Legislature(1997 - 1998)
03/19/1997 09:05 AM Senate HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 36 PUBLIC SCHOOL FUNDING
SB 85 PUBLIC SCHOOL FUNDING/CHILD CARE GRANTS
Number 225
CHAIRMAN WILKEN introduced SB 36 and SB 85 as the next order of
business before the committee.
COMMISSIONER SHIRLEY HOLLOWAY , Department of Education, noted that
many present have been part of the numerous efforts to rewrite the
formula. Commissioner Holloway said that Deputy Commissioner Cross
would inform the committee of what the department views as
strengths and areas of concern with the CS.
RICK CROSS , Deputy Commissioner of the Department of Education,
identified the following areas as strengths of the bill:
Allocating money on a per student basis.
The 20 percent indicator for funding special needs students.
Separating the funding for intensive needs students.
The minimum school size at 10 students.
Addressing single site schools within the formula.
The expansion of the area cost differential study.
Assigning area cost differentials to funding communities.
The elimination of considering impact aid.
Mr. Cross said that there are four areas of significant difference
between SB 85 and CSSB 36(HES). Each of these four areas will
shift money from districts with little or no ability to provide
funding to those districts with the ability to provide funding.
The first area of difference is the required local effort. Under
SB 85 the required local effort is maintained at the current 4
mills. Under CSSB 36(HES), the required local effort is dropped to
3 mills. This drop decreases the size of funding school districts
that are allowed from the required local sources. If the pie
remains the same as Mr. Cross believed to be the intent of CSSB
36(HES), then the local portion is smaller and therefore the
state's share is larger. If the state's share is kept constant,
then money will be shifted from those districts without the ability
to pay, REAAs, to those districts with the ability to pay.
Secondly, SB 85 contains a supplemental equalization factor.
Supplemental equalization is the ratio of a district's wealth to a
statewide average which is inversely proportional to the amount of
money the district receives from the state. The wealthier a
district is, the less that district receives from the state. This
factor would compensate poor districts. The third area of
difference is transportation. CSSB 36(HES) keeps the
transportation factor outside the formula as under the current
formula. Transportation is the only area in education which has
been compensated for inflation. As written, the transportation
regulations and statutes provide that as the cost of providing
education increases the compensation to districts that have
transportation programs increases. Mr. Cross said that was not
true for the foundation formula. Those districts with
transportation programs have received an inflationary increase, but
those districts without a significant transportation program have
not which would be continued under CSSB 36(HES). Mr. Cross noted
that those districts with transportation programs tend to be the
wealthier districts with the ability to pay. Therefore, this is a
third mechanism which would shift funding from poorer districts to
wealthier districts.
Number 341
The fourth difference is the taxation. Mr. Cross said that he
would be discussing the impact of taxing REAAs. Currently, the
REAA pie has only one piece, state aid. Federal aid is ignored
under SB 85 and CSSB 36(HES). Under CSSB 36(HES), there would be
a method of taxation requiring the REAA to provide the equivalent
of a minimum local effort. Therefore the REAA's pie has a state
and a local piece. Mr. Cross understood that CSSB 36(HES) would
leave the state funding constant which would mean that the REAA
local piece would be placed in the pot and be redistributed. This
is the fourth manner in which dollars would be shifted from poorer
districts to those districts with the capacity to pay.
Mr. Cross did not believe there had been any discussion allowing
REAAs to have excess capacity. The purpose of the taxation is to
provide for the REAA's local effort and supplant state effort. The
REAA would not be able to generate additional funds beyond the
required minimum local effort as all organized boroughs are allowed
and under CSSB 36(HES) without limit. Currently, the minimum
required local effort is 4 mills. On a statewide basis, the
organized boroughs are contributing to education on average over 7
mills. There is significant additional effort provided in areas
where people have the capacity to pay which the method of taxation
under CSSB 36(HES) would not provide to REAAs. In conclusion, Mr.
Cross emphasized that the impact of the four mechanisms he
discussed is excessive and would not fairly distribute dollars to
districts.
Number 387
COMMISSIONER HOLLOWAY discussed the incentive level of additional
funds for those schools who try to achieve the Quality School
Initiatives under SB 85. The Quality School Initiatives has the
following four components: high academic standards for students as
well as a mechanism to assess those standards, high professional
standards from an evaluation and licensure perspective, networking
between the school, the community and other agencies, and school
excellence standards driving the new accreditation system.
