The first meeting of the Senate Standing Committee on Education was held on Monday, January 31, 2005, at 2:00 PM, in Room 131 of the Capitol Annex. Senator Ken Winters, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Ken Winters, Co-Chair; Senators Walter Blevins Jr, Brett Guthrie, Alice Kerr, Vernie McGaha, Gerald A Neal, R J Palmer II, Tim Shaughnessy, Gary Tapp, Johnny Ray Turner, Jack Westwood, and David L Williams.
Guests: Susan Weston, Kentucky Association of School Councils; Clyde Caudill, Jefferson County Public Schools; Wayne Young, Kentucky Association of School Administrators; Toni-Ann Mills, Kentucky Adult Educators Literacy Institute; Cindy Heine, Prichard Committee; and Tony Sholar, Rotunda Group.
LRC Staff: Audrey Carr, Janet Stevens, Jonathan Lowe, Sandy Deaton, Janet Newman, and Lisa Moore.
Senator Ken Winters, Chair, introduced new members of the Senate Standing Committee on Education. He also introduced Mr. Tom Layzell, President, Council on Postsecondary Education; Dr. Lee Todd Jr., President, University of Kentucky (UK); and Dr. Joe McCormick, Executive Director, Kentucky Higher Education Assistance Authority (KHEAA). The panel discussed postsecondary education affordability issues with the committee members.
Mr. Layzell said the 1997 Kentucky Postsecondary Education Improvement Act had several purposes. They included: 1) Development of a society with a standard of living and quality of life that meets or exceeds the national average; and 2) Increased educational attainment at all levels. He gave a summary of national and regional tuition and fees comparisons for public two and four-year institutions for fiscal year 2004-2005.
Mr. Layzell said postsecondary education is still a good buy. He said affordability, access, and quality are the three variables that institutions need to keep in balance when determining tuition and fees, and pursuing the task of meeting the goals in (1997) House Bill 1. He said Kentucky institutions continue to be affordable. The Kentucky average tuition and fees for 2004-2005 was $4,321, which is less than the national average of $5,132. He said the two-year institutions are not faring as well. The Kentucky Community and Technical College System (KCTCS) tuition and fees now exceeds the national average. He said two of the seven border states had higher average annual tuition and fees in fiscal year 2004-2005.
Mr. Layzell said there is a national report card called "Measuring Up" that is conducted by a national organization every two years. He said Kentucky has dropped to 14th in the country in overall affordability, but that is still a very good ranking.
Mr. Layzell said very few students pay the sticker price that people read about in the newspapers because of the concept called net student cost. There are discounts such as federal aid, state aid, institution aid, and private scholarships and grants which all contribute to reducing a student's cost of attending college.
Mr. Layzell said the average financial aid package in 2002-2003 of a first-time full-time freshman at a Kentucky public four-year university covered the tuition and fees at the time, but did not cover the full cost of attendance. The total cost of attendance can include costs such as room and board, books and supplies, transportation, and other various costs that go beyond tuition and fees. He said the good news is the average financial aid package still continues to exceed tuition and fees, but the bad news is that students still have to work or take out additional loans to afford to attend Kentucky institutions. He said this should be a red flag for committee members as Kentucky reviews its postsecondary studies.
Mr. Layzell said the comparison of total public funds revenue between fiscal year 1999 and fiscal year 2004 show cause for concern. In the year 1999, the state General Fund represented 69 percent of funding for operating costs for institutions compared to 31 percent of tuition and fees revenue. In 2004, the state General Funds dropped to 59 percent compared to 41 percent of tuition and fees revenue. Mr. Layzell said this is an alarming trend, and for Kentucky to reach its goals as set in House Bill 1, it is going to require much more state investment in the years to come.
Mr. Layzell summarized by saying that Kentucky ranks 14th among the states in providing affordable postsecondary education opportunities, according to "Measuring Up" 2004. He said the percentage of family income necessary to pay for public postsecondary education in Kentucky is unchanged from a decade ago.
