occupational Education budget. He requested staff be given some time to verify the availability of SLIAG funds for the suggested purpose should the committee choose this option. Senator Raggio stated it is not necessary to act hastily on this budget. He requested that staff restructure the budget along the lines discussed, prior to action being taken to close the budget. Senator Rawson stated this budget will be held pending further work by staff. Continuing Education - Page 237 Ms. Botts called attention to the fact the Continuing Education budget was formerly named the Adult Basic Education (ABE) budget. She said the Governor has recommended merging the Job Training Partnership Act (JTPA) budget account with the ABE account, and the Department of Education proposes renaming the account "Continuing Education." Ms. Botts pointed out the state's required match for the federal ABE grant is being met in two components. The first component consists of General Fund appropriations recommended in amounts of approximately $227,000 each year of the biennium. In the second component, the recipients of these funds (school districts and community colleges) are asked to provide matching amounts from non-General Fund sources of approximately $260,000 per year. Ms. Botts said one question to be addressed is whether a new half-time Education Consultant should be hired to assist the full-time consultant in monitoring 62 sub- grants in the Adult Basic Education program. She said funding for the position would come from a reduction in grants. She explained that on the basis of a 1991 letter of intent from the Senate Committee on Finance and the Assembly Committee on Ways Means the budget director attempted, over the 1991-1993 biennium and during the 1993 legislative session, to reduce the number of federally funded positions in the department and pass those savings on as additional aid to the local school districts. Ms. Botts said if the Education Consultant is created, less funding will be available for sub-grantees, and the decision therefore requires that the need for additional staff in this program be weighed. She reminded committee members the agency was asked if it is possible to save money and still provide assistance by hiring a Grants and Projects Analyst I rather than an Education Consultant, and the agency said no. The reason indicated was that the agency would prefer a person who has a degree in education and experience in teaching and administering adult basic education programs, Ms. Botts stated. Continuing, Ms. Botts said the agency was also asked to supply the overtime records of the two persons employed in this program. The information provided indicates the Adult Education Consultant worked 94 hours of overtime in FY 1994, and through February 1995 she had worked 117.5 hours in FY 1995. The clerical position is full- time and worked only 21 hours of overtime in FY 1994. Ms. Botts said it therefore does not appear this level of overtime justifies the addition of a position. Further, she stated, the allowance for administrative costs in this program is not sufficient to accommodate another position. The person would need to be hired under the "ancillary services" provision allowed by the federal government, and paid from federal grant funds. Senator Raggio said he accepts staff's recommendation that at this point there is insufficient justification for the recommended half-time Education Consultant position. Assemblyman Dini inquired as to the impact of Senate Bill (S.B.) 8 on the funding for the school districts from this account. He said Carson City School District officials have indicated they are seriously concerned about the effect the bill would have on distribution of funds to the school districts. SENATE BILL 8: Requires that computation of basic support of school districts include the average daily attendance of certain part-time pupils. Ms. Botts explained S.B. 8 would not affect this account because the bill pertains to the state component of adult education in the Distributive School Account (DSA), and the Continuing Education budget account involves federal funds. She said this measure resulted from the interim study authorized by Senate Concurrent Resolution (S.C.R.) 52 of the Sixty-seventh Session. SENATE CONCURRENT RESOLUTION 52 OF THE SIXTY-SEVENTH SESSION: Directs Legislative Commission to conduct interim study of public elementary and secondary education. Prior to 1987, Ms. Botts reminded the committee, all adult diploma programs were operated on a formula basis. There was some indication the school districts were actually able to provide the programs at a lower cost than the amount at which they were funded, particularly with respect to the educational programs in the state's prisons. Subsequently, the prison program funding was removed from the formula, and the amount of funding for prison education programs was capped. In the 1991 legislative session, Ms. Botts continued, a decision was made again that the formula was providing more funding than necessary to cover the program costs. Additionally, she said, the impact to the DSA was unpredictable and not known until late in the fiscal year. Therefore, it was decided to cap the regular, non-prison adult education programs, as well. Ms. Botts said S.B. 8 would effect a return to a formula method of funding, which would accommodate growth. The funding would provide one-fifth of basic support for