Legislature(1993 - 1994)
04/06/1993 03:00 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 85: PUBLIC SCHOOL FOUNDATION PROGRAM CHAIR BUNDE invited Rep. B. Davis to present her amendments to HB 85. Number 037 REP. B. DAVIS said that one of her concerns was with the talented and gifted (TAG) program being removed from the special education line. She said she had amendments to keep it in. She stated the amendments would also reflect the Department of Education's (DOE) effort to cap at 4.5 percent the percentage of student populations which could be funded under the TAG program. She noted that the cap would be phased in over three years under her amendment, as opposed to one year. She noted that testimony on the bill had shown that some school districts had identified up to 17 percent of their students as TAG, while the national average was about 5 percent. CHAIR BUNDE asked for copies of the amendment to be distributed. Rep. B. Davis proceeded to distribute the amendments. Number 085 CHAIR BUNDE asked if the amendment already in the bill packets was similar to the one she had just distributed. REP. B. DAVIS said she was told by DOE that she had to have her new amendment added to her CS version of the bill. She said she had an amendment prepared for that reason. She asked Duane Guiley to help her clarify the amendments. Rep. Davis said, "What I have on the amendment is to phase it in over a three-year period. And I have also the price index, I mean the formula index, for the gifted program which I didn't pass out. But it would be phased in over a three year period, and the numbers would be 19, 16 and 12. It would be capped at 12. It would stay there and it would be in statute and not in regs. And that's the intention of my amendment here. It's to leave it under the gifted, under the special-ed, but allow it to be capped at the 4.5 level that they suggested that it should be." CHAIR BUNDE invited Mr. Guiley to testify. Number 108 DUANE GUILEY, DIRECTOR, DIVISION OF EDUCATION FINANCE AND SUPPORT SERVICES, DEPARTMENT OF EDUCATION, addressed the committee. He said, "Rep. Davis referred to the weighting factor, the revenue weighting factor that's referenced in the statute, the proposed statute is 0.012, as approved by the board currently, which would be set through regulation. Under the existing statute in current law the revenue weighting factor for gifted and talented child is 0.025. The representative is suggesting that we phase in the reduction in the weighting factor over a three-year period. The first weighting factor would be assigned in statute at 0.019 for each student. The second-year weighting factor of 0.016, and finally the target number of 0.012, which she's suggesting that those weighting factors actually be established in statute as opposed to allowing the department the opportunity to set them through regulation, as House Bill 85 currently states." CHAIR BUNDE asked if Mr. Guiley had an official position on the amendment. Number 125 MR. GUILEY said that the commissioner of the DOE had expressed the concern that phasing in the reduction of the weighting factor would actually increase the fiscal note, and he would prefer to phase in the increase in vocational education program at the same time to result in a zero fiscal note. Number 138 REP. B. DAVIS said there were other ways to avoid taking such a step with voc-ed funds. She said she would hate to see voc-ed played against special-ed funds. She stated, "I think because more school districts are now needing that money there might be some other ways we could come up with the money that is proposed from some other source, and I have two other ideas. I think when we get ready to talk about the price index, when we begin to discuss it in this particular bill, 85, it does not necessarily address some of the needs of the larger school districts and, I'm particularly concerned about the one for Anchorage, but also along with those others. And I discussed it with some people and I found out if Anchorage was not left there, just being grouped by itself, and was put into the grouping with some of the other groups, that might be a way to solve some of the Anchorage problems on their financial end of it. And I also have another idea that I would be willing to bring out if we consider to do that, because I think to make it a wash there's a possible way we could do it to by bringing in, increasing the four school districts that's now at the 35 percent bracket to the 50 percent. And I don't want to put that out there yet until actually he has a chance to discuss the price index. As we go through the price index we might be able to figure out what we could do to help some of the larger school districts with their financial burdens. And then I would make my proposal." REP. B. DAVIS said she did not mind hearing more testimony before addressing her amendments. Number 196 REP. TOOHEY MOVED adoption of the committee substitute (CS) HB 85. CHAIR BUNDE, hearing no objection, declared that the committee had ADOPTED CSHB 85 as a working draft of the bill. Number 203 REP. B. DAVIS said that, while the committee had addressed the TAG issue, she thought