November 9, 2022
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Rep Cavenaugh: Thank you, Mr. Chair. Special Language Subcommittee met on Wednesday, November 2, at 1:30 p.m., and reports the following actions. The subcommittee adopted the agency recommendations for language for the constitutional agencies listed, with the exception of the revised agency recommendation, which is noted as Attachment 1. The subcommittee adopted executive recommendations for the agency language listed. The subcommittee adopted institution requests for the language recommended by the Institutions of Higher Education and approved by the Higher Education Coordinating Board. The Subcommittee adopted legislative recommendations for certain pieces of agency language. Those items are noted in the report. The Special Language meeting will take place Wednesday, November 9, at 1:30 p.m. in Mac B building. I move for adoption of the report.
Sen Rice: Thank you. Do I have a second? I have a second. Any discussion on the motion? If not, all in favor of aye. Opposed? Thank you. Special Language Subcommittee report is approved. Next up, we have Personnel Subcommittee. Senator Wallace, are you ready for that, sir?
Sen Wallace: Mr. Chair, the institutions received their AHEC recommendation, and the agencies received the executive recommendations, with the exception of the deferred positions at EBD. And we recommend approval.
Sen Rice: Okay, I have a motion for approval. I have a second? Second. All in favor, aye. Opposed? Thank you for that. Next up, Kevin’s got information for us on miscellaneous federal grant appropriation authorizations.
Anderson (BLR): Yes, sir. Thank you, Mr. Chairman. This is item B3. This is miscellaneous federal grants that have already been approved for the current year by the General Assembly. Adoption of this letter will allow these federal appropriations to be continued and included in the new FY 2024 appropriation bills. That’s item B 3, Mr. Chairman.
Sen Rice: Any questions on that for Kevin? If not, do I have a motion to approve? Do I have a motion to approve? I have a motion. And a second? Second. All in favor aye. Opposed? Thank you for that. We will now be going to Audit findings for Department of Education, and our auditor is ready. Please recognize yourself and present.
Webb (Leg Audit): Thank you, Mr. Chair. My name is David Webb. I’m an audit supervisor with Arkansas Legislative Audit. A recent audit finding for the Department of Education is included in the materials that you have today. There was one finding for the departmental audit report for the year ended June 30, 2021. During our observation of capital assets, the Arkansas School for the Deaf was unable to locate two pieces of equipment with a total cost of $33,000. And additionally, one item valued at $35,000 had been deleted from the accounting records but was still on hand and in service. Thank you, Mr. Chairman. That concludes the audit finding for this agency.
Sen Rice: Thank you. Are there any questions on audit findings? All right, thank you. Appreciate your presentation. And we are ready for our analyst. Katie Walden, if you will present.
Walden (BLR): Thank you, Mr. Chairman. Good morning, members. Katie Walden, Bureau of Legislative Research, Fiscal Division. This morning we’re going to be reviewing the Department of Education and its divisions’ budget request for the upcoming biennium. The first budget request for your review begins on page 1 of your manual. This is the Department of Education Administration and Shared Services. As you all know, the Department of Education administers the programs and financial assistance to the state’s public elementary and secondary schools. The Arkansas Constitution requires the state to maintain a general, suitable, and efficient system of free public schools and to adopt all suitable means to secure to the people the advantages and opportunities of education. The first appropriation for your review is detailed on page 3 of your manual. This is their shared services paying account appropriation. This appropriation totals about $8 million each year. It is funded with monies and appropriation transferred from the various divisions of the Department of Education, and it provides for the overall administration of this cabinet-level agency. As you can see in the summary that’s listed on page 2, the agency requests to transfer in nine new positions from various divisions, as well as a number of reclassifications, six extra-help positions with associated salaries and matching costs, and the executive recommendation provides for the appropriation with the exception of the new regular positions and reclassifications. These are on hold for further review by the new administration. This results in the executive recommendation totaling $7.9 million annually. Mr. Chair, if it pleases the committee, I will move forward and do the Department of Ed, also, operations appropriation now.
Sen Rice: Go ahead.
Walden (BLR): Thank you. The department appropriation summary is on page 11. As you can see, ADE has 18 appropriations total under their operations appropriation. This provides for all the staff of the Department of Ed, the appropriations for all the grants that they receive, their federal programs. The request totals $1.86 billion each year of the biennium, and it’s funded with federal revenue, cash funds, general revenues, fund balances, trust funds, educational adequacy funds, and funding from the Educational Excellence Trust Fund. They have 320 positions authorized and 11 extra help. And if it pleases the committee, I’ll go over the appropriations with change levels at this time. The first appropriation with change levels is on page 16. It is the Federal Grants Administration appropriation. This totals $670,000 for each year. This provides for the administration, accounting, and purchasing of their federal programs. They request for the reclassification of one position with no associated appropriation, and any salary and matching changes you’ll see here are a result of adjustments that were made in the previous biennium, so they don’t constitute a change level. The executive recommendation provides for the agency request with the exception of the reclassification, which is placed on hold by review of the new administration. The next appropriation with changes is Medicaid administration cash and treasury. This is on page 18. This is a cash appropriation, but it is funded through the Arkansas Medicaid program. This program provides Medicaid reimbursement to schools for providing therapy and health services. And you’ll see on page 18, ADE requests a total increase of $8.75 million annually, for a total new appropriation of $40 million each year.
Walden (BLR): They state this is because they are changing their payment structure and providing reimbursement for the full school year within the fiscal year. So they’re trying to pay off all the therapy services by June, so they need this appropriation to be able to cover those costs. The executive recommendation provides for this request. The next appropriation with changes is the Professional Licensure Standards Board. It is on page 20. This appropriation is funded with cash funds and provides for the activities of the Professional Licensure Standards Board, including the establishment of standards for potential teachers and investigations of non compliance. The agency requests a total appropriation of $1.4 million for each year of the biennium. This includes a reclassification of two positions with no requested change in appropriation, and the restoration of $50,000 in capital outlay for unforeseen capital needs. The executive recommendation provides for the agency request with the exception of the reclassifications which are placed on hold for review of the new administration. The next appropriation with changes is on page 22. It is the State Operations Appropriation. This appropriation is funded with general revenue, and it provides for the operations cost of the Department of Education, including all of their divisions, central administration, educator effectiveness, licensure, Division of Learning Services, academic accountability, research and technology. And they request $22.1 million for each year of the biennium. And this includes an $18.2 million request for general revenue. You’ll see in their request narrative that they are requesting to transfer seven positions to shared services with associated salaries and match. They want to reclassify 12 positions and upgrade one position, but these include no appropriation change. They also want to restore $100,000 each year in capital outlay for department needs. The executive recommendation provides for the agency request and appropriation with the exception of the position reclassifications and upgrade.
Walden (BLR): The fifth appropriation with changes is the child nutrition appropriation. This is on page 28. This appropriation is federally funded and provides administrative services and reimbursement to school districts that participate in school lunch, school breakfast, and special milk programs. You’ll see on page 29 they request $428 million for each year of the biennium, and the change levels include the upgrade of seven positions with associated salaries and matching and the reclassification of four positions. And those reclasses include no change in appropriation. Finally, they want $50,000 in capital outlay to restore appropriation to previous levels. The executive recommendation provides for the agency request with the exception of the upgrades and reclassifications with associated appropriation. Those will be reviewed by the new administration. On page 31, we have the federal elementary and secondary education. This appropriation houses the federal entitlement programs including special ed, early childhood programs, AIDS education, migrant education, English language learners support and others. The agency requests $1.28 billion for each year of the biennium, and it includes a couple of change levels. They want to reclassify one position with no associated appropriation, and they want to restore their capital outlay for the biennium at $200,000 annually. The executive recommendation does provide for the capital outlay, but they have placed the reclassification on hold for review by the new administration.
Walden (BLR): On page 35, we have the multiple grant award program cash and treasury. This appropriation provides for the spending of various grants from sources other than federal government received by the Department of Ed. They request $2.47 million for each year of the biennium. This total includes an increase of $900,000 per year. And this is to accommodate a grant from the Walton Foundation that they’ve received for mathematics curriculum programs in schools statewide. They also want to restore their capital outlay at $100,000 each year. And the executive recommendation provides for the agency request. On page 49, you will see the Save the Children appropriation. And you may notice there are two Save the Children appropriations in the appropriation request. The first one is for $500,000, and it’s requested to continue at the same level, so I didn’t go over that one. But this one, there was a second appropriation added in a previous biennium for $2 million for Save the Children. And the Department of Ed has requested to discontinue the $2 million appropriation for efficiency’s sake and to continue the $500,000 appropriation just so that there’s one fund center going to that entity. And the executive recommendation does provide for the discontinuation of this particular appropriation. The last appropriation with changes for Department of Ed operations is on Page 52. It is the Arkansas Better Chance program administration appropriation. This is funded with general revenues and provides for the administration costs of the state’s Pre-K program, Arkansas Better chance. The total request is $2.17 million for each year of the biennium. This includes the reclassification of six positions with no change in appropriation due to these. The executive recommendation provides for the appropriation, but places the six reclassifications on hold for review by the new administration. This concludes my remarks on the Department of Education operations.
Sen Rice: Thank you, Ms. Walden. If the department would go ahead and come up the table. We do have some questions on the board. Welcome. And when you get settled there, if you will recognize yourself.
Key (ADE): Johnny Key, Department of Education.
Rogers (ADE): Greg Rogers, Department of Education.
Sen Rice: Thank you. Representative Cavenaugh, you’re recognized.
Rep Cavenaugh: Thank you, Mr. Chairman. I’m over here to the right. Thank you. Okay, first thing I do is I have a request, if you could supply me with a report just some time before session, please. I would like to have a report showing all fund balances, the source of the funds, and any restrictions on those fund balances. So I don’t care if it’s a cash balance, general revenue, federal fund, special revenue. Whatever you’ve got a fund balance in, if I can have a report that shows that information on it.
Key (ADE): Okay, we’ll get that for you.
Rep Cavenaugh: Thank you. And on page 25, that is your building maintenance. I was just looking on that. You do have a large fund balance in that, and it doesn’t show that you’re doing much spending in that. So that’s one thing I’d like for you to look at. Your most historic spend on this particular appropriation was in 2018-20 19. It was for $30,000. You have a fund balance that shows of about $4.4 million in that?
Rogers (ADE): Yes, ma’am. So there are two appropriations that are assigned to that fund. We have a reappropriation that we use to do building maintenance as well. And that’s the one that we use. And last year, we transferred $823,000 out into capital appropriation to use for building maintenance.
Rep Cavenaugh: That still left you a fund balance of $4.4 million even after that transfer.
Rogers (ADE): Correct. And right now, we’ve just gone through where we’re renovating our CTE building. We’ve got other building renovations that we are doing, because unlike a lot of different agencies, the Department of Education owns the Arch Ford building, B building, and the D building. The department has to maintain those. So instead of asking for general improvement appropriation to keep those up, we pay ourselves rent in this fund. And that’s what we do our capital improvements with.
Loans and interest rates
Rep Cavenaugh: Okay, similar on page 27, this is the revolving loan. And on this, can you tell me really how many loans that we’ve had on this appropriation? How many loans we’ve given out?
Key (ADE): Do you have that, Greg? Yeah, we’ll get that in just a second. But I will say that fund has not been used much lately in the last several years because it’s been advantageous for districts to go seek other financing opportunities. This fund is available for districts if they want to purchase school buses or do that type of expense. And it’s possible that with interest rates going the direction they’re going, that this may become an option again for districts to use. But we do realize that this has carried a fund balance for some time and has had a little activity. But I think the financing market being favorable to school districts has been one of the reasons.
Rep Cavenaugh: And also on this particular, Secretary, your most historic spend has been $530,000. And that was back in 2012-2013. So, I mean, even if you go back 10 years, you don’t have have any history showing that you’re doing loans of $13 million.
Key (ADE): No, we certainly understand that, and we have looked in the past at different opportunities to use that fund in different ways or maybe expand the use of that fund. And that’s something that we’ll continue to do, but it doesn’t get replenished every year except by any repayments that come in.
Rep Cavenaugh: That’s why I was looking for that report about what it could be used for. There were several unfunded programs in here that where funds– is this something that we can use to help fund some of those unfunded, whether it’s nursing programs or whatever it is because we have a lot of those and they’re never funded.
Key (ADE): Right.
Rep Cavenaugh: Thank you.
Key (ADE): I think Mr. Rogers has the information about the number of loans.
Rep Cavenaugh: Okay.
Rogers (ADE): Right now we have three loans outstanding with two different school districts for a total of just a little under $80,000.
Rep Cavenaugh: Okay. Thank you.
Sen Rice: Thank you. Senator Hammer, you recognized.
Sen Hammer: Thank you. Let me pick up on that conversation with a quick question. The way that loan program is structured, is it not advantageous for the schools to utilize that above what other resources they are using, or is that something you all would look at, maybe, to lighten it up a little bit?
Key (ADE): Well, and just because of the low interest rates in the last several years, our interest rate would not be as favorable as what they could get through a local finance institution or something like that. So that’s why I’m saying now that those commercial rates are going up, it may become more financially advantageous for them to look at this option.
Sen Hammer: That interest rate you’re referring to, who sets and determines what the interest rate is? Is that us or you or Treasury?
Key (ADE): Treasury.
Sen Hammer: Treasury?
Key (ADE): Treasury sets it.
Sen Hammer: Treasury does? Okay.
Key (ADE): And I’m not sure what it is right at this moment, but we can get that info for you.
Lunch for children
Sen Hammer: Okay. And then another question would be with the free lunches going away, are you all tracking that, or do you have– is that on your radar screen? The free lunch is going away that the Feds are not paying for anymore. And is that built or addressed anywhere in your budget, or are you going to defer that to the next administration to take that up?
Key (ADE): It is on our radar. The difficulty that districts are encountering now is just, once parents got out of the habit or the routine of filling out those free and reduced lunch forms, it’s been really difficult for districts to get them back into that routine. And we do know that there are districts that are having some issues with that. To make up the difference between what the Feds have paid historically and what districts might come in as far as a shortfall, that’s something that would be very expensive if the state took that on. There are provisions, programs that some states are looking at where they would make up the difference. And then every child would eat free, as they did during the pandemic. But I think that would be several millions of dollars for Arkansas if we were to look at general revenue to fill that void.
Sen Hammer: But if the parents would just get those forms filled out that would alleviate a lot of the problem, correct?
Key (ADE): It would help immensely, yes, if we could get that done.
Sen Hammer: All right. Thank you. Thank you, Mr. Chair.
Key (ADE): And, Senator, the interest rate right now is 4.95% on loans for the revolving loan fund.
Sen Rice: Thank you. Representative Evans, you’re recognized.
