Legislature(2007 - 2008)CAPITOL 106
03/27/2008 03:00 PM House HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| SB285 | |
| HB386 | |
| HB306 | |
| HB358 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 285 | TELECONFERENCED | |
| += | HB 386 | TELECONFERENCED | |
| *+ | HB 358 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 306 | TELECONFERENCED | |
HB 386-ENERGY SUBSIDY FOR SCHOOLS 4:15:14 PM CHAIR WILSON announced that the next order of business would be HOUSE BILL NO. 386, "An Act relating to an energy subsidy for public schools." THOMAS BROWN, Intern to Representative Gabrielle LeDoux, Alaska State Legislature, speaking on behalf of the sponsor, Representative LeDoux, informed the committee that HB 386 was drafted in response to requests made by school districts throughout the state. He noted that gas prices have increased 110 percent in the last 13 months and, even with the recent passage of funding for education, school districts will have difficulties maintaining budgets. Mr. Brown referred to budget reports submitted by Carl Rose, the Executive Director of the Association of Alaska School Boards, indicating the increase in energy costs involved in operating a school from January to March, 2007. He further described a variety of conservation measures taken at schools across the state. 4:18:01 PM REPRESENTATIVE ROSES recalled that one of the factors of the area cost differential is the difference in the price of fuel for the different areas of the state. He stated his opposition to the bill, as it is written, based on the language that directs the state to pay 50 percent of the cost of fuel, as opposed to 50 percent of the increase in the cost of fuel. With appropriate amendments, he stated, he could support the concept. 4:20:38 PM REPRESENTATIVE SEATON questioned the inclusion of FY 06 budgeted energy costs. 4:21:31 PM MR. BROWN explained that many school districts have attempted to mitigate their own cost issues prior to requesting additional funding. However, these schools are in immediate need. 4:22:54 PM JIM LANGTON, Superintendent, Denali Borough School District, described the increases in utility costs for his school district. With the nearby Usibelli Coal mine one of the schools in his district is equipped to heat with coal under certain conditions. Although it is not possible to predict accurately, he estimated an increase of 10 to 15 percent for next year. Dr. Langton stated that energy costs are eating into his budget and instructional cuts are still being made in spite of the additional base student allocation (BSA) funding to his district. 4:25:06 PM REPRESENTATIVE ROSES asked what was budgeted last year versus next year. DR. LANGTON answered that the FY 06-07 actual cost was $167,000 for electricity and $260,000 for fuel. This year's budget request will be $170,000 [for electricity] and $277,000 [for fuel]. He anticipated exceeding those predictions. REPRESENTATIVE ROSES observed that there was a $30,000 increase in total costs. DR. LANGTON said that the increase is closer to $40,000. 4:26:38 PM REPRESENTATIVE ROSES remarked: Are you aware that this particular bill would not even pick up the increase, but would give you half of everything that you spent. So if you are projecting an increase of $40,000 this bill, as it is written, would actually give you $256,000. 4:26:52 PM DR. LANGTON stated that he is not aware of the specific language of the bill. Nevertheless, a majority of the $100 BSA increase in funds is going to replace school improvement grants in his district. 4:27:42 PM BRUCE JOHNSON, Director, Alaska Association of School Boards, stated his organization's support for school districts receiving assistance for the extraordinary costs related to energy. 4:28:38 PM CHAIR WILSON closed public testimony. 4:28:44 PM REPRESENTATIVE ROSES moved that the committee adopt Conceptual Amendment 1, such that [language relating that] the state shall pay 50 percent of the increase in energy costs for the previous fiscal year [will be inserted]. There being no objection, Conceptual Amendment 1 was adopted. 4:29:28 PM REPRESENTATIVE FAIRCLOUGH clarified that the subsidy would only be for the previous year. REPRESENTATIVE ROSES confirmed that this would pick up 50 percent of the cost of the increase from FY07 to FY08 and then from FY08 to FY09. 