it would also address the Alaska School Price Index (ASPI). CHAIR BUNDE answered that the committee would get to that, but was still discussing the TAG issue. He asked Rep. B. Davis whether her CS addressed problems with some school districts being overly generous in defining high percentages of their student populations as TAG students. Number 216 REP. B. DAVIS answered yes, because the CS would cap funding regardless of the percentage of TAG students. It would be up to the local school districts to fund TAG programs above the level funded by the state. Districts with no TAG students would be able to collect the money. CHAIR BUNDE noted that the committee had been heavily lobbied by parents, as well as by teachers of the gifted through their students. He asked if her proposal had drawn a response from those interested parties. Number 230 REP. B. DAVIS said she had spoken to people from various school districts who had said they would like to see TAG remain under special-ed. CHAIR BUNDE asked if those people had agreed with the cap on TAG funding. Number 235 REP. B. DAVIS said that those school districts she had spoken to had agreed with the cap. Number 244 MR.GUILEY said the amendment would set a minimum rate in statute, but not the actual rate. He said because HB 85 allows the DOE to set the revenue weighting factor thorough regulation, it would be necessary for the DOE to suggest a factor and observe a 60-day public comment period. He said the state Board of Education had suggested a revenue weighting factor of 0.012, while the bill said the revenue weighting factor shall not be less than a certain amount. Therefore, he said, the revenue weighting factor could be higher than 0.012 after public hearings. (Rep. Kott arrived at 3:25 p.m.) Number 261 REP. TOOHEY said she hoped people would testify by teleconference on the issue. CHAIR BUNDE declared that he would not close public testimony on the bill until those on teleconference had the opportunity to testify. He then asked the committee to consider the ASPI and invited the school price committee to present a report. Number 275 MR. GUILEY spoke on the ASPI. He referred to a four-page document, entitled "Alaska School Price Index Committee." He said the first two pages described the committee's composition and activities. The third and fourth pages contained the draft ASPI, as compared to the existing area cost differential. He described the different columns on the chart on page 3 and what they contained. Number 311 MR. GUILEY said the DOE considered the document a draft document, as there had been some changes not reviewed by the ASPI committee. He said he intended to bring those changes back to the ASPI committee for final review and discussion before finalizing the index. CHAIR BUNDE commented that it was a lot of information to digest at one time. Number 321 REP. VEZEY remarked that he was glad to see even a draft of the ASPI. He commented that the draft ASPI, as laid out in column, seemed to indicate an increase in the funding formula for each school district. MR. GUILEY answered that in most cases the index did rise. Number 339 REP. VEZEY asked which column contained the most current draft ASPI figures. MR. GUILEY answered that the most current version was in column I. REP. VEZEY observed that it looked like there had been lots of work done to arrive at numbers substantially similar to the existing formula. He also asked why the state was rewarding school districts in which the cost of educating index was higher than the cost of living index in the same areas. He suggested it might be more appropriate to penalize such districts, instead of rewarding incompetence and inefficiency. Number 358 MR. GUILEY said the intent of grouping school districts was to average over time the effect of existing negotiated labor contracts. If they had awarded individual indexes to each district, it would have been rewarding inefficient operations, he said. But, he noted, the comparison of a market-basket of educational expenses over several districts smoothed out differences in contract costs. The ASPI was an attempt to provide state revenue in accord with the cost of providing education, not the cost of living, in the district. REP. VEZEY asked what were the components of the cost of providing education, and why was it felt the state lacked the control over them that allowed deviation from a base cost rate? Number 381 MR. GUILEY replied that many of the costs of education are under a school district's control, but districts inherit previously negotiated contracts and lack the power to overturn those contracts and start over from zero. He said some of the factors measured to derive the area cost differential (ACD) are unrelated to the costs of education. REP. VEZEY observed that the bill codified past contracts so that they would become incorporated in statutes and serve as the basis for all future negotiations. MR. GUILEY said on the average, that was correct. Number 396 REP. VEZEY related an anecdote illustrating the difficulty of knowing when an action taken was the most effective action, and said he was not sure whether the ASPI was the right