Call to Order and Roll Call
The meeting of the Education Assessment and Accountability Review Subcommittee (EAARS) was held on Tuesday, September 15, 2015, at 10:00 AM, in Room 129 of the Capitol Annex. Representative James Kay, Co-Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Mike Wilson, Co-Chair; Representative James Kay, Co-Chair; Senators Gerald A. Neal, and Max Wise; Representative Mary Lou Marzian.
Legislative Guest: Representative Derrick Graham.
Guests: Clyde Caudill, Kentucky Association of School Administrators.
LRC Staff: Joshua Collins, Janet Stevens, and Daniel Clark.
Primer on Kentucky Independent School Districts
Brenda Landy, Education Accountability Analyst, Office of Education Accountability (OEA), spoke about the data analyzed for the primer on independent school districts (ISDs) and said the legal framework included in the study was based on the Kentucky Constitution, statutes, regulations, case law, and attorney general opinions. Also, since students can attend schools outside of district boundaries, OEA staff asked ISDs for reciprocal agreements, policies and procedures, and any ISD superintendent’s comments. Financial, student, and boundary data were also analyzed for the study. Ms. Landy said there are 53 ISDs located in Kentucky and, aside from size, ISDs resemble county districts in most ways on average. However, ISDs vary more widely in terms of student achievement, student diversity, and boundaries.
Cassie Blausey, Education Accountability Analyst, OEA, spoke about the key findings from the legal framework discussed in the primer on ISDs and said the law is generally the same for both county and ISDs, but some statutes refer specifically to ISDs. Also, nonresident student contract disputes and reciprocal agreements were within the key issues of legal context in the report.
Ms. Blausey spoke about ISDs expanding their boundaries and said ISDs are no longer permitted to grow along with cities. However, there are annexation statutes that permit expansion under certain circumstances. The two methods for ISDs to expand territory are either a transfer of adjacent territory or a transfer of adjacent territory containing a school. Eight ISDs under KRS 160.045 attempted to transfer to adjacent territory, with 6 actually annexing. Bowling Green Independent was the only ISD to have a transfer of territory containing a school.
Ms. Blausey spoke about nonresident student enrollment and said most students attend school within the district that they live. The movement of students between school district boundaries has more of an impact on ISDs because of their smaller size. Also, nonresident student enrollment is a privilege, not a right, and each school district can set their own policies. In order for a school district to receive state SEEK funds for a nonresident student, the student must be either covered by a reciprocal agreement or is a child of a school district employee. Also, school districts may charge tuition to all nonresident students. This allows school districts to make up for local taxes or SEEK funds that is not received.
Ms. Blausey spoke about how school districts merge and said KRS 160.041, governing the merger of independent districts with county districts, is directly applicable to ISDs. Also, KRS 160.040, governing the merger of districts, is directly applicable to county districts and ISDs and provides an important backdrop for KRS 160.041.
Deborah I. Nelson, Education Accountability Analyst, OEA, spoke about nonresident students and said those students are a large percent of enrollment in ISDs. Local policies and procedures for nonresident students vary widely and are unclear in many school districts. In 2014, there were 27,000 nonresident students in Kentucky, and those students are a greater percentage of total enrollment in ISDs than in county districts.
Dr. Nelson said a reciprocal agreement is a contract between two school districts that allows students residing in one district to attend school in another district. The agreement covers issues such as tuition, enrollment conditions, transportation, and total number of students. Reciprocal agreements allow school districts in which nonresident students are enrolled to receive state SEEK funds for students covered by the agreement. Also, the agreement is not required for districts to receive SEEK funds for nonresident students who are children of district employees.
Dr. Nelson said most ISDs did not report charging nonresident students with tuition who were covered by reciprocal agreements. The school districts are already receiving SEEK funds for those students. It is more common for school districts to charge nonresident students who are not covered by a reciprocal agreement. The majority of school districts have policies that charge tuition based on SEEK funds. Local polices for school districts are often unclear on tuition policies and are often scattered among several documents.
Dr. Nelson said local boards of education should ensure that district policies and procedures related to admission of and tuition for nonresident students are clear, transparent, and reflect best practices. District policies and procedures should address, at a minimum, the criteria that the district uses in making admissions decisions for nonresident students and the tuition that applies to students covered by reciprocal agreements and children of district employees.
Dr. Nelson said the Kentucky Department of Education (KDE) should work with all school districts to ensure that data in Infinite Campus reflects accurate resident and nonresident student numbers. Also, data used for determining transportation SEEK credit may have some inaccuracies according to the report. Of the 53 ISDs that coded nonresident students for transportation in KDE data, sixteen reported to OEA that they do not transport students. KDE has reported that it is not consistently adjusting transportation areas.
Dr. Nelson said KDE, as it reviews student transportation, should also include a review of reciprocal agreements to identify which districts are authorized to receive SEEK transportation credits to be calculated in accordance with KRS 157.370, as well as ensuring that district areas are adjusted accordingly pursuant to KRS 157.370 (4).
Gerald Hoppmann, Education Accountability Division Director, OEA, spoke about revenue and expenditures and said ISDs range from the lowest to the highest districts in per-pupil revenue. ISDs average per-pupil local revenue is about $700 greater than county districts average. ISDs have less taxable property than counties but levy higher tax rates. Also, some ISDs have not levied the highest rates and missed the potential to generate additional local revenue. The average per-pupil revenue for ISDs was $12,358 compared to $11,727 for county school districts. Also, ISDs per-pupil local revenue is $3,595, which on average calculates to $705 more dollars per student than county districts.