Mr. Layzell said there are many affordability challenges ahead. In 1980-1981, the Pell Grant covered 35 percent of the average cost of attending a public, four-year institution; by 2003-2004, it covered only 23 percent, according to the College Board. In 1992, the college participation rate for students from low income families in Kentucky was 20 percent compared to the United States average of 17.2 percent. A decade later in 2002, the college participation rate in Kentucky remained at 20 percent, while the national average increased to 24.7 percent. Mr. Layzell said other affordability challenges include increased financial aid for part-time students, adults, and transfer students; increased access to postsecondary education; and increased funding for institutional operation to maintain and improve quality.
Mr. Layzell said the council is addressing the challenges in several ways. The Affordability Policy Group, Comprehensive Funding Review, and Strategic Planning Process are all council affordability initiatives. The council has approved recommendations for statewide tuition reciprocity and mid-year tuition increases. He said there is an affordability study to fill gaps in data and policy recommendations, as well as the Western Interstate Commission on Higher Education Project, which is a national project that is looking for ways to align tuition, financial aid, and funding policies. Mr. Layzell said the comprehensive funding review is looking for ways to link affordability with finance policies, and the council has restructured the public agenda to focus on affordability.
Mr. Layzell concluded by saying that potential outcomes include: 1) Increasing access to financial aid for General Equivalency Diploma (GED) graduates, part-time students, and transfer students; 2) Expanding grant programs and low-interest/forgivable student loans; 3) Integrating and aligning policies governing financial aid, tuition, and state appropriations; and 4) Improving communications with prospective students and their families about financial aid opportunities and net college costs.
Dr. McCormick made several points to the committee. He said approximately 60 percent of the total aid disbursed to Kentucky students was in the form of student loans. A total of $909 million dollars was spent on students attending Kentucky colleges and universities.
Dr. McCormick said that while Kentucky ranks 14th in the country for affordability, for the very needy individuals in the state, access to college is less affordable. Although Kentucky has made dramatic progress in the amount of grant dollars the legislature provides in the Kentucky Educational Excellence Scholarship (KEES) fund, College Access Program (CAP), and the Kentucky Tuition Grant (KTG) fund. The amount was $22 million dollars in 1994 to $148 million in 2004, but students had to increase their borrowing from $186 million in 1994 to over $400 million in 2004.
Dr. McCormick discussed the average student loan debt load. He said most Kentucky students will graduate with an average student loan debt load of $15,375. The average of KHEAA-guaranteed student loans for one year was $5,500. He said Kentucky has seen a progressive increase in default rates in part due to loaning more money to high-risk students.
Dr. McCormick discussed the impact in Kentucky of changes in the federal need analysis methodology. He said the United States Department of Education announced a two percent reduction in state and local tax allowance for the Free Application for Federal Student Aid filers for 2005-2006. He said fourteen percent of Kentucky students will lose a portion of the Pell Grants they received the prior year, and 0.5 percent will lose their eligibility for Pell awards completely. Total projected financial impact is a $1 million reduction in Pell Grants for Kentucky students. These students would also lose eligibility for Kentucky's CAP grant.
Dr. Todd told committee members he appreciated the opportunity to discuss the tuition issues facing the country. He said as corrections costs, Medicaid, and K-12 demands increase, higher education is getting the short end of the budget stick around the nation.
Dr. Todd said he is the convener for all of the Kentucky presidents so he is speaking for all of them. He said postsecondary education in the last three years has received a $116 million cut in recurring costs, and a $41 million non-recurring cut. For UK, this amounted to $72 million less accumulative over the last three years. Dr. Todd said therefore, UK has taken steps to make the campus more efficient. He referred members to the handout that UK completed this week which explained things that the university has done to contain costs.
Dr. Todd said UK has not been lavish with salary increases, has a hiring freeze in place, and has contained rising health care costs to eight percent versus the nation's average of rising costs at 11 percent. He said House Bill 1 helped the Bucks for Brain program, but urged legislators to continue those type of investments to help Kentucky become a top-20 public research university.
Dr. Todd said with costs increasing, and state funding being cut, the only option has been to increase tuition. He said UK's budget on a per student basis has been cut $2,360 per student, and tuition has been increased over the last three years by $1,430, therefore, UK has lost $930 per student at a time when enrollment had increased by 2,000 students. He said UK is losing money on volume.
