Legislature(1993 - 1994)
02/24/1994 01:00 PM House CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
February 24, 1994
1:00 p.m.
MEMBERS PRESENT
Representative Harley Olberg, Chairman
Representative Jerry Sanders, Vice Chair
Representative Con Bunde
Representative Cynthia Toohey
Representative Ed Willis
Representative John Davies
Representative Bill Williams
MEMBERS ABSENT
None
OTHER LEGISLATORS PRESENT
Representative Fran Ulmer
COMMITTEE CALENDAR
*HB 477: "An Act increasing the amount of local
contributions that may be made to a city
or borough school district under the
foundation formula; and providing for an
effective date."
PASSED FROM COMMITTEE WITH INDIVIDUAL
RECOMMENDATIONS
WITNESS REGISTER
DIANNE LINDBACK, Staff to Representative Ulmer
State Capitol, Room 403
Juneau, AK 99801-1182
Phone: 465-4947
POSITION STATEMENT: Staff to Prime Sponsor of HB 477
REPRESENTATIVE FRAN ULMER
Alaska State Legislature
State Capitol, Room 403
Juneau, AK 99801-1182
Phone: 465-4947
POSITION STATEMENT: Prime Sponsor of HB 477
DUANE GUILEY, Director of School Finance
Department of Education
810 W. 10th St., Suite 201
Juneau, AK 99811-2100
Phone: 465-8679
POSITION STATEMENT: Supported HB 477
PREVIOUS ACTION
BILL: HB 477
SHORT TITLE: ALLOWABLE LOCAL EFFORT FOR SCHOOL FUNDING
SPONSOR(S): REPRESENTATIVE(S) ULMER
JRN-DATE JRN-PG ACTION
02/14/94 2376 (H) READ THE FIRST TIME/REFERRAL(S)
02/14/94 2376 (H) CRA, HES, FINANCE
02/24/94 (H) CRA AT 01:00 PM CAPITOL 124
ACTION NARRATIVE
TAPE 94-9, SIDE A
Number 000
CHAIRMAN HARLEY OLBERG called the meeting to order at 1:11
p.m. He noted for the record Representatives Toohey,
Williams, Sanders, Davies and Willis were present and noted
that a quorum was present.
Number 018
HB 477 - ALLOWABLE LOCAL EFFORT FOR SCHOOL FUNDING
DIANNE LINDBACK, STAFF TO REPRESENTATIVE ULMER, said, "HB
477 would raise the cap on local contributions. As you
know, there are two provisions in statute which control
local contributions to schools. One is a minimum required
contribution and the other is a maximum allowable
contribution. This bill addresses that discretionary or
allowable portion over the minimum required. The federal
government has a cap of 25 percent on this additional local
contribution, and the purpose of that cap is to ensure that
there's relative parity between school districts in the
state, so that those communities that have a lot of money
don't end up with schools that are funded way in excess of
those communities that are perhaps less endowed financially.
So we need to keep within that federal cap of 25 percent.
The current statute sets the allowable discretionary local
contribution at 23 percent of the basic need and this bill
would raise it to 24 percent. And the Department of
Education has advised that that would still keep us
underneath the cap, so that we're not violating that federal
control. There are several districts that are really right
at the cap now, that this would probably be very useful for
and this, besides Juneau, is Fairbanks, Kenai, Ketchikan and
Sitka. For Juneau, this would mean that we could contribute
an additional $289,957. So this will help offset the costs
of inflation, the way that's eroding our ability to maintain
our current programs."
Number 079
REPRESENTATIVE CYNTHIA TOOHEY said, "I'm nervous about
removing this 23 percent and going to 24 (percent) when we
haven't shown any signs or desires to cut anything. In my
district, it would be very upsetting, I think, to do this at
this time."
MS. LINDBACK said, "This does not affect the general fund at
all."
CHAIRMAN OLBERG clarified, "I think we're talking local
option again where each individual district is simply being
given the option to go to 24 percent, instead of 23 percent.
Some districts may, some districts may not. To the extent
that we can avoid mandates, I think we're all better off."
