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JULY 20, 1999, TUESDAY

SECTION: CAPITOL HILL HEARING

LENGTH: 18501 words

HEADLINE: HEARING OF THE SENATE HEALTH, EDUCATION, LABOR AND PENSIONS COMMITTEE
SUBJECT: REAUTHORIZATION OF THE ELEMENTARY AND SECONDARY EDUCATION ACT
CHAIRED BY: SENATOR JAMES JEFFORDS (R-VT)
WITNESSES:
ROB SAMPIERI, DIRECTOR K-12 EDUCATION,
PRICE WATERHOUSE COOPERS
NINA SHOKRAII REES, EDUCATION POLICY ANALYST, DOMESTIC POLICY STUDIES,
HERITAGE FOUNDATION
MIKE WATSON, MURPHY COMMISSION,
ARKANSAS POLICE FOUNDATION
BETTY PRESTON, CHAIRMAN,
STATE BOARD OF EDUCATION, MISSOURI
430 DIRKSEN SENATE OFFICE BUILDING
WASHINGTON, DC
9:30 AM.

BODY:

SEN. JAMES JEFFORDS (R-VT): Morning. This hearing by the Health Committee will come to order.
This committee has held nearly two dozen hearings regarding the reauthorization of the Elementary and Secondary Education Act. We began the hearing process last fall and have examined a large range of issues, including the Title 1 Program, professional development, early childhood education, literacy, technology, elementary and secondary education programs targeted both for special and at risk population and research and evaluation.
Today, the committee will turn its attention to the funding of elementary and secondary education programs. Throughout the hearing process, we have heard from many witnesses about the importance of very various elementary and secondary education programs contained in the Elementary and Secondary Education Act.
At the same time, we have also learned that some of these programs may not be achieving the performance results originally intended. Presently, elementary and secondary education is funded through the following entities. The federal government funds slightly over 6 percent, which amounts to an estimated $15 billion for this year. State governments provide close to 44 percent. Local governments contribute approximately 40 percent and roughly 10 percent comes from other entities. It is important to note that programs funded through the Department of Education comprise 2 percent of the entire federal budget.
Today's panel will provide us with four very different perspectives on the uses of elementary and secondary education funds and help us address some important questions. How are education dollars being spent? Are these funds contributing to overall school and student performance? How does federal funding complement the primary funding sources (where share ?) our state and local dollars?
As I said many times throughout the hearing process, various reports and studies indicate that we have not made a great deal of progress since the release of the 1983 Education at Risk Report. Our goal in this reauthorization should, not only be to improve the content of education program, but also to ensure that federal funding of these programs enable states and local communities to strengthen their overall educational delivery system by providing quality education to each and every student.
A headline in the January issue of Education Week, perhaps, says it best. Quote, providing a free public education to all has been a success for the United States, but ensuring equal quality is what is offered continues to challenge the nation.

Normally, at this point, of course, I would turn to the ranking member of this committee, Senator Kennedy. We are all deeply sadden by the events of this past weekend and I know they dominated my thoughts throughout the weekend and I look forward to his speedy return.
And now, I would turn to first today's panel, we have Bob Sampieri, who is the director of K 112 education at Price Waterhouse, Coopers; Nina Rees who is the senior education policy analysis at the Heritage Foundation; Mike Watson, who is the Arkansas Policy Foundation and Betty Preston who is the chairman of the State Board of Missouri.
Before we turn to the panel, although, I believe Senator Hutchinson would like to have a comment.
SEN. ASA HUTCHINSON (R-AR): I thank you, Mr. Chairman, and I join you and I know all of our colleagues in expressing the deepest sympathy and condolences to the Kennedy family and I, like you, look forward to Senator Kennedy's return and our prayers are certainly with that family.
But I am very delighted today to be able to welcome to the panel one of my constituents and one that I am glad to call a constituent of mine. Mike Watson, as you said, Mr. Chairman, is the president of the Arkansas Policy Foundation. He was also the staff director for the Murphy Commission, which did such great work in Arkansas, kind of our equivalent of the Grace Commission, except I think we did better than the Grace Commission, at least, in getting some of the recommendations implemented. But there's a long ways yet to go and Mike has been very involved in that.
Prior to being president of the Arkansas Policy Foundation, he was with the Texas Public Policy Foundation for nine years and throughout his time, both in Texas and Arkansas, has focused on education reform and has made a great contribution to reform it in Arkansas. I'm delighted to have him here today.
MR. MIKE WATSON: Thank you, Senator.
SEN. JEFFORDS: Mr. Sampieri, please, start.
MR. BOB SAMPIERI: Good morning, Mr. Chairman, Senator Hutchinson.
The Price Waterhouse, Coopers is very pleased to be invited here and I hope that we fit in. We may be not totally congruent with your objectives that you stated earlier. What I am prepared to detail for you are some specific details regarding expenditure patterns in local educational agencies across the nation and a little bit about the trends of those expenditure patterns in general and I'm hopeful that that will be in some way resourceful to you in your deliberations.

Price Waterhouse, Coopers conducts a great deal of financial analysis of school districts across the nation and when we examine school district budgets, we take a look at them from three dimensions, from the functional side, from the programmatic side and from the educational level side. And so this information that I'll be giving to you will be in the form of benchmarks that we have found in practice across the nation.
There's about 200 LEAs that are included in our database and as you know, there's probably 1,400 and 400, at least, less than 1,500 school districts across the nation. And the proportion of these school districts generally reflect the urban, the suburban and the rural characteristics of American educational school districts. I don't want to have you assume that this is statistically -- this is not a study that we've conducted. This a series of LEAs that we provide services to and so we include them in this benchmarking information. So it could be that the data that I am presenting to you is not like a national study, but rather it's skewed toward those LEAs that seek professional assistance in their financial management and expenditure strategies.
The LEAs that utilize this type of methodology that we're talking about do so for a variety of reasons. The initial push for this kind of an analysis was that stakeholders, board members, citizens, staff members within LEAs, they wanted to be able to communicate financial information to their stakeholders and to themselves in simple understandable terms. And so that's one of the major motivations to have a clear simple understanding of what the financial implications are that LEAs are involved in across the nation or in that particular LEA.
Secondly, the data that they collect is used for management information about how resources are tied to the LEA's mission, their goals and objectives. And this is one of the major weaknesses in school districts across the nation that we have found and that is that boards of education are very adept at creating wonderful mission statements and staff developed goals and objectives that articulate the delivery of those goals and objectives. But there's a bifurcation frequently between the written mission statement and the actual budget and as we probably already know, the budget is really a financial statement of the goals and objectives of an organization. So theoretically, you should be able to tie the goals and objectives to that budget document. It is extremely difficult to do that in most LEAs across the nation.

The third objective that school districts are interested in doing is in establishing a performance monitoring process that they can use as a self-improvement management strategy. In other words, when you think about management in it's purest sense, you're talking about where do you want to go, what resources are you applying to getting there and then, monitoring the performance that you're achieving toward those goals and objectives. And if those three things can be monitored in an ongoing manner, then you position your school district in a way that you can begin to say strategy A in the third grade reading class is delivering more effective productivity achievement in student scores than strategy B and you can determine whether it's do they need more time, is it money in terms of -- is that a timer that I should be sensitive to?
SEN. JEFFORDS: Well, it's a warning that you have one minute, but we don't do anything too severe.
(Laughter.)
MR. SAMPIERI: That's interesting. I'm on my first page.
(Laughter.)
Just tell me to stop when you want me to stop.
The point is that the process analysis that should be occurring that occurs in private sector on a more common basis is that those three elements are constantly being monitored. And unfortunately in our school districts we find that bifurcation is quite apparent between the allocation of resources and the expenditure of those resources and the management of activities and strategies toward specific goals and objectives. Price Waterhouse, Coopers utilizes this data that I've prepared for you as benchmarks for LEAs that are interested in seeing if they are congruent with the expenditure patterns of other like school districts. And you'll notice in the data that we've prepared for you that one size does not fit all, that a rural or a suburban school district definitely has a different expenditure pattern than a large urban school district and that becomes very, very apparent.

Because the time element seems to be pertinent, let me very quickly, then, say that all school district budgets can be, and generally are, categorized into five major, major, functional categories -- construction; direct service to kids, whether it's direct contact between a teacher, a certified teacher and the aide and the student; the instructional support services, i.e. curriculum development, et cetera; operations, the typical business operations of the school district, finance, books, food, transportation, et cetera; other commitments, the bonds, paying off the debts, capital improvement and so forth; and then of course leadership, starting with the superintendent, all of the deputies, executive central office personnel and school site personnel.
I won't go into deep detail, but let me go into -- when we take a look at all of the LEAs in our database, we see some very interesting things, that in those five categories, and again I ought to mention this, that when we make a financial analysis, we're not just looking at the general fund or categorical funds, we're looking at all funds. The stakeholder in the community generally says how much does it cost to run this school district and so that means how many dollars altogether are there? Of the total dollars you can see that we put in three years and later on if you're interested I can tell you more about that. Fifty-one percent in this first year, 51.5 percent of all of the dollars went to direct classroom instruction. That's good. However, look at year two, drops down to 48 and then it builds to 48.7 so we see a trend in our limited sample of the decline in resources dedicated to direct classroom instruction. It's interesting we see a trend in the opposite direction for instructional support as standards and other things become important to school districts we're seeing more resources dedicated to aligning the curriculum, taking a look at staff development, doing those things that support improved effective instruction.
Notice operations is reducing in costs, which is usually what everybody cheers about. That's good. A lot of this is attributable to more efficient technology being introduced into the school districts as well as outsourcing of services is becoming a little more prevalent among school districts.
Other commitments, not too interesting. The leadership, most interesting. I found it kind of interesting to compare instruction with leadership. In year one a total of 7 percent of the budget was dedicated to the salaries and fringe benefits of superintendents and deputies, et cetera and principals, but by year three it had grown in percentage. What that means that you know, whatever you want it to mean.
Then the other two charts that I would bring to your attention: these are the expenditure patterns of large LEAs. These are LEAs of 20,000 or more students and you know that most of the LEAs in America are extremely small. I think there's something like 280 LEAs that are 20,000 or greater in sum. These are their expenditure patterns and the little document that I've prepared for you details that a little bit more and you'll notice, for example, look at your leadership costs, seven, six and then up to 8.6. These are the expenditure patterns that we've found in the small LEAs. These would be student bodies of less than 20,000. Notice that the proportional cost is higher because your critical mass is small. You still have to have a superintendent, you still have to have a principle, but you have fewer kids to spread that across. Instruction, a little richer in the smaller school districts as far as resource dedication is concerned.
Then there's last two charts I'd like to bring to your attention. Major expenditures by programs, I've compared the large and the small. We've only done the very large ones. I mean we know that within these there's literally scores and scores of small programs, special ed.; bilingual; Voc Ed; Chapter I or Title I depending on the year; all other categorical and then general education. Notice in the large school districts it represents about 77.4 percent of all expenditures whereas in the small district because, again, of critical mass it represents 83.84 percent of expenditures.
And the last chart, one of the tools that deals with equity that this instrument provides. And that is many superintendents and boards of education are interested in to ensuring that Pine Street Elementary School and Eucalyptus Elementary School have about the same resources available to them so that not on one side of the city do you get a lot of money and on the other side you don't get too much. And so this tool is used very much to determine equity; not adequacy, but equity.
Usually we find, in the large school districts, about 46 percent is spent at the elementary level, 17 at the middle, 25.9 percent at the high school. Alternative schools get 2.5, all the other kinds of schools like charter schools and so forth, 3.7 and then the non-school costs for the administrative offices about 3.9 in the large school districts and about 14.5 percent in the smaller school districts.
I would be glad to answer questions.
Thank you for the light.
SEN. JEFFORDS: Thank you for your enlightening information on how the various districts differ.
Our next witness is Nina Rees, senior educational policy analyst for domestic policy studies at Heritage Foundation in Washington, DC
Please proceed.
MS. NINA SHOKRAII REES: Thank you, Mr. Chairman. It's an honor to appear before your committee today to talk about an idea that I hope will not only capture your attention but offer a chance for our nation to view the federal investment in education and policy in a completely new light.