Dr. Todd said students receiving a public education in Kentucky are still receiving a very good deal. Every public institution is less expensive than the average of their benchmarks for undergraduate tuition and fees. He said compared with our contiguous states, Kentucky's annual average tuition and fee rate is one from the bottom. It is $3,000 less than the state with the highest cost that surrounds Kentucky.
Dr. Todd said the state's average university tuition and fees are compared as a percent of per capita income because this is a sensitive issue in states that have a low per capita income. However, if a state always says it cannot do something because of a low per capita income, there will always be a low per capita income. He said the goal of House Bill 1 was to change that. Kentucky, Tennessee, and West Virginia are all tied at the bottom at 14.4 percent. Illinois is 16 percent, Indiana is 18 percent, Missouri is 19 percent, and Ohio is 23 percent of the cost of tuition versus the per capita income of those respective states. Dr. Todd said UK is considered one of the best deals in the nation. According to Kiplinger's personal finance magazine, UK ranks the fourth best value of education in the nation considering UK's tuition and the quality of education a student receives.
Dr. Todd said despite the increases in tuition, Kentucky schools are educating more people than ever. In 1998, Kentucky had 158,000 students and in 2004 there are 200,000 students. The Kentucky public higher education system is operating the best it can with limited resources.
Senator Winters thanked the panel members for their presentation and opened the floor to members for questions. Senator Kerr asked why the graduating class of 2007 will be the largest class to go to college, but the least prepared. Dr. Todd said this was a quote from Brett Kirwan who spoke on this topic at the national level. It has much to do with the large number of Hispanics entering into the K-12 education system.
Senator Shaughnessy said he is concerned about the major shift in what is expected from higher education in the last four years. He said Kentucky has moved from expecting greatness from our state universities to not even funding the baselines so they can keep up with the institutions with whom they compete. He discussed the earmarking of a penny in the cigarette tax to provide an incentive fund for the cancer research at the UK and University of Louisville to get their cancer programs accredited by the National Cancer Institute.
Senator Winters said the committee is sympathetic to the needs of our state universities, and Kentucky's future depends upon its educational program K-infinity. He said Kentucky must work aggressively to make our state a showcase, or a shining star in education.
Senator Neal asked where the breakdown occurs, and if some intervention does not occur now, is some erosion inevitable. Mr. Layzell said that erosion is starting to occur already. He said the Council on Postsecondary Education and all the state university presidents are seriously concerned that Kentucky is not going to meet its goals of 2020 without a significant infusion of state funds.
Dr. Todd said the time is now for the legislature to provide funding for the state universities. He said Kentucky was envied at one time from around the nation for its higher education programs. He said the endowment at UK has gone from under $200 million to $550 million since 1997. This has been a tremendous upswing, however, last legislative session he told the committee that the state was on a plateau, which can be very dangerous because other states continue to move forward. If the legislature does not provide help this session, the tilt of this plateau will be negative. He said North Carolina passed a $3.1 billion referendum to build research and classroom buildings all over North Carolina. He noted that California passed $3 billion for stem cell research, and Wisconsin has provided $750,000 for stem cell research. Michigan has earmarked all of its tobacco settlement money to life sciences. Dr. Todd said that UK is completing its Biological/Biomedical Sciences Building which will generate $25 million a year with average salaries from $20,000 - $200,000, and will educate thousands of students who hopefully will stay in Kentucky and distribute themselves throughout the state and create jobs.
Senator Neal made the observation that it is going to take courageous and enlightened leadership to overcome the challenges and help get our state universities get back to excellence. Senator Winters said the General Assembly is capable of thinking outside the box and he challenged members of the committee to remember this as the budget is crafted in the session.
Senator Kerr agreed with Senator Shaughnessy that the leadership with our presidents is excellent for higher education. She said Governor's Fletcher vision for higher education is strong, and has specific jobs in mind that he wants to see created.
Senator Winters welcomed Senator Kelly, Ms. Glenna Fletcher, First Lady, and Dr. Susan Cantrell, Executive Director, Collaborative Center for Literacy Development, University of Kentucky, to discuss Senate Bill 19. Senator Kelly said this initiative has been termed the Governor's Read To Achieve Initiative.