4:30:04 PM REPRESENTATIVE GARDNER noted that the bill was written for the fiscal year 2007, but the intent of the amendment was not to include the increase from 2006 to 2007. REPRESENTATIVE ROSES re-stated the intent of the amendment that was adopted. CHAIR WILSON confirmed that the subsidy was for two years. 4:31:03 PM REPRESENTATIVE SEATON asked the EED to comment on the implementation of the amendment. EDDY JEANS, Director, School Finance and Facilities Section, Department of Education and Early Education, explained that the amount for FY07 is known, and there is an estimate of FY08, so an appropriation could be made for FY09. The financial statements would be available in FY09, thus the amount could be calculated and distributed, and supplemental funds requested, if necessary. 4:32:18 PM REPRESENTATIVE SEATON surmised that the appropriation would be a capital budget item this year and the FY09 budget would be immediately paid to the school districts for the past fiscal year. 4:32:51 PM MR. JEANS stated that the funding would be allocated to the school districts in FY09 based on 50 percent of the increase from FY07 to FY08. Another appropriation in FY10 would be provided for the increase from FY08 to FY09. 4:33:27 PM REPRESENTATIVE KELLER asked what effect this would have on the requirement that a school district spend 70 percent of its budget on instruction. 4:33:51 PM MR. JEANS answered that these funds would free up money that schools are now spending on non-instructional items. For example, funds spent on fuel could be re-directed back into the instructional component. 4:34:27 PM REPRESENTATIVE ROSES asked what a $100 increase to the BSA would cost. 4:34:49 PM MR. JEANS responded that a $100 increase to the BSA costs roughly $22 million. REPRESENTATIVE ROSES compared the estimated FY08 energy costs and stated that the amount of $19,542,000 is just short of the amount of the cost of the increased BSA. Also, this action would bring the total funding to the amount requested by the governor for education. 4:35:30 PM MR. JEANS pointed out that the $19,542,000 remains to be reduced by 50 percent, as directed by the amendment. REPRESENTATIVE ROSES agreed. 4:35:57 PM The committee took an at-ease from 4:36:21 PM to 4:37:02 PM. 4:37:13 PM REPRESENTATIVE KELLER stated his opposition to the bill as it does not appear that the money appropriated to the school districts would be used for instructional purposes. 4:37:53 PM CHAIR WILSON opined that this money would go to instruction, as schools are currently redirecting funds to pay fuel bills. 4:38:19 PM REPRESENTATIVE SEATON moved that the committee adopt Amendment 2, such that the language "50 percent" is deleted and new language inserted specifying that the subsidy would be for the increase in fuel cost. REPRESENTATIVE GARDNER objected. She then asked whether the adoption of the amendment would be the equivalent of the passage of a $200 increase to the BSA [by the legislature]. 4:39:20 PM There followed a brief discussion, and members agreed. 4:39:27 PM REPRESENTATIVE FAIRCLOUGH stated her opposition to the bill if Amendment 2 is adopted. She stressed that cost increases must be shared. 4:40:41 PM A roll call vote was taken. Representatives Seaton, Gardner, Roses, and Wilson voted in favor of Amendment 2. Representatives Fairclough and Keller voted against it. Therefore, Amendment 2 was adopted by a vote of 4-2. 4:41:34 PM REPRESENTATIVE SEATON moved to report HB 386, as amended, out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE FAIRCLOUGH objected. 4:41:40 PM REPRESENTATIVE SEATON withdrew his motion. He then moved to report HB 386 as amended, out of committee with individual recommendations and the updated forthcoming fiscal note. REPRESENTATIVE FAIRCLOUGH objected. 4:42:30 PM A roll call vote was taken. Representatives Seaton, Gardner, Roses, Wilson voted in favor of HB 386, as amended. Representatives Keller and Fairclough voted against it. Therefore, HB 386 was reported out of the House Health, Education and Social Services Standing Committee by a vote of 4- 2.
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