Legislature(2003 - 2004)

03/29/2004 03:30 PM Senate RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
              SJR 31-FEDERAL FUNDING FOR EDUCATION                                                                          
                                                                                                                              
VICE CHAIR  THOMAS WAGONER called  the Senate  Resources Standing                                                             
Committee meeting  to order  at 3:30  p.m. Present  were Senators                                                               
Kim Elton, Fred Dyson, Ben  Stevens, Ralph Seekins and Vice Chair                                                               
Thomas Wagoner.  The first order  of business to come  before the                                                               
committee was SJR 31.                                                                                                           
                                                                                                                                
SENATOR  GENE THERRIAULT,  sponsor, said  the statistics  used in                                                               
this  resolution were  based on  the  Utah Legislative  Council's                                                               
fiscal office statistics and he  would be referencing a number of                                                               
charts during his comments, which follow.                                                                                       
                                                                                                                                
     SJR 31 is related to  urging the United States Congress                                                                    
     to compensate  the State  of Alaska  for the  effect of                                                                    
     federal land  ownership on the state's  ability to fund                                                                    
     public  education.   This  legislation  stems   from  a                                                                    
     resolution  adopted in  July of  2002 by  the Executive                                                                    
     Committee  of  the  Council of  State  Governments-West                                                                    
     (CSG-WEST)  urging  its  membership  of  13  states  to                                                                    
     support  and  pass  joint  resolutions  expressing  how                                                                    
     federal land ownership  hinders western states' ability                                                                    
     to  fund  education.  Chairman   Ogan  and  myself  are                                                                    
     members of that committee.                                                                                                 
                                                                                                                                
     The  CS before  you had  one  change that  was made  in                                                                    
     State  Affairs and  that was  adding another  "whereas"                                                                    
     paragraph  to   page  2,  line  27,   which  ties  this                                                                    
     resolution to  the overall efforts of  CSG-WEST and the                                                                    
     other 12  member states. Since  this effort  began, all                                                                    
     13 states  have introduced similar resolutions  and all                                                                    
     but four - California,  Washington, Colorado and Alaska                                                                    
     - have  passed them. This  initiative is the  result of                                                                    
     research and  preparation by the  legislature [indisc.}                                                                    
     of the State of Utah....                                                                                                   
                                                                                                                                
     The  Western  Governors'  Association  (WGA)  has  also                                                                    
     endorsed this  resolution, which has been  termed APPLE                                                                    
     from  the Action  Plan for  Public Land  and Education.                                                                    
     Western  states,  as a  group,  are  falling behind  in                                                                    
     education funding when measured  in growth of real per-                                                                    
     pupil expenditures  during the  period of 1979  - 1998.                                                                    
     Eleven of 12 of the  states with the lowest real growth                                                                    
     in  pupil expenditure  are western  states. The  growth                                                                    
     rate of rural per-pupil  expenditures in the 13 western                                                                    
     states  is  less  than  half -  28  percent  versus  57                                                                    
     percent  - of  that, in  the 37  other states.  Look at                                                                    
     graph 1.  On average,  enrollment in western  states is                                                                    
     projected  to increase  dramatically  while the  growth                                                                    
     rates  in   other  states  is  projected   to  actually                                                                    
     decrease (graphs 2 and 3)....                                                                                              
                                                                                                                                
     In  western states  the  state and  local  taxes, as  a                                                                    
     percentage of  personal income, are  as high  or higher                                                                    
     than  other  states  (graphs  4  and  5).  In  1998-99,                                                                    
     western  states had  11.1 percent  versus 10.9  percent                                                                    
     for the  eastern states. In western  states, commitment                                                                    
     to education  as a  percentage of  the state  budget is                                                                    
     equal to  that of other  states. In year  2000, western                                                                    
     states'  contribution  was  32.6  percent  versus  32.7                                                                    
     percent for  the eastern states. (That  is a percentage                                                                    
     of total funds (illustrations 6 and 7).                                                                                    
                                                                                                                                
     The problem  lies with the  federal government  and the                                                                    
     enormous amount of  land it owns in  western states. If                                                                    
     an  imaginary  line  was  drawn  from  Montana  to  New                                                                    
     Mexico, no  state east  of that line  has more  than 14                                                                    
     percent of  its land  owned by the  federal government.                                                                    
     No state west of that line  has less than 27 percent of                                                                    
     their  land federally  owned -  with  the exception  of                                                                    
     Hawaii. Four  western states have more  than 62 percent                                                                    
     of their  land federally-owned. Alaska is  one of those                                                                    
     - Idaho, Nevada and Utah  (graphs 8 through 11). Number                                                                    
     8 shows that  if you draw that imaginary  line north to                                                                    
     south, those states  that are to the west  are the ones                                                                    
     that have the high percentage of federal ownership....                                                                     
                                                                                                                                