Mr. Hoppmann spoke about local tax base and said the real estate tax rate generates 70 percent of local revenue. Since ISDs have less taxable property than county school districts, ISDs have to tax real estate property at higher rates. ISDs on average have about $42,000 less in per-pupil property assessment than county school districts.
Mr. Hoppmann said ISDs can generate additional revenue thorough local grants and donations. Local grants come from WHAS Crusade for Children, The United Way, Toyota, and Wal-Mart. Local donations typically come from PTA and PTO groups, booster clubs, and families that leave donations to specific schools. Seventeen percent of ISDs received $130 more per-pupil revenue from donations than county school districts did in fiscal year 2014. In fiscal year 2014, ISDs received an additional $27,738,878 from state SEEK funds along with another $3,343,713 in tuition payments from nonresident students.
Approval of May 20, 2015, Meeting Minutes
Upon motion from Representative Mary Lou Marzian and a second by Senator Mike Wilson, the minutes were approved by voice vote.
In response to Representative Derrick Graham’s questions regarding ISDs school taxes and ISDs in a multi-county area, Ms. Landy said generally the Property Valuation Administrator (PVA) of the county, along with the Department of Revenue, decides where the taxes go and how they are determined. Also, there are three ISDs in Kentucky located in multi-county areas.
In response to Representative Graham’s questions regarding SEEK funding for students and ISDs that do not provide transportation, Dr. Nelson said if there is no reciprocal agreement for a nonresident student, and that student is charged tuition, then the SEEK funding generally does not go to the school district. Also, there are some ISDs that do not provide transportation for students because the students’ residences are not far from the school. Also, ISDs are not required to provide transportation for students who live outside the school district.
In response to Senator Mike Wilson’s questions regarding SEEK funding and provisions made for the end of the school year, Tracy Herman, Associate Commissioner, KDE, said SEEK funds typically follow students who are covered by reciprocal agreement. If a nonresident student has to pay tuition, then the SEEK funds return to the state. There is then an adjustment to the entire SEEK formula that goes to the school districts.
In response to Senator Mike Wilson’s question regarding funding for homeless students and how many Kentucky students are considered homeless, Dr. Nelson said the report treated homeless and special needs students the same in regards to nonresident and resident students of a school district. Ms. Herman said residency has to be approved for enrollment in a school district and Kentucky has close to 30,000 homeless students with federal law dictating their residency.
In response to Senator Max Wise’s questions regarding oversight on ISDs merging with county school districts and the reason for Harrodsburg, Monticello, and Providence school districts merging, Ms. Blausey said the oversight and merging is initiated by local school boards with the state giving guidance to those local boards. Ms. Nelson said residents of merging school districts are generally very loyal to their schools, and the tax rates for merging school districts are authorized by voters. Ms. Blausey said finances were the reason for those three school districts to merge.
Acceptance of the Primer on Independent School Districts
Upon motion from Senator Mike Wilson, seconded by Senator Max Wise, the Primer on Independent School Districts was accepted by voice vote.
Bi-annual Compendium of State Education Rankings for 2015 and The Kentucky District Data Profiles School Year 2014
Ms. Landy said the purpose of district profiles and a state compendium is to provide a quick reference and easy access to commonly used education data. Also, the reports allow legislators to compare each district to similar districts and to compare Kentucky to other states. The District Data Profiles are a compilation of data from KDE as recorded by districts in two main systems; Infinite Campus and Munis. The State Rankings Compendium uses a broad array of data reported by states to the US Department of Education, income and poverty data by the US Census Bureau, and teacher salaries from the National Education Association.
Ms. Landy said the data reported by the US Department of Education for states does not always exactly match the data that states report internally. Reporting methods may differ and each state uses their own calculations and adjustments. Also, the US Department of Education might make their own adjustments to the data reported to them. In most cases discrepancies are small.
Ms. Landy said Kentucky ranks fourteenth nationally in the student-to-teacher ratio. Kentucky’s student-to-instructional aide ratio reflects a higher rate of disability and pre-school enrollment, as well as instructional aide requirements for kindergarten. In recent years, Kentucky has moved closer to the national average on this measure. Also, Kentucky is moving closer to the national average in the ratios of students to district administrators and students to school administrators.
Ms. Landy spoke about student performance and said kindergarten readiness is a new measure to the Kentucky District Data Profiles. Kindergarten readiness is reported for each type of setting that the students were in for the previous year. In Kentucky, 49 percent of all students were considered ready for kindergarten.
Ms. Landy said the financial section of the compendium ranks states on per pupil revenue, expenditures, sources of revenue, and the percent spent on instruction. Also, there are 10 years of financial trends located in the appendix of the compendium.
In response to Representative Derrick Graham’s question regarding student performance in state rankings, Ms. Landy said the information and rankings provided in the compendium is from advanced placement courses only and the Cambridge Program for Fairdale High School is not included in the state rankings.
Senator Mike Wilson commended OEA on their work with the Primer on Kentucky Independent School Districts, Bi-annual Compendium of State Education Rankings for 2015, and The Kentucky District Data Profiles School Year 2014. Also, he would like a memo to be provided to all Legislators informing them that all reports are available online for their review.
Acceptance of Bi-annual Compendium of State Education Rankings for 2015
Upon motion from Senator Mike Wilson, seconded by Senator Max Wise, the Bi-annual Compendium of State Education Rankings for 2015 was accepted by voice vote.
Acceptance of the Kentucky District Data Profiles School Year 2014
Upon motion from Senator Mike Wilson, seconded by Senator Max Wise, the Kentucky District Data Profiles School Year 2014 was accepted by voice vote.
With no further business before the committee, the meeting adjourned at 11:36 a.m.