MINUTES OF THE JOINT MEETING OF SENATE COMMITTEE ON FINANCE AND ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session February 14, 1995 The joint meeting of the Senate Committee on Finance and the Assembly Committee on Ways and Means was called to order by Vice Chairman Raymond D. Rawson, at 8:00 a.m., on Tuesday, February 14, 1995, in Room 119 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, Vice Chairman Senator Bob Coffin Senator Dean A. Rhoads ASSEMBLY COMMITTEE MEMBERS PRESENT: Mr. Morse Arberry, Jr., Chairman Mr. John W. Marvel, Chairman Mrs. Jan Evans, Vice Chairman Ms. Sandra Tiffany, Vice Chairman Mr. Dennis L. Allard Mrs. Maureen E. Brower Mrs. Vonne Chowning Mr. Jack D. Close Mr. Joseph E. Dini, Jr. Mr. Thomas A. Fettic Ms. Chris Giunchigliani Mr. Lynn Hettrick Mr. Bob Price Mr. Larry L. Spitler SENATE COMMITTEE MEMBERS ABSENT: Senator William J. Raggio, Chairman (Excused) Senator Lawrence E. Jacobsen (Excused) Senator William R. O'Donnell (Excused) Senator Bernice Mathews (Excused) STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Mark Stevens, Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Jeanne L. Botts, Program Analyst Marion Entrekin, Committee Secretary OTHERS PRESENT: Mary Peterson, Superintendent of Public Instruction, State Department of Education Douglas C. Thunder, Director, Fiscal Services, State Department of Education Don Hataway, Chief Assistant Budget Administrator, Budget Division, Department of Administration Keith W. Rheault, Ph.D., Director, Occupational and Continuing Education, State Department of Education Dede Goodnight, President, Nevada Association of School Board Henry Etchemendy, Executive Director, Nevada Association of School Boards Mike Alastuey, Assistant Superintendent for Business, Clark County School District Brian Cram, Ph.D., Superintendent, Clark County School District Doug Sever, Business and Financial Services Administrator, Washoe County School District Denise Nowacki, Nevada State Parent Teacher Association Anne Macquarie, Concerned Parent Barbara Clark, Representing Donna Proper, Concerned Parent Mary Nebgen, Superintendent, Washoe County School District Rose Rowe, Concerned Parent Katharine T. Hawley, Concerned Parent Debbie Cahill, Assistant Executive Director, Nevada State Education Association Al Bellister, Organization Specialist, Nevada State Education Association Wade Johnson, Comptroller, Lyon County School District Nat Lommori, Superintendent, Lyon County School District, D. Don Francom, Ph.D., Superintendent, Lincoln County School District Edward Murkovich, Superintendent, Storey County School District Daniel Leck, Carson City School Board Carol Andrews, Substitute Teacher, Douglas County Rose McGuire, Principal, Desert Heights Elementary School Janine Hansen, State President, Nevada Eagle Forum Sherri Lakin, Concerned Parent Susan Balkenbush, Concerned Parent Bob Raney, Community Partnerships, Incorporated Sheila Leslie, Community Partnerships, Incorporated Due to the funeral of Senator B. Mahlon Brown, who had served in the Nevada State Legislature during the period 1951 - 1976, Senator Rawson excused a number of the members of the Senate Committee on Finance from today's hearing. Mary L. Peterson, Superintendent of Public Instruction, State Department of Education, pointed out in the audience today were members of the State Board of Education, local school district superintendents, and local school district trustees, many of whom would also be testifying before the committees. Prior to discussing the budgets for the State Department of Education, Ms. Peterson stated she would highlight, by use of an overhead projector, some pertinent facts about the condition of some of Nevada's children. She thought it important to recognize the influence poverty, family structure, preschool access, ethnic and language differences, and violence have on children. Copies of the overheads (Exhibit C) containing statistics secured from the National Center of Education Statistics and the United States Bureau of the Census, were distributed to the joint committee members. Ms. Peterson continued her testimony by referring to the overheads, but stressed the statistics accurately describe the students who attend Nevada schools, and are the children teachers and educators throughout the state must deal with on a daily basis. Ms. Peterson circulated Exhibit D, a copy of the Nevada State Board of Education's strategic plan, which she said would be addressed during discussion of the department's budget. She referred to page 17 of Exhibit C, and read the seven top budget priorities of the Nevada State Board of Education to the committees. Ms. Giunchigliani disclosed for the record that she is a special education teacher in the junior high-school level, and is on an unpaid leave-of-absence from the Clark County School District. She also indicated she will be discussing the State Department of Education budgets, and will be voting on relevant issues pertaining to education as required. Mrs. Chowning mentioned that many of the students in some of the schools in her district, as well as surrounding districts of Clark County, have close to 90 percent of the school's enrollment with limited proficiency in English. She asked that information be provided to the joint subcommittee on K-12 education of the percentage of elementary school children that fall into this category in Clark County as well as the other school districts throughout the state. Ms. Peterson answered she would hesitate to give the percentage off the top of her head, but said over the last 5 years the population of the state has more than doubled. As of a count made in the fall of 1994, there were more than 20,000 students with limited English proficiency in Nevada. However, she will provide the exact percentages to the committees. Senator Rawson remarked other grade levels were required to maintain an acceptable pupil to teacher ratio while class-size reduction was incorporated, but he has seen the ratio change by a full person, maybe more. Ms. Peterson acknowledged the ratio has increased by a small amount. She suggested some of her colleagues from the local school districts may want to respond to the question. In order to accommodate individuals from various school districts wanting to testify regarding the Distributive School Account (DSA) and Class-Size Reduction (CSR) programs, Ms. Peterson asked if budget discussions pertaining to those programs could begin on pages 171 and 177 of the Governor's Executive Budget. Senator Rawson agreed to the suggested departure from the Agenda (Exhibit A). Distributive School Fund - Page 171 Class Size Reduction - Page 177 Douglas C. Thunder, Director, Fiscal Services, State Department of Education, clarified he would discuss both the DSA and CSR budgets so that the various comments from visiting educators can be addressed to both items at the same time. By use of the overhead projector, Mr. Thunder reviewed with the committees Exhibit E, containing various charts and graphs and other material involving governmental sources of school revenue, and school revenue by major categories, for kindergarten through twelfth (K-12) grade education. The explanation he provided to the committees of these charts and graphs is contained on pages 1 - 4 of Exhibit F. (Original is on file in the Research Library). Using prepared text on pages 5 - 15 of Exhibit F, Mr. Thunder commented on the major issues and the key highlights of the DSA. He said the department will go into greater detail on many different segments of the DSA in committees and subcommittees on both sides of the Legislature. Mr. Marvel noted the department's investment income for Fiscal Year 1995 - 1996 is projected to be less than in Fiscal Year 1994 - 1995, and asked the reason for the decline. Mr. Thunder could only assume it was due to a downturn in interest rates. Jeanne L. Botts, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, pointed out the Investment Income line reflected in the Governor's Executive Budget on page 172 shows the 1994 actual was $3.2 million, but the Governor is recommending an increase to $3.4 million which will be a slight increase. Ms. Giunchigliani asked for clarification regarding breakouts in the budget for the department, and suggested the information could be provided when the joint subcommittee for K-12 education meets at a later date. She asked: 1. How are pupil-teacher ratios calculated? Are all certified personnel included or only classroom teachers? 2. How are the average per-pupil expenditures for Nevada and the United States calculated? Is the average per-pupil expenditure for each county in Nevada available? Nevada has a wealth equalization formula that not all states have. 3. What is the per-pupil allocation of state funding per county? 4. What is the number of special education units allocated to each county and how many of those units are designated for gifted and talented students? 5. How many kindergartners at risk of failure are served by the CSR program? 6. What would be the budgetary impact of adjusting the basic support for a second count of pupils at mid-year versus the count taken at the end of the first school month? 7. How much revenue does each county receive from the 25-cent and 50-cent portions of the property tax for school operations, and what amount comes from the tax on net proceeds of minerals? 8. Where is revenue from penal fines found in the budget? 9. Upon what percentage of growth is the budget based? 10. What is the actual revenue from penal fines? A Legislative Counsel Bureau audit shows that some of the revenue from fines may actually have been diverted from the Permanent School Fund. Ms. Botts answered the growth was 6.17 percent in the first year of the biennium and 6.36 percent in the second year of the biennium. She also said the penal fines all go to the permanent school fund which cannot be spent, only the interest earned on the fund is spent. Ms. Botts referred to the Investment Income line in the Governor's Executive Budget which reflects revenue to the DSA of about $3.4 million. Mr. Spitler recalled in the early 1980s a decision was made to combine all of the education funding provided for adult education and penitentiaries into one account and to place it in the department's budget. He said the action should not have taken place. Mr. Spitler referred to the department's adjustments to their Base Budget shown on page 173 of the Governor's Executive Budget, and noted another movement of expenditures. He requested the costs for the High School Diploma Program be broken out to show the costs per student in adult education, and the costs per inmate under the prison program. Additionally, he asked that information be provided to the joint subcommittee to explain how the formula for funding the High School Diploma Program was arrived at, and how the budget was consequently planned. Mr. Spitler said he is concerned the budget proposes rolling together the High School Diploma Program with the Prison Diploma Program into one account. Due to the growth in prison population he believes the joint subcommittee for K-12 education would want to have the figures compiled separately for two accounts, and not collectively as one large account. Mr. Spitler requested the funding information for the High School Diploma Program and the Prison Diploma Program be provided to the joint subcommittee as separate figures. Mr. Spitler asserted programs that compete with K-12 funding should not be shown within the department's budget due to the significance