Save the Children
Rep Evans: Thank you, Mr. Chair. Secretary Key, looking at page 43 and 49, I believe that’s the correct pages, the two requests on the Save the Children Programs. Can you explain the department’s reasoning for wanting to cut $2 million out of programs for after school literacy for low income and at risk students.
Key (ADE): It’s just the appropriation. That appropriation wasn’t funded. The other appropriation was funded. And I’m not sure. I really don’t remember how we ended up having two appropriations for that. We just simply dropped one of those appropriations. But we will continue funding the–
Rep Evans: The first?
Key (ADE): The first appropriation.
Rep Evans: The $500,000?
Key (ADE): Yes.
Rep Evans: Was there any discussion to maybe combine those, split the difference, and then just have one appropriation for maybe more than that?
Key (ADE): We’d be open to that conversation. I think just when we look at the appropriations from biennium to biennium, ones that don’t get funded, that are kind of add-ons, we often just kind of drop those or seek to drop those. But when we looked at that, we did not want to completely eliminate funding Save the Children, so we kept that one.
Rep Evans: Okay, thank you. Thank you, Mr. Chair.
Sen Rice: Thank you, Representative Springer, you are recognized.
Rep Springer: Good morning. Thank you, Mr. Chair. Representative Eaves picked up on my question, and I had questions about the Save the Children program as well. So do we have any historical data with respect to monitoring or evaluation of these programs for that amount to go from $2 million down to $500,000? I’m very concerned about that, because if it involves additional assistance and help to students, I’m trying to figure out why would you cut that from $2 million to– the ask from $2 million to $500,000?
Key (ADE): Well, and just to clarify, there’s never been $2 million that has been funded.
Rep Springer: I’m saying appropriated.
Key (ADE): So we have worked with Save the Children. We have granted them additional funds through the Gear funding, I believe. It’s one of the federal ESSER funds that came into play. So they have received grants through that. There are also programs that are available through some of the state set-aside ESSER funds where groups like Save the Children can get access to other grant funding for before school, after school, summer school programs. We do have some information, we’re happy to provide it, of the work that Save the Children has done and kind of how they’ve leveraged the state investment in getting match from local entities and other entities to help further their work. So we’ll have that available too, if you’d like it.
Rep Springer: Thank you. I would. I would like to know, provide information with respect to the program for the last three years as to where it’s been funded, the total amount for the last three years, the school districts and so forth. If you could break that down and provide that information to me, because I think it’s very important that we have that information, given that our kids cannot read on grade level, beginning at third grade level. We’re below, way below where we need to be.
Key (ADE): Absolutely.
Rep Springer: Thank you,
Sen Rice: Representative Wooten, you are recognized.
Rep Wooten: Thank you, Mr. Chairman. I’d like to follow along with Representative Cavenaugh’s request. I’d like to know the total dollar of interest on the total dollars of your fund balances. And then I’d like to know what that money goes for, and then I’d like to know why you don’t show that as an income funding source. Because with the balances you’ve got, it’s got to be a pretty good amount of money. So why do you not show that interest as an income or funding source?
Rogers (ADE): I can get with you on it and show you the interest on it, or send it to staff and have it sent out. But as far as why we don’t show it in the budget manual, is that what you’re asking? I’m trying to–
Rep Wooten: There’s no interest shown as funding source under any category of any one of your budgets.
Rogers (ADE): So we don’t compile the budget manuals. That’s how DFA would put it together. So that’s–
Rep Wooten: I’m asking you why you don’t show it. Do you show it anywhere? I’m not worried about DFA. I’ve got a problem with the way they’re doing it too.
Rogers (ADE): Yes. I have–
Rep Wooten: We’re not keeping up with the interest income at the agency level. And I think that’s very important. I think we need to do it, and I’m going to work to get the forms changed. So what I’m asking you to provide me with is a report that shows all your interest income from all your fund balance sources and where that money is used. And then answer the question, why do you not show it as an income source? Because it’s got to be a pretty good amount of money. I’m trying to track that interest rate to find out where that money is going and how that money is being used, because it’s income from taxpayers’ money of the state of Arkansas, and it’s not being treated right. And I don’t care how you cut it or how you look at it, there’s going to be some changes made. So that’s what I’m asking you.
Rogers (ADE): And absolutely, I have a list of our interest and I can show you what we’re doing with it.
Rep Wooten: I’ll have some more questions, Mr. Chairman, but I’ll wait.
Key (ADE): Representative Wooten, that hasn’t been the practice in state government as long as I can remember. But if that is a practice that we–
Rep Wooten: I don’t care what we done before in the past, it’s a new day.
Key (ADE): Yes, sir.
Rep Wooten: And things are going to be done differently in state government as long as I’m sitting in this chair. I’m going to ask and try to do that. Anybody will tell you in any business, in any government agency, they should show interest income as a funding source. I don’t care what DFA says, and I don’t care what the governor’s office has said, but they’re dead wrong.
Key (ADE): Yes, sir.
Rep Wooten: It’s an income source. We earned over $100 million in state government last year. We’ve earned $40 million in the past quarter because of the higher interest rates and the inflation spiral. And the thing about it is we don’t know for sure exactly where all that money is going and how it’s being used. And that’s what we want. So don’t come up here and tell me what state government has done. I know what state government has done for 50 years and I’m telling you, it’s not right.
Key (ADE): Yes, sir. And I was going to say that I agreed with you that we need to change the practice.
Rep Wooten: All right. Thank you.
Key (ADE): I remember, Representative, that it wasn’t that long ago that– I believe it’s Senator Dismang, he may have been Representative Dismang at the time, during Peer, was asking State Treasury why did we not get better reports on interest income. And actually, the investments at that time were invested in very low-return instruments. So one of the things that I have seen in the last 15 years is better management of those funds as far as what they are being invested in and the return that they’re getting. So yes, I think if there’s a way that we can change the practice to show that, I’m supportive of that and would be open to working with you to see how we can make it happen.
Rep Wooten: Thank you very much.
Sen Rice: Thank you. Senator Elliott, you’re recognized.
Lunch for children (part 2: Elliott)
Sen Elliott: Thank you, Mr. Chair. Secretary, is it a matter of the Feds will not pay for lunches anymore, or is there something else at play here?
Key (ADE): They did not continue the waivers that basically set in place the pay structure for school lunches during the two or so years of the pandemic. That would have taken Congressional action to do that. They did leave some of the waivers in place, but the waiver that covered every school child did not continue.
Sen Elliott: Okay. So but those who are who were originally “the most needy” are still getting an opportunity to have a free lunch? Senator Chesterfield here, do something.
Key (ADE): Well, yes, but again, pending either filling out the free and reduced lunch form or if the district has filed for one of the other provisions, such as community eligibility provision, which requires a certain level of their population to be at the poverty level and then that kicks in for more students.
Sen Elliott: On page 20, I don’t think you need to turn back there necessarily, the fees for potential teachers, I don’t know if I heard that correctly or not. Can you tell me about that, what that means?
Key (ADE): Well, I mean, we have no changes to that. But the fees paid, licensure fees go fund PLSP. And right now that’s $75 for 5 years. That’s for the license itself. Then they would also pay $10 for the Central Registry check– that’s through DHS– and $35 for fingerprinting, which is a combination of State Police and FBI. So $120, $75 is for 5 years. And if they change employer, then they will have to go through the Central Registry check and the fingerprinting every time. So if you change every five year–
Sen Elliott: By potential, teachers, that’s defined as people who completed everything. They’re just up to that point where they’ve got to go through all of the process and a background–
Key (ADE): Correct. Yes.
Sen Elliott: Okay. That’s what I was thinking there was a lot of teachers down there that are potentials, and we just need to do something.
Key (ADE): We hope so.
Sen Elliott: I was getting excited. Okay.
Key (ADE): I will tell you, Senator, that for our educators-rising participants, we saw an increase from about 400 students last year to over 1,200 students this year.
Sen Elliott: That’s really good.
Key (ADE): Yes. We are working on that.
Sen Elliott: All right. My last question has to do with the mathematics curriculum and why we are– I don’t know if we sought the grant or whatever, but why we are paying for a mathematics curriculum by some outside entity, or explain to me how that works.
Key (ADE): Yeah. I may need to get somebody to get additional information for you on that. I know that we have worked with various organizations on our math quest, and it’s an effort to improve our delivery, improve our curriculum in middle and high school. But I can get someone to get you more details on that.
Sen Elliott: So the Department of Education, though, you’re still in charge of the mathematics curriculum program?
Key (ADE): Yes, standards, yes.
Sen Elliott: The standards.
Key (ADE): Whatever we develop is aligned with our Arkansas math standards.
Sen Elliott: Okay. But somebody can explain to me why it is being funded by some outside entity, and what impact that might have, there is somebody who can get with me and tell me that?
Key (ADE): Yes. Yes. Yes. We’ll get somebody to follow up with you.
Sen Elliott: Okay. Thank you. Thank you, Mr. Chair.
Sen Rice: Thank you. Representative Crawford, you recognized.
Title 9 and federal funding
Rep Crawford: Thank you, Mr. Chair. Good morning. My question is one that as Arkansas stands against federal mandates of Title 9, have you thought about how that will reflect in your state budget and the things that we’re going to need to do?
Key (ADE): Well, it certainly will depend on the direction. I mean, I can’t speak to some of the lawsuits that are pending, but I know that Arkansas is involved in at least one, maybe two lawsuits dealing with Title 9 issues. And it’s really hard to know how those will go and what impact those could have if the federal government withholds funding. I mean, at this point, I’m not aware of any state that has had federal funds withheld. But if that does become a situation, the implications of that would be considerable, and we would keep you posted on what that would mean.
Rep Crawford: Okay.
Key (ADE): But we don’t have an assessment of that right now.
Rep Crawford: Okay. Follow up, please. Do you believe that we will be able to protect our children if such things come down, specifically?
Key (ADE): Well, I certainly think we will, and I think this General Assembly has passed legislation with that goal in mind.
Rep Crawford: Okay. Thank you.
Sen Rice: REP WARDLAW*****Senator Hammer, you’re recognized.
Sen Hammer: Thank you, Mr. Chair. On the interest earned subject, educate me. Does that money all trickle down to those individual accounts, or is it lumped into your overall fund balance?
Rogers (ADE): I’m sorry. I’m not– are you talking about just–
Sen Hammer: The interest that Representative Wooten was talking about, the interest earned off of those various accounts or off any of the accounts, does that interest earned stay within the category of its appropriation? Or does it trickle down to an overall fund balance that we ask you about from time to time?
Rogers (ADE): Both. It depends on which appropriation it is, if it’s a cash fund. If it’s federal fund, then it does stay in there because we can’t keep that interest. So we automatically send that back to the Feds. But if it’s a cash account, it can be used in the cash fund at which it was earned in.
Sen Hammer: Okay. John, did you want to say something? I saw you lit your button up on that. Okay. Then the second question would be on the categories involving shared services that I see in here, that’s shared services within the agency’s structure, correct, where you’re just moving money around within your agency, correct?
Key (ADE): Yes, that’s correct.
Sen Hammer: Okay. And then the next question is on Medicaid. I’m looking at page 17, and you’re requesting appropriation in the amount of $40 million in each year of the biennium. Can you just talk about the Medicaid reimbursement? And is that from the services that are being provided by the school that they’re being reimbursed by Medicaid? And is that a growing number from budget cycle to budget cycle?
Key (ADE): Yes, it is. That’s the services that happen at the schools. And what’s been happening there is that we’ve not been able to pay the fourth quarter until the next fiscal year rolls over. And so we’re asking– just because we didn’t have the appropriation and so we’re asking for the additional appropriations so we can actually make that payment before the fourth quarter in that fiscal year. But that’s reflective of the increased demand that’s coming for those funds.
Sen Hammer: Okay. And do you anticipate that that is going to continue to grow, or do you think we’re about leveled off as schools utilize what they can bill off to Medicaid? Or what’s your thoughts?
Key (ADE): I think that’s going to grow, Senator. I really do. I think we still have districts that probably have room to be able to do more, and I think they’re looking to do that. So I expect that over time, this is going to continue to grow.
Sen Hammer: And is that realized income to the district as the Medicaid reimbursement grows to them? Is that realized income to them and to their individual budgets?
Key (ADE): It depends on how they set up. I mean, I think some of those districts have in-house people perform those services, but a lot of those services are provided by outside entities. We don’t see a decrease in the number of services or number of things that are being required under IEPs, and that’s where some of those things can happen and that increase grows.
Sen Hammer: Okay. And then the last question is, and I know this is being addressed in the Matrix and Adequacy Study, but as it’s reflected in the budget before us, I know that there seems to be a growing demand to help support schools with the cost of special needs kids that are in their individualized classrooms. And also I know there’s a move to push kids out of that, from what I’m hearing, to put them into the normal classroom setting. Is that addressed anywhere in your budget as far as the cost to increase funding to that? Have you made allowances for that in this budget, or we’re just going to let the adequacy thing play out and the next administration pick it up and go?
Key (ADE): Well, we did not address that because that is part of adequacy. And so what’s reflected here does not reflect either the House Committee’s or the Senate Committee’s recommendations at this point. But that’s something we would have to address in the session.
Sen Hammer: All right. Thank you. Thank you, Mr. Chair.
Sen Rice: Thank you. Representative Wooten, you’re recognized.
Rep Wooten: Thank you, Mr. Chairman. Mr. Secretary, I’d like to talk about testing budget? How much is it costing us to test the students of Arkansas? How much have you budgeted?
Key (ADE): Representative, that is in the Public School Fund.
Sen Rice: That will be in the next segment.
Key (ADE): And I think that’s the next segment.
Sen Rice: Next segment, Representative Wooten.
Rep Wooten: Do what now?
Key (ADE): I think that’s in the next section that Ms. Walden will cover.
Rep Wooten: All right. Thank you. Follow up, if I may. In your total budget, and we just went through this in personnel, you all requested 17 new positions. And you have 224 vacancies down there, and you have 96 that are over 2 years old. That’s 43% of your positions that are over two years old. Why are you asking for 17 new positions when you got 224 vacant down there? I want the Secretary to answer this.
Key (ADE): Because the vacancies we have don’t match up with the needs, and the requests were to match up with the needs of the agency.
Rep Wooten: Well, can’t you just ask for salary adjustments and reclassifications of some of those vacant positions?
Key (ADE): That’s one way to do it. Yes, sir. And we have done that in the past.
Rep Wooten: Why are you asking for 17 new positions then when you’ve got 96 that have been vacant for over 2 years? That’s what I’m trying to get to the bottom of.