MS. LINDBACK proceeded, "There's also another reason why
this would be additionally desirable. If the instructional
unit is essentially short funded or underfunded so that we
come out with a unit, as the Governor has proposed at
$59,800, the Department of Education...would have to by
regulation reduce the amount that a local district can
contribute. So they go down proportionately, is what I'm
trying to say. So if we are able to allow our districts to
compensate for some of that, the only way we can do it is in
this local option."
Representative Con Bunde joined the committee at 1:16 p.m.
REPRESENTATIVE JOHN DAVIES said, "I think it is the
case...around the state that real cuts have been made,
especially if we level fund the instruction unit, that's
going to fund additional real cuts and this just allows the
local option to decide whether or not they want to try to
offset some of those cuts with increased local effort."
REPRESENTATIVE BUNDE said, "In the Anchorage area, they do
not fund up to the maximum local level at this point, so
this bill may not have an impact there. I'm concerned that
it will increase the disparity where these folks, who chose
to make up the larger local contribution."
Representative Fran Ulmer joined the committee at 1:18 p.m.
REPRESENTATIVE JERRY SANDERS asked, "If we pass this, does
this mean we can cut the budget one percent?"
Number 180
REPRESENTATIVE FRAN ULMER, SPONSOR OF HB 477, said,
"Remember not all districts are situated in the same way in
this state. Some are at the cap and some aren't. Some are
in a position to use this and choose to use it, and others
aren't or won't. So it's not like an across the board
assistance of one percent to every district in the state."
REPRESENTATIVE SANDERS proceeded, "If we did cut, they'd be
free to make it up, right?"
REPRESENTATIVE ULMER said, "If you allow the districts to
move up one percent, it will help take the pressure off some
districts, absolutely. But it doesn't replace as much as
we're looking at in terms of potential cut."
Number 199
REPRESENTATIVE BUNDE said, "I certainly applaud those
districts that not only are at their cap, but would be
willing to make a greater contribution and as such, I would
support this legislation. I do think it's a double edged
sword though, because if we support this, there's more of an
inclination to cut state support, which may be coming
anyway. So we're allowing local districts to make up what
the state will no longer provide, and I think it will make
this gap between those that are funding clear to their max
and those that are not, even more apparent and will cause
some political pressure..."
REPRESENTATIVE SANDERS asked, "Is there a reason for not
raising them to 25 (percent) to the cap?"
REPRESENTATIVE ULMER replied, "What we're trying to do is
not get so close to the federal percentage as to really
create a possibility that we have offended this discrepancy
of percentage for the federal level and that might throw us
into a litigation situation... I think it's to just create
kind of a little cushion so we're not really right at the
max."
Number 248
DUANE GUILEY, DIRECTOR OF SCHOOL FINANCE, DEPARTMENT OF
EDUCATION, stated, "The previous question about the 25
percent limit: Certainly, the state legislature has the
opportunity to increase the cap to 25 percent, however, I
would remind you that when districts are preparing their
budget, we are in fact, working on a budgeted figure and
when we actually calculate our disparity standard, it's well
after the end of the school year. If we were to raise our
limit to 25 percent, it may actually require a retroactive
repayment of local dollars from the district to the
municipality after the dollars have already been spent.
That's why the current threshold is 23 percent...there would
be no harm in raising it to 24 percent and for that reason
the Department of Education does support this legislation;
in that on a simple basis it provides an opportunity for
those that wish to further help themselves to do so without
putting the burden on the state. And we don't anticipate
that it will harm our disparity standard or put us out of
compliance with federal statutes."
REPRESENTATIVE TOOHEY asked, "Do the citizens have a chance
to vote on it (HB 477)?
REPRESENTATIVE ULMER said, "It's up to each city council and
borough assembly as to whether or not they want to do it..."
Number 300
REPRESENTATIVE DAVIES moved to pass HB 477 out of committee
with individual recommendations. There were no objections.
ADJOURNMENT
CHAIRMAN OLBERG adjourned the meeting at 1:26 p.m.
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