of the funding amount involved. He said the committee's first priority should be the K-12 budget. Mr. Thunder said there was not an intent by the department to roll the aforementioned accounts together, except to combine them to arrive at the total costs. Otherwise, the accounts remain separate. He pointed out under Expenditures on page 173 of the Governor's Executive Budget, the funding is shown separately for the two programs. In the last few years, the department has isolated the prison programs and the regular adult programs in separate categories, and it is their intention to continue to do so. Mr. Spitler pointed out that is why he wished to call this fact to the attention of the Budget Division, because the combined totals are shown in the Governor Recommends portion of the budget. Mr. Spitler commented: The other reason I want this looked at very carefully, and this is another area that those of us on that (education) subcommittee will look at, there is a new area to go into the Inmate Store Fund to fund additional reading programs, areas like that. I think what happens is when you are not looking at the budget you forget that in all of these other budgets, a few hundred thousand here and a few hundred thousand there, and pretty soon you are talking about a couple of million, that may impact what you do here with those dollars when there seems to be another source to fund some of these things. Referencing Enhancement Category 251 (E-251), Mr. spitler asked the department to provide the joint subcommittee with their calculations for the Lovelock prison program. Mr. Marvel asked if the budget figures for the Lovelock prison are predicated on an opening in October 1995, because there is a possibility the facility may open sooner. Mr. Thunder stated the department did make calculations based on an October 1995 opening. However, if the prison opens sooner, he understands an adjustment would have to be made to the budget to allow for additional staffing and other costs. Ms. Giunchigliani asked if E-251 indicates the amount allocated to Pershing County is to be factored into the adult High School Diploma Program, or will it be an additional amount. She explained school districts usually supply their own personnel. Mr. Thunder replied the Pershing County School District would be responsible for the Lovelock program, and the amount shown in the E-251 category is solely for the inmate program at the prison. Mr. Thunder resumed his testimony of the DSA by reading from pages 14 and 15 of Exhibit F. Senator Rawson asked for a breakout, by school district, of the amount allocated per pupil for textbooks, library books and materials, and instructional supplies. Additionally, he asked that a detailed explanation be provided for each year of the coming biennium of what the department considers a shortfall in funding for special education. Senator Rawson suggested the department discuss with staff and the school boards whether or not they would support a Budget Stabilization Account for the DSA, specifically the ending fund balance that reverts to the state. Ms. Giunchigliani commented she has proposed a bill to require mandatory kindergarten attendance, and asked the department to provide the number of school districts that now provide kindergarten education, and the total number of pupils enrolled in kindergarten classes. She remarked the state has an obligation to fully fund education, but a review of the budget revealed the state funds less than 50 percent of the actual per pupil account. Mr. Spitler asked the department to provide additional information on Enhancement Category 710 (E-710) for the replacement of equipment. He also asked what additional expenses the department requested that were not recommended by the Governor for funding. Mr. Thunder replied the way the budget documents were compiled, a salary increase for the department's staff was also included in the unfunded amount, even though there was another salary increase involved. He stated he would provide the details to the subcommittee. Senator Rawson asked the department to provide to the subcommittee a breakout of the number of computers provided to the schools. Mrs. Evans noted there is a $29 million one-shot appropriation for the local school districts under the line item Operations and Equipment, part of which is to meet locally identified needs for classrooms, and library. She indicated concern that some of the appropriation will be used for school staffing and operating on an ongoing basis. She pointed out one-shot appropriations are not to be used for ongoing expenses. Ms. Peterson said the $29 million is designated for locally identified needs for classrooms, library, school staffing, operating, and equipment expenses. The department will support the notion the school districts do need the flexibility to identify their own needs. She suggested the local school district representatives should address how they intend to use the one-shot appropriation. Mr. Marvel asked, "What do you mean by staffing? I have the same concern. One- shot appropriations should not be used for ongoing operations." Senator Rawson requested the issue be carefully discussed at subcommittee hearings. Don Hataway, Chief Assistant Budget Director, Budget Division, Department of Administration, stated the Budget Division has received constant feedback from individual school districts regarding their needs, and each district's needs are different. The Budget Division consequently determined the decision regarding how funding should be spent needed to be placed at the local district level. He said it is not the intent of the Governor to change the rules of budget preparation. The Budget Division recommended the funds go into the School Improvement budget account in the form of a one-shot appropriation to be allocated to the school districts in the same manner as the DSA, wherein Clark County would receive approximately 60 percent, Washoe County 20 percent, and the remaining school districts the other 20 percent. Senator Rawson said the committee's concern is obvious. If ongoing programs are built with one-shot appropriations, revenue would have to be increased in the future. Mrs. Chowning asked for a breakout of funding so the subcommittee may review the amount being allocated for programs such as Limited English Proficiency and School to Work. Mr. Thunder returned the committee's attention to page 16 of Exhibit F from which he resumed his testimony. Mr. Allard asked if there are statistics available that would reflect the positive outcome of the CSR program. Ms. Peterson said in 1993 there was an evaluation study completed, and another study is now in progress. She stated the department would share the results of the studies in subcommittee hearings. Mrs. Brower asked if the department will be preparing performance indicators to be ready sometime in May 1995 concerning the CSR program. Ms. Peterson said there is an ongoing evaluation of CSR that includes achievement test scores and surveys from parents which may be available in May 1995. Mr. Allard asked the department to submit statistics on similar programs being conducted in other states. Ms. Peterson said a premier study of the student-teacher achievement ratio (STAR) was completed in Tennessee and is called The Tennessee STAR Study or Project STAR. She thinks some of the individuals who are prepared to give testimony on CSR will touch briefly on the results of Project STAR. The difference between what was done in Tennessee, and what is being done at the present time in Nevada, is that in Tennessee a tightly controlled study was conducted wherein they looked at a number of variables over a longer period of time. Ms. Peterson stated she will provide a written summary of Project STAR to the subcommittee for K-12 education. Senator Rhoads said the CSR program in the rural districts has created a funding problem. In Elko County alone, he estimates it will cost the state about $1 million to build classrooms or buildings. He understands the report that will soon be released by the department does not show any measurable increase in the performance of the students in the CSR program. He asked for comments. Ms. Peterson said the CSR study that was completed and released in 1993 indicated the achievement test scores did not go up in huge increments, but there was some improvement. She said if all of the social factors that involve student performance are studied, some positive impact of CSR can also be noted. Mr. Allard asked if there are statistics available for the subcommittee's review regarding the effects of mandatory kindergarten and preschool attendance. Ms. Peterson said regarding the preschool issue, she will provide the subcommittee with a copy of an excellent study done in Michigan from the early 1960s where the performance of children compared to their peers was followed over a period of years. She said the particular study may not include mandatory kindergarten attendance, but she will provide other information the department may have concerning the issue . Of interest to the subcommittee, Senator Rawson said there has been a lot of discussion on the issue of whether problems are compounded in the school districts by continuing with CSR, and whether or not other programs should be reviewed. Therefore, he asked the department to be certain to provide the joint subcommittee on K-12 education with very comprehensive reports. Ms. Giunchigliani remarked: I think we have to recognize we cannot always quantify children and because the legislative body did not fund third grade (CSR) the last time around and left a 2-year blip in this, it is going to be very difficult to measure some of the achievement score increases and the benefits that are there. I would like to know what effect that may have had for not having, if you wanted a controlled group of some sort, those first, second...and then those kids were stopped at the third grade level, fourth grade level....Even though you are dealing with a class-size average in the state, you can go to any kindergarten class and I will tell you right now you will see from 36 to 38 kids in a classroom. You can even go into your CSR in the elementary grade levels...because we still continue to divide the number of certified people on that campus by the number of individuals. That means you are counting your counselors, potentially your administrators....It really is skewed and even though we have a goal of class size, we have never achieved that amount for even first or second grade. I think all of those factors have to be taken into consideration. Senator Coffin said he was startled to see a story in the Las Vegas Sun dated February 10, 1995 written by Cy Ryan (Exhibit G) that indicates a new report was released that says smaller class sizes do not lead to increased academic performance in Nevada's elementary and high schools. He remarked he did not receive a copy of the report. Ms. Peterson answered the report referred to was done in 1993 at the request of the Legislature, and required all of the school districts to report by school and by district on certain data elements. The department referred to the report as the Accountability Report. Copies will be provided to all of the joint committee members right away. The report addressed all of the data elements required, and the analysis did find that class size impacted achievement in a radical sort of way. However, Ms. Peterson said this was not the major finding of the Accountability Report. Ms. Botts pointed out the information