Legislature(2003 - 2004)
04/22/2003 11:04 AM House EDU
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON EDUCATION
April 22, 2003
11:04 a.m.
MEMBERS PRESENT
Representative Carl Gatto, Chair
Representative Paul Seaton, Vice Chair
Representative Dan Ogg
Representative Peggy Wilson
Representative Kelly Wolf
Representative Les Gara
Representative Mary Kapsner
MEMBERS ABSENT
All members present
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."
- MOVED CSHB 259(EDU) OUT OF COMMITTEE
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."
- MOVED CSHB 233(EDU) OUT OF COMMITTEE
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
04/16/03 (H) Heard & Held
MINUTE(EDU)
04/16/03 (H) L&C AT 3:15 PM CAPITOL 17
04/16/03 (H) <Bill Hearing Postponed>
04/22/03 (H) EDU AT 11:00 AM CAPITOL 124
BILL: HB 233
SHORT TITLE:INCREASE EDUCATION FUNDING
SPONSOR(S): REPRESENTATIVE(S)WILSON
Jrn-Date Jrn-Page Action
04/02/03 0738 (H) READ THE FIRST TIME -
REFERRALS
04/02/03 0738 (H) EDU, HES, FIN
04/16/03 (H) EDU AT 7:00 AM CAPITOL 124
04/16/03 (H) <Subcommittee assigned>
MINUTE(EDU)
04/17/03 (H) EDU AT 1:00 PM CAPITOL 106
-- Meeting Canceled --
04/22/03 (H) EDU AT 11:00 AM CAPITOL 124
WITNESS REGISTER
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.
ACTION NARRATIVE
TAPE 03-19, SIDE A
Number 0001
CHAIR CARL GATTO called the House Special Committee on Education
meeting to order at 11:04 a.m. Representatives Gatto, Seaton,
Wilson, Ogg, and Wolf were present at the call to order.
Representatives Gara and Kapsner arrived as the meeting was in
progress.
HB 259 - PUPIL TRANSPORTATION FUNDING/DRIVER WAGES
Number 0056
CHAIR GATTO 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."
CHAIR GATTO announced that since he is the sponsor of HB 259, he
would be turning the gavel over to Vice Chair Seaton.
Number 0108
VICE CHAIR SEATON announced that the committee had before them
the proposed committee substitute (CS) for HB 259, which was
labeled CSHB 259(EDU), 23-LS0767\V. [Although there was no
formal motion, the committee treated Version V as the working
document.]
CHAIR GATTO, speaking as the sponsor, told the committee that
the tradition and funding of student transportation has caused
the administration and the legislature to be at odds with school
districts. The reason for this difficulty pertains to
accountability. He explained the process of providing student
transportation. The school districts advertise contracts for
pupil transportation, and then whoever is the low bidder submits
the bill to the state for payment. And, he remarked, although
the state has asked the districts to find some economies in
student transportation, what would be a district's motivation in
seeking out a lower bid when the end result is that those funds
would default back to the state? He commented that under the
current method, there is no benefit to the districts [in finding
efficiencies].
CHAIR GATTO told the committee that the governor is supportive
of this bill, and that while not all school districts have been
contacted, they are all aware of it. Some of the larger
districts that he has had a chance to talk to are "okay" with
the bill. He explained that the bill says that if a district
can find an economy in the busing program, any savings will be
the district's to keep. Chair Gatto said it is his hope that
the funds would go back into the classroom. That is the essence
of the bill, he summarized. He explained that it is
accomplished in the simplest way, by determining how much money
is needed to run a busing program on a per student basis in each
district. That figure is taken from the FY 03 data and frozen
in place. Then the next time the district puts out a contract,
if it is for less money, [the district keeps the difference].
CHAIR GATTO said he hopes the districts can find some economies
by combining routes. There have been complaints from people in
the community that they see school buses going up and down the
road and they are only three to five minutes apart. Some said
they believed it was a waste of money. The districts would say
that what they like to do is keep the elementary kids separated
from the middle school kids, and the middle school kids
separated from the high school kids. In order to do that it is
necessary to run multiple buses on the same route. If the
districts combine routes, there can be significant pupil
transportation savings. Many districts are willing to combine
busloads to save money, he predicted, as long as any savings
would then be the district's to keep and hopefully put back in
the classroom.
