Legislature(1993 - 1994)
02/14/1994 03:00 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 361 - APPROPRIATION: EDUCATION FUNDING FOR FY 95 Number 554 REP. VEZEY asked Chair Bunde to clarify his earlier statements on the funding information on HB 361 and the committee substitute (CS). Number 577 CHAIR BUNDE stated that between the two versions there was a general fund difference of $17 million. Number 583 REP. OLBERG indicated that there were large differences in other funding categories within the two versions. Number 589 CHAIR BUNDE stated that John Bitney from Rep. Larson's office could speak to those issues. He said, as he understood it, the general fund difference between the two versions would be $17 million. Number 600 JOHN BITNEY, Legislative Aid, testified on behalf of Rep. Ron Larson. He stated that the CS would fund education for FY 95 from budget reserve. He said the budget reserve amounts would replace all general funds that fund education programs, resulting with the only general fund amounts being generated by Mental Health Trust Fund. He said that what makes for the confusion is that components from Governor Hickel's budget have been lifted and placed into both versions of the proposal. He further stated that the original bill had just the foundation program in it, at the Governor's level. Within the CS, full funding for the foundation program, for pupil transportation, for school construction debt service, and for single site school districts had been included. Number 638 CHAIR BUNDE asked if that totaled approximately $17 million. Number 637 MR. BITNEY said that a $17 million increase was represented in the funding for the foundation program and pupil transportation above that proposed in HB 361. Number 643 CHAIR BUNDE clarified and said that HB 361 does not include some of the funding that the CS includes, and that the total difference between the two versions, in unrestricted general funds (GF), is $17 million. Number 653 MR. BITNEY said he did not have the exact figures available, but as an approximation, Chair Bunde was correct. Number 667 REP. OLBERG said that the difference in basic foundation formula plus single site schools accounted for the $17 million. Number 690 DOROTHY GARRETT, Teacher, Inlet View School, testified in support of CSHB 361 via teleconference from Anchorage. She felt that the funds in the CS were more sufficient to the needs of teachers and students. She cited the dire need for supplies and teaching materials in the Anchorage school district. She said, due to lack of funds, supplemental texts cannot be purchased for a large number of students who need a different level of learning. She related to the committee that she personally, over the last four years, has spent at least $500 on reading books for those very students. Number 760 CHAIR BUNDE asked where the $500 came from. Number 760 MS. GARRET replied that the funds came from her paycheck. Number 764 REP. TOOHEY asked if the workbooks that Ms. Garret referred to were the type that children filled in. Number 764 MS. GARRET said they were paperback texts that the library did not have. She also added that she had purchased books for other units that are taught at Inlet View School. She explained that she also runs incentive programs where she awards books that she has purchased to students. MS. GARRET stated that children learn best by using tangible aids and she has used objects, games, and other manipulatives for over four years and needs to have those replaced. She said that they were hers, and that meant that she would have to purchase them again. She said there were many other teachers who also subsidized the materials needed in their classrooms. She asserted that individual schools should not have more or less successful students based on teachers' personal financial circumstances. MS. GARRET asked the committee to make education and its funding their number one priority. Number 823 REP. TOOHEY stressed how difficult decision making is when the budget needs to be reduced. She listed the welfare programs, Aid to Dependent Families with Children (AFDC), and public assistance as other needy programs that must be addressed when reducing the budget. She said the decisions are extremely difficult. Number 843 REP. VEZEY asked what school district Ms. Garret was from. Number 843 MS. GARRET answered that she was from the Anchorage school district. Number 846 CHAIR BUNDE indicated that Anchorage is one of the "wealthier" school districts and situations must be more difficult in the poorer districts. Number 863 JOHN HOLST, Superintendent, Sitka School District, testified via teleconference from Sitka in support of CSHB 361. He stated that since the pulp mill closed in Sitka, the town was facing a difficult financial future. He said that HB 361 would cause a decrease in funding for the Sitka school district of approximately $206,000. He estimated the enrollment decline for the upcoming school year to be 130 students and said the staff would be down-sized accordingly and that would cause an additional loss of approximately $525,000. He said the figures totaled a reduction