the committee members were given that the statewide average pupil-teacher ratios in both the first and second grades are 15.9 to 1 did not include counselors and all licensed individuals, those are only classroom teachers. In kindergarten, the pupil-teacher ratio is 23.5 to 1. The pupil-teacher ratio in third grade, which currently receives no funding, is 26.6 to 1. Mr. Close said even though he is not on the joint subcommittee for K-12 education, he would appreciate the department providing the rest of the joint committee members with copies of all documentation requested today. Senator Rawson said that prior to closing any of the budgets for the Department of Education, the committees would like to see their performance indicators. He encouraged the department to place priority on providing these performance indicators before May 1995 in order to address some of the concerns that were brought out as a result of an audit done by the Legislative Counsel Bureau (LCB) in 1993. Keith W. Rheault, Ph.D., Director, Occupational and Continuing Education, State Department of Education, responded the department has developed a response to the LCB audit report and said the time line dealt with the requirement they provide the information no later than June 30, 1995. The department was asked to develop performance indicators that would actually measure and reflect outcomes. He said it will be difficult for the department to have the information available in May, but emphasis will be placed on the effort. In looking ahead he envisions 90 percent of the performance indicators now in place will be changed or be different. Ms. Peterson said the LCB audit also recommended the department's performance indicators should fit into the strategic plans of the Nevada Association of School Boards. She mentioned the department agreed with the recommendation, but pointed out it will also be a time-consuming effort. Senator Rawson said there are two aspects to the CSR program that have been firmly stated to achieve optimal results. One is to measure differences, and the other to properly train the teachers involved. He advised the committees to look carefully at these issues. Ms. Peterson agreed, and said in the first year of the CSR program, there was revenue made available for training for the teachers who would be in the program. However, there has never been funding allocated for evaluation purposes. Mr. Thunder continued his testimony regarding CSR using prepared text. Senator Rhoads asked if most of the school districts throughout the state feel they have adequate funding for CSR programs, or will they use team teaching as an alternative method. Mr. Thunder answered the department is aware of the configuration of the various classes throughout the state, and is also aware of the problems the districts have in providing classrooms. For the reason of not having enough classrooms of sufficient size, they have had to double up and have 30 to 32 children to two teachers in a classroom. Mr. Thunder believes the percentages have been dropping in configuration numbers, but pointed out if the third grade is added, most of the students would have to be in a team-teaching situation due to the lack of available classrooms for the CSR program. Dede Goodnight, President, Nevada Association of School Boards, thanked the school board members in the audience who traveled from across the state to show their support for education and their commitment to the partnership between the state and the local school boards. Ms. Goodnight said other school board presidents from across the country have expressed envy of Nevada's equalized funding plan for education, and the CSR program. She remarked the Nevada Association of School Boards also favors CSR, but only if sufficient funding can be provided for a pupil-teacher ratio of 16 to 1. Senator Rhoads asked if the Nevada Association of School Boards would still support the CSR program if a bond issue would have to be passed to build additional classrooms to accommodate the program. Ms. Goodnight answered as an association they wish to go on record in support of class-size reduction, but said there are different opinions within the school boards about CSR. She commented bond issues have been passed in Washoe County, and the schools have been designed to accommodate CSR. As a result, team teaching has decreased and single-teacher classrooms have increased. She said she could not speak for the other school districts in the state, but the team teaching efforts in Washoe County schools have been beneficial. Henry Etchemendy, Executive Director, Nevada Association of School Boards, wished to defer any comments he may have in favor of testimony by qualified individuals from the school districts throughout the state. Ms. Giunchigliani referenced Exhibit G which stated there is evidence that pupils in classes with veteran teachers, or teachers with advanced degrees, perform better. She stressed team teaching would be more successful when those types of individuals can be grouped together to share ideas. Mr. Allard wished to know if it is felt throughout the school districts that team teaching is better than having one teacher in a small classroom environment. Ms. Goodnight responded both methods can be beneficial, but it depends upon the teacher. In general, Ms. Goodnight believes most parents prefer one teacher to 16 students. Mr. Allard asked how the school districts arrive at a determination to use team teaching as opposed to the traditional one teacher concept. Ms. Goodnight said the districts are constrained by funding and space, but if teachers want to team and have a good working relationship, they can do so. However, when a teacher feels more comfortable working alone, the districts try to keep the teacher- pupil ratio at 16 to 1. Mr. Allard summarized there is no definite plan. Mike Alastuey, Assistant Superintendent of Business, Clark County School District, distributed Exhibit H, Distributive School Account Issues, School Years 1995 - 1996 and 1996 - 1997, Clark County School District, from which he reviewed the major distributive school account issues, and exhibits supporting each, with the committees. Brian Cram, Ph.D., Superintendent, Clark County School District, stated education can solve many of the problems the state now faces. He illustrated Nevada's children are at risk as a group. Nevada ranks 50, or the worst in the nation, in teen suicides, juvenile incarcerations, and alcohol consumption; 49 in cocaine addiction, and teen pregnancy; 46 in violent teen deaths; 40 in no health insurance in the home; and 36 in single-parent homes. As a comparison, the State of Nevada ranks second in fire service and fourth in police service. He pointed out only two states in the nation provide less for K-12 education, and Nevada ranks 13 in K-12 funding which means 12 states have a higher taxing capacity. Dr. Cram expressed his disappointment in the decline of funding for education since 1992. He said funding for education has gone down even though problems have increased. He pleaded with the committees to provide the resources needed to properly educate the children of Nevada. Dr. Cram expressed his annoyance with the state's willingness to place revenue into a "Rainy Day" fund while children in public schools are in need. He inquired, "The problems are increasing. Why are the funds decreasing?" Mr. Arberry asked, "If we grant you all the funding you need to operate, do you believe we will see a turnaround in the system?" Dr. Cram replied: Let us try once. One time, one school. Give us the money and let us try. I do know statistics show there is a correlation between expenditure and achievement. For people to think it would not help to have lower class size, better technology, more resources and support for children....You are expected as my representative to have the vision to extend beyond the mass. If we depend on the mass to make all these decisions, to provide the leadership, we will be leaderless. That is why you are elected. Mr. Arberry asked Dr. Cram if the revenue prescribed by the Governor's Executive Budget is sufficient to meet the needs of the school districts, or would he propose another budget plan that would make the system work. Dr. Cram answered: I would propose that you first of all consider that the budget has been declining since 1992, and our need for money has not declined. As for the budget, I think you ought to reinforce it with some of the funds in the so-called Rainy Day account, and decide that we have some kids that need services now...not remove our ending fund balance. Mr. Arberry asked Dr. Cram to provide the committee with an alternative plan that would better describe the funding needs of the district, and Dr. Cram responded he would be happy to do so. Ms. Botts referred to Exhibit G and wished to correct the first issue that states local K-12 school sales taxes are being retained by the state and not by schools. Ms. Botts said the sales taxes are collected by the Department of Taxation, returned to the county of origin, and the school districts do receive the taxes. She pointed out when the Local School Support Tax (LSST) exceeds estimates, the need for state aid is reduced, and the savings occur in the DSA. Ms. Botts said the LSST is considered a local revenue under the Nevada plan. Ms. Giunchigliani asked if there is a need for adjustments to be made in the Nevada plan. She remarked: As a state we have an obligation to make policy. I think our state's policy has long been education will get what is left, and not what is right. I think we have chosen to be shortsighted in our funding revenues, and I say this as a school teacher who went back into the classroom 4 years ago....Dr. Cram is my boss and we may disagree on the ways to handle the problems, but I do not think we disagree on the fact we have children and we have an obligation to them....If we do not do prevention first, we will continue to do a disservice to our constituents. At some point I think we have an obligation as a state to fund education, and allow the local school boards who are elected by their constituency to decide how to spend the money. I think we need to allow the flexibility. Give them (the school boards) the funds and hold them accountable, but make sure they can address the needs of children in their particular area. You have to allow the local governments to have the opportunity to put the revenue where it needs to be, but we have an obligation to fund it...and I am not talking about salaries. I am talking about funding for education and the children's instructional time. I am not on the K-12 subcommittee, but I would hope this time around we stop doing what is shortsighted and we put the money where our mouths are. In response to Ms. Botts' remark, Mr. Alastuey stated what is intended by the issue as written in Exhibit G is the entirety of the additional dollar benefit is retained by the state not the school district, and it would have the same dollar effect as if directly collected by the state, because there is not an incremental benefit to the school district. In reference to Ms. Giunchigliani's comments regarding the Nevada plan, Mr. Alastuey commented: There are two features that might be considered. One in our estimation does not pose the greatest difficulty and that would be the distribution mechanism. The distribution mechanism over time has probably provided a reasonably equal opportunity...although a sparse one throughout all districts. However, the state and local relationship with respect