Report Title:

Education Reform; Student Weighted Formula

Description:

Implements education reform and decentralization measures; establishes a student weighted formula for providing operating moneys to individual public schools.

HOUSE OF REPRESENTATIVES

H.B. NO.

2002

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to education.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that significant changes need to be made to enhance Hawaii's public education system, and improving student achievement should be the guiding principle behind this effort. However, the legislature further finds that the State's students, parents, teachers, school administrators, departmental staff, and other educational stakeholders do strive to achieve excellence. Unfortunately, their efforts will never be completely successful until various aspects of the system around them is improved.

The legislature has supported and will continue to support efforts by the department of education to reinvent Hawaii's schools to meet the needs of today's workplace. Research shows that student performance is significantly higher in smaller schools. While comprehensively establishing smaller schools throughout the State is not economically feasible, some schools have taken it upon themselves to create smaller and more manageable learning communities within their schools. Research also strongly supports the need for early childhood education and the establishment of a coherent system that spans all levels of education. The department of education teamed with the University of Hawaii and Good Beginnings Alliance to create a vision for such a system, which was presented in 2002, and is now being implemented.

Despite these efforts, more needs to be done. Currently, public school principals are faced with a nearly impossible task, as they are asked to attend to every detail of operating their schools without enough institutional support or the discretion to expend funds on programs of their choosing. While some support and additional school leadership is provided by the school/community-based management (SCBM) system at many schools throughout the State, SCBM plays a far more limited role at some locations, and has not been implemented at all at others.

Recently, departmental leadership was decentralized through the creation of the complex area system, including the hiring of complex area superintendents. While replacing the old district system with this new structure was an important first step, further changes need to be made to allow meaningful authority to exist as close to the schools as possible. The complex area structure will serve as an excellent base upon which to build these continued reforms. Ideally, a far greater number of decisions, and a much higher percentage of moneys, will be placed directly in the hands of individual schools and their leaders.

Another area of improvement necessary to promote excellence in learning is the method by which moneys are allocated to individual schools. Hawaii currently receives high marks nationally for funding equity, as the State's organization under a single statewide district enables it to fairly disburse moneys to schools. In other states, local revenue sources such as property taxes account for a significant portion of school and district funding, resulting in massive financial disparities between schools in more and less affluent areas.

Although the State avoids this particular pitfall, further improvements can be made to ensure that moneys go to the schools that truly have the greatest need, and to place more moneys at the discretion of individual schools. While the current funding system takes into account certain criteria when allocating moneys to schools, it does not comprehensively address the fact that some students cost more to educate than others. For example, students with special needs, such as those with limited English proficiency, or who have physical, psychological, or other impediments to learning, are more expensive to teach than other students who are not faced with such barriers. The current system also does not adequately empower schools by giving them significant authority to expend funds.

One method that can be used to address these funding issues is a student weighted formula. Under such a system, moneys are allocated to schools based on a system of weights that applies to every student in the public schools. To determine which weights apply to each student, the cost of educating a theoretical "baseline" student with no measurable impediments to learning is calculated. Then a set of criteria is devised which can be applied to any student to determine how expensive it is to educate that student, relative to the "baseline" student.

Under a student weighted formula there are several advantages. Among other things:

(1) The true cost of educating students can be much more accurately assessed;

(2) Funds follow students to whichever school they attend;

(3) More operating moneys are placed in the hands of individual schools; and

(4) The budget process becomes more transparent as it is based on dollars, not staff positions.

Another benefit of using this system in Hawaii, is that it may also be applied to the State's charter schools, which have faced significant funding difficulties in recent years. In this way, one funding mechanism can be used to ensure that moneys are distributed fairly to all schools in Hawaii.

However, establishing a student weighted formula cannot be effective in a vacuum. Other reform measures must be implemented as well. In particular, principals will need more training and support if they are required to take on additional responsibilities. Furthermore, the SCBM system will need to be enhanced if it is to become a more critical part of the school's leadership team.

The department of education is also faced with significant impediments that will likely reduce their ability to effectively implement the student weighted formula. With educational responsibilities spread throughout numerous state agencies, there are various roadblocks to progress that could keep the department of education and individual schools from successfully performing their duties and making the best use of a new funding system.