of over $730,000. He mentioned that Sitka was projecting a drop in collections of sales and property tax, and due to the impending financial crisis, the community was expecting not to support the school district, leading to the loss of another $350,000. He said that now the total was approximately $1.5 million of lost funding for the Sitka school district. MR. HOLST said the school district was hoping that the foundation formula would go beyond the $61,000 unit. He felt the economic viability of Sitka's education system would be dismantled if the aforementioned cuts are implemented. Number 932 CHAIR BUNDE, referring to criticisms that public schools are top heavy in administration, asked, if Sitka was to absorb the funding cuts, how would they be reflected administratively and in staffing? Number 939 MR. HOLST replied by saying that Sitka has made substantial administrative and staffing cuts over the last seven years. He felt that Sitka currently has as lean an administrative group as anywhere in the state and is still making adjustments. Mr. Holst said they have experienced savings by bidding out jobs, such as custodial care and food service. He also stated that because Sitka is at the 1.0 area cost differential, the district has undergone another "crunching factor" that other districts throughout the state have not had to deal with. Number 972 CHAIR BUNDE commended Mr. Holst for the efforts Sitka has made. He then asked what the administrative cost per student in the Sitka school district was. Number 980 MR. HOLST said he did not have that figure handy. CHAIR BUNDE urged Mr. Holst to have the figure available for future meetings. Number 990 MR. HOLST said he felt it would be lower than any other district in the state because Sitka has large buildings with single principals, as does Anchorage. Number 998 CHAIR BUNDE said the numbers will probably reflect well on Sitka. He also stated that "in order to achieve the $61,000, you're probably very aware that it will require bipartisan support." He also urged Mr. Holst to look for support throughout the legislature and not only to the HESS Committee. Number 015 JOHN DALGREN, Associate Superintendent, Kenai Peninsula School District, testified via teleconference from Soldotna in support of CSHB 361. He stated that he supported fully funding the foundation unit at the $61,000 level. He explained that since 1987 the CPI for the Kenai Peninsula school district has increased 1.5%, while the CPI in Anchorage increased over 24%. In response to the financial crunch, he stated that the district had become leaner. He said funding is at $11 million and there are 10,000. He felt that if there was a reduction in the foundation unit, the district would not only lose money from the state, but also from the local borough. He expressed concern that transportation would not be fully funded, citing that they already bid out to a bus company and the proration would amount to less than the cost of the existing operation. He said there were no incentives for districts to contain costs, and when efforts are made to save, they are still penalized. Mr. Dalgren felt that education has been in the forefront for budget reductions for too long, and there were no other directions to follow within the education system that could undergo further reductions. Mr. Dalgren stated that to balance the budget, the district might have to lay off 112 teachers, and that was not the type of education system he felt should be provided. Number 140 CHAIR BUNDE said that reducing the funding of education was not a priority of his, but the priority of the general public is to reduce state spending, including education. He urged Mr. Dalgren to lobby his constituents to support and increase the funding level of education. Number 166 REP. G. DAVIS asked if Mr. Dalgren had the increase enrollment numbers from last year to this year. Number 170 MR. DALGREN said that the district was projecting a conservative increase of 2%, going from 9846 to 10,073 students. Number 188 CHAIR BUNDE thanked Mr. Dalgren for his testimony and introduced Wanda Cooksey. TAPE 94-18, SIDE B Number 000 WANDA COOKSEY, Representative, Single Site School District Consortium, testified in Juneau in support of CSHB 361. She stated that the single site school districts represent 21 of 54 districts and that the Single Site Consortium supports the CS. She then offered her testimony time to the people on teleconference from the single site school districts. Number 036 LARRY WIGET, Legislative Liaison, Anchorage School District, testified via teleconference from Anchorage in support of CSHB 361. He stated that he supported full funding for education at the $61,000 level. He said HB 361 would eliminate an additional $5.5 million in funding. He then stated that the Anchorage school district was willing to let the legislature determine how to fund education at the $61,000 unit level. Number 077 CHAIR BUNDE asked Mr. Wiget what efforts have been made to downscale administrative costs and what the administrative cost per student was in the Anchorage school district. Number 090 MR. WIGET stated that he did not