Legislature(2001 - 2002)

03/19/2001 01:30 PM Senate CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
                SB   1-FOUNDATION FORMULA INCREASE                                                                          
                                                                                                                              
SENATOR WILKEN,  prime sponsor, testified  that this bill  increases                                                            
the base student  allocation for educational funding  from $3,940 to                                                            
$4,085. The  bill recognizes that,  due to inflation, it  costs more                                                            
to operate  a school  today than  it did  when the  base was set  in                                                            
1998. The $145.00 increase  is composed of two components. The first                                                            
is a  .9 percent  increase that  recognizes the  inflation rate  for                                                            
FY01  in  Anchorage,   AK.  The  second   shows  the  13.9   percent                                                            
inflationary loss  of the per student dollar since  FY88. He stated,                                                            
"SB 1 takes  the 13.9 and  divides it by  five and suggests  a five-                                                            
year plan to recoup the  purchasing power of the student dollar that                                                            
has been lost  to inflation since 1988. Multiply $3,940  by 2.78 and                                                            
you have SB 1."                                                                                                                 
                                                                                                                                
SENATOR  WILKEN  commented  that increasingly,  parents  drop  their                                                            
children at school and  expect to have an educated and well-mannered                                                            
child at  the end of  the day.  This costs money  and resources.  As                                                            
performance  standards become a reality,  schools will be  held more                                                            
accountable  for  student  learning.  Additional  classes,  remedial                                                            
opportunities  and  programs  will  make  a  difference  in  student                                                            
performance  but they  will also  have  an impact  on the  financial                                                            
resources of local schools.                                                                                                     
                                                                                                                                
SENATOR WILKEN  maintained that Alaska's children  have the right to                                                            
be taught  by the very best  teachers possible  who are held  to the                                                            
same  performance standards  as  their students.  It  isn't easy  to                                                            
recruit and retain  quality teachers without adequate  funding. This                                                            
is  particularly  problematic   for  schools  that  are  remote  and                                                            
isolated.  Addressing  the teacher  shortage experienced  in  Alaska                                                            
means offering  salaries and  benefits that  are competitive  in the                                                            
professional workforce.  K-12 education is a number one priority for                                                            
Alaska and should be recognized as such in the state budget.                                                                    
                                                                                                                                
SENATOR PHILLIPS  asked for the total  on the fiscal note  for SB 1.                                                            
                                                                                                                                
SENATOR WILKEN said that  if it is added to the 2002 requirement for                                                            
the  foundation formula  it's  approximately  $30 million.  It  it's                                                            
added  to  the  spending  for  the  2001  foundation   formula  it's                                                            
approximately $20 million.                                                                                                      
                                                                                                                                
SENATOR  PHILLIPS said  that  inflation isn't  the  only thing  that                                                            
affects the numbers. It's  also based on a per capita or per student                                                            
enrollment  and that's why there is  $10 million less in  the coming                                                            
fiscal year than the current fiscal year.                                                                                       
                                                                                                                                
SENATOR WILKEN  said the reason that $10.5 million  less is required                                                            
this  year  has  nothing  to do  with  student  enrollment.  It  has                                                            
everything to do with an  $8 million increase in the amount of money                                                            
that organized  Alaska is asked to pay for their education.  This is                                                            
assessed value.  There's also about $2.5 million more  in Public Law                                                            
874 money coming from the federal government.                                                                                   
                                                                                                                                
SENATOR PHILLIPS  said there  is no 10-year  plan or vision  for the                                                            
State of Alaska  and although he doesn't mind doing  "something like                                                            
this," he's disturbed by  the lack of planning. It shows no proof of                                                            
leadership.                                                                                                                     
                                                                                                                                
SENATOR WILKEN shares his  frustration but contends that SB 1 offers                                                            
a five-year plan  for funding K-12 education using  inflation as the                                                            
guiding economic  principle. This legislature cannot  pass a 10-year                                                            
plan  binding  the next  four  legislatures;  it  needs to  work  at                                                            
melding all  60 legislators' plans  on a biannual basis.  It doesn't                                                            
make  sense to  hold  up educational  plans  for  Alaska's  children                                                            
because we don't  have a guiding master plan for the  next 10 years.                                                            
"This a component  of the ten year plan, a five year  plan and a two                                                            
year  plan.  And  the  fact  of the  matter  is,  if  we  shirk  our                                                            
responsibility  to fund K-12 today we surely will  have a difficulty                                                            
ten  years from  now  with increased  costs  due to  a non-educated                                                             
populace.                                                                                                                       
                                                                                                                                
