Legislature(2007 - 2008)SENATE FINANCE 532
03/29/2008 10:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB233 | |
| HB 233 | |
| HB373 | |
| HB19 | |
| HB75 | |
| HB338 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 19 | TELECONFERENCED | |
| + | HB 75 | TELECONFERENCED | |
| + | HB 373 | TELECONFERENCED | |
| + | HB 338 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | HB 233 | ||
HOUSE BILL NO. 373
"An Act extending specified public school bond debt
reimbursement; and providing for an effective date."
Co-Chair Hoffman MOVED to ADOPT SCS HB 373, labeled 25-
LS13040/C, Mischel, 3/24/08, as the working document.
Co-Chair Stedman OBJECTED for purposes of discussion.
10:18:07 AM
EDDY JEANS, DIRECTOR, EDUCATION SUPPORT SERVICES, DEPARTMENT
OF EDUCATION AND EARLY DEVELOPMENT, explained that the
Committee Substitute for HB 373 amends AS 14.11.008(b), the
participating share for school districts to address major
maintenance and school construction programs. He informed
the committee that the table was set into statute in 1993.
Since then, property values have increased around the state.
The Alaska Municipal League requested that the state update
the table to reflect increases in property values.
Co-Chair Stedman WITHDREW his OBJECTION.
There being NO further OBJECTION, 25-LS13040/C was adopted.
10:21:02 AM
REPRESENTATIVE KEVIN MEYER, SPONSOR, explained that HB 373
extends the sunset of the current school bond dept
reimbursement program from November 2008, to November 30,
2010. Projects on the Department of Education and Early
Development approved list would still be reimbursed at 70
percent; other projects would be reimbursed at 60 percent.
The State of Alaska's school bond debt reimbursement program
is an important partnership between communities and the
state, where each shares a portion of the cost of school
construction. He underlined that without this assistance
many municipalities would not be able to afford school
construction costs.
Co-Chair Hoffman felt there should be a long-term solution
for what the provision addresses. He emphasized the
importance of urban and rural schools being funded on an
equitable basis.
Representative Meyer agreed with Co-Chair Hoffman.
10:24:33 AM
DAN BOCKHORST, MANAGER, KETCHIKAN GATEWAY BOROUGH testified
via teleconference in support of the bill. He noted that
when the current law was enacted in 1993, it reflected a
rational public policy choice that municipal school
districts with greater fiscal resources should pay a higher
share of local major maintenance costs. He explained that,
since then, inflation has increased at 42 percent over the
past 15 years, and the decline in student enrollment has
increased significantly. Due to these factors, both urban
and rural districts have suffered unintended consequences.
Mr. Bockhorst provided an example: Kluwock has had a six-
fold increase in its major maintenance cost share over the
past 15 years. Initially, Kluwock paid 5 percent of major
maintenance costs. Currently, the local share is at 30
percent. For the past 14 years Ketchikan has had to
shoulder the same 30 percent share that Kluwock now faces.
Ketchikan will still pay major maintenance costs unless the
CS is passed. The increase facing Ketchikan is not due to
an increase in its tax base, it is due to the decline in
student enrollment - more that 16 percent since 1993. If
moderate relief is granted through the CS, local governments
will continue to shoulder a substantial burden: Ketchikan
will still pay $3 million as its share of major maintenance
costs in the upcoming year. Without the CS, the figure will
increase by $500,000.
Mr. Bockhurst urged support of the CS in order to provide
needed relief to both urban and rural districts throughout
Alaska.
10:28:00 AM
Co-Chair Hoffman asked Mr. Jeans to convey the urgency of
passing the legislation this year. Mr. Jeans explained that
the law is to sunset in November of 2008. If the sunset is
not extended now, then the legislature would not be able to
address the issue until the next session in January.
Co-Chair Hoffman asked what the impact to school districts
would be, in terms of construction planning and budgeting,
if the legislation were not passed this session. He further
queried if any school districts had expressed the need for
passage of the bill due to plans to move forward with
specific bond issues. Mr. Jeans reported that the only
district that had contacted him regarding the sunset of the
bill was the Juneau School District. He elaborated that the
Juneau School District intends to take projects before
voters this year. If the legislation is not passed the
district would have waited a year.
10:30:31 AM
In response to Senator Dyson, Mr. Jeans said the reference
made by Mr. Brockhurst has to do with the participating
share under the grant program. Currently, Klawock has
participating shares at 30 percent. With the enactment of
the CS, the participating share would drop to 10 percent.
This has to do with the property value per child.
Senator Dyson asked how many other communities would qualify
at 10 percent. Mr. Jeans clarified that Klawock is the only
community whose share decreases to 10 percent.
Senator Huggins asked if any communities would see a
participating share increase. Mr. Jeans responded that
under the CS the share would only decrease. He further
clarified that the CS does not change current law for the
debt reimbursement program, it only extends it for two
years.
Co-Chair Stedman noted that the enrollment decline is a
significant factor when addressing funding for schools.
10:33:25 AM
In response to Senator Dyson, Representative Meyer said it
is always assumed there will be a state match. The current
law carries through to November 2008. Bonds passed in April
will be covered under the CS. He also responded to an
earlier question regarding the effects of waiting a year to
pass legislation. If action on the provision is postponed,
it will have an effect on the Anchorage election next year,
but has no effect this year.
10:34:03 AM
Co-Chair Hoffman commented that if the CS were to pass,
there would be plenty of time before the voting cycle.
Senator Dyson felt that if the bill passed in this session,
it would substantiate the state commitment to reimburse
school districts. He maintained that with the uncertain
stability of high oil prices, he supports a two or three
year sunset.
SCS HB 373(FIN) was HEARD and HELD in Committee for further
consideration.
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