Legislature(2003 - 2004)

04/16/2003 07:13 AM EDU

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
              HOUSE SPECIAL COMMITTEE ON EDUCATION                                                                            
                         April 16, 2003                                                                                         
                           7:13 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Carl Gatto, Chair                                                                                                
Representative Paul Seaton, Vice Chair                                                                                          
Representative Dan Ogg                                                                                                          
Representative Les Gara                                                                                                         
Representative Mary Kapsner                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Peggy Wilson                                                                                                     
Representative Kelly Wolf                                                                                                       
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 259                                                                                                              
"An  Act relating  to public  school transportation,  and to  the                                                               
minimum  wages  for school  bus  drivers;  and providing  for  an                                                               
effective date."                                                                                                                
                                                                                                                                
     - HEARD & 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."                                                                                                             
                                                                                                                                
     - SUBCOMMITTEE ASSIGNED                                                                                                    
                                                                                                                                
HOUSE BILL NO. 220                                                                                                              
"An  Act relating  to the  base  student allocation  used in  the                                                               
formula for state funding of  public education; and providing for                                                               
an effective date."                                                                                                             
                                                                                                                                
     - SUBCOMMITTEE ASSIGNED                                                                                                    
                                                                                                                                
HOUSE BILL NO. 222                                                                                                              
"An  Act requiring  an annual  inflation adjustment  of the  base                                                               
student  allocation used  in  the formula  for  state funding  of                                                               
public education; and providing for an effective date."                                                                         
                                                                                                                                
     - SUBCOMMITTEE ASSIGNED                                                                                                    
                                                                                                                                
HOUSE BILL NO. 233                                                                                                              
"An Act relating to the base student allocation used in the                                                                     
formula for state funding of public education; and providing for                                                                
an effective date."                                                                                                             
                                                                                                                                
     - SUBCOMMITTEE ASSIGNED                                                                                                    
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                                
BILL: HB 259                                                                                                                  
SHORT TITLE:PUPIL TRANSPORTATION FUNDING/DRIVER WAGES                                                                           
SPONSOR(S): REPRESENTATIVE(S)GATTO                                                                                              
                                                                                                                                
Jrn-Date   Jrn-Page                     Action                                                                                  
04/11/03     0934       (H)        READ THE FIRST TIME -                                                                        
                                   REFERRALS                                                                                    
04/11/03     0934       (H)        EDU, L&C, FIN                                                                                
04/16/03                (H)        EDU AT 7:00 AM CAPITOL 124                                                                   
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CODY RICE, Staff                                                                                                                
to Representative Carl Gatto                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 259 on behalf of Chair Gatto,                                                                 
sponsor, and answered questions from the members.                                                                               
                                                                                                                                
EDDY JEANS, Manager                                                                                                             
School Finance and Facilities Section                                                                                           
Education Support Services                                                                                                      
Department of Education and Early Development                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on HB 259 and responded to                                                                       
questions from the committee.                                                                                                   
                                                                                                                                
TONNIE BARLOW                                                                                                                   
School Board Member                                                                                                             
Wrangell City School District                                                                                                   
Wrangell, Alaska                                                                                                                
POSITION STATEMENT:  Testified on HB 259.                                                                                       
                                                                                                                                
SUSAN SCIABBARRASI, Superintendent                                                                                              
Wrangell City School District                                                                                                   
Wrangell, Alaska                                                                                                                
POSITION STATEMENT:  Testified on HB 259.                                                                                       
                                                                                                                                
DAVE SPENCE, Director                                                                                                           
Planning and Operations                                                                                                         
Kenai Peninsula School District                                                                                                 
Kenai, Alaska                                                                                                                   
POSITION STATEMENT:  Testified on HB 259.                                                                                       
                                                                                                                                
MIKE SCHWARTZ                                                                                                                   
Petersburg, Alaska                                                                                                              
POSITION STATEMENT:  Testified in opposition to HB 259.                                                                         
                                                                                                                                
STEVE BRADSHAW, Superintendent                                                                                                  
Sitka Borough School District                                                                                                   
Sitka, Alaska                                                                                                                   
POSITION STATEMENT:  Testified on HB 259.                                                                                       
                                                                                                                                
STEVE KALMES, Director of Transportation                                                                                        
Anchorage School District                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on HB 259 and answer questions                                                                   
from the members.                                                                                                               
                                                                                                                                
CAROL COMEAU, Superintendent                                                                                                    
Anchorage School District                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on HB 259 and answered questions                                                                 
from the members.                                                                                                               
                                                                                                                                
CAROL ENZLER, Superintendent                                                                                                    
Petersburg City School District                                                                                                 
Petersburg, Alaska                                                                                                              
POSITION STATEMENT:  Testified on HB 259.                                                                                       
                                                                                                                                
JANELL PRIVETT, President                                                                                                       
School Board                                                                                                                    
Wrangell City School District                                                                                                   
Wrangell, Alaska                                                                                                                
POSITION STATEMENT:  Testified on HB 259 and answered questions                                                                 
from the members.                                                                                                               
                                                                                                                                
DEBBIE OSSIANDER, President                                                                                                     
Association of Alaska School Boards                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on HB 259 and answered questions                                                                 
from the committee.                                                                                                             
                                                                                                                                
JOHN STEINER, Member                                                                                                            
Anchorage School Board                                                                                                          
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Testified on HB 259  and answered questions                                                               
from the committee.                                                                                                             
                                                                                                                                
CARL ROSE, Executive Director                                                                                                   
Association of Alaska School Boards                                                                                             
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in  support of HB 259 and answered                                                               
questions from the members.                                                                                                     
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 03-17, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
VICE  CHAIR PAUL  SEATON called  the House  Special Committee  on                                                             
Education meeting to order at  7:13 a.m.  Representatives Seaton,                                                               
Ogg,   and   Gara   were   present  at   the   call   to   order.                                                               
Representatives Gatto and  Kapsner arrived as the  meeting was in                                                               
progress.                                                                                                                       
                                                                                                                                
HB 259-PUPIL TRANSPORTATION FUNDING/DRIVER WAGES                                                                              
                                                                                                                                
VICE  CHAIR SEATON  announced that  the first  order of  business                                                               
would be  HOUSE BILL NO. 259,  "An Act relating to  public school                                                               
transportation, and to the minimum  wages for school bus drivers;                                                               
and providing for an effective date."                                                                                           
                                                                                                                                
Number 0099                                                                                                                     
                                                                                                                                
CODY  RICE,  Staff to  Representative  Carl  Gatto, Alaska  State                                                               
Legislature, presented HB 259 on  behalf of Chair Gatto, sponsor.                                                               
He told the  committee HB 259 is in response  to recent criticism                                                               
of the pupil transportation funding at  the K-12 level.  The idea                                                               
is  to  encourage  efficiency through  the  school  districts  by                                                               
allowing the districts to keep  any money they might save through                                                               
cost cutting  and/or increased  efficiencies.   This is  would be                                                               
accomplished  by   taking  the   FY  03  entitlement   for  pupil                                                               
transportation  and dividing  it by  the FY  03 enrollment,  less                                                               
correspondence students.   That would give a  per-head number for                                                               
pupil  transportation  on  a district-by-district  basis.    That                                                               
number is set in statute and  is used as a multiplier against the                                                               
enrollment   in   future   years.     That   would   mean   pupil                                                               
transportation  entitlement  would be  linked  to  the number  of                                                               
students that need to be transported.                                                                                           
                                                                                                                                
Number 0240                                                                                                                     
                                                                                                                                
VICE CHAIR  SEATON asked  Mr. Rice  to address  page 1,  line 14,                                                               
where it says "by $1,200 per student".                                                                                          
                                                                                                                                
MR.  RICE responded  that  the idea  was to  limit  the per  head                                                               
amount per year  for students at $1,200.  That  figure appears to                                                               
be a reasonable  limitation.  At that price, it  is believed that                                                               
districts could create efficiencies.                                                                                            
                                                                                                                                
Number 0320                                                                                                                     
                                                                                                                                
VICE CHAIR SEATON asked for  some clarification on paragraphs (1)                                                               
and (2) [Page 1,  line 11 and line 14 of the  original bill].  He                                                               
asked if this bill refers to the  lesser of the two amounts.  For                                                               
instance,  one  is  the per-student  allocation  divided  by  the                                                               
amount received.                                                                                                                
                                                                                                                                
MR. RICE replied that is correct.                                                                                               
                                                                                                                                
Number 0342                                                                                                                     
                                                                                                                                
REPRESENTATIVE OGG asked  what the allotted amount  of funding is                                                               
under the  present budget  for the  FY [03]  budget for  per head                                                               
cost in student transportation.                                                                                                 
                                                                                                                                
MR.  RICE told  the members  that  the numbers  vary district  by                                                               
district.   He referred to a  three-page fiscal note in  the bill                                                               
packet  which breaks  down  the  costs by  districts.   Mr.  Rice                                                               
referred to page 2 [of the  fiscal note] in the third column from                                                               
the left titled "Estimated FY03 COST PER STUDENT."                                                                              
                                                                                                                                
Number 0412                                                                                                                     
                                                                                                                                
REPRESENTATIVE  OGG asked  if this  bill would  provide for  each                                                               
district to  have a different  "per capita"  or would there  be a                                                               
statewide "per capita."                                                                                                         
                                                                                                                                
MR. RICE responded  that each district will have  a separate per-                                                               
capita based on what was actually received in FY 03.                                                                            
                                                                                                                                
VICE  CHAIR SEATON  noted for  the benefit  of the  audience that                                                               
$1,200 per  student was  the maximum  for the FY  03 costs.   The                                                               
[Ketchikan]  Gateway  [Borough   Schools],  Bristol  Bay  Borough                                                               
Schools,  Copper   River  Schools,  Delta/Greeley   Schools,  and                                                               
Southeast Island Schools have FY  03 costs per student of $1,200.                                                               
Denali  School District's  cost  is $1,179,  and  the cost  drops                                                               
significantly from there.                                                                                                       
                                                                                                                                
Number 0515                                                                                                                     
                                                                                                                                
EDDY  JEANS,  Manager,  School Finance  and  Facilities  Section,                                                               
Education  Support Services,  Department of  Education and  Early                                                               
Development, testified on HB 259  and responded to questions from                                                               
the committee.   He clarified the fiscal note where  it refers to                                                               
the  per-student amounts  listed.   Those  that  show the  $1,200                                                               
amount actually  exceeded that amount  but were capped.   He said                                                               
if  he recalls  correctly, Delta/Greely  was the  highest in  the                                                               
state with  a cost  of $1,400  per student.   Mr. Jeans  told the                                                               
committee  any school  district that  shows a  $1,200 per-student                                                               
cost was  actually capped at that  price and the actual  cost was                                                               
likely more.                                                                                                                    
                                                                                                                                