Ms. Fletcher said each year thousands of children enter into Kentucky schools and will not learn to read. For decades, these children were set aside in special education classes, or went on to drop out of school. Ms. Fletcher said Kentucky can do better by identifying these struggling readers when they first enter school, teachers can intervene with proven research-based strategies and put them on the road to lifelong learning.
Ms. Fletcher said in 1998, Senator Westwood and Senator Kelly sponsored legislation creating early reading intervention grants to increase the number of teachers trained to provide these services. Through this effort, thousands of Kentucky public school children are receiving these services, but unfortunately thousands of other children who need these services still do not have them available. She said Senate Bill 19 also sponsored by Senator Westwood and Senator Kelly, is the next step to ensure that every Kentucky child that needs these services to learn how to read will receive them. She and her husband believe that if Kentucky can get the reading right, the rest will fall into place, and she personally endorses Senate Bill 19.
Dr. Cantrell shared the progress that has been made in Kentucky in providing intervention services to students who are at-risk of reading failure since the passage of Senate Bill 196 in 1998. She also shared the need for continued and expanded intervention services so that all children across the state who need intervention services can receive them.
Dr. Cantrell said the National Assessment of Educational Progress 2003 results for Kentucky indicate that 36 percent of fourth graders are "below basic" in reading, and the Commonwealth Accountability Test System (CATS) scores indicate that 1/3 of fourth graders are not proficient in reading. A percentage of these students could achieve proficiency with improved classroom instruction, however, about 1 in 5 of these students need intensive intervention and additional instruction focused on the needs of struggling readers.
Dr. Cantrell discussed the social consequences of reading difficulties. Children who experience serious reading difficulties have a 10 - 15 percent chance of dropping out of high school. They comprise about half of all adolescents and young adults with criminal records, and comprise about half of all youths with substance abuse problems. Only two percent complete a four-year college program.
Dr. Cantrell said research has shown: 1) A child's reading level at the end of third grade is a more accurate predictor of school success than any other variable (Slavin, 2001); and 2) The probability that a child who is a poor reader at the end of the first grade will remain a poor reader at the end of Grade 4 is nearly 90 percent (Juel, 2000).
Dr. Cantrell said researchers have noted that in order to prevent reading failures schools need a comprehensive and effective reading program for all students, ongoing professional development for teachers to increase their knowledge and skill, and to increase early intervention for students at-risk.
Senator Kelly said there has been a tremendous amount of progress in establishing early literacy intervention programs in the state as Dr. Cantrell's handout shows. He said there are still too many gaps however throughout the state, and this legislation allows for all schools to have these early intervention programs so that all children can have access to these services.
Senator Kelly said Senate Bill 19 is trying to move from the incentive grant program that Kentucky had previously and change to a permanent funding strategy so that every school district that comes forward with a program that shows they are screening their students, providing services effectively, and can show through accountability that this is being accomplished, will be eligible to receive this level of funding. It does not happen automatically as teachers will have to be highly trained to provide these services. It is the hope that within four years these intervention services will be available to every student in Kentucky who needs it.
Senator Kelly said this is a brief introduction of the legislation and wanted to give the members an understanding of the bill before moving into the short 2005 Regular Session. He said this chamber has passed this initiative in the last session and have been very supportive of this effort not only in the legislation, but in the budgetary process, and hopes members will continue to be supportive.
Senator Neal agreed that reading is the foundation for learning for students. He asked what the plan was for a funding strategy to pay for this initiative. What will the cost be and in what period of time.
Senator Kelly said Kentucky is currently investing about $6 million to do this statewide. The proposal from the Governor's staff shows a minimum of $4 million a year over the next four years to fund this initiative in this cycle, or about $25 million annually to implement this program full-scale.
Senator Neal asked what Kentucky is getting back for this dollar. He wants to know what gauges the effectiveness of the program. Dr. Cantrell said the Collaborative Center for Literacy Development has conducted a number of small scale studies since 1998 to judge the effectiveness of the program. Overall, students served by the program made gains in reading. Early intervention is critical, as the younger students made more progress than second and third grade students. Deep knowledge and skilled teaching was the most important factor associated with higher student achievement, which emphasizes the need for professional development.
Senator Neal asked if the methodologies being utilized in the program have been effective. Senator Kelly said several research studies have been conducted, but he feels that they have. Senator Kelly said a mix of intervention strategies have been used and we have not limited ourselves to utilizing one strategy.