Key (ADE): Yes, sir. We do that so that the General Assembly– because at times you all don’t like it– you all don’t like it sometimes when we come during the middle of the fiscal year, and I remember being asked, “Well, we just got out of session. Why are you doing this now? We just left a session. Why didn’t you ask for it then?” So we were trying to get upfront and ask for those things ahead of time to make those adjustments.
Rep Wooten: You’re not answering my question. Why do you not reclassify the 96?
Key (ADE): Well, I thought I was. Some of those are at a level that you just simply can’t reclassify them high enough. I mean, they’re level three, fours, twos, and they’re not–
Rep Wooten: Why are you carrying them if they are over two years old and they’re that high a paid job?
Key (ADE): We’re in the process of getting those on that list, the two-year where they’ll go away.
Rep Wooten: So do we need legislation that says you’re going to reclassify those positions? I mean, I just don’t understand why we don’t do it.
Key (ADE): Some of those 17 are reclassifications. Either we have people who are topped out or their jobs have changed, and so the position they’re in now is being reclassified.
Rep Wooten: So are you adding to the total employment of the department–
Key (ADE): No, we’d still be under our cap. We’re making sure we stay under our cap as an agency.
Rep Wooten: What is your cap?
Key (ADE): I’d have to get that from Greg.
Rep Wooten: But what I’m saying, are you adding 17 new positions to the positions that are currently filled so there will be new positions?
Key (ADE): No, sir. Not completely new.
Rep Wooten: Not completely. Okay.
Key (ADE): We have added positions through the pool process as the needs have come up, but no, for the most part, we’re not looking to add headcount to the department. I mean, 10 of the 17 were requests for Northwest Technical who were looking to grow their programs.
Rep Wooten: Well, on the report I’ve got, your authorized positions are 1,062, and you’ve got 1050 budgeted. So with 17 additional employees, you’re going to be over your authorized number.
Key (ADE): Well, those numbers of positions do not translate to actual head counts. We would not be adding– now, for Northwest Technical, that would be adding headcount because those are faculty positions that they’re asking for, for growing their nursing program and other allied health programs.
Rep Wooten: In Higher ED?
Key (ADE): It’s under the division of Higher Ed, yes, sir.
Rep Wooten: Okay. Well, they just gave up– they just gave up 1,142 positions.
Key (ADE): And Northwest Technical is different because they’re still a state agency. They are classified under the state agency rather than an actual independent higher education institution.
Rep Wooten: Well, they show 81 employees. And how many more? I think they’re asking for three more. The executive branch didn’t go along with that and I understand we were before that.
Key (ADE): Correct.
Rep Wooten: But they have authorized positions of 81 and 74. And they have six positions that have been vacant for over two years. So we’re back to the same topic. Why not reclassify– for RN, and it’s a new program, why not just reclassify some of those six?
Key (ADE): That’s something we’ll go back and look at, Representative.
Rep Wooten: Okay. Thank you. Thank you, Mr. Chairman. Thank you, Mr. Secretary.
Sen Rice: Seeing no more questions, do I have a motion for executive rec? Motion. Do we have second? Any discussion? All in favor, aye. Opposed? Thank you. The general education has passed. Ms. Walden, you’re recognized to present number 3.
Public school fund
Walden (BLR): Thank you, Mr. Chair. The next request for your review is the Public School Fund’s appropriation for the Department of Ed. And staff has created this schedule, it should be in your packet. If you look at Public School Fund in the manual, they list the appropriations by appropriation numbers. So we put together the same appropriations, but in alphabetical order just to make it a little bit easier for you all to navigate. Looking at the schedule, on the far left, we put the page number where you can find the narrative for each line item. The line item name, the actual expenditures in 2022, the authorized in 2023, and then their request with the agency request and the executive recommendation and the difference to the right of that. So there are three agencies that receive Public School Funding, and those are all included– or three divisions that receive Public School Funding. And they’re all included in this schedule. The first is Department of Ed Public School Fund, which you all are very familiar with. The second is the Division of Career and Technical Education, and the last one is the State Library. If it pleases the committee, I’ll just go over this whole schedule all at once. So the first three pages are the Department of Ed Public School Fund account appropriation request. And I want to note for the committee that we have highlighted–
Sen Rice: Excuse me. Members, if I didn’t think to tell you, the sheet with the green on it is on your desk.
Walden (BLR): Thank you, Mr. Chairman. As Mr. Chairman just stated, the lines with the green indicate change levels. And I want to note for the committee, you can tell there aren’t very many green lines. And so I just want to reiterate what Secretary Key said, this budget request does not include any adequacy recommendations. So this is just the department’s first round of budget recommendations prior to the adequacy recommendations. I just want to let you all know that. So I’ll go over the few appropriations with change levels now. The overall appropriation request begins on page 55 of the manual. You can see the Public School Fund per Department of Ed has over 70 appropriations, and there are 7 with change levels. On page 57, you can see this appropriation includes $3.2 billion each year. Funding is comprised of Public School Funding, general revenue, educational adequacy funding, fund balances, educational excellence trust funds, transit taxes, and TANF funds, and it provides for all the state aid distributed to local school districts. The first appropriation with changes is on page 85. This is the additional public school employee insurance. This is one of the four lines that was combined into one line to provide for all the payments that will now be paid to the Employee Benefits Division to help pay for teacher health insurance. As was agreed on by the Education Committee, Education requests to delete this line in the new biennium. And the executive recommendation provides for the agency request.
Walden (BLR): Moving down on our schedule, the next line with change levels is detailed on page 61. This is the AppScan appropriation. AppScan’s mission is to provide a statewide data communication network that connects all public school systems within state and education service cooperatives. It provides electronic access for computing services to school districts, as well as the accounting software for school districts. This recommendation includes the restoration of one special language pool position with an increase in salary and matching, as well as restoration of $200,000 in capital outlay. This is to provide for unforeseen needs, and the executive recommendation provides for the agency request. I also want to note for Representative Wooten on the first page of the schedule, per your question, if you look at– it’s really small, but if you look at row 16 on page 1, this is assessment end-of-course testing. This is the testing funding line item, and you’ll see there’s no change level for the upcoming biennium. Yes, sir. So towards the bottom of page 1, on row 33, we have the Educator Compensation Reform Program. As you all know, this program was created to help school districts achieve the new minimum salary requirement. But as of now, all school districts should be in compliance with this new minimum salary requirement. So ADE requests to delete this funding line item, and the executive recommendation provides for the agency request. Moving to the next page. It’s actually on the back. No, I’m sorry, that’s on mine. It’s just on the second page. We have general facilities funding. This is another one of the lines that provided direct aid to EBD, and ADE has combined that funding with the public school employee insurance line. So they request to delete this line item for efficiency, and the executive recommendation provides for the agency request.
Walden (BLR): The next line with change levels is Gifted and Talented. ADE requests an increase of $75,000 for each year of the biennium, and this is to help them provide for standardized AP training for school districts. The executive recommendation provides for the agency request. Towards the middle of the second page, we also have Office of Education Renewal Zones. This line item is detailed on page 59 of your manual. This is the operation of the education renewal zones, which includes a compact between public schools, education service cooperatives, and institutions of higher education. They request $1.3 million for each year of the biennium, and it just includes adjustments for salaries and matching that were made in the previous biennium. Next, we have the public school employee insurance line. This is all of the aid that goes to the Employee Benefits Division for the teacher insurance programs. There’s no change level, but I just highlighted that to show you all that this is where all of those lines that were deleted, the funding is now within this line item. The last line item in this particular budget is the supplemental millage line. And this was the final line that was previously given as direct aid to EBD. But it’s combined with the public school employee insurance line, and they are asking to delete this line for efficiency. So, as I stated, the total budget request for the Public School Fund for ADE is $3.2 billion. This is an overall change level decrease of $59 million. And this is because of that removal of the Educator Compensation Reform Program.
Walden (BLR): On page four, I’ll just quickly go over the Division of Career Ed. The Division of Career Ed has four appropriations that receive Public School Funding, and that amount totals $32.9 million annually. It is their vocational center aid, startup grants, coordinated Career Education Services, and Career Coaches Programs. They have two appropriations with change levels for this section and this fund. The first one is on page 107. This is for the Coordinated Career Education Services. You’ll see the appropriation amount is the same, but they’re requesting to reallocate money from grants and aid to conference and travel to allow staff to attend national conferences. And the executive recommendation provides for the agency request. The next appropriation is career coaches. It’s detailed on page 109. Career Ed requests to reallocate general revenue from their high-tech scholarship program and general revenue in the amount of $9,500 for each year of the biennium. And this is to absorb a program that has ended. And the executive recommendation provides for that request. And the final request is your last page of your schedule. This is for the State Libraries aid to libraries. It is detailed on page 206 of the manual. You’ll see the previous appropriation amount was $5.7 million in Public School Funding. And this is the direct aid that goes to all the local libraries around the state. It also provides scholarships to librarians around the state. The state library requests an increase of $4.3 million annually, and this is to provide additional support to local libraries and to award more scholarships. And the executive recommendation provides for the agency request and appropriation with general revenue funding at $5.6 million for each year the biennium. So, Mr. Chair, this covers the Public School Fund appropriation for Department of Ed, Career Ed, and the State Library.
Sen Rice: Thank you. Ms. Walden. I’ve got a few questions. Representative Cavenaugh, you’re first.
Rep Cavenaugh: Thank you, Mr. Chair. My question is going to be on page 61. If you can look at your operating expenses, it’s got it jumped around. It’s $19.6 million. Then you’re requesting $25.2 million. What makes up that operational expenses?
Key (ADE): So the cost of our broadband that we pay for districts as we accelerate and we increase the speed, then there’s increased cost. So I know that’s one component of that. I don’t know if Greg, if you have any– I know that was a pretty significant increase.
Rep Cavenaugh: Do you remember what that was? Because it’s $6 million over what your spend is. We’re paying $6 million more for broadband?
Key (ADE): I don’t know if that’s the total. We’ll find out. I know that was an increase over FY 2022.
Rep Cavenaugh: If you could find that–
Rogers (ADE): I don’t know that it’s all broadband, but it was our DIS bill, that increase was in there. But I can get the bill, how we pay those operating, and it is DIS, that is.
Rep Cavenaugh: If you don’t mind. Okay.
Rogers (ADE): Yes, ma’am.
Rep Cavenaugh: Thank you.
Sen Rice: Thank you. Senator Chesterfield, you’re next.
Incarcerated children’s education (part 1: Chesterfield)
Sen Chesterfield: Yes, I have a question for the department, Mr. Chair, if I may. AppScan had been extended to the Arkansas juvenile assessment treatment center and other of those centers that deal with our incarcerated youth. Are they still a part of the system?
Key (ADE): We have not made any changes to that. I mean, AppScan kind of covers a whole range of things. Is there any specific part of it?
Sen Chesterfield: Before we had it put in, it would take weeks to send information between schools.
Key (ADE): Okay.
Sen Chesterfield: And so we were able to put that in, but it’s been some time ago, and so I’m just wondering if it’s still a part of the system so that we can have the free flow of information between our kids who are incarcerated and going back into the regular school.
Key (ADE): Okay. I know that that has been improved over the last several years. Let me check to see the status of that and make sure that it’s still moving along the way we need it to.
Sen Chesterfield: All right. Thank you. And the other question is, we did fight under Kimbrell when he was Department of Ed to get equal funding for our kids who are incarcerated because they were being paid at a lower rate than the other folks, yeah, the teachers. But the amount of money per student was lower than the amount of money per student in regular public schools. So I’m just interested to see whether or not we have continued that so that our kids who are incarcerated will have certified employees, that sort of thing. That’s what it allowed us to do at that point.
Key (ADE): They do have certified employees. I mean, that work has continued. We’ll check to see the status of that as well for you, Senator, yes, ma’am.
Sen Rice: Senator Stubblefield, you’re recognized.
Sen Stubblefield: Thank you, Mr. Chairman. Senator Key, I’ve got a couple of questions concerning the education co-ops. How many education co-ops do we have?
Key (ADE): We have 15.
Sen Stubblefield: Is their budget lumped in with the total Education Department budget?
Key (ADE): They have a line item in the Public School Fund.
Sen Stubblefield: Okay.
Key (ADE): Yes, sir.
Sen Stubblefield: What is their budget?
Key (ADE): Let me find the right line. $6.129 million.
Sen Stubblefield: That’s all 15 of them?
Key (ADE): Yes. That’s a regular line item. And then there’s also a $1.2 million line item that we use to pay for their tech coordinators.
Sen Stubblefield: How many employees are employed by 15 co-ops?
Key (ADE): I don’t have the answer to that, Senator. I would have to check to see how many.
Sen Stubblefield: So you don’t know how much we’re paying the employees, plus the $6 million?
Key (ADE): No, sir, I don’t have that.
Sen Stubblefield: I would like to know that number.
Key (ADE): We can get that because that’s not their only source of funding. Co-ops by their nature, they set up consortia to help all the member districts in their co-op do things for cost savings purposes. And so, depending on the co-op, they may have different fee structures where those member schools pay in, but that doesn’t go through us. So we’ll get that information for you.
Sen Stubblefield: Does $60 to $70 million a year for these co-ops sound in the ballpark?
Key (ADE): It’s possible.
Sen Stubblefield: Okay.
Key (ADE): I wouldn’t want to give a firm figure on that until we go back and look at the numbers.
Sen Stubblefield: Okay. Thank you, Secretary Key. Thank you, Mr. Chairman.
Sen Rice: Thank you, Secretary Key, like the co-ops, are they totally at liberty to do federal grants on their own and to make agreements for the schools within their co-ops that goes with the federal dollars?
Key (ADE): Well, those agreements would be subject to their board approval. And their board is made up of superintendents from the member districts in those co-ops. They do have autonomy under existing statute. I couldn’t answer specifically the type of federal grants they might be looking at and operating in. But I do know they have autonomy to operate and perform services, seek funding, that sort of thing.
Sen Rice: And are they required to do any reporting to the Department of Ed, what their agreements are?
Key (ADE): They do reporting. To the level, I’d have to check as far as what type of reporting they would have to do on federal grants. They do get evaluated on a regular basis, but they are subject to fiscal standards. They could even be put in fiscal distress if a co-op has any type of fiscal deficiencies, audit findings, that sort of thing. So there’s very similar requirements that they have that school districts have.
Sen Rice: But my question is and concern is, the Department of Education does not have oversight or review of the individual co-ops’ agreements with federal authorities and money coming into those co-ops and then the criteria that goes mandated with that to the schools. You don’t have any oversight or review of that.
Key (ADE): It would be limited at best. But if there’s anything specific that we can dig into, we’d be happy to do that. But they do have a level of independence from the agency.
Sen Rice: I appreciate finding that out. Thank you. Representative Wooten, you’re recognized.