Number 0565                                                                                                                     
                                                                                                                                
VICE CHAIR SEATON asked if he  has the actual numbers with him so                                                               
the members can see the differences.                                                                                            
                                                                                                                                
Number 0584                                                                                                                     
                                                                                                                                
MR. JEANS  responded that  he does  not have  them with  him, but                                                               
would be happy to provide the numbers to the committee.                                                                         
                                                                                                                                
MR. RICE  commented that  he recalls of  the five  districts that                                                               
were capped, only  Delta/Greely was above $1,300.   The rest were                                                               
between $1,300 and $1,200.                                                                                                      
                                                                                                                                
Number 0619                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GARA  commented that  he  was  curious about  the                                                               
districts  that had  exactly a  $1,200  per-student cost  because                                                               
that seemed suspicious.  He asked  if there has been any analysis                                                               
on the  districts that spend  more than  $1,200 per student.   Is                                                               
there any documentation of waste  within the districts?  He asked                                                               
if there is  a reasonable expectation that  those districts could                                                               
go  down   to  $1,200  per  student   without  affecting  student                                                               
transportation.                                                                                                                 
                                                                                                                                
Number 0656                                                                                                                     
                                                                                                                                
MR.  JEANS  told the  committee  that  the  current system  is  a                                                               
reimbursable system.   The department has in  regulation what are                                                               
reimbursable  expenses.   In each  of these  districts that  were                                                               
capped, they  contract for  their routes, so  they are  using the                                                               
current  system  to the  maximum  extent  they  can in  terms  of                                                               
reimbursement  from the  state.    He said  in  other words,  the                                                               
districts do  not really look  for efficiencies.  The  state will                                                               
reimburse it,  so they submit  a request for reimbursement.   Mr.                                                               
Jeans said when he  took a look at page three  in the fiscal note                                                               
Delta/Greely had  projected to  the department  their FY  04 cost                                                               
under the  current system of [$882,572].   He said he  also knows                                                               
that Delta/Greely would like to add  a couple of routes that were                                                               
not included  in this number because  they have had an  influx of                                                               
students in the Delta Junction area.   Mr. Jeans pointed out that                                                               
under this proposal they would  generate a grant of [$1,014,000].                                                               
He said  he believes this would  more than cover the  cost of the                                                               
existing system and provide enough  in funding to cover the costs                                                               
of the routes the district would like to add next year.                                                                         
                                                                                                                                
MR.  JEANS  said  that  as   the  department  works  with  school                                                               
districts and a projection like this  is given to add routes, the                                                               
department really  holds their  feet to the  fire and  makes them                                                               
jump through  a lot of hoops  to get those routes  because if the                                                               
department allows  them to get  additional routes here,  the rest                                                               
of the  state pays for that  under the current system.   It would                                                               
simply be  prorated and everyone  would pay for  those additional                                                               
routes.   Under  the  system proposed  by  this legislation,  the                                                               
district  could   go  back  to   their  contractor  and   try  to                                                               
renegotiate for  a lower  rate.  Depending  on what  happens with                                                               
the   fuel  tax,   districts  could   purchase  fuel   for  their                                                               
contractors  so  the  contractors  do not  have  to  purchase  it                                                               
directly.   He summarized  by saying that  this bill  really does                                                               
open  up  a  lot  of  avenues   for  districts  to  try  to  find                                                               
efficiencies.                                                                                                                   
                                                                                                                                
Number 0847                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA commented  that before he decides  to cap the                                                               
costs of pupil transportation from  1,000 miles away from another                                                               
community at $1,200 per student,  he needs some assurance that it                                                               
is fair  to those districts.   He said he understands  the theory                                                               
that there is a desire for  the districts to be efficient, but he                                                               
does not  know the reality of  whether or not they  can manage at                                                               
less than $1,200.   Representative Gara told  the committee until                                                               
he is convinced  of that, he will have a  problem with the $1,200                                                               
cap.  He added  that he does not think getting rid  of the cap as                                                               
undermining the  concept of the bill.   The bill's concept  is to                                                               
take  what was  spent last  year and  inflation proof  it in  the                                                               
future.  He  questioned whether the bill  really inflation proofs                                                               
the costs well enough.                                                                                                          
                                                                                                                                
VICE CHAIR SEATON asked Mr.  Jeans if the Department of Education                                                               
and  Early  Development  has contacted  the  districts  on  their                                                               
position on this bill.                                                                                                          
                                                                                                                                
Number 0936                                                                                                                     
                                                                                                                                
MR.  JEANS responded  that  he has  not  contacted the  districts                                                               
directly, but  he does know  that school business  officials were                                                               
in town a few  weeks ago and one of the  items they supported was                                                               
moving the current  reimbursable program to a grant  program.  He                                                               
told  the committee  that the  current system  is a  reimbursable                                                               
system  whereby  the  state   reimburses  districts  for  student                                                               
transportation services for  students who live beyond  a mile and                                                               
a  half from  school.   A district  may determine  that the  high                                                               
school or junior  high school students can walk two  miles or two                                                               
and half  miles.   Those are  changes that could  be made  at the                                                               
local level  that would affect how  much it would cost  for their                                                               
program.   However, on the  statewide level  there needs to  be a                                                               
uniform application  to the program, so  one and a half  miles is                                                               
the state  standard right now.   Mr. Jeans said  this legislation                                                               
provides a way  at the local level to make  efficiencies in pupil                                                               
transportation.                                                                                                                 
                                                                                                                                
Number 1012                                                                                                                     
                                                                                                                                
VICE CHAIR  SEATON asked about  the differences in  hazardous bus                                                               
routes  that are  within  four  blocks of  the  schools, have  no                                                               
sidewalks, and  require students  to walk  on icy  highways; some                                                               
districts are  busing when  they determine  there is  a hazardous                                                               
bus  route.   Does the  state  reimburse on  those hazardous  bus                                                               
routes?                                                                                                                         
                                                                                                                                
MR.  JEANS  responded that  the  state  does reimburse  on  those                                                               
hazardous bus  routes at the  rate of 50  percent on the  cost of                                                               
those routes.   He said  he sees this as  a problem at  the state                                                               
level  because  the local  board  gets  to  establish what  is  a                                                               
hazardous route  and the  state reimburses 50  percent.   In some                                                               
cases, the  district may be  able to use crossing  guards instead                                                               
of  establishing hazardous  routes.   Those  are  the things  the                                                               
districts must look  at from a local level that  the state cannot                                                               
control.                                                                                                                        
                                                                                                                                
VICE CHAIR SEATON  responded that the districts on  a local level                                                               
could be lobbying for a bike path  or some other way to avoid the                                                               
hazardous  routes.   The  district would  then  have the  savings                                                               
incorporated within  the district  grants instead of  just losing                                                               
the money because the district has nothing to reimburse.                                                                        
                                                                                                                                
MR.  JEANS  replied   that  he  believes  that   is  an  accurate                                                               
assumption.                                                                                                                     
                                                                                                                                
MR. RICE noted for the record that he has contacted the Delta-                                                                  
Greely School  District and at  this point they have  not weighed                                                               
in on their position on HB 259.                                                                                                 
                                                                                                                                
VICE CHAIR SEATON  added that his office has  contacted the Kenai                                                               
Peninsula School District,  but they have not had  enough time to                                                               
analyze the numbers yet.  He  asked if any other school districts                                                               
have weighed in on this.                                                                                                        
                                                                                                                                
Number 1184                                                                                                                     
                                                                                                                                
MR. RICE told  the committee that he also  contact the Matanuska-                                                               
Susitna (Mat-Su), Fairbanks, and  Anchorage School Districts.  In                                                               
response to Vice Chair Seaton's  question as to their position on                                                               
the bill, Mr. Rice said  all three districts were very interested                                                               
in the  bill, but were  not willing to go  on the record  at this                                                               
point.                                                                                                                          
                                                                                                                                
Number 1230                                                                                                                     
                                                                                                                                
VICE CHAIR  SEATON announced for  the record  that Representative                                                               
Kapsner  has joined  the committee,  and that  the House  Special                                                               
Committee on Education does have a quorum.                                                                                      
                                                                                                                                
REPRESENTATIVE KAPSNER said that  Lower Kuskokwim School District                                                               
was contacted but no official response has been received.                                                                       
                                                                                                                                
Number 1250                                                                                                                     
                                                                                                                                
VICE CHAIR SEATON  referred the members to Section 2  in the bill                                                               
that refers to nonpublic school  student transportation.  In that                                                               
section it  removes the  word "department"  and replaces  it with                                                               
the word "district".   He asked if the state  has areas where the                                                               
department provides transportation to  public and private schools                                                               
that are not  in a district and that would  still need to receive                                                               
transportation from the department.  He  asked if there will be a                                                               
loss of transportation services by this change in language.                                                                     
                                                                                                                                
MR. JEANS said that this  language removes the reference from the                                                               
department and replaces it with  the district.  What is currently                                                               
happening  under  this  system   is  that  school  districts  are                                                               
providing  transportation  for  non-public school  students  when                                                               
there is space  available and when it is over  an existing route.                                                               
This  would allow  districts  to continue  that  practice as  the                                                               
state moves to a grant program.                                                                                                 
                                                                                                                                
VICE CHAIR SEATON asked if  this practice is on a space-available                                                               
basis.   Mr. Jeans said  yes.  Vice  Chair Seaton asked  if there                                                               
would be  any required  changes by  districts for  providing that                                                               
public transportation.                                                                                                          
                                                                                                                                
MR.  JEANS replied  that this  service is  for non-public  school                                                               
students.    For  example,  the  bus goes  by  a  private  school                                                               
student's house, there is space  available on the bus, that child                                                               
can get  on that bus, the  bus goes right by  the private school,                                                               
and the student can be dropped off at the private school.                                                                       
                                                                                                                                
VICE CHAIR  SEATON clarified that  even though there is  a change                                                               
in the wording, there is no required change by the districts.                                                                   
                                                                                                                                
Number 1390                                                                                                                     
                                                                                                                                
MR. RICE  asked that the committee  take up Version V  before the                                                               
committee for consideration.  He  pointed out that the difference                                                               
between  Version  U  and  Version  V  is  that  Version  U  is  a                                                               
[proposed]  sponsor  substitute  and  Version  V  is  a  proposed                                                               
committee  substitute.    Mr.  Rice   stated  that  is  the  only                                                               
difference between the two versions of the bill.                                                                                
                                                                                                                                
Number 1440                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GARA said  that he  recalled one  version of  the                                                               
bill  having  language that  addressed  cost  increases into  the                                                               
future.  He  commented that Version U of the  bill has the number                                                               
set in stone forever.                                                                                                           
                                                                                                                                
MR. RICE  responded that to  his knowledge, there never  has been                                                               
an inflationary increase component in the bill.                                                                                 
                                                                                                                                
