02/06/2003 11:00 AM House EDU
| Audio | Topic |
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON EDUCATION
February 6, 2003
11:00 a.m.
MEMBERS PRESENT
Representative Carl Gatto, Chair
Representative Paul Seaton, Vice Chair
Representative John Coghill
Representative Peggy Wilson
Representative Kelly Wolf
Representative Les Gara
Representative Mary Kapsner
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 19
"An Act relating to appropriations for operating expenses for
primary and secondary public education; and providing for an
effective date."
- HEARD AND HELD
HOUSE BILL NO. 26
"An Act relating to the base student allocation used in the
formula for state funding of public education; and providing for
an effective date."
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 19
SHORT TITLE: EDUCATION FUNDING
SPONSOR(S): REPRESENTATIVE(S)STEVENS
Jrn-Date Jrn-Page Action
01/21/03 0036 (H) PREFILE RELEASED (1/10/03)
01/21/03 0036 (H) READ THE FIRST TIME -
REFERRALS
01/21/03 0036 (H) EDU, HES, FIN
01/21/03 0036 (H) REFERRED TO EDUCATION
02/04/03 (H) EDU AT 11:00 AM CAPITOL 124
02/04/03 (H) -- Meeting Canceled --
02/06/03 (H) EDU AT 11:00 AM CAPITOL 124
BILL: HB 26
SHORT TITLE: INCREASE EDUCATION FUNDING
SPONSOR(S): REPRESENTATIVE(S)STEVENS
Jrn-Date Jrn-Page Action
01/21/03 0038 (H) PREFILE RELEASED (1/10/03)
01/21/03 0038 (H) READ THE FIRST TIME -
REFERRALS
01/21/03 0038 (H) EDU, HES, FIN
01/21/03 0038 (H) REFERRED TO EDUCATION
02/04/03 (H) EDU AT 11:00 AM CAPITOL 124
02/04/03 (H) -- Meeting Canceled --
02/06/03 (H) EDU AT 11:00 AM CAPITOL 124
WITNESS REGISTER
REPRESENTATIVE GARY STEVENS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As sponsor of HB 19 and HB 26, explained
the purpose and intent of this legislation, and answered
questions with respect to the merits of the bills.
EDDY JEANS, Manager
School Finance and Facilities Section
Education Support Services
Department of Education and Early Development
Juneau, Alaska
POSITION STATEMENT: Provided the Department of Education and
Early Development's position and answered questions on HB 19 and
HB 26.
LARRY WIGET, Executive Director
Public Affairs Division
Anchorage School District
Anchorage, Alaska
POSITION STATEMENT: Provided the Anchorage School District's
position and answered questions on HB 19 and HB 26.
JENNIE HAMMOND
Nikiski, Alaska
POSITION STATEMENT: Testified in favor of HB 19 and HB 26.
CAROL HAKKINEN
Kenai, Alaska
POSITION STATEMENT: Testified in favor of HB 19 and HB 26.
DONNA PETERSON, Superintendent
Kenai Peninsula Borough School District
Kenai, Alaska
POSITION STATEMENT: Provided the Kenai School District's
position and answered questions on HB 19 and HB 26.
MILDRED LINK
Kenai, Alaska
POSITION STATEMENT: Testified in support of HB 26
ANNE KILKENNY
Wasilla, Alaska
POSITION STATEMENT: Testified in favor of HB 26
ROBERT DOYLE, Interim Chief School Administrator
Matanuska-Susitna School District
Wasilla, Alaska
POSITION STATEMENT: Provided the Matanuska-Susitna School
District's position and answered questions on HB 26.
ACTION NARRATIVE
TAPE 03-5, SIDE A
Number 0001
CHAIR CARL GATTO called the House Special Committee on Education
meeting to order at 11:00 a.m. Representatives Gatto, Seaton,
Wolf, and Gara were present at the call to order.
Representatives Coghill, Wilson, and Kapsner arrived as the
meeting was in progress.
HB 19-EDUCATION FUNDING
[Contains discussion of HB 26]
Number 0108
CHAIR GATTO announced that the first order of business would be
HOUSE BILL NO. 19, "An Act relating to appropriations for
operating expenses for primary and secondary public education;
and providing for an effective date."
CHAIR GATTO informed members that he expected to hear a number
of bills on education funding because of the complexity of the
issue.
Number 0192
CHAIR GATTO noted for the record that Representatives Kapsner,
Coghill, and Wilson had joined the committee.
Number 0346
REPRESENTATIVE GARY STEVENS, Alaska State Legislature, sponsor
of HB 19, explained that the primary goal of this legislation is
to allow school districts to know how much funding they will
receive for the next school year by April 1. He told the
committee that school districts are required to submit funding
requests to municipal governments by May 1 of each year. In
many instances, the legislature has not yet passed the operating
budget by then, and it is very difficult for school districts
and municipal governments to put together a financial plan.
REPRESENTATIVE STEVENS shared his experience as the president of
the Kodiak Island School District, where a reduction in state
funding required the district to do serious cuts in the budget.
As a result, the district was forced to give pink slips to all
of the newly hired teachers. He said it was a terrible
situation for the teachers and the district. While the district
staff felt that in the fall there would be an adequate number of
students necessary to justify rehiring them, the district could
not guarantee employment.
REPRESENTATIVE STEVENS pointed out that this is a problem in
many areas of the country. He shared his daughter's experience
as a teacher in the Seattle School District, where the
administration has misplaced $30 million. In this case, all the
new teachers have been told that they will be let go; however,
they were also told if they waited around, on the first day of
school they probably will have their jobs.
Number 0576
REPRESENTATIVE STEVENS went on to say that HB 19 solves these
kinds of problems in two ways. Section 1 requires the governor
to submit a separate appropriation bill to the legislature for
public elementary and secondary schools before the fourth day of
each regular session. It also requires the legislature to pass
and transmit to the governor a bill to fund education for the
succeeding fiscal year.