It's an idea that, for the first time, shifts the attention of federal dollars from feeding inputs to demanding outcomes, zeroes in on closing the achievement gap between rich and poor students and rewarding school districts and states for good performance and punishing them for failure. Offered by Senator Slade Gorton and the chairman of the House Education Committee, Representative Bill Goodling, it's called the Straight A's Act, also known as Academic Achievement for All. And in many ways it has all the elements to improve the use of federal education funds, which is the topic of today's hearing.
First, the problem. Our nation's schools are not performing well. If you look across the board, I think everyone realizes that our schools are not doing as well as they should be given how much money we're spending on them. At the federal level, after 34 years and $120 billion spent on the Title I program, which is the general aid to disadvantaged school districts, only 13 percent of our low-income fourth graders perform at a proficient level on national reading tests at the fourth grade level, compared to 40 percent of upper-income students. Even worse, in my view, no progress has been made in closing the achievement gap between rich and poor students despite all the money spent on the Title I program.
Despite spending $358 million to train teachers in math and science, America ranks 19th out of 21 industrialized countries in 12th grade mathematics, and it came in last last year in 12th grade advanced physics. Though certainly not the cause of all of our education problems, the federal role in my view has been, at best, irrelevant in some states and a serious barrier to reform in states that are ahead of the curve in implementing serious reforms.
For example, in Florida, six times as many people are required to administer a federal dollar as a state dollar, yet, not a single federal penny can be used by the state today to compliment state dollars used to offer students trapped in failing schools an option out of the system. Now, there are a lot of proposals offered by members of your committee on both sides of the aisle and the administration to fix this problem. But they're all based, in my view, on the same faulty, one-size-fits-all, Washington-knows-best premise.
To be sure, Congress has never once stopped to reassess its own role and its own effectiveness in the area of education since it enacted the Elementary and Secondary Education Act in 1965. Mr. Chairman, it's time to reassess this program as a whole and see if there is another way to proceed, a third way, if you will. The Straight A's Act offers such an option. It leaves the basic construct of federal education programs intact, but offers some states the opportunity to experiment with this third way.
I've attached a paper to my testimony that outlines how Straight A's would work. Let me just walk you through it very quickly.

Straight A's would allow states or school districts to spend their share of federal dollars on the reforms of their choice in exchange for agreed upon academic results. So, for instance, let's take Florida as an example again. If Florida decides to participate in Straight A's, it would select the formula-based K-12 programs it wishes to co- mingle. It would outline in a contract or a charter agreement how it plans to spend the money, and by how much it hopes to decrease the achievement gap between its rich and poor students.
Next, the state would send the secretary of Education baseline data on the academic wellbeing of its students, desegregated by socioeconomic background. The federal government would then send Florida one check and agree that in exchange for the flexibility and freedom to use this money as it wishes, it promises to achieve academic results. If Florida achieves these results, the federal government would provide a bonus. If it fails, its flexibility would be withdrawn. And in my opinion, under egregious circumstances, the state or the school districts should also either suffer from more monetary sanctions or some other form of sanction that is not currently outlined in the Straight A's Act.
Straight A's may seem like a radical departure from the status quo, but in my view, it's very similar to some of the things that this committee has considered in the past. For instance, before President Clinton ended welfare, as we know it, Congress gave some states waivers to try things differently. This approach worked, as it encouraged innovation, experimentation, and allowed states to come up with their own solutions. It should also work in the area of education. And today, 35 states have charter school programs -- 35 states and the District of Columbia. These laws allow school principals considerable fiscal and legal autonomy to administer their funds in exchange for academic results.
If charter schools perform well, their enrollments go up, they get more funding, and if they fail, they have to shut down. Straight A's is based on the same premise as charter schools are premised on. Straight A's state can be considered in a lot of ways a giant charter school.
Just so we are clear, Straight A's will not end the federal role or investment in education, nor eliminate a single federal education program. States will not be required to participate in Straight A's, only those that choose will participate. Straight A's invites an experimental approach to the next five years of ESEA, rather than a Washington-knows-best approach. And more importantly, Straight A's will not leave the poor behind. In fact, it's the only proposal, as I mentioned earlier, that demands that states improve the academic achievement of their low-income students and offers rewards and sanctions in case the state doesn't meet the terms of its charter. And it's also the only program that demands that states decrease the academic achievement gap between rich and poor students.
Mr. Chairman, reform-minded Democrat superintendents like Bill Oshefsky (sp) of Seattle and Paul Valis (sp) of Chicago have endorsed the Straight A's Act. Governors like Michigan's John Engler and Virginia's James Gilmore, whose states are already leading the way in imposing tough standards and accountability systems, have also endorsed Straight A's.
A recent draft statement on education prepared by the National Governor's Association has also endorsed the basic concepts underlying the Straight A's Act. Clearly, Straight A's is an idea whose time has come. If your committee is serious about boosting the return on the dollars invested in education, it would consider and hopefully enact Senator Gorton's Straight A's Act. Otherwise, the next 34 years may not look much different from the past 34.
Thank you.
SEN. JEFFORDS: Thank you.
Next witness is Mike Watson, Murphy Commission, Arkansas Policy Foundation, Little Rock, Arkansas. Please proceed.
MR. MIKE WATSON: Thank you, Mr. Chairman.
I'm here representing the concerns of many of my states business leaders who served on the Murphy Commission, which as Senator Hutchinson noted was a kind of grace commission for Arkansas. One of the central issues of concern of that commission, of course, was education. And in one of the commission's earliest reports on education, it wrote in education academic performance is the overriding singular goal. And that is where the bulk of the people's resources belong, in the classroom, for the child, allocated directly to instructional activity, resourcing an exceptional teacher who is extraordinarily well paid, achieving uncompromised results.
This simple premise, putting resources where they best achieve expected results has guided the commission as it looked to education in our state from the perspective of return on investment. The question the commission sought answers for was simple. For all of the money and other resources pumped into the state's K-12 systems for years has Arkansas achieved acceptable student academic performance? The words of Ms. Rees, we looked at inputs versus outputs. And here's what we found. I'm going to begin with the inputs first. Arkansans provided state and local tax revenue for public education totaling some $20 billion from 1971 to 1975. This number reflects a steady dramatic year by increase, some 619 percent nominally increase over 24 years. When federal funds for schools are factored in, the federal dollar total for the same period is $5 to $10 billion. Different sources that we checked with reported that different numbers. So, we cited as a range. This raises Arkansas's total state and federal investment in public schools for more than two decades to $25 to $30 billion.
Let me say just a few words about the growing federal presence in Arkansas before I move on with these inputs. Eighty-six percent of the state Education Department's program and operating budget comprises federal dollars. Only four percent of the budget comprises state funds. Ten percent come from other sources. This according to a recent study by the University of Little Rock at Arkansas.
The report went on to recommend a 20-percent reduction in the department staff, which would have included a number of federal employees. But for all practical purposes, that has yet to happen. Federal funds today comprise 12 to 13 percent of Arkansas's total public education revenues. We checked with a number of sources in Arkansas to determine where that total is now. We got a number of different answers. The Department of Education officials we phoned last week cited the number at 203 million (dollars) for 1998. The state Department of Finance and Administration showed the '98 allocations at 225 million (dollars). Another Department of Education official provided a list of some 49 major grants in place now which total more than 385 million (dollars), and they drive, of course, hundreds of programs throughout the system.
He did note, however, that his figures included only those K-12 grants that pass directly through the state Department of Education. Other K-12 grants flow separately through the Department of Work Force Education. Other agencies direct the school districts, direct the schools, and finally, in Arkansas, to a statewide system of 17 educational cooperatives. One thing we noted is that we could find no single source that could give us a comprehensive list of every federal program in Arkansas that impacted K-12. Differing lists were supplied by differing agencies with differing data. And that tells us that maybe there needs to be not only some additional accountability of these programs, some audit function, but perhaps some sort of central clearinghouse that could give citizens and policy groups information that's concise about all of these programs.
The influx of federal revenue coupled with state revenue through the years spurred some fairly dramatic spending. From 1965 to 1997 K- 12 spending in our state increased by more than 1000 percent nominally, 160 percent when adjusted for inflation. Per pupil spending rose during the same period by almost 200 percent. The number of teachers rose 70 percent; this is over about a 25-year period. The number of counselors tripled, librarians increased by 69 percent and non-teaching staff soared by 80 percent from 1970 to 1976. It's worth noting that during the almost 30 years in which this influx of massive support and resources occurred, Arkansas' student enrollment remained essentially constant around 450,000 students. Moreover, Arkansas' number of school districts, now at 310, has remained the highest of the 12 southeastern region states and the 17th highest nationally. Florida, by contrast, with its massive student population gets by with 67 districts and Georgia with 180.
Let me recap that investment for you in terms that our business group looked at. Ever-increasing significant infusions of state and federal dollars year by year; nearly a doubling of our teaching and non-teaching personnel; a disproportionally high number of school districts; the creation of 17 educational co-ops with an 18th proposed; an impressive 14:1 student to teacher ratio -- you'd expect that to go down with the influx of teachers; a wealth of support services for students, including counselors, aides mentors, teachers, tutors, so forth; workforce education, School to Work, special education, advanced placement programs; standards and curriculums that have been revised and then revised again; even a K-12 dance framework; arts appreciate programs; manners and courtesy programs; more distance and interactive learning; more professional education for teachers; a computer network that's going to cost $300 million and probably more like a billion(dollars) by the time they're through; expanded sports and curricular activities; a stream of politically correct and currently in vogue methodologies from whole language learning to reading intervention programs to critical thinking and higher order learning, all to serve about the same number of students over a 30- year period.
So what has the return on the investment yielded, to go back to my original question? Here are the figures. Eighty-seven percent of Arkansas' eighth graders are not proficient in math, according to the MAPE (ph). Eighty-seven percent of 11th graders failed the math section of the state's exit exam. Eight percent of Arkansas' fourth graders are not proficient in reading on the MAPE. The number of Arkansas students falling into the lower percentiles of nationally norm tests such as the Stanford Achievement Test has increased; more students going into the lower percentiles. Arkansas' average ACT scores; we use the ACT, 20.2 remains consistently below the national average of 20.9. Arkansas' college remediation rate for entering students is 60 percent at a cost of $26 million to our taxpayers.
We think there's some lessons to be learned from the Murphy Commission's finding and experience. Our experience in trying to pin down expenditures, and federal expenditures in particular, tells us that academic accountability must be accompanied by reliable fiscal accountability.