REPRESENTATIVE GARA  replied that  10 years  from now  the number                                                               
will still be the same as this year.                                                                                            
                                                                                                                                
MR. RICE replied that would be entirely up to the legislature.                                                                  
                                                                                                                                
Number 1472                                                                                                                     
                                                                                                                                
MR. JEANS  clarified the point that  the bill does not  allow for                                                               
any   inflationary   adjustment,   but  the   amount   of   money                                                               
appropriated will change  from year to year based  on the changes                                                               
in  enrollment.   So  if  a district  has  more  pupils, it  will                                                               
qualify for a  larger grant.  What  this bill will do  is lock in                                                               
the student  amount.  On  page two of  the fiscal note  where the                                                               
department  has identified  estimated  FY 03  costs per  student,                                                               
that  would be  the amount  per student  that the  district would                                                               
qualify for  and then as  the districts' enrollment  increases or                                                               
decreases, their  grant will  increase or  decrease from  year to                                                               
year.                                                                                                                           
                                                                                                                                
VICE CHAIR  SEATON pointed out that  this bill does not  have any                                                               
inflationary amounts built into it,  but does allow the districts                                                               
some flexibility in  how they provide pupil  transportation.  For                                                               
instance, if  they have  one child  at the  end of  20-mile road,                                                               
they could  send a taxi  for that  student, instead of  sending a                                                               
bus.                                                                                                                            
                                                                                                                                
MR.  JEANS  commented  that  it  is true  that  the  bill  allows                                                               
districts flexibility.  He said it  is important to note that the                                                               
grant will  change from year to  year based on how  many students                                                               
are enrolled in the district.                                                                                                   
                                                                                                                                
VICE  CHAIR SEATON  added that  the allocation  amount for  pupil                                                               
transportation per student would remain the same.                                                                               
                                                                                                                                
Number 1565                                                                                                                     
                                                                                                                                
MR. JEANS agreed that the amount  would remain the same until the                                                               
legislature changes it.                                                                                                         
                                                                                                                                
REPRESENTATIVE OGG  posed a  situation in  which a  district, for                                                               
example, Kodiak  Island School District,  believes that  they are                                                               
providing  pupil  transportation   as  efficiently  as  possible;                                                               
however, the  contractor comes in  and says insurance  costs have                                                               
gone up,  and fuel costs have  gone up, and the  actual bid comes                                                               
in over  what the  grant allows  based on  pupil enrollment.   If                                                               
Kodiak Island  Borough wants to add  more money to keep  the same                                                               
service, will  that amount have an  impact on the cap  that local                                                               
governments can contribute to education?                                                                                        
                                                                                                                                
MR.  JEANS  responded  that  it  will  not  impact  the  cap  for                                                               
education.   The reason  is that pupil  transportation is  from a                                                               
special revenue fund  and districts account for  that outside the                                                               
operating  fund.   The  cap  under  the foundation  program  only                                                               
applies to the school-operating fund.   So if a district did find                                                               
itself in  a position where  the costs were actually  higher than                                                               
the grant,  the municipality could  make an appropriation  to the                                                               
pupil transportation fund to cover those additional costs.                                                                      
                                                                                                                                
Number 1658                                                                                                                     
                                                                                                                                
VICE  CHAIR  SEATON  told  the committee  an  amendment  will  be                                                               
offered for  a new section  to eliminate  the one-and-a-half-mile                                                               
distance  requirement  that is  in  another  section of  statute.                                                               
That amendment is currently being  drafted by Legislative Affairs                                                               
Legal Services.   He mentioned this because he  wants the members                                                               
to be aware that amendment will be offered at some point.                                                                       
                                                                                                                                
REPRESENTATIVE  GARA   asked  how  the  amendment   would  change                                                               
statute.                                                                                                                        
                                                                                                                                
VICE  CHAIR  SEATON responded  that  it  eliminates the  distance                                                               
requirement so if  the districts decide that they  want to change                                                               
the requirement to  one mile and three-quarters or  two miles and                                                               
provide ways for students to  get there, the districts can change                                                               
that distance requirement.                                                                                                      
                                                                                                                                
MR.  JEANS  told the  committee  that  he believes  the  distance                                                               
requirement is not  in statute, but in regulation.   He said that                                                               
if the  grant program  passes, the  department will  be repealing                                                               
all the regulations dealing with reimbursable expenses.                                                                         
                                                                                                                                
Number 1719                                                                                                                     
                                                                                                                                
VICE CHAIR SEATON thanked Mr. Jeans for the information.                                                                        
                                                                                                                                
Number 1748                                                                                                                     
                                                                                                                                
TONNIE  BARLOW,  Member,  School   Board,  Wrangell  City  School                                                               
District, testified on  HB 259.  She encouraged  the committee to                                                               
take  some  time  to  allow  districts to  review  the  bill  and                                                               
understand the impact  of the legislation.   Ms. Barlow explained                                                               
that it  is difficult  to understand  the effect  the legislation                                                               
will  have   on  the  districts  because   amendments  are  being                                                               
discussed that they have not had  the opportunity to review.  She                                                               
said  because  Wrangell is  a  small  district, any  amount  will                                                               
impact them greatly.   She asked that time would  be provided for                                                               
districts  to ensure  that  transportation  issues are  addressed                                                               
adequately.     Ms.   Barlow  said   she   believes  that   pupil                                                               
transportation should be reimbursed by  the state at 100 percent.                                                               
Currently, the  state approves contracts by  districts.  Wrangell                                                               
has a five-year  contract already approved by  the department, so                                                               
when fiscal cuts  are made the district is looking  at honoring a                                                               
contract that has been committed to  with less funding.  She said                                                               
this will impact  student achievement because funds  will have to                                                               
be taken away from instruction to pay for transportation.                                                                       
                                                                                                                                
Number 1820                                                                                                                     
                                                                                                                                
VICE CHAIR  SEATON asked  Mr. Jeans  how existing  contracts that                                                               
extend over multiple years would  be influenced by this change in                                                               
law.                                                                                                                            
                                                                                                                                
MR.  JEANS commented  that many  districts are  in the  middle of                                                               
five-year contracts  right now.   By  using the FY  03 as  a base                                                               
year, at a minimum the  state is covering the existing contracts.                                                               
The contracts  do have inflationary adjustments  built into them,                                                               
but  he  submits  that  the   districts  could  go  back  to  the                                                               
contractors and reopen  those negotiations based on  the level of                                                               
funding available  to them.  Mr.  Jeans said he has  already been                                                               
contacted  by a  number of  districts that  want to  reopen their                                                               
contracts if  the gas  tax passes  to purchase  the fuel  for the                                                               
contractor.   These  are issues  that  will be  addressed at  the                                                               
local level.                                                                                                                    
                                                                                                                                
Number 1895                                                                                                                     
                                                                                                                                
SUSAN   SCIABBARRASI,   Superintendent,  Wrangell   City   School                                                               
District,  testified on  HB 259.    She told  the committee  that                                                               
Wrangell,  other communities  in  Southeast, and  other areas  of                                                               
Alaska  continue to  be  hit hard  with  major economic  decline.                                                               
This has been devastating to  the school districts.  Wrangell has                                                               
the highest  city sales  tax in  the nation, at  7 percent.   She                                                               
said this tax allows the community  to support the schools to the                                                               
cap each  year to compensate for  flat funding.  The  city cannot                                                               
continue   to    pay   for   unfunded   mandates,    cutting   of                                                               
transportation, and underfunding.                                                                                               
                                                                                                                                
MS.  SCIABBARRASI said  that Wrangell  has a  history of  valuing                                                               
education, but with the economic  decline, current high tax rate,                                                               
and major  cuts to education, the  district will have to  cut the                                                               
school budget between  $700,000 to $900,000 next year.   She said                                                               
the district  is reducing their  certified teaching  positions by                                                               
29 percent, thereby increasing the  pupil-teacher ratio (PTR) and                                                               
eliminating many elective classes that  have proved to enrich the                                                               
quality of education.  This  bill continues that downward spiral,                                                               
especially  for  districts  that  are already  in  crisis.    Ms.                                                               
Sciabbarrasi   urged   the   committee  to   fully   fund   pupil                                                               
transportation.    Research shows  that  for  students to  get  a                                                               
quality  education,   they  must   attend  school.     Decreasing                                                               
transportation  budgets could  cause  a decrease  in bus  routes,                                                               
thus  providing  a reason  not  to  attend  school or  to  attend                                                               
sporadically.                                                                                                                   
                                                                                                                                
Number 1994                                                                                                                     
                                                                                                                                
VICE  CHAIR SEATON  clarified any  confusion about  some comments                                                               
that have been  made.  He said the governor's  budget came to the                                                               
legislature with  only a portion of  pupil transportation funding                                                               
and  it is  anticipated that  the issue  will come  forward again                                                               
next year.   The attempt here is  to try to change  the system so                                                               
that the districts do not  get a portion of reimbursement without                                                               
having the flexibility  of containing their costs.   He said that                                                               
is the  objective of this legislation;  it is not just  a cutting                                                               
measure.   It is a  way to change  the process so  that districts                                                               
are not faced with short-funding pupil transportation.                                                                          
                                                                                                                                
Number 2060                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA  agreed with Vice  Chair Seaton.   There will                                                               
be continuing  pressure in the future  to figure out a  new pupil                                                               
transportation formula.   That just  seems to  be a reality.   He                                                               
encouraged  school districts  to  come up  with  a proposal  that                                                               
would meet  the governor's  concern.   The governor's  concern is                                                               
that   by   fully   funding   every   school   district's   pupil                                                               
transportation  costs,  it  is  unclear  if  some  districts  are                                                               
spending too much and whether there  is any waste in the existing                                                               
contracts.   There  are  those  that are  looking  for a  funding                                                               
mechanism that will try to  assure the legislature that contracts                                                               
are being negotiated  in the most efficient manner  possible.  He                                                               
asked the districts  to advise the members of  any proposals they                                                               
might  have in  addressing  this  problem.   He  said  he is  not                                                               
speaking  for anyone  else on  the  committee, but  that he  just                                                               
wants those  listening to  understand the  concern that  has been                                                               
shared with the members and what this bill is trying to address.                                                                
                                                                                                                                