Number 0599
REPRESENTATIVE STEVENS said Section 2 amends the provision in
the Executive Budget Act to reflect that a separate
appropriation bill for education funding must be submitted by
the governor as part of the budget package. He noted that this
bill in no way prevents the legislature from appropriating
additional funding to the foundation formula after the April 1
deadline, and in no way discourages the funding of Learning
Opportunity Grants (LOGs). Representative Stevens addressed the
issue that the districts might fare better if the legislature
waits until the end-of-session negotiations, when possible
additional funding may be available from the Constitutional
Budget Reserve (CBR) account. He told the committee that while
that may be true, it is also true that the CBR has less and less
funds available. He emphasized the importance of providing
districts and municipalities with early funding information to
assist them in their budget processes.
Number 0709
REPRESENTATIVE GARA thanked Representative Stevens for his
efforts to provide a solution to school districts and
municipalities in their budgetary planning. Representative Gara
shared his concern about a problem with this plan in years when
there are shortfalls in funding. He offered an example where
school districts and municipalities have taken action based on
information provided to them in April, only to find at the end
of session that additional funding has been appropriated from
the CBR. Since the districts have already taken action based on
the information received in April, they now have to revisit the
issue. He said he thinks this legislation may complicate the
districts' budgetary process.
REPRESENTATIVE GARA said districts have told him they are more
interested in adequate funding than timely funding. Once the
adequate funding issue has been resolved, he believes the
districts would be more comfortable having an appropriation
deadline. He asked Representative Stevens for his thoughts.
Number 0906
REPRESENTATIVE STEVENS agreed with Representative Gara that
adequate funding is important, and that the effect of additional
funds from the CBR [is to require the districts to revisit the
budgetary process]. He pointed out how fortunate Alaska is to
have another funding source, since many states like Oregon, for
example, have no additional funding sources. Representative
Stevens also mentioned the problem rural governments face when
they are already at the cap in funding and cannot appropriate
any more money to help fund education. He told the committee he
thinks it is important to have a discussion about long-term
financing of education when the CBR is gone. He stated that
while it maybe be premature now, it may not be in a couple of
years.
Number 1007
REPRESENTATIVE WILSON said that last year there were discussions
about forward-funding education. While initially the districts
showed an interest in seeing this legislation pass, they were
more concerned with adequate funding, so the bill did not pass.
She asked where the school districts stand on this legislation.
Number 1058
REPRESENTATIVE STEVENS replied that he does not think the school
districts have changed their positions on adequate funding or
early funding. He said he believes districts think if they wait
until the end of session, they may have more funds appropriated.
Representative Stevens said he does not dispute that premise at
all, but considering the seriousness of the situation, he
believes it is important to address the early funding issue.
Number 1090
REPRESENTATIVE WILSON told the committee that years ago there
was a safeguard in place to assist districts when enrollment
dropped between the time they made their budget and the
beginning of the school year. In some cases the districts have
signed contracts with tenured teachers, then have had no funds
to continue employment even though the district must provide the
same services. Representative Wilson asked if Representative
Stevens would consider including a safety valve in this
legislation for not only tenured teachers, but also newly hired
teachers, when districts face a drop in enrollment.
Number 1197
REPRESENTATIVE SEATON said Kenai Peninsula School District is
faced with a problem similar to what Representative Wilson
described. They just laid off 55 teachers, not only new
teachers, but tenured teachers as well, and eliminated the
language program. He asked Representative Stevens if he sees
any other negative effects on the districts' budget process if
early funding of education were provided, other than the hope
that waiting until the end of session will result in greater
funds.
Number 1340
REPRESENTATIVE STEVENS said he does not know of any downside in
early funding of education, with the exception of the one
Representative Seaton mention. He said he believes this
legislation would provide districts with valuable information
that would allow for careful planning, and it would be a real
advantage for the boroughs as well. He told the committee the
Department of Education and Early Development staff is available
to address further questions on this issue.
Number 1390
REPRESENTATIVE SEATON said one suggestion he received that would
address the districts' problem in providing their budgets to the
municipal governments [on May 1] would be to change the
statutory deadline. However, he noted that doing so would not
address the teacher retention problem.
REPRESENTATIVE STEVENS agreed that he does not think it would
solve the problem of teacher retention either.
Number 1446
REPRESENTATIVE GARA asked Representative Stevens to comment on
his willingness to address inflation-proofing of the foundation
formula first, and then follow that piece of legislation with
his early funding of education bill. He pointed out that in two
out of every three years the state falls behind the rate of
inflation in education funding.
REPRESENTATIVE STEVENS replied that he would be supportive of
inflation-proofing the foundation formula. He said the next
bill on the calendar [HB 26] will deal with the foundation
formula and the issue of moving money from Learning Opportunity
Grants (LOGs) into the formula.
Number 1546
REPRESENTATIVE SEATON asked, if the legislature were to try to
inflation-proof the fund every second year when there is an
election, whether legislators would actually, by statute, be
trying to "buy" the next legislature. He further questioned
whether it might be necessary to have a constitutional amendment
to inflation-proof the foundation formula by law.
Number 1575
REPRESENTATIVE STEVENS replied that Representative Seaton could
be right about the process necessary to inflation-proof the
foundation formula, but that is not the intent of his bill.
Representative Stevens did comment that by inflation-proofing
the formula, [this legislation] would be affecting future
legislation.
Number 1598
CHAIR GATTO responded that legislatures always bind future
legislation. It is impossible not to proceed that way, or the
legislature would have to start funding from zero.
Number 1605
REPRESENTATIVE COGHILL asked what other variables come into play
after the April deadline. He asked if the April 1 date was
specifically selected to be in line with the districts.
Number 1644
REPRESENTATIVE STEVENS replied that the date was selected to
allow time for legislation to be passed, for the districts and
boroughs to be funded, and for communities to deal with the
budget.
Number 1657
REPRESENTATIVE COGHILL commented that once a date is selected
for required action, that will be the target date. He also said
that he believes the legislature has stayed well within the
levels of inflation in education funding. He said he believes
he could make a case for that if the committee were to look at
overall spending on education.