Commissioner Holloway emphasized the need to stop giving dollars to
districts without the expectation of an increase in student
learning. Across the nation, struggles to improve the quality of
schools are occurring. Commissioner Holloway informed the
committee that she had just returned from the Chiefs States School
Officers meetings where one of the major topics was regarding
improving schools and fixing the failing schools. No matter the
political affiliation, those at the meeting agreed that high
learning standards and assessing those standards must happen.
Commissioner Holloway urged the committee to include in any
foundation formula, core learnings and a mechanism to assess that
learning. Everyone has an obligation to ensure that every student
leaves the system with the skill and knowledge to make choices
about their lives. Commissioner Holloway quoted statute that
supported this obligation. Unless the expectation is tied to the
funding, that expectation will not be achieved.
Number 433
SENATOR WARD said that he had not heard from anyone that supported
SB 85. COMMISSIONER HOLLOWAY did not believe that anyone would
support a bill in which his/her school district is not perceived as
a winner. Historically, that has been the problem with any
foundation formula. Many would like to maintain the current
formula and request more dollars. Commissioner Holloway was
frustrated that no support could be garnered even for a proposal
that adds money to the foundation formula.
SENATOR WARD understood Mr. Cross' comments to mean that CSSB
36(HES) attacks the rural or poor in favor of the rich portions of
the state. Does the current formula treat everyone fairly? RICK
CROSS explained that currently, there are areas that do not have
the capacity to generate revenue while other areas have that
capacity. Until that is changed, that must be accepted when
developing a foundation formula. CSSB 36(HES) has four powerful
mechanisms which shift money from those areas without the ability
to generate revenue under the current laws to areas that do. The
compounding of those four mechanisms will have a marked and
dramatic effect. With regards to the lack of support for SB 85,
Mr. Cross said that some had stated support of SB 85 to him. He
credited the Governor and the committee with accepting that the
current formula cannot continue. Mr. Cross offered to work with
the committee.
SENATOR WARD reiterated that he had not found anyone that supported
SB 85. If there is something out of balance, why was it not fixed
before. Senator Ward suggested that the department submit
recommended changes to the CS.
Number 501
CHAIRMAN WILKEN believed that the initiative was Level III. If
this type of initiative is necessary, why imbed such an initiative
in a yearly entitlement where it would be lost. Chairman Wilken
asked if it would be better to take the concept of the Quality
Schools Initiative outside the foundation, review how it works on
a test basis. If it improves some schools, then the initiative
could be brought back.
COMMISSIONER HOLLOWAY stated that the connection between the money
provided and the expectations of the school should be reviewed.
Commissioner Holloway looked forward to future conversations with
the committee regarding that issue.
CHAIRMAN WILKEN believed that Level III was a variable that did not
add to the current goal. Chairman Wilken requested that Mr. Cross
explain the transportation mechanism sometime. Chairman Wilken
asked Mr. Cross if he meant that if the four components are left
untouched, there is concern that the educational opportunity would
be diminished for some in different regions of the state. RICK
CROSS agreed that was his concern. When there are multiple factors
that do the same thing within a complicated system, compounding
occurs and a greater impact results. Mr. Cross believed that to be
the case.
COMMISSIONER HOLLOWAY mentioned that during the shift to
unorganized boroughs, the Legislature committed to being the REAA's
borough assembly. That commitment has not been upheld.
SENATOR LEMAN noted that Mr. Cross said that the current formula is
inequitable, yet the attempts to create greater equity as Mr. Cross
says creates shifts in the same direction. Senator Leman said that
Mr. Cross may be right that the correction may be occurring in one
direction, but suggested that review of the current situation and
the end result is necessary. The corrections are fairly small.
For example, Hydaburg receives $8,400 per student per year,
Anchorage receives $4,000 and Ketchikan receives $2,900. Those
numbers still illustrate the inequity in distribution, but not by
taking from the poor and giving to the rich. If a correction is
applied, whoever wins supports the correction while whoever losses
complains. For that reason, there has been no significant change
in the formula in the past.
RICK CROSS realized the need to correct, however there may be a
greater level of correction occurring than anticipated due to
multiple factors with the same effect. As the formula ages, the
correction may be more than anticipated. SENATOR LEMAN agreed that
Mr. Cross may be correct and said that he wanted to review that.
TAPE 97-28, SIDE B
Number 586
ROBERT HERRON , President of the Lower Kuskokwim School Board,
believed that all testimony has echoed the same basic message
voters last Fall supported: take care of education. Mr. Herron
said that the ground rules of simplicity, equity, and timing
encompassed in CSSB 36(HES) are sound. However, the fourth ground
rule of no new dollars is flawed. Mr. Herron stated that no new
dollars will not work.