to state imposed taxes that later result in deductions of state aid I think might well be examined. Mr. Spitler voiced his concurrence with the comments made by the school district, and said he is sponsoring legislation that will address the ending funding balance question. He stressed the revenue should be given to the local school districts who should then be held accountable for how the revenue was spent. Senator Coffin advised Dr. Cram the statement he made about using the Rainy Day fund is appealing to him, but he would approach doing so judicially. He explained the Rainy Day fund will not be available long, and should not be counted on to incur ongoing expenses. Senator Coffin stated he would support using the Rainy Day fund for one-shot appropriations to accommodate school construction for class-size reduction and growth. He also would support an increase in property taxes and a cut in sales taxes to inure it to the benefit of the schools. In reference to the Rainy Day fund, Dr. Cram indicated while he would like to see the state have some reserves to take care of emergencies, he thinks a portion should be used for the benefit of the schools. He remarked the state is accumulating a reserve at the expense of school funding, and feels part of the Rainy Day fund was produced by cuts in education funding since 1992. He asserted, "I do not think that is expeditious. Logically, it bothers me. It does not seem to make much sense. We have been given less per child since 1992, and it looks like the next 2 years will be the same." Mr. Allard voiced his agreement with Dr. Cram's comments, but remarked just raising funds per pupil will not be the answer. He said more innovative programs should be investigated, and said he is sponsoring legislation that will provide a tax incentive for businesses willing to hire high school juniors and seniors to get them interested in school again. He also remarked the state must balance the raise in taxes and spending to arrive at a proper level and not simply spend more without bringing revenue into the state. Dr. Cram reiterated his concern the state has placed a high priority on the funding for fire and police protection, but a low priority on the funding for education. He asserted the state should consider schools to be at least equally important as fire and police service. Dr. Cram stated, "I would like us somehow to be placed on at least the same level as streets and sewers. If that could happen, I would feel gratified as a school superintendent." Mr. Allard commented he believes the decrease in parent involvement in education has been a prime factor in the decline of education, and the harder the parents must work to pay taxes, the farther removed they are from the child-rearing equation. He said the state must contribute funds for education at a level prior to 1992 or higher. Dr. Cram said the fragmented traditional family is a concern, but to ignore what is produced by that condition will cost the state a lot more. He stressed: You have very modest funding. You have a very tough student population we are dealing with. Our performance tends to be above the national average in almost every category across the state....I think because we have had that condition we have taken it for granted in the past, and now conditions are worsening and some people are going to have to step forward and help us. Doug Sever, Business and Financial Services Administrator, Washoe County School District, testified on behalf of Washoe County and as a representative of the schools in general in the other counties throughout the state. He stated he wished to comment logistically about the budget itself, specifically in regard to the per-pupil support recommended by the Governor. Mr. Sever's remarks were from prepared text, Exhibit I. Senator Rawson requested the record reflect Mr. Price's arrival at 10:50 a.m. Denise Nowaski, Nevada State Parent Teacher Association, testified from written material (Exhibit J) in support of class-size reduction. Anne Macquarie, Concerned Parent, stated she has two children in elementary school in Carson City, and has spent a great deal of time in a first and second grade classroom environment as a parent volunteer. Ms. Macquarie indicated her support for team teaching methods, and the pupil to teacher ratio of 16 to 1. She stated team teaching has been of great benefit to her children, and expressed her hope the state will continue to place importance on the implementation of full class-size reduction. Barbara Clark, representing Donna Proper, Concerned Parent, read a statement (Exhibit K) to the committee written by Ms. Proper in support of the CSR program being used in the Carson City School District. Ms. Clark stated she is also a parent and classroom volunteer, and supports a pupil to teacher ratio of 16 to 1. Mary Nebgen, Superintendent, Washoe County School District, spoke in favor of the continuation of class-size reduction to the third grade level. Her presentation before the joint committee was taken from her drafted remarks (Exhibit L). Ms. Nebgen's testimony included comments concerning Tennessee's Project STAR, a 4-year study of class size in which classes with 13 - 17 students per teacher, 22 - 25 students per teacher, and 22 - 25 students per teacher with an aide, were analyzed. Senator Rawson stated he has experienced frustration regarding the CSR program due to the investments that have been made in terms of funding and time expended by the legislative bodies. He expressed his appreciation for the statistical material and information that was provided to the committees to offer additional insight into the success or failure of the program. Reading from written testimony (Exhibit M), Rose Rowe, Concerned Parent, commented she could not provide information from personal experience for a 16 to 1 pupil to teacher ratio, but indicated there are advantages for a 32 to 2 pupil to teacher ratio in a team teaching classroom environment. She urged the continuation of funding for CSR for first, second, and third grade classes in Nevada. Katharine T. Hawley, Concerned Parent, spoke in favor of complete funding for CSR in the next biennium. Her testimony was from prepared text (Exhibit N) written in corroboration with Joyce Burkholder, another concerned parent from Washoe County who supports funding for the CSR program. Debbie Cahill, Assistant Executive Director, Nevada State Education Association, said despite the fact Nevada's public schools are underfunded, and socio-economic factors have hampered many of the students' ability to succeed, the public schools of Nevada are doing a good job. For the information of the committee members, Ms. Cahill distributed Exhibit O, The Myth of the Instruction Gap, referencing flaws in a report prepared by the Nevada Policy Research Institute regarding the instruction gap. She concluded her testimony by reading from prepared text (Exhibit P). Al Bellister, Organization Specialist, Nevada State Education Association (NSEA), testified regarding the NSEA's position in support of increased funding for public schools in Nevada. He provided the committee with Exhibit Q and highlighted several issues outlining facts relating to the NSEA's views. Mr. Bellister concluded his testimony by stating the NSEA favors CSR, an increase in the number of public school counselors, increased funding for special education, changes in the funding formula for special education, and increased funding for public employee salary increases. Ms. Giunchigliani recalled in 1993 an issue arose concerning school counselors that were hired as a separate pool. She asked if the current budget addresses the issue of school counselors. Ms. Botts answered the Governor has recommended funding of approximately $1 million to continue funding 23 counselors that were hired in 1991. He is also recommending an additional $1 million to double the number of counselors to 46. The recommended funding is rolled into the DSA. Addressing his question to the NSEA representatives, Senator Coffin asked if there has been a relaxation of the requirement in Public Law 94-142 mandating states to provide special education. Specifically, he asked if that mandate will be changed or continued nationally, because it causes tremendous disruption in the state's budget. Senator Coffin opined many of the special education students are so badly handicapped they rarely rise above the level achieved at the beginning of the special education program. Ms. Cahill replied the NSEA is aware of discussions that have been taking place on Capitol Hill regarding unfunded mandates, and special education falls into the unfunded federal mandate category that has trickled down to the school districts from the state. She pointed out special education has not been funded at the state level. The NSEA is hopeful that the move to eliminate unfunded mandates will either focus attention on the regulations or create a funding amount at the federal level. Senator Coffin asked if there is data available from the NSEA or the United States Department of Education that would describe the levels of achievement for special education children in grades one through three. Ms. Cahill stated she would research to determine if statistical studies or recent information is available that addresses the level of achievement of special education children. Ms. Giunchigliani commented: If you are going to look at achievements....My kids do take the achievement tests so you would have them grouped and since ours are higher than the national norm, I would argue that we are doing a very good job in making sure those kids are functioning members of society, get a good job, and pay taxes back to the program. There is an additional factor...the forced inclusion of many of the children into regular classrooms long before they are ready. That is a local level issue. If you are going to look at the issue of special education I would urge us to look at that part of it as we would otherwise be doing an injustice not only to special education children, but to the regular education children who lose additional touch and time. I do think there should be some standardized testing....There are also achievement test scores available though Individual Education Plans (IEPs). Wade Johnson, Comptroller, Lyon County School District, said the rural districts do share many or all of the concerns that have been expressed to the committees by Mr. Sever of Washoe County and Mr. Alastuey of Clark County, and he emphatically stated the $29 million one-shot appropriation should be distributed among local school districts to meet locally-identified needs. Mr. Johnson concurred the local school districts should be held accountable to the state for the use of the funds. Mr. Johnson referred to Rule 22 of the Governmental Accounting Standards Board (GASB 22) requiring taxes collected by the taxpayer, such as sales tax, to be recognized within the accounting period in which they become susceptible to accrual, or when they become measurable and available to finance expenditures of the fiscal period. He expressed his displeasure the disbursements from the DSA will be reduced due to the implementation of GASB 22 because the State Controller plans to implement the new rule in Fiscal Year 1994 - 1995, which will mean 13 months of sales tax will be reported in Fiscal Year 1994 - 1995 instead of 12 months. Mr. Johnson said if the school district must follow GASB 22 in calculating distributions from the DSA, they should not only pull in the August 1995 revenue, but they should