Legislature(2001 - 2002)
2002-01-28 House Journal
Full Journal pdf2002-01-28 House Journal Page 2080 HB 363 HOUSE BILL NO. 363 by the House Rules Committee by request of the Governor, entitled: "An Act providing for and relating to the issuance of general obligation bonds for the purpose of paying the cost of construction and major maintenance for certain public school facilities; and providing for an effective date." was read the first time and referred to the Health, Education & Social Services and Finance Committees. The following fiscal note(s) apply: 1. Fiscal, Dept. of Revenue The Governor's transmittal letter dated January 25, 2002, appears below: "Dear Speaker Porter: Adequate school facilities are an important factor in the success of an educational program. To afford all Alaska students the opportunity to learn in an environment that enhances their chances for success, I am 2002-01-28 House Journal Page 2081 transmitting a bill to finance construction and major maintenance of public schools. This legislation authorizes a public vote on general obligation bonds to tackle one third of the $641 million backlog of needed school construction and major maintenance projects across our state. I propose this as the first of three installments to complete the entire existing statewide Department of Education and Early Development priority lists within six years. This legislation specifically authorizes a vote in the 2002 general election on $212 million in general obligation (GO) bonds for schools. An accompanying bill appropriates $210 million for the first eight school construction and 81 major maintenance projects on the statewide priority list. This would make available approximately $101 million for fiscal year 2003 and approximately $109 million starting in 2004. The remaining $2 million would pay the costs of bond sale and issuance. The debt service for these bonds will be paid from general funds starting in fiscal year 2004. In recent years, school construction funding has come from a combination of new or unique funding sources for bonds (such as Alaska Housing Finance Corporation dividends and the tobacco settlement), and school debt reimbursement for urban districts funded by tobacco taxes. These revenue sources are not available this year. The grant approach in this legislation is an improvement over the process used in previous years. Communities will only provide the local share of the project cost -- approximately 30%. Former school debt reimbursement programs required districts to bond for the full project amount, using more of their local debt capacity than is actually needed for the local share. Local bonding is also more expensive than using GO bonds because the state has a stronger credit rating than municipalities and can issue debt at lower cost. More effective use of state dollars is made possible in this two-year package by phasing school construction projects so that design is funded in the first year and construction thereafter. To assure bondholders and school districts that the specific projects proposed for the bonds are fully funded, the major maintenance and school 2002-01-28 House Journal Page 2082 construction lists submitted under AS 14.11.011 will be frozen until July 1, 2003. This first phase of the six-year funding plan will emphasize rural and urban school districts' critical major maintenance needs by completing project priorities 1-60 in the first year and 61-81 in the second year. It is my hope that another bond package, similar to this one, will be addressed during each of the next two general election years to meet the rest of the state's school construction and major maintenance needs in the near future. We have a responsibility to provide Alaska's children with both the academic programs and the educational facilities they need to be successful. We are making significant progress improving the quality of education and I urge your prompt and favorable action on this measure to make similar progress on our statewide elementary and secondary school facilities. Sincerely, /s/ Tony Knowles Governor"