CHAIR GATTO pointed out that some districts that are losing
students will get less money to run their bus service, while
those gaining students would get additional money. He said most
districts are pretty flat. Southeast is losing, and the
Matanuska-Susitna ("Mat-Su") districts and Anchorage are
gaining, so there will be disparity in each district with regard
to how much they will get because it depends on enrollment
numbers.
Number 0578
REPRESENTATIVE WILSON said she believes this bill is directed at
districts that have been spendthrifts; however, she added, there
needs to be some thought for the communities that are not. She
used Petersburg as an example and explained that the reason that
district's cost is only $229 per student, which is very low
compared to Matanuska-Susitna Borough School District (MSBSD)
which is $776, is because Petersburg is at the end of a ten-year
cycle on its buses. The next time the Petersburg School
District puts out a contract, the contractor will have to get
new buses, so the costs will jump considerably. If this bill is
in place, there will be no way for Petersburg to meet these
costs. Representative Wilson asked how this bill could be fixed
to address this kind of problem.
CHAIR GATTO responded that Representative Wilson is correct that
MSBSD's costs are high, but surmised that that is due largely to
the fact that that borough is the size of West Virginia. The
MSBSD has to bus kids fairly long distances. A lot of the
busing funds are determined by the Individuals with Disabilities
Education Act (IDEA), he said. These are federal mandates which
require that students who qualify are bused no matter how far
away from the school they live. He pointed out that Petersburg
is a smaller community with very few buses.
CHAIR GATTO went on to say that every community's buses will
wear out. The idea is to get a contract, own a bus, or run
services in a different way in the hopes that the school
districts can keep the savings for classrooms. Some districts
actually pay the parents 32 cents per mile to take their kids to
school. That is a great deal for any district. He said that
while he is not advocating that practice, it is done. The
parents like it and the districts like it. Chair Gatto told the
committee that it is not the solution he is proposing for
Petersburg, rather that there are different ways that districts
are handling student transportation. This bill simply says that
districts that have more kids get more money. Since these funds
stand outside the funding formula, they are subject to
appropriations each year, he explained. As expenses for
contracts, buses, insurance, fuel, and other items go up, the
legislature can then take this fixed amount of money and
increase it by a percentage for each district. Chair Gatto said
that he agreed with Representative Wilson in that some districts
will suffer. He told members that the governor would like to
take this out of the hands of each individual community because
they do not support increases in student transportation funding.
In summary, he said that if the state continues to handle
student transportation the same way, the districts will suffer.
He acknowledged that there will need to be some adjustments;
however, if the transportation issue is handled in this way, he
said he believes that the districts will be better off because
the funding is fixed.
Number 0924
VICE CHAIR SEATON recognized for the record that Representatives
Gara and Kapsner had arrived.
REPRESENTATIVE WILSON surmised from Chair Gatto's comments that
he knows this bill is not fair to the smaller communities like
Petersburg and does not care.
CHAIR GATTO replied that he believes the bill is fair and that
he does care. He says he believes it is fair because it
provides a specific amount for each student based on the past
costs from each district. It would be terribly unfair if the
legislature made the amount for student transportation the same
for every student in every district in the state. He said that
he believes that every district has had to make adjustments.
The state did not just allow districts any amount of money they
wanted to submit for reimbursement. The contracts had to be
justified with multiple bids if multiple bids were available.
That is the fairness of it, he remarked. Chair Gatto emphasized
that he cares about how much money is funded for education
because he knows that whatever is not provided for student
transportation will probably come out of the classroom. He said
he is trying to make it possible for districts to keep as much
money as is possible.
REPRESENTATIVE WILSON said she believes this legislation is
unfair because it penalizes the communities that are already
working very hard to economize. These communities will be faced
with a great hardship because, as the contracts come up for
negotiations, there will be no way for communities to address
the [shortfall in funding]. She summarized her comments by
saying that she does appreciate all the work Chair Gatto has put
into this legislation; however, she opined, it will be a real
hardship for many small communities.