Number 1690
REPRESENTATIVE GATTO said over the years he has heard, through
his service on the school board, a concern that funding is
falling further behind. Districts' costs are going up faster
than the amount of money received. Whether a district receives
local contributions or not, all the districts are in agreement
that they are falling behind and need some sort of relief. He
told the committee there needs to be some discussion of whether
to do it as inflation-proofing or, as suggested here, in an
increased dollar amount [referring to HB 26]. If it is done
that way, there certainly will be a lot of questions.
The committee took an at-ease from 11:25 a.m. to 11:40 a.m.
Number 1808
EDDY JEANS, Manager, School Finance and Facilities Section,
Education Support Services, Department of Education and Early
Development, testified in support of HB 19. He told the
committee the purpose of this bill is to allow municipalities
and school districts to know what their education foundation
funding is going to be for the upcoming year, in a timely
manner. He reiterated that school districts have to submit
their operating budget to the municipalities by May 1st. Often
the legislature has not passed the foundation funding at that
point in time, and so districts are moving along without knowing
what is going to happen. Mr. Jeans told the committee that the
foundation-funding program has been fully funded since 1987.
Districts have been able to move forward knowing that.
Number 1880
REPRESENTATIVE COGHILL noted that many education budget items
dovetail with the Department of Health and Social services
(DHSS) budget items. He asked Mr. Jeans if he sees any
difficulty if the health and social services budget changes and
how that might impact the education budget.
Number 1922
MR. JEANS replied that he prepares the education budget for
schools. He said that what happens after the budget comes to
the legislature, and is heard by various committees, is not
something he could comment on.
Number 1935
REPRESENTATIVE COGHILL said he sees a real problem with possible
budgetary impacts on the education budget based on what happens
to the DHSS budget because of the many services provided through
DHSS. Representative Coghill cautioned the committee that it
could have a significant impact on programs such as childcare,
or many of the other programs that dovetail with the education
budget. Even if the impact is not felt the first year, it could
be felt a year later. He asked Mr. Jeans if he saw this as a
problem.
MR. JEANS replied that it would not be a problem.
Number 1969
CHAIR GATTO stated that this is a very complicated issue that
impacts 53 school districts. He said all 53 school districts
are asking for various things and he believes Mr. Jeans'
understanding of the issues is credible and valued. He asked
Mr. Jeans if he has anything he would like to bring to the
committee's attention or a particular issue he thinks the
committee should understand as a major question or major
problem. Representative Gatto asked if he could tell the
committee what is the least understood concept by the people who
are not working on the budget, but who are simply the recipients
of the budget.
Number 2025
MR. JEANS responded that there is not one particular issue that
he could put his finger on; however, he told the committee he
would be doing a presentation on the foundation formula. He
said that it is scheduled for February 13, and that he hopes the
committee will attend. Mr. Jeans said the presentation is very
informational and he will have materials that the
Representatives can take back to their offices which will assist
them in answering just about any question from members'
constituents. He explained that he has been doing this
presentation for a while, so he knows the foundation formula
inside and out. Mr. Jeans said he hopes he can help the
committee review the process and answer questions.
Number 2072
CHAIR GATTO replied that he understands there are only two
people who know the foundation formula inside and out, and that
Mr. Jeans is one of those individuals. He said the committee
will be relying on him to take them through the process.
Number 2096
REPRESENTATIVE COGHILL said that through this legislation, the
committee is trying to solve a problem, but questioned if it
really is that big of an issue. He asked Mr. Jeans if the
department will be able to translate the budget information fast
enough to actually address this problem.
Number 2117
MR. JEANS replied that this bill simply requires the legislature
to make an appropriation for the foundation program earlier on
in the session. He said the legislature will have these numbers
well before this bill requires legislators to make a
determination of what that funding level should be.
MR. JEANS did point out one problem with the question of notice
of non-retention of teachers. He said under the current
statute, districts are required to provide notice of non-
retention to teachers by March 15. If for some reason the
legislature underfunded the foundation program, this
legislation's required date of funding, April 1, still comes
after the cutoff date of notice of non-retention. He told the
committee they should look at this issue more closely.
MR. JEANS told the committee when he worked with Representatives
Stevens on this issue last year, it was understood that the
legislation was simply an effort to assist local school
districts and municipalities in their budgeting process by
allowing them to know what the state intended to put forward
through the foundation program.
Number 2189
REPRESENTATIVE KAPSNER asked if it is politically realistic to
expect the legislature to put out a budget by March 15 or
April 1.
Number 2215
MR. JEANS replied that he did not know if that is possible. He
said he knows that if the date is moved to an earlier time, the
implication would be that the legislature will make an
appropriation for education within days or weeks of the time
they walk in the door. He said he does not believe that is
reasonable. He said he thinks it is important to have a
discussion about it. Mr. Jeans said he brought this issue up
because he wanted the committee to be aware of the fact that
this piece of legislation does not address the teacher non-
retention issue. He said the committee may want to look at
other mechanisms to address that issue.
Number 2233
CHAIR GATTO said the way he understands it, it is trading one
set of problems for another. On the one hand, the finance
personnel receiving the money are saying they would like to know
how much they will be getting sooner, and on the other hand, the
finance personnel on the other side are saying," We cannot tell
you until later because we do not know how much funding will be
available." He asked Mr. Jeans if that is an accurate
assessment of the problem.
MR. JEANS replied that what he believes Chair Gatto is referring
to is the overall state budget process, and he is reluctant to
comment on that.
Number 2299
REPRESENTATIVE GARA asked for Mr. Jeans to clarify the earlier
comment he made concerning full funding of the foundation
formula since the 1980s. He questioned whether full funding for
the formula included the cost of inflation. Representative Gara
asked if what he really meant was that the base numbers entered
into the foundation program were fully funded.
MR. JEANS replied that Representative Gara is correct. He told
the committee the state has fully funded the foundation program
at the level of statutory requirement, and that level does not
account for inflation during that time period.
Number 2347
REPRESENTATIVE SEATON asked when the numbers would be available
for the finance subcommittee to work on the foundation formula.