CHAIRMAN TORGERSON  commented that  the Senators were talking  about                                                            
different things.  He doesn't see  SB 1 as a five-year plan  because                                                            
it's continued funding for education.                                                                                           
                                                                                                                                
SENATOR  PHILLIPS  said that  passing  SB  1 would  obligate  future                                                            
legislatures to fund it.  He would like to develop a vision and then                                                            
include  SB 1 as a  part but without  a plan he  doesn't see  how it                                                            
will fit. "It can't go by itself."                                                                                              
                                                                                                                                
SENATOR  WILKEN said  the  bill recognizes  the increased  costs  of                                                            
education, teacher shortages  and increased costs of accountability.                                                            
"This is a one year plan  with four more years of suggestions on how                                                            
to buy back the power of the student dollar."                                                                                   
                                                                                                                                
SENATOR AUSTERMAN  said it's an interesting debate  that goes to the                                                            
heart of the long-range  plan issue. He asked where  the $30 million                                                            
is supposed to come from.                                                                                                       
                                                                                                                                
SENATOR WILKEN  said he is encouraging  the legislature to  fund the                                                            
things that  are important to him  and to the people he represents.                                                             
This is  what the other  59 legislators  are doing  as well.  If the                                                            
money must come from the  savings account then so be it; it's a good                                                            
use for the savings account.  When the savings are gone then another                                                            
plan will  be devised  without taking  money away  from the  working                                                            
people of Alaska.  It's obvious that  the legislature is  capable of                                                            
solving this type  of problem when there is need.  The current issue                                                            
is the  priority placed on  the education  of Alaskan children,  not                                                            
where the money comes from.                                                                                                     
                                                                                                                                
SENATOR AUSTERMAN  agrees that  this is a  good program and  it will                                                            
eventually  force the  development  of a  long-range  plan and  make                                                            
Alaskan  citizens  more  responsible   for  education.  The  savings                                                            
account cushion should be used before Alaskans must pay.                                                                        
                                                                                                                                
Number 226                                                                                                                      
                                                                                                                                
SENATOR KELLY  reminded committee  members that there are  places in                                                            
the budget where there  is no discussion about more or less funding.                                                            
The  Health,  Education,  and  Social  Services  (HESS)  Budget  has                                                            
formulas  attached  to  it  that  increase  every  year.  Costs  are                                                            
increasing and the number  of people signing up for services is also                                                            
going up. This is what  drives most of the budget discussion and yet                                                            
it isn't ever  questioned. It's a  mistake to throw the contingency                                                             
of  a long-range  plan  in  front of  high  priority needs  for  two                                                            
reasons. "They're high  priority needs. We're down here to do just a                                                            
couple  of things  and  one of  them is  to educate  our  children."                                                            
Second, there  is no such thing as a long-range plan.  There is only                                                            
a plan  that is in  front of each  legislature and,  two years  at a                                                            
time, legislators  make decisions  about what is before them  at the                                                            
time. It's  not possible  to devise  a long-range  fiscal plan  that                                                            
will solve future  needs of the state. Decisions about  need will be                                                            
based on the situation at hand.                                                                                                 
                                                                                                                                
SENATOR LINCOLN said she  is pleased to hear discussion about a long                                                            
range fiscal plan as the  Democratic Minority has been urging. She's                                                            
disturbed that the educational  plan is being piecemealed when there                                                            
should be a package.                                                                                                            
                                                                                                                                
She  asked what  affect this  legislation  has on  the supplemental                                                             
funding floor  and what the Governor's  task force has recommended.                                                             
She's in  favor of increasing  the base student  allocation  but she                                                            
wants to know  what else is needed  to educate Alaskan students  and                                                            
get them through the qualifying exams.                                                                                          
                                                                                                                                
CHAIRMAN  TORGERSON  cautioned  that  he  would  allow  latitude  in                                                            
responding  to  the question  but  that the  Governor's  Task  Force                                                            
wasn't before the committee.                                                                                                    
                                                                                                                                
SENATOR WILKEN  said SB 1 has no affect on the supplemental  funding                                                            
floor. He had no comment on the task force.                                                                                     
                                                                                                                                
TOM ANDERSON,  Anchorage School Board  member, testified  in support                                                            
of the concept.  He pointed out that  inflation has increased  about                                                            
30 percent in  the last ten years while state funding  has increased                                                            
just five  percent. Property  assessments  have increased  markedly,                                                            
placing  an  increased  burden  on  property   owners  in  organized                                                            
boroughs to  pay for education. Assessments  have increased  over $8                                                            
million statewide. Ten  years ago the state paid 73.7 percent of the                                                            
budget  while local  taxes paid 23.7  percent. This  year the  state                                                            
will pay 62.5 percent and local tax will pay 3.3 percent.                                                                       
                                                                                                                                