Testing (part 1: Wooten)
Rep Wooten: Thank you, Mr. Chairman. I want to continue on the testing. On the assessment of end-of-course testing, you spent $13.7 million. And you’re asking for $20 million, or your budget was $20 million and you’re continuing that. Then I want to tie that in with a question. Why are we just spending $1.4 million on children at risk, and we’re spending $14 million to test them when we know that they’re at risk? But my question, is there any other testing that the department does like self improvement? Here’s what I’m hearing, Mr. Key. I’m hearing that the self-improvement testing that each district is doing with their students, they do it quarterly or two or three times a year. And it’s not jiving with what this $20 million or $13, $14 million were spending. And that’s where we’re getting all the bad publicity like we had in the paper this morning on the front page. So is that true? I’m hearing that the students are showing percentages of improvement that are much better than that of the tests that we pay $13 million for. If that’s true, why is that happening? And why are we spending $14 million on a test that shows we’re doing poorly when we’ve got self improvement, proven fact from the teachers in the classroom and from the school districts themselves that say we’re doing much better. Is there a difference there?
Key (ADE): There is a difference. And just for awareness, our ACT Aspire, which is the state assessment, that’s $7.5 million of this money. To the first point you made about why we’re asking for the $20 [million], so we added through legislative action in the 2021 session Work Keys, which is an assessment that is through ACT, but it’s kind of focused in– it has a curriculum, but it’s a lot of work-based and career technical-based, and it’s through our CTE division. That was $5.4 million. So that $13 million reflects an aberration. So we really can’t look at that for FY 2022. FY 2023, it’s going to be closer to $20 million. But it is different. So since COVID, we have paid for districts for K-8 to– under statute, we have K-2 required testing through the year. And then we expanded that for K-8 so districts could know how their kids were doing. And it’s optional. They can use that, or they don’t have to. K-2, they do have to. They could be showing growth. And a lot of times that’s what those assessments measure is growth. So a student could be growing through the year, but the ACT Aspire looks at where they are in comparison to the standard, so their achievement. All right. So they may not be at that level of achievement, but they may be growing through the year, which is what we want them to do, but eventually we want them to get to where they’re achieving at the grade level. So there are differences.
Rep Wooten: Follow-up on that.
Key (ADE): Yes, sir.
Rep Wooten: And I see the point that you’re making, but you also touched on a final point to me in testing, and that is, at that point in time, that student could have had sickness, could have been ill, could be not feeling good on that test day. In addition to that, he could have a home situation that’s not conducive to a learning environment, and then he goes and takes the test the next day. Because I’ve had players come to me and say, “Look, my mother and her boyfriend got into it last night, and he ran me off, and I slept in my car.” And if that young man is tested that day, I guarantee you he’s going to do poorly. My question is, would we not be better to look at a more concise look at the test results as they’re growing? Because they’re definitely, they’re showing achievement, but on that one point in time on that one test that one day, it’s tough, is it not?
Key (ADE): It is. And that’s why as part of our– we are in the process of developing a new assessment that will replace the ACT Aspire. We presented on this to the Education Committee.
Rep Wooten: So you are working.
Key (ADE): We’re working on it, and one of the components– everything you’ve said has been feedback we’ve received from teachers during the process. And so we want the new assessment system to be more flexible to account for those types of situations and even looking at some options of how that measure of growth and achievement are more accurate.
Rep Wooten: Okay. One question on the inflationary spiral and construction cost, we had discussions with you and the facilities board about the $80 million short fall. Are we going to cover that, or are you all going to deal with that? I thought we were going to deal with it when we did the tax break, but it got on the back burner and never came up. But the districts, I know you improved the cost from $200 a square foot to $275, but are you going to go back to those that had been funded and now they find that they’re $4 or $5 or $10, $12 million short? Are you all going to cover that in this session?
Key (ADE): That’s not part of what we’ve submitted. No, sir. Because that’s been in the discussion with the education committees, and so none of the recommendations from the education committees are reflected in what we’ve submitted.
Rep Wooten: Okay. So that’s going to be a totally separate matter. Okay. I have one more, Math Professional Development Funding. Did you change it, or did we change it where that money could be used for anything, for any professional development? Because I’m getting feedback from some of the math teachers that that money is being used, and when they get ready to go, I had one share with me that she spent $1,000 of her own money to go receive professional development over the summer because of the fact that her district had used the money elsewhere. I’m not being critical of the districts, but did we change that? Was that money designated for professional development in mathematics, and then did we change that? Did we as the legislature or did you change that?
Key (ADE): No, sir. There wouldn’t have been any changes. The professional development funding is unrestricted. So when districts get that, they use that how they–
Rep Wooten: So it wasn’t given to them restricted for just mathematics?
Key (ADE): Correct.
Rep Wooten: Okay. Thank you. Thank you, Mr. Secretary. Thank you, Mr. Chairman.
Rep Wardlaw: Senator Hammer, you’re recognized.
Sen Hammer: Thank you, Mr. Chair. A couple of questions real quick. Would you expect that with broadband going out as much as it is, that over time that the accessibility to the schools, subsequently the cost of the schools that you referenced a while ago, would eventually come down? Or is that something is going to be a built-in cost going on from here on out?
Key (ADE): I would have hoped so, but I think it’s going to be a built-in cost because the other factor is as soon as you meet one standard for speed, then the standard increases because of the content, it’s just the amount of content that is accessed now. And I don’t expect that we will see a settling of that. We might. I hope we do. But again, a lot of that’s depending on the contracts that DIS negotiates with the providers.
Sen Hammer: Okay. And on the co-op subject matter, do they carry their individual balances within your budget, or does each co-op have their own budget, and would they, therefore, have carry-forward funds or cash funds that we would want to look at their balances, or do you have that in your budget?
Key (ADE): That’s not in our budget. I will say that a number of years ago, we can review their budgets, and we can get that information– or review their balances and get that information for you. One thing that we noticed after I got to the department is there had been a practice of putting money at the co-ops in the form of grants from the department. And we still do that. I mean, they’ve been a critical partner. We issue grants to them for personnel, for RISE training. I mean, our major initiatives, we issue grants for their support to those districts in their area. What we found was that there were some money being, for lack of better word, being stashed there at the co-ops. And probably six, seven years ago, we noticed what was happening, and we put a stop to that practice. So we have tried to be more diligent in looking at how we manage our funds with respect to the co-ops. We even brought in an internal auditor at that time to help us with that process, not just that, but a number of internal audit functions. But that was one of the drivers of us adding that position several years ago.
Sen Hammer: Could you give me the fund balances that each of the co-ops have?
Key (ADE): Yeah. It would help us if we knew by a date by which– I mean, as of today or as of end of fiscal year.
Sen Hammer: Let’s get it as two weeks from now. They’ll give you a little time to do it, if we could, before Thanksgiving. How about that?
Key (ADE): Okay.
Sen Hammer: That work?
Key (ADE): All right. Yes.
Local library funding
Sen Hammer: Thank you. And then the library is needing funding out of the school funds. If I understood that right, it’s we’re budgeting through your budget to schools who in turn give that money to local libraries. Did I understand that right, or did I misunderstand that?
Walden (BLR): Senator Hammer, that funding is administered by the state library, and it’s based on a formula, and the state library sends that funding directly to the local libraries as determined by their eligibility.
Sen Hammer: Why is it in the education budget? That’s what I need help understanding.
Walden (BLR): Yes, sir. That was just part of the schedule that I created. But I just covered all of the Public School Funds for all three of the divisions. So that particular line is administered by the state library. It’s found later in the budget book. But just for your ease, I went over all three sections at once.
Incarcerated children’s education (part 2: Hammer)
Sen Hammer: Okay. Last question is on the Alexander Youth Center out there. Aren’t they a standalone charter school, or am I mistaken on that? They’re not under another school district? They’re a standalone school, right?
Key (ADE): Yeah. They’re not a charter school, but they are a school.
Sen Hammer: Right, but those employees– I know I know this, but I’m just clarifying to make sure I’m right. Those employees, though, are not employees of the state. They’re employees have right of passage that has the contract to run that facility out there. Is that correct, or do you know?
Key (ADE): I do not know the answer to that, Senator. We can find out.
Sen Hammer: Okay. Well, where I’m leading with is the line 71, the teacher retirement matching with those employees that are teachers, which you testified a while ago are certified teachers, would they qualify for the teacher retirement matching? It’s on the green sheet, or it’s the sheet that you handed out, page three.
Key (ADE): Yeah. I don’t think we have that same sheet, but we’re looking–
Sen Hammer: It was one you were holding up while ago. Staff was holding it up.
Rogers (ADE): So that teacher retirement goes for those as outlined in law for service co-ops, vocational centers, Easter seals, and schools operated by the Department of Corrections. That’s what that line is for. Now, I don’t think we do, but I’d have to find out where those employees are because I don’t know enough about that contract with Alexander and right of passage.
Sen Hammer: Okay. Well, let’s just offline conversation because, I mean, they are certified teachers. I’m just afraid they’re not getting treated equal as if they were in any other school district. And we’ll have offline conversation. Thank you.
Sen Rice: Representative Beck, you’re recognized.
Testing (part 2: Beck)
Rep Beck: Thank you, Mr. Chair. I’m going to back this up, and just I have some questions concerning the testing. I understand you said the ACT Aspire kind of tells me where I’m at. And then the other testing that we do tells me that I’m advancing or the student’s advancing or whatever. So, I mean, the obvious question, and I may be trying to compare apples and oranges or something here, but if I know where you’re at today, this year, and I know how you advanced, wouldn’t I know where you’re at at the end of that year? I mean, you understand what I’m saying? It seems like we’re saying, okay, we’re testing to see if we advanced, all right, how much we advanced. And you knew where I was last year, so wouldn’t you know where I’m at this year if you knew how much I advanced?
Key (ADE): Well, I think they do. I think the difference is the interim testing occurs through the year and gives you that progression. It’s a progress monitoring. But that ACT Aspire says where you are today, how you’re performing against that grade level standard. And you may be growing. You may be seeing great growth towards the standard during the year, but at the end of the year, you may not quite be there at that level of proficiency. And that’s what the ACT Aspire would capture.
Rep Beck: If I may, just a quick follow-up. But you understand my concern. Let’s say that I met the ACT Aspire at my grade level last year. I was there, and your advancement protesting shows that I’m advancing along just fine. Either something’s wrong with your advancement testing, or I should be– you could almost say I’m where I’m supposed to be at with the ACT Aspire because I’m advancing along, and I was caught up at the beginning of the year. My concern is this. It’s not just from a financial standpoint, but it’s also from the standpoint of testing, testing. You hear that a lot. We just test, test, test. So it would seem to me that the combination of the two would give you a great opportunity to look at really where the students are, whether the advancement testing that you’re doing is actually showing advancement or not, and vice versa. So I would challenge you to look at that because there’s a lot of money being used for testing, and plus there’s a lot of time, student time I’m talking about, that’s being used for this testing. Some of your statements kind of seem to indicate that, maybe the ACT Aspire you could have a bad testing day, I understand that. But your advancement should show that that child just had a bad testing day.
Key (ADE): It might show. I mean, the ACT Aspire has four levels that show you where that child is. So it could be if they’re close which means that if they’re rated as close, if that’s where they score, then sometimes they are meeting the grade level expectations, but it’s not consistent over time. The different questions, they may get one question right. They may get another question wrong that deals with that same standard, math standard or English standard. But everything you said is feedback that we received and how we are looking at developing this next system where there would be more of– the new assessment would have components of an interim assessment through the year that would be more aligned with where the expectations for that child are at the end of the year. Right now, we have with K-2 assessment, which is required, then there are four different types of– there are four different providers of that districts can select from. They have I-station, NWEA, a couple of others. So they’re different than the ACT Aspire, and it’s just within the last couple of years that we’ve expanded that due to COVID so that they could get K-8 and look at all of their students if they choose to. Not all districts use that tool. But that’s something that– everything you’ve said, everything Representative Wooten said, those are things that are being considered as we move forward with the new assessment.
Rep Beck: Thank you.
Sen Rice: Representative Springer, you’re recognized.
Rep Springer: Thank you, Mr. Chair, Secretary Key. Mr. Chair, if you allow me, I think I have several questions. And instead of asking compound questions, I just want to ask one at a time. So if you indulge–
Sen Rice: If you keep it on budget matter.
Professional learning communities
Rep Springer: Yes, sir. It is going to be on budget. I am looking at your appropriation sheet for the different programs that you would like to have appropriated. And on here I’m trying to see if PLCs, your professional learning communities, are they are part of this request, or what line item is that?
Key (ADE): That’s in the professional development line item.
Rep Springer: What page is that over on the quote?
Walden (BLR): Representative Springer, that’s on page 2.
Rep Springer: On page 2.
Walden (BLR): If you go down to row, on the left hand side, row 51, that’s included in the total for the professional development funding line at $37.1 million.
Rep Springer: Okay. And I guess my follow-up question would be, of the $37 million, how much of that is for the PLCs?
Key (ADE): $16.5 million.
Rep Springer: $16, okay. So the reason why I asked this question is I’m trying to find out whether or not the department has identified certain programs that you all have evaluated and determined that they will address the needs of the students within the state so that they can read on grade level and be proficient in math. So that’s what I’m trying to determine. So have you all identified any programs? And I think early on this year we heard about the PLCs, and it allegedly received rave reviews. So I’m trying to determine, are there other programs that you’re making appropriation requests for that will address the needs of the children of the state? So I would just like to have the answer to that question.
Key (ADE): We’re not asking for additional funding or appropriation for some of those. We’re looking at how we’ve been spending funds and reallocating. We stopped doing what wasn’t working, and let’s do what is working. One of the big initiatives that we have in both math and literacy is high-quality instructional materials and the professional development that goes along with that. So for math and literacy, we have established Arkansas ED Reports. It’s a website that districts can go on to and see that publishers have submitted their curricula to us. We’ve rated those. We’ve looked at those, compared those to the Arkansas standards, and we’ve given them a rating similar to a program that Louisiana has done for several years now that helps guide districts in how to buy or where to look for effective curriculum, supplemental materials, and intervention programs. And that’s a website that is active now.
Rep Springer: What is it called again?
Key (ADE): It’s HQIM, High Quality Instructional Materials.
Rep Springer: And there has been staff development with the different staff across the state?
Key (ADE): Yes. Dr. Tiffany Pride is the Assistant Commissioner. Learning Services leads that work, and we can get as many details as you want about that.
Rep Springer: Okay. All right. Dr. Pride, that’s good. Okay.
Key (ADE): Yes.
Rep Springer: If you have her follow up with me, I’d love to hear about it.
Key (ADE): Okay.
Rep Springer: Thank you.
Sen Rice: Representative Wooten, you’re recognized.