In Arkansas it's virtually impossible to implement the kind of performance budgeting accounting and performance information and for systems that Mr. Sampieri talked about and there's a disturbing lack of accounting uniformity that severely limits a standard reporting format that would allow citizens to obtain information. That's why we recommended statewide the adoption of the Insight Accounting Module and fiscal model that was developed by Coopers Lybrand and Fox River. And we're still sticking by that recommendation, I might add.
Looking at benchmark finance and performance data for almost a thirty-year period convinced us that automatically increasing education dollars year by year is no guarantee of results. It led us to conclude that the more important issues now are how do we better allocate existing educational funds, to which programs do we allocate funds and how are they best used to further the core academic mission of schools. Block grants reflect these concerns and are part of the solution. A Murphy Commission report, I think it was only the second report of our commission -- we've done 15 -- said states must continue to press their congressional delegations for the use of more block grants. The demand by states for block granting is mounting. In 1994 nine block grant proposals went before Congress, two were enacted. Had all nine been enacted, 350 programs would have been affected, giving states much more freedom to apply federal funds.
It seems that Arkansas' Murphy Commission and Senator Hutchinson share much common ground in this Dollars to Classroom Bill -- block grants, redirection of funds to classrooms -- but what is most heartening is the growing recognition by the Senator and so many of his colleagues in Congress, that the classroom is where the rubber hits the road in education. Reinforcing the time-honored process of teaching learning is the key to an academic turnaround in Arkansas and in the nation. Effective teachers interacting with motivated students make the difference. States know this and perhaps it's time we let decisions about solving problems be made by those closest to the problem, especially in education where a constitutional guarantee in the form of the 10th Amendment grant the states that right.
Thank you, sir.
SEN. JEFFORDS: Our final witness is Betty Preston, chairman of the state board of Missouri.

MS. BETTY PRESTON: Good morning and thank you, Chairman Jeffords, members of the committee and all of you who are interested in education. We appreciate the opportunity to be with you this morning and on behalf of the National Association of State Boards of Education and the state board of education in Missouri, I thank you for this opportunity to talk to you today and to share our views about how federal education dollars can be spent and how they can be well taken care of in each of our states.
I have served as president of the state board for several years and have had an experience there and I also come to you with knowledge of what it's like to be on a local board of education. I spent 12 years serving on a local board in one of our 525 school districts in north Missouri and I know what it takes and what those superintendents and principals in those local districts feel and care and want to have when the rubber does meet the road for those kids in the classrooms in our schools. As you're considering the improvements to the Elementary and Secondary Education Act reauthorization, and as you're going through that process, we urge you to maintain the current approach and the funding levels that the states are now using with their federal education dollars.
As state boards, we have the primary responsibility for governing education. We set education policy, we set goals in our state and we set the priorities that are based on the best available information and research and we continuously evaluate educational progress in our states. State boards are composed of people like myself. We're citizens from all walks of life and we're dedicated to making our states' students and public education the very best in the world.
State boards today continue the American tradition and the deeply valued ideals of lay governance of education. We believe in the separation of educational policymaking and of the political arena. More importantly, state boards are the only policymaking institution that is completely focused and exclusively working on education. Despite this fact, there have been an increasing number of people and proposals in Congress who have wanted to shift the authority over federal programs away from state boards and over to our governors and our legislators. I urge you to respect the states' sovereignty and the governance structures that our citizens in our states have put in place by acknowledging the state boards of education and when you formulate the federal education programs respect the system that our states have put in place.
Of course, state boards of education do not operate in isolation. We work in close consultation with our governor, with our key state school officer and with our legislators. I, myself, was appointed by the governor of Missouri. It's a constitutional route that we follow in becoming members of the state board of education. And I will tell you that I truly respect and appreciate his input, our governor's input, into education in Missouri. Nevertheless, I must request that our state constitution, which clearly defines the state board authority over educational issues, be respected and remain in place. Fundamentally, education is a state and local responsibility. In Missouri, our state and local communities work in concert to improve education for our students and I'm pleased to report the progress we've made in that area. On the third International Math and Science Study, the (TIMS ?) test, our eighth graders out performed or were in the top group in the world. Only Singapore did better. And our eighth graders were above average in math. That doesn't mean we're where we ought to be, but it means that reform is showing that we are making process and we are on the road to seeing that our students are achieving in the highest ranks in the world. I'm proud of our student performance, but we know we have a ways to go.
The federal government has a critical role to play in that process. States and districts have enjoyed a productive and mutually beneficial relationship with our partner, the federal government. While state and local districts have funded the bulk of education spending to the tune of about 94 percent, which in Missouri is 95 percent, we have received targeted educational funds from the federal level to supplement out own resources.
State board members realize that a level playing field does not exist for all students in our state or in any other state, but we're committed to providing the necessary resources to obtain those elements of good education and good instruction. We want the best teachers and we want fine good quality materials and proper facilities and smaller classroom sizes for our students, so that they can achieve at those high levels that we expect of all students.
In order to do this, however, there is a role for the federal government to help state boards in this effort. And I ask you to reaffirm our pledge to work together as a team to make sure that when that classroom door closes, the best things happen in there for those teachers and the ones who are learning.
As a state education leader, I have viewed with increasing dismay the undeserved criticism and the misinterpretation that sometimes happens here in Washington about the use of federal funds at the state level and by extension, that criticism also includes the roles and responsibilities and the work of state education agencies across the country. Such a view does a disservice to the important and sometimes thankless job that is the work performed by educators at the state level. State education agencies are not bloated inefficient bureaucracies, as they are sometimes portrayed. Quite frankly, I'm troubled when national leaders call into question the amount of funds states use to cover the administrative expenses of the federal programs.
Let me explain to you a little bit about the administration costs, as I am acquainted with them. In Missouri, our State Department uses about 1.5 percent, a little under 1.5 percent, as a matter of fact, of the federal education fund for administration. The rest is passed through to local districts for educational improvement activities. Missouri's experience is the rule, not the exception, in state education agencies across the country. Yet, there continue to be those proposals to reduce or eliminate the state's share of funds or alternatively to block grant them any directly to local districts in an attempt to deliver more money to the local level.
These are unrealistic solutions to an unreal problem as the data that I have referenced shows. Worse, block grants would eliminate the most effective component of the current federal assistance, as we have it now. The targeting and leveraging of the limited federal resources and the increased equity through supplemental funding is a very important teamwork role of our partnership federal, state and local in delivering education in a quality manner to the classroom.
As states have increasingly implemented the compact that offers districts increased flexibility in exchange for guarantees of improvement in student performance and achievement, the role of the state education agencies has been shifting from regulation to providing technical assistance. That's a very important concept in accountability that is not a gotcha attitude, but it's one of how can we help to make good things happen in a team approach from, both the state level and the local level, using all the funds available to make those things happen. This important role must not be ignored.
States are focusing on results by providing technical assistance to substandard districts and schools and by only using punitive measures as a very last resort. This support can take many forms from increased financial aid to teams of experts, which in Missouri we call success teams that are sent into low performing schools to assist educators in improving instruction and learning.
If I had time today, I would tell you about the Missouri Reads Initiative, which is a system coming out of the first alliance that allows districts to use federal funds. This year we're using $400,000 to get help into the classroom for literacy, helping teachers and administers, by people coming from the State Department and working with them. And then, they go and train other people, so the money is used in a spreading fashion that it helps people in all districts to become better able to use the best research and the best practices to particularly work on the issues of literacy. So this technical advice is an invaluable resource to many struggling districts and schools.
In addition, our State Department staffs in all of our states provide districts and schools with more comprehensive assistance from forming and overseeing charter schools, which is a very real issue in many of our states, certainly n Missouri now, to incorporating educational technology to implementing new state standards.