Number 2153                                                                                                                     
                                                                                                                                
DAVE SPENCE,  Director, Planning and Operations,  Kenai Peninsula                                                               
School District,  testified on  HB 259.   He said  he appreciates                                                               
the efforts of  the committee in considering an  equitable way to                                                               
address transportation costs.  The  school district would like to                                                               
be  a  part  of  the  process,  but  they  need  time  to  really                                                               
understand what the consequences will  be in having a fixed grant                                                               
amount  to provide  pupil  transportation.   Mr.  Spence said  he                                                               
believes  the  Kenai Peninsula  School  District  has been  quite                                                               
competent  in  providing  transportation   in  an  efficient  and                                                               
economical manner.   He pointed  out that there are  changes that                                                               
impact the  costs of transportation with  increases in insurance,                                                               
gasoline, and  maintenance costs.   There  are also  other things                                                               
that come into  play.  He pointed out that  the district does not                                                               
know how  the [federal] No  Child Left Behind  (NCLB) legislation                                                               
will impact the schools.  [The  district] continues to have a lot                                                               
of pressure for remediation,  and transportation accompanies that                                                               
in the  summertime.   The district  continues to  address special                                                               
education needs,  and there  are transportation  costs associated                                                               
there.  Other  agencies have a domino effect on  how the district                                                               
can provide transportation around Kenai.                                                                                        
                                                                                                                                
Number 2218                                                                                                                     
                                                                                                                                
MR. SPENCE  pointed out  that what  happens in  other departments                                                               
also affects  transportation.  For  instance, how well  the roads                                                               
are  maintained,  hazardous  bus  routes, and  bad  weather  also                                                               
impact the costs  of transportation.  He said  the district would                                                               
like to  understand what locking in  the amount will mean  to the                                                               
district.  Mr.  Spence said that like other  districts around the                                                               
state,  their school  district has  had  financial problems  that                                                               
could be severely impacted by  this legislation.  The current PTR                                                               
has significantly gone up.  They  have laid off a lot of teachers                                                               
and have had to eliminate activities  travel.  He said they would                                                               
like to  request some time,  consideration, and careful  study on                                                               
this bill.                                                                                                                      
                                                                                                                                
Number 2330                                                                                                                     
                                                                                                                                
VICE  CHAIR  SEATON thanked  Mr.  Spence  for his  testimony  and                                                               
explained that this  is the first committee of  referral for this                                                               
bill.  There will be many  more opportunities for the district to                                                               
provide their position.   He told Mr. Spence that  Version V will                                                               
be "on  line" shortly; however, Version  U is the same  bill with                                                               
the  exception  of a  title  change  from sponsor  substitute  to                                                               
committee substitute.                                                                                                           
                                                                                                                                
Number 2411                                                                                                                     
                                                                                                                                
MIKE SCHWARTZ  testified via teleconference  in opposition  to HB                                                               
259.   He explained that  he owned the transportation  company in                                                               
Petersburg for  many years  and recently sold  the business  to a                                                               
young  man who  lives there.   Currently,  Petersburg is  getting                                                               
$229 per  student and Wrangell is  getting $449 per student.   He                                                               
said there  is a stranglehold  on education that goes  beyond his                                                               
comprehension.                                                                                                                  
                                                                                                                                
Number 2453                                                                                                                     
                                                                                                                                
MR. SCHWARTZ  said that the bid  in Wrangell took place  when his                                                               
equipment was  five years old.   By law,  school buses can  be no                                                               
older  than  ten  years  old.     So  he  was  able  to  compete.                                                               
Wrangell's contract,  on the other  hand, had  ten-year-old buses                                                               
and they  had to  go out  and buy  all new  buses, which  was his                                                               
justification for  getting $449 per  student.  Mr.  Schwartz said                                                               
that  in  the   twenty-five  years  he  was   involved  in  pupil                                                               
transportation the districts  tried saving money in  all sorts of                                                               
ways including payment  for transportation on a daily  basis.  He                                                               
said he was paid  so much per day, per mile, and  per route.  For                                                               
those in  the business, there is  a total cost required  and that                                                               
is what it is  going to take to run the  business.  Petersburg is                                                               
already  in a  stranglehold educationally.   He  said he  went to                                                               
school in Petersburg,  taught school there, and  has two children                                                               
who  are currently  teaching there.   The  cut to  education this                                                               
year is  going to  be $500,000.   The district  will have  to cut                                                               
teachers and programs, and they  are eliminating sports and music                                                               
programs.   When the contractor  comes in  next year to  bid this                                                               
contract, he will  have to come in with brand-new  equipment.  If                                                               
the legislature passes this legislation,  the contractor will not                                                               
be able  to buy new  buses, but  will have to  find five-year-old                                                               
buses, which  will not be  easy because everyone will  be looking                                                               
for  the  same   thing.    This  is  a  huge   hardship  on  many                                                               
communities.                                                                                                                    
                                                                                                                                
Number 2560                                                                                                                     
                                                                                                                                
VICE CHAIR  SEATON commented that  Mr. Schwartz brings up  a good                                                               
point about aging equipment.                                                                                                    
                                                                                                                                
MR. SCHWARTZ told the committee  the first time the districts cut                                                               
a hazardous  run and  a student is  killed, the  legislature will                                                               
look back  on this and  wonder why this was  done.  He  said this                                                               
legislation will hurt a lot of  communities.  He asked fair it is                                                               
that  some districts  are locked  in at  $1,200 while  others are                                                               
locked in at a lower rate.                                                                                                      
                                                                                                                                
VICE CHAIR SEATON  announced for the record that  Chair Gatto has                                                               
joined the  meeting, but that  he himself will continue  to chair                                                               
the meeting, since Chair Gatto is the sponsor of HB 259.                                                                        
                                                                                                                                
VICE  CHAIR SEATON  asked Mr.  Jeans  about the  question of  old                                                               
equipment and  purchase of new  equipment, and how that  might be                                                               
addressed.                                                                                                                      
                                                                                                                                
Number 2639                                                                                                                     
                                                                                                                                
MR. JEANS responded that he knew  this would come up as an issue.                                                               
He  told the  committee in  his experience  with contracts,  even                                                               
when a  district has a contract  with new buses, he  does not see                                                               
the contracts  going down five  years later.   He said  that once                                                               
the contract  is signed at a  certain level, the costs  just keep                                                               
going up from that level.   He said he understands Mr. Schwartz's                                                               
point about  Petersburg's dilemma.   He pointed out  that Annette                                                               
Island does it cheapest in the state at under $100 per day.                                                                     
                                                                                                                                
VICE CHAIR  SEATON said that  is an  issue the committee  will be                                                               
considering as the legislation goes forward.                                                                                    
                                                                                                                                
Number 2738                                                                                                                     
                                                                                                                                
STEVE  BRADSHAW, Superintendent,  Sitka Borough  School District,                                                               
testified via  teleconference on HB  259.  He told  the committee                                                               
he appreciates the intent of the  bill and would like to take the                                                               
time to see  what the impact would  be on the district.   He said                                                               
he appreciates  being held harmless  this year because  like many                                                               
districts in  the state, Sitka  is in the  first year of  a five-                                                               
year  contract, so  this could  have a  tremendous impact  on the                                                               
school  district.   The  governor's  proposal for  transportation                                                               
will cost this  district about $150,000, and  the district cannot                                                               
afford that.   He asked that  the district be given  time to look                                                               
the legislation  over.   He told the  committee one  concern that                                                               
occurred to him  is that the grant is based  on a per-pupil basis                                                               
and that could be very  difficult.  Currently, the Sitka district                                                               
is building  in 30 fewer students  in the budget than  last year,                                                               
but that does  not mean any bus  routes could be cut  or that the                                                               
cost  of transportation  would go  down.   Mr. Bradshaw  said his                                                               
initial reaction is  that it will be tough to  base the grants on                                                               
a per-student  basis.  He  summarized his comments by  asking the                                                               
members to give the district more time to provide input.                                                                        
                                                                                                                                
Number 2809                                                                                                                     
                                                                                                                                
VICE  CHAIR  SEATON  asked  Mr.  Bradshaw if  he  would  fax  his                                                               
thoughts on the bill to Chair Gatto's office.                                                                                   
                                                                                                                                
Number 2845                                                                                                                     
                                                                                                                                
STEVE  KALMES,  Director   of  Transportation,  Anchorage  School                                                               
District, testified  via teleconference on  HB 259.   He reminded                                                               
the committee  that 98 percent  of all students that  are injured                                                               
on their  route to  and from  school are  not school  bus riders.                                                               
They walk,  bike, or  are driven  by their  parents.   School bus                                                               
transportation  is the  safest possible  way to  get kids  to and                                                               
from school.                                                                                                                    
                                                                                                                                
MR.  KALMES   said  there  is   an  assumption  that   there  are                                                               
inefficiencies  in pupil  transportation  across the  state.   He                                                               
said he  does not believe  that is the  case.  In  Anchorage they                                                               
currently  run fewer  buses  than in  1985,  when enrollment  was                                                               
10,000  students fewer.    Costs have  increased.   A  commercial                                                               
driver's  license is  now  necessary  that has  a  whole host  of                                                               
requirements that  go along with  it, including drug  and alcohol                                                               
testing, background checks on drivers,  a 40-hour driver training                                                               
program, and a  certified school bus instructor  that is required                                                               
by   the  state;   all  drivers   receive  first   aid  and   CPR                                                               
[cardiopulmonary  resuscitation]  training.   The  districts  are                                                               
also required  to do  specialized training  for special-education                                                               
students.                                                                                                                       
                                                                                                                                
Number 2926                                                                                                                     
                                                                                                                                
MR. KALMES  said there are  significant increases in the  cost of                                                               
equipment and  supplies.   For example,  the cost  of a  tire has                                                               
more than  doubled in the  last 10 years.   The minimum  wage for                                                               
school bus drivers that is soon  coming will be an added expense.                                                               
He  told the  committee they  have done  things in  the Anchorage                                                               
School  District  to  control  costs.     They  worked  with  the                                                               
Department  of Education  and  Early  Development to  consolidate                                                               
contracts   with   [Matanuska-Susitna    School   District]   and                                                               
[Fairbanks School District].  Prior  to that, the district had no                                                               
other bidders  on transportation  contracts.   He said  this time                                                               
there were  six bidders, so  the district has been  successful in                                                               
attracting competition.   The  district uses  larger buses.   For                                                               
instance, four buses transport the  same number of kids that used                                                               
to require  five, so  the district saves  operating costs  on one                                                               
bus.     The  staff  does  not   like  to  hear  this,   but  the                                                               
transportation department  sets the school times  to ensure there                                                               
is the  most efficient system  in place.  The  district increased                                                               
the fleet  age in  the last contract  from 10 to  12 years.   The                                                               
wages for  the district's  school bus  drivers have  been frozen,                                                               
and the  top paid drivers make  $.25 more per hour  than they did                                                               
20 years  ago.  Mr. Kalmes  told the committee the  district uses                                                               
crossing  guards and  has  eliminated  hazardous routes  wherever                                                               
sidewalks have been built.                                                                                                      
                                                                                                                                
TAPE 03-17, SIDE B                                                                                                            
Number 2981                                                                                                                     
                                                                                                                                