every adult in the program. She said the funds in this federal program flow more to community colleges than to school districts. Regarding decision unit E-720 in this budget, Assemblyman Hettrick said the purchases of new computer equipment for state agencies should include attendant maintenance contracts covering at least 2 years. He said it is not necessary to purchase such contracts because they can easily be bargained for when purchasing the equipment. He requested a caveat be included, when the various budgets involving new computer equipment purchases are considered, that staff has the opportunity to verify whether a maintenance contract is included in a given budget and whether or not the contract is justified. Senator Rawson asked that staff perform the procedures requested by Mr. Hettrick. Mr. Thunder offered in explanation of the maintenance contract provisions in the budget that the department learned late in the budget construction process the Department of Information Services (DIS) strongly recommends that whenever an agency orders a computer it should follow up in subsequent years with allowance for maintenance costs. Assemblyman Dennis L. Allard returned to decision unit E-250 pertaining to the half- time Education Consultant. He inquired as to the need for this position, given the recommendation for a Grants and Project Analyst position for the planning section of the State Department of Education (decision unit E-127, page 464) that "would allow the state to have one centralized person to identify both federal grants and private grant opportunities for social services, employment, training and education grants...." Mr. Allard directed his inquiry to the committee members. Mr. Rheault stated his desire to respond to the requested half-time adult education position. He said the department had also requested a half-time state-supported position to work with all the alternative education programs in the state, but the request was not recommended in the Executive Budget. Regarding the overtime request, he continued, the department is very conscious of overtime and attempts to limit it to a minimum number of hours. He said the adult education consultant does not submit all of the hours of overtime she actually works, due to the limits imposed by the department. She does this because she is dedicated, Mr. Rheault remarked. Additionally, Mr. Rheault said, the full-time consultant also has the responsibility for the GED (General Education Diploma) program within the state, including monitoring of all of the testing. He said this is very time-consuming, and there is no funding other than the state appropriations to pay a portion of the consultant's salary for this function. Commenting on the proliferation of alternative education programs within the state that are related to the continuing education program, Mr. Rheault further testified there is currently no consultant in the department assigned specifically to work with alternative education programs and to provide technical assistance. He said there is a need for coordination and assistance in developing the programs, to avoid duplication. The addition of the half-time position could enable the department to provide at least a minimal amount of attention to this area, Mr. Rheault stated. He said he views the request for the half-time position as critical. ASSEMBLYMAN ALLARD MOVED TO RECOMMEND ADOPTION OF THE ADJUSTMENTS MADE BY STAFF (EXHIBIT C, PAGE 17), TO RECOMMEND THAT THE HALF-TIME EDUCATION CONSULTANT POSITION BE DENIED, AND TO RECOMMEND APPROVAL OF THE BUDGET AS AMENDED. SENATOR RAGGIO SECONDED THE MOTION. Assemblywoman Chowning commented the alternative education programs have proven effective in Clark County, where the dropout rate has been decreasing, albeit slightly, in connection with these programs. Ms. Peterson affirmed the dropout rate had been decreasing prior to this year. Mrs. Chowning attributed the decrease in the dropout rate in Clark County to alternative programs such as the Horizon programs, which she said have been highly successful. She noted there are more and more at- risk students who are being helped by such programs, which she said translates into jobs and better economics for the community. She suggested it might be counterproductive not to provide greater state support in this area. Senator Raggio echoed Mrs. Chowning's sentiments regarding the value of alternative education programs, but he said her argument supports the motion under discussion. He said the half-time position request cannot be justified on the basis of the amount of overtime currently required of the full-time consultant. He opposed using funds from the alternative programs to support this position. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED. (SENATOR RHOADS VOTED NO.) * * * * * Proficiency Testing - Page 243 Ms. Botts explained the decisions required in this budget account. Regarding budget module E-250, the decision is whether or not Nevada should participate in the National Assessment of Education Progress (NAEP). The program involves testing 25 students from each of 100 schools. The Governor has recommended $52,875 in FY 1996 and $17,625 in FY 1997 for the NAEP. For each year of the biennium, $15,000 is recommended to hire a contractor to coordinate Nevada's participation and to recruit schools to participate in the assessment. The amount of $30,000 has been included in the budget for the first year in case the NAEP requires states to help pay for data analysis and reporting. Senator Raggio asked what additional dimension would be provided by the NAEP in terms of student assessment and why it is necessary to recruit schools to participate in the assessment. He requested clarification of the purpose and benefits of the NAEP. Ms. Peterson noted the Legislature currently requires testing at grades 4, 8 and 11. The nationally normed Comprehensive Test of Basic Skills (CTBS) is administered to students in grades 4 and 8. Not all states administer the CTBS statewide, Ms. Peterson pointed out. She estimated only 10 to 12 states require this test statewide. On the other hand, Ms. Peterson stated, NAEP involves 35 to 37 states and reports on student performance statewide. It would enable the State Department of Education to have data comparable to other states that participate in NAEP. Continuing, Ms. Peterson said regarding the random sampling aspect of NAEP, because of Nevada's relatively small population the department has been assured by its Planning Research and Evaluation director that students in most of the state's schools will be tested. While the NAEP does not test every single student in each grade, she stated, it would provide data to compare students in Nevada with students in other states, in terms of performance. Of all the proficiency tests, NAEP is the one most widely administered throughout the nation, Ms. Peterson said. Senator Rawson inquired regarding the possibility of testing all students, but random sampling the results; this would enable the state to compare all of its students. Ms. Peterson replied NAEP compares only on a statewide basis and does not report individual results. Ms. Botts explained the CTBS data is used in the school-by-school accountability reports, and it is essential the test be nationally norm-referenced. NAEP, on the other hand, merely provides a "picture" of how Nevada compares to other states; there is no way to use the test data for by-school or by-district accountability. Further, Ms. Botts said, NAEP does not test every subject every year, so it does not provide a continuing record. Senator Rawson asked if the department is recommending the state have both the CTBS and the NAEP. Ms. Peterson replied yes. She said the CTBS provides student- by-student data that can be used in the accountability report, while NAEP enables nationwide comparisons. In the past, she pointed out, members of the Legislature have often questioned the State Department of Education as to why Nevada is not included in the NAEP results, and the reason is the state has not participated in the NAEP testing. Ms. Peterson said the department is recommending the state participate in the NAEP. Senator Raggio inquired how many states currently participate in NAEP. Ms. Peterson revised her earlier estimate of 35-37 states to approximately 45 states. She offered to obtain the exact number. She said Nevada is one of only a few states that have not participated in NAEP throughout the years, which is why the question always arises as to why Nevada's scores and comparisons with other states are not included in the NAEP reports. The senator asked the source of the questions. Ms. Peterson said when the NAEP reports have been released in the past, questions have been asked even by legislators as to Nevada's ranking and scores. Senator Raggio requested further explanation of the need for this particular test. Ms. Peterson responded the NAEP is seen as a way to put in perspective the performance of Nevada's students and to be able to compare their performance with that of students in other states. It is one of the few mechanisms in place that involve participation of most states in the nation, she added. Senator Raggio sought further clarification as to the differences between the norm-referenced (CTBS) tests and the NAEP, and why NAEP is needed. Ms. Peterson said the CTBS is administered and reported on a student-by-student basis, and this information is used in the department's accountability report to indicate how Nevada's students are doing. The NAEP tests are random-sample tests and report overall how the state's students are doing statewide, which can be used for comparison with other states. The NAEP, which facilitates state-by-state comparisons, is simply a different way of reporting on student performance. Senator Raggio continued to question the need for the NAEP. He said the overall, norm-referenced testing currently used by Nevada and other states has far more validity than a random-sampling test. Ms. Peterson said the NAEP is another measure of student performance and contains some elements not found in the CTBS. Senator Coffin requested this budget be held for further study and clarification by the State Department of Education. Assemblywoman Tiffany asked about the inclusion of $30,000 in FY 1996 for data analysis and reporting. Ms. Botts said the department has not obtained a final answer from NAEP as to payment of the costs for these procedures. She pointed out that most of the cost of this program is associated with hiring a contractor to coordinate the state's participation rather than for the participation itself. The $52,875 in FY 1996 includes$15,000 for hiring a contractor and $30,000 in case funds are needed to cover data analysis and reporting costs. Ms. Tiffany suggested the person within the state education system already