Legislature(1993 - 1994)
04/01/1993 09:30 AM Senate CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
The Senate Community & Regional Affairs Committee was called
to order by Chairman Randy Phillips at 9:30 a.m.
SENATOR RANDY PHILLIPS introduced SB 62 (PUBLIC SCHOOL
FOUNDATION PROGRAM) as the only order of business. He
explained the meeting was being teleconferenced in a listen-
only mode, and that public testimony would be taken the
following week. He then directed attention to a draft
committee substitute.
Number 040
SENATOR LEMAN moved that CSSB 62(CRA) be adopted for the
purpose of discussion and markup. SENATOR ADAMS objected.
A hand vote was taken with the following result: Senators
Leman, Taylor and Phillips voted "Yea"; Senators Adams and
Zharoff voted "Nay." The Chair stated the CSSB 62(CRA) was
adopted for discussion purposes only.
Number 057
SENATOR RANDY PHILLIPS presented the following overview on
the main components of the proposed committee substitute:
Concerns with the Alaska School Price Index (ASPI) (Deleted
from bill)
The ASPI has a fundamental flaw. One of the purposes given
by the legislature passing HCR 23 in 1992 asking for
rewriting the foundation formula was to encourage schools to
be fiscally responsible. The ASPI does the opposite. The
ASPI is based on the actual costs incurred by school
districts in 1988-89 and 1991-92. This could reward those
school districts that were poorly managed and penalize those
districts that have worked to keep their costs in line.
Concerns with the funding change int he gifted program and
vocational education. (Deleted from bill)
The current law rewards those districts that have programs
for gifted and talented students. The original version of
SB 62 gives gifted and vocational education funding for all
school districts based solely on student population. There
is no incentive for any school to use these funds whether
for a gifted and talented program or for vocational
education. Additional funding for schools should be tied to
the programs that the schools operate.
Local Contribution (Section 1 of CS)
Under the current law, local governments must contribute the
lesser of 4 mills or 35 percent of basic need. All except
three school districts pay 4 mills, three school districts
pay 35 percent of basic need at a mill rate much less than
4. This bill will improve taxpayer equity by requiring
these wealthier districts to make a larger contribution.
Minimum size of funding communities (Section 2 of CS)
While all students are entitled to an education provided by
the state, it is not reasonable to operate schools that are
below a certain size. Currently, schools with as few as
five students are being funded with costs as high as
$122,000 per student. Under this proposal students would
like have the following options: district correspondence;
state correspondence; and state boarding school.
Changing the divisor in the large elementary school formula
(Section 3 of CS)
This change benefits students in all schools with more than
525 elementary students. Currently, the formula recognizes
the economy of scale for larger schools. However, smaller
class sizes for elementary students have been shown to be
important no matter how large the school district is.
Single site funding formula (Section 4 of the CS)
Additional funding for single site school districts has not
been addressed in the formula. Each year, the single site
schools come to the legislature for additional funding.
Some years there has been concern about political
manipulation of funding for these schools. This section
establishes a formula for the additional single site
funding.
Number 138
DUANE GUILEY, School Finance Director, Department of
Education, referring to Section 1 of the committee
substitute, said currently, under the 35 percent requirement
versus the proposed 50 percent requirement, the North Slope
School District, in the past, has been able to meet their 35
percent requirement with as little as four tenths of one
mill local contribution equivalent as compared to the other
districts that must make the required four mill local
contribution. The effect of the change will raise their
equivalent millage requirement although it still does not
approach the four mills.
Turning to Section 2, Mr. Guiley related that the Board of
Education this year approved action through regulation that
would eliminate funding communities that have less than 10
students by the year 1999. This would affect 20 existing
schools statewide. The change in Section 2 to less than 25
students has the potential to affect 71 schools statewide.
Changing the elementary divisor as provided in Section 3
would award an additional unit of funding for each group of
16 students as opposed to the current group of 17 students.
In Section 4, the single site number goes up to an average
daily membership size of 900. It includes additional
districts, and now, rather than having 22 single site
districts, there will be 24 single site districts. The
amendment will also remove any reference to hold harmless.
Number 193
SENATOR TAYLOR noted that he is very concerned about the
committee substitute and that he is going to have a lot of
questions on it.
Number 205
SENATOR ADAMS asked Mr. Guiley if he had a chart showing the
wealth per student throughout the school districts. DUANE
GUILEY acknowledged that he did and said he would provide it
to the committee. SENATOR ADAMS also requested that the
fiscal note be broken out per sections.
Number 220
SENATOR ZHAROFF said he has concerns with Section 1 and if
it meets the disparity test and if the whole bill is in
conformity with the federal regulations as well. He is also
concerned with the elimination of schools with 25 students
or less, which will have a definite impact on a number of
the rural schools. Another concern is changing the divisor
in the large elementary school formula in Section 3 and if
it is also meeting equitable funding for all students in the
state.
Number 250
SENATOR LEMAN said he would like to hear if students'
education would be jeopardized if they have to be on
centralized correspondence.
Number 260
SENATOR SALO asked if by deleting the Alaska School Price
Index it has the effect of returning to the existent formula
in regards to the area cost differential. DUANE GUILEY
acknowledged it would. With the deletion of the section
referring to the Alaska School Price Index, the fiscal note
that the department calculated was based upon the current
area cost differential as it exists in statute.
Responding to Senator Zharoff's concern with Section 1,
which requires the 50 percent local contribution as opposed
to the existing 35 percent, Mr. Guiley said this should not
have any effect on our disparity test, in that the units
generated by these specific schools are eliminated under the
current state law.
Number 298
SENATOR RANDY PHILLIPS invited the committee members to come
up with their recommendations at the next hearing on the
bill.
Number 305
SENATOR ZHAROFF requested that the members be provided with
a breakdown on other sources of funds that are allocated to
the school districts, a breakdown for pupil transportation
and reimbursement for school indebtedness, etc.
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