PATRICK DOYLE , Superintendent of the Copper River School District,
informed the committee of the seven communities with schools in the
district which serve a total of 600 students. Two of the schools
are one room schools. Additionally, a correspondence school is
operated with approximately 170 students of which over 100 are from
outside the borders of the Copper River district. Mr. Doyle stated
that over the past 15 years, the Copper River district has
undertaken every possible conservation measure to reduce the costs
of operation without affecting the educational opportunities of its
students. Staff was asked to do more and accept less. The staff
has given up many of the things that most teachers take for
granted. The Copper River district operates its extra-curricular
activities with volunteers. In spite of all the obstacles, the
students in the Copper River School District perform among the best
in the state and continue on to high levels of success.
The latest reverse "Robin Hood" strategies of the Legislature may
deliver the proverbial straw that breaks the back of the Copper
River School District. The school districts of Alaska have been
reduced to competing with one another for a pool of dollars that is
too small to meet the educational needs of the students of Alaska.
Mr. Doyle indicated opposition to the concepts of CSSB 36(HES).
What is the equity in shifting inadequate financial support from
one group to another? Where is the accountability from those who
provide the funding to produce quality education? Mr. Doyle noted
that he would forward his comments to the committee.
Number 513
ROBERT MCCLORY , parent and counselor in Ketchikan, did not believe
that his testimony was significantly different than others, but he
felt compelled to share his thoughts with the committee. He
discussed the impacts of the pulp mill's closure, particularly the
sizable cuts to the schools. Mr. McClory mentioned the hold
harmless clause and urged the committee to make the Educational
Endowment Fund a reality. Mr. McClory informed the committee of
the following statistics found in the Educational Background &
Economic Status of the Spring of 1990. Those with a degree beyond
high school on average earn $2,231 per month as compared to $1,077
for those with a high school diploma. High school dropouts on
average earn $492 per month. Doctoral degrees boost earnings to
$3,855 per month and those with special degrees earn about $5,000
per month. Mr. McClory urged the committee to show students that
just as politics can negatively impact the job market, so too can
the leaders positively shape the future.
TAMMY MORRIS , parent in Ketchikan, informed the committee that she
and her family had moved to Ketchikan from Fairbanks one and-a-half
years ago. Ms. Morris noted that she had visited the schools in
Ketchikan to determine whether the move would be good for her
children. However there was a flaw in the planning, Ms. Morris did
not consider inquiring about the funding status of Ketchikan
schools. Only after relocating, when Ms. Morris' children began
attending the Ketchikan schools did she realize there was a
problem. The schools in Ketchikan were not equal to those in
Fairbanks. Ms. Morris informed the committee that Ketchikan
schools do not have a nurse while Fairbanks schools do. Ketchikan
students only receive one half hour of music each week. Ms. Morris
noted the lack of physical education and current learning materials
in Ketchikan. Ketchikan elementary schools do not receive any
counseling services while Fairbanks schools do. One librarian in
Ketchikan divides her time among four elementary schools while each
Fairbanks school has a librarian. If funding continues in the same
manner, the list will be longer. Ms. Morris was ashamed that there
is adequate money in Alaska, but not all Alaskan children have
equal funding for education. The Ketchikan district has been
supporting the school district with as much as allowed, the
difference can only be made by the state.
DIANE GUBATAYAO , parent and Ketchikan Gateway School Board Member,
informed the committee of the January 1997 Education Week which
grades Alaska with a D+ in equity and an F on allocation. With
regards to the ties between quality education and teacher funding
and higher standards, Ms. Gubatayao asked if there have been
studies that show flat funding in education lead to a decline in
education. She mentioned the increase in oil prices and permanent
fund dividends. In conclusion, Ms. Gubatayao said that she was
looking for someone to realize that funding is inequitable.
Number 415
MIKE MURPHY , Chairman of the Nome School Board, stated that none of
the proposals solve the issues of accountability, equity, fairness,
and simplicity. Mr. Murphy suggested that schools be funded in a
two tier system. The operations and maintenance of the schools
should be funded first and then education. Depending upon a
schools location in Alaska, the cost of operation is different.
For example, if $5,000 per student is received for school A and it
costs $1,000 per student to maintain school A while school B only
needs $500 to operate and maintain school B, then school B is able
to spend $500 more on education. That is not fair or equitable.
If costs for operation and maintenance are taken care of statewide,
that would be fair because those are fixed costs. Mr. Murphy
proposed that an average of operations and maintenance costs be
taken from the past five years in order to establish the state's
share. However, the state must be willing to fund increases or
decreases as they occur. Also incentives should be offered to
those school districts that work to lower costs. If a district
saves $50,000 by reducing energy costs, the state could give the
district a percentage of the savings.