Ironically, reducing or eliminating these funds in the name of getting more funds to the local level for instruction would force states to cut back on the very state services that local educators have come to rely on to improve the teaching and learning that does go in place when that rubber meets the road in the classroom, the most important place it can possibly be.
Again, I want to thank you for the opportunity to speak with you today about an issue that I feel strongly about personally and that we feel strongly about in Missouri and that we want to have continue as a team effort to use the dollars in the very best way and the most integrated and cooperative way to make good things happen in teaching and learning in all our states, so that our students can become the top performers in the world.
Thank you very much.
SEN. JEFFORDS: Well, thank you.
Thank you all for your excellent testimony.
I want to state that I may have to leave soon. The Finance Committee we're marking up I think eight or $900 billion, so it has some interest for all us. Senator Hutchinson will take over at that time in case I have to leave.
In the interim, let me ask you this question. How should federal elementary and secondary education dollars be used? Should they be primarily used for the under served, educationally disadvantaged populations, which was the original purpose established in the ESEA Bill in 1965 or should federal funds operate as general revenue source for state and local educational programs?
Anybody want to volunteer?
Ms. Rees.
MS. REES: I think they ought to be targeted.
MR. SAMPIERI: I would concur with that. I mean, they shouldn't be general funds. That's the local LEA has access to general funds. They should be targeted for specific needs. SEN. JEFFORDS: Watson.
MR. WATSON: Well, I think, however, they're targeted the measure of their effectiveness and the consideration for how they are targeted should be rooted in academic results. Will they contribute significantly to improving academic performance and results?
SEN. JEFFORDS: With emphasis on the under privileged?
MR. WATSON: I think anyone who's not performing academically, in a sense, is under privileged and I know what you're saying. I'm splitting hairs there, but not necessarily, no, sir.
MS. PRESTON: I think the most important issue we have is equity for all kids in all districts. And certainly there are areas in every state I believe that has under performing schools and under performing districts. And to be able to use the funds, from a state perspective in those areas and in those issues that are most important, as identified by the leaders in the state, those funds could be used I think in a best manner that way.
SEN. JEFFORDS: I think we're, sort of, in a different situation than we were in '65. Right now, we're recognizing that we have international competition and all of our students are not to the levels they ought to be to maximize their own opportunities in the nation, to move forward versus the problems we had more directly related in the '60s that indicated that those poor and racial problems needed the special emphasis. So I think of trying to just think that out, as we talk, as to how, whether, what that does, if you make that decision.
So, Ms. Rees, in your statement, you quote General McCaffrey, who testified before this committee last regarding the lack of accountability in the Safe and Drug-Free Schools Program, which we all agree needs to be strengthened in this year's reorganization, reauthorization. Who established the accountability measures in a straight A proposals? Does each state establish their own? Does the Department of Education set measures, or do states and the Department of Education work together in devising accountability standards?
MS. REES: Those are two different things. We don't have a particular benchmark for how Safe and Drug-Free our school needs to be under the Straight A's Act. The focus of the Straight A's Act is on academic achievement. And under the Act, the state, however, the state Constitution determines who is in charge of education, will submit a contract. And so long as they fill in the blanks and say how they plan to boost academic achievement and provide the data needed to measure success over say, the next five years, divided by -- desegregated by socioeconomic background, the secretary of Education will have to sign off on the contracts and simply hold that state accountable for outcomes.

So, there's no real room for negotiations because we wanted to limit the power of the secretary to some extent, and at the same time, allow states maximum flexibility in drafting a contract that best suits their needs and acknowledges that we have different needs in different states.
SEN. JEFFORDS: Mr. Watson.
MR. WATSON: I am just concurring.
(Laughter.)
SEN. JEFFORDS: I saw your head going up and down. It thought I would verbalize that.
Mr. Sampieri.
MR. SAMPIERI: Well, I've heard good testimony regarding inputs and outputs, and the only point I would like to emphasize is that accountability is going to be determined by the throughput. It's going to be the nexus between where you want to go and where you're going. And somehow, if the federal government could focus its accountability standards on requiring those methodologies that require continuous analysis and assessment of the performance of all levels, whether it's in the classroom or not, that's where the difference is going to be made.
We've had several decades of goal statements. Now, we're going to reduce tardiness. We're going to reduce absenteeism. We're going to reduce dropout rates. We're going to reduce the use of narcotics. We're going to reduce violence. What we need, in my humble opinion, is an emphasis on not so much of what we're going to do because that can be articulated at the local level most appropriately. They know where the needs are. But where we need help is introducing and requiring management practices that cause those things to happen. No matter what the goals and objectives are that are articulated by the local area, we need to say, look, we know how to manage projects. And you have to have a methodology in place. And a goal statement is only one element of that. It's the day-to-day monitoring and assessment of that, and demonstrating that you can adjust your performance based on the results of that input that you're getting.
I don't know if that's making any sense.
SEN. JEFFORDS: Well, I guess --
Yes, Mr. Watson.
MR. WATSON: Well, just an observation. It seems to me that the things being sounded here signal kind of a see change in the whole approach, in terms of getting educational results. You hear a state perspective saying that we want results. I think again and again, I've heard our business leadership in Arkansas say, results, results. We don't want to continue to see those low performance scores. We want children to learn and learn well.
We hear the Straight A Program talking about doing what charter schools do, a kind of performance contract at a state level that says here are the results that we'll get, and we measure whether or not we get those results. We hear about academic accountability, and then, we find the management and fiscal model sitting here that helps us gather the information and manage the process of getting those results, and doing the evaluation. And we hear the states saying give us more control over those dollars that flow in so that we can put it into this system that's been defined. And just, at least, on the surface, it looks like it's workable, and maybe it's time for that kind of change.
SEN. JEFFORDS: Ms. Preston.
MS. PRESTON: I had the opportunity to spend a year chairing a national study group that was commissioned by NASBE on accountability. And one of the things that we talked about a great deal during that year as we visited with business leaders, and education policy leaders, and state board people, and teachers around the country, was what does accountability really mean? How can it be most effective? How can we measure whether or not the accountability is a good system in local districts, or at the state level, or even at the federal level. And there are some things there that I think would be very informative for all of us in this room in looking at that report.
But accountability is most effective when it is not highlighting the punitive measures of -- the statement was made earlier that they should suffer sanctions. Ultimately, it's the kids that suffer in the classroom if we highlight the sanctions. But those need to be the last resort. The idea of technical support, the idea of putting together a team where we can integrate and have cooperative efforts of funding and of setting goals and visions that ultimately become standards, that ultimately become learning objectives in the classroom, that's a very important part of what needs to happen in accountability. And if we can put together the team that helps that to happen within the state, it is most effective for our students. And that accountability highlighting technical assistance, I think, is the most important thing we have to talk about.
SEN. JEFFORDS: Let me ask you all this cause I am going to have to leave very shortly. Remember the statement made in 1983 by the Reagan Committee, which was established -- which stated that if a foreign nation had imposed upon this nation the educational system we have today, it would be declared an act of war.
Bring that to mind because I sit on the Goals 2000 panel, as does my friend from Mexico.

And the last report we got said there had been no improvement, no measurable improvement except that kids come to school a little bit healthier. And then, we looked to try to figure out how to measure the improvement, and we found startling that the only data that we had was 1994 data to give us the report for 1995. Obviously, any system, which is trying to improve itself that can't find out what's going on until four or five years after it happened has some problems.
So, okay, how do we solve them?
Yes.
MR. SAMPIERI: I don't know how to solve it, but I would think a move in the right direction -- I had to kind of smile, I thought back to my early years as an administrator in the Los Angeles Unified School District when we first introduced the concept of quarterly expenditure projections -- and I'm using this as an example to illustrate how archaic we are in education. The initial budget is adopted after months and months, and -- a board member, will recall this process, how long this takes. It's usually late. The school opens. The budget is not truly adopted sometimes until after school starts, and then, you're off and running.
And that's the last that anybody ever knows about it. Everybody just does their thing. Well, when we introduced the concept of quarterly expenditure projections, it required superintendents to project what tasks, what activities, what achievements they foresaw would occur over the next three months. That had to be the biggest challenge because everything was, well, by June, we're going to have X number of graduates. We're going to have so many kids passing the ACT test or the SAT test, or whatever it might have been at the time.
To consolidate what I am trying to say here is it's the throughputs that make the difference. We've got to emphasize that there is a methodology of managing instruction. It can be managed. Teachers know how to manage instruction. They need to accelerate that. Right now, at the end of the school year, they don't even get the results of the standardized tests until the next year and the cohorts are all gone. I mean, what kind of corrective action can you expect when every year you find out how you did six months after the kids that you were responsible for are gone.