also push out the August 1994 revenue. Mr. Johnson completed his testimony by reading from prepared notes (Exhibit R). Senator Rawson said the committee would consider Mr. Johnson's suggestions very carefully. He also remarked the Legislature feels very strongly that one-shot appropriations should not be used for ongoing programs. Nat Lommori, Superintendent of Lyon County School District, concurred with Senator Rawson, and said Lyon County does not allow employees to be hired using one-shot funding. Mr. Lommori said the local school boards have experienced a great deal of frustration over unfunded mandates involving special education units that are not fully funded. He explained one special child moving into a local district might necessitate hiring one additional teacher or one additional aide, and that is expensive for the local districts. Regarding CSR, Mr. Lommori said the Lyon County School District does not have a problem with the CSR program. In fact, due to the small class sizes in schools in Smith Valley, Nevada, the students have had very high achievement test score results. In conclusion of his testimony, Mr. Lommori stated he is not asking for additional funds, but would like to see funding for the schools returned to the 1992 levels and continued from that point. Senator Rawson appointed an advisory committee to work on issues of GASB 22 to include Wade Johnson, Lyon County School District; Douglas C. Thunder and Linda Smith, State Department of Education; Don Hataway, Budget Division; Rick Kester, Douglas County School District; Mike Alastuey, Clark County School District; and Doug Sever, Washoe County School District. D. Don Francom, Ph.D., Superintendent, Lincoln County School District, requested the committees consider increasing the funding for elementary school counselors to allow the Lincoln County School District to have the use of counselors in the district. He indicated in the past, revenue has not been sufficient enough to allow them to have the assistance of counselors. Edward Murkovich, Superintendent, Storey County School District, stated if government is going to mandate assistance for schools, then government ought to fund the schools as well. He said the Lincoln County School District receives revenue of $93,000 for the CSR program, but it costs the district $105,000. Similarly, the district receives $130,000 to fund special education, but it costs Lincoln County $190,000 for the program. According to Mr. Murkovich, parents of special education children are getting very militant. The county is getting ready for litigation because one parent wants a special education child to be picked up at the door and driven to Reno to receive special education schooling. The school district also had to hire a special aide for one student. Mr. Murkovich ended his testimony by asserting they need three teachers, a counselor, and $41,000 for an elevator required by the Americans with Disabilities Act. He remarked, "We have to have a safety policy. Do not sit on broken glass. These things are mandated for us. If government through your constituents requires these things of us, they should fund them all." Senator Rawson said he has done research on this subject, and in the last decade there were 457 mandates placed upon the state, and each one has driven costs up. Daniel Leck, Member, Carson City School Board, stated of more importance than being a board member, he is also the parent of five children attending school in Carson City. Mr. Leck referred to earlier discussion regarding the CSR program. He suggested the CSR program should not be viewed from a negative or positive standpoint, but each school district should be allowed to evaluate its own needs and use the revenue provided accordingly. Mr. Leck remarked accountability is probably the end product of what should be looked at in education. As a board member, he would not be aware of the problems that exist in the Carson City School District without an accountability report. According to Mr. Leck, the CSR program began in Carson City in the 1990 - 1991 school year. During that time period, test scores for third grade levels were in the middle to upper 50 percentile range and are now in the lower 40 percentile range, which is an indication the CSR program has not worked in Carson City. He requested the districts be allowed to submit programs to the State Department of Education, using revenue designated for CSR, for professional development and modified uses of CSR. Mr. Leck stressed there have been many school districts across the United States that have tried CSR with no success. He said, "This is not Tennessee. This is Carson City, Nevada for me. CSR has not worked here." Mr. Leck proposed that districts be allowed, with the oversight of the individual district school board and the State Department of Education, to approve any alternative plan to CSR. He stated the purpose of CSR is to impact our at-risk children, but in Carson City, third grade reading, mathematics, and language, received a negative impact. CSR has helped the gifted and talented and the attendance rate, Mr. Leck admitted. Mr. Leck said the February 1995 Analysis of Nevada School Accountability Systems contains a report about teachers and their knowledge or experience and concludes the more experience the teacher has, the greater the learning aptitude and achievement of the students. Mr. Leck stated the state now has the opportunity to allow the districts, with the approval of the State Department of Education, the opportunity to train teachers. Mr. Leck remarked Nevada is in dire need of computerization technology. He said Nevada is lagging behind almost every state in the union, and if CSR is not working in Carson City, allow the district to try something different such as increased technological measures. In concluding his testimony, Mr. Leck said: Instead of funding first, second, and third grade, why not focus the funds on the children who really need it. I think that was the original intent of CSR. I am not here to ask for the elimination of the CSR program, but to give the school districts the flexibility to use the funds for what is best for their schools and their children. Senator Coffin stated while he endorses Mr. Leck's concept to implement school district control over spending, under the Nevada plan a decision cannot be made by the Legislature. Also, because of tax shifts the funding has been placed into the hands of the state. Senator Coffin repeated if it were up to him, local property tax would fund the local school districts which would provide sufficient revenue for the schools. He suggested Mr. Leck might want to look into why the CSR program is not working in the Carson City School District. Mr. Leck agreed with Senator Coffin's suggestion and said it is not the school board's intent to eliminate CSR, but to have the flexibility to determine the use of funding provided for the district. Mr. Marvel noted 44.8 percent of first grade and 76.2 percent of second grade students in Carson City schools are team taught compared to 30 percent for the first grade and 29 percent of the second grade in the rest of the state. Mr. Leck said during the remainder of the legislative session the committees will be hearing from countless numbers of individuals who will testify regarding the benefit of CSR and two teachers to a classroom. However, he firmly believes CSR can also create negative problems for children because they become co-dependent on the teacher and less likely to share ideas with other children in the class. Carol Andrews, Substitute Teacher, Douglas County, testified regarding the issue of phonics versus whole language, and federal funding for school districts. Her remarks were read to the committees from Exhibit S. Ms. Nebgen stated she wished to testify in support of the portion of the Governor's Executive Budget dealing with Family Resource Centers. She indicated this is an issue of fragmented services for many students and families throughout the state who are at risk. Family Resource Centers would allow the districts to bring together human and social services, as well as education, in a school-linked location. She said this effort has begun in Washoe County at the Family Focus Center in the Glenn Duncan Elementary School in Reno, and at the Family Resource Center in Sun Valley, Nevada. Ms. Nebgen pointed out Washoe County presently has a patchwork of grants from agencies and foundations making it difficult to continue, but funds provided in the Governor's budget would allow some start-up costs to continue so that the Washoe County School District can expand their efforts. Ms. Nebgen introduced Rose McGuire, Principal, Desert Heights Elementary School, the founder of the Family Focus Center in the Glenn Duncan Elementary School. Ms McGuire said she is beginning a new Family Focus Center in the Desert Heights Elementary School, and can answer any questions the committee members may have concerning the planning and implementation of the centers. Senator Rawson said the subcommittee on K-12 education will be reviewing the Governor's proposal concerning Family Resource Centers in great detail. He thanked Ms. McGuire for appearing at today's hearing. Janine Hansen, State President, Nevada Eagle Forum, stated CSR does not always improve student performance, and available data seems to indicate the pupil to teacher ratio is not a significant factor in the determination of student performance. Ms. Hansen provided the committees with written documentation, Exhibit T, from which she read for the record. Senator Rawson announced the joint meeting of the Senate Committee on Finance and the Assembly Committee on Ways and Means would be in recess for lunch until 1:15 p.m. The meeting was called to order by Senator Rawson at 1:15 p.m. Sherri Lakin, Concerned Parent, discouraged the committees from funding or accepting federal funds for any measures that are involved with federal legislation. She stated the United States Congress passed many education bills and formed three panels referred to as the National Goals Panel, which Congress called the education supreme court; National Education Standards and Improvement Counsel, which would function as a national school board; and the National Skills Standards Board, which would set up guidelines for the knowledge and skills to enter the work force. She indicated by the end of 1995 this board will identify clusters of occupations, and students and businesses would be required to adopt their standards. Ms. Lakin stressed she does not want to see Nevada become involved with regulations that may hinder the free job market that exists today. Specifically, Ms. Lakin wished to know if the wording in the Governor's Executive Budget pertaining to job partnerships is connected with the National Skills Standards Board. Ms. Lakin pointed out as a concerned parent and taxpayer, she does not understand the connection between true education and Family Resource Centers situated on campuses. She asked for details concerning the concept of Family Resource Centers. Ms. Lakin concluded her testimony by requesting that judicious consideration be placed upon legislation involving federal intervention in the state's budget for education. Senator Rawson suggested Ms. Lakin contact some of today's guest speakers to obtain the information she requested. Susan Balkenbush, Concerned Parent, stated as a taxpayer she is alarmed by the demands by the education bureaucracy for revenue to fund social programs in the schools. She also said she is disturbed