Program Review and Investigations Committee




<MeetMDY1> August 14, 2008


The<MeetNo2> Program Review and Investigations Committee met on<Day> Thursday,<MeetMDY2> August 14, 2008, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Representative Reginald Meeks, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Ernie Harris, Co-Chair; Representative Reginald Meeks, Co-Chair; Senators Charlie Borders, R.J. Palmer II, Dan Seum, Brandon Smith, and Katie Stine; Representatives Dwight D. Butler, Ruth Ann Palumbo, Arnold Simpson, and Ken Upchurch.


Guests:  Ron Carson, Senior Fellow, Policy Development, Council on Postsecondary Education. Michael Miller, Director; Donna Travillian, Program Consultant; Division of Curriculum, Kentucky Department of Education.


LRC Staff:  Greg Hager, Committee Staff Administrator; Rick Graycarek; Christopher Hall; Colleen Kennedy; Van Knowles; Rkia Rhrib; Tara Rose; Cindy Upton; Stella Mountain, Committee Assistant; Program Review and Investigations Committee Staff.  Lisa Cave and Mike Clark; LRC Staff Economists.


Upon motion made by Senator Stine and seconded by Senator Seum, the minutes of the June 12, 2008 meeting were approved by voice vote, without objection.


Ms. Cave presented the part of the report The Costs of College and High School Textbooks in Kentucky that covered college textbooks. She said that data from the Bureau of Labor Statistics indicated that from 2001 to 2007 prices of new textbooks increased more than overall prices. Data on expenditures, which includes new and used textbooks, were available from the College Board. From 2004 to 2007, the national average of expenditures rose about 15%, from $800 to almost $1000. For the South region, which includes Kentucky, the average was slightly lower.  According to data provided by Morehead State University for recent years, textbooks increased in some, but not all, years. 


She said that prices varied by discipline at Morehead State University. Nursing and Veterinary Technology were the most expensive textbooks at $190 to $200 per textbook. Russian and Religion were the cheapest textbooks at about $20 each. 


Ms. Cave explained that in the market for college textbooks, publishers provide new textbooks, retailers sell the textbooks to students, faculty members select the textbooks, and college students actually purchase the textbooks.  Major publishers in the market for new textbooks compete with each other to have faculty members select their textbook for a given class. 


She said that there are three different types of retailers. The on-campus store has a contract with the university, giving it the exclusive right to sell university goods, but the requirement to provide textbooks for all classes.  Depending on the contract, the store provides a set amount of money or a percentage of its profits to the university. Off-campus stores are physical stores that provide books to students, but are not required to provide books for all classes.  Examples of online stores are e-campus and Overall, on-campus and off-campus stores indicate that new textbooks account for about 40% of total dollar sales.


She noted that a survey done for this study of 25 faculty members at public and private universities in Kentucky indicated that their most important determinants selecting textbooks were content, organization, and ancillary materials, not prices. About half the surveyed faculty indicated that they knew the prices of the textbooks they assigned. 


In the adoption process, the bookstore requests that faculty provide their textbook selections for the next semester. The deadline is typically a month before the end of the semester.  Faculty members confer with publishers’ representatives about textbook offerings for a given class.  The bookstore determines how many books are needed. Orders for new books are filled by publishers.  If a book has been assigned previously, the bookstore can buy copies back from students before the end of the semester.  Students get about 50% of the list price if a book will be reused.  Next, the bookstore goes to the wholesale market to find used books.  Once bookstores have exhausted all the used books options, they purchase new books from publishers. 


Ms. Cave emphasized that timing is important in this process. Bookstores offer students higher prices for books that the stores know have been adopted for the next semester. If faculty members notify the bookstore of textbook selections after the semester, students do not have the opportunity to sell back their books at the higher price.  Also, the later that bookstores are informed of faculty’s selections, the less chance stores have of getting used books to fill their orders.  Western Kentucky University provided information for the Fall 2006 semester.  By the adoption deadline, 15% of all courses had textbook adoptions.  Two weeks before the end of the semester, about 55% of the courses had textbook adoptions. Some classes had no textbook adoptions by the end of the semester. 


