Legislature(1993 - 1994)

04/06/1993 03:00 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                      
  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                                                                   
  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                      
  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                          
  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                             
  Number 421                                                                   
  REP. OLBERG asked, if the program were implemented, which                    
  column would show what figure would apply to school                          
  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                  
  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                        
  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                      
  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                                                                   
  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                                                                   
  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                                                                   
  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                 
  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                    
  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                   
  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                                                                   
  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.                           

Document Name Date/Time Subjects