designated as testing coordinator could handle the responsibilities associated with coordinating the NAEP program. Ms. Botts said she has spoken with the director of the Nevada Proficiency Testing Program, who has indicated he would be unable to assume the additional responsibility of coordinating the state's participation in NAEP. In further questioning Ms. Tiffany asked if the data collected from testing and then compiled in reports are ever used to assess and modify existing programs. Commenting on the current demand for data, she said the data is needed, but its value lies in the way it is used. Responding, Ms. Peterson said this is an important issue and was part of the rationale for including in the accountability bill [enacted in the 1993 legislative session....] that does require school districts to examine the data that has been reported, then report what they will do to improve based on the findings in the accountability report. She said the accountability law as it was written in 1993, and as it is being revisited during the current legislative session, is designed to require schools and districts to examine the data and report to their constituents what they will do to improve their programs based on that data. Ms. Peterson stated, "We have a long way to go." Ms. Tiffany remarked there does not appear to be adequate coordination "on all of this testing, all of this accountability, all of this reporting, and what the outcomes should be from that." She questioned the value of Nevada's participation in NAEP when the coordination and means of utilizing the data are not in place. Senator Rawson requested the subcommittee be furnished a copy of the "dropout report." Ms. Peterson agreed to supply the information. Senator Rhoads asked what is entailed in "recruiting of schools." He raised the possibility the scores might be slanted in a particular direction by recruiting the "right" schools or the "right" students. Ms. Peterson responded that participation would occur through random sampling. She indicated the term "recruiting" is inappropriate. This budget was held pending further information and consideration. Educational Personnel Testing - Page 249 Ms. Botts explained the Governor is proposing this budget account be abolished and the balance of test fees be transferred to the Teacher Education and Licensing budget account (page 254). The fees would be segregated in a separate category in that account, "Test Costs." The source of funding for this account is a $5 fee paid by each examinee who takes a National Teacher Examination and requests the scores be sent to Nevada. Ms. Botts noted the department has been repaying the General Fund for an appropriation made in 1989 for validation of the competency tests, according to the payment schedule outlined in a letter of intent. ASSEMBLYMAN DINI MOVED TO RECOMMEND APPROVAL OF THIS BUDGET AS RECOMMENDED BY THE GOVERNOR. ASSEMBLYMAN ALLARD SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Teacher Education and Licensing - Page 251 Ms. Botts noted this budget contains the Professional Standards Commission and all teacher licensing activities. In the base budget, the Budget Division is suggesting that the licensing fees for all educators be deposited directly into this budget account instead of depositing these funds directly into the state General Fund. A proposed legislative measure, Assembly Bill (A.B.) 296, would enact the recommended change into law. Ms. Botts pointed out that if this budget is approved, with the licensing fees being placed in this budget, that amount (approximately $300,000 per year) would need to be removed from the General Fund as a revenue source. ASSEMBLY BILL 296: Revises provisions governing distribution of fees collected for issuance or renewal of licenses for teachers and other educational personnel. The other decision in this budget concerns whether or not the staff in the teacher licensing office should be increased by 3.25 full-time equivalency (FTE) positions as recommended in the Executive Budget, Ms. Botts continued. She said the Governor is recommending the new positions not be filled until January 1996. However, the busiest time for licensing is in the late summer months, Ms. Botts observed, and her recommendations are therefore based on a hiring date of July 1, 1995 rather than January 1, 1996. She said that while this would increase the General Fund appropriation by $50,000, the alternative of increasing teacher licensing fees by the corresponding amount would be difficult to implement on short notice. Referencing the recommendation in the base budget to deposit fees from educators' licenses into this budget, Senator Raggio asked what would be gained by this action since the Teacher Education and Licensing budget must still be subsidized by the General Fund. Ms. Botts indicated it was anticipated in the budget formulation process the fees from the educators' licenses could be used to fund desired changes in the teacher licensing system. Senator Raggio inquired as to the amount of the fee presently paid by applicants for an educator license. Ms. Botts replied the cost of a 5-year license is currently $50. She said data provided previously by the Budget Division indicates the fees are fairly low relative to similar fees paid by other professionals. Senator Raggio requested that an analysis of the current fee situation, to include the date the fees were last increased and the total