VICE CHAIR SEATON commented that even though there is a vast
disparity in the pupil transportation cost per student, he said
he believes much of that expense depends on what percentage of
the student population must be bused. For example, in a
[community] where 50 percent of the students walked to school,
then, when dividing the cost of busing by the total student
population, the costs will come out quite low, whereas if [a
community] has a very dispersed population, the cost of busing
will be quite high.
Number 1151
REPRESENTATIVE KAPSNER asked if this Version V addresses the
concerns and costs associated with providing transportation for
IEP (individual education program) students and those with
special needs.
CHAIR GATTO responded that it is addressed through the FY 03
numbers because IEP students were included in that figure. He
commented that for many districts, that cost is quite high
because of the long distances students must be transported.
REPRESENTATIVE KAPSNER expressed concern that the bill does not
allow for any growth of student population, especially the
special education population.
CHAIR GATTO replied that the bill does allow for growth in
student population because the higher the population, the more
money a district will get. He told members that if the special
education population percentage remains the same, then this bill
would be entirely fair; however, he added, there is no way to
predict [what future special education student populations] will
be. Chair Gatto summarized by saying that if a district had few
special education students, the district would do better with
pupil transportation costs; however, if that population grows,
then the district would not do as well.
REPRESENTATIVE KAPSNER commented that if school districts could
not provide adequate public transportation to get students to
school, then that could interfere with the 95 percent attendance
requirement in the No Child Left Behind Act (NCLB).
CHAIR GATTO commented that there was an adjustment in the NCLB
on the percentage of attendance. He said it does place a
requirement on the district to get the children to school. The
whole idea behind NCLB is to get children to do better in
school. This is a federal decision, not a district decision and
he hopes NCLB will lead to better-educated students.
CHAIR GATTO said he hopes that this legislation will help to
make education better for the state because it gives districts
the opportunity to [get funds] that they would not otherwise
have.
Number 1557
REPRESENTATIVE GARA asked for clarification regarding what
version of the bill was being discussed.
VICE CHAIR SEATON replied that the version being discussed was
Version V.
REPRESENTATIVE GARA told the members that he understands that
Chair Gatto tried to come up with a proposal that is better than
what is being proposed by the administration. He commented that
this is a better proposal than the administration's since that
is a flat 20 percent cut to student transportation; however, he
said he is interested in pursuing a working group's efforts to
come up with efficiencies that would avoid requiring districts
to cover an additional expense which would otherwise have to be
taken from classrooms. Representative Gara offered to
participate in a working group should the committee choose to
pursue that avenue.
REPRESENTATIVE GARA expressed concern with the portions of HB
259 that set limits on the amount of money that may be allotted
to school districts. An example he cited is the limit of $1,200
per student which can be paid to a district; there are currently
four districts that spend more than that right now. He
emphasized the importance of hearing from those districts.
REPRESENTATIVE GARA pointed out another concern with respect to
district's contracts which have been negotiated. In the case of
a district where the number of pupils declines, the district
will be compensated at less than their costs of student
transportation. He questioned whether the appropriation under
this bill will keep up with inflation or increased costs. He
asked if the committee would be willing to rework the bill to
address those problems.
Number 1759
CHAIR GATTO responded that that is the same issue with any
school if the number of students declines, whether it is teacher
retention [or pupil transportation]. He told members that it is
up to the districts to anticipate enrollment to the best of
their ability. He said he believes it is unreasonable for the
state to make these kinds of projections since it's the
districts that really know their own situations much better.
CHAIR GATTO agreed that inflation will occur and told the
members that that is the reason the bill allows for revisiting
the amount allocated per student for each district. He told
members that the governor agrees with this bill; however, he is
very concerned that if the bill does not pass, the consequences
will be very heavy and will mean a 20 percent reduction in
funding student transportation. He said that he believes this
is the best compromise possible. He summarized his comments by
saying he believes $1,200 per student for 180 days is very
generous funding.
REPRESENTATIVE GARA asked if the four districts that incur more
than $1,200 per student have indicated their ability to reduce
their costs. He asked if the reason for high costs has been
explored.
CHAIR GATTO responded that he does not know the reason [for such
high costs in student transportation]. He commented that the
Delta/Greely School District is on the road system, adding that
he believes there are probably some efficiencies that could be
made. He offered that it may be that the Delta/Greely School
District's geography is more spread out than the Matanuska-
Susitna Borough School District, which is providing pupil
transportation at a cost of [$767] per student. He commented
that there needs to be a cap.