So, my point is very simple. The analytical skills that all of these young teachers are taught at the universities to stimulate and see what the response was, and change your methodology constantly, seeing are they learning their multiplication tables, how? Under what circumstances? Why is Jim doing it and Jack's not doing it? We have to empower those teachers in the classroom to become the scientists that they were trained to become, to learn how to develop that lesson, apply the lesson, look at what the results are, and change it when those kids are in their class on a daily, weekly basis, not rely on the end of the year, like you've indicated, Senator, that the financial expenditure information and the achievement scores are a year old. They're not functional. They're not useful to the people that are responsible, and who are in the only position to make the difference.
I mean, I love superintendents, and I love board members, but they're not going to make that difference. They're going to set up the environment for it to occur, but it's the teachers that are going to make the difference in the core mission of public education in America, and they need to be empowered to do that. And all we're doing is saying, oh, you want to put more money in the classroom so you'd bring in another A, you know, more books, more -- that's not it. We need management information, feedback systems. They need to have that. They need to be trained to use that.
SEN. JEFFORDS: Mr. Watson.
MR. WATSON: Well, I agree. And with respect to your questioning the data lag. I mean, we've all been there. We've looked at scores from various tests that are sometimes even three and four years old by the time we get to mention them in our policy studies. But there's another issue with respect to measuring outputs as well when you're looking at the various tasks. And that's what goes on not only with the dumbing down of the test, which occurs periodically. But in Arkansas right now, we've just spent four years fighting for an academic accountability program that would retain norm tests and allow us to do comparisons with other school districts, with other states, with the nation and how we fare in measuring ourselves against the so- called 41 industrialized nations that we always measure against. And along comes the latest team of people who are going to revise our curriculum, our standards, our frameworks, introduce new methodologies and rewrite new tests and among the recommendations from this team of consultants working with the Department of Education is that we no longer need norms to test.
We don't need those comparisons; they don't make a difference. You need to look only at the criteria for your state and you measure things beyond academic performance. They count as much; the whole self-esteem movement works into that. So we face these sort of upheavals from time to time which makes it very difficult to pattern the performance trend and to understand it. We went back on the ACTs which underwent two dumbing-downs that we could discern by the admission of the folks who actually do the ACT so we had to do some norming on those tests to make the trend more accurate. So that's a continuing problem as well in measuring output.
MS. PRESTON: Excuse me. I think we're talking about two separate things here. When we talk about state assessments and what they are measuring, state assessments are looking at how is the school doing as a whole, how is the district measuring this district with the next district and then how are we measuring the kids in our state compared to national. We do have norm reference tests. They are still part of what we do and then the other issue is local assessments which really do measure how are my kids in this classroom doing this year on an ongoing, regular basis. For those assessments to help the teacher and the parents and the business community measure what is really taking place in teaching and learning in the classroom. So assessments have different functions that they bear out, both state and local assessments.
The other issue is the length of time, which we are measuring. If you look at what's happened in education in the states in the last four years, you know you can go back and look at results that have come from the late '80s or the early '90s and they are definitely going to be different. And if you look at the performance of 12th graders we, I believe, are going to see a trend for improved academic performance as the students who have experienced more hands-on, performance-based curriculum teaching and learning from say third grade on, we're going to see a rise in that curve of academic achievement.
The other thing that we're going to need to remember is that if in policymaking everything we do highlights student achievement, then it's very important that our school accreditation process zero in on performance in the local district. It is a way of measuring what is happening in the local district if we look at the accreditation process and highlight how students are performing. Achievement must be the main focus of everything we do in accrediting school districts from a state level and that also implies how we manage the funds in the district, how many administrators, how they are managing what's going on in the district. Those all are impacting.
MS. REES: I don't think there are really easy answers to your question. We are using the MAPE database at Heritage to compare Catholic schools to public schools in the District of Columbia and the data for the 1998 reading test is only going to be available in August, you know way later than the data will be actually useful for what we're trying to do. And in the meantime you have a number of charter schools in the district that have doubled up and things look a lot different today than they did when they first took this test.
I mean I also believe that in order to do this properly you need some time to evaluate the data and submit it for peer review so I think to the extent your committee can weigh in on the National Assessment Governing Board and provide them with the funding they need to do these tests more regularly and provide the information, faster as a Congress we can certainly provide better information to the public faster. And it's also important for the Administration and other political entities not to interfere too much with NAGB and the results that NAGB produces.
SEN. JEFFORDS: Yes, Mr. Watson.
MR. WATSON: Mr. Chairman, I think there is an easy answer. I think we just make the issue complex. For those who subscribe to E. D. Hirsch, you know that there is a body of fact and content-filled knowledge that our children should learn that should be fairly easy to define. For some reason it's not, but if we define it that way we can then define the measures and then we can tie those measures academically to the fiscal and management measures as well. We just make it difficult. It's easy to do.
SEN. JEFFORDS: Thank you. I'm sorry to take so much time. I'm going to leave.
Senator Hutchinson, if you'd take over, and Senator Bingaman, your turn.
SEN. JEFF BINGAMAN (D-NM): Thank you very much. Thank you all for being here.
Mr. Watson, you talk about your -- in your testimony you say there's a disturbing lack of accounting uniformity that severely limits the standard reporting format that would allow citizens to obtain information for comparative purposes. And I gather that Mr. Sampieri is sort of talking about this same problem a little bit.
You're in favor of as much local control as possible, but you think we should have a uniform system of accounting so that we can make reasonable comparisons. Should we have it across all public education in the country?
MR. WATSON: Fiscal accountability should be certainly across all education in the country.
SEN. BINGAMAN: But should the accounting be uniform?
MR. WATSON: Across the nation? You know, I don't know if I want to answer that question or can answer that question but from the Arkansas perspective, it absolutely should be. We want to look at our schools in our state and be able to know how they're spending their money. We can't do it now. The chart of accounts are different from school to school; the accounting programs are different. We don't know how they, what constitutes at one school support, academic support, and what constitutes pure direct support for classrooms and a myriad of other accounting breakdowns.

They're different from school to school so we can't read that data in our schools and know whether we're getting bang for buck.
The insight model allows us to do that. We think it would work in Arkansas. What other states think I have no idea but I would assume that they would want at least that same kind of fiscal accountability whether it came through the insight model or some other model.
Would you like to take a stab at that, Mr. Sampieri?
MR. SAMPIERI: The federal government actually issues an excellent manual on a recommended chart of accounts for school districts across the nation and generally what happens is all of the states build a chart of accounts around that model. They can add to it; they can't take away from it and then of course the LEAs take their guidance from the accounting manuals that the state issues and they can add to that but they can't take away from it. Now it is true that there's a high variance among school districts across the nation and it is a major problem. And it would be nice to have it more standardized. I hesitate to say that you know there should be one you know given standard from the federal government. I don't think that's functional, but I do bring your attention to the fact that you do have an excellent manual that is used. It is under revision at the present time, Handbook II it's referred to as, and it does provide that --
SEN. BINGAMAN: But it doesn't seem to be working in Arkansas?
MR. SAMPIERI: Right. Various states have the right obviously, state's right, to adopt whatever they wish, but it's not as if the federal government has not created a very excellent --
SEN. BINGAMAN: I guess my concern is that if I'm on a school board in New Mexico and I'm interested in knowing whether we are committing as much of our resources to in-classroom instruction as is being done in Arkansas or Maryland or Massachusetts, it's really, what I'm hearing from Mr. Watson is it's probably impossible for me to tell.
MR. SAMPIERI: Right, and in a comparative way because the definitions that I've included in our little presentation vary from state to state and basically what happens is a superintendent who wishes to demonstrate that there's a high percentage of funds being generated for instruction will consolidate two of the groups. They'll consolidate instruction and support and instructional support and so the percentage looks like it's very high. There are some districts that have gone so far as to say everything we do is for classroom instruction and so everything is dedicated to that and there was one very large school district in the state of New York that's doing that.
SEN. BINGAMAN: It seems to me that what we're talking about here unless we can get some agreement as to the accounting procedures and definitions and standards, this notion of accountability is a fraud.
MR. SAMPIERI: As it relates to finance.
SEN. BINGAMAN: As it relates to finance and management. It's a fraud. I mean there's no, I mean if one of the things we're holding local school districts to in terms of accountability is you've got to commit at least 50 percent of your money to in-classroom instruction and everybody in the country gets to define that differently, then it's a joke. So, all of this talk about we should ensure accountability at the federal level means nothing unless we're willing to step up to this problem, at least on the management and fiscal management of school districts.
Is that the way you see it, Mr. Watson?
MR. WATSON: Well, it seems to me that one of the roles the federal government could play would be best practices, to look at the insight model and other models that bring that uniformity and define the chart of accounts as well as the measures and outputs uniformly for states, leave it up to the states as to which model they want to go with. I like the insight model. But make sure that states have that kind of model in place so citizens of those states can enjoy consistent reporting that gives them the true picture and not distorted reporting because they're all different from school to school and school district to school district.
SEN. BINGAMAN: Mr. Sampieri.
MR. SAMPIERI: Senator, there is a way to crosswalk from a whole variety of charts of accounts into one consistent standard. So, it could be that states and LEAs, you can do what you want, but when you make this particular report, here are the definitions that you must use when you crosswalk your data from this point to this point.
Now, many school districts will say, wow, we can eliminate the crosswalk if we simply adopted these definitions. But it wouldn't be mandated. But if they wanted to, and they had to report that data, there is a way to crosswalk that data. It is difficult and it takes more time and effort.
SEN. JEFFORDS: Let me just --
Ms. Preston wanted to say something. Go ahead. MS. PRESTON: Clearly, the larger question is why do we want accountability. And we want it because we want students to have achievement. That's the ultimate reason for public education, the ultimate reason we talk about teaching and learning because we want students to achieve. And when we talk about fiscal accountability, we're talking about how can those education dollars from the federal government be placed within the states in the most effective way to bring equity and bring good education practice to all kids.
We can talk about things like kids with disabilities who have the opportunity of summer school. We can talk about things like kids with disabilities who have the opportunity for early childhood experiences that branch out and go into the communities and into daycare centers within the communities. We can talk about universities who have the opportunity to research and provide assisted devices for good learning to take place for children who need special assisted devices. Those kinds of things enhance student achievement for those who might not have the opportunity for that achievement if those dollars were not well spent within the state.
And the best vehicle for making sure that accountability takes place is through the State Education Agency where the oversight is closer to those entities I just mentioned, and where the communication has a well thought out and understood channel in place.
SEN. BINGAMAN: Let me ask Ms. Rees, on the bill which you've developed, which Senator Gorton is proposing, the Straight A -- it's the A-Plus -- what is the name again?
MS. REES: The Straight A's Act.
SEN. BINGAMAN: The Straight A's Act. You give the -- you would like to have the funds block granted to the states.
MS. REES: Well, it's not really a block grant, but in a sense, I mean, it is one -- if a state applies --
SEN. BINGAMAN: A single check.
MS. REES: -- then, they get one check, yes.
SEN. BINGAMAN: It's one check. So, that's about as block granted as you get around here.
(Laughter.)
MS. REES: But it's very different from the traditional block grants that this Congress has considered in the past. That's why we don't like to use that term.
SEN. BINGAMAN: Well, it's different you're saying because you believe that here you have some emphasis on accountability and results. MS. REES: Yes.
SEN. BINGAMAN: But, you give one check, and you give it to the state. Now, do you give it to the school board, the State Board of Education, or do you give it to the governor?
MS. REES: It depends on how the state defines who's in charge of running the school systems. So, in some states, it might be the school boards, in other states it might be the governors, and in some states, it might be the superintendents.
SEN. BINGAMAN: Now, you say here Paul Valis, who's head of the Chicago Public Schools endorses this plan.
MS. REES: Yes.
SEN. BINGAMAN: We had him at a lunch last week, and he said, for God sake, don't give any money to the states.
(Laughter.)
We in Chicago are bigger than most states, and we do not want more money being siphoned off at the state level. So, give it to the school districts.
MS. REES: I mean, you can't keep everyone happy, and, in my view, connecting 15,000 or so school districts with the federal government is a bit dangerous. So, we've tried to come up with a scenario that makes everyone somewhat happy so that if the state of Illinois decides not to participate, then, the city of Chicago could apply.
SEN. BINGAMAN: Okay, but if the state of Illinois decided to participate, then, the state would decide how the city of Chicago spent its money.
MS. REES: Yes.
SEN. BINGAMAN: Which Mr. Valis would not like.
MS. REES: Well, I'm sure there are a lot of things Mr. Valis doesn't like about the current system in place either.
SEN. BINGAMAN: But you think he's endorsed your bill?
MS. REES: He has testified in favor of it at a House hearing in Chicago.
SEN. BINGAMAN: Okay, okay. My time is up, Mr. Chairman.