MR. KALMES pointed out that the  district may start the year with                                                               
over 200  students and end  the year with over  300.  That  is an                                                               
increase over  the course of a  year which impacts the  number of                                                               
routes that operate.                                                                                                            
                                                                                                                                
VICE CHAIR SEATON told Mr.  Kalmes that the committee appreciates                                                               
the efforts districts have made  in cost saving efficiencies.  He                                                               
asked where this bill would  differentiate between the governor's                                                               
proposal of  funding at the  80 percent  level, and if  there are                                                               
some  other mechanisms  to fund  pupil transportation  that would                                                               
not be as detrimental to districts.                                                                                             
                                                                                                                                
MR. KALMES said the Anchorage  School District would be more than                                                               
willing to work  with other districts and the  department to come                                                               
up with something.   The problem with putting  something in place                                                               
is that some districts would  like to keep the savings; Anchorage                                                               
School District  just wants to pay  the bills.  What  will happen                                                               
is that efficient  districts will not be able to  find savings to                                                               
keep, but  the inefficient districts that  will find efficiencies                                                               
will be  rewarded.  He  volunteered to work with  other districts                                                               
toward  a  solution  or  audit  other  districts'  transportation                                                               
systems.                                                                                                                        
                                                                                                                                
VICE CHAIR SEATON  asked Mr. Kalmes to fax any  suggestions for a                                                               
positive solution to the committee.                                                                                             
                                                                                                                                
Number 2883                                                                                                                     
                                                                                                                                
CAROL   COMEAU,   Superintendent,  Anchorage   School   District,                                                               
testified  on HB  259 and  answered questions  from the  members.                                                               
She told the committee the  district is very concerned about this                                                               
bill and  the governor's proposed  cuts to  pupil transportation.                                                               
The district is  as efficient as possible based on  the large and                                                               
growing number  of students.   Not all the new  subdivisions have                                                               
safe  roads,  and there  are  heavy  traffic patterns  which  are                                                               
changing all  the time,  so the district  is required  to provide                                                               
transportation on those  hazardous routes.  She  pointed out that                                                               
Anchorage is the  hub for the vast majority  of special education                                                               
students who have serious medical or behavioral problems.                                                                       
                                                                                                                                
Number 2826                                                                                                                     
                                                                                                                                
MS.  COMEAU said  all  of those  students  who receive  education                                                               
services receive transportation as  part of their IEP [individual                                                               
education program], and the district  is required to provide that                                                               
transportation  to  them.    In   some  cases,  it  becomes  very                                                               
expensive  and very  individualized.   For example,  the district                                                               
has a contract  to provide education for the  Alaska State School                                                               
for  the Deaf  and Hard  of  Hearing.   Because that  is a  state                                                               
contract, there are  a number of students who live  in the Mat-Su                                                               
area.   The Mat-Su does  not provide the educational  program, so                                                               
the Anchorage  School District is  required by the  department to                                                               
provide pupil transportation from  Mat-Su into Anchorage for that                                                               
program.   Ms.  Comeau said  she believes  the district  is being                                                               
penalized in this  bill or by the governor's proposed  cuts.  She                                                               
said the  district worked  very closely  with the  department two                                                               
years ago  to become  as lean  and efficient  as possible  and to                                                               
bring in a new contractor.                                                                                                      
                                                                                                                                
Number 2774                                                                                                                     
                                                                                                                                
MS. COMEAU  said they would like  to be part of  the solution and                                                               
asked  the committee  to  look  at putting  together  a group  of                                                               
people  from  different  parts  of the  state,  where  there  are                                                               
different-sized   districts,   and  different   complexities   of                                                               
transportation.  She  believes this bill would not  allow for any                                                               
growth  in  student  population,   particularly  in  the  special                                                               
education population.   There needs to be a  factor included that                                                               
provides for  that complexity of student  transportation that the                                                               
district must individually  provide to those students.   The NCLB                                                               
is going  to be another  complicating factor if the  district has                                                               
to  reduce transportation  routes  for students;  that will  most                                                               
directly  impact  the  lowest  socioeconomic-base  students,  who                                                               
oftentimes are  the lowest-achieving students.   They may  or may                                                               
not  be showing  adequate yearly  progress  in NCLB,  and if  the                                                               
students are not  even in school, the district  will be penalized                                                               
because the  district will not  have 95 percent of  each subgroup                                                               
attending school to be tested.                                                                                                  
                                                                                                                                
Number 2730                                                                                                                     
                                                                                                                                
CHAIR GATTO,  sponsor of HB 259,  told the committee that  one of                                                               
the solutions proposed by the  governor is an enormous percentage                                                               
cut in  student transportation.   If  the districts  experience a                                                               
cut without  a resolution  in favor of  some other  method, would                                                               
not the district be much worse off?                                                                                             
                                                                                                                                
MS. COMEAU responded  that the Anchorage School  District is very                                                               
concerned  about the  portion  of  the bill  that  only looks  at                                                               
average daily membership  (ADM), rather than some kind  of way to                                                               
factor in  the special  education and hazardous  routes.   No one                                                               
wants any  child killed or  seriously injured because  a district                                                               
has taken away transportation and made  him or her walk on a very                                                               
hazardous street.  There  needs to be a way to  factor in some of                                                               
those situations beyond just the ADM factor.                                                                                    
                                                                                                                                
CHAIR GATTO  replied that since  there is only one  available pot                                                               
of money for pupil transportation,  if the legislature factors in                                                               
special education and hazardous routes  for one district, it must                                                               
be  factored into  all  districts.   How  will  the districts  be                                                               
better off?                                                                                                                     
                                                                                                                                
MS. COMEAU said that she believes  it is essential to look at the                                                               
kids  that  are being  transported,  and  it  is more  than  just                                                               
numbers of  students.   The district is  required by  federal and                                                               
state law to provide transportation  for certain numbers of kids,                                                               
those [covered  by the]  Individuals with  Disabilities Education                                                               
Act (IDEA).   Ms. Comeau said  she believes it would  not be fair                                                               
for  the district  to  take away  transportation  for other  kids                                                               
because those children have as  much right to safe transportation                                                               
to school  as the  special education kids,  who simply  have more                                                               
protection under federal law.                                                                                                   
                                                                                                                                
Number 2652                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GARA  asked  Ms.   Comeau  to  explain  how  this                                                               
legislation does not factor in special education kids.                                                                          
                                                                                                                                
MS. COMEAU  said she  will speak  to this  question but  will ask                                                               
Steve  [Kalmes]  to also  address  the  question.   She  posed  a                                                               
hypothetical example  where five  special education  students who                                                               
have wheelchairs moved into Anchorage.   That is the only way the                                                               
students can  get around.   So the  district must  transport them                                                               
with a bus that  has a lift.  Most of the time  these kids do not                                                               
live  anywhere close  to each  other,  so there  is an  elaborate                                                               
shuttle  system that  is  as efficient  as  it can  be.   So  the                                                               
transportation  for  five  special  education  students  is  very                                                               
different from  the transportation of five  non-special education                                                               
students that are just added to existing routes.                                                                                
                                                                                                                                
Number 2580                                                                                                                     
                                                                                                                                
MR. KALMES told  the committee that 40 percent  of the district's                                                               
buses  transport  5  percent  of  the  students.    That  is  the                                                               
district's handicapped  population.   Because of the  low density                                                               
and the  fact that  program locations are  spread all  across the                                                               
district,  it  is more  expensive  to  transport these  students.                                                               
Many  of  the  kids  need  additional  services  and  specialized                                                               
training because  they have medical  needs.  There are  kids that                                                               
need short ride  times so it reduces the length  of time they can                                                               
be on the  bus.  Mr. Kalmes told the  committee that the district                                                               
cannot transport a medically fragile kid for $300 per year.                                                                     
                                                                                                                                
Number 2537                                                                                                                     
                                                                                                                                
CAROL  ENZLER, Superintendent,  Petersburg City  School District,                                                               
testified on HB 259.  She  commented that as she was listening to                                                               
Carol  Comeau's testimony  on  special education  transportation,                                                               
she noted  that it  is likely  that Anchorage  has more  than its                                                               
fair share  of special  education students.   One thing  that was                                                               
not mentioned is that many  of those students must be transported                                                               
door to door.   These students are  not required to go  to a main                                                               
pickup  location, as  other students  are  required to  do.   Ms.                                                               
Enzler asked the  committee to give the  districts an opportunity                                                               
to review the  bill to determine what impact it  might have.  She                                                               
said it  does not look  as though it will  be a great  impact for                                                               
Petersburg next year, but the district  needs to have a chance to                                                               
look at what  it will do in  the future.  She  told the committee                                                               
she will  fax the members  the district's comments on  the impact                                                               
of the bill.                                                                                                                    
                                                                                                                                
Number 2477                                                                                                                     
                                                                                                                                
VICE CHAIR SEATON  announced that the committee  plans on holding                                                               
the bill and asked all the  districts to send suggestions on ways                                                               
of  improving this  bill or  any other  ideas in  addressing this                                                               
issue.                                                                                                                          
                                                                                                                                
Number 2442                                                                                                                     
                                                                                                                                
REPRESENTATIVE  OGG  said  that  he will  be  leaving  to  attend                                                               
another meeting, but will listen  to the testimony later on Gavel                                                               
to Gavel.                                                                                                                       
                                                                                                                                
Number 2413                                                                                                                     
                                                                                                                                
REPRESENTATIVE KAPSNER mentioned that  Version V is not available                                                               
on line yet,  but that Chair Gatto's office  could provide copies                                                               
to those that request it.                                                                                                       
                                                                                                                                
VICE  CHAIR   SEATON  agreed  with  Representative   Kapsner  and                                                               
announced that any one wishing to have  a copy of Version V of HB                                                               
259 should contract Chair Gatto's office.                                                                                       
                                                                                                                                
Number 2362                                                                                                                     
                                                                                                                                
JANELL  PRIVETT, President,  School Board,  Wrangell City  School                                                               
District, testified  on HB  259 and  answered questions  from the                                                               
committee.  She  said communities have not had  an opportunity to                                                               
look at  the bill to determine  the intentions and impact  it may                                                               
have.   She encouraged the  members to talk with  the contractors                                                               
who provide  busing for the  districts.   Mr. Jeans can  give the                                                               
members their names.  She said  she believes it is very important                                                               
to invite them to the table.   She said they are experiencing the                                                               
same  kinds of  increases in  costs that  all private  businesses                                                               
face with increased  liability and insurance costs.   She pointed                                                               
out that when  Wrangell and Petersburg numbers  are being quoted,                                                               
it is important  to keep in mind that Wrangell's  contract is new                                                               
this year and Petersburg has no  idea what its contract will look                                                               
like next  year.  She  asked that the legislators  remember their                                                               
responsibility  under  the  state  constitution  to  ensure  that                                                               
Alaska's children have an opportunity  for an adequate education.                                                               
The kids will not be at school without appropriate busing.                                                                      
                                                                                                                                