According to a survey of students at Eastern Kentucky University done for this study, 73% purchased their books from the on-campus store and 47% sold their books to the on-campus store at the end of the semester. On average, they paid about $435 for the semester for books and they received about $90 on average per semester for selling their books.


Ms. Cave said that this market is unusual in that the group that selects the product, faculty, is not the group that actually pays for it.  Students are required to purchase the books for their classes and have few alternatives to doing so. 


She explained that used books are typically lower priced than new books.  Revised or new editions affect the used book market. If faculty choose to continue with the old edition, it may be difficult to continue to fill that order over time as used copies become scarcer.  If the faculty member chooses the new edition, students will have trouble selling copies of the old edition back to the on-campus store. Revision cycles vary by subject. For example, the cycle in the physical sciences tends to be shorter.


Emerging trends to counter the rising costs in textbooks have been ebooks or electronic books, rental programs, and custom textbooks.  Electronic books are typically cheaper than new textbooks.  Students purchase subscriptions to online access instead of having physical textbooks. The subscription expires at the end of the semester or the given time period. 


Rental programs can be established by an entire university or for particular departments.  Textbooks are selected for a specified period for four to five years, for example. Students rent textbooks for the semester or the year and then return the textbooks, which tends to lower their textbook costs.  The start-up costs associated with rental programs are high, approximately $10 million for a four year institution.


With custom textbooks, faculty members work with publishers to determine what parts of the textbook they would like to have.  This can reduce the size of the textbook and reduce the textbook’s cost.  If the book is not readopted, students will have trouble selling it back.


Ms. Cave said that six major types of legislation have been enacted in other states:  prohibiting publishers from providing payments to faculty for textbook adoption;  requiring universities to make book lists public, typically online, before the semester starts;  imposing faculty guidelines for textbook adoptions, which ensures that faculty will adopt textbooks in a timely fashion; placing restrictions on bundling of materials; requiring publishers to provide a list of revisions for new editions; and requiring publishers to provide price lists to faculty. 


At the national level, the recently enacted College Opportunity and Affordability Act requires that publishers provide faculty with the prices of textbooks, requires that items in bundled packages must be available for separate purchase, and that schools must make book lists publicly available in advance of the semester. 


Ms. Cave concluded by saying that costs for college textbooks are rising at a faster rate than inflation; that faculty primarily select textbooks on characteristics other than price; that publishers have an incentive to develop products that faculty find important; and that 16 states have passed laws to address rising textbook costs, but it is too soon to determine their effectiveness.


Senator Stine asked about the status of using ebooks in Kentucky and other states.


Ms. Cave replied that a university bookstore manager interviewed for the report estimated that about 1% of all textbook sales are ebooks.


Senator Stine asked why usage was so low.


Ms. Cave said many students seem to prefer having a physical book and that students may be restricted in the number of pages they are allowed to print due to publishers’ restrictions.


Senator Stine asked whether staff asked whether teachers and professors in Kentucky get incentives to choose particular books, for example, by sponsoring seminars.


Ms. Cave replied that they did not ask that specific question but that staff did not hear of any incentives being offered.


Senator Stine said that this is an important question, especially since some states prohibit payments and other incentives to faculty.  She asked whether staff saw significant differences in editions in more static areas of study such as history. 


Ms. Cave replied that history professors did indicate there were revisions for their textbooks, but it varied as to whether they thought that the revisions were significant or not.


Senator Stine asked whether staff found evidence that any universities link professors’ consideration of textbook costs in their selection process to their raises or other personnel decisions.


Ms. Cave indicated that to her understanding there is no link.


Senator Seum asked who runs the on-campus stores.


Ms. Cave replied three universities in Kentucky have institutional bookstores; the rest contract with private firms such as Barnes & Noble. 


Senator Seum inquired whether staff asked about the percentage mark-up for textbooks.


Ms. Cave said yes, and that it varies for new and used books.


Senator Seum asked whether an off-campus store is private.


Ms. Cave replied that it is a private store.


Senator Seum asked whether staff did a comparison of prices in off-campus and on-campus stores.


Ms. Cave replied that they did not.