Number 2366
MR. JEANS replied that the numbers are available the first day
of session.
Number 2374
REPRESENTATIVE SEATON asked if Mr. Jeans knew of any potential
problems in changing the statutory date of notice of teacher
non-retention to April 1. He questioned whether there is any
particular reason for the March 15 date.
MR. JEANS said he is not sure the why the March 15 date is in
statute. He told the committee he would have to confer with the
commissioner to see if there is a problem in changing the date.
Number 2408
CHAIR GATTO said moving the date has a spin-off effect on local
contributions, since local contributions are entirely dependent
upon the amount of money the districts get from the state.
Number 2419
REPRESENTATIVE WILSON asked Mr. Jeans if he sees a problem if
appropriations to the foundation formula are provided a month
earlier. She asked if he knew where the school districts would
fall in this scenario. Representative Wilson told the committee
she thinks they would be very happy to have that information
earlier so they could go to the local community with their
proposed budget. She said she believes the districts would be
happy if there were more money appropriated at the end of
session.
MR. JEANS responded that this piece of legislation is intended
to assist local governments with their budgeting process. He
explained to the committee that in some school districts there
is a provision with local government that if they have increased
state aid, their local contribution is reduced or adjusted,
depending on the particular circumstances. This is a problem
some communities will always have to deal with, but the benefit
to early funding is that the communities can proceed in their
budgeting process in good faith that this is a minimum of what
they will be receiving for education.
Number 2223
LARRY WIGET, Executive Director, Public Affairs Division,
Anchorage School District, testified concerning HB 19. He
expressed his thanks to Representative Stevens for bringing
forward the issue of early funding for education for discussion.
He told the committee it is a topic of interest to many in
school districts across the state that are trying to make
decisions on staffing and programming for the next school year.
Number 2560
CHAIR GATTO interrupted Mr. Wiget because static on the
teleconferencing equipment was impairing the reception of his
testimony. He told Mr. Wiget the committee would come back to
him for his testimony once the technical difficulties had been
resolved.
Number 2630
JENNIE HAMMOND, parent of students in Nikiski, testified in
favor of HB 19. She urged the committee to give school boards
the opportunity to know what they are receiving every year at an
earlier date to assist their planning efforts.
Number 2668
CAROL HAKKINEN, parent of two students at Kenai High School,
testified that she wanted to speak on HB 26, but would also like
to echo the previous testimony on HB 19. She said that it is
easier to plan a budget if the school board has early
notification of monies it will be receiving. She said if
additional funds are made available down the road, the more the
better. She urged the committee to address this issue soon.
Number 2711
MR. WIGET continued with his testimony, saying that the
Anchorage School District appreciates Representative Stevens'
bringing forth this bill. He said the Anchorage School
District's concern is really not early funding, but adequate and
equitable funding of K-12 education, including debt
reimbursement on construction.
MR. WIGET told the committee the Anchorage district's budget
process begins in October and November when schools and
departments submit their proposed budget for the coming year.
He explained that they use guidelines put forth by the
superintendent and the board, with the board setting the upper
limits of the budget in November. In late December and January,
the superintendent and the administration spend a great deal of
time looking at the schools' needs and preparing a balanced
budget to go before the board in January. He used this year's
schedule as an example, saying in January the district held two
work sessions with the board, in which the administration laid
out the proposed budget to the board. Two public hearings were
held, a first and second reading during which the board
finalized the budget for the year in January. The board-adopted
budget then goes before the municipal assembly for approval in
March. He told the committee the district is aware of the fact
that they will not know what monies will be received from the
legislature until the end of session, and they may have to
revise the budget. He shared his concern that early funding may
result in less than adequate funding for schools. He cautioned
that lawmakers will be forced to meet the deadline established
by law, without having the time to fully consider other budget
items that need to be addressed. He thanked the committee for
the opportunity to testify on HB 19.
Number 2854
DONNA PETERSON, Superintendent, Kenai Peninsula Borough School
District, testified that while her role prevents her from
speaking directly on the bills that are being heard today, she
would like to follow Mr. Wiget's example and ask the committee
to remember that she represents approximately 9,500 students and
1,200 employees in 43 schools, with urban, rural, and remote
sites. She said she has a strong belief in the public school
system and believes if democracy is to be preserve in our
communities, it is important to cherish and value our public
schools.
MS. PETERSON said the State of Alaska is responsible for
providing education for its citizenry, and with that charge is
the need for appropriate and adequate funding. She told the
committee that the Kenai Peninsula school district follows all
of the rules by meeting the [70-to-30] criteria for
instructional expenditures. Ms. Peterson said the district has
less than 5 percent administration costs and yet, even with the
local funding to the tune of one-third of its budget - $25
million - seems to be punished for being competent, efficient,
and frugal. The district is in crisis due to inadequate
education funding, with absolutely no way to obtain addition
dollars other than through state funding. As an example of what
the district is facing [because of years of inadequate funding],
she told the committee the status quo budget in FY 04, without a
single additional program, is $5.2 million dollars in the red.
Reductions other school districts are beginning to make, the
Kenai district made five to ten years ago. In order to have a
balanced budget, the district is laying off 56 teachers and
raising the pupil-teacher ratio by three students in classrooms
throughout the district. In very small schools, the district is
cutting entire programs, and next year there will not be a
single school on the peninsula, including the 13 high schools,
that will have a full-time librarian. Music, physical
education, and vocational education classes have been cut en
masse. Ms. Peterson told the committee all books and curriculum
purchases have been slashed from the budget. Extracurricular
travel dollars have been eliminated, and the district's
inadequate supply budget, which has been reduced for years, will
take a 40 percent cut to balance the budget.
TAPE 03-5, SIDE B
Number 2951
MS. PETERSON asked for increased state funding. She said the
district needs a minimum of $4,500 per student to provide an
education for Alaskans. She said with early, adequate funding
of Alaskan public school children's needs, districts could
fulfill the promise of the American dream. She said without it,
the perilous future is upon us. She asked the committee what
cost society is willing to pay for this shortsightedness. In
closing, Ms. Peterson said she was in a room off-net because she
was meeting with 24 representatives from the district's site
councils to try to figure out a solution to this problem and
asked for the committee's help.