Number 2240                                                                                                                     
                                                                                                                                
MS. PRIVETT told  the committee that she cannot  support any bill                                                               
the brings  more reductions to  her community when  the community                                                               
is demanding  excellence in education.   The community  is paying                                                               
for that  as best they can.   Wrangell has the  highest sales tax                                                               
in  the  state of  Alaska;  they  contribute the  largest  amount                                                               
possible   to  education;   they  are   responsible  in   funding                                                               
education;  however, they  cannot  sustain  what the  legislature                                                               
keeps reducing in a fair and  equitable manner.  This year alone,                                                               
29 percent  of their staff  will be  terminated.  She  said there                                                               
are many great ideas, but those ideas cost more and more money.                                                                 
                                                                                                                                
Number 2210                                                                                                                     
                                                                                                                                
MS. PRIVETT  reminded the  members that they  are walking  in the                                                               
same footsteps as  many other legislators, and  are continuing to                                                               
do the  same things and will  continue to fail as  a legislature.                                                               
She told the committee they  are not bringing forth a responsible                                                               
fiscal plan,  or a  plan that  has a  future.   One of  the great                                                               
governor's  of this  state  made  a statement  and  she said  she                                                               
believed he  was wiser  than all  of us  understood at  the time:                                                               
Governor Hickel said  that "when there is no vision,  there is no                                                               
hope, and there is no future,  no agenda for Alaska, if your only                                                               
ideology or  only philosophy, if  your only  cause is to  cut the                                                               
budget."   She asked  the committee to  look toward  developing a                                                               
fiscal plan.   One  positive note  in the  bill is  the inflation                                                               
proofing of bus driver's salaries.   She asked that the committee                                                               
look to inflation proofing costs of education as well.                                                                          
                                                                                                                                
Number 2134                                                                                                                     
                                                                                                                                
VICE  CHAIR SEATON  asked  her to  please  contact Chair  Gatto's                                                               
office to get a copy of Version V of the bill.                                                                                  
                                                                                                                                
CHAIR   GATTO  commented   that   some   districts  are   gaining                                                               
enrollment,  some  districts  are  losing  enrollment,  and  some                                                               
districts' enrollment is  steady, but what is  noteworthy is that                                                               
in every single  one of those cases the districts  are asking the                                                               
legislature to increase pupil transportation.   This is something                                                               
that does  not seem possible for  the legislature to do  when the                                                               
governor  is  suggesting  that  there  be  reductions.    If  the                                                               
legislature  responds to  only those  districts  that are  losing                                                               
students,  as in  Wrangell, and  ignores those  that are  gaining                                                               
students and those that are  staying steady in enrollment, how is                                                               
that fair to anyone?                                                                                                            
                                                                                                                                
Number 2086                                                                                                                     
                                                                                                                                
MS.  PRIVETT  suggested that  the  committee  sit down  with  the                                                               
providers and find  out why there is so much  inconsistency.  She                                                               
said she  believes that will  provide some  of the answers.   The                                                               
Anchorage School District superintendent  spoke eloquently on the                                                               
different  services the  districts are  required to  provide, Ms.                                                               
Privett said.   In the  community of  Wrangell there is  only one                                                               
bus provider.  There will not be competition.                                                                                   
                                                                                                                                
Number 2058                                                                                                                     
                                                                                                                                
CHAIR GATTO said this is far from the question he'd asked.                                                                      
                                                                                                                                
MS. PRIVETT  pointed out that Wrangell's  current busing contract                                                               
is less than that of the  previous five years.  Wrangell has also                                                               
reduced their bus routes.                                                                                                       
                                                                                                                                
CHAIR  GATTO  asked how  it  is  fair  to  take money  away  from                                                               
districts that  are gaining enrollment or  those whose enrollment                                                               
is the same and give it  to districts that are losing enrollment.                                                               
How can  it not be  fair to treat everyone  the same by  saying a                                                               
district will  get a  certain amount of  money for  each student?                                                               
Is not that a fair way to do it?                                                                                                
                                                                                                                                
MS. PRIVETT  said she believes Chair  Gatto is putting her  in an                                                               
unfair position.   She  said if she  had adequate  information to                                                               
answer that  question, she would, but  she can only speak  to her                                                               
district's position.   Those  questions should  be asked  of each                                                               
district, but she  will be happy to provide the  answer on behalf                                                               
of her own  district.  There are people within  the Department of                                                               
Education and  Early Development, specifically, Eddie  Jeans, who                                                               
should be able to answer that question for Chair Gatto.                                                                         
                                                                                                                                
Number 1986                                                                                                                     
                                                                                                                                
REPRESENTATIVE KAPSNER  told Ms.  Privett that  Version V  of the                                                               
bill  does not  provide  for inflation  proofing  of bus  drivers                                                               
salaries.                                                                                                                       
                                                                                                                                
Number 1958                                                                                                                     
                                                                                                                                
VICE CHAIR  SEATON agreed with Representative  Kapsner's comment.                                                               
He asked Ms. Privett  to get a copy of Version U  or V from Chair                                                               
Gatto's office.                                                                                                                 
                                                                                                                                
Number 1910                                                                                                                     
                                                                                                                                
DEBBIE  OSSIANDER,   President,  Association  of   Alaska  School                                                               
Boards,  testified and  answered  questions  from the  committee.                                                               
She told the  committee the association consists  of school board                                                               
members  from  across Alaska  and  they  are extremely  concerned                                                               
about the  current discussions going  on a number of  fronts with                                                               
respect to  education.  Districts  are really feeling  the pinch,                                                               
and  the talk  of reductions  in pupil  transportation and  other                                                               
areas is extremely alarming.                                                                                                    
                                                                                                                                
MS.  OSSIANDER  said there  were  four  areas of  discussion  she                                                               
wanted  to bring  up  on this  bill.   First,  school boards  are                                                               
concerned about  linking payments to  2003 standards if  there is                                                               
no inflationary index  in the bill.  As the  costs to contractors                                                               
go up,  the districts  have to  meet those costs.   She  said the                                                               
second  item of  concern is  the lack  of regard  for changed  or                                                               
hazardous  conditions, or  special student  populations.   Third,                                                               
she said  she was concerned  with the  administration's testimony                                                               
[implying]  that school  boards could  have children  walk longer                                                               
than one and  half miles and that it would  be perfectly safe and                                                               
acceptable  thing to  ask communities  to do.   Fourth,  there is                                                               
also concern  that federal mandates  require that schools  have a                                                               
95 percent attendance  or the school will be placed  in a failing                                                               
category.   How  that  will  factor in  with  new discussions  on                                                               
tightening  pupil  transportation  or  not  fully  funding  pupil                                                               
transportation is a serious question.                                                                                           
                                                                                                                                
Number 1796                                                                                                                     
                                                                                                                                
MS.  OSSIANDER  expressed the  belief  from  the members  of  the                                                               
association  that school  boards and  school districts  have been                                                               
working  extremely   hard  to  contain   their  costs   in  pupil                                                               
transportation.  She said she is  amazed that there is the belief                                                               
by  some  that  there  would   be  some  willingness  by  private                                                               
contractors to open up a  contract and renegotiate the terms when                                                               
there  is a  reversal in  revenues  from the  public entity  that                                                               
entered into the  contract.  Ms. Ossiander  concluded her remarks                                                               
by  saying pupil  transportation  funding affects  a majority  of                                                               
districts  in the  state of  Alaska profoundly.   If  the funding                                                               
does not meet the fixed contract  costs, then the funds will have                                                               
to come from  somewhere.  The passion the members  are hearing in                                                               
testimony reflects districts' deep  concern that these funds will                                                               
come  from the  classroom.    She urged  the  committee to  tread                                                               
carefully  and told  the committee  the  association believes  in                                                               
fully funding transportation costs according to need.                                                                           
                                                                                                                                
Number 1728                                                                                                                     
                                                                                                                                
CHAIR GATTO commented that he and  Ms. Ossiander have been on the                                                               
same side  for a  lot of years,  and he wanted  her to  know that                                                               
they are still on the same side.   He said his biggest concern is                                                               
the $10.7 million reduction in  pupil transportation.  He said he                                                               
thinks that if  these reductions were to go  ahead, the districts                                                               
would wonder how the legislature could  have let this happen.  He                                                               
said what  he is trying  to do with this  bill is to  reverse the                                                               
$10.7  million in  a way  that  is acceptable  to the  governor's                                                               
office and  to the legislature.   This may be  a way to  do that.                                                               
It does  put the responsibility back  on the districts.   That is                                                               
what  he has  been asked  to do  by districts,  instead of  their                                                               
making  efficiencies  for which  the  district  gets no  benefit,                                                               
because  every time  a district  makes an  efficiency, the  money                                                               
goes  back  into  the general  fund.    This  is  a way  that  if                                                               
efficiencies  can  be found,  the  district  can keep  the  money                                                               
saved.                                                                                                                          
                                                                                                                                
CHAIR  GATTO  told  Ms.  Ossiander  this  bill  is  a  result  of                                                               
conversations he has  had with school districts who  said if they                                                               
were given  a fixed amount of  money, they know where  they could                                                               
make some  efficiencies and  would apply them  if the  money were                                                               
the districts' to keep.  That is  the reason for the bill.  It is                                                               
not simply a  desire to cut into education, but  rather an effort                                                               
to restore  education funding.   Chair Gatto  said he  knows that                                                               
the $10.7  million will come  right out  of the classroom  and he                                                               
does not believe  there is room to take it  out of the classroom.                                                               
He told  Ms. Ossiander  that he  is trying his  best to  keep the                                                               
money in  the classroom.   It appears this  bill might be  on the                                                               
right track.   He does not  have a different solution  unless Ms.                                                               
Ossiander might  have one.   He said  if the districts  face this                                                               
big a  cut, he knows  where it will be  coming from, and  that is                                                               
why he is here trying to resolve  this problem.  He said it is an                                                               
imperfect system  and imperfect people  are dealing with it.   He                                                               
does not  know where to get  the funds for fully  funding student                                                               
transportation.  He said he  will be listening to Ms. Ossiander's                                                               
comments  because  he knows  she  has  been involved  in  student                                                               
education for many years.                                                                                                       
                                                                                                                                