The legislature finds that a comprehensive effort addressing all of these issues is required for Hawaii's public schools to maximize student achievement. Accordingly, the purpose of this Act is to enhance educational outcomes in Hawaii's public schools by:

(1) Requiring the department of education to apply a student weighted formula in allocating operating moneys to all public schools;

(2) Replacing the current SCBM system with a mandatory elected school-based board system that is to be implemented at each public school;

(3) Appropriating moneys to expand the SCBM system and prepare for the implementation of school-based boards;

(4) Appropriating moneys for principals' training;

(5) Requiring the department of education to convene a working group with other state agencies to address implementation of the student weighted formula and impediments to the efficient management of schools; and

(6) Requiring the department of education to submit a detailed plan for implementation of the student weighted formula.

SECTION 2. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§302A- Student weighted formula. In providing operating moneys to public schools, the department shall implement a student weighted formula that takes into account the educational needs of each student. Under the student weighted formula, the department shall:

(1) Create a list of applicable criteria that affect the cost of educating students;

(2) Determine the cost of educating a baseline student; and

(3) Create a system of weights based upon the criteria that may be applied to the cost of a baseline student to determine the relative cost of educating any student.

As used in this section, "baseline student" means a public school student to which none of the criteria determined under paragraph (1) apply."

SECTION 3. Section 89-10.6, Hawaii Revised Statutes, is amended to read as follows:

"§89-10.6 [School/community-based management] Elected school-based board waiver. A school or a learning support center participating in the [school/community-based management] elected school-based board program may initiate a waiver from policies, rules, or procedures, including collective bargaining agreements, as provided for in section 302A-1126."

SECTION 4. Section 302A-101, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read:

""Student weighted formula" means a formula for allocating operating moneys to individual public schools that includes a system of weighted criteria affecting the baseline cost of educating each student attending a public school."

SECTION 5. Section 302A-202, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-202 Student assessments.[]] Any school [electing to participate in school/community-based management] may develop and implement its own student assessment mechanisms; provided that the board shall include the results of the assessments in the educational status report to the legislature and the governor required in section 302A-1004."

SECTION 6. Section 302A-1103, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-1103[]] Principal; authority and responsibility. The role of the principal shall include but not be limited to overseeing the day-to-day management of the school, the primary function of which is to develop and deliver instructional services to students in accordance with statewide educational policy and standards. The principal shall collaborate with:

(1) Complex and complex area leadership to ensure that the goals and objectives of the complex and complex area are being met; and

(2) The school's school-based board in operating and managing the school.

The principal shall ensure that the curriculum facilitates the achievement of the statewide student performance standards adopted for the public school system. The principal shall be responsible for expending operating moneys provided to the principal's school under the student weighted formula."

SECTION 7. Section 302A-1124, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-1124[]] Mandate to [initiate school/community-based management] establish elected school-based board system. The department[, through the board and its superintendent, shall formulate policies, including criteria and procedures to determine which schools and learning support centers shall participate in the system, to initiate a school/community-based management system in the public schools.] shall establish an elected school-based board system that:

(1) Diffuses educational decision-making by involving and securing the input of those persons directly affected at the school level; and

(2) Encourages school-initiated methods for achieving statewide educational goals established by the board of education.

Under the elected school-based board system, each public school shall establish and maintain an elected school-based board which shall collaborate with and assist the school's principal in operating and managing the school. School-based boards may participate in the selection of school personnel by providing input into the selection process.

The board of education shall establish policies governing the composition, election, and operation of school-based boards."

SECTION 8. Section 302A-1126, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-1126[]] Waiver of policy, rule, or procedures. Any state agency that may be required to act under state law on a matter affecting an individual school, its school community, or a learning support center shall waive otherwise applicable policies, rules, or procedures when requested to do so by a school or a learning support center participating in the [school/community-based management] elected school-based board system unless the agency, within thirty days, can justify a denial to the appropriate authority. The board shall adopt procedures necessary to process waivers initiated by schools or learning support centers subject to the [school/community-based management] elected school-based board system. This section shall apply to collective bargaining agreements as provided for in all relevant collective bargaining agreements negotiated pursuant to chapter 89."