Senator Seum said this would be an interesting question, as would questions as to what the mark-up is and what the percentage of profits is. He asked whether a faculty member or a school could literally change books every year, which would hurt the resale values of students’ books.


Ms. Cave replied that they could because there are no restrictions placed on faculty adoptions of textbooks. She said that if a book cannot be sold back to the on-campus store, it could be sold online.


Senator Harris asked how long a textbook is typically in use.


Ms. Cave replied that it varies by subject. Faculty in the physical sciences indicated that it was approximately 3 to 4 years.


Representative Meeks asked what institutions can do to enforce adoption deadlines.


Ms. Cave said she was not sure, but bookstores make an effort to get faculty adoptions on time. 


Senator Borders asked whether staff observed any oversight or monitoring of faculty in the process of book adoptions.


Ms. Cave replied that they did not.


Senator Borders questioned why faculty would change a textbook for subjects that did not change such as the first hundred years of American history.


Ms. Cave speculated that they might prefer the organization of a different textbook.


Senator Borders commented that oversight is needed to prevent change of books because of personal preferences of faculty.


Senator Stine commented that in her opinion, textbook adoption is not just a bookstore issue; it affects attendance and retention.  She said that it seemed that there was not enough effort to remember that the student is the customer. She said that it would not be too difficult to link faculty raises to how cognizant they are of the student as customer. 


Representative Meeks asked what typically gets changed when there are revisions to a textbook.


Ms. Cave said that it varies widely from subject to subject and from edition to edition.  For example, computer science professors indicated that their textbooks are revised very quickly because there is always new technology being introduced, and it is such a rapidly changing field that there are significant changes from edition to edition. 


Representative Upchurch said that in his experience the costs of textbooks were very high.  He said that common practice for his college classes was assigning books for which the instructor or departmental faculty had written a chapter and this could be because of royalties. He asked whether staff found anything like this in their research.


Mr. Clark replied that they did not have a good sense of how common that this practice may be. He noted that they heard complaints from some students about this.  He said that some faculty have noted that if they are writing a good book, and for the course that is the best available, they should be using it.  Promoting their own book would have little effect on its marketability, but the issue of payments or royalties is a concern.


Representative Meeks asked that representatives from the Council on Postsecondary Education (CPE) address questions about colleges and universities treating students as customers and universities’ influence on professors to consider costs in their selection of textbooks.


Mr. Carson replied that the questions raised by Senators Stine, Borders, and Seum are areas of interest for CPE. He said that CPE staff would be very interested in working with LRC staff to follow up on these issues.


Mr. Clark presented the section of the report covering high school textbooks. He said that in 2007 schools in Kentucky reported that they spent approximately $44 million on textbooks and instructional materials, which was a little less than 1% of their total expenditures.  High schools reported about $13.8 million in expenditures for textbooks and instructional materials, which was about $76 per high school student. 


He mentioned that the market for high school textbooks is different than for college textbooks.  Twenty-two states, including Kentucky, have a state-level process to identify lists of books from which public schools can choose.  In the remaining states, local schools pick textbooks on their own.


He said that in Kentucky the 11-member State Textbook Commission develops the approved lists. With the help of the Department of Education, the commission accepts bids from publishers interested in having textbooks considered for approval on the list.  Based on the review process, the commission develops lists of approved textbooks and creates a consumer guide with information about each approved textbooks. 


He said that there are six adoption groups, each of which is a subject area such as language arts and reading or social studies.  The commission develops a new list for one subject area each year. Once a list for a subject area has been developed, the list stays in place for 6 years. 


Publishers interested in having their textbooks and instructional materials considered by the commission must submit sealed bids to the Department of Education.  The submitted prices, which are what schools will pay, are set for 6 years until a new list for the subject area is developed.  The Textbook Commission, with the assistance of a team of reviewers, typically teachers, determines whether submitted textbooks and materials align with the Core Content and Program of Studies and for what grade levels the materials are appropriate. 


Mr. Clark said the multiple list is a listing of the books the commission has approved.  It includes the title and price of each book and the intended grade levels. The consumer guide includes the commission’s evaluations and information submitted by publishers such as how the materials are to be used. Mr. Clark demonstrated how an educator can access the multiple lists on the KDE Web site.