Number 2876
REPRESENTATIVE GARA asked Ms. Peterson if the 29-to-1 teacher-
to-pupil ratio was in all of Kenai's elementary schools or just
the larger elementary schools.
CHAIR GATTO said that Ms. Peterson was already [offline]. He
clarified that she was speaking of only the larger elementary
schools.
Number 2838
REPRESENTATIVE WOLF commended the Kenai Peninsula school
district for having the highest test scores of a charter school
in Alaska, and noted that the district has the lowest
administrative costs throughout the state. He said two of his
children go to that charter school.
Number 2816
CHAIR GATTO asked if there were any more questions. He then
told the committee that he would be talking to the governor's
office and the department that deals with finance [Office of
Management & Budget], to provide some additional information.
Chair Gatto announced that he will hold the bill until a later
date.
The committee took an at-ease from 12:10 p.m. to 12:15 p.m.
HB 26-INCREASE EDUCATION FUNDING
[Contains discussion of HB 19]
CHAIR GATTO announced that the next order of business would be
HOUSE BILL NO. 26 "An Act relating to the base student
allocation used in the formula for state funding of public
education; and providing for an effective date."
Number 2762
REPRESENTATIVE GARY STEVENS, Alaska State Legislature, sponsor
of HB 26, testified that this legislation pertains to allocation
of the foundation formula. He told the committee one of the
most important things the legislature does is fund education.
He said he appreciates the comments from the superintendent of
schools from Kenai Peninsula [during the hearing on HB 19],
because he believes she touched on many of the issues that this
bill is intended to address.
REPRESENTATIVE STEVENS said he believes that despite increases
in the foundation formula in the past two legislative sessions,
public education has still taken a tremendous hit because of
escalating expenses like salary increases, higher fuel prices,
and rising insurance costs. He told the committee that
inflation over the years has had a tremendous impact on public
school funding and the purchasing power that districts once had
has been eroded over time. Even if the legislature increases
the state contribution to the 53 school districts, in many cases
it will not be enough. He pointed out that there are more
demands on the public education system, for example, the
implementation of the high school graduation-qualifying exam,
the federal government's "No Child Left Behind Act," and at the
same time the state is encountering tremendous difficulties
hiring and retaining teachers and administrators. He expressed
concern that the state cannot keep asking school districts to
meet all of these responsibilities with a budget that is
dwindling, and said he believes additional funding is necessary.
REPRESENTATIVE STEVENS said HB 26 increases the per-student
allocation by $118, to $4,128. He told the committee the
department has provided a fiscal note of about [$24 million].
He said this effort is to match the amount appropriated to
public education through the Learning Opportunity Grants [LOGs]
for the fiscal year 2003, so that at the very least, school
districts would receive similar funding in FY 04.
Representative Stevens reiterated his statement that there are
few things the legislature does that are more important than
adequately funding education. He told the committee he does not
have any illusions that this money, $24 million, will solve all
of Alaska's education problems, but he told the committee it
won't hurt and will substantially help.
Number 2650
CHAIR GATTO said it is important to note that LOGs have often
been available to the schools, and they are used each year;
however, it is money that cannot be depended upon because it is
a grant. He asked Representative Stevens if he is correct in
that assumption.
REPRESENTATIVE STEVENS agreed that [LOGs] are grants, could not
be depended upon, and did not go through the foundation formula
itself. He said there is a question of equity in the granting
process.
Number 2619
REPRESENTATIVE KAPSNER told the committee a good analogy that
she has borrowed from Representative Croft is the difference
between a raise and a bonus. The LOGs are a bonus that someone
cannot really depend upon, whereas the increase to the
foundation formula is a raise. A lot of the grants that came to
the districts were one-year programs or short-term programs, and
required hiring temporary staff to head those programs. They
were not programs that the districts could have long-term
reliance upon.
Number 2582
REPRESENTATIVE SEATON pointed out that the districts are not
allowed to match that [LOG] money under the cap. He said that
by handling LOGs this way, the legislature is basically reducing
the money that local districts can fund by putting the money in
LOGs instead of the foundation formula. Representative Seaton
told the committee the Kenai Peninsula Borough is at the cap and
has been at the cap for a number of years. The district has
been searching for multiple ways to fund busing or other items
outside of the cap. He urged the committee to consider putting
the LOGs within the formula, so that local school districts that
want to can match more money for education.
Number 2486
CHAIR GATTO requested clarification on LOGs distribution. He
asked if Representative Stevens would comment on an example of
two students, one from the Anchorage School District and one the
Yukon School District. Would the LOGs be administered with the
same dollar amount for each student regardless of his or her
location? Or does the dollar amount change through a formula
based on differences in the communities?
Number 2474
REPRESENTATIVE STEVENS replied that it may be best to check with
the Department of Education and Early Development on this;
however, he said his understanding is that the LOGs do not go
through the foundation formula, so the costs of distance, fuel,
electricity, and hiring of teachers in the Bush are not
included.
REPRESENTATIVE WILSON told the committee she believes LOGs are
administered per pupil, so the schools with a lot of kids get a
lot more money than the schools with fewer kids.
Number 2404
EDDY JEANS, Manager, School Finance and Facilities Section,
Education Support Services, Department of Education and Early
Development, responded that LOGs are distributed on a per-capita
basis, so every child gets the same dollar amount.
Number 2393
CHAIR GATTO said that makes a very large difference when it is
rolled into the formula, as it would then be allocated much
differently. The amendment to simply roll the LOGs into the
formula makes a huge difference to a Yukon school, and no
difference to an Anchorage school, assuming the LOGs are
distributed through the formula.
Number 2384
REPRESENTATIVE COGHILL asked Representative Stevens if the
dollar amounts of the LOGs are the same.
REPRESENTATIVE STEVENS replied that is correct. The LOGs are
the same dollar amount and there would be no increase. This
would just roll the LOGs into the foundation formula.