Now that operations and maintenance costs have been funded,
education can be funded. Mr. Murphy pointed out that several
problems in the current proposals will disappear once the cost of
operations and maintenance are dealt with. First, the dollars for
education become more equitable and fair because education is being
funded alone. Second, the area cost differential battle becomes
smaller. The figures are no longer skewed for the high cost of
operation and maintenance in rural Alaska. The cost of education
is fairly average statewide when comparing teacher's salaries. Mr.
Murphy did acknowledge differences in the cost of freight. Mr.
Murphy stressed that education becomes more accountable when funded
alone. Mr. Murphy also mentioned that the foundation formula has
not kept up with inflation.
DAVID STONE , testifying from Point Hope, informed the committee of
Resolution 97-13 which requests $10 million for annual educational
support for the North Slope Borough School District. This amount
would not even pay for operating two of the larger schools in the
district. Mr. Stone opposed any reduction to the already
inadequate educational funding from the State of Alaska. He also
opposed any legislation changing the foundation formula such that
the North Slope Borough would be required to provide financial
support to the rest of the state. The City Council of Point Hope
is opposed to any action by the Legislature that would reduce or
redistribute the current foundation funding of the North Slope
Borough. The City Council of Point Hope supported the current
foundation funding formula. Mr. Stone said that any decrease in
funds would be devastating, especially in the Point Hope area. Mr.
Stone noted the air travel necessary in the North Slope.
CHAIRMAN WILKEN commented that the students from the North Slope
did a great job testifying before the committee last week.
Number 325
KIM FRANKSON , Parent and School Advisory Council member from Point
Hope, discussed the impacts that would result with the loss of
funding to the North Slope. The loss in funding would result in
the loss of services, such as access to libraries, to the students
and residents of the North Slope. Ms. Frankson indicated that the
loss of funding could result in an increase in the welfare, social
service, and unemployment rolls. Ms. Frankson pointed out that
people can lose their jobs as a result of the proposals before the
committee.
CHAIRMAN WILKEN inquired as to the number of people wanting to
testify in Point Hope. After discovering that four or five more
desired to testify, Chairman Wilken invited those folks to fax
their testimony or have one person speak for those remaining.
OLIVER LEAVITT , North Slope Borough Assembly member, noted that the
committee had the full text of his testimony. The North Slope has
been painted into a corner. The people of the North Slope are
opposed to being zeroed out. Mr. Leavitt noted that the Mayor and
the Assembly members believed that the foundation funding proposals
are unlawful under the Alaska State Constitution as well as federal
laws. Mr. Leavitt quoted Article VII, Section 1 of the Alaska
State Constitution, the public school provision, which does not
permit the Legislature or the state to arbitrarily deny the school
children of the North Slope any and all state aid for education.
Most of the state education budget is produced by taxes and royalty
on the North Slope oil. Although the Inupiat Eskimo people opposed
the North Slope oil development in the 1960s, an informal
accommodation was reached between the residents of the North Slope,
the oil industry and the state. Mr. Leavitt stressed that now a
major effort to deny any state education benefits to the residents
of the North Slope is underway. This is mean spirited, short
sighted, harmful to our children, and contrary to the state's long
term economic interests. Mr Leavitt contended that this foundation
formula effort is diverting the borough's scarce resources from
projects that could generate revenue for the state, the borough,
and for the children. In conclusion, Mr. Leavitt emphasized that
the quality of education of the children of the North Slope will be
protected. Other local funding sources for North Slope schools
will have to be found if K-12 education funds are eliminated. Mr.
Leavitt identified the following options if state aid is lost:
raising the millage rate from 18.5 to 20 mills, imposing annual
regulatory and license fees on new energy projects, and increasing
other tax and license fees on the oil industry. Mr. Leavitt
requested that the committee work with the borough on this issue.
CHAIRMAN WILKEN noted that Barrow had just joined the meeting via
teleconference. He asked that those wishing to testify fax their
testimony because there would not be time today to hear from
Barrow. Chairman Wilken asked if Point Hope had chosen a speaker.
Number 195
CAROLINE CANNON , Mayor of Point Hope, opposed any changes to the
current foundation formula in the North Slope School District.
Mayor Cannon discussed the community uses of the school facilities
and the high cost of living in the North Slope. Mayor Cannon
identified adequate funding by the state as the problem. Alaska
has a constitutional responsibility to provide adequate funding for
all. Mayor Cannon also pointed out that this proposal may be
unconstitutional because it may discriminate against a community
that is 95 percent minority.
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