He explained that schools can choose textbooks that are not on the lists. Fourteen percent of principals surveyed indicated that their schools had made off-list purchases.  Schools wishing to make an off-list purchase must use an evaluation process with the same criteria the commission used and submit documentation to the Department of Education. If there are schools from two or more separate districts that are interested in making the same type of purchase, each district goes through this process of evaluating the textbook and submitting paperwork.  The report’s first recommendation is that the Department of Education should post the approval of off-list materials and not require that additional evaluations be performed by other school districts that wish to use the same materials. 


Senator Harris asked whether the lists include multiple textbooks for each subject.


Mr. Clark replied that they do.


Mr. Clark said the state provides funding for elementary and middle school textbooks.  High schools are responsible for paying for textbooks and some charge fees to students to help cover costs.  He said that 32% of surveyed high school principals indicated their schools charge student fees, which in part are used to fund the purchase of textbooks, and 18% had textbook fees specifically designated to fund textbook expenditures.  Of schools charging fees, 25% charged a fee of $10 or less, and slightly less than 50% charged a fee of $40 or more. 


Mr. Clark said that comparing prices of books over time was problematic because there are relatively few instances when books on a multiple list are matches of books on the list from 6 years earlier. He was able to provide examples that price changes varied depending on the book. On an annual basis, some books increased in price more than the general rate of inflation, and some books increased less.


Staff also compared prices in Kentucky to prices in selected other states with state-level adoptions.  For books for which matches could be found, price variation seemed to be the result of the timing of the adoption cycles: the more recent the purchase, the more expensive the book.


He said that based on the survey of high school principals, lost and damaged textbooks commonly affect textbook expenditures.  Schools are developing textbook management systems to track textbooks assigned to students and to hold students accountable for returning their textbooks. 


He said that the survey also indicated that schools are using a number of approaches to reduce the number of textbooks they have to purchase.  An example is the use of classroom sets, which means the school purchases one set of books that students of a class can use at school and check out, but each student does not have his or her assigned copy.  He said that teachers and principals said that some parents were concerned that their children do not have a physical textbook that they can take home on a regular basis. 


Mr. Clark said that some teachers indicated that some books did not meet expectations once they were implemented in the classroom.  Publishers noted that sometimes this is an issue of teachers not being trained properly to use material as intended.  The report’s second recommendation is that the Textbook Commission should develop a formal method to allow educators to share experiences with textbooks and other instructional materials purchased by each high school.


As part of the survey, staff asked high school principals whether the 6-year adoption cycle is appropriate, too long, or too short. More than 50% of principals indicated that 6 years was appropriate for each subject area.


Surveyed principals were also asked how heavily teachers use textbooks and instructional material in the classroom.  Respondents said that textbooks tend to be more heavily used in mathematics, science, and social studies, and to a lesser extent in reading.  For arts and humanities, practical living, and writing, textbooks were not reported being used a lot; teachers tended to use supplementary materials. 


He said that staff researched information that may be provided by the publisher on the effectiveness of their products and included in the consumer guide, such as brief summaries of evaluations and how widely the materials are used. Staff concluded that there tend to be few standards for measuring the effectiveness of textbooks and that summaries tend to be too brief to evaluate the claims. The report’s third recommendation is that the Textbook Commission should encourage publishers to provide additional information demonstrating the effectiveness of instructional materials.  The commission should also include material in the consumer guide to help schools evaluate the information on effectiveness provided in the guide. 


Senator Stine asked what the relationship is between textbook publishers and the ACT/SAT publishers; for example, whether they are the same companies.


Mr. Clark replied that he did not know, but he would follow up.


Senator Stine asked whether the Textbook Commission determines which books or off-list materials are being used by schools that score higher on the ACT, SAT, and CATS tests.


Mr. Clark replied that there is no central data collection to understand which schools are purchasing which textbooks. 


Senator Stine suggested that doing so would be a good idea.


Senator Harris asked what Web site showed the list of approved textbooks.


Mr. Clark said it is on the KDE Web site and that he could provide the specific link to access the lists.