Number 2345
REPRESENTATIVE COGHILL asked Representative Stevens if it is his
intention to exclude the LOGs from the funding package [as
required in Section 2 of the bill].
REPRESENTATIVE STEVENS answered in the affirmative.
REPRESENTATIVE COGHILL indicated there would be federal dollars
coming to the state for education incentives through the No
Child Left Behind Act. He said he believed the LOGs were part
of an incentive program to assist in outcome-based education,
and asked Representative Stevens if he believes if [the LOGs
system] is a framework that the legislature wants to get rid of,
since there will be more money coming from the federal
government for educational incentives.
Number 2321
REPRESENTATIVE STEVENS replied that he believes LOGs are a
framework the legislature needs to get rid of.
Number 2317
REPRESENTATIVE WILSON pointed out a chart in the bill packet
that reflects how districts would be affected. She noted that
some schools will gain, but many schools will remain the same.
REPRESENTATIVE SEATON restated his point that rolling the LOGs
into the foundation formula allows districts to fund education
at higher dollar amounts because municipalities can then match
that amount.
Number 2245
MR. JEANS clarified that LOGs are supplemental funding,
allocated to the Department of Education and Early Development,
that are distributed to school districts outside the foundation
funding formula. LOGs are distributed on a per-capita basis, so
the funding is not adjusted for equalizing effects; however,
there are adjustments within the foundation funding formula. He
said, as Representative Seaton has pointed out, that putting
this money into the funding formula allows local municipalities
to increase their ability to contribute locally.
MR. JEANS said the spreadsheet the Department of Education and
Early Development prepared for the committee indicates all
school districts would have an increase in the state foundation
funding if this money [LOGs] is put into the state foundation
funding formula. He said if [the committee is] looking at how
the districts fare when the money is in the formula and outside
the formula, that is a different comparison that would have to
be prepared. Putting the money into the formula and running
those adjustments results in a redistribution of that money.
Number 2161
CHAIR GATTO asked: Since each student gets the same amount now,
if the legislature rolled the LOGs into the formula, would the
number of dollars allocated need to be increased or could the
same dollars be taken and simply be reallocated according to the
formula?
MR. JEANS replied that the total dollar amount is the same;
however, the per-pupil amount is different from what was
actually allocated through the other mechanism. He believes the
per-pupil allocation under the LOGs was $186 per child, but as
it is put into the funding formula, that amount is $118 per
pupil.
Number 2119
CHAIR GATTO asked, if the LOGs were moved into the formula,
whether the amount of funds the Anchorage School District
receives would be less.
MR. JEANS responded that by moving the money into the funding
formula, Anchorage will receive less money than they are
currently receiving through the allocation under LOGs.
Number 2054
CHAIR GATTO said he thinks that it is an important consideration
for some districts since it is a reduction, while for others it
is an increase.
MR. JEANS replied that Chair Gatto is correct. He told the
committee one thing they need to consider is that this funding
is being allocated for instructional programs, and it should be
distributed through the funding foundation formula.
Number 1987
REPRESENTATIVE GARA asked if he might offer his amendments into
discussion before the committee hears public comment so the
public can address his comments as well.
CHAIR GATTO stated that he would like to take testimony before
entertaining amendments.
Number 1979
MILDRED LINK, concerned parent from Kenai, testified that she
had never contacted her legislators about any topic. However,
that all changed the first night she went to the Kenai Central
High School meeting and received the news of the budget cuts
implemented by the Kenai Peninsula school district. She told
the committee since that time she has attended all of the
meetings regarding the cuts. At the most recent meeting they
faced the prospect of losing 56 teachers districtwide. She said
the teacher-to-student ration has been raised from 21.5 to 25.5
students, which further dilutes the quality of education the
children will receive. She told the committee her daughter
attends Kenai Central High School, and her first and foremost
priority has always been her education. Ms. Link said next year
Kenai Central High School is slated to lose four teachers; while
it still is not known all of the classes that will be lost, it
is known that loss will be advanced English, advanced history,
and calculus. Calculus is now a course required by many
universities for entrance. If children are to attend good
universities and become the next generation of leaders from
Alaska, she believes the quality of education cannot continue to
be reduced. She told the committee she supports raising the
allowance per child to $4,500 per student. She said she is in
favor of whatever increase in the budget to maintain the current
level or improved level of academic staffing possible. While HB
26 does assist her district, it does not meet and certainly does
not exceed "our expectations or demands," she concluded.
Number 1775
JENNIE HAMMOND told the committee she currently has two small
children in a special-education program in the district, which
is a very fine program with small classrooms. However, because
of all the budget cuts and loss of teachers, she is concerned
that all the hard work that is going into educating children
will be lost as they get into their later years of their
schooling. The increase of PTR [pupil-teacher ratio] and
consolidations of schools are some of the ways the school
district is trying to address the problem. She said the Nikiski
community has pretty much agreed that two of the schools need to
come together to help solve the funding problems in an effort to
get some of the programs back. She asked the committee to
please look at ways to fund education at $4,500 per student.
Number 1700
CAROL HAKKINEN testified as a parent of two students of Kenai
Central High School. She told the committee that her husband
was born and raised in Kenai, and graduated from Kenai Central
High School. She said they moved back to Kenai in 1994 on a
trial basis, but what kept them there was the school district
and small community. However, with all the budget cuts they are
wondering what kind of an education the students will get. The
headlines said the community is opposed to consolidation, but
Ms. Hakkinen said she does not think that is representative of
the community. She said she is willing to seek consolidation of
schools to assure the best education for students. Ms. Hakkinen
said she believes schools should provide the necessary and
required classes that high school students need in order to
pursue scholarships and further education at college, or if they
prefer, to start their educational training for a career. She
said she is worried about the enrollment numbers and hears
various proposals about cutting the budget with academics and
extracurricular activities being at the forefront. She
explained that studies show extracurricular activities help a
student have a good work ethic, be organized, work harder, and
set goals. The school district meeting discussed another $2.9
million being whittled away from the budget, which consists of
custodians, counselors, nurses, and all travel for
extracurricular [activities]. She asked why the administration
is not being cut first.