Rep Wooten: Mr. Secretary, I want to pursue just for a second, the at-risk. Do you all know the number of students that we’re funding? Was it $1.4 million? Do you know the number of students that we’re funding in that? And do you know the number of students in districts that you all have taken control of that fall under that and are being funded?
Key (ADE): So that at-risk amount, and Greg, correct me if I’m wrong, but I believe that was grants that are issued to help put on ACT boot camps or ACT prep programs for students that are at-risk. It’s a college career readiness planning grants. So that’s what that money goes to. And we do know from year to year how many students participate in those. So we can get that for you.
Rep Wooten: Okay. So just one more. So we’re teaching the test, so they tell me.
Key (ADE): Well, you can’t really teach the ACT, but you can help prepare them.
Rep Wooten: Well, I know, but I mean, you’re telling them what to expect and trying to improve them so that they can pass that.
Key (ADE): Yes, sir. Because these at risk students typically do not have access to– their parents can’t provide the ACT books or the other prep programs.
Rep Wooten: I’d like to have the total number.
Key (ADE): Yes, sir.
Rep Wooten: And then I’d like to have those that are in districts that are in financial distress.
Key (ADE): We’ll get that for you.
Rep Wooten: Thank you.
Key (ADE): Yes, sir.
Rep Wooten: Thank you, Mr. Chairman.
Sen Rice: Senator Elliott, you’re recognized.
Testing (part 3: Elliott)
Sen Elliott: Thank you, Mr. Chair. Secretary Key, budgetarily, and when we think about all the money we do spend on testing, and I know some of it we have control of, some we don’t. But I’m just curious. In some of the more elite, I guess, is a word for it, private schools in our area and our state, if you have enough– if you have interaction with them, do you know or can you find out how much testing do they do compared to the testing that we do? Do you have any idea about that?
Key (ADE): I don’t, Senator. We do not have a way. The only thing that we know from the private schools, those who participate in Succeed scholarships, is their end-of-year assessment. And it could be the SAT 10. It could be a number of things that they use.
Sen Elliott: Yeah. I’m thinking in terms of it may be something that could be helpful to us to know, like the Shiloh Christians and the Episcopal and PA and the schools on that kind of level. Because I know in so many cases, they’re not spending money on testing. And I suspect a large part of it is the advantage with which they come to these schools. I don’t know that for sure. But what they typically say is, “We spend our time educating kids, not testing our kids.” I don’t mean specifically those schools. And that’s just something I think would be interesting to know to see if it could be instructive to us in any way. And if it’s not a matter– it could be a matter of, it would be instructive to us to understand background as a matter of achievement of what they make on test scores or whatever. I know it’s a big deal when it comes up to SAT and ACT scores for college and whatnot, but I’m just really wondering if they’re not spending a lot of money on testing, that might help redirect some of the ways we fund what we’re funding to try to bring up achievement. Because we’ve talked so many times about we’re bringing everything to the schoolhouse door and say, fix it there. I suspect they are not– any kids in those schools who are homeless or hungry or in need of the things so many of our kids do need so they can spend more time on educating their kids. If you have a good relationship with them– and that might be some information we can get. And I’m really serious about that. Because I think the comparison and the contrast needs to be had. Thank you.
Key (ADE): Yeah. Okay.
Sen Elliott: Would you agree? I forgot this is a question. Sorry about that. Do you think that would be helpful or instructive?
Key (ADE): It could be helpful. We’ve reduced the hours of testing. Now ACT Aspire is four to six hours, depending on what grade level you’re at. And with some of the old tests, it was eight plus. So as far as the time– now, the number of tests through the year, some of that is– I do know there are districts that choose to assess things that are beyond what the state requires. Now, how that compares in private schools, I don’t know, but we’ll certainly take a look and see if there’s anything out there that could help us, inform us on that.
Sen Elliott: Okay. Thank you. Thank you, Mr. Chair.
Sen Rice: Thank you. Seeing no more questions, I have an executive rec motion for public school. I have a motion and second. All in favor, aye. Opposed? Thank you. Ms. Walden, if you’ll present Public School Academic Facilities and Transportation.
Public School Facilities and Transportation
Walden (BLR): Thank you, Mr. Chairman. The Division of Public School Academic Facilities and Transportation begins on page 87 of your manual. This division is responsible for administering programs of state financial participation in support of academic facilities, assisting all school districts with general academic facility support, providing oversight of their construction, repair, and maintenance of both their academic and nonacademic facilities on public school campuses in the state. And they administer and conduct school bus safety inspections and driver training programs. The department appropriation summary is on page 88. They have appropriations totaling $218 million each year. They have 31 positions authorized and five extra help. The only appropriation with any changes is the Public School Academic Facilities appropriation. It is on page 90 of your manual. This provides for the operation of the Facilities Partnership Program, as well as their division staff, program oversight, and implementation of the programs. The total request is $2.9 million for each year. And this appropriation includes adjustments to salaries and matching that were made in the previous biennium. And they’re just requesting to continue those adjustments. The executive recommendation provides for the agency request. The other appropriation is on page 92. This is the Academic Facilities Partnership Program appropriation. This provides for the state financial participation of awarded projects to districts, and they request for a continuation of appropriation at $215.3 million for each year of the biennium. The executive recommendation provides for that request. Thank you, Mr. Chairman.
Sen Rice: Thank you, Representative Love, you are recognized.
Rep Love: Thank you, Mr. Chair. I actually just accidentally hit my button. But I will ask the question since I’m now lit up.
Sen Rice: We don’t want you to feel obligated.
Rep Love: Mr. Secretary, just looking at this portion of the budget, let me ask, now, have we assessed all our facilities for the actual needs they have? Walk me through the process of actually how we come up with these figures and how it relates to the need that we have for our facilities.
Key (ADE): So we do have an annual inspection program, and I would have to get how many districts or how many buildings get inspected each year. But they’re on a rotation. So that goes into part of the data that we look at. Most of the data that we go by comes from their facilities master plans and that’s submitted by the districts and updated regularly. They identify what their needs are, and then they submit projects to us for review based on their facilities master plans. And then they’re assessed based on– they’re prioritized based on the need and based on the wealth index that they have. And then funding then is allocated. I’m giving you a very rough description of that process. We have not conducted a– back in 2004, 2005, there was a comprehensive review where teams went out to every building and every district across the state. That has not been done in recent years. There have been reviews, but part of the meeting of adequacy was to establish that regular inspection process. And we’ve also made that more efficient. Now we can get around and do more each year because we’ve made that electronic. We made the recording of that process electronic. We’ve taken it from a paper-based system to a tablet-based system. So now we’re getting around to seeing more districts, seeing more school buildings each year.
Rep Love: Okay, so are we going to have a grading scale for those schools? So I mean–
Key (ADE): Yes. It’s not a grading scale as A to F, but there is looking at the longevity of a building that’s left, looking at roof, looking at the major systems. They do assess the expected life of the building, and that goes into the ratings.
Rep Love: And that would go into where we would direct our funds. Because I guess in thinking about it, I would assume that we would have a grading scale. And the reason why I say grading scale is because if a school is an F– we do it academically, so I don’t know why we wouldn’t do it in looking at the physical structure. But if a school is an F, that means that school is in high need of whatever repairs or replacement or whatever. So I would just assume that we could do the same thing so that we could make sure that the schools that are in most need get the assistance they need.
Key (ADE): I think we have something very similar. It’s just not as simple. The rating assigned isn’t an A to F, but we do have now, as something that’s new from the last session, a statewide needs list that also helps us prioritize. So that gives us a more refined look at districts that you maybe have in mind, or I can think of one. Brinkley. They have an old high school. They are really in need of additional new facilities. And through the statewide needs list, they’re going to be looking at possibly having a higher priority because of their need in comparison to others in the state.
Rep Love: Okay. All right, so when do you all plan on beginning this statewide assessment?
Key (ADE): It’s in process now. It is constantly in process. We are working with districts now for the 2023 to 2025 construction partnership cycle. We are still working with districts on the 2021 to 2023 partnership cycle. So this cycle never really stops. We just go from one cycle to the next, and the process is ongoing. That helps provide support to districts in looking at what their needs are. I will say that a lot of district needs have been addressed recently with the use of the ESSER funds. We’re looking at HVAC systems, roofs, and those types of things that could have an impact on air quality. So we’ve had a number of improvements around the state with that.
Rep Love: And then you all will publish a report on this?
Key (ADE): There’s a condition report that comes out every year. I think that was submitted October 1.
Rep Love: Okay.
Key (ADE): I can check on that and see.
Rep Love: All right, thank you. Thank you, Mr. Chair.
Sen Rice: Thank you. Senator Stubblefield, you are recognized.
Crushing buses? (Sen. Stubblefield)
Sen Stubblefield: Thank you, Mr. Chair. Secretary Key, what is the criteria for determining when a school bus needs to go? How do you determine that?
Key (ADE): Well, there’s a school bus manual, and I don’t have that one memorized, Senator, so I’ll have to get somebody from the division to help with that. But I do know there are criteria that basically says you’re go or no go. And we do bus inspections every year as well.
Sen Stubblefield: Is that disposal of those school buses, is that left entirely up to each school district?
Key (ADE): Yes. Yes.
Sen Stubblefield: So they determine whether they can either crush the bus or put it up for a bid and sell it?
Key (ADE): Well, they have to dispose of it by means that are provided for by statute. They can’t just give it away or anything like that. They would, they would sell it.
Sen Stubblefield: No, I don’t mean to give it away, but they could put it up for bids.
Key (ADE): It may get sold as scrap, but they would put it up for bids, yes.
Sen Stubblefield: Or they can drive it up to northwest Arkansas and have it crushed.
Key (ADE): I’m not sure about that part. I think they have to dispose of it through a bidding process. I’m not aware of any crushing, but if that’s happening, we’ll check it out.
Sen Stubblefield: I would like to know the answer to that, because I have several school people that told me that they’re taking buses to Northwest Arkansas, leaving them running, pulling them in, and crushing them while they’re still running. So if that’s the case, we need to look into that.
Key (ADE): I would agree, and that’s something we’ll check out. I’ve not heard that.
Sen Stubblefield: And I would also like to know what the disposal process is, what these schools go by, what criteria they use to determine whether that bus is no longer capable of carrying kids safely.
Key (ADE): Yeah, we’ll get that to you. I know that’s one of the big jobs of our transportation department is inspecting buses to make sure they’re roadworthy and safe for students.
Sen Stubblefield: Well, there’s a lot of public out there that would love to bid on these buses, and the school could get something out of them.
Key (ADE): Yes, sir.
Sen Stubblefield: There’s taxpayers paid for those buses.
Key (ADE): That’s right.
Sen Stubblefield: All right. Thank you. Thank you, Mr. Chair.
Sen Rice: Representative Wooten, you are recognized.
Rep Wooten: Thank you. Mr. Secretary, on page 90, it shows 30 employees. On the report I got from our analysts on the Personnel Committee, we don’t show that you all budgeted anything for any salaries. Where are they being paid out of? On page 90.
Key (ADE): Yeah, I see. We’re showing a $1.74 million request for salaries.
Rep Wooten: Where is that money coming out of? Is that funded? Why is this report– Tony, do you know why this report shows zero budgeted? Is Tony in here?
Sen Rice: Kevin, Kevin says he’ll check on it.
Rep Wooten: It’s showing it’s not budgeted. But the next question is on page 92. You requested $211 million continuing or $215 million, and we only awarded $61 million. Is that totally funded at $215 million?
Key (ADE): Yes, sir. Because, as I was mentioning before, there’s a cycle. And we don’t spend all that money in one fiscal year because of the nature of school construction. So there are projects that have been committed to that we still have funding allocated for, and we have to have that appropriation so that we can–
Rep Wooten: So you’ve already–
Key (ADE): Make–
Rep Wooten: Okay, well–
Key (ADE): Those would be approved and funded projects.
Rep Wooten: That’s my next question. On average, how many do you fund each year? Because I saw a list back in the fiscal session where we had $60 or $70 million of buildings that were unfunded.
Key (ADE): Well, I would have to get the number from Mr. Kane, but we have funded all of the projects that are in this cycle. We just recently because– I’ll give you an example. If a district doesn’t pass its millage, then it can’t meet its local match requirement. Then it may rescind their project for that cycle. That frees up state money that we can go down the list and then award additional schools funding. And just, I think it was last week the commission met. And so at this point, we have funded all the projects for this cycle that have been submitted.
Rep Wooten: So if we continue funding at $61 million, we’ve got four years, roughly, if that’s an average.
Key (ADE): Well, I mean, it doesn’t really take into account the inflation issue that you addressed earlier. This is–
Rep Wooten: We talked about that a moment ago. Are you all going to address that in the session?
Key (ADE): Well, we’re in conversations with other members.
Rep Wooten: The Education–
Key (ADE): Senate Education and House Education. Yes, sir.
Rep Wooten: So how many requests do you receive a year?
Key (ADE): Total number of requests? Mr. Kane asked if he needed to be here, and I should have said, yes, you do. We’ll get that for you.
Rep Wooten: Okay.
Key (ADE): I wouldn’t want to give you the wrong answer, but it’s substantial.
Rep Wooten: If you can get me the average number of requests awarded–
Key (ADE): Yes, sir.
Rep Wooten: –and then the average request that you receive.
Key (ADE): Let me get that for you.
Rep Wooten: Thank you. Thank you, Mr. Chairman.
Key (ADE): Yes, sir. That’s something that we do track. I just don’t have it.
Rep Wooten: That’s fine. Thank you.
Sen Rice: Representative Beck, you are recognized.
Rep Beck: Thank you, Mr. Chair. This might be a report request. I don’t know. I would be surprised if you had this off top of your head, but there’s been some things that we’ve done, and this is energy-related things, where we’ve had these companies come in and offer to finance and improvements– to supply the funding for improvements. Typically air handling units, sometimes they put solar in some of these places and things like that. And I was wondering, have you guys seen any negative effects? I mean, not negative. Negative budget. As a matter of fact, that these companies are going and doing improvements to our school districts that we would normally have to– like an air handling system that we would be scheduled to be replaced is now being replaced by a more efficient unit these people are doing. I’m just wondering if that’s had any positive effects as far as to the schools.
Key (ADE): Well, it’s hard to say at this point, because you’ve got some districts that have gone and they partnered with organizations on solar. That’s kind of a big thing right now. And I think it’s going to take a few years to see if the promises of that will actually come to fruition in the budget. I know there are some districts that are really hoping to see some energy savings because of what they’re producing from their solar banks and solar fields. The improvement with HVAC, air handling and that sort of thing, that has not been done recently for efficiency as much as it has been for air changeovers due to the COVID issue. So it’s hard to say at this point if what we’re seeing, or if we’re going to see anything, that has a substantial impact on budgetary issues for the schools.