have those figures, but $1.5 million has been cut from administration and they were projecting more cuts this year. He indicated that class size was being increased by one student and that he would send Chair Bunde a list of other measures being taken to reduce spending. Number 117 CHAIR BUNDE stressed that there be broad based support for funding education and urged the Anchorage school district to fund its full share with local support. Number 152 MR. WIGET referred to an imaginary pot of money that the school district was thought to have, and stated that it just isn't the case. Number 161 CHAIR BUNDE said it was not his intention to imply that, but his inference was that the public was telling him that people need to be laid off. He further stated that everybody wants the cuts in someone else's backyard, but hoped that the cuts would be made in the appropriate places. Number 195 CARL ROSE, Executive Director, Alaska School Boards, testified in Juneau in support of CSHB 361. He said that funding has been held constant since 1986 and that it has had an impact on the school districts. He explained that last spring at the $61,000 funding level, Anchorage was $20 million in debt with a $300 million budget. He said that Juneau has a $2.5 million deficit. Mr. Rose further stated that funding has not kept pace with the cuts in staffing and administration that most school districts have made. He urged the committee to consider the $61,000 level as the more realistic figure to move forward with. He said single site school districts rely heavily on that appropriation. He said all cities and borough school districts go to their local sources for funding, but the local resources are being impacted also. He strongly urged the committee to realize the severe circumstances that will result from inadequate levels of funding. He reiterated that $61,000 is a more realistic figure, but an increased amount could be justified, all things considered. Number 284 CHAIR BUNDE restated the need for bipartisan support for CSHB 361. It was his feeling that the impact of not fully funding would affect different parts of the state with greater magnitude. He indicated districts where enrollment had increased would suffer disproportionately if not fully funded and so would single site districts. Number 325 MR. ROSE commented that within a week an impact study would be completed that would demonstrate how Governor Hickel's proposed funding would affect school districts. Also, he said the administrative cost per student figures would be available then, too. Number 334 CHAIR BUNDE hoped that the study would help to restore confidence in school districts. Number 345 CAM CARLSON, Concerned Citizen, testified in support of CSHB 361 via teleconference from Fairbanks. She asked if the legislation was going to fund education without considering the rest of the budget. Number 361 CHAIR BUNDE responded that the legislation package considers the entire scope of the budget. Number 384 MS. CARLSON said it was her hope that education would not get top priority before the rest of the budget was considered. She said Alaska spends more on education than perhaps any other state, and she felt the results weren't "red hot." She said Fairbanks ranks on the average in the 50th and 60th percentile in national testing. She said when the pipeline was under construction, buses were being used for three different runs. She explained that even now, with the pipeline completed, the district is still funded for the same pupil transportation. Ms. Carlson said, "we seem to have plenty of money for education. The board here, and I think statewide, has plenty of money to negotiate wages in teachers' unions. They pay sabbatical leave for union presidents, they pay for leave days for the union... If the legislature wants to do something worthwhile, I think they can pass legislation that would mandate that it's illegal to spend taxpayer's money to support the union, in any way, shape, or form." She felt that education should have to justify their funding with higher test scores. She felt that throwing money at education was not the answer. Number 453 CHAIR BUNDE said that education was having to meet the challenge of the budget like every other department. He also said that lower test scores could be the result of a lower quality of raw materials coming into the school districts. Number 468 RUTH EWIG, Concerned Citizen, testified in opposition to CSHB 361 via teleconference from Fairbanks. She was opposed to funding from the constitutional budget reserve at the expense of other areas of need in the state. She said the bill was vague and that administration is top heavy. She felt the funds should be monitored to ensure that the students are the ones who benefit. She stated that the tax paying public should have a line item financing process so to better scrutinize how funds are spent. She questioned if the funds being spent were from the permanent fund. Ms. Ewig felt that spending more money on education was not the answer. Number 520 CHAIR BUNDE assured Ms. Ewig that the funding was not tied to the permanent fund in any way. Number 