Senator Neal said that with so many children being at-risk, he wondered if $25 million was going to be enough money over time to pay for the program. The need is so comprehensive, he believes that reading should be a number one priority in funding. Senator Kelly said that $25 million does not reflect the total cost, it reflects the additional funds that need to be in there to leverage the other local and federal funds that are available to make the program work.
Senator Westwood said he agrees with Governor Fletcher that more school dropouts add to increased welfare numbers and prison populations. He said research has shown that children who are not reading on grade level by the end of the fourth grade do not ever catch up with their peers and continue to fall further behind. He said 2014 is rapidly approaching and this is the magic date set by the Kentucky Education Reform Act (KERA) to have every student reading at proficiency. He said he thinks Senate Bill 19 will enforce meeting the goal set in KERA. He did ask if Senate Bill 19 would utilize lottery and General Funds in order to pay the school districts. Senator Kelly said that was correct.
Senator Williams asked Senator Kelly if it was his experience that there are areas of the state that have a population of students who need this service, but the school districts do not show an interest in providing these types of services. Senator Kelly said the target population of children that need these services is everywhere. He said he wants the grants to have geographic diversity as well as demographic diversity as to obtain good, solid research to determine what works in these various environments. He said the program would utilize the grant application technique to see what school districts are being creative and raising local funds to contribute to the effort. Hopefully, these grant recipients will be able to provide as models for the rest of the state.
Senator Williams asked if there was a collaborative effort with the federal level. Senator Kelly said a key criteria is for a school district to obtain a grant is to show that they can service all of the children who need the service, and have accountability and use cost affordability. Senator Williams asked if there were any firewalls that prohibit the state from going in and serving the general population in a school district. Senator Kelly said this program was free from those type of firewall criteria. Senator Williams asked if current programs that exist have firewalls that would hinder integrating this program with existing ones. Senator Kelly said most schools that are effectively implementing intervention strategies use their Title I funds to some degree.
Senator Williams asked if there a geographic or socio-eononomic status link to the areas that need these services. Senator Kelly said every demographic and geographic area has children that need these services. Commissioner Gene Wilhoit, Department of Education, said when we look at current reading results, there is an alignment between low socio-economic status and low reading scores. He said there is also a correlation between ethnic background and low performance.
Senator Williams asked how this program fits in with the No Child Left Behind program. Commissioner Wilhoit said one piece of No Child Left Behind was a federal reading program. He said Kentucky is aligning the criteria and the program delivery of the federal funds with the state money so that there should not be a program running in a different direction that is not aligned at the state level.
Senator Winters asked about counties that are doing nothing at this time. Senator Kelly said these are schools that are not utilizing the grant programs, but may be doing something else within the school to help the struggling readers. Dr. Cantrell said some schools are applying for these grants, but have not been successful in receiving the funding.
Senator Kelly discussed Senate Bill 46 with the committee members. It is the Education Cabinet's reorganization bill which combines the old Education, Arts, and Humanities Cabinet, with the old Workforce Development Cabinet. He introduced Mr. Jeff Mosely, General Counsel, Education Cabinet, who explained the bill.
Mr. Mosely said Senate Bill 46 places all relative entities into one cabinet to foster communication cohesiveness and the effective delivery of educational services to the Commonwealth. Senate Bill 46 confirms Executive Order 2004-725 which was dated in July 6, 2004. Executive Order 2004-725 abolished the Cabinet for Workforce Development and the Cabinet of the Arts and Humanities, and created the Education Cabinet, which assumes the duties and functions of those cabinets. He said it also attaches other major organizational units that relate to the newly created cabinet namely the Council on Postsecondary Education and the Education Professional Standards Board. He explained other aspects of Senate Bill 46. Mr. Mosely explained that Senate Bill 46 gives no agency any more authority than it already has.
Senator Kerr asked for a brief synopsis of Senate Bill 46 due to the printed bill being so large. Senator Winters said there was one in the folder.
Senator Winters said he would see the members on Thursday, February 3, at 11:30 a.m. in Room 149. He briefly ran through the Senate Committee on Education committee operations for the 2005 Regular Session. With no further business before the committee, the meeting adjourned at 3:45 p.m.