Rep Beck: Thank you.
Key (ADE): Especially now with the fuel prices and the energy prices going up. I don’t know that we’re offsetting from the efficiencies with the increases we’re seeing.
Sen Rice: Senator Chesterfield, did you have a question? Would you like to offer a motion? It’s the proper time. I have executive rec and a second. All in favor aye. Opposed? Thanks for that, Senator Chesterfield. Number five, Career and technical education. Ms. Walden, you are recognized.
Career and Technical Education
Walden (BLR): Thank you, Mr. Chair. Moving to page 93 of the manual. This is the Division of Career and Technical Education. This division is responsible for administering public secondary vocational technical training programs across the state. The division appropriation summary is on Page 94. As you can see, they’re funded with federal revenue, Public School Funds, educational excellence trust fund transfers and interagency transfers, as well as general revenue, special revenue and cash. They have nine total appropriations that total $55.1 million each year. They have 44 authorized positions. You have already reviewed four of the appropriations under the Public School Fund’s schedule, and there are three remaining with change level requests. The first one is on page 97. It is the high-tech scholarship program. This is a program that’s being phased out and the last eligible student for this program should be completing their career in FY 2023. So the last payment will go out in this fiscal year. The division requests to discontinue this appropriation and the executive recommendation provides for the request. The next appropriation with change levels is on page 103. This is their Vo Tech Administration Operations appropriation, and this provides for the administration of the entire division. The total appropriation is $3.3 million for each year, and it includes a couple of changes. They request the restoration of two special language pool positions with associated increases in salaries and match. And they also request one position title change and the transfer of two positions to the Shared Services appropriation. The executive recommendation provides for the agency request with the exception of the title change which is placed on hold for review by the new administration.
Walden (BLR): The next appropriation with change levels is the Federal Vocational Education Operations appropriation on page 64. This is federal funding also for the Vo Tech operations programs. The agency request total is $18.8 million for each year of the biennium. And this appropriation includes the transfer of one position in from the state appropriation. Excuse me. It actually includes no change levels, but adjustments to matching. And the executive recommendation provides for the agency request. The last appropriation with change levels is on page 112. This is the Camp Couchdale appropriation. This was one-time funding received by the Division of Career and Technical Education to make improvements for an agriculture mechanics lab at Camp Couchdale. However, the funds are now spent, and so the division is requesting to discontinue this appropriation. The executive recommendation provides for the agency request. Thank you, Mr. Chairman.
Sen Rice: Thank you. Can you tell me, is Adult Ed in this? It’s not in this?
Key (ADE): No, sir.
Sen Rice: Where is Adult Ed on our agenda included?
Walden (BLR): That would be reviewed, or it has already been reviewed under the Division of Workforce Services.
Sen Rice: Okay. Just for reference, was there a recommended increase from executive for adult ed?
Walden (BLR): I don’t have that information, but I’m glad to get it back to you and submit it to the committee.
Sen Rice: You don’t have anything on that, Secretary?
Key (ADE): No, sir, we don’t have anything on that.
Sen Rice: Okay, I’ll check further. Thank you. We got a question from a co chair, Representative Wardlaw, you’re recognized.
Rep Wardlaw: Thank you. Mr. Chair, I sat here all morning and watched and listened. I thought we had a guy hired over the Department of Ed for Legislative Liaison, David Branscum, and he has yet to be at the table to answer a question about your guys’ budget. So I’m wondering, from the taxpayers’ perspective, what do we pay him for? And yes, Secretary, you are required to answer this question.
Key (ADE): To liaise with legislators and community members and superintendents around the state.
Rep Wardlaw: So where is he?
Key (ADE): I don’t know where he is right now.
Rep Wardlaw: My point exactly.
Key (ADE): He’s liaising somewhere.
Sen Rice: Just for the record, I did see him in Personnel Committee this morning. Representative Wooten, you’re recognized.
Rep Wooten: Mr. Secretary, on page 97 of the manual. There’s $9,500 for scholarship program and we spent $500. There’s nothing budgeted. And with all the high-tech needs out there, what was that program used for and why are we doing away with it?
Key (ADE): Well, there are a number of other scholarship programs now that are available that would fill what this one had done. All the people that were in that program, I think we had one left, and that person is going to be exiting that program. So we’re just doing away with that line item because it’s no longer necessary.
Rep Wooten: Are you keeping the position or are you doing away?
Key (ADE): There’s no position.
Rep Wooten: Okay.
Key (ADE): Yes.
Rep Wooten: On page 99, what is this, Vocational Startup Grants? We authorized $4.7. We budgeted 2.37, then you spend $2.319. What is that?
Key (ADE): So those are grants to districts that help to purchase equipment for startup programs. And I think I saw Ross is here, Mr. Ross White, our director. He can come up and give you a further explanation of that, but usually we have more applications than what we have funding for those. Mr. Chair, with your permission, I’d like Mr. White to come up–
Rep Wooten: It’s a startup program for local schools.
Key (ADE): Yes, sir. A new start up grant for equipment or something if they’re starting up a program that they don’t currently have.
Rep Wooten: How many do we average a year?
Sen Rice: Please recognize yourself.
R White (ADE): Ross White, the Director of the Division of Career and Technical Education. I’m sorry. I didn’t hear your last question. I was sitting down. I’m sorry. Was it a specific number?
Rep Wooten: We know now that it’s local districts, or at least I do. How many do we have a year?
R White (ADE): Well, it varies year to year. So actually the application process closed for this current year November 1. We had 145 applications for this current year. The funding structure is actually based around what we call our minimum equipment. So for a program, for them to implement a program, we have a list of equipment that is the expectation the district has, and we do the funding based off the grants give 85% of the funding the district has to put in 15% of the funding. And so typically, we have awarded out– just kind of give you some numbers. So in FY 2020, we had 68 that we were able to fund, 81 we were unable to fund. In 2021, 68 that were funded, 20 that were unfunded. In 2022, 58 that were funded, and 66 that were unfunded. In the current year, we were able to use our state startup dollars, but also I’m using some additional funds. With the ESSER funds that we’ve had available, we’ve been able to award more for the current year that we’re living in. But we’ve been about half that we– half or more than half that have gone unfunded just because we only have that $2.3 million that’s there. So you’ll also notice, I think you mentioned the dollar amount, that I think with the actual was the $2.3 million. So we award that to the districts, and then they spend. Obviously sometimes with that equipment, we have districts that have things that happen, and they’re not able to fully spend the amount. Or sometimes we have grants returned to us because when they submitted that application that year prior and things happen, or new superintendents come in and the money is then returned to us and not actually used. So that’s sometimes where you see the full allocation not being spent.
Rep Wooten: So how many did you say you’re receiving a year?
R White (ADE): This year we received 145. I can say based off the history they’ve all been–
Rep Wooten: And they’re awarded.
R White (ADE): We were able to award, I mean, in the range of 68 in 2020, 68 in 2021, 58 in 2022, and then 64 in the current year.
Rep Wooten: All right, on page 113, Mr. Secretary. Thank you. On page 113, Camp Couchdale. We authorized $2.52 million. Is that funded?
Key (ADE): Yes. Yes, sir.
Rep Wooten: Okay, so we didn’t spend anything, and we budgeted $30,000, and we’ve got fund balances of $29,000. So there’s nothing out there in the agency. They made no request. Is that a– what is Camp– I can’t remember what it is. Refresh my memory.
Key (ADE): It’s an FFA camp.
Rep Wooten: Okay. Future farmers. Okay. How come we’re not funding it and we didn’t spend any money out there? And then why do we need $2.5? Why are we doing away with it?
Rogers (ADE): Representative Wooten, that was an appropriation that was given to help renovate the Camp Couchdale building– I can’t remember what the name of the building was, but it was to add bathrooms, add some classrooms down there for the Camp Couchdale. And you all had given us one-time restricted reserve funds that we got for the $2.5 million, and we’ve worked with Camp Couchdale over the past four years to send that money out, and we’ve finished that program, and even spent the $29,000 so–
Rep Wooten: So you’ve expended all the $2.5?
Rogers (ADE): Yes, sir.
Rep Wooten: Oh, okay. All right. Thank you, Mr. Chairman. Thank you.
Sen Rice: Senator Hammer, you’re recognized.
Career technical grants
Sen Hammer: Thank you, Mr. Chair. On the subject of the career technical grants that you were talking about a while ago, what was the dollar value? Or do you have the dollar value of the grants that were not awarded because you didn’t have the funds to award?
R White (ADE): So I can’t give you at the moment what that exact dollar amount would be. We can get that information to you, but I do not have it with me today.
Sen Hammer: Okay. If you don’t mind, I’d like to get that because then my second question to that would be, of the programs that were not funded, are they high-skill programs that have immediate demands in the job market like the welding, the plumbers? Is that what the equipment that they were asking money for would have went to address?
R White (ADE): Typically, yes. I mean, our application process is based off our approved programs of study that we have within our programming that we follow– within our State Perkins Plan that we submit. Obviously, when we do our applications, we have a rubric that we use. Obviously, the largest piece of that rubric is looking at that high-skill, high-wage, high-demand piece to ensure that the programs that we are helping implement are ones that are going to fill the needs that exist within those communities in the workforce area. But obviously, it lines to any program of study in which we offer within the area of career and technical education.
Sen Hammer: Okay. And I know Cody over there at whatever agency he is with, I know there’s, I wouldn’t say overlapping, but complementing of attempts to develop the facilities and equipment. So maybe you can answer this question or you can give it to the guy to the left of you to answer this question. But what I’m wondering is, when that number comes back, is this the time that, for as much discussion as there is, as short of a work supply, employee supply, as there is, is this time we need to step up and bite the bullet so we get these schools equipped? Because I know some of the feedback I get from some schools, especially in diesel, I mean, they’re working on equipment that’s 20 years old and it’s worthless when they come out, for the most part. Is this the time we need to step up and just go ahead and bite the bullet so we can get these schools equipped and get the need met?
Key (ADE): Yes.
Sen Hammer: Can you give–
Key (ADE): Well, I mean, that was a– if you want me to elaborate, I will. But that’s why you see this budget reflects an increase. We don’t want to– we want to avoid the overlap, if you will. There’s going to be some between what’s offered at the high schools and what’s offered at the secondary centers. I mean, there’s bound to be some level of overlap there, but what that creates is kind of a network of opportunities for students. And the challenge we have is making sure that the students, one, that they’re aware of the opportunities, and two, that the centers or the programs at the high schools are equipped with up-to-date, modern technology that they’ll actually be expected to operate once they get out into the workplace. So yes, I mean, this is an area that we feel like we could step up and do more, and that’s what we tried to reflect in our request.
Sen Hammer: But does your request– because you didn’t know the dollar amount a minute ago and I understand that but does this request– how far does this request go in meeting the total number of grants that were turned down, and what’s the gap we need to fill?
Key (ADE): So for FY 2023, we used an additional $1.1 million from federal funds that was allowable under ESSER to provide additional grants to fund all the requests. So we actually got to fund 97 total. 64 were funded with startup grants, and 33 were funded with the additional federal funds. So that gives you an indication that it’s definitely over a million. But I think the likelihood is that once districts know, “Okay, we’ve had a pent-up need. We just haven’t applied because we wouldn’t necessarily be at the top of the list to get it,” if they know there’s more out there, I think we’ll see more districts submitting grant applications. I mean, Ross, you can tell me I’m right or wrong on that.
R White (ADE): I would agree. I think we definitely have some districts that don’t apply just because they know that the limited funds that exist there. And so they try to work with local business and industry or other mechanisms to figure out how to implement the programs to the best of their ability with the equipment needs they have, which are good and powerful sources, but at the same time, I know that that has existed because that funding has been kind of at that set rate and there hasn’t been much adjustment that they know, the limited pool that exists.
Sen Hammer: Okay, final thought, I want you to– if you would, I’d like to get those numbers so we know what we’ve got to go for and work with Cody over there so we eliminate the– and let’s get that before we get into the general session, if you would, because I wouldn’t want to see a school disadvantaged, especially if they’re in a low-income area and they just don’t have the funds or whatever. I wouldn’t want to see them disadvantaged because there’s not enough money. So if you would, we’ll work together on that. Thank you, Mr. Chair.
Sen Rice: Thank you. Senator Chesterfield, it is the proper time.
Sen Chesterfield: I move executive rec.
Sen Rice: executive rec motion for career and technical education. Second. All in favor, aye. Opposed? Members, I remind you it’s 11:15. We got to be out here by 1:30. I’ll stay as long as you want to. Next up, we have Department of Higher Education. Ms. Baldwin, if you will present, and are we going to have Dr. Markham come up?
Walden (BLR): Thank you, Mr. Chairman. The next division for your review is the Division of Higher Education. Their request begins on page 117. The Division of Higher Education serves as the administrative staff for the Arkansas Higher Education Coordinating Board. They also review academic programs. They administer statewide financial aid programs and they contract with the SREB for supportive graduate and first professional study outside of the state. The department appropriations summary is on page 120 of the manual. You can see they have 25 appropriations that total $108 million for each year of the biennium, and eight of those have change-level requests. They receive general revenue, federal revenue, special revenue, trust funds, and cash funds and have 52 positions. Right now, I’m going to review the eight appropriations with change-level requests.
Walden (BLR): The first appropriation is their operations. It’s on page 123 of the manual. This provides for the administrative functions of the division. It is payable by general revenue and lottery proceeds. They request $4.2 million for each year of the biennium and includes the following changes. They want to restore one growth pool position and two special language positions with associated salaries and matching. They also have various personnel changes, including reclassifications with no change in appropriation. They want to increase extra help by $72,000 annually. This is to provide for part-time programmers for their new financial aid and application management system. And they want to reallocate $3,000 in general revenue from the Veterans Approving Agency. This is just for efficiencies. They would like to have the state portion of this appropriation brought in under their operations appropriation. The executive recommendation provides for the agency request with the exception of the reclassifications and associated appropriation.
Walden (BLR): The next appropriation with changes is on page 127. This is Student Assistance Grants and Scholarships. This provides for the board to award financial aid based on academic performance in some programs of financial need. It’s funded with a combination of funding sources including general revenue. The total request is $62.95 million for each year, and this total includes a decrease of $1.5 million each year. And this is to remove the HE Opportunities Grant, and this is due to phasing out of this program. The executive recommendation provides for the agency request.
Walden (BLR): The third appropriation with changes is on page 129. This is the TANF appropriation. This federally-funded appropriation totals $10.1 million for each year of the biennium, and it provides for the administration and aid of the Arkansas Career Pathways program. The request for the biennium includes an increase of $3 million each year in enrollment and education, a new line they’ve created– or in this line item. And this is for supportive services and training at institutions that provide for the Career Pathways program as well as pilot TANF programs. The executive recommendation provides for the agency request.