by the continuous claims that bureaucratic intervention is necessary because parents are unable to manage their own families. Ms. Lakin stated the national goals for improved education of children outlined in the Goals 2000 Program will create an even bigger bureaucracy to control the educational system, and will further alienate parents. Education State Programs - Page 165 Ms. Peterson called the committee's attention to Exhibit F from which she provided information concerning this budget. In reference to the department's request to have funding restored for fees and registrations to national organizations, Senator Rawson asked that a list be provided to the subcommittee of the organizations dues would be paid to, and the amounts. Also, he noted partial funding was set aside in 1993 for the payment of dues for previous years, but because of internal decisions the fees may not yet be paid. Ms. Peterson stated there was partial funding provided in 1993 for fees and registrations the department paid to the extent possible. The present budget will fully fund the current fees and registrations, but will not fund the balance that was due to some of the organizations. She pointed out the expanded narrative the department will provide to the subcommittee will contain detailed information concerning fees and registration costs. School Improvement - Page 181 Ms. Peterson said the Department of Education provided the Assembly Committee on Ways and Means with an expanded narrative of all of their budget accounts containing additional background information than that provided during today's hearings. She indicated this narrative can be provided to the Senate Committee on Finance as well. Senator Rawson suggested the expanded narrative be submitted for use by the subcommittee on K-12 education. Using prepared text in Exhibit F, Ms. Peterson discussed the major issues contained in the School Improvement budget account. Ms. Peterson also referred the committee members to Exhibit U, Requested Appropriations One-Shots, which she explained contains detailed information for all the one-shot appropriations recommended. Senator Rawson asked if a one-shot appropriation has been provided for a consultant. Ms. Botts responded funding for a consultant is included in the department's Education State Programs budget reflected on page 169 of the Governor's Executive Budget. Because of concerns expressed about the Goals 2000 Program, Senator Rawson asked if this program is voluntary. Ms. Peterson responded for both years of the biennium 90 percent of the funds provided under Goals 2000 must be sub-granted to local school districts for implementation of local improvement plans. Goals 2000 is 100 percent federally funded and is voluntary at both the state and district level. Ms. Peterson concluded her testimony of the School Improvement budget by referencing Enhancement Category 126 of the Governor's Executive Budget concerning Family Resource Centers. Ms. Peterson stated E-126 provides $565,000 in each year of the biennium as "seed money" to create Family Resource Centers in the service areas of 38 public K-12 schools in Nevada. The funding will provide center coordinators plus an outside contractor to provide training and technical assistance and a state coordinator. The centers are to be located in areas of high concentrations of elementary students at risk of failure, but each school district would get at least one center. Bob Raney, Community Partnership, Incorporated, said the establishment of Family Resource Centers included the involvement of several members of the legislature and the Governor's office in the planning process. Mr. Raney said there are several such centers in existence throughout the state, and in Washoe County, the earliest facility was known as The Children's Cabinet. Since that time the Family Cabinet has been established in Clark County. Mr. Raney said the creation of a public-private partnership brings the representatives of the private sectors together with individuals serving in the public sector to address needs. Through the efforts of public-private partnerships, advisory boards have been established in various neighborhoods to specifically identify the needs within the service area, such as referrals to child-care providers, after-school child care, and referrals to other social and employment services. The Family Cabinet in Las Vegas created a workbook defining a family resource center, and how one can be established in a neighborhood. This workbook is available upon request, Mr. Raney said. According to Mr. Raney, no actual funding has been dedicated toward the development of a center because facilities that are already in existence are utilized, and private and government services already available are used to coordinate the services provided. The revenue provided will be used to get the process started, especially in the rural districts. Mrs. Brower asked for a description of some of the programs and services provided by the centers. Mr. Raney stressed every Family Resource Center should have programs driven by the needs of the neighborhood. For example he said a public safety issue was brought up in a Las Vegas neighborhood, and as a result the metropolitan police moved into a Family Resource Center to establish bike and foot patrols of the neighborhood. Within a very short time, neighborhood feedback indicated many of the residents felt safe walking from their dwelling to the local grocery store. Another major service provided by resource centers involves recreational programs and child-care referral, Mr. Raney said. In the future, Mr. Raney hopes to provide child-care within a Family Resource Center. Ms. Giunchigliani commended Mr. Raney for the work that went into the establishment of Family Resource Centers in the Las Vegas area that have proven to be very successful. Mr. Hettrick asked if services offered by a Family Resource Center are feasible in the rural counties where there may be only one center servicing a 200-mile radius. He said he is concerned this concept may not work in the rural counties. Mr. Raney said he shares the same concern but said the program must be driven by the residents of the neighborhood, including the rural counties. Mr. Raney pointed out one of the reasons funding has been suggested in the budget is because of concerns expressed by rural communities that funding would be required to bring the people together to get the process started. Sheila Leslie, Community Partnerships, Incorporated, remarked the rural communities are very supportive of the establishment of Family Resource Centers. In Ely, Nevada, the Rural Youth Cabinet has been established and managed by a private employee supported by an individual from the local welfare agency a few hours each week. Ms. Leslie suggested a link directly with the school in the rural district is another way to successfully establish a center. The center does not have to be on the school campus although it is important to work closely with the schools. Upon establishment of a centralized network of Family Resource Centers throughout the state, Ms. Leslie said federal funding will become available because of the coordination efforts involved. Mrs. Evans asked what the criteria will be for the selection of 38 centers to be located in "at risk" areas. Mr. Raney replied criteria has not yet been established for approximately 100 "at risk" schools identified by the Department of Education, but the goal of Community Partnerships, Incorporated, would be to establish the resource centers as quickly as possible. He recognized many of the "at risk" schools will require revenue assistance. Mrs. Evans remarked, "I am concerned about setting aside a pot of money with what appears to be unknown selection criteria of how this is going to be spent. How did we arrive at the "seed money" amount of $565,000?" Mr. Raney answered the $565,000 was determined by the Governor's staff. Mrs. Evans stated the subcommittee will require this information as well as specific budget information to know what will be spent. She asked what kind of commitment there is the program will continue in the rural areas that lack a wealth of people and businesses to support a center. Ms. Evans asserted she is concerned about setting up centers that might be short-lived. Mr. Raney stated the Family Resource Center will survive if that is what the community wants. Mrs. Evans remarked, "I object to setting up something that in 2 years will go away." Ms. Peterson indicated the state should consider using "seed money" that would attract other revenue and programs that may be in existence, and funding will not be ongoing as the people in the community should be able to support the centers. Ms. Peterson also clarified approximately $15,000 was determined to be needed for each of the 38 centers proposed to arrive at the "seed money" of $565,000. Ms. Peterson said she will provide the subcommittee with a more complete budget. Mrs. Chowning noticed funding for the Limited English Proficiency program was requested but not recommended by the Governor. She asked for information to be provided to the subcommittee regarding where funding will come from for this program. Ms. Peterson stated funding for Limited English Proficiency was not recommended in the Governor's Executive Budget at this time. However, she will provide any information that may become available to the subcommittee. ECIA - Chapter 1 - Page 187 Other - State Education Programs - Page 199 Dr. Rheault covered the provisions of the Education Chapter 1 Act (ECIA) as well as other state programs reflected in the budgets by reading from Exhibit F. ECIA - Chapter 2 - State Programs - Page 202 Dr. Rheault said this budget account provides federal funds to assist state and local educational agencies to improve elementary and secondary education in such areas as programs to assist in reducing the drop-out rate, increasing student achievement, the acquisition of instructional materials, and training and professional development. Using Exhibit F, Dr. Rheault continued his discussion of this budget account. Mr. Hettrick noted In-State and Out-Of-State Travel expenses of $30,000 for six employees seems high. He asked for a detailed explanation to be submitted to the subcommittee describing how the $30,000 will be used. Mrs. Chowning referred to the Measurement Indicators and asked the department to provide additional information regarding the programs detailing what the results have been in reducing drop-out rates and increasing student achievement. She also asked where instructional materials have been placed. Mrs. Evans asked the department to submit to the subcommittee copies of the most recent annual evaluation of the effectiveness of school programs assisted with Chapter 2 money from the federal government. She also requested a copy of the worksheet reflecting administrative costs. Title II EESA - Page 205 Dr. Rheault testified this budget provides training to elementary and secondary teachers in mathematics, science and technology, and 90 percent of the funds must be provided to local school districts so they can conduct training based on needs identified at the local level. The program requires the state to administer the sub- grants to each local school district. The remaining 10 percent of the funds are used by the state for additional statewide training of teachers based on identified state priorities and technical assistance to schools. Dr. Rheault pointed out the Governor has recommended consolidation of funding from this