I know we've got a vote as well. Thank you very much.
SEN. HUTCHINSON: We do have a vote on, and I'm going to recognize Senator Sessions. I don't think he's going to be able to return after the vote. So, I am going to allow him to go ahead and begin.
SEN. SESSIONS: All right. Thank you, Mr. Chairman.
This is such a fascinating issue. My wife taught a number of years, and I've taught one year. And I know how difficult and challenging it is, and people demand accountability, but you really take classrooms as you find them. If your children are ahead of grade level when they come to you, you can look good accountable-wise, or if they are behind, then, you can look bad. How do you judge progress? Maybe the group of kids you've got are -- you just have a situation in which you have a larger dropout rate, or lack of interest rate, and it's difficult to blame a teacher for all of that.
So, I think accountability has got to be our goal, but how we achieve it is somewhat difficult. And I'm interested, Ms. Preston, in your comments, and others. Even the Heritage Report said that we're not eliminating a single federal program, whereas, the House Committee says we've got 788 government programs. And does anybody doubt -- so, let me ask this question. Is there any doubt in your minds that we could consolidate and eliminate many of those programs in the bureaucracies that support those, give more money to the local education systems with less burdensome regulation, and therefore, have a expectation that education could be improved without even an increase in taxes.
Mr. Sampieri, would you like to comment on that?
MR. SAMPIERI: Well, I don't think there's any doubt that that would be a wise strategy. And in terms of accountability, I would throw in the term --
SEN. SESSIONS: You might pull that microphone up --
MR. SAMPIERI: Certainly, in terms of accountability, I would contribute the term gain, as opposed to standard norms and things like that, that in your excellent example, if you inherited a great third grade class, and they only gained one month of reading skills after nine months of treatment. And in a class next to you, somebody -- and they were at the high end of the scale, and the teacher in the next room inherited that other group of kids, but she was able to achieve, let's say, nine months gain in nine months of treatment, her accountability score would be much higher, I would think, than in your particular classroom.
So, I would think that we may want to move from the concept of standard norms to the concept of gains aggregated at the classroom level, rather than at the school or the district level.
SEN. SESSIONS: Well, I think that something of that factor surely would be a part of the mix. But just assuming that a teacher's responsible for maintaining grade level, that the kids are not, is not a very good idea, and an unfair burden on many.
What do you think about the government programs? Could we benefit by elimination, consolidation, and moving money to the classroom?
MS. PRESTON: To some extent, although, as a taxpayer, I have to ask why it is that Congress is taxing us to begin with to bring all the money to Washington, and then, divide it up into local education bureaucrats. I think that an ideal scenario would actually channel the funding more directly to parents and to the extent that you are going to trust the state or local bureaucrat, I think, you ought to ask that they produce results with the money, and, in my opinion, academic achievement is the best thing to demand from them.
SEN. SESSIONS: But you're not opposing -- the Straight A's that you're supporting -- you're not opposing in any way this Congress's effort to evaluate programs that are in existence in eliminating or consolidating --
MS. PRESTON: Not at all.
SEN. SESSIONS: -- for efficiency.
MS. PRESTON: Not at all.
SEN. SESSIONS: All right.
What about you, Mr. Watson? Have you thought about this subject?
MR. WATSON: Oh, very much and my impression is that there are programs all over the map that are redundant or inefficient or wasteful that could go away and either save that money or redirect it to get better results from some other fashion, either through block grants to the states or whatever. No question about it, I would, just for your reading interest, I would refer to you a report done by Dennis Doyle for the Heritage Foundation which documented hundreds of those programs that should be looked at. In our own state we took a look at our own system and found some $50 million in programs in state money that we felt could just simply go away without compromising at all the state's ability to deliver quality education services.
SEN. SESSIONS: Ms. Preston, you want to comment on that?
MS. PRESTON: I think the most important thing to look at is what the needs are of the children within the state and I don't believe they're the same in Missouri as they are in maybe California or as they are in Washington, DC. And how are we going to determine what those needs are and how the money can be best spent? It's important how we determine that, through what vehicle. If it's the state board of education or the state education agency there probably can be an overriding benefit to all students and equity feature there that needs to be there just as the model is there for federal funds to come to the state level so that they can equitably be distributed. I think it's the reason and it's a valid question. Why do tax dollars come to the federal government and then be redistributed? Because of equity issues; the same reason that I think state funds can be more equitably distributed considering what the needs are within the state. And --
SEN. SESSIONS: Well, you're a champion of the state school boards. You've got 788 programs. I'll just ask you directly, which would you prefer, those to continue or all that money be sent to the Missouri School Board with the expectation that you would use it wisely for the people of Missouri?
MS. PRESTON: Well, of course, Missouri I would rather it were sent to the Missouri School Board, but --
SEN. SESSION: Ah, but it's other states you don't trust.
MS. PRESTON: No.
SEN. SESSIONS: Right? I'm serious about it. Do you trust the school boards or not?
MS. PRESTON: I think the fact is that the state board of educations in every state, except Wisconsin which does not have one, are there because they want to do what's best for the kids in their states and I think it's a serious issue, too. And I think we need to do the very best we can for those kids, but we need to have the accountability of saying there are too many programs out there. Can we better define those programs?
The model is in Missouri of doing that very thing. When we had lots of grant money going to shotgun approach, all sorts of different kinds of programs, we pulled back and said the basic fundamental issue is kids have to learn to read so every grant we're sending out this year has to do with literacy and if it doesn't have to do with that it doesn't go. And so that is an important model, I think, to follow.
SEN. SESSIONS: Well, you indicated, I guess earlier, that you want to keep the current approach and funding levels, that's what the school boards recommend, but you're not saying that we ought not to review the multiplicity of federal government programs and see if we can't provide more ability for school boards to do their duty.
MS. PRESTON: Exactly. I think looking and reviewing and getting rid of multiplicity or combinations of things that just aren't working is always good.
SEN. SESSIONS: And I think Senator Hutchinson's concern about Dollars to the Classroom really didn't focus so much on state bureaucracies as to federal bureaucracies, although we do put burdens on states. I mean the local school system's got to write a grant, somebody's got to come in and write the grant program for them. Your 1.5 percent I think was focused on the state board of education, how much federal regulations burden it, but 1.5 percent's a pretty good amount for that.
Then you've got the local system plus the federal bureaucrats and all of these different programs and agencies. And there's no doubt in my mind, this is, I'm not an expert on this, but there is no doubt in my mind we can get more money into the classroom to improve education if we step forward aggressively and eliminate some of these programs and consolidate and give more freedom to the education leaders that we've elected in our communities to run education. I think there is an argument that we need some control if we're going to send the money. Maybe it's a block grant program and no control, which is better than the current system in my view. It may still not be the right approach.
Let me ask you this, Ms. Rees. How would you compare the Straight A's project, proposal, that your testifying for and Senator Hutchinson's Dollars to the Classroom idea? Are there similarities? Can they be harmonized in some way to get the benefit of some elimination of programs at the same time getting your accountability and moving the money to the states?
MS. REES: Certainly and maybe Mr. Watson want to comment on this later as well. But in a nutshell I think what Straight A's allows you to do is pass Senator Hutchinson's Dollars to the Classroom Act and allow some states to perhaps do things differently based on this other model so you can have two separate universes where you reauthorize ESEA and hopefully enact some of Senator Hutchinson's proposals and block grants and at the same time allow this third way to flourish and allow some states to do things differently. Because quite frankly I don't think we have all the answers and despite certain models that may work here and there we don't have all the answers.
SEN. SESSIONS: Mr. Watson, do you want to comment?
MR. WATSON: I think it's imperative that they be merged because the elements of both of them are good and needed for the states.

I love the idea of the performance contract. I think that's essential, but I also like the idea of freeing up the money for the states to make the decisions so I think they kind of go hand in hand.
SEN. SESSIONS: Ms. Preston, you raised a point that I hear a good bit and Senator Bingaman did or discussed it. Where is education, where is the classroom, who do you send it to? Is it a city school system or the county school system? Is it to the individual school or is it to the governor's office, the state board of educations? For us in Washington, we've got, I think, the right vision now. I think there's a majority at least in this Congress that want to eliminate bureaucracies and get money to the classroom as hard as possible, as best we can. Let me ask you that. If you're assuming that was a vision of the members of Congress based on your experience as a state school board member and a local school board member, what would you suggest?
MS. PRESTON: I think we have to define what it means to get money to the local classroom. You know just because a check shows up at the local classroom or as a local principal or the local superintendent, doesn't necessarily ensure that good education practices are going to take place. You know it sounds good to have dollars show up at the classroom but I think about ways that money has been used and there is a 1.5 percent administration cost that has been a part of at least our budget in Missouri. I think about how the rest of that money has flowed through to the classrooms and to the school districts. It has been with opportunities to empower or to make a broader impact in areas that were clearly identified as need within the state and just having money go to the classroom is not necessarily the best bang for the buck.
SEN. SESSIONS; Well, I guess my question is if it goes to the state, the governors I guess to the state, or should the money go to the state school board or --
MS. PRESTON: That's a good question and it's one that --
SEN. SESSIONS: -- school boards.
MS. PRESTON: It's one that we've wrestled with quite a bit and we are very fortunate in Missouri at this time to have a governor who is very supportive of education and that is well and good but you know governors have lots of things on their plates. They have a lot of other political entities that are seeking their attention and that require a great deal of policymaking endeavor and as you think about the state school board there is no other agenda, no other approach, except working on education issues for the state school board. That's one issue.
Another one is that governors have a limited term, whether it's by election or the term limits and there is not a long-term dedication to the issue as there is with the state board of education. So those two issues can make it very difficult to have the opportunity for a long lasting effort that is sustained in the state for education.
SEN. SESSIONS: We're going to have to wrestle with the techniques of that because every state is different and it's complex matter.
Let me just say this and I think we'll probably need to recess. I don't want to miss this vote. Senator Hutchinson should be back shortly and I'll let him rejoin us, but we also had a hearing recently in which the President of MIT testified and he said, in his view, one of the most astounding lacks in this country is to learn precisely how children learn. That he thinks it's a hand on process is a big part of it that can actually improve learning.
Now, I understand your suggestions, Mr. Sampieri, is how do we make learning occur. Just adding more aides may not be the key to it. Maybe we do need to spend some more money in research on the actual learning process and I would ask briefly this question. I suppose, if you could get a 5 percent increase in learning by any one government program, we would be astounded and say that was remarkable. I saw an article within the last month that said, if you increased significantly the amount of light, sunlight, in a classroom, learning was up 20 percent. Did anybody see that?
MR. SAMPIERI: (Hawthorne ?).
SEN. SESSIONS: Does anybody want to comment on that? Any of you see that article and do you have any comment? Is anything like that possible, in your view?
MR. SAMPIERI: Well, I mean that's the Hawthorne effect. I think everybody who might have been familiar with said you can make any kind of a change and you state that it's associated with now you're going to learn more, it will occur for a little while, but it will have no sustaining impact on the learning of children.
SEN. SESSIONS: You're not believing that more windows can increase learning 20 percent?
MR. SAMPIERI: No.
SEN. SESSIONS: Anybody else agree with --?