Walden (BLR): The fourth appropriation with changes is on page 131. This is ADHE scholarship administration. This appropriation provides for the administration of the Arkansas Academic Scholarship program. It is funded with lottery proceeds. The total appropriation is $1.1 million each year and includes the following changes. They request to restore one growth pool position with associated salaries and matching, as well as increase their operating expenses by $250,000 annually. This is to provide for maintenance costs of the new application management system for financial aid. The executive recommendation provides for the agency request.
Walden (BLR): The fifth appropriation with changes is on page 132. It is technical education federal programs. This appropriation provides for the administration of the Carl Perkins funding for post-secondary portion of the Perkins Act funding for career and technical education services. The agency request is for $547,000 for each year of the biennium. This includes an additional $100,000 in operating expenses and $47,000 annually in professional fees for training programs. And these were previously appropriated through a miscellaneous federal grant, so they’re just requesting to integrate that MFG into their normal federal appropriation. The executive recommendation provides for the agency request.
Walden (BLR): On page 155, you’ll see a Veterans Approving Agency state appropriation. This general revenue appropriation provides for the certification of training programs for veterans. This is the state match portion, and the division requests to discontinue this separate fund center. And as I mentioned previously, they will continue to provide the same services, but they just want to bring the state match into their operations appropriation for efficiency. That includes $3,000 annually in general revenue. The executive recommendation provides for the agency request. On page 157, we have Veterans Approving Agency, federal. This is the federal portion of the veterans approving services that the division provides. The appropriation totals about $361,000 for each year. Their request includes personnel changes including reclassifications with no change in appropriation. The executive recommendation provides for the appropriation but not for the reclassifications, and those are on hold for review by the new administration.
Walden (BLR): The last appropriation with change levels is on page 158. It is the AmeriCorps operations appropriation. This provides for the Arkansas AmeriCorps program and it’s funded with general revenue and federal revenues. The agency requests $997,000 for each year of the biennium and $170,000 in general revenue funding, and they request the following changes. They would like to continue one miscellaneous federal grant position with associated salaries and matching. They have a number of reclassifications and upgrades with associated salaries and matching costs. They want to increase extra help at $30,000 each year with associated matching to integrate an existing miscellaneous federal grant appropriation. And they also want to increase operating expenses by $140,000, professional fees by $2,400, and grants and aid at $50,000 each year, all for the integration of a previously approved miscellaneous federal grant. Additionally, they request an increase in general revenue funding of $31,000 in FY 2024 and $62,000 in FY 2025. This is to meet the state matching requirement for this program. The executive recommendation provides for the agency request with the exception of the reclassifications, upgrades, and the associated appropriation, and those are placed on hold for review by the new administration. Thank you, Madam Chair.
Sen Irvin: All right. Thank you. Representative Cavenaugh, you’re recognized for a question.
Rep Cavenaugh: Thank you, Madam Chair. I’m over here to the right. Thank you. My first is going to be on page 123. When you go down to your funding sources, you talk about this interagency fund transfer. Where does that get transferred to? It’s page 123.
Walden (BLR): Operations. That’s $8 million.
Fuller (Higher Ed): Good morning. Nick Fuller, Assistant Director for Finance for Higher Ed. You’re mentioning the $8 million transfer?
Rep Cavenaugh: Yes, sir.
Fuller (Higher Ed): That goes to the Workforce Initiative Act appropriation, which is further down in our appropriation section.
Rep Cavenaugh: But that gets transferred out of this? Okay.
Fuller (Higher Ed): Yes.
Rep Cavenaugh: And then my final question is dealing with page 153, which is our web-based applications. You’re asking for an appropriation for a million dollars out of general revenue– or you’re asking for appropriation for a million dollars. You’re asking for $500,000 out of general revenue. Why are you wanting an appropriation for double of what you’re getting in GR and your spend has only been $55,000?
Fuller (Higher Ed): In the event that additional expenses are needed for the continued upgrade or operations of the financial aid management portal. Currently, that $55,00– I apologize– is all that we spend on the state general revenue matching piece that we pay for it. The rest of the funds are paid for from lottery funds. But in the event that lottery revenues are not there to be able to reimburse or that additional expenses need to be incurred to update that portal like we have done over the past two years, that’s why we request the appropriation. We’re not requesting an increase in general revenue for the program at all.
Rep Cavenaugh: I see that, but you’re asking for an appropriation to spend above what you need, and you’re asking for GR. If it would come out, it would have to be GR if you ask for it. So your historic spend doesn’t show that you’re spending that much on that. So I guess my question is what justification do you need for having to possibly come back and ask for half a million dollars in general revenue that you’ve never spent?
Fuller (Higher Ed): We’re not asking for additional general revenue for the program.
Rep Cavenaugh: You’re asking for additional appropriation, and if it’s to be funded, it’d have to be funded through general revenue. So if you come back–
Fuller (Higher Ed): Yes, ma’am. It would be funded through our current revenues that we already receive if we needed to spend that funding. We needed to have the authority from the spending authority to be able to spend it in the event that something occurs. We would reduce general revenue in other areas of the agency to spend that. We wouldn’t ask for additional funding.
Rep Cavenaugh: Okay. And what are you expecting to have to do with that?
Fuller (Higher Ed): We aren’t anticipating anything currently, but with technology and the upgrades– we did just implement a new financial aid portal that went live on October 1 of this year, so it is possible that other expenses may arise that were not planned.
Rep Cavenaugh: Okay. Thank you.
Sen Irvin: I want to speak to this just a little bit because a lot of the updates and the upgrades that they have made, I was part of that request because you have so many kids that are trying to go to veterinarian school or dental school or higher education that need to be able to have a very good working system online portal to make sure that those applications get in as soon as possible and that the deadlines are clear. And so because those are– we actually pay for slots at different veterinarian schools because we do not have a veterinarian program here, and then the same with dental schools. And so you have got to make sure that those are fully operating websites that they can get all of their updates and their information into and that it’s clear for the students. So I appreciate those upgrades. Thank you. Representative Vaught? We needed to spend the money to do that.
Rep Vaught: Thank you, Madam Chair. My question is going to be on page 137. We’ve got a nursing shortage, which we talk about all the time, but we have $3 million sitting there for a grant that we’ve actually looks like never used, and it’s been passed since 2015. So why do we have it sitting there, and why haven’t we ever used any of this money?
Fuller (Higher Ed): Yes, ma’am. This appropriation was actually added during the past fiscal session in 2021.
Rep Vaught: So before it wasn’t funded? Is that what you’re telling me? Before it was not funded, but now it is?
Fuller (Higher Ed): Yes, ma’am. Right. The Workforce Initiative Act of 2015 is the same fund that this would be paid from if additional funds were added for this program. It’s the same as the $8 million that I’m transferring that was asked about previously from Representative Cavenaugh. Those funds go to the Workforce grants.
Rep Vaught: Okay. So can I ask a follow-up, ma’am?
Sen Irvin: Yes.
Rep Vaught: Thank you, ma’am. So what is the process now that we’re going to use to actually disperse these funds out to try to get more people into the nursing field?
Markham: So first we have to get the funds. So we’re asking for the $3 million appropriation. The appropriation was approved, but we don’t have the $3 million. Should we get that, we would use the same process we use for our regional workforce grants, so all of the schools with nursing programs would be eligible to receive, I think we said, $150,000 each to do whatever they needed to do, whether it’s increase faculty salaries, increase technology so that they can do more simulation. Whatever the barrier is in that region for their nursing shortage, they could use those funds to address those.
Rep Vaught: Okay. And Madam Chair, may I ask another question?
Sen Irvin: Yes.
Rep Vaught: Yes, ma’am. And will $3 million even put a dent into what we need?
Markham: No. No, I don’t think so.
Rep Vaught: I don’t even know where to go with that question now.
Sen Irvin: Well, I mean, I can tell you that we are working with DHS and we’re working with the Division of Higher Ed. There is a joint effort of us that we are working through in order to identify exactly where the shortages are. So I know, for instance, there is a company that has been contracted to do a statewide assessment. But it’s not just nursing. It’s also phlebotomists and lab technicians and really the whole spectrum of allied healthcare because we have shortages in all those different areas. And so we’re kind of waiting for that to be done. It should be completed by December, and I think this is an appropriate appropriation to have as a placeholder. However, they may need to come back and request a different appropriation levels if we use ARPA funds to be able to fund that with, which is what we’re looking to do.
Rep Vaught: So Madam Chair, I have a question for you, then. How much was the contract to do all of that?
Sen Irvin: Actually, that is been an independent group that has contracted with an independent company.
Rep Vaught: So we’re not going to need to use any of these $3 million to actually help with that?
Sen Irvin: No. No state money is being used for that.
Rep Vaught: Right. So may I ask one other question?
Sen Irvin: Yes. Absolutely.
Rep Vaught: So ma’am, being that I’ve already asked, will the $3 million even put a dent into it, which I don’t think it will. I don’t even think it will get close to what we need. Did you all have a magic number and you just ask for $3 million just for the placeholder, as Madam Chair suggested, or?
Markham: I think–
Sen Irvin: Wasn’t it Representative Bentley that really did the leg work on this?
Markham: Yes. Right. I didn’t request this. This was something that– it was a member-initiated appropriation. And I did speak with Representative Bentley several times about how we would be able to do this quickly and roll this out. And that was just a number that she felt comfortable with, and it was something that we knew we could make a positive impact on the institutions and to do some things in the short term, but it’s not a long-term solution. This would be a one-time shot in the arm for some of these programs to be able to do something maybe in one year.
Rep Vaught: Okay. Thank you, Madam Chair.
Sen Irvin: Yes, ma’am. Thank you for the questions. Representative Wooten, you’re recognized for questions.
Rep Wooten: Thank you, Madam Chairman. On page 123, you have 25 positions and you’re paying $70,000, and then you’re requesting $2.1 million for 27 positions. That’s $8,000. Are you raising those salaries? Was that in your reclassification to increase that budget line item? You’re going from an average of $70,000 to an average of $78,000 annually.
Fuller (Higher Ed): It could be a portion of that, but it could also be due to adjustments for COLA and merit raises. As you’ll see, for the current budgeted year, for those same 27 positions, it’s budgeted for $2.15 million rather than the $2.107 that we’re requesting for the upcoming years.
Rep Wooten: Oh, okay. All right, on page 125, you budgeted $500,000. You spent $288. You’re requesting $1 million. Why not $500,000?
Fuller (Higher Ed): Yes, sir. This appropriation is only for grants from mineral lease revenues as they come in. So for fiscal 2022, we only received $288,000 in mineral lease revenues. This is just to, again, have a placeholder in anticipation that those revenues come in higher.
Rep Wooten: Okay. On page 131, the budget was $1 million. Your actual expenditure was $1.7 million and your authorization was $771,000. What’s that about?
Fuller (Higher Ed): Yes, sir. That was for one-time expenses for the creation of the new scholarship application portal. That’s why the expenses were so high for fiscal 2022. So we replaced the former scholarship portal that was over 10 years old, that being last year. So there was a one-time expense.
Rep Wooten: All right. On page 151, there’s several of these. They have a $300,000 appropriation, no expenditures, but they’re continuing on. Are those funded request or are those– there are several of them, but the one I’m citing is on page 151.
Fuller (Higher Ed): There are quite a few of those that we receive the appropriation in a prior year and received one-time funds to support it, so we requested the appropriation again in the event that additional funds are given to us. But the only expenses were from one-time funds that were given in the past.
Rep Wooten: Okay. Then on page 160. And Madam Chairman, this is the last one. On page 160, you have an Americare, and you have six positions at $43,000, and you’re requesting $342,000. But here’s my question. You have actually authorized $248, but your actual expenditures were $261. How did you exceed that budget?
Fuller (Higher Ed): We came to committee and requested additional pay plan appropriation.
Rep Wooten: Oh, you did? That’s fine. Thank you. Thank you, Madam Chairman.
Sen Irvin: Yes, thank you. Representative Cavenaugh, you’re recognized.
Rep Cavenaugh: Thank you, ma’am Chair. I forgot to ask this first. I’m going to ask you if you can supply me the same report that I ask education, which is basically if you have me a report that shows all your fund balances, the source of those funds and any restrictions that might be on them, and whether it’s cash, general revenue, special aid, the fed– it doesn’t matter. Thank you.
Sen Irvin: Thank you. Senator Chesterfield?
Sen Chesterfield: I move executive rec.
Sen Irvin: Okay. Representative Wooten, can you just get with them offline, please, with your question? Do you mind? Okay. Well, you can get with them offline. All those in favor say aye. And opposed? Ayes have it. Executive rec is approved.
Northwest Technical Institute
Walden (BLR): Thank you, Madam Chair. The next budget for your review, also under the Division of Higher Education, is for the Northwest Technical Institute. This institute is part of the Division of Higher Ed. They are located in Springdale, and it functions as a secondary career center providing classes to high school students, and they also offer 18 technical career diploma programs. They also serve as an adult education center for the Northwest Arkansas area. Their department appropriation summary is on page 166 of the manual. They have three appropriations, state, federal, and cash, that total $13.2 million in 2024 and 2025. They have 84 positions and 136 extra help positions. All three of their appropriations have change levels. The first appropriation is detailed on page 168. This is their state appropriation. This provides with the operation of NTI and is funded with general revenue adult ed grants received from the Division of Workforce Services and transfers from the Workforce 2000 Fund. The request totals $6 million for each year of the biennium. And actually, they request $7 million in FY 2025, but the recommendation is for $6.1 million in 2025. Their request includes the addition of three positions in FY 2024 and another seven positions in FY 2025 with associated salaries and matching. This is to provide additional positions for the growth of their nursing program. They also ask for various personnel changes including reclassifications with associated appropriation changes. You’ll see an increase in operating expenses of $31,000 in FY 2024 and $60,000 in 2025. This is for increased fuel costs for their CDL training program, as well as building and contents insurance. And they ask for a general revenue increase of $552,000 in 2024 and $1.1 million in FY 2025. The executive recommendation provides for the agency request, with the exception of the position additions and changes. These are on hold for review by the new administration. General revenue is recommended at $3.3 million for each year of the biennium, and this is a $238,000 increase over previous levels.
Walden (BLR): The next appropriation is detailed on page 170. This is their federal appropriation. This provides for the utilization of Carl Perkins Grant funding for their job training programs. They request about $350,000 for each year of the biennium, and this includes salary and matching increases associated, with some requested reclassifications. The executive recommendation provides for the agency request, with the exception of the reclassifications and the associated appropriation. These are on hold for review by the new administration.