Number 1498
LARRY WIGET, Executive Director, Public Affairs Division,
Anchorage School District, stated that HB 26 put forth by
Representative Stevens is a good first step toward adequate and
equitable funding of K-12 education for the coming year. He
thanked Representative Stevens for putting forth the bill and
told the committee he knows it is challenging to come up with a
final decision. School districts across the state are meeting
revenue shortfalls in their attempt to meet the needs of their
students. In the weeks ahead, he said the committee will learn
more about the needs of school districts, including the
Anchorage School District, which will not be funded unless new
monies are added to the foundation formula. This bill is a
first step in a discussion [his district] hopes will not only
result in taking existing and lapsed revenues and placing them
into the foundation formula, but also will result in the
addition of new monies to meet the educational challenges [the
district] has before it. Mr. Wiget explained that in Anchorage
and throughout Alaska, there are efforts to meet the goals of
the "No Child Left Behind Act" and the quality schools
initiatives. However, if districts are to succeed in these
endeavors, they cannot rely merely on creativity or thinking
outside the box. It will take new revenue. He said he applauds
this first discussion about adequate and equitable funding of K-
12 education.
Number 1387
ANNE KILKENNY, parent of a student, gave the committee the
analogy that she wants her cake and ice cream, too, and she
wants to eat it today. She said the cake she wants is an
increase in the base student allocation, the ice cream would be
the LOGs, and having it today would be to do so without gaining
any weight or facing the fiscal reality. She said she knows
this is an impossible request and that she believes it is
important to have both. She told the committee that it is
important to be realistic in addressing the educational funding
needs, whether it is new revenue taxes or new revenue sources,
which she told the committee she is willing to pay. She said
she will not vote against somebody who takes the stand to
address the fiscal problems of Alaska. She said she does not
see this bill as an increase in funding for schools, since it
does not meet the needs of the schools across the state unless
an increase is implemented. Moving LOGs into the foundation
formula is not adequate. She said she hopes the committee will
increase funding and maintain the LOGs program.
Number 1241
ROBERT DOYLE, Interim Chief School Administrator, Matanuska-
Susitna School District, testified on behalf of the 14,200
students that the district projects will attend school there
this fall. He told the committee he agrees with Anne Kilkenny
that merely moving the existing LOGs into the formula as a way
to increase funding is not an increase in funding for schools.
He told the committee the spreadsheet he saw shows a net
increase, but did not reflect the net decrease for LOGs in the
Matanuska-Susitna district. He said the district is one of
three in the state that has participated in a curriculum audit.
He also told the committee that he believes that the result of
adding the LOGs to the foundation formula would result in a net
loss of at least $200,000, and that figure is before the area
cost differentials of an additional $1.4 million that would be
taken from a growing school district and moved to other school
districts that are not growing in student numbers at all. He
asked the committee to seriously take a look at new revenue
sources for schools.
Number 1151
CHAIR GATTO asked Mr. Doyle, if the legislature were to move
LOGs into the formula, whether that would result in a net
increase or decrease for the Matanuska-Susitna district.
MR. DOYLE said he believed it would be a net decrease. He said
the LOGs program is important and is meeting the students'
needs, as well as the No Child Left Behind program. He told the
committee the district also is planning a lot of instructionally
valid research-based programs for students.
Number 1122
CHAIR GATTO asked Mr. Doyle if people in the district are
commenting on additional revenue. Is that something people
expect, or are they just hopeful?
MR. DOYLE said the people in the valley expect the state to
stand and deliver. Education is a top priority for the state's
newly elected governor, he opined, and he thinks the community
expects additional revenue for education. He told the committee
at the present time, the district is looking at serious cuts,
maybe not as severe as the cuts facing Kenai. However, the
district is looking at increasing class size by two across the
district and possibly closing schools. He said the district has
similar problems that Kenai is facing and he sympathizes with
them, but asked the committee not to take money from one
district and move it to another, or from one program and move it
to another, without actually adding anything to the amount of
funding for education.
Number 1020
REPRESENTATIVE GARA moved to adopt Amendment 1, which read
[original punctuation provided]:
Page One, line 6: $4,303 [$4010].
REPRESENTATIVE GARA commended Representative Stevens for his
many years of being a passionate voice for adequate and
appropriate increases in school funding. He told the committee
how he arrived at that number and provided some historical
background on the base student allocation process. He said that
in 1998, the legislature adopted the base student allocation
process whereby education funding, in part, was determined by
deciding how much each student should receive in state funding.
The idea then was that Alaska had fallen behind in terms of real
dollars for education funding. Almost every year [the
legislature] would fund education less and less, and every year
legislators would go out and campaign on how they believed in
strongly funding Alaska's educational system. Yet when it came
down to it, by the end of the budget cycle, when taking into
account inflation, the legislature funded schools with less and
less money. In 1998, the base student allocation was $3,940 per
student. If the state just kept up with the cost of inflation,
and nothing more, the base student allocation today should be
$4,303. Representative Gara said he does not believe it is
asking too much of parents, educators, and those interested in
providing Alaskan kids with an adequate education. He said he
believes the state should be putting as much into education this
year as it did in 1998, and not less. He summarized that this
is the basis for his amendment.
Number 0707
REPRESENTATIVE GARA told the committee that the legislature has
to make priorities in funding. If education is to be funded the
way education should be funded, [legislators] have to prioritize
and decide not to fund things that are maybe not as important as
education. He said there have been proposals over the last few
months to engage in some sorts of corporate subsidies for roads
to private mines, and to particular areas where businesses are
located. Representative Gara encouraged the committee to look
at whether those things get funded before Alaska's schools. He
urged the committee to look at the plan to extend the railroad
line or spend $50 million toward the Anchorage and Kenai area
intertie upgrades. He pointed out that in terms of cost, the
intertie upgrade has proven to be far more expensive than the
benefits that are produced. Representative Gara said he
believes that the people in all districts think education is a
priority.
