Legislature(1999 - 2000)

03/03/2000 09:01 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
     CS FOR SENATE BILL NO. 105(HES)                                                                                            
     "An Act determining the facilities constituting a                                                                          
     school for purposes of public school funding; and                                                                          
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
Senator  Taylor   stated  that  this   legislation  corrects                                                                    
problems  with  SB  36, legislation  passed  in  a  previous                                                                    
session changing  the foundation funding formula  for public                                                                    
schools.  He pointed  out that  Petersburg barely  qualified                                                                    
for  the  enrollment  requirement  set  out  in  SB  36.  He                                                                    
continued  that  in the  community  of  Wrangell there  were                                                                    
three  funding   units  for  elementary,  middle   and  high                                                                    
schools.  He noted that  because of this, Wrangell would not                                                                    
receive any  significant funding,  but rather  were required                                                                    
to institute  special taxation programs  to make up  for the                                                                    
shortfall.  He added that  Petersburg or Wrangell have never                                                                    
taken  advantage  of  the   previous  school  basic  funding                                                                    
formula.    He  explained   the  characteristics  of  a  new                                                                    
committee  substitute not  presently  before the  committee,                                                                    
which would  provide for  a decline  on the  present funding                                                                    
mechanism at 75 percent, then  to 50 percent, and finally to                                                                    
25 percent.   He asserted  that these funding  percents were                                                                    
created  for   the  purposes  of  bringing   Petersburg  and                                                                    
Wrangell to current levels of necessary allotted monies.                                                                        
                                                                                                                                
Senator Phillips  affirmed that this legislation  would only                                                                    
affect three  communities, these being  Petersburg, Wrangell                                                                    
and Delta Greely.  He  wondered how much each community paid                                                                    
for their schools.                                                                                                              
                                                                                                                                
Senator Taylor  responded that these  communities pay  up to                                                                    
the cap  and above, some of  which; is paid out  of the city                                                                    
coffers.   He  continued  that Wrangell  increased its  real                                                                    
property  taxes by  20 percent,  all of  which was  spent on                                                                    
education.   A discussion ensued between  Senator Taylor and                                                                    
Senator  Phillips regarding  the  non-tax  paying status  of                                                                    
Delta Greely.                                                                                                                   
                                                                                                                                
Senator Wilken gave a historical  overview of school funding                                                                    
for  Petersburg and  Wrangell, as  well as  Delta Greely  as                                                                    
illustration of  the inequities between  tax based  and non-                                                                    
tax  based  communities,  which progressed  into  a  general                                                                    
discussion about  how school  expenses are  funded statewide                                                                    
per   established  formulas.      Senator  Taylor,   Senator                                                                    
Phillips, Senator  Green and  Senator Leman  participated in                                                                    
this discussion.                                                                                                                
                                                                                                                                
Senator  Green referred  to  discussions  from last  session                                                                    
regarding   the   Department    of   Education   and   Early                                                                    
Development's hesitancy  to amend  SB 36, until  the overall                                                                    
effects of this legislation could  be weighed on a statewide                                                                    
basis.                                                                                                                          
                                                                                                                                
Mr.  Jeans responded  that this  is  still the  department's                                                                    
position.  He  noted that the department  does recognize the                                                                    
effects to a school system  that falls below the established                                                                    
formula number.   He  noted that when  a community  has more                                                                    
than 750  students in their  system, this community  has the                                                                    
benefit  of   counting  three  schools,  if   three  schools                                                                    
presently  exist.    He  continued   that  with  a  drop  of                                                                    
students, this community  can only count on  funding for two                                                                    
schools, which can  be a substantial cut.   He remarked that                                                                    
a three-year transition formula  as proposed in this current                                                                    
legislation might  be inappropriate,  but rather  a one-year                                                                    
transition might be in order.                                                                                                   
                                                                                                                                
Senator  Green asked  if the  department  could foresee  any                                                                    
other community falling into this similar situation.                                                                            
                                                                                                                                
Mr.  Jeans responded  that the  two  communities closest  to                                                                    
this cut-off figure  are Petersburg and Delta  Junction.  He                                                                    
then responded  to various questions about  a proposed study                                                                    
regarding cost differentials, which  this study is slated to                                                                    
be completed next year.                                                                                                         
                                                                                                                                