MS. PRESTON: Well, I think it's, sort of, like the Mozart effect, you know, which is sort of the same idea, but it's in a more of a fine arts venue and by the way, I am a music teacher, so I guess I could say I was prejudiced to that. But that points up a very important point and that is that we have to be careful that we don't go off on one tangent of research and there has to be a stabilizing effect somewhere within a state that every local district doesn't say, well, I believe we're going to increase all the Mozart in our classrooms or we're going to increase the windows, so it's important.
SEN. SESSIONS: Good - I think.
Thank you, Mr. Chairman.
SEN. HUTCHINSON: Thank you, Senator Sessions.
We kept the vote open for you and I want to thank the panel. I've got a number of questions, but I want to thank you for your excellent testimony. I think it's been a great hearing and I certainly applaud Senator Jeffords, Chairman Jeffords, for holding the hearing, the series of hearings that we've conducted in anticipation of the reauthorization of the Elementary and Secondary Education Act.
I think there's some difference on the panel as to the degree to which we still face a crisis in education, but to me, the evidence is overwhelming that the experience with ESEA, the current system, that we fail and you can take almost any measurement. The average student proficiency for 17-year-olds on the MAPE (ph) reading test, 17-year- olds being at the end of the high school process, went, well, stayed basically flat lined from 1971 to 1996, 25 years of experience and we have seen. And at the same time, in inflation adjusted dollars, we've gone in 1970 $3,300 per student to $6100 in 1996, 180 percent increase in per student funding and, Mr. Watson, I think that reflects a lot of the statistical data that you provided us on Arkansas.
So it seems to me that we have a system that is broken and we have in the reauthorization of ESEA an opportunity, a golden opportunity, to make a dramatic change in our approach, at least, the federal role in education. We earlier this year passed the Ed. Flex Bill. The President signed it into law and it was a modest first step on providing that additional flexibility and returning local control. But ESEA provides us a huge vehicle to, I think, make dramatic change that needs to be made.
Ms. Rees, I'm not sure I agree entirely that straight As is the only vehicle by which that can occur. That there are a number of bills that have been introduced that make the kind of dramatic change that is necessary. Local school districts and one thing Mr. Watson pointed out was that Arkansas has -- I think he said we are ranked 17th in the nation in the number of school districts. Am I correct on that?
MR. WATSON: That's correct. SEN. HUTCHINSON: Over 300 school districts.
MR. WATSON: Right.
SEN. HUTCHINSON: That in a rural state, in which you have many, many school districts, a lot of the small school districts, in order to -- apart from the formula funding, when you look at the grant funding are in a terrible disadvantage in trying to even compete for those federal education dollars. I had a teacher in my office not long ago from Little Rock who said that in her school, they had to take a librarian and a counselor from their regular duties for an entire week in order to fill out the paperwork and make the application for it. They couldn't afford -- their school district could not afford a full time grants writer. So I think it's unfortunate when we force schools to choose between time spent with students or time spent trying to bring federal dollars and so I would just hope that we don't miss the opportunity that we have.
A few years ago, we faced a similar, I think a very analogous situation with welfare in this country. We knew we had a system that for 30 years was not working. That it was not working for those who are on welfare, the clients, and who were trapped in a life of dependency and we made a national commitment that we were going to end welfare, as we know it. And we made broad new -- we hate to use the word block grants, but we made block grants to the states and we told the states, we're going to give you the flexibility you've asked for. You show us that it works. We expect you to reduce the roles. We expect you to have people working. We expect there to be changes.
And it has had an incredible and the skeptics now are those first to admit that it has worked and it seems to be that, if we have proper accountability, there is no reason we can not tell the same thing to the states in the area of education. We've got a system that's not working. We'll give you the flexibility you've asked for. Now, show us the results and as so often has been the case, the states being the laboratories of democracy and the real sources of where reform take place that we'll see it work again.
Now, let me -- we have about 45, approximately 45 programs, under ESEA requiring each one categorical, each one requiring specific requirements. None of them related to achievement or accomplishment, but aiming at a particular goal. I would like each of you to respond to how the current educational system has strayed from the original purpose or even if you look back to when ESEA was first passed, how it has strayed from that original goal and purpose. That's a very broad -- that's a softball for each one of you, if you'd like to take it.
Ms. Preston.

MS. PRESTON: I think, if we look at the issues of equity, those are issues that have been important through the years. But now we found out that, if we don't highlight achievement and improvement and performance and if we do that through a measuring of the states or an accreditation process with school districts and by the way, we have 525 in Missouri. And I agree with you that there are certainly districts who are at less of an advantage to be able to write the grant to even supply librarians and counselors with their districts. That's an equity issue and it also is an issue then that becomes one of performance or improvement by the students because they don't have those opportunities.
But I think at the state level it's a place where we can address the issues in our state in some school districts in our state and say, these are places where we can send out technical assistance from the state level to aide those school districts in whatever their needs are as long as we're focusing on achievement. And as I said, particularly in Missouri, we have focused on literacy as the main issue that we are directing funds toward through all of the monies that flow through from the federal to the state to the local school districts.
SEN. HUTCHINSON: Mr. Watson.
MR. WATSON: Well, that's a difficult question to answer, but I would note this. It seems as we've broadened all of those things that we do in our education system, as we broaden that mission, we've tended to dilute, and even take away from our basic or core mission of academics and academic rigor.
It's interesting, when I go around Arkansas, and I quote these numbers on the MAPE (ph) scores and the other tests, people don't seem to be particularly bothered by that. It's been an astounding reaction. I would have thought that there would have been a cry of outrage. And people always come back and say, but, yes, we've done this and this, and we've done this and this and this. And we come back and say, but what counts, what counts is that schools are in business to educate children. And then, we go and look at that litany of all of those things that I read that we've done in our system, and find that at the time when our math scores were plummeting, we had energy, resources, and money being spent on developing an extensive 40-page K-12 dance framework. Something is askew somewhere in the system, and I think the priorities need to be reestablished.
SEN. HUTCHINSON: Ms. Rees.
MS. REES: I mean, I agree with you. I think that if you just look at the sheer size of the Elementary and Secondary Education Act when it was enacted until today, the number has definitely -- the number of pages has definitely grown in size, and ESEA has taken on all of these added responsibilities. It seems like every time that the Congress and every Senator has a pet project and issue area they want to talk about at the federal level they create a new program, and pour a little bit of money into it. And one of the reasons why a lot of these programs individually are not producing any results is somewhat related to the fact that you're not even pouring enough money into it to demand the kind of mechanism to measure its success. And that's why I think it's very important to go back to the original intention of ESEA, which was aid to disadvantaged students, and actually turn the clock back to some of the reforms that were implemented in this Congress in 1994, which further diluted Title I funds in low-income school districts and focus it a little bit more on producing academic results for Title I students instead of simply saying here's the money, and simply make sure that it's allocated properly.
SEN. HUTCHINSON: Okay.
Mr. Sampieri.
MR. SAMPIERI: My long tenure in public education permits me to know what it was like prior to ESEA and what it was like when it started. It was a great objective to supplement the support and instructional programs for kids that really had a disadvantage. And we had to close that gap. But very candidly, what is quite apparent if you go from one city to the other is that we've created a Juncts (ph) Program in our LEAs across the nation.
If the small LEA, they have been successful in fusing the dollars into the existing staff. If it's a moderate to a large LEA, i.e. Chicago, New York, Los Angeles, Houston, you have created -- not you, second person, plural -- we have created a separate and unequal bureaucracy within each one of these LEAs. And it has been created in a sense to respond to the type of accountability that was required under that original act to keep the records separate, to keep documents separate, to be able to prove that, yes, the dollars came in, and this is how we achieved it. And so, when we go to these, if any of us go to the LEAs, you can see very easily two societies within those. And those are the categorical folks, and the general-funded folks. And yes, they talk to each other, but it's a caste system, and it does exist, and it is expensive, very expensive.
So, I've seen a big change, and that has been the practical application that is quite apparent in LEAs.

SEN. HUTCHINSON: Mr. Sampieri, you had a chart that demonstrated the percentage involved in direct instruction, as opposed to leadership and so forth. Could you put that back up?
Now, in year one of your comparisons, 51.54 percent involved an instruction. Now, that's direct instruction, that's classroom --
MR. SAMPIERI: That is direct instruction.
SEN. HUTCHINSON: I've been told, and of course the year two and year three indicate this, that we are the only industrialized nation in the world in which more than half of our educational personnel are not involved in direct instruction in the classroom.
I would like your reaction to that. That seems to me to be very instructive as to the problem in which we have created, regardless of what we say about one-and-a-half percent administrative costs that the statistics indicate we are very top heavy, that our resources are not getting to classroom. Okay, would you respond to -- Mr. Sampieri, I guess you're the right one to start with here.
MR. SAMPIERI: There's no question that -- I mean, even 51-and-a- half percent is not too impressive when you think of what is the --
SEN. HUTCHINSON: I think it's very depressive.
MR. SAMPIERI: Yeah, right. I mean, big deal. More than 50 percent. Why isn't it 75 percent? You're right. The data that we've collected for non-teaching staff in school districts has been 69 to 70. They have grown substantially faster than the number of teaching positions in school districts. It's been since 1995 that that growth has leveled off, and now, it's about the same. But the teacher-pupil ratio in 1990 were 17.2. In 1995-'96, it's 17.2. So, we -- but we have poured a lot more money into that with that intent. But the result has been absolutely a flat level of teacher-pupil ratio across the nation.
Now, within specific LEAs, obviously, there will be anomalies and changes, and so forth.
SEN. HUTCHINSON: Ms. Rees.
MS. REES: I agree with you. I think that it's a travesty that we have such high numbers of individuals who are not in the classroom. And I certainly don't see the Straight A's Act as the plan that competes, or is that different from the Dollars, the Classroom Act -- I just think that if you are going to trust states, or local education agencies, or any entity to produce results, it's fair to give them the flexibility to reach those results as they wish. And in a lot of places, I would imagine that the way to get there is by eliminating some of these bureaucrats and sending dollars to the classroom.
SEN. HUTCHINSON: Mr. Watson.

