SB3251 SD2

SECTION 1. The legislature finds that the key to Hawaii's future success is a community filled with highly-educated, highly-qualified individuals to support the State's economy. The backbone of this endeavor is a strong public school system that equips our keiki with the knowledge, skills, and experiences necessary to succeed.

The legislature further finds that the public education system in the State is in dire need of increased funding not only to improve, expand, or grow new programs and facilities, but merely to address the pending backlog of infrastructure and facilities repair and maintenance projects in elementary, middle, and high schools throughout the State, as well as within the University of Hawaii system. Within the department of education, the backlog for repair and maintenance continues to be a problem. In 2001, the legislature appropriated funds to help mitigate the department of education's estimated $640,000,000 backlog of repair and maintenance projects. In 2007, the estimated backlog of repair and maintenance projects was $341,000,000, which included recurring major and minor repairs, ongoing cycle maintenance, service and contract maintenance, nonrecurring projects, and emergency repairs. Unfortunately, due in part to the governor's decision not to release $110,000,000 previously approved by the legislature during past legislative sessions for repair and maintenance projects for the department of education, the backlog remains and continues to increase. The backlog has increased to approximately $420,000,000 and is expected to increase by an additional $75,000,000 during the upcoming fiscal year.

Similarly, at the University of Hawaii, a backlog of repair and maintenance projects has accumulated, due to the lack of general funds, currently totaling approximately $257,000,000. Existing repair and maintenance projects include not only well-documented deficiencies such as major renovations necessary to Edmondson hall, athletic facilities including Cooke field, the college of education office, the University laboratory school, and Hamilton library, but also re-roofing, mechanical and electrical systems, resurfacing, repainting, and other improvements and projects to upgrade facilities at all university and community college campuses.

Facilities provide the centerpiece around which all other educational activities exist at higher education institutions. Well-maintained physical infrastructure and facilities at our higher education campuses that are functional, architecturally sound, aesthetically pleasing, and in compliance with building and safety codes support quality instruction, research, student, and community services programs. Therefore, it is imperative to reinvest in the university's physical plant to ensure that the physical infrastructure supports the mission of the institution.

In recent years, the legislature has passed significant initiatives to strengthen the public school system with resources, procedures, and opportunities to make effective change in the manner by which schools are organized and children learn. The Reinventing Education Act of 2004 directed funds to schools based on the needs of their populations, taking into account economic hardship, English as a second language, special needs, and mobility. Additionally, the legislature has provided a governance structure to charter schools to allow the decision makers to be closer to their constituency and placed an emphasis on learning academies and experiential or applied learning programs.

In addition to the foregoing, the early education task force unveiled "Keiki first," a plan to enable eighty per cent of Hawaii's four-year-olds to attend preschool. This plan requires an infusion of new resources to equip our four-year-olds to enter kindergarten ready to learn. When fully implemented, for the eighty per cent goal, $170,000,000 per year would be needed.

Adequate funding for the foregoing changes and initiatives continues to prove to be a difficult issue. Increased mandates resulting from the No Child Left Behind Act and the Felix consent decree, among others, have contributed to the lack of adequate funds to support public schools in the State. Despite these increased mandates, over the past few decades, the percentage of the budget allocated to education has consistently decreased as well.

The provision of an adequate education in Hawaii's public schools presents many challenges to the State, including providing adequate funding and developing methods to meet those funding needs. In 2005, the department of education commissioned a study on funding adequacy, the objective of which was to "[d]evelop an adequacy funding model that can be used as a tool for determining the level of funding required to support the vision and goals of the State of Hawaii Department of Education (DOE) and Board of Education (BOE)." Adequacy Funding Study, Department of Education, March 14, 2005. The study examined the expenditure of funds for the 2003-2004 fiscal year for the average elementary, middle, and high schools. Results indicated that increased funding of seventeen per cent or $278,000,000 was necessary for schools to achieve adequate standards. A five-year implementation plan was presented to bring public schools up to adequate levels.

The study also recommended the establishment of a commission, with sub-committees, to examine the different aspects of the adequacy funding implementation proposed, update the adequacy models, oversee the development of alternative model schools, define performance goals for different funding levels, and communicate with various stakeholders. Unfortunately, no further action has been undertaken by the department of education or the board of education.

The purpose of this Act is to convene a task force to examine issues regarding funding adequacy in public schools and to establish necessary funding requirements and an implementation plan for providing public school students with an adequate education in the State.