Senator Wilken  referred to the efforts  of two Accountants,                                                                    
who  are presently  trying  to align  the  state's chart  of                                                                    
accounts.                                                                                                                       
                                                                                                                                
Mr.  Jeans  responded  that  in   addition  to  SB  36,  the                                                                    
legislature appropriated  additional resources for  the hire                                                                    
of two  internal auditors who are  compiling comparable data                                                                    
between school  districts.  He  added that  different school                                                                    
districts were accounting for  certain types of expenditures                                                                    
inconsistently with  other school districts.   He summarized                                                                    
that these  efforts were an  attempt to make  these accounts                                                                    
more uniform.                                                                                                                   
                                                                                                                                
DAN BECK,  Greely School Board testified  via teleconference                                                                    
from  Greely.   He  stated  that his  community  was in  the                                                                    
process of creating  a borough.  He noted  that Greely would                                                                    
need help  with funding  their schools once  this transition                                                                    
takes place.  He outlined the  funds that Greely has lost in                                                                    
this past  year because their student  enrollment fell below                                                                    
the cut-off  formula.   He stressed  that unless  Greely can                                                                    
get  some relief,  the community  will  have to  lay off  19                                                                    
teachers  and one  administrator.   He  spoke to  additional                                                                    
shortfalls.                                                                                                                     
                                                                                                                                
                                                                                                                                
Tape: SFC - 00 #45, Side B, 9:49 AM                                                                                             
                                                                                                                                
                                                                                                                                
Mr.  Beck responded  to a  question posed  by Senator  Leman                                                                    
regarding  the  district's  ADM (Average  Daily  Membership)                                                                    
number at  1022 students,  putting them over  the threshold.                                                                    
Mr. Beck noted this number was closer to 891 students.                                                                          
                                                                                                                                
Senator  Phillips asked  what the  timeline  was related  to                                                                    
Greely becoming a borough.                                                                                                      
                                                                                                                                
Mr.  Beck  responded that  the  charter  would be  submitted                                                                    
within six weeks.                                                                                                               
                                                                                                                                
ART GRISWOLD, Borough  Incorporation Committee testified via                                                                    
teleconference   from   Greely  reiterated   this   six-week                                                                    
estimate.  He continued  that after the necessary signatures                                                                    
were collected,  it would be  up to the  Boundary Commission                                                                    
to  set a  date  for a  hearing, and  it  would probably  be                                                                    
within 90 to  120 days after this hearing that  a final vote                                                                    
would take place.                                                                                                               
                                                                                                                                
KAREN   LIGON,   Nome    Public   Schools,   testified   via                                                                    
teleconference  from Nome.   She  stated that  in Nome  they                                                                    
absorb   the  Nome   Youth  Facility,   which  is   a  youth                                                                    
correctional  institution.     She  added  that  educational                                                                    
services  are  provided here  for  a  capacity  of 6  to  12                                                                    
students.  She  spoke about an alternative  high school with                                                                    
a student population that fluctuates  from 25 to 35 students                                                                    
there as  well.   She stressed  that it  is hard  to provide                                                                    
adequate  services  to these  small  schools  when it  is  a                                                                    
requirement to count them as  part of a larger school, which                                                                    
has the highest ADM.                                                                                                            
                                                                                                                                
DEBBIE   COOK,   Chinook   Charter  School   testified   via                                                                    
teleconference  from Fairbanks.    She  stated the  school's                                                                    
concern  with SB  105 dealt  specifically with  section 1.3,                                                                    
which states:                                                                                                                   
               (3) in a community with an ADM of greater                                                                        
     than 450  [750], each facility that  is administered as                                                                  
     a  separate  school shall  be  counted  as one  school,                                                                    
     except  that each  alternative school  with  an ADM  of                                                                    
     less than 200 shall be counted  as a part of the school                                                                    
     in the district with the highest ADM.                                                                                      
                                                                                                                                