budget account into the ECIA - Chapter 2 - State Programs account reflected on page 202 of the Governor's Executive Budget. Mr. Thunder interjected there will still be two separate grants, but the accounting for them will be in one area, thus eliminating the preparation of one budget account by the department. Education for Handicapped Act - Title VI-B - Page 209 Education of Handicapped Persons - Page 215 Early Childhood Education - Page 219 Education for Handicapped - Teacher Training - Page 223 Mr. Thunder's testimony was read to the joint committee from prepared remarks (Exhibit F ) combining four budget accounts all relating to special education. He stated it is the recommendation of the Budget Division that three of the four budget accounts be combined in budget account 2715, Education for Handicapped Act - Title VI-B. Mr. Thunder said the department concurs with the Budget Division since funding for three of the accounts is appropriated from the U. S. Congress. Senator Rawson voiced his concern about the growing number of out-of-state placements of children with disabilities. He noted about $2.8 million has been budgeted for the program, and the number of children who qualify is unpredictable. He remarked it is about time the state started looking into developing some of the specialized programs within the state. Ms. Peterson commented she would discuss Senator Rawson's suggestion with some of the department's special education staff. She pointed out a center was opened in Las Vegas to bring back some of the children in the out-of-state placement program, but the opening of this center has not worked to everybody's satisfaction. Senator Rawson said one experience should not cause the department to disregard future development. He commented somebody should take the lead to see if there are programs that can be modified within the state to handle some of the students with severe disabilities. Mrs. Evans referred to the Individuals with Disabilities Act (IDEA) and noted a minimum of 75 percent of the grant funds must be sub-granted to school districts based on their child counts. She asked if the department will meet this requirement in both years of the biennium or 1996 and 1997. Mr. Thunder responded in the affirmative, and said the department would provide documentation to the subcommittee reflecting how the funds will be distributed. Ms. Giunchigliani questioned where funding for the discretionary special education units is reflected in the budget. Mr. Thunder said the discretionary units are part of the DSA and are the 40 units that are not assigned to a school district, but are allocated by the State Board of Education to school districts with a shortfall in their number of units or for special projects at the beginning of the year. Ms. Giunchigliani asked if school districts' special education programs are limited by the number of units available. Mr. Thunder responded some school districts end up funding additional units from their own revenue, and the units may be picked up in a future biennium as additional state- funded units. Ms. Peterson remarked school districts are required to provide special education services whether a sufficient number of units are provided to the district or not. The shortfall between unit funding and the actual costs of special education is growing because school districts are obligated to provide the services, and the State Board of Education runs out of discretionary units very early in the school year. Senator Rawson asked if the Clark County School District qualifies as a Medicaid provider. Mr. Thunder did not have that information but offered to report back to the subcommittee. Senator Coffin asked if there have been Intelligence Quotient (IQ) growth studies made of students in IDEA programs. He wondered if special education for the severely retarded children is not respite care for the parents as opposed to something that can provide meaningful education to the children. He asked, "Are we clogging up the schools and our budget with children that cannot be helped, and is it time to admit it and communicate this concern to the federal government." Ms. Peterson replied she is not aware of such a study. She does not think an IQ growth study has ever been done in Nevada. However, a study is presently underway in the school districts regarding the impact of inclusion of severely handicapped children in the classroom. She pointed out growth in the special education population is twice the growth of the regular student population. Ms. Hansen interjected there was a study performed by the Cato Institute concerning the Head Start program that usually deals with disadvantaged children. She distributed to the committee members Exhibit V, a paper dated December 18, 1992, suggesting an end to Head Start programs. Senator Rawson remarked the Clark County School District reported at the end of the 1991 - 1992 school year, 42 percent of children who exited the district's early childhood special education programs were not continuing in special education. He suggested the department consider tracking these children to evaluate the effectiveness of the early childhood program. Ms. Giunchigliani suggested IQ growth studies should be conducted for the entire special education population, not only the severely retarded. Nutrition Education Programs - Page 227 Mr. Thunder stated this is the budget account in which the department accounts for all of the nutrition education programs throughout the state. Funding for nutrition programs is available to public and private nonprofit schools and agencies which provide day care and residential care to children and certain functionally impaired adults. The federal allotment for each program sponsor is based on a formula which may consider meal costs or budgets, the number of individuals served, and the income level of those individuals. Exhibit F was referenced for the balance of testimony by Mr. Thunder concerning this budget account. Senator Rawson commented the Fiscal Division requested overtime records on two half-time Education Consultants, a half-time Management Assistant I, and a quarter- time Program Assistant I due to fluctuations that appeared in their reported overtime for Fiscal Year 1993 - 1994 and Fiscal Year 1994 - 1995. He asked Mr. Thunder if he was familiar with their work conditions to explain why the fluctuations occur. Mr. Thunder replied he had conducted reviews with the employees but would have to document what the pressures are at certain times of the year when overtime is recorded. He stated this information would be provided to the subcommittee. Senator Rawson asked if the Nutrition Consultants are hired by the state or are contract employees, and Mr. Thunder responded they are state employees. Senator Rawson asked if overtime is earned by Nutrition Consultants while performing out-of-state travel. Ms. Peterson said the Nutrition Consultants do perform travel to local school districts to provide technical assistance on site, and a great deal of their recorded overtime is involved with travel. They sometimes travel out-of-state to attend conferences on nutrition education issues as well. Senator Rawson requested information be provided to the subcommittee concerning the use of overtime hours for in- and out-of-state travel. Occupational Education - Page 233 Dr. Rheault referred the committees to Exhibit F from which his testimony was read, and to Exhibit U regarding a one-shot appropriation of $4 million to support the Nevada Business Plan which has been retitled Nevada's School-To-Work Plan. Mr. Marvel asked if the budget for the Rural Regional Coordinator for the School-To- Work program is included in this budget account. Dr. Rheault answered the state is currently receiving approximately $200,000 for a development grant for the School-To-Work program, and there are coordinators hired on contract. The Department of Education is not the fiscal agent for the budget for the coordinator. The State Job Training Office, through the Department of Employment and Training, is the fiscal agent. Mr. Marvel pointed out the Rural Regional Coordinator position was eliminated, and Dr. Rheault said statewide contract-coordinator positions were eliminated as well. Senator Rawson remarked a 1993 letter of intent from the Assembly Committee on Ways and Means and the Senate Committee on Finance directed the Department of Education to designate $168,750 of federal Carl D. Perkins Vocational Education funds for use by sub-grantees for apprenticeship programs. He asked if an assessment has been made of the apprenticeship programs. Dr. Rheault stated the department does not have an evaluation or assessment of the outcome of related classroom instruction conducted under an apprenticeship program other than the number of individuals enrolled in the program. Continuing Education - Page 237 Dr. Rheault stated the federal Adult Basic Education Act provides educational opportunities for adults to acquire basic literacy skills and to at least continue their education to the beginning secondary level. There is a state matching requirement: 75 percent federal funds and 25 percent state funds. The match can be provided through state or local funds. Dr. Rheault indicated an impact to this budget is the needs of alternative education programs and personnel within the state will not adequately be addressed during the next biennium, although additional personnel support will be available to address the adult education and literacy needs within the state. Mr. Dini asked if this will cause problems for some of the school districts. Dr. Rheault replied Senate Bill (S.B.) 8 will be introduced that will provide for a different formula for funding adult education programs. If approved, this will cost the Carson City School District $150,000, and will be a disadvantage to most of the rural school districts as well. SENATE BILL 8: Requires that computation of basic support of school districts include average daily attendance of certain part-time pupils. Ms. Peterson added S.B. 8 would affect the funding in the DSA for the Adult High School Diploma program. Mr. Dini asked if students that participate in the Adult High School Diploma Program must be classified as a school dropout. Dr. Rheault responded to be enrolled in an adult education program one must be considered a school dropout and be 17 years of age or older. Ms. Peterson stated the department has experienced growth in alternative programs because they do not want to encourage children to drop out of school and then enroll in the Adult High School Diploma Program. Mr. Spitler asked if any of the adults that participate in basic education programs pay a tuition charge or contribute to what they receive in adult basic education. Dr. Rheault said to his knowledge if federal or state funds are used, there is no requirement for additional payment of the services. Mr. Spitler expressed surprise. He said upon delivery of health care systems that are federally funded, charges are imposed on a sliding scale. He stated he would be interested to know why an able-bodied person who could share in the expense is not required to do so. Mr. Marvel asked what is included in the item Other Non-State Revenue reflected in the budget summary. Dr. Rheault replied that is the transfer of Job Training Partnership Act (JTPA) funds from another budget account into this budget account. Mr. Thunder said there will be separate budget categories established so that the revenue and expenditures will match and be identifiable. Proficiency