     The primary  ways that  federal land  ownership impacts                                                                    
     funding  of  education  in western  states  is  through                                                                    
     enabling acts  and property  taxes. Most  enabling acts                                                                    
     for  western states  including Alaska  promise to  give                                                                    
     the state  five percent of  the proceeds from  the sale                                                                    
     of federal  land for the  benefit of  public education.                                                                    
     In 1977, the federal  government abandoned its original                                                                    
     policy to dispose of public  lands depriving the states                                                                    
     of public  education funding estimated  to be  over $14                                                                    
     billion.  This  resolution   does  not  recommend  that                                                                    
     federally owned lands be sold,  only that the states be                                                                    
     compensated  as promised.  States  are  not allowed  to                                                                    
     assess property tax on  federal lands impacting western                                                                    
     states in the  amount of over $4  billion annually. The                                                                    
     federal  government does  provide  payment  in lieu  of                                                                    
     taxes -  PILT money - as  we know, and we  receive some                                                                    
     PILT money  here in the  State of Alaska,  since states                                                                    
     cannot  tax  federal  lands. But  the  amount  of  PILT                                                                    
     payments to  states in 2001  was only 4 percent  of the                                                                    
     annual property tax revenue lost by western states.                                                                        
                                                                                                                                
     This  resolution   proposes  to,  number   one,  create                                                                    
     legislative awareness; two,  educate the public; three,                                                                    
     build a  western states  coalition; and  four, petition                                                                    
     Congress to compensate western  states. In summary, the                                                                    
     western states are financially  harmed in a significant                                                                    
     way  by  the  amount  of federal  land  ownership.  The                                                                    
     conclusion  is  that  federal  land  ownership  hinders                                                                    
     western states' ability to fund public education.                                                                          
                                                                                                                                
     That brings  us to the  question of what is  next. CSG-                                                                    
     WEST   has  formed   the   APPLE  initiative   steering                                                                    
     committee, which  is chaired  by Speaker  Marty Stevens                                                                    
     with the Utah House of  Representatives and I am also a                                                                    
     member,  as President  of the  Alaska  State Senate  to                                                                    
     that  steering committee.  The steering  committee will                                                                    
     work  like a  strategic planning  group who  will press                                                                    
     the  case  in Congress  and  the  judiciary. The  first                                                                    
     meeting of the  steering committee will be  in the CSG-                                                                    
     WEST annual meeting that is  scheduled to take place in                                                                    
     Anchorage this fall.                                                                                                       
                                                                                                                                
SENATOR KIM  ELTON said  the whereas clauses  all talk  about the                                                               
issue for western  states including Alaska, but  the resolve just                                                               
urges Congress to  appropriate just compensation to  the State of                                                               
Alaska only with copies sent  to our congressional delegation. He                                                               
asked why just  compensation for the other 12  states couldn't be                                                               
included.                                                                                                                       
                                                                                                                                
SENATOR THERRIAULT  replied that he  wasn't sure, but  that would                                                               
be  a  good  question  for Brian  Alread,  the  Utah  Legislative                                                               
research staff person who worked on this resolution.                                                                            
                                                                                                                                
MR.  BRIAN   ALREAD,  Office   of  Legislative   Research,  Utah,                                                               
responded  that  there is  no  official  directive limiting  this                                                               
resolution to the various states.                                                                                               
                                                                                                                                
     I think it's simply a  matter of each state identifying                                                                    
     the issue in their state  and becoming part of a larger                                                                    
     coalition....I don't  think there's  any reason  to not                                                                    
     expand that language if you chose to do so.                                                                                
                                                                                                                                
SENATOR THERRIAULT  pointed out that specific  language was added                                                               
on page 2, lines 27 -  30, about other states' efforts in passing                                                               
the joint resolution on their  individual state, but he felt this                                                               
resolve could be opened to allow  the State of Alaska to advocate                                                               
on behalf of the entire group.                                                                                                  
                                                                                                                                
SENATOR  RALPH  SEEKINS  noted  that Alaska  is  unique  in  that                                                               
another 47  million acres have  been withdrawn from the  tax base                                                               
by federal fiat, even though  they are private lands. He wondered                                                               
why they  wouldn't ask the  federal government to apply  the same                                                               
formula to those lands.                                                                                                         
                                                                                                                                
SENATOR  THERRIAULT replied  that  the  committee could  consider                                                               
adding another whereas  clause pointing out the  difference if it                                                               
desired.                                                                                                                        
                                                                                                                                
SENATOR  SEEKINS  reiterated that  those  lands  were removed  by                                                               
federal requirement  and the effect is  the same as if  they were                                                               
federal lands outside of the state's tax system.                                                                                
                                                                                                                                
VICE  CHAIR  WAGONER  agreed  and added  that  those  lands  were                                                               
supposed to go off of their  protected status after 25 years, but                                                               
Congress authorized  it for  another 25  years; then  asked, "Why                                                               
aren't we receiving compensation because  a lot of that land lies                                                               
in the unorganized areas, also, of the State of Alaska?"                                                                        
                                                                                                                                
SENATOR  SEEKINS recalled  that Texas  was the  last state  to be                                                               
admitted to the union without being  forced to grant lands to the                                                               
federal government as a condition of statehood.                                                                                 
                                                                                                                                
VICE  CHAIR WAGONER  asked  if the  committee  was interested  in                                                               
adding  another whereas  on  this  issue or  put  it in  separate                                                               
legislation.                                                                                                                    
                                                                                                                                
SENATOR SEEKINS replied  that he would prefer dealing  with it as                                                               
a separate issue.  He moved to pass CSSJR  31(STA) from committee                                                               
with individual  recommendations and attached fiscal  note. There                                                               
were no objections and it was so ordered.                                                                                       

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