543 SUE HALL, President, Alaska PTA, testified on CSHB 361 via teleconference from Fairbanks. She urged the legislature to look to the future and the precedence being set in regards to education. She stated that education has been affected by the natural rate of inflation, and the value of the instructional unit has dropped 24% since 1986. She said that even if the instructional unit is fully funded as indicated in CSHB 361, reductions would still have to be made. She explained that over the years student enrollment has continued to increase regardless of depressed oil revenues. She stated that Alaska ranks 46th in the percentage of budget spent on education. In a chart from the Bureau of Statistics it shows that Alaska is 50th because there are three other states that are funded strictly by local funds. She said, proportionately, other states spend much higher percentages of their budget on education. Ms. Hall stated that teachers' salaries cannot be significantly reduced through negotiation and the reductions have been made at the expense of the students. She urged the committee to make students and education their number one priority. Number 648 NANCY MENDENHALL, Concerned Citizen, testified via teleconference from Fairbanks in opposition to CSHB 361. She stated that undeniably oil revenues are dropping and as a result education needs to make cuts like every other area of the budget. She felt it was unrealistic for other departments to sacrifice their funding to alleviate the problems in education. She said that money could improve education to a point, but beyond that point, bureaucracy increases and education suffers. Number 670 CHAIR BUNDE asked if Ms. Mendenhall was opposed to CSHB 361. Number 673 MS. MENDENHALL answered yes. She said there needed to be further reduction in the foundation formula this year. Number 685 CHAIR BUNDE asked Ms. Mendenhall what specific cuts she would recommend. Number 706 MS. MENDENHALL said she felt that funds should be allocated to the school district, and the school board should decide how the money is spent. Number 727 REP. VEZEY asked if Ms. Mendenhall was opposed to HB 361, also. Number 733 MS. MENDENHALL said she was not sure if HB 361 would appropriate more or less funds to education, but she was in favor of reducing the education budget. Number 760 REP. TOOHEY stated that she appreciated how realistic Ms. Mendenhall was and commented that she wished Ms. Mendenhall could sit in on meetings with the committee. Number 768 MS. MENDENHALL commented that only lobbyists can afford to travel to Juneau. Number 784 CHAIR BUNDE said that it only cost .29 cents to send communication to him. MS. MENDENHALL said that it would be better to see the legislators face to face, the way lobbyists do. Number 799 REP. VEZEY questioned if HB 361 would represent a decrease in the foundation formula amount, which actually would be an increase above the 1994 budget. CHAIR BUNDE responded that it was a decrease per student. REP. VEZEY asked if the total appropriation was an increase. Number 811 DUANE GUILEY, Director, Division of Education Finance and Support Services, answered questions on HB 361 and CSHB 361. He stated that the overall appropriation had increased in the area of debt service and food nutrition services. He explained that the foundation program was exactly the same as authorized in 1994 and that the pupil transportation program was a reduction of over $1.5 million. He further stated that the programs that have grown with federal funding and the increase in debt service that has grown has required an increase in the overall appropriation; but the K-12 program for the basic need was 1994 authorized. Number 839 REP. G. DAVIS stated "that it also has the elimination of single site school... $3 million is my understanding." Number 843 MR. GUILEY said it was his understanding that single site appropriation has been funded as a named recipient branch outside of the foundation program. The last two years of funding was awarded to the Department of Education (DOE) through the agency budget. He said that funding was not included in HB 361. Number 858 CLAUDIA DOUGLAS, President, National Education Association/Alaska (NEA/AK), testified in Juneau in support of CSHB 361. She said she understood there was a decrease in revenues and a funding crisis within the state, and that NEA/AK would advocate new sources of revenue in the form of a state tax. She commented that in 1983 Alaska rated second in the nation in terms of pupil/teacher ratio, and ten years later it has fallen to 34th. She said she was gathering statistics on how much money teachers spend personally on their classroom. She felt that funding at full level was an investment in students who will return the investment in the future. She further stated that salaries have not increased comparatively to the early 1980s, and many contracts were being negotiated with minimum or no salary increases. Number 931 CHAIR BUNDE reiterated that support for increased funding for education was not universal within the public or the legislature. He reminded the witness that passage of the legislation