direction for the state to take. Number 400 REP. OLBERG asked whether column I reflected the ASPI as it existed at that time. MR. GUILEY answered yes. REP. OLBERG asked a clarifying question about the columns. MR. GUILEY said the column identified as "Draft ASPI" reflected a preliminary calculation of the ASPI, based on preliminary information, and had been included to provide those districts which had made calculations based on the preliminary information with a basis for further comparisons. Number 421 REP. OLBERG asked, if the program were implemented, which column would show what figure would apply to school districts? MR. GUILEY answered column Y, with a base factor calculated at 1.0. Number 427 General discussion of the chart and its contents followed, with Mr. Guiley answering various clarifying questions from committee members. Number 451 REP. OLBERG noted that there was a 17 percent difference between the weighting formulas for Tok and Delta Junction school districts, and asked why the ACD was being changed. MR. GUILEY said the ACD dated to 1983 and was based on household, not educational costs. He said the ASPI was an effort to update the funding formula and have it more accurately reflect the costs of providing education. He said the formula was developed by school district officials, private auditors and others. He said that there was a need to update the information used as a basis for state educational funding. Number 474 REP. TOOHEY asked if the salaries used in the market basket were averaged across the state. MR. GUILEY said that the ASPI assigned salaries 65 percent of the weighting for the ASPI market basket. He stated the salary element of the formula was calculated such that 50 percentage points were based on the salaries in the eight school districts in the base, while another 15 percentage points were based on the average of the average paid salaries unique to that district. Number 489 CHAIR BUNDE noted for those listening on teleconference that the committee was discussing the ASPI element of CSHB 85 and that public testimony would soon begin. REP. TOOHEY asked further questions concerning the variances among teacher salaries. MR. GUILEY said while there was up to 30 percent variance in salaries for similarly qualified teachers around the state, the most remote districts did not necessarily have the highest teacher salaries. Number 505 REP. B. DAVIS asked if Mr. Guiley had information on salary ranges. MR. GUILEY said that he had passed out salary schedules at earlier committee meetings on the bill and he did have raw data to support each of the elements in the ASPI. Number 513 CHAIR BUNDE announced he had intended to move forward on HB 85 in that meeting but, given the new information and CS version presented to the committee, he would instead allow discussion on the bill until 4 p.m. and then move on to HB 84. REP. VEZEY asked how the ASPI, if applied that day, would affect the state foundation formula. MR. GUILEY noted that the original bill carried a $12.4 million fiscal note, but that it was likely to reach $15 million over the current foundation formula cost with the updated information. Number 524 REP. VEZEY asked whether there had ever been an effort to make the formula revenue-neutral. MR. GUILEY answered that the ASPI committee, when formed, had been given no direction to create a revenue-neutral index, but one that accurately reflected the cost of providing an education, and ignored the financial impact of that index. Number 528 REP. VEZEY observed that making the index revenue-neutral would require cutting some funding from Anchorage, Fairbanks and Juneau school districts. MR. GUILEY said that the preliminary ASPI index showed that many smaller school districts actually would see their index decrease over time. He said HB 85 contained a hold-harmless clause, which would for three years prevent any decrease in funding on account of the index. Number 541 REP. VEZEY observed that almost all school districts received increases, and that education spending would increase overall under the bill. CHAIR BUNDE asked what effect the ASPI would have on the $61,000 level for one educational funding unit. Number 550 MR. GUILEY answered that the index would apply to all instructional units, and that would be impossible to tie a one point increase in the funding index with any specific dollar amount. Number 556 CHAIR BUNDE asked whether the hold-harmless clause would cost the state an additional $15 million in education funding. MR. GUILEY answered that was correct. Number 526 (Rep. G. Davis arrived at 3:47 p.m.) REP. B. DAVIS noted that HB 85 eliminated the single-site school district issue and the need for supplemental appropriations for single-site school districts. She said that helped HB 85 be a good deal for the state. REP. OLBERG noted that the single-site school districts cost about $2 million to $3 million per year. He said he would like to see a district-by-district breakdown of the effects of the ASPI's $15 million increase in state educational funding. Number 575 CHAIR BUNDE indicated a desire to hear public testimony, after which the committee would consider