Number 1566                                                                                                                     
                                                                                                                                
MS. OSSIANDER  expressed her thanks  for Chair Gatto's  intent in                                                               
putting forth  this bill because  she knows the concern  and care                                                               
he has about this  issue.  She said if she  had to decide between                                                               
the two choices,  she would go with Chair Gatto's.   She does not                                                               
have the understanding yet that she  must step away from what she                                                               
believes is right, and that is  fully funding the costs for pupil                                                               
transportation.  If it is necessary  to go with HB 259, there are                                                               
some ways the bill could be improved.   One thing might be to get                                                               
people from  various-sized districts  to serve  as auditors  or a                                                               
specific group  of experts that  could suggest some  changes that                                                               
would work.   Another thing  that would help  is if there  were a                                                               
little  bit  of  flexibility  from  ADM  to  accord  for  special                                                               
circumstances such as special  education populations or hazardous                                                               
conditions that  have cropped up.   Ms. Ossiander said  she hopes                                                               
her suggestions help.                                                                                                           
                                                                                                                                
CHAIR  GATTO replied  that  her suggestions  do  help.   However,                                                               
every  time  there  is  a  suggestion, there  is  a  new  problem                                                               
associated with it.  He reiterated  that the amount of money that                                                               
will be  appropriated is fixed  and any kind of  flexibility from                                                               
ADM will come  from within the districts.  The  group of experts'                                                               
idea is  wonderful.  Chair  Gatto said he believes  Ms. Ossiander                                                               
is well positioned to come up  with one, two, or three people who                                                               
would have good  input.  He said he needs  the information pretty                                                               
quickly, and he  said he is more than willing  to make changes to                                                               
the bill if it would result  in an improvement.  Any changes that                                                               
suggest the  legislature increase the  amount of money  above the                                                               
$10.7 million will have to have  a method to produce those funds.                                                               
If there  can be a system  developed to implement the  idea, that                                                               
would be really welcome.  Chair  Gatto explained that it needs to                                                               
be  done  somewhat  quickly and  that  suggestions  are  welcome,                                                               
whether  they  are  from  experts  or  not.    CHAIR  GATTO  said                                                               
currently  the  administration is  cooperating,  but  if that  is                                                               
lost, he  said he  is fearful of  what will happen.   He  said he                                                               
hopes to get the  bill to where it is acceptable  and pass it on.                                                               
It may not  make it all the  way, but at least  the committee did                                                               
the best they could at the time.                                                                                                
                                                                                                                                
Number 1389                                                                                                                     
                                                                                                                                
MS. OSSIANDER said  she would send Chair Gatto a  couple of names                                                               
of people who are transportation folks.                                                                                         
                                                                                                                                
REPRESENTATIVE KAPSNER said the House  is not in lockstep on this                                                               
issue.  She said  she does not believe this is  the best that can                                                               
be done  with what the  state has.  She  believes there is  a lot                                                               
more money  than what is being  said.  Just because  the governor                                                               
did not want  to fulfill his promises on education  does not mean                                                               
she  does  not want  to  fulfill  her promises.    Representative                                                               
Kapsner said she does not  believe the legislature is beholden to                                                               
the governor and it is not  necessary to be in lockstep with him.                                                               
She said in the previous eight  years the legislature was not arm                                                               
in arm  with the  governor's office,  so there is  no need  to be                                                               
now.   The legislature is an  independent body, and she  said she                                                               
believes members should be thinking  for themselves.  This is not                                                               
a route  she wants  to take.   Representative  Kapsner reiterated                                                               
that  the legislature  is not  in 100  percent agreement  on this                                                               
issue.                                                                                                                          
                                                                                                                                
Number 1313                                                                                                                     
                                                                                                                                
VICE  CHAIR  SEATON  asked for  clarification  of  Representative                                                               
Kapsner's comments.   He asked if she has  problems with specific                                                               
parts of the  bill or just is  in favor of full  funding of pupil                                                               
transportation.                                                                                                                 
                                                                                                                                
REPRESENTATIVE KAPSNER  responded that  the school  districts are                                                               
not  bound legally  to provide  student  transportation, but  the                                                               
state is.  She asked Mr. Jeans if her assumption is correct.                                                                    
                                                                                                                                
MR.  JEANS replied  that  the state  is not  required  by law  to                                                               
provide pupil transportation.                                                                                                   
                                                                                                                                
REPRESENTATIVE  KAPSNER  commented  that  she  worries  when  the                                                               
legislature saddles  school districts  with having to  turn their                                                               
backs  on special-needs  kids or  having a  first grader  walking                                                               
over a mile  and a half to  meet the bus.  She  said that thought                                                               
makes her  shudder.   The education community  is the  last place                                                               
she believes the legislature should be looking for cuts.                                                                        
                                                                                                                                
Number 1217                                                                                                                     
                                                                                                                                
JOHN  STEINER, Member,  Anchorage School  Board, testified  on HB                                                               
259  and answered  questions from  the  committee.   He told  the                                                               
committee  that the  transportation costs  are not  discretionary                                                               
for  the  school  districts.    They  are  driven  by  contracts,                                                               
competition for  drivers, route distances, geographic  extent and                                                               
scope  of the  district,  student residents'  density within  the                                                               
district, weather  and climate within  the district,  fuel costs,                                                               
road and  traffic conditions, hazardous routes,  community growth                                                               
patterns,  and   the  degree   of  federally   protected  special                                                               
education students.   He pointed out that none of  the factors he                                                               
mentioned are related to ADM.                                                                                                   
                                                                                                                                
Number 1130                                                                                                                     
                                                                                                                                
MR. STEINER said  he very much appreciates  Chair Gatto's efforts                                                               
to  make some  sense of  the fact  that whether  the numbers  are                                                               
driving the  amount of transportation dollars  when districts are                                                               
growing  or shrinking,  it is  an imperfect  or flawed  solution.                                                               
For  example, if  there is  a compact  community with  relatively                                                               
mild weather  and no heavy  traffic highways that  make hazardous                                                               
routes,  they  may need  to  transport  virtually none  of  their                                                               
children,  since  they  may  all   be  within  walking  distance.                                                               
However, for  a community that is  geographically widespread with                                                               
a lot of highways, such as  Anchorage and Mat-Su and Kenai, there                                                               
will be  a very different picture.   Within that the  question is                                                               
not how  many students  are in  the district,  but how  many will                                                               
need transportation.   In one dense neighborhood  in Anchorage it                                                               
may  be that  virtually  all the  children walk  to  school.   In                                                               
another, it may be  that all of them have to  ride because of the                                                               
highway conditions around the school  and the distance from where                                                               
the  students   live.     If  100  students   are  added   for  a                                                               
redevelopment in a community that is  close to a school, there is                                                               
no  additional  cost  for  transportation.     If  it  is  a  new                                                               
subdivision that  is far away  from a school, those  children may                                                               
require an  entirely new bus  route, which will  be substantially                                                               
more expensive for the school  district than if the children live                                                               
next to the school.   All of this suggests that  in order to have                                                               
a fair  and workable  solution it  will be  necessary to  look at                                                               
factors other than ADM.                                                                                                         
                                                                                                                                
Number 1015                                                                                                                     
                                                                                                                                
MR. STEINER  told the committee  that his fundamental  concern is                                                               
that  the  20 percent  cut  is  not possible.    It  is a  flawed                                                               
situation, particularly when a large portion  of the cost is in a                                                               
district where  transportation is very  efficient.  To put  a cap                                                               
on  all  those issues  mentioned  earlier,  including changes  in                                                               
growth patterns and  special education, does make it  come out of                                                               
the classroom because there is nowhere else to take it.                                                                         
                                                                                                                                
Number 0940                                                                                                                     
                                                                                                                                
VICE CHAIR SEATON  told Mr. Steiner that he  should contact Chair                                                               
Gatto's office for  a copy of the  bill and the fiscal  note.  He                                                               
said  the idea  of this  bill  is that  most of  the factors  Mr.                                                               
Steiner mentioned are taken into  account by going to last year's                                                               
2003 costs to  the districts.  So whether a  district is rural or                                                               
not, the attempt was made to  look at its actual costs right now.                                                               
He  said  the  figures  in  the fiscal  note  will  show  a  vast                                                               
difference in the  cost of pupil transportation  from district to                                                               
district.  The  attempt is to use that as  baseline data and then                                                               
only look at  the changes to ADM.  The  legislature will need Mr.                                                               
Steiner's  input  on  how the  legislature  might  address  other                                                               
factors that need to be considered.   Part of the hope is that if                                                               
schools  are being  built along  highways, the  district will  be                                                               
lobbying  very  hard with  the  boroughs  and municipalities  for                                                               
adequate bike paths  or adequate ways of  accessing those schools                                                               
so that they are not in hazardous conditions.                                                                                   
                                                                                                                                
Number 0748                                                                                                                     
                                                                                                                                
CHAIR  GATTO  said the  members  are  familiar with  the  funding                                                               
formula and many of the items  he mentioned are included in that.                                                               
He said he  can only imagine if the legislature  tried to develop                                                               
a formula  that included densities, fuel  costs, traffic patterns                                                               
and  routes,   community  growth,   and  locations   for  special                                                               
education  students, all  of  which would  change  the very  next                                                               
year, which would mean more adjustments.  It would be dynamite.                                                                 
                                                                                                                                
Number 0570                                                                                                                     
                                                                                                                                
CHAIR GATTO reminded  Mr. Steiner that Mr. Jeans  said that pupil                                                               
transportation is  permissive.   It is conceivable  that everyone                                                               
in the House  and Senate will agree to restore  the $10.7 million                                                               
in funding,  and the governor  has the ability  to cut that.   He                                                               
said he  is not  sure that  the governor will  not because  he is                                                               
looking for  a CBR [Constitutional  Budget Reserve]  draw limited                                                               
to $395  million; if the  legislature ends up above  that figure,                                                               
he will be looking for places to cut the budget.                                                                                
                                                                                                                                
CHAIR GATTO said that the only thing  he would like to do is make                                                               
it [less]  difficult for  the districts  to at  least be  able to                                                               
depend upon  a certain amount  of money.   The districts  do well                                                               
with  predictable  numbers  and knowing  the  student  enrollment                                                               
gives  a predictable  number for  student transportation.   Chair                                                               
Gatto said he  knows the costs are going up  and believes all the                                                               
members know that,  but he does not want to  see money coming out                                                               
of the  classroom to fund  pupil transportation.   If there  is a                                                               
cut, that is the only place he  knows of where it will come from.                                                               
He  said  the  population  in  the Bush  is  stable  to  slightly                                                               
growing; in Southeast it is  shrinking; and in Anchorage and Mat-                                                               
Su it  is slightly growing, some  areas more than others.   Those                                                               
are trends  that may not  continue, but may reverse;  however, he                                                               
said he is trying  to look at a way to get  this written in stone                                                               
in a  way that  will help districts  with predictable  amounts of                                                               
money.  That is his goal.                                                                                                       
                                                                                                                                
CHAIR GATTO  said he does not  know how to make  a formula taking                                                               
into account  all the things Mr.  Steiner mentioned.  Even  if he                                                               
did come  up with a  formula, it  would probably be  changed over                                                               
and  over again  each year,  trying to  make it  correct, and  it                                                               
would never get there.                                                                                                          
                                                                                                                                