MR. WATSON: Well, I first ran across the reference to that statistic in a Manhattan Institute study by Dianne Ravage (ph), and I've cited it extensively over the last two years. She noted that more than half of our country's education work force is engaged in activities that is not related to the classroom. Of course, our detractors come back and say, well, what are you going to take away from kids, the ability to transport them to schools, or to feed them under the Free Lunch Program, or whatever. That's what we're talking about. We're just talking about the waste, and inefficiency, and redundant programs in the system that could be redirected to the classroom.
SEN. HUTCHINSON: Ms. Preston.
MS. PRESTON: I think that I would want to have real definite figures on those people who are auxiliary people. But if we're talking about the people within the school buildings, I would like to share with you a personal observation of something that we're doing with federal dollars in Missouri, as a matter of fact. Our Reading First Initiative, a Missouri reading initiative, and one of the things that is a requirement of the federal dollars that are being used in local school districts that are funneled through the state right now is that not only teachers are getting the professional development to use the best research-based approach to teaching and developing instructional practices to teach literacy, but also principals and other administrators within the building must be involved in those same things. And as we begin to model those kinds of teachings that involve everyone in the school building, the principals have to be involved as well as the teachers, then, we are going to begin to see results of, not only looking at the total child, and how we approach education with the child, but the total school system, and how each of those people in the system have a vested interest in the teaching of that child, and the learning that takes place.
And I agree that it is important that we not have top heavy administration, but that we have administrators involved in classroom activities, and in teaching and learning so that they know how to encourage those best practices.
SEN. HUTCHINSON: I was struck. I was amazed at the statistic, Mr. Watson, you had in your testimony in which you said that 86 percent of the State Education Department's operating budget was comprised of federal dollars.
Could you expand a little bit? Does that mean that, first of all, how many employees are in the Arkansas Education Department?
MR. WATSON: You would ask. I think, now, Senator, it's around 386 -- in the Department. Or overall employees in the school system --
SEN. HUTCHINSON: In the department.

MR. WATSON: About 386.
SEN. HUTCHINSON: So, the 86 percent figure would indicate that --
MR. WATSON: Well, it wasn't a reference to numbers of employees, specifically. Although there is a high preponderance of people in the State Department of Education in Arkansas who are essentially working for the federal government. I went back and looked at the exact quote from the ULR study in Arkansas that generated that statistic --
SEN. HUTCHINSON: That's the University of Arkansas, Little Rock.
MR. WATSON: Little Rock, yes, sir. It said concerning the public school fund for '97, which was $1.4 million of this budget 1.2 million, or 86 percent is the pass-through in state equalization funding for the school districts so of the department's $268 million that remains which is separate from the public pass-through, 86 percent of that, of that $268 million, 86 percent of that is federal money and federal programs. They went on to say --
SEN. HUTCHINSON: What happens to it? Where does it go?
MR. WATSON: Well, I'll get to that. They went on to say that only 4 percent of the department's remaining funds are state funds, 2 percent are cash fund and 8 percent and then they said other than state equalization funding and federal fundings the department has only a marginal funding base for all of its operations and responsibilities. So the inference and the conclusion of the ULR study was that we have essentially a federalized department of education in Arkansas. Who knows what happens to that money. We've tried to find that out for ourselves.
SEN. HUTCHINSON: So what's the operating budget for the state department of education is really almost 90 percent comprised of federal dollars?
MR. WATSON: Yes, sir.
SEN. HUTCHINSON: Now how would that compare with Missouri? MS. PRESTON: Missouri is not that much. We have a few people, very few, who are full time administrators of federal programs or of federal funds, but most of our people in the state department have other opportunities for work that are state level jobs who go out and work with local districts. I'm thinking of our vocational people who do receive federal funds, our people who work with the kids with disabilities, who of course have federal funds flowing through their departments. But I find those figures heavy, much more than in Missouri.
MR. WATSON: I might just edify a little bit and refer you to two statements from the ULR study. One said these federal funds come with regulations and mandates that may or may not coincide with the goals and objectives promulgated by the general assembly, the state board or the director. And another said these federally funded projects are not well integrated into the department and appear better staffed and funded. Employees within these projects feel a strong affinity to their programs and hold less allegiance to the department or the state since they work for the federal government.
SEN. HUTCHINSON: I would translate that to mean that Arkansas' not the master of their own destiny when it comes to education policy.
MR. WATSON: For about a 13 or 14 percent total share of education revenue part of the federal government they seem not to be the master of their own destiny.
SEN. HUTCHINSON: Ms. Rees, on the Straight A's proposal, which I agree conceptually what I proposed and what Senator Frist has proposed, Senator Gorton has proposed are all very, very close and hopefully there can be some consensus on it because I think it does represent the kind of see change that has been referred to that we need. But you said that I think you used the term formula-based for the funding that is covered by Straight A's. How would Straight A's affect states like Arkansas where you have so many school districts trying on the competitive grants or find it so difficult to compete and to use limited resources to try to compete for?
MS. REES: Straight A's doesn't affect any of the discretionary programs so it wouldn't address these problems at all.
SEN. HUTCHINSON: How many programs are included in --
MS. REES: The final program, the Straight A's Act, which was dropped, with 14 programs.
SEN. HUTCHINSON: And those programs would be preserved but funds could be co-mingled between the previous programs so long as they had a charter or a --
MS. REES: Agreement, yes, because the states --

SEN. HUTCHINSON: -- agreement.
MS. REES: -- decide which programs they want to include in their charter agreements.
SEN. HUTCHINSON: Can anybody assist me in knowing what kind of paperwork requirements are mandated through federal education programs today? My sister teaches in elementary school and that's one of her complaints I hear regularly is the amount of time -- she said she went into teaching to teach, to go into the classroom and to experience the magic when a teacher sees the light come on in a student's eyes and mind and to experience that; not to use prep time filling out paperwork requirements. Give me examples that assist me in understanding what kind of requirements the federal government imposes in the area of paperwork. I guess that's in the name of accountability, but Mr. Sampieri.
MR. SAMPIERI: In my experience there's been about five major thrusts from the federal government. One is what is known as common core of data and this occurs generally once a year and it follows the October 1st report which is in most school districts permanent program day and it asks all kinds of demographic information about staff, about students, et cetera. There's another survey on governmental finance in school districts that's collected from school districts. There's a data collection requirement under the General Education Provision Act and then under the Vocational Education Act there's a lot of data required there about programs, placement, follow-ups, salaries, things like that. And then each of those 778 specific federal programs have a variety of unique requirements that school districts who chose to participate must respond to. So those are, in my experience --
SEN. HUTCHINSON: Isn't there a better way?
MR. SAMPIERI: Oh, yes.
SEN. HUTCHINSON: Do you all concur with what Mr. Sampieri has said is his experience on --
Now let me, I'm going to conclude my questions by pitting you all against each other.
MR. WATSON: Oh, great.
SEN. HUTCHINSON: In a very polite way.
Now, Ms. Rees, you've come advocating a proposal which though you didn't like the term block grant has been characterized as being at least a form of block grants, consolidated funding with accountability for the programs in the charter that would be agreed upon between the states and the federal government if I accurately given a general description of it.

And Ms. Preston you, in your testimony, objected to the concept of block grants. I would like you to expand on your concern about block granting and Ms. Rees to give a brief rebuttal.
MS. PRESTON: I feel that block grants go to let's take for example to the governor's office. The issuance of that money being funneled through the governor's office is through, as I stated earlier, a part of our government that is not focused solely on education, on educational issues.
SEN. HUTCHINSON: Can I interrupt you? Your primary concern not the concept of the consolidated funding but where it would be directed and who would control those funds?
MS. PRESTON: Exactly.
SEN. HUTCHINSON: That is helpful.
Ms. Rees, that may -- could you respond to that concern?
MS. REES: The Straight A's Act doesn't give the money to the governor, it gives it to whatever entity is in charge of --
SEN. HUTCHINSON: Some block grant proposals have done that, though, where they designate it --
MS. PRESTON: And so I'm saying this I think that the agency that is focused solely on education and solely on bringing equity to all districts within a state, whether it's 525 or 300 or small states, needs to be in an agency that is focusing on education and whose constituency is the kids.
SEN. HUTCHINSON: Ms. Rees, I interrupted you. Did you want to --
MS. REES: No, I was just trying to clarify that Straight A's doesn't give the money to the governors although my preference would be to give it to the governors because they are so ahead of the curve in coming up with reforms that are targeted at boosting academic achievement, especially for poor kids.
SEN. HUTCHINSON: Don't, in most states, the governor has a great deal of control over who is direct running a state department of education?
MS. REES: It varies quite a bit in the state of Wisconsin, for instance, the governor doesn't have any control whatsoever in who is elected. It's another office. But in the acts right now, Ms. Preston, the state has not defined, it's left up to the states to decide which entity should be in charge of administering the Straight A's funds and apply for the charter.
SEN. HUTCHINSON: Okay.

This has been very instructive, very helpful. That was a very polite debate, too, but thank you, all of you, for your testimony today and I have run my course of questions. I would like to place in the hearing record a statement by Senator Frist. I also request that the record remain open for two weeks so that other members of this committee may submit statements or other materials pertinent to this hearing.
We thank the panel for their excellent presentations and the hearing is adjourned.

END

LOAD-DATE: July 22, 1999

Document 91 of 317.


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