an amendment to HB 85 from Rep. Gary Davis. Number 575 ELL B. SORENSEN, PRESIDENT, ALASKA ASSOCIATION OF SCHOOL ADMINISTRATORS (AASA), testified in Juneau in support of HB 85. He said the ASPI reflected the actual cost of providing education in a specific school district. He stated he enjoyed working with the DOE and the administration toward fair and equitable education funding. He said it was obviously difficult to understand how Anchorage would fit into the index. He stated that finding out who would benefit most from the situation was almost impossible. He noted that the AASA intended to keep working with the DOE and help ferret out problems in the bill. TAPE 93-58, SIDE B Number 000 CHAIR BUNDE said he assumed that Mr. Sorensen had not seen CSHB 85, and invited him to obtain a copy. Number 007 REP. TOOHEY asked Mr. Sorensen to comment on the ASPI. CHAIR BUNDE invited him to submit his comments in writing. MR. SORENSEN agreed to do so. Number 020 DEB GERMANO testified from Homer in support of HB 85. She asked if there was a CS for HB 85. CHAIR BUNDE said there was, and offered to fax a copy to her. He said it looked like there would be about one week for members of the public to review the CS and then testify on the bill. MS. GERMANO said she would rather reserve her testimony, and asked to be faxed a copy of the CS. Number 048 STEVE GIBSON testified from Homer, saying he would also reserve testimony until he had had a chance to study the CS version of HB 85. He asked if the CS versions of HB 85 in the state House and Senate were very similar. CHAIR BUNDE answered no, they were different. MR. GIBSON said it was a good idea to cap the number of students that could be identified as TAG, but said it was also good to stipulate the formation of TAG programs in each school district. Number 071 DENNIS WETHERELL, A PARENT OF A STUDENT IN THE CENTRALIZED CORRESPONDENCE STUDY PROGRAM, testified from Wasilla and asked to have a copy of CSHB 85 faxed to the Anchorage Legislative Information Office. CHAIR BUNDE noted that the CS would address Mr. Wetherell's concerns that TAG programs not be removed from the special education category. Number 080 MR. WETHERELL declined further testimony pending his study of the CS. Number 085 CLAUDIA WALTON, A PARENT WITH CHILDREN IN THE CENTRALIZED CORRESPONDENCE STUDY (CCS) PROGRAM, testified from Anchorage in support of HB 85, saying she did not have a copy of CSHB 85, and asked whether it addressed the CCS issue. CHAIR BUNDE answered that elements of HB 85 dealing with CCS had not been changed in the CSHB 85. Number 098 MS. WALTON encouraged the committee members to support the provisions of CSHB 85 as they pertained to CCS. She said that while the program had never been recognized as more than an elementary school program, it served 800 students, many of them secondary students, and the program should be recognized as a separate school. She also favored increasing the formula funding of secondary students in CCS to reflect the higher cost of serving the increasing number of secondary school students in the program in the Anchorage area. CHAIR BUNDE asked whether CCS students counted as attending their local school districts. Number 131 MS. WALTON said it depended on the district. She said some school districts, including the Anchorage School District, purchase CCS materials for students enrolled in their own schools. CHAIR BUNDE said he was worried that students might be counted twice for state funding. Number 149 FRANK GARRITY testified from Barrow, declining to testify pending receipt of CSHB 85, but saying he had heard that HB 85 would severely impact the North Slope Borough School District. REP. B. DAVIS asked how the bill would affect the North Slope Borough School District. Number 155 MR. GARRITY responded that he could not answer the question, but said some information faxed to him showed that the district's cost differential would drop to 1.27 from 1.45 under the ASPI. Number 176 REP. B. DAVIS said the only change from HB 85 contained in the CSHB 85 was a phase-in of the TAG provisions and the retention of TAG in the special-ed program. He said the changes he had described had not yet been discussed by the committee, which had just received the index information at the meeting. MR. GARRITY said he would therefore look forward to testifying on the bill in the next week when the committee addressed the index. Number 192 RICHARD M. SWARNER, EXECUTIVE DIRECTOR FOR BUSINESS MANAGEMENT, KENAI PENINSULA BOROUGH SCHOOL DISTRICT, testified from Kenai asking that a copy of CSHB 85 be faxed to his district's office. CHAIR BUNDE repeated that the committee was planning to take no action on the bill that day. He invited Rep. Gary Davis to present his amendment to HB 85, after which the committee would discuss HB 84. Number 199 REP. GARY DAVIS said that the changes that would be effected by his amendment were already incorporated in the CS. CHAIR BUNDE asked for further questions or discussion on CSHB 85 in light of the committee's intention to return to the bill the following week. Hearing none, he closed public testimony on HB 85 and brought HB 84 to the table.