SECTION 2. (a) There is established a task force on education funding adequacy within the department of education for administrative purposes only. The task force shall be comprised of nineteen members to be appointed without regard to section 26-34, Hawaii Revised Statutes, as follows:

(1) Two members to be appointed by the president of the University of Hawaii;

(2) Two members to be appointed by the superintendent of education;

(3) Three members to be appointed by the Hawaii Business Roundtable; provided that the three members shall possess and represent experience in the fields of technology, finance, and personnel management or human resources management;

(4) Two members to be appointed by the president of the senate;

(5) Two members to be appointed by the speaker of the house of representatives;

(6) One member representing the Hawaii P-20 Council;

(7) One member appointed by the governor;

(8) One member appointed by the Hawaii Association of Public Accountants;

(9) Two members representing the Hawaii Government Employees Association, the Hawaii State Teachers Association, and the University of Hawaii Professional Assembly; and

(10) Three members representing school community councils.

The task force shall select a chairperson from its membership.

(b) The task force on funding adequacy shall convene sub-committees that address specific funding categories, including but not limited to:

(1) Facilities;

(2) Repair and maintenance;

(3) Capital improvement projects;

(4) English as a second language;

(5) Technology;

(6) Learning materials;

(7) Highly-qualified teachers;

(8) Early education; and

(9) The average, regular education student.

Each sub-committee shall include and obtain input from stakeholders, qualified individuals with knowledge, expertise, and experience in the relevant fields pertaining to the specific category, and any other individuals as may be determined necessary by the task force. Each sub-committee shall establish goals for the funding category and examine the most efficient and cost-effective methods for providing adequate funding for the respective category and perform any other functions as may be deemed necessary by the task force for the fulfillment of their functions.

(1) Examine issues of funding adequacy in Hawaii's public schools, including a review of the 2005 adequacy funding study;

(2) Analyze all relevant components requiring funding for the public schools;

(3) Consider each sub-committee's recommendations and establish a plan for the annual reduction of the funding inadequacy over a multi-year period that includes:

(A) Cost estimates for a multi-year implementation period, not to exceed six years, to bring the public schools up to an adequate level; and

(B) A cost estimate for perpetual funding once an adequate level is achieved that considers the inclusion of various alternative means and methods or combinations thereof, including but not limited to the use of proceeds from:

(i) The general excise tax;

(ii) The state income tax;

(iii) Real property or facilities lease agreements;

(iv) The sale of real property,

(v) Fees or charges; or

(vi) The reduction of services;

provided that any proposals that include tax increases would also include positive tax reform measures, such as additional tax exemptions, tax credits, or increases in the standard income tax deduction amounts, to balance the added burden imposed by the increased tax; and

(4) Identify areas of major restructuring and collective bargaining.

(d) In carrying out its duties under this section, the task force on education funding adequacy may request staff assistance from the department of education and other appropriate state departments or agencies. The task force on education funding adequacy may contract with or hire a private consultant, who shall be exempt from chapters 76, 78, and 89, Hawaii Revised Statutes, or consulting firm to assist the task force in performing its duties as provided in this Act.

(e) The task force on education funding adequacy shall be exempt from chapter 92, Hawaii Revised Statutes; provided that the task force shall make a good faith effort to make its proceedings and work products accessible and available to the general public in a manner consistent with the intent of chapter 92, Hawaii Revised Statutes.

(f) The task force on education funding adequacy shall be exempt from the requirements of chapter 103D, Hawaii Revised Statutes.

(g) Members of the task force on education funding adequacy shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

(h) The task force on education funding adequacy shall submit a report of its progress, implementation of proposals, findings, and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular sessions of 2009 to 2011; provided that:

(1) The 2009 report shall also include a plan for a multi-year implementation phase for achieving funding adequacy in public schools, as well as proposals for methods and mechanisms for funding during this phase;

(2) The 2010 report shall also include information on progress on areas of restructuring and collective bargaining, as well as updated information on funding methods and mechanisms proposed and implemented; and

(3) The 2011 report shall be a final report that includes data and information on funding adequacy for the public schools, accountability standards, the continued need for the task force, if appropriate, the defined tasks yet to be accomplished, and any other relevant information.

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $250,000 or so much thereof as may be necessary for fiscal year 2008-2009 for the task force on education funding adequacy.

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

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2008.

THE SENATE	S.B. NO.	3251
TWENTY-FOURTH LEGISLATURE, 2008		S.D. 2
STATE OF HAWAII