SECTION 9. Section 302A-1185, Hawaii Revised Statutes, is amended to read as follows:

"§302A-1185 New century charter schools; funding. (a) Beginning with the fiscal year [2004-2005] 2006-2007 supplemental budget request, and each budget request thereafter, the charter school administrative office shall submit a request for general fund appropriations for each new century charter school based upon[:

(1) The actual and projected enrollment figures in the current school year for each charter school; and

(2) A per pupil amount for each regular education and special education student, which shall be equivalent to the total per pupil cost based upon average enrollment in all cost categories, including comprehensive school support services but excluding special education services, and for all means of financing except federal funds, as reported in the most recently published department of education consolidated annual financial report.

The legislature shall make an appropriation based upon the budget request; provided that] the student weighted formula established pursuant to section 302A- . The legislature may make additional appropriations for collective bargaining increases for charter school employee members of collective bargaining units and for other requested amounts. The governor, pursuant to chapter 37, may impose restrictions or reductions on charter school appropriations similar to those imposed on other public schools.

(b) All federal financial support for new century charter schools shall be no less than all other public schools; provided that if administrative services related to federal grants and subsidies are provided to the charter school by the department, the charter school shall reimburse the department for the actual costs of the administrative services in an amount that does not exceed six and one-half per cent of the charter school's federal grants and subsidies.

Any new century charter school shall be eligible to receive any supplementary financial grant or award for which any other public school may submit a proposal, or any supplemental federal grants limited to new century charter schools; provided that if department administrative services, including funds management, budgetary, fiscal accounting, or other related services, are provided with respect to these supplementary grants, the charter school shall reimburse the department for the actual costs of the administrative services in an amount that does not exceed six and one-half per cent of the supplementary grant for which the services are used.

All additional funds that are generated by the local school boards, not from a supplementary grant, shall be separate and apart from allotted funds and may be expended at the discretion of the local school boards.

[(c) To enable new century charter schools to access state funding prior to the start of each school year, foster their fiscal planning, and enhance their accountability, the charter school administrative office shall:

(1) Provide forty per cent of a new century charter school's per pupil allocation based on the new century charter school's projected student enrollment no later than August 1 of each fiscal year; provided that the new century charter school shall submit to the charter school administrative office a projected student enrollment no later than May 15 of each year;

(2) Provide an additional forty per cent of a new century charter school's per pupil allocation no later than October 15 of each year; provided that the new century charter school shall submit to the charter school administrative office a verified student enrollment no later than September 15 of each year; and

(3) Provide the remaining twenty per cent per pupil allocation of a new century charter school based on the new century charter school's verified student enrollment no later than January 1 of each year; provided that the new century charter school shall submit to the charter school administrative office a revised student enrollment no later than December 1 of each year.

(d)] (c) The department shall provide appropriate transitional resources to a new century conversion charter school for its first year of operation as a charter school based upon the department's allocation to the school for the year prior to the charter school's conversion.

[(e)] (d) No new century charter school nor new century conversion charter school may assess tuition."

SECTION 10. Section 302A-1505, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Prior to meeting with the department of accounting and general services to advise it of a school's repair and maintenance needs, the school's principal and the business and fiscal officer shall consider the recommendations made by the [school/community-based management council, if there is such a council at the school;] elected school-based board or the local school board, if the school is a new century charter school or a new century conversion charter school. [If there is no school/community-based management council or local school board, then the school's principal shall appoint a standing committee composed of a teacher, a member of the support staff, a parent, a student, and a community member.]"

SECTION 11. Section 302A-1507, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-1507[]] Classroom cleaning project; established. (a) There is established a classroom cleaning project in all public schools [designated to participate in school/community-based management]. Each [school/community-based management] school, through its [council,] school-based board, may develop mechanisms to provide for classroom cleaning, including but not limited to having parent, student, or other community groups clean the classrooms on a regular, continuing basis.

(b) [School/community-based management schools] Schools may use any available resources to achieve the purposes of this section; provided that no full-time custodial staff currently employed at the school shall be displaced."

SECTION 12. Section 302A-101, Hawaii Revised Statutes, is amended by deleting the definition of "school/community-based management system".

[""School/community-based management system" means a method of educational management that diffuses educational decisionmaking to involve or secure the input of those persons directly affected by the decision to be made at the school level, and encourages school-initiated methods for achieving educational goals established statewide by the board.""]

SECTION 13. Section 302A-601, Hawaii Revised Statutes, is repealed.

["[§302A-601] Selection of school personnel. School/community-based management councils may participate in the selection of school personnel by providing input into the selection process."]