Walden (BLR): The last appropriation is their cash appropriation. It’s on page 172. This provides for the expenditure of funds received in tuition costs, resale from the bookstore, and apprenticeship programs, and it is used to supplement their general revenue. The total request is about $6.8 million for each year of the biennium and includes position reclassifications with associated salaries and matching. They asked for an increase of $100,000 in operating expenses for their secondary career center programs, and they asked to restore capital outlay at $200,000 annually. This is for equipment expenses for instruction and plant maintenance. The executive recommendation provides for the agency request, with the exception of the reclassifications and associated costs. Thank you, Madam Chair.
Sen Irvin: Thank you. Representative Cavenaugh, you’re recognized for a question.
Rep Cavenaugh: Thank you, Madam Chair. My question is going to be on page 172, dealing with your cash operations. Can you tell me the difference between your line item operating and maintenance and operating expense?
NTI staff: I’m sorry, could you repeat the question?
Rep Cavenaugh: Sure. On 172, you have a line item operating expense, and then you have another one operating in maintenance.
NTI staff: Yes. Last year during this exact meeting, at that time, Senator Eads amended our budget that we could have the $2.5 million in case additional funds became available for our school.
Rep Cavenaugh: What are they to be used for?
NTI staff: At that particular time, it was to be used for operating and the apprenticeship programs.
Rep Cavenaugh: Okay. But you have them labeled as operating and maintenance. Is that because it’s–
NTI staff: That’s DFA title.
Rep Cavenaugh: Okay. And so these are going to be for apprenticeships?
NTI staff: It could be– for the growth. And we were thinking– anticipating, at that time, doing an apprenticeship program, and it did not come through.
Rep Cavenaugh: Okay. So you don’t have an apprenticeship program?
NTI staff: Yes. Yes, we do. But the particular one we were looking at did not come through.
Rep Cavenaugh: Okay. So do you need this appropriation, then, if you don’t have that program?
NTI staff: No, ma’am.
Rep Cavenaugh: Okay. Would it be okay if we reduce that since your appropriation– since you don’t have that program?
NTI staff: Yes. Yes.
Rep Cavenaugh: Okay. Madam, I’ll make that at the proper time.
Sen Irvin: Okay. I’ll come back to you for a motion. Representative Wooten, you’re recognized for questions.
Rep Wooten: I have a motion at the appropriate time. I was trying to figure out how to incorporate what Representative Cavenaugh wanted into the motion. I guess we just– I move it for adoption, with the exception of that $2.5 million. Is that satisfactory, Representative Cavenaugh?
Rep Cavenaugh: Okay.
Sen Irvin: Okay, Representative Wooten, do you mind just pulling that down? I told Representative Cavenaugh I’m just going to come back to her. I thought you had a question. I apologize.
Rep Wooten: Do what?
Sen Irvin: I thought you had a question. Did you?
Rep Wooten: Well, no, I said I have a motion at the appropriate time.
Sen Irvin: Okay. Well, I’ve already said that to Representative Cavenaugh, so I’m going to just go back to her for that motion.
Rep Wooten: All right. Thank you.
Sen Irvin: Okay? Thank you. Representative Cavenaugh, you’re recognized.
Rep Cavenaugh: Thank you, Madam Chair. I make a motion that we accept executive recommendation, except for line item operating and maintenance on page 172, that we delete that $2.5 million.
Sen Irvin: Okay. That’s a proper motion. Is there a second? Second. All those in favor say, aye. And opposed? Ayes have it. Motion passes. I did say the no’s. Yes, I did. Okay, moving on.
Walden (BLR): Thank you, Madam Chair. The next appropriation for your review is–
Sen Irvin: Senator Chesterfield, yes.
Sen Chesterfield: Yeah. What did we just do?
Sen Irvin: We did a motion for executive rec, and we took out the appropriation request under operating and maintenance on page 172. It’s $2.5 million. The gentleman at the table said that that was not necessary because that was never funded.
Sen Chesterfield: Gotcha. Thank you.
Sen Irvin: So they moved that appropriation with executive rec. All right, thank you. Thank you, gentlemen. Thank you for being here. All right, moving on.
School for the Blind
Walden (BLR): Thank you, Madam Chair. The Arkansas School for the Blind appropriation begins on page 173. ASB provides education and training for all children and young people who are visually impaired throughout the state. They provide vocational training, residential living, extracurricular activities, low vision evaluation services, physical and occupational therapy, life skills training, and they also produce Braille publications and distribute them throughout all the schools in the state. The department appropriation summary is found on page 174 of the manual. They have five total appropriations, and they request about $11 million for each year of the biennium. They have 104 positions. There’s one appropriation with change level request. It is the first appropriation, their state operations appropriation. It’s detailed on page 176. This appropriation is funded with general revenue and provides for the main operations of the School for the Blind, including the operation of their main campus which is a residential facility, as well as their outreach and vision testing programs.
Walden (BLR): The agency requests $9.4 million for each year of the biennium. This request includes the following changes. They asked to add six positions with associated salaries in matching. They also asked to increase salaries and matching by $100,000 in salaries and $22,000 in matching for shift differential pay. They asked for an increase in capital outlay of $50,000 for each year for educational equipment and library holdings. And finally, they ask for an increase of $1.25 million in special maintenance. This is to provide appropriation for carry-forward balances for maintenance costs. The executive recommendation provides for the agency request and appropriation only, with the exception of the new positions and associated matching costs. Those are on hold for review by the new administration. Also, the special maintenance line is recommended at $1.2 million each year, which is $50,000 less than what was requested. The rest of the appropriations will stay the same. So that concludes my remarks on the School for the Blind. Thank you, Madam Chair.
Sen Irvin: All right. Thank you. Are there any questions? Motion for executive rec? Second. All those in favor say, aye. And opposed? Ayes have it. Thank you. Moving on.
School for the Deaf
Walden (BLR): Thank you, Madam Chair. The Arkansas School for the Deaf begins on page 187. This school also operates as a day school and a residential facility. They provide educational services and opportunities for students from birth through the age of 21 that have hearing impairments. The department appropriation summary begins on page 188. They have three total appropriations that total about $14.3 million for each year in their request. Funding comes from general revenue, federal revenues, cash funds, and fund balances. They have 150 full-time employees and 55 extra help. All three appropriations have change levels.
Walden (BLR): The first one is detailed on page 191. It is their state operations appropriation. This is funded with general revenue and some federal. Their request is for $13 million for each year of the biennium and includes the following requests. They request to add four positions with associated salaries and matching, various personnel changes which include reclassifications with no appropriation associated with those, an increase of $350,000 in salaries and matching for extra duty pay and shift differential pay. They asked for an increase of $10,000 each year in extra help and matching costs to pay for substitute teachers. They ask for an increase of $93,000 in operating expenses for monthly overhead expenses and building upkeep. They asked for an increase of $1.1 million in special maintenance. This is to provide for the spending of prior year fund balances for building maintenance. They request for an increase in $30,000 in capital outlay for the purchase of equipment, and they also asked for various reallocation of funds to better align with expenditure needs. Those are detailed on page 190 for your review. The executive recommendation provides for the agency request and appropriation only, with the exception of the four new positions and reclassifications, which are on hold for the new administration to review.
Walden (BLR): The next appropriation is page 194. This is the School for the Deaf federal operations appropriation. Primarily funded with federal revenues, this appropriation totals $1.08 million for each year of the biennium, and it includes the following increases. They asked for an increase in salaries of $15,000, with associated matching costs for stipends for tutoring, an increase in extra help at $5,000 for federal programs, an increase in operating expenses at $20,000 for trade relevant training programs, increase in conference and travel of $5,000 for staff to attend professional development conferences, an increase in professional fees at $25,000 for physical therapy and occupational therapy costs. And they also request $45,000 in capital outlay for the purchase of classroom equipment. The executive recommendation provides for the agency request.
Walden (BLR): The final appropriation with changes is the cash operations. It’s on page 196. This is funded with USDA breakfast and school lunch reimbursements, interest on cash investments, and legacy donations. They request $230,000 for each year of the biennium. This includes decreases in operating expenses at $45,000, as well as a reallocation of $30,000 from operating to capital outlay to purchase new kitchen equipment. And the decrease is due to just a lowered anticipated revenue due to more fundraising occurring with their foundation. The executive recommendation provides for the agency request. Thank you, Madam Chair.
Sen Irvin: All right. Thank you. Are there any questions? Seeing none, do I have a motion? Motion and a second for executive rec. All those in favor say, aye. And opposed? Ayes have it. Thank you.
Arkansas State Library
Walden (BLR): Thank you, Madam Chair. The next appropriation for your review is the Arkansas State Library. It’s found on page 198. The State Library serves as a resource for state government, for public libraries, and for all citizens. They offer services with an overall mission to provide Arkansans with access to information. Their department appropriation summary is found on page 199. They have five total appropriations that total $17.4 million for each year of the biennium. They receive general revenue, federal revenue, Public School Funding, and they have some cash funds and fund balances. They have 49 positions and 12 extra help positions.
Walden (BLR): They have two appropriations that you have not already reviewed with change levels. The first one is on page 201. This is their operations appropriation. It is funded with general revenue. It provides for the ongoing operations of the State Library. They request $3.8 million for each year, and that total includes the reclassification of six positions with associated salaries and matching, an increase of extra help at $5,000 for each year of the biennium. And this is for the Arkansas Public Service Internship program. They also asked for an increase in conference and travel at 2,500 each year for increased travel costs, as well as an increase in books and subscriptions at $9,700 each year for an increasing cost of database maintenance. The executive recommendation provides for their request, with the exception of their reclassifications and associated appropriation. These are on hold for the new administration to review.
Walden (BLR): The second appropriation with changes is on page 204. This is the federal operations appropriation. This is funding from the US Department of Education through the Institute of Museum and Library Services. It promotes access to all kinds of library resources. Their request is for $3.2 million for each year of the biennium. It includes a request for the reclassification of three positions with associated salaries and matching, an increase in extra help for added support during the summer months, reallocations from professional fees to conference and travel at $7,300 for increased travel cost, a decrease of $2,700 in professional fees to better align with the anticipated expenses, and the restoration of $40,000 annually in capital outlay for the replacement of aging vehicles. The executive provides for the agency request, with the exception of the reclassifications, which are on hold for review by the new administration.
Walden (BLR): The last appropriation is the aid to Public Library, which you all have already reviewed. And the schedule that was provided, it’s on page 206. And as I stated previously, the executive recommendation was to provide for the requested increase, bringing them up to $10 million annually in aid to public libraries in appropriation only. Thank you, Madam Chair.
Sen Irvin: All right. Senator Hammer, you’re recognized for a question.
Sen Hammer: Thank you. On that aid to public libraries conversation earlier, can you explain– that’s $10 million that’s going not through the schools, but just straight out to the public libraries. Is that right?
Walden (BLR): Yes, sir. It will go to the libraries. And there’s also a scholarship program that they administer and use those funds for librarians and media specialists.
Sen Hammer: Okay. And which agency is that appropriation under? I’m sorry.
Walden (BLR): This one is under the Arkansas State Library.
Sen Hammer: Okay. All right. Thanks.
Sen Irvin: All right. Any other questions? Motion for executive rec. Second? All those in favor say, aye. And opposed? Ayes have it. Thank you.
MLK Jr. Commission
Walden (BLR): Thank you, Madam Chair. The next appropriation is the Martin Luther King Jr. Commission. It begins on page 213 of your manual. This commission’s purpose is to promote understanding and acceptance of nonviolence and human equality as a way of building community among all Arkansans. They are primarily focused on youth-oriented projects. Their appropriation summary is on Page 214. As you can see, they have two appropriations totaling about $440,000 for each year of the biennium. They are funded with general revenue and cash funds. They have four positions. The one appropriation with change levels is on page 216.
Walden (BLR): This appropriation provides for the operation of the commission and is paid with general revenue and cash funds. Their request total is about $350,000 for each year of the biennium. This includes a decrease in operating expenses of $10,700 each year due to reduced rent costs. In the previous biennium and during the pandemic, their rent costs were lowered by the division– or the Department of Arkansas Heritage, and they were able to lock in that lower rate. So they’re just reflecting their budget to show those reduced rent costs. They also request an additional $15,700 in general revenue funding to allow the commission to utilize their cash donations for community outreach. Executive recommendation provides for the agency request and appropriation as well as an increase in their general revenue funding in their recommendation. Thank you, Madam Chair.
Sen Irvin: Thank you. Are there any questions? Motion for executive rec. Is there a second? Second. All those in favor say, aye. And opposed? Motion carries. Thank you.
Walden (BLR): Thank you, Madam Chair. The last budget for your review today is for Arkansas PBS. Their appropriation begins on page 219 of the manual. Arkansas PBS is organized for the purpose of making the benefits of educational television available to and promoting its use by inhabitants of the state. They provide lifelong learning opportunities to all Arkansans. They have instructional programs to schools, programming and services to improve and enhance the lives of Arkansas citizens. And they also provide the online professional development programs for the Department of Education. Their department appropriation summary is found on page 220 of your manual. You can see they have two appropriations totaling about $15 million for each year of the biennium. They are funded with general revenue, fund balances, grants, and cash funds. They have 105– requested 105 positions, and they have 51 extra help.
Walden (BLR): The first appropriation is their AETN or Arkansas PBS Treasury paying appropriation on page 222. This provides for the use of funding from grants from private foundations, partnerships, and other entities. They request $8.9 million for each year of the biennium. This total includes a change level increase of $355,000 for each year of the biennium. It includes the restoration of capital outlay each year for the replacement of essential network broadcast equipment, updates to program production, and maintenance of professional development services, including the Arkansas Ideas program. They also ask for one position title change to reflect the new agency name of Arkansas PBS. The executive recommendation provides for the agency request, with the exception of the title change, which is placed on hold for review by the new administration.
Walden (BLR): The second appropriation is AETN Operations. It is on page 224 of the manual. This is funded with general revenue and provides for the infrastructure and operational needs of AETN or Arkansas PBS. They request about $6.4 million for each year of the biennium. This total includes three new positions with associated salaries and matching, an increase of extra help at $3,000 with associated matching. They also request 12 position title changes. This is to match their positions with the agency’s new identity and an increase in general revenue funding. The executive recommendation provides for the agency request for the appropriations, with the exception of the new positions and the salary and matching associated with those new positions. Those are on hold for review by the new administration. The title changes are recommended, and the general revenue is recommended at $5.8 million for each year of the biennium. Thank you, Madam Chair.
Sen Irvin: Thank you, Ms. Walden. Any questions? Motion for executive rec. Is there a second? All right. Second. All those in favor say, aye. And opposed? Ayes have it. Motion carries. And with that, I think we are we are– we have Special language at 1:30. Special Language at 1:30. All right. Seeing no other business, meeting is adjourned.