required bipartisan support. Number 938 MS. DOUGLAS stated that CSHB 361 was not an increase in spending. She contended that schools in Alaska could not survive if the funding level was not increased in regards to the pupil. Number 946 CHAIR BUNDE said "there are those who are advocating, what you would consider, very Draconian cuts... maybe throwing out the baby with the bath water." Number 952 REP. VEZEY supposed that the state may have to double its revenues to maintain funding at the present level and into the future. Number 974 MIKE WILEY, Member, Kenai Peninsula School District, testified via teleconference from Seward in support of CSHB 361. He said if $1.5 billion was added to the budget, the state would face a similar catastrophe and domino effect that occurred the last time there was a depression in oil revenues. He felt that using the budget reserve fund for education funding was a wise approach and urged expediency. He further stated that the $61,000 unit was not an increase, and if inflation was factored in, it was actually a decrease in funding. He also stated that by cutting food service completely in the school district to balance the budget, it would actually cost Kenai money because of unemployment costs. It was his hope that politics would be taken out of education and that there be no infighting with the legislature. TAPE 94-19, SIDE A Number 000 CHAIR BUNDE contended that education was a very political issue in Juneau. Number 047 DEBORAH SMITH, Executive Director, Alaska Mental Health Board, testified in Juneau in opposition to HB 361 and CSHB 361. She stated for the record that "we do not feel it is appropriate for funding for special education services to come out of the trust, when it is the right of every child in Alaska, regardless of the trust beneficiary status." She indicated that the schools for the handicapped component within the DOE budget has an increase in funding for FY 95 of $426,900. She said it was a cost shifting from the general fund to the trust totalling $126,000 and a $300,000 increase. She said, based on the information given to her from DOE, it is based on the formula allocation for the Special Education Services Agency (SESA). She further stated that the allocation for SESA is 2% of the special education foundation funding or $85 per special education student, or whichever is greater. She stated that "they are increasing their amount coming out of the trust, which we... are in opposition to." Number 123 REP. VEZEY asked if Ms. Smith would like to see the legislature take $8 million out of the funds for education. Number 135 MS. SMITH responded that currently the funds were being taken out of the mental health trust and they should be taken out of the general fund. Number 139 REP. VEZEY said the funds aren't in the general fund and asked again if it was the position of the Mental Health Board to take the funds out of education. MS. SMITH asserted that it was the position of the Mental Health Board that the funds should not come out of the mental health trust. Number 163 CHARLES McKEE, Concerned Citizen, testified via teleconference from Anchorage in opposition to HB 361 and CSHB 361. He stated that he had the right to promote the original treasury seal to fund education. He felt there should be support for his standing. Number 291 CHAIR BUNDE said he felt the problems Mr. McKee was addressing were beyond the scope of the committee and thanked him for his testimony. Number 317 CAROL HEYMAN, President, Anchorage Chamber of Commerce, asked questions pertaining to HB 361 and CSHB 361 via teleconference from Anchorage. She said the Chamber of Commerce had sent two resolutions to the legislature, and one asked the legislature to reduce the budget to the level of the FY 93 budget. The other resolution asked for spending control for state government. She asked if HB 361 would cut spending completely for school transportation. Number 359 CHAIR BUNDE replied that pupil transportation would become local responsibility. Number 360 MS. HEYMAN asked if HB 361 would consolidate single site school districts. Number 372 CHAIR BUNDE answered no, and explained that HB 361 would impose a substantial budget cut to single site schools. Number 392 MS. HEYMAN stated that the Chamber of Commerce was in the process of preparing a list of recommended budget cuts. She said the recommendations indicate that the solutions should be found "in our own backyards." She said she would like to testify at another time with a better knowledge of the proposed CS. Number 439 CHAIR BUNDE said Ms. Heyman would be welcome at anytime. Number 463 REP. NICHOLIA said it was her hope that when the cuts are being made that "you would not look in the backyard of my district." She said she was alarmed by that statement. MS. HEYMAN said that Anchorage was the largest district in the state, but hoped they would be treated fairly. CHAIR BUNDE stated that HB 361 would have a larger per capita cut to educational funding in Anchorage than it would in Rep. Nicholia's district. Seeing no further business before the committee, CHAIR BUNDE ADJOURNED the meeting at 4:50 p.m.