amount of revenue generated from this source, be performed prior to subcommittee action on this budget. Senator Rawson agreed this budget should be held temporarily. Assemblywoman Chowning said if the reason for increased staff in the teacher licensing office (M-200) is to eliminate the backlog in the licensing of educators, the committee needs to know what the backlog is at present and how long it will take to resolve that problem. She indicated she does not support maintaining the new positions indefinitely. Senator Rawson instructed that the information requested by Mrs. Chowning be obtained for the committee subsequent to the next meeting. Senator Raggio inquired if, in addition to the backlog in the teacher licensing offices, the request for the additional position is also predicated on the extent to which the class size reduction program (CSR) is expanded. Responding, Ms. Peterson said in the previous year, the department licensed approximately 1,000 new teachers, and there was no expansion of CSR. She said the positions are necessary to address the backlog and to more adequately keep pace with the growth the education system is experiencing in Nevada. Reversing the order of his question, Senator Raggio said he assumes implementation of third grade CSR was anticipated when the budget was constructed. Pointing out that a substantial number of new teachers would be required should the CSR expansion be approved, the senator asked Mr. Hataway whether this budget is predicated on such an occurrence. Before responding to Senator Raggio's question, Mr. Hataway provided background information to address the issue involved. He said the Commission on Professional Standards in Education is one of 33 professional licensing boards in the state, and it is the only one that is not totally self-supporting with fees generated from the industry that is regulated. The Budget Division views A.B. 296 as the first logical step in making the commission self-supporting. Mr. Hataway said a survey was conducted of all occupational licensing boards, and the results indicate this board has the lowest fee structure in existence. With only minor fee increases, he stated, the commission could meet the funding obligations in this area. With regard to third grade CSR, Mr. Hataway continued, the budget recommendations pertaining to the request for additional staffing were based on the premise the teachers would contribute to at least the continuation of their share of the cost. He said the only time he has seen material lags in issuing licenses is when CSR is expanded. He further stated the new positions would help to address the situation resulting from third grade CSR, should the Legislature decide to fund that program, but would probably not totally eliminate the lag in issuance of licenses. Senator Raggio pointed out the additional staffing is only recommended for the "out" year. Mr. Hataway replied he recommended starting the new positions on January 1, 1996 for two reasons: (1) to give the commission an opportunity to implement its new fee structure before staffing decisions were made, and (2) because the Teaching Licensing Analysts are professional positions, it might take some time to fill these positions; by the time they were hired, the 1995-1996 year would be coming to an end. Mr. Hataway said the January 1, 1996 starting date is based on allowing time to prepare the commission and the staffing level for the 1996-1997 year and to implement the new funding mechanism, should this recommendation be approved. This budget was held pending further information and consideration. Education Support Services - Page 257 Ms. Botts explained the technical adjustments in this budget reflect changes in the statewide cost allocation plan and the cost allocation plan for the attorney general's office. Regarding decision unit E-126, Ms. Botts said the Budget Division has determined and stated in a letter that, in view of these changes, there are now funds available for the State Department of Education to purchase its $48,887 departmental computer network in the first year of the biennium. Decision unit E-125 concerns whether or not the Deputy Superintendent for Administrative and Fiscal Services position should be restored. (This question was addressed in the committee's consideration of the Education State Programs budget, page 165.) Explaining the adjustments pertaining to indirect costs, Ms. Botts said after the budgets of the department are finalized, the rent costs, cost allocations for the state's cost recovery plan and the attorney general's office, fringe benefits and insurance costs will be recalculated and distributed throughout the budgets. She requested permission to make the adjustments at that point. SENATOR RAGGIO MOVED TO RECOMMEND APPROVAL OF THIS BUDGET IN ACCORDANCE WITH STAFF RECOMMENDATIONS. SENATOR COFFIN SECONDED THE MOTION. Senator Rawson referenced a note he had made during previous hearings on this budget regarding whether to institute a formula to fund this budget from the 17 school districts. Ms. Botts noted the account draws heavily from federal funds. All budgets within the department, most of which are federally funded, are assessed for the costs of operating central services such as accounting and personnel. Ms. Botts indicated it would be preferable to draw from the federal funds rather than to charge the school districts. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Student Incentive Grants - Page 263 Staff remarks on this budget are that the state match for this program is provided from higher education's share of estate tax which is transferred from the university system's Special Projects Account (page 289). The amount transferred should equal $230,818 in FY 1996 and $232,059 in FY 1997. SENATOR COFFIN MOVED TO RECOMMEND APPROVAL OF THIS BUDGET AS RECOMMENDED BY THE GOVERNOR. ASSEMBLYMAN HETTRICK SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Drug Abuse Education - Page 267 Ms. Botts explained the staff notations for this budget that the transfer to ESEA Chapter 1 should equal 10 percent of payroll costs of the Federal Programs Director and his clerical support. A letter of intent was also proposed which would suggest that performance indicators for this account focus on outcomes. The letter would further specify the agency should draw from findings of surveys of students to measure changes in reported use of drugs or alcohol. Assemblywoman Evans inquired if this is the drug abuse program that has been recommended by Congress for elimination. Ms. Peterson said the House of Representatives has recommended elimination of this program, but the recommendation is now being reconsidered by the Senate. While the possible restoration of some of the funds has been reconsidered, it is not known what the level of funding will be if the funds are, indeed, restored. Ms. Evans inquired if the department has developed an alternative plan in the event the program is eliminated. Ms. Peterson indicated the department does not have the information required to develop an alternative plan at this time, but will devise such a plan once the information becomes available. ASSEMBLYMAN HETTRICK MOVED TO RECOMMEND APPROVAL OF THIS BUDGET AS AMENDED BY THE RECOMMENDATIONS OF STAFF. ASSEMBLYWOMAN EVANS SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * School Health Education - AIDS - Page 271 In explanation of the adjustments made by staff to this budget, Ms. Botts said that, as in the previous budget, there is an adjustment in this account of the amount transferred to ESEA Chapter 1 to help fund the Federal Programs Director and his clerical support. To balance the account, the amount budgeted for instructional supplies has been increased. A possible letter of intent would specify the performance indicators for this account should focus on outcomes, and that the agency should draw from findings of surveys of students that measure changes in students' knowledge about health issues and acquired immunodeficiency syndrome (AIDS), changes in their behavior and in the incidence of AIDS in the student population. ASSEMBLYWOMAN EVANS MOVED TO RECOMMEND APPROVAL OF THIS BUDGET AS AMENDED BY THE RECOMMENDATIONS OF STAFF INCLUDING A LETTER OF INTENT (EXHIBIT C, PAGE 27). ASSEMBLYMAN HETTRICK SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Job Training Partnership Act - Page 275 Ms. Botts said a decision is required in E-250 regarding whether the half-time Grants and Projects Analyst I position should be increased to full-time. As stated in the summary of staff recommendations, the State Department of Education justifies the increase to full-time "based upon the increasing complexity of federal regulations pertaining to grants. The previous incumbent averaged 12.65 hours per week of overtime in FY 1993 and 10.04 hours per week in FY 1994. The program's half-time Management Assistant I earned 64.50 hours in FY 1994 but has accumulated 109.25 hours in FY 1995, largely because the Grants and Projects Analyst's job is vacant." The staff recommendation supports the department's request to increase the half-time position to full-time. Ms. Botts said Barbara Weinberg, Director, Department of Personnel, has verified the need for a full-time Grants and Projects I Analyst position. SENATOR RAGGIO MOVED TO RECOMMEND APPROVAL OF THIS BUDGET AS AMENDED BY THE RECOMMENDATIONS OF STAFF, INCLUDING INCREASING THE HALF-TIME GRANTS AND PROJECTS ANALYST I POSITION TO FULL-TIME. SENATOR COFFIN SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * Ms. Botts presented a draft letter of intent for the committee's consideration. The letter would direct the State Department of Education to develop, over the 1995-1997 biennium, a planning, research and evaluation budget account consolidating the activities of that branch and tapping into federal funds that are available to help fund data collection, analysis and assessment. Ms. Botts said it is her understanding there are funds available in Chapter 2, special education and occupational education programs, for such activities, and it is suggested the federal funds from this source could be used to enhance the planning, research and evaluation efforts of the department. SENATOR RAGGIO MOVED THAT AN APPROPRIATE LETTER OF INTENT BE SENT TO THE STATE DEPARTMENT OF EDUCATION IN ACCORDANCE WITH THE ABOVE RECOMMENDATION BY STAFF. ASSEMBLYMAN HETTRICK SECONDED THE MOTION. ASSEMBLY: THE MOTION CARRIED UNANIMOUSLY. SENATE: THE MOTION CARRIED UNANIMOUSLY. * * * * * The meeting was adjourned at 10:55 a.m. RESPECTFULLY SUBMITTED: Sue Parkhurst, Committee Secretary APPROVED BY: Senator Raymond D. Rawson, Chairman DATE: Assemblywoman Jan Evans, Chairman DATE: Assemblyman Lynn Hettrick, Chairman DATE: Senate Committee on Finance Assembly Committee on Ways and Means Joint Subcommittee on Human Resources/K-12 April 11, 1995