Number 0515                                                                                                                     
                                                                                                                                
MR. STEINER responded  that he fully respects  those concerns and                                                               
considerations.   He told the members  that he has a  copy of the                                                               
fiscal  note and  sees  the  various amounts  that  are spent  in                                                               
different districts.  The current  fiscal year does consider some                                                               
of those factors  already.  Some of those factors  do change from                                                               
year  to year,  as Chair  Gatto had  mentioned.   The changes  in                                                               
growth patterns  and where  new highways  are built  change where                                                               
hazardous  routes   are  located,   as  Vice  Chair   Seaton  had                                                               
mentioned.    He said  his  concern  in  using  an ADM,  with  no                                                               
adjustment factors that  allow for an efficient  district to have                                                               
a way  to address those  cost increases,  is that the  funds will                                                               
wind  up coming  directly out  of the  classroom.   There may  be                                                               
other  districts  where  there  are efficiencies  that  could  be                                                               
gained,  but he  said he  does not  believe those  savings should                                                               
stay in  the school district.   There should be some  system that                                                               
requires  districts to  be efficient  and for  those funds  to be                                                               
used to  help those other  districts that are  already efficient,                                                               
if that is the case.                                                                                                            
                                                                                                                                
Number 0353                                                                                                                     
                                                                                                                                
MR.  STEINER shared  the  concern that  the  governor may  simply                                                               
"line  item   veto"  pupil  transportation.     However,  if  the                                                               
legislature has gone to the  public, has carefully looked at what                                                               
has  been  touted  as  a  cost-plus  financing  system,  and  has                                                               
determined that  although there may  be some  inefficiencies, the                                                               
vast  majorities  of  these  monies  are  being  spent  extremely                                                               
efficiently, the  governor would  listen if the  legislature told                                                               
the governor that there is no  way to get this reduction from the                                                               
program because of  the extreme importance of  student safety and                                                               
the fact  that the  only place  reductions can  come is  from the                                                               
classroom.                                                                                                                      
                                                                                                                                
Number 0261                                                                                                                     
                                                                                                                                
CARL  ROSE,  Executive  Director, Association  of  Alaska  School                                                               
Boards,  testified on  HB  259 and  answered  questions from  the                                                               
members.  He  told the committee that he has  been listening very                                                               
carefully  to  the  testimony  this morning  and  in  the  Senate                                                               
Finance Committee  last evening, as  well as the  discussion that                                                               
took place in the House with  regard to the operating budget.  He                                                               
told the  committee that these  are the challenges of  the times.                                                               
Much  of what  the  committee  has heard  today  is  a result  of                                                               
frustration, and people  clinging to principle and  wanting to be                                                               
treated fairly.   On the other hand, the state  is facing serious                                                               
economic and political challenges.                                                                                              
                                                                                                                                
MR. ROSE said  he comes to the committee today,  as he is looking                                                               
at this budget  and trying to come up with  a plan that addresses                                                               
districts' needs, in  part, the $10.7 million,  and that presents                                                               
"us"  with one  opportunity.   Things  start to  look bleak  when                                                               
looking at the  next fiscal year and  on down the road.   He said                                                               
he is very concerned and alarmed.   The state is operating from a                                                               
point of  scarcity right now  and looking to squeeze  every area.                                                               
He told the  committee he testified last evening and  much of the                                                               
focus  was  on  economic  development  [oil  and  gas  in  Arctic                                                               
National Wildlife  Refuge] that is  anticipated in 10 years.   So                                                               
if looking  at the future in  10 years, that says  that the sixth                                                               
graders today  will be  the [people  with bachelor's  degrees] 10                                                               
years from  now.  If Alaska  is going to be  developed, education                                                               
is going to  be an important element  from [kindergarten] through                                                               
university.   The  best  possible education  that  the state  can                                                               
provide in its schools is going  to be limited by access, so that                                                               
is why transportation is so important.                                                                                          
                                                                                                                                
Number 0052                                                                                                                     
                                                                                                                                
MR. ROSE  said he  lends his  support in saying  that this  is an                                                               
issue that  needs to be  addressed.  "We"  are trying to  look at                                                               
what the  short-term benefit might  be and the  long-term impact.                                                               
He  said  he  is  hearing  that  the  districts  would  like  the                                                               
committee to move  slowly.  However, Mr. Rose said  that he feels                                                               
urgency, that  there needs to be  something done, and that  it is                                                               
important not to  sit back and wait.  He  commended the committee                                                               
and the  sponsor for putting  this bill  forward.  The  bill will                                                               
not  be settled  in  this committee;  it has  to  go through  the                                                               
entire  House,  the committee  process  in  the Senate,  and  the                                                               
Senate.    This bill  needs  to  get moving.    No  one wants  to                                                               
compromise.  The  governor has many options available  to him; he                                                               
not only has the line-item-veto  authority, but he can reduce the                                                               
appropriations.     That   is   not   something  districts   have                                                               
experienced in the last eight years.                                                                                            
                                                                                                                                
TAPE 03-18, SIDE A                                                                                                            
Number 0033                                                                                                                     
                                                                                                                                
MR. ROSE said  in the past the districts have  had a governor who                                                               
was willing to add money  to the budget; therefore, the districts                                                               
were  fearless of  any  veto  of additional  funds.    This is  a                                                               
different set of  circumstances today.  He told  the committee he                                                               
wants to  lend his support to  this legislation.  He  thanked the                                                               
committee and  the sponsor for  bringing this issue  forward, for                                                               
looking for solutions,  and said he knows there  will be numerous                                                               
opportunities   for   districts   to  bring   concerns   to   the                                                               
legislature.    He  said  he  really  appreciates  the  sponsor's                                                               
efforts in  restoring the $10.7 million  in the short term.   Mr.                                                               
Rose told  the committee  he is really  concerned about  what the                                                               
budget battle  will be next  year and  in subsequent years.   The                                                               
state has  a lot of  work to do.   He  said he hopes  the Special                                                               
Committee  on Ways  and Means  will  come up  with some  brighter                                                               
outlook, as  Janell Privett from Wrangell  had mentioned earlier.                                                               
There needs  to be some kind  of fiscal plan that  gives everyone                                                               
some hope.  In the short  term, however, everyone is compelled to                                                               
look at  the realities  and challenged  of the  times.   Mr. Rose                                                               
summarized  his   comments  by   saying  that  he   supports  the                                                               
committee's efforts,  but that  there is a  sense of  urgency and                                                               
there is a need to get moving.                                                                                                  
                                                                                                                                
Number 0132                                                                                                                     
                                                                                                                                
VICE CHAIR SEATON  agreed that this committee has  the same sense                                                               
of urgency that  Mr. Rose expressed.  The  legislature is working                                                               
on  the budget  and trying  to restore  funds and  identify where                                                               
those  monies will  come from.   He  said there  are a  number of                                                               
different  issues that  members  are putting  forward  to try  to                                                               
identify  revenues that  can pay  for these  things.   Vice Chair                                                               
Seaton applauded  the sponsor for  coming forward to try  to take                                                               
the pupil transportation off the table  as a major item of budget                                                               
cutting because  the members have  seen the priorities  listed by                                                               
the governor.  Vice Chair  Seaton said the legislature should not                                                               
ignore those  priorities, because  the governor has  the ultimate                                                               
authority  and unless  the legislature  addresses  those in  some                                                               
way, it is possible transportation will be cut.                                                                                 
                                                                                                                                
Number 0256                                                                                                                     
                                                                                                                                
CHAIR  GATTO agreed  with  the comments  made  to the  committee.                                                               
There is the  short-term and long term view;  the long-term which                                                               
is about ten years off.  He  said he is currently working on some                                                               
way that  will do something  for education and that  will enhance                                                               
the revenue stream for  education.  It is hard to  do.  There has                                                               
to  be support  from the  House,  the Senate,  the governor,  and                                                               
sometimes the public.   In the short term the  legislature has to                                                               
deal  with this  budget now.   It  does not  matter that  in two,                                                               
three,  five,  or  ten  years  the  state  will  be  better  off.                                                               
Something has  to be done  today with  the budget that  is before                                                               
the  legislature.   That is  why this  conversation is  happening                                                               
now.   What  does the  legislature do  now?   It is  important to                                                               
restore  funds to  education, and  everyone is  in agreement  [on                                                               
that].   How does legislature make  that happen?  Where  does the                                                               
money  come from?    Those  are the  questions  that  need to  be                                                               
answered.  [HB 259 was held over.]                                                                                              
                                                                                                                                
Number 0484                                                                                                                     
                                                                                                                                
CHAIR GATTO announced  that the following all deal  with the same                                                               
issue:  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."; HOUSE BILL NO.                                                               
220, "An Act relating to the  base student allocation used in the                                                               
formula for state funding of  public education; and providing for                                                               
an effective  date."; HOUSE  BILL NO. 222,  "An Act  requiring an                                                               
annual inflation  adjustment of the base  student allocation used                                                               
in  the  formula  for  state funding  of  public  education;  and                                                               
providing for  an effective date.";  and HOUSE BILL NO.  233, "An                                                               
Act relating to  the base student allocation used  in the formula                                                               
for  state funding  of  public education;  and  providing for  an                                                               
effective date."  A subcommittee will  look at all of these bills                                                               
that deal  with money  for education funding  and will  bring one                                                               
bill back to the full committee  to deal with.  That subcommittee                                                               
will be composed of  Representative Seaton, chair; Representative                                                               
Wilson; and Representative Gara.   Chair Gatto said that he hopes                                                               
the funding  formula can get an  increase in funds.   He said the                                                               
members  are  concerned  about  kids and  education  and  want  a                                                               
foundation  formula  bill  to move  though  the  process  quickly                                                               
before  the   legislative  session  is   over.    He   hopes  the                                                               
subcommittee will  come back  to the full  committee at  the next                                                               
meeting with a  bill to address the formula.   [End of discussion                                                               
of HB 26, HB  220, HB 222, and HB 233, all of  which were sent to                                                               
a subcommittee.]                                                                                                                
                                                                                                                                
CHAIR GATTO  briefly returned  attention to  HOUSE BILL  NO. 259,                                                               
"An  Act relating  to public  school transportation,  and to  the                                                               
minimum  wages  for school  bus  drivers;  and providing  for  an                                                               
effective date."   He said  that he hopes  to have changes  to HB                                                               
259  after consulting  with  some of  the  committee members  and                                                               
individuals  whom  Ms.  Ossiander  said would  assist  in  making                                                               
revisions to the bill.  [HB 259 was held over.]                                                                                 
                                                                                                                                
ADJOURNMENT                                                                                                                   
Number 0583                                                                                                                     
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special  Committee on  Education  meeting was  adjourned at  8:54                                                               
a.m.                                                                                                                            

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