Senator Seum asked whether the survey of high school principals was anonymous.


Mr. Clark replied that it was.


Senator Seum asked why the report covered high schools textbooks, but not middle and grade schools.


Mr. Clark replied that the study topic presented to staff was high school and college textbooks.  The process by which the Textbook Commission develops its approved list is the same regardless of the grade level.  In terms of looking at expenditures and talking with principals and teachers, staff focused on high schools.


Senator Seum said that it bothers him that state laws do not mandate that every child will have a textbook.


Mr. Clark replied that he was not aware of any such law.


Senator Seum said that he is appalled that students have to share textbooks.  He asked whether staff asked about this.


Mr. Clark replied that schools are using classroom sets.  Staff did hear of concern from parents regarding this matter. 


Representative Meeks asked about the reasons given for principals to purchase off-list textbooks.


Mr. Clark replied that, generally, they felt that it was a better match for the classes that they were providing. 


Representative Meeks asked whether he understood correctly that there is not really a good way of identifying and measuring the effectiveness of material.


Mr. Clark said the research that is being provided in the consumer guide tends to be too brief to determine whether or not it would meet research standards and whether or not a certain textbook increases scores if it were used in certain situations. 


Representative Upchurch remarked that looking at the money spent on textbooks, high schools pay less for their books that college students, yet the cost of printing a textbook for a high school is not that much different other than the content.


Mr. Clark said that in high school, the cost per student seems to be considerably lower than the cost of textbooks in college.  The revision cycle as well as the fact that some classes are being taught without textbooks may be part of the reason.


Representative Upchurch pointed out high schools have guidelines in place that colleges do not, so this is something that the legislature should possibly look at.


Senator Borders agreed that children need textbooks and something needs to be done about that. He also asked whether there are groups and foundations across the Commonwealth that can help with grants for textbooks.


Mr. Clark said that he has heard of those types of grants.


Senator Borders said that if there is a system to help poor districts, they should use it, but they have the responsibility to make sure that all students have the textbooks they need.


Senator Seum suggested that to help reduce expenditures for lost and damaged books, schools should ask for a deposit from parents on books, which they get paid back if the books are returned.


            Representative Meeks asked members of the Kentucky Department of Education to come forward to respond to the report.  Michael Miller, Director of the Division of Curriculum Development, introduced himself and Donna Travillian, Program Consultant.


Written responses from the KDE to the recommendations in the report were distributed to committee members.


Mr. Miller said that one of the key reasons that KDE hears for adopting an off-list book is that while a book did not make the list because it does not cover the entire scope of the core content of a subject area, it is an excellent book that can be used with other materials.  An example is a spelling book in the language arts area.


Mr. Miller said that one of the ways that teachers communicate with each other about instructional materials and textbooks is through listserves for each content area. Hundreds of teachers, if not thousands, have participated in these listserves, and word gets out when something is not working.  In regard to the Consumer Guide, a publishing company will promote its own product, and larger companies have more resources to provide scientific-based research. By statute, publishing companies are required to deliver samples of textbooks to schools. He said his experience is that teachers spend a lot of time looking at textbooks to find out what is best. 


Mr. Miller said that there could be a way to reduce the paperwork for off-list purchases by providing the list of schools that have made their purchases and what kind of purchasing decisions other schools are making. He agreed that additional evaluations being performed by each school for an off-list purchase seems burdensome. 


Addressing an earlier question from Senator Stine, he said that it is a function of the KDE, when looking at ACT and SAT scores and core content test scores, to find out what instructional resources and textbooks high performing schools are using, and what is making the difference in those high performance schools, but still something educators should do when selecting textbooks.


The report The Costs of College and High School Textbooks in Kentucky was adopted upon motion made by Representative Simpson and seconded by Senator Harris, without objection by roll call vote.


Senator Seum made a suggestion that, if it is appropriate for the co-chairs to do this, he would like somebody from KDE explain to the committee why students are not necessarily assigned their own textbooks. 


Representative Meeks said it was appropriate.


Senator Seum posed the question as to whether the legislature should consider mandating that every student have a textbook.


The meeting was adjourned at 11:50am.