MR.  ANDERSON said  teacher  and principal  salaries  are no  longer                                                            
competitive  causing positions to  be open in the Anchorage  system.                                                            
At the same  time, there is a significant  increase in the  need for                                                            
special education  and English as a second language  (ESL) services.                                                            
These  are  both  expensive  programs  to  implement  and  maintain.                                                            
Finally,  the Learning  Opportunity  Grant that was  given has  been                                                            
helpful but isn't sufficient  to enable them to meet the mandates of                                                            
the  Quality  Schools Initiative.   They are  also  struggling  with                                                            
changing curriculum to  add standards based instructional materials.                                                            
This involves  increased  time and  teacher training.  He noted  the                                                            
board supports making education a priority in any plan.                                                                         
                                                                                                                                
ERNIE HALL, Educational  Funding Task Force member and member of the                                                            
State Board  of Education,  testified  in support  of SB 1.  Senator                                                            
Wilken  covered most  of the issues  addressed by  the funding  task                                                            
force and SB 1 is a vehicle to fund what they have recommended.                                                                 
                                                                                                                                
CHAIRMAN  TORGERSON  asked  what the  recommendation  was  for  this                                                            
year's increase in the foundation formula.                                                                                      
                                                                                                                                
MR. HALL said it was approximately $34 million.                                                                                 
                                                                                                                                
CHAIRMAN TORGERSON said  that the fiscal note for the legislation is                                                            
$28.945  million  and  there   is  a list   of what   each  district                                                            
anticipates it will receive.                                                                                                    
                                                                                                                                
He asked whether there were any questions for Mr. Jeans.                                                                        
                                                                                                                                
SENATOR LINCOLN wondered  where that money will come from to pay for                                                            
the approximately $29 million over the next five years.                                                                         
                                                                                                                                
EDDY JEANS,  Finance  Manager for  the Department  of Education  and                                                            
Early Development, said  the department doesn't know where the money                                                            
will come from  at this time. On the  fiscal note, it's been  costed                                                            
out as a general fund increase.                                                                                                 
                                                                                                                                
SENATOR  LINCOLN  asked how  the  department  came up  with  $28.975                                                            
million, while the task force figure is $34 million.                                                                            
                                                                                                                                
MR. JEANS said  the task force went through a laundry  list of items                                                            
that districts  haven't  received  sufficient funding  for over  the                                                            
last  several years  due  to increased  costs.  When  that list  was                                                            
costed out, it came to $34.6 million.                                                                                           
                                                                                                                                
[Tape malfunction.]                                                                                                             
                                                                                                                              
SENATOR AUSTERMAN  moved SB  1 and fiscal  note from committee  with                                                            
individual recommendations.                                                                                                     
                                                                                                                                
CHAIRMAN  TORGERSON  said  the bill  will  be  heard in  the  Health                                                            
Education and  Social Services (HESS) committee but  it is primarily                                                            
a finance bill. He asked whether there were objections.                                                                         
                                                                                                                                
SENATOR PHILLIPS  objected because  there is no vision or  long term                                                            
plan  in place  and he  feels  that is  necessary  before any  large                                                            
appropriations  are made. He believes policy could  be set this year                                                            
to be followed by future legislatures.                                                                                          
                                                                                                                                
CHAIRMAN  TORGERSON  said  planning  is  necessary  but educational                                                             
funding   shouldn't  be  held   up  until   a  long-range   plan  is                                                            
implemented. He supports moving the bill.                                                                                       
                                                                                                                                
SENATOR LINCOLN  said she, too, is concerned about  the lack of long                                                            
range plans but education  is a top priority for the state and those                                                            
needs must be  addressed regardless. It is her hope  that the Senate                                                            
HESS Committee will delve into the issue further.                                                                               
                                                                                                                                
SENATOR  KELLY asked  when the  minority was  going  to put out  its                                                            
plan.                                                                                                                           
                                                                                                                                
SENATOR  LINCOLN said  it has been  discussed in  open caucus  every                                                            
year.                                                                                                                           
                                                                                                                                
CHAIRMAN TORGERSON  said there was objection to moving  the bill and                                                            
asked  for a  roll  call. Senators  Lincoln,  Austerman,  Kelly  and                                                            
Chairman  Torgerson voted  yea and Senator  Phillips voted  nay. The                                                            
motion to move the bill passed four to one.                                                                                     

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