Testing - Page 243 Dr. Rheault said the Proficiency Testing budget is almost entirely state funded. A small amount is received from the sale of testing materials to private schools, and school districts have contributed to the testing program over the years. Dr. Rheault provided additional testimony by reading from Exhibit F. Senator Rawson asked if the state will purchase or develop testing materials. Dr. Rheault responded the Proficiency Testing material will be developed by the Department of Education and other educators within the state. Dr. Rheault said if the one-shot appropriation for grades 4 and 8 described in Exhibit U is considered, the testing material for those grades will be developed within the state. If not approved for funding, the department will have to continue to use the existing test for grades 4 and 8 for a total of 7 to 9 years and continue to use the 50-point multiple choice test for writing instead of a direct writing examination. Mr. Hettrick said based on the Measurement Indicators, 50,000 students were tested in 1994 at a cost of approximately $5 per test, and it is projected approximately 36,000 students will be tested in 1995 at an increased cost of $14 per test. It was his observation that the cost to the state for testing has increased in a relatively short period of time. Mr. Hettrick stated the subcommittee should have justification as to why the cost of testing has more than doubled in 2 years. In terms of expense, he pointed out the department has not yet developed new testing materials, and a one- shot appropriation is also being requested. Dr. Rheault responded the English and mathematics portion of the High School Proficiency Examination developed by the state is almost 10 years old. If the test material is not updated on a regular basis, Dr. Rheault said security becomes a problem. The department believes it is time to develop new test material which will be a cost to the state. Ms. Peterson said in 1993 the Legislature changed the grade levels at the request of the Department of Education to test grades 4, 8, 11, and 12 instead of 3, 6, 9, and 11. During Fiscal Year 1994, which was an overlap year, the department included more grade levels by also testing grades 3, 4, 6, and 8. Starting in Fiscal Year l994 - 1995, the department will follow the new schedule which will reduce the number of grade levels that will be tested. Ms. Peterson remarked this accounts for the decrease in the number of students that will be tested in Fiscal Year 1994 - 1995. Referencing Enhancement Category 250, Quality Education Opportunities, Mr. Close noted this decision unit recommends the cost of the state participating in the National Association of Educational Progress (NAEP). He asked the department to provide the subcommittee with up-to-date information on NAEP such as what subjects are tested, what data will be received by the school districts, and whether or not other states are participating. Ms. Peterson replied up to the present time, Nevada is one of the few states that did not participate in NAEP, which tests random samples of students both on a variety of subjects and factors. Ms. Giunchigliani asked if an age restriction had been imposed for the allocation of federal funding for the Job Training Partnership Act (JTPA), and if the state had considered combining JTPA with other programs that are performing job training. She asked for the information to be provided to the subcommittee. EDUC Personnel Testing - Page 249 Dr. Rheault said this account was funded through a loan from the General Fund which is to be paid back in $2,000 annual payments for 10 years and fees from teacher licensing tests. He highlighted the Agency Request and Governor Recommended portion of the budget by reading from Exhibit F. Senator Rawson requested a status report on the Teacher Competency Testing Program. Dr. Rheault said he will furnish a summary report. He explained a preliminary injunction was filed on behalf of Clark County teachers who were subject to termination for failure to pass the Basic Skills Test, the Professional Knowledge Test, and/or the Speciality Area Test. Although it was ruled the state's testing procedures are valid, the injunction was granted by the District Court of Clark County. The judge did provide for some additional help to the teachers that could not pass the test by requiring the Commission on Professional Standards to identify alternative courses that could be taken. After the order was challenged by the Commission on Professional Standards and appealed to the Supreme Court, Dr. Rheault said the two sides got together to work out a settlement to the case. The Commission on Professional Standards has now agreed to identify courses in lieu of passing the Basic Skills Test for reading, writing, and mathematics. Teachers will still be required to pass the Professional Knowledge Test, and more flexibility was added to the Specialty Area Test. Senator Rawson asked if the department had information regarding those teachers that had difficulty with the testing program. He clarified he did not want names, but wished to know what the perceived deficiencies were in order that feedback can be provided to the state's educational program. Ms. Peterson said at the time the lawsuit was filed there were 27 teachers unable to pass one or more of the tests. Most of them were having difficulty passing the Professional Knowledge Test or the Speciality Area Test, and a few of them had difficulty passing the Basic Skills Test. Ms. Peterson added the graduates from the University of Nevada, Reno, and the University of Nevada, Las Vegas, are required to pass all of the skills tests before they can graduate from the teacher program in Nevada. Senator Rawson asked for a profile of the 27 teachers to include their level of experience. Ms. Peterson responded this information will be provided to the subcommittee. She pointed out the department did find that most of the 27 teachers involved in the lawsuit were from out-of-state and had been teaching for many years. Ms. Giunchigliani remarked that testing does not necessarily prove that a person can teach. Individuals from out-of-state unfamiliar with Nevada requirements may not pass one or more of the tests but still be excellent teachers, and this is part of the argument the districts are making. She said the Commission on Professional Standards did stand by the legislative intent to have qualified individuals within the classroom. Mrs. Evans asked if teachers that take courses in lieu of the examination must then be tested upon completion of the course. Dr. Rheault answered the requirement in the judges' order stipulated the teachers had to at least take the Basic Skills Test. After failure to pass the test, the teacher would then be allowed to take a course. They still have the option of repeating the Basic Skills Test to pass it instead of taking a class, and Nevada gives them 2 years to do so. There is no requirement to go back and retest. If the teacher takes the class and passes it with a B grade or better, the provision to pass the Basic Skills Test is taken off the license. Mr. Marvel asked if teachers had been eliminated due to failure to pass the Basic Skills Test. Ms. Peterson answered up until the lawsuit in Clark County was filed, no teachers had been eliminated. As of September 9, 1994, the day the lawsuit was filed, teachers had to either meet the testing requirements or leave the classroom. This deadline has been extended to July 30, 1995. Teacher Education and Licensing - Page 251 Dr. Rheault's testimony concerning the budget was read from prepared remarks contained in Exhibit F. Mr. Marvel noted the Governor has recommended two additional Teacher Licensing Analysts and a Management Assistant I to start on January 1, 1996. He asked why placement of new staff members has been delayed until January when the busiest time for licensing teachers is August and September. Dr. Rheault agreed, by delaying the addition of new personnel to the budget until January 1, 1996, the backlog of teacher licenses needing to be issued will continue to grow until additional staff is provided. Ms. Giunchigliani asked the current amount of teacher licensing fees and if an increase in the fee is being considered. Dr. Rheault said the fee calculations were prepared by the Budget Division and not the Department of Education, but to fully fund the department's requests the fee is approximately $30 per year per licensed personnel in the State of Nevada. Dr. Rheault added instead of a fee of $50 for a 5-year renewal for a license, it has been proposed to increase the fee to approximately $150 for a 5-year renewal for every teacher and administrator in the state. Ms. Giunchigliani asked what the value is in having a 5-year license. Ms. Peterson said a license renewable after 5 years provides time for teachers to secure renewal credits that are necessary. She does not believe what is being proposed will require a teacher to be licensed every year, but the cost would be spread out on a yearly basis per teacher. Ms. Peterson said it would be the department's intent to keep in place the 5-year renewable license, but in order to support the budget it would be necessary to triple the renewal fee charged each teacher every 5 years. Ms. Giunchigliani commented further discussion regarding the fee issue should take place in a subcommittee meeting. She also asked the department to determine the dollar amount individuals must pay to take required tests for licensing. Regarding teacher licensing fees, Mr. Hataway wished to clarify that at the present time the collected fees are placed into the General Fund and new fees in addition to the fees currently being deposited are not recommended. A bill draft request is being proposed that will authorize the placement of fees in the Teacher Education and Licensing budget account and not in the General Fund, Mr. Marvel asked how often teacher testing is offered in a given year. Ms. Peterson replied the Professional Knowledge Test and Specialty Area Test are offered three times per year. The Basic Skills Test is also offered three times per year but can be taken at a Sylvan Learning Center by appointment. She pointed out teachers are given 2 years to complete the testing requirements. Education Support Services - Page 257 Mr. Thunder testified the Education Support Services budget account contains the staff and costs associated with all of the Department of Education's financial and support activities. A major function of this budget account has been the financial administration of the DSA and the CSR program and all other legislatively-approved programs which require the disbursement of funds to the school districts. The remainder of discussion by Mr. Thunder for the budget was from prepared remarks, Exhibit F. Job Training Partnership Act - Page 275 Dr. Rheault said 8 percent of the funds available to Nevada under the federal JTPA are allocated to the Department of Education to provide education and training to economically disadvantaged youth and families. Targeted populations include handicapped individuals, teenage parents, and school dropouts. The remainder of his testimony concerning the JTPA budget was read from prepared text, Exhibit F. Senator Rawson adjourned the meeting at 4:47 p.m. RESPECTFULLY SUBMITTED: Marion Entrekin, Committee Secretary APPROVED BY: Senator Raymond D. Rawson, Vice Chairman DATE: Assemblyman John W. Marvel, Chairman DATE: Senate Committee on Finance Assembly Committee on Ways and Means February 14, 1995 Page