REPRESENTATIVE GARA offered to support another blue ribbon panel
if members are not happy with the bipartisan A+ report produced
several years ago by the Department of Education and Early
Development. At a minimum, he urged the committee to keep up
with the cost of inflation. He said the proposal that he is
putting forth in the amendment to increase the base student
allocation to $4,303 he believes is supported by the members of
his caucus and he hopes this will not be a partisan issue since
both Democrats and Republicans have run on platforms that
support better and stronger schools for Alaska's children.
Number 0614
REPRESENTATIVE COGHILL objected to the amendment.
CHAIR GATTO asked Representative Gara what the additional cost
would be to the state budget if the amendment were adopted.
REPRESENTATIVE GARA replied that he thought it would be
somewhere in the area of $50 or $60 million.
Number 0548
REPRESENTATIVE STEVENS stated that he appreciates the amendment
by Representative Gara, but his concern is that this bill's
purpose is to bring some equity to the situation, and to move
the LOGs into the foundation formula. He told the committee
that the district that would be most affected, Anchorage,
supports moving the LOGs into the foundation formula. He
reiterated Representative Seaton's point that this would
increase the cap that municipalities can contribute to education
funding. He told the committee he is opposed to the amendment
because he believes it would be the "kiss of death" to the bill.
It would never get through the legislature, because the fiscal
note would increase from $24 million to $60 million. He said he
hopes the committee will place any other major changes to the
foundation formula in a separate bill.
Number 0427
REPRESENTATIVE SEATON stated that he is in favor of increasing
funding to education; however, he wants to keep these issues
separate and will be opposing the amendment for that reason. He
told the committee he would like to see the discussion about
moving the LOGs into the foundation formula go forward.
Number 0368
REPRESENTATIVE WILSON said this is a difficult amendment,
because everyone wants more funding for education; however, she
agrees with the sponsor that this amendment would be the "kiss
of death" for HB 26. Representative Wilson expressed her
concern with LOGs because she believes they provide an unfair
advantage to larger schools. She said the formula for schools
is set in place so it is a fair way to distribute money to the
schools. She told the committee her preference is to do away
with LOGs and add increased funding to the districts on a year-
by-year basis without any guarantees. However, she told the
committee she does understand what Representative Stevens is
trying to accomplish, and, therefore, will oppose this
amendment.
Number 0254
REPRESENTATIVE GARA spoke on the point of LOGs, saying he agrees
with most of the members of the committee that LOGs should be
rolled into the base student allocation; however, he told the
committee without this amendment the bill's results will be less
state funding for schools this year. Representative Gara told
the committee he believes it is essential to keep up with the
cost of inflation. HB 26, as it is presently written, leaves
education funding behind the cost of inflation. He also pointed
out that comments by the Anchorage School District were that
they did not mind rolling the LOGs into the base student
allocation, but they also requested additional monies.
Number 0137
REPRESENTATIVE WOLF stated that he is also opposed to the
proposed amendment, saying he wants the issues to be kept
separate. He told the committee he believes everyone in the
building supports funding education, but a $60 million
appropriation is too much.
Number 0032
A roll call vote was taken. Representatives Gara and Kapsner
voted in favor of Amendment 1. Representatives Coghill, Wilson,
Wolf, Seaton, and Gatto voted against it. Therefore, Amendment
1 failed by a vote of 2-5.
TAPE 03-6, SIDE A
The committee took an at-ease from 1:00 p.m. to 1:01 p.m.
Number 0036
REPRESENTATIVE GARA moved to adopt Amendment 2 as follows:
Page One, line 6: $4,228 [$4010].
REPRESENTATIVE GARA explained that a bipartisan panel familiar
with educational issues came out with a report called the "A+
Report." That report looked at the shortcomings of [Alaska's]
educational system, and recommended a base student allocation of
$4,228 for this fiscal year. Representative Gara told the
committee the panel assumed a 1.5 percent rate of inflation;
however, the state actually had 2 percent and 4 percent rates of
inflation in the last two years. He offered Amendment 2 as an
alternative to Amendment 1.
Number 0143
REPRESENTATIVE COGHILL objected to the amendment. He told the
committee the sponsor of the amendment has provided this number
to ensure "the LOGs number is taken care of." He reminded the
committee that this [LOGs] is the first transitional issue and
he thinks the committee should stay focused on that. He said
there are other committees of referral where there will be more
debate, especially when the legislation comes before the House
Finance Committee. He told the committee he does not want to
disregard what the sponsor of this amendment is bringing up, but
that he thinks this legislation should offer better
discretionary power "under the formula funding narrowly defined
in the LOGs."
Number 0215
REPRESENTATIVE KAPSNER commented on Representative Coghill's
statement, and told the committee she can understand his
concerns. However, she feels that since this committee's
primary concern is the education of Alaska's children, she
believes when the bill moves out of the Special Committee on
Education it should reflect what is best for kids in terms of
their education, not necessarily what is best financially.
Representative Kapsner said the House Finance Committee does
have the ability to amend it [HB 26] or go back the sponsor's
original bill, but since she is not on the House Finance
Committee, she is in full support of this amendment.
Number 0271
REPRESENTATIVE SEATON stated that he understands both sides of
this issue; however, he asked the committee to deal with LOGs
separately, since there will be other bills before the committee
to deal with the base foundation formula increases. He said he
will not be supporting the amendment.
Number 0381
A roll call vote was taken. Representatives Gara and Kapsner
voted in favor of Amendment 2. Representatives Coghill, Wilson,
Wolf, Seaton, and Gatto voted against it. Therefore, Amendment
2 failed by a vote of 2-5.
REPRESENTATIVE SEATON asked if Mr. Jeans from the Department of
Education and Early Development could provide the committee with
a breakdown of how districts would fare positively and
negatively with respect to the LOGs' moving into the foundation
formula.
CHAIR GATTO noted that his district would lose money if the LOGs
were rolled into the foundation formula. Chair Gatto stated
that the committee will hold the bill until a later date.
ADJOURNMENT
There being no further business before the committee, the
Special Committee on Education meeting was adjourned at
1:10 p.m.
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