She  stated that  this section  continues  to treat  charter                                                                    
schools with  less than 200  students for  funding purposes,                                                                    
as  if the  students are  enrolled  in the  school with  the                                                                    
largest  ADM  in  the  district.   She  asserted  that  this                                                                    
creates an inequity with smaller  schools.  She gave various                                                                    
examples of  how the  Chinook Charter  School lacks  many of                                                                    
the  programs of  these larger  schools and  along with  the                                                                    
established  funding formulas,  this  charter  school has  a                                                                    
harder time meeting their costs.                                                                                                
                                                                                                                                
SCOTT  WHEAT testified  via  teleconference  from Homer  and                                                                    
stated that he supports  this legislation, especially from a                                                                    
rural perspective.                                                                                                              
                                                                                                                                
RICK  HARNESS testified  via  teleconference  from Homer  to                                                                    
support this bill.   He spoke to the  possibility of cutting                                                                    
staff  in  Homer  schools  because  of  funding  shortfalls,                                                                    
something,  which  affects the  whole  community.   He  also                                                                    
stressed  that funding  charter  schools  takes away  monies                                                                    
that could be used in the public school system.                                                                                 
                                                                                                                                
PATRICK  HICKEY,   Kenai  School  District,   testified  via                                                                    
teleconference from  Kenai.  He  addressed the issue  of how                                                                    
schools are  categorized by this legislation.   He suggested                                                                    
that  having  a  charter  school  with  26  students,  while                                                                    
funding  it along  with a  community  of 600  students in  a                                                                    
larger  high school  creates an  inequitable situation.   He                                                                    
concluded that  charter schools should  be treated  like any                                                                    
other.                                                                                                                          
                                                                                                                                
Senator  Green  responded  to Co-Chair  Torgerson's  concern                                                                    
that  the  testimony  was  turning  into  a  charter  school                                                                    
debate.   She pointed out  that this legislation  in earlier                                                                    
versions did make reference to  charter schools and inferred                                                                    
that some  of the  testifiers were  referring to  this older                                                                    
version.                                                                                                                        
                                                                                                                                
ELIZABETH  BACOM,  Petersburg  School  Board  testified  via                                                                    
teleconference  from   Petersburg.    She   highlighted  the                                                                    
negative  fiscal impacts  created  by declining  enrollment,                                                                    
while  using the  two-school formula  as  versus the  three-                                                                    
school  calculations as  was testified  to previously.   She                                                                    
listed  all  those  programs that  the  district  stands  to                                                                    
loose, as  a result and  those that they have  already lost.                                                                    
She also outlined  how Petersburg has had to  shore up their                                                                    
resources to save existing funding.                                                                                             
                                                                                                                                
MIKA   MACH,   Chinook   Charter   School,   testified   via                                                                    
teleconference  from Fairbanks  regarding  the inclusion  of                                                                    
charter schools  into this legislation.   She requested that                                                                    
a benchmark  be included in  section 3 to cover  the Chinook                                                                    
Charter School.                                                                                                                 
                                                                                                                                
CARL ROSE, Executive Director,  Association of Alaska School                                                                    
Boards   stated   that   the   association   supports   this                                                                    
legislation,  although they  are  concerned  that a  present                                                                    
state funding policy exists under  a foundation formula.  He                                                                    
noted the  benchmark change  from 750 to  450 ADM,  his main                                                                    
point  being that  whatever the  benchmark, it  needs to  be                                                                    
consistent from one school district to the next.                                                                                
                                                                                                                                
Senator  Phillips asked  Mr. Rose  to  address the  inequity                                                                    
created by  two tax paying jurisdictions  that are presently                                                                    
requesting  relief,  along  with  another  community,  Delta                                                                    
Greely, a non-paying tax community.                                                                                             
                                                                                                                                
Mr.  Rose responded  that  he does  agree  that an  inequity                                                                    
exists, but  suggested that this issue  be addressed through                                                                    
another  avenue.   A lengthy  discussion ensued  between Mr.                                                                    
Rose,  Art  Griswold  and Senator  Phillips  regarding  this                                                                    
issue.                                                                                                                          
                                                                                                                                
Senator Wilken made a motion  to adopt SB 105, 1-LS06AA\T as                                                                    
the committee substitute.   Hearing no objection,  it was so                                                                    
moved.                                                                                                                          
                                                                                                                                
Co-Chair Torgerson ordered the bill HELD in committee.                                                                          
                                                                                                                                

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