SECTION 14. Section 302A-1306, Hawaii Revised Statutes, repealed.

["[§302A-1306] School priority program; established. (a) There is established within the department a school priority program to augment regular instruction and other educational services at the discretion of the individual public schools. Further, it is the intent of the legislature that the school priority program promote the equitable distribution of educational resources statewide, strengthen the scope of decisionmaking, increase flexibility in resource allocation at the school level, and provide a systematic method of conforming resource allocation to the unique needs and priorities of individual schools.

(b) All moneys to carry out the purposes of the school priority program under this section to section 302A-1309 shall be allocated by the legislature through appropriations out of the state general fund.

(c) The department shall include in its budgetary request for each upcoming fiscal period, the amounts necessary to effectuate the purposes of this section to section 302A-1309."]

SECTION 15. Section 302A-1307, Hawaii Revised Statutes, is repealed.

["[§302A-1307] Distribution of resources. The superintendent shall allot the moneys of the school priority program to the school districts based on enrollment. In the allotment of positions to the districts, the superintendent shall calculate each district's entitlement based on enrollment and may deploy one instructional resource augmentation position for each two hundred fifty students enrolled in each school; provided that all positions shall be deployed."]

SECTION 16. Section 302A-1309, Hawaii Revised Statutes, is repealed.

["[§302A-1309] Departmental controls. The superintendent shall develop and implement appropriate planning procedures and follow-up accountability reports, without regard to chapter 91, to ensure sound planning, control, and accountability in the use of moneys allocated by the legislature to the school priority program. The procedures and reports, however, shall recognize the need for providing the schools latitude and discretion to determine their needs and priorities, and shall avoid imposing undue amounts of paperwork and administrative burdens on the schools.

The department shall submit an annual report to the legislature, which shall include but not be limited to an accounting of how funds were used by the schools."]

SECTION 17. The department of education shall convene an interagency working group to:

(1) Address the implementation of the student weighted formula;

(2) Discuss systemic impediments to the efficient management and operation of schools and the public school system, including issues related to:

(A) Personnel;

(B) School construction;

(C) School repair and maintenance;

(D) Operational support; and

(E) Any other impediments encountered by the department of education;

(3) Determine which statutes, rules, policies, or procedures need to be amended or removed to enable the effective implementation of the student weighted formula and the efficient management of schools; and

(4) Determine which functions and positions could be moved to the department of education to allow for schools and the public education system to be operated and managed more effectively.

The working group shall include the following individuals, or their designee:

(1) The superintendent of education;

(2) The comptroller;

(3) The director of human resources development;

(4) The director of human services;

(5) The director of health;

(6) The director of budget and finance; and

(7) The attorney general.

The working group shall submit a report of its findings to the legislature no later than twenty days before the convening of the regular session of 2005.

SECTION 18. The department of education shall submit to the legislature no later than twenty days prior to the convening of the regular session of 2005:

(1) A detailed plan for implementing the student weighted formula;

(2) A list of statutes, rules, policies, or procedures that need to be amended or removed to enable the effective implementation of the student weighted formula; and

(3) A list of mandated programs that are recommended to be repealed to enable the department and individual schools to have greater flexibility in budgeting, operations, and curriculum management.

SECTION 19. The department of education shall develop the elected school-based board system to be established under section 7 of this Act.

SECTION 20. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2004-2005 for the department of education to establish and operate a principals training academy to train principals to address:

(1) The implementation of the student weighted formula funding system; and

(2) Other new responsibilities and policies affecting principals under this Act.

The sum appropriated shall be expended by the department of education for the purposes of this Act.

SECTION 21. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2004-2005 for the department of education to:

(1) Enable the school/community-based management program to effectively address the implementation of the student weighted formula; and

(2) Prepare for the implementation of the elected school-based board system.

The sum appropriated shall be expended by the department of education for the purposes of this Act.

SECTION 22. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 23. This Act shall take effect upon its approval; provided that:

(1) Sections 19, 20, and 21 shall take effect on July 1, 2004;

(2) Sections 2, 4, 6, 9, 14, 15, and 16 shall take effect on July 1, 2006, and shall apply to the 2006-2007 school year; and

(3) Sections 3, 5, 7, 8, 10, 11, 12, and 13 shall take effect on July 1, 2005, and shall apply to the 2005-2006 school year.

INTRODUCED BY:

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