VICE CHAIR SEATON asked whether the Department of Education and
Early Development has had any discussions with the school
districts on the $1,200 cap in pupil transportation.
Number 1932
EDDY JEANS, Manager, School Finance and Facilities Section,
Education Support Services, Department of Education and Early
Development, replied that there has been no discussion on this
issue. He offered to initiate input from the districts and
report back to the committee.
VICE CHAIR SEATON asked which school districts presently have
the highest transportation costs.
MR. JEANS replied that the Delta/Greely School District is the
highest in cost - at $1,400 per student; another district is
paying $1,300; and two other districts are just over $1,200.
CHAIR GATTO interjected that the Delta/Greely School District is
in an area with a growing population. He said that as the
district's ADM [average daily membership] goes up, there will be
an increase in the amount of funds allocated to the district.
He said he believes that the Delta/Greely School District will
think this is a good idea.
REPRESENTATIVE KAPSNER asked Mr. Jeans whether students are
flown to school. She said she believes that students from
Naknek must be flown over to South Naknek, and students from
Oscarville must be flown to Napaskiak during the river freeze-up
or break-up. She asked if these students would be affected by
the [$1,200 cap].
MR. JEANS responded that he is only aware of the students in
Naknek having their transportation provided. The department
pays for students to be flown from Naknek to South Naknek on a
daily basis. He commented that the school district [in
Napaskiak] may have a plane and may provide transportation on a
temporary basis for the students [who live in Oscarville].
REPRESENTATIVE KAPSNER asked how this bill will affect the
transportation funding for these students.
MR. JEANS responded that that is a choice the two communities
must make. Currently, students are educated in Naknek through
grade 5. Once the students are in sixth grade they are flown to
South Naknek. He reiterated that this is a choice that the
Bristol Bay School District and school board must make. The
Bristol Bay School District has projected that their
transportation costs for FY 04 will be $321,000. If
transportation were funded at the governor's recommended amount,
Bristol Bay School District would be funded at $237,000;
however, under [HB 259] the district would be funded at $283,000
- which is still $40,000 less than what is being projected for
FY 04.
CHAIR GATTO noted that the governor's proposed appropriation
would be $90,000 less than what the district has projected.
MR. JEANS concurred.
Number 2108
CHAIR GATTO asked what districts have planes.
MR. JEANS replied that it is his understanding that the Bering
Strait School District has a plane, but the state does not
provide reimbursement it.
CHAIR GATTO asked if the department provides reimbursement for
any planes.
MR. JEANS said the department does so for the Bristol Bay
Borough School District.
CHAIR GATTO asked what the cost of that is per student.
MR. JEANS responded that the cost is $321,000 which includes a
plane contract and a small bus route. The majority of those
funds are spent on the plane contract.
REPRESENTATIVE GARA surmised that the premise of both this bill
and the governor's bill is that school districts are wasting
money in the area of pupil transportation. He asked Mr. Jeans
whether there is any specific information that would confirm
that this premise is accurate.
MR. JEANS responded that pupil transportation costs have
increased 136 percent in the last ten years. It has gone from
under $25 million up to the projected $58 million. He told the
committee that part of this increase is due to the system that
is currently in place, which is a reimbursable system. Even
though districts put RFPs [request for proposals] on the street,
the contractors and the school districts know that under the
current system that cost is passed on to the state. Mr. Jeans
said that the department believes there are efficiencies that
can be achieved, but it will be up to the individual school
districts to determine how they will get there. He explained
that he has been told by school districts that under the current
reimbursable system, if efficiencies are made, those funds are
rolled back to the state or passed on to other school districts.
Number 2309
MR. JEANS said that under the governor's proposal, the Anchorage
School District will receive a 20 percent reduction, which is
actually a 26 percent reduction because that figure does not
take into account the increases in projections for FY 04. He
projected that the Anchorage School District will be required to
find $4.9 million from local sources to cover their
transportation program.
MR. JEANS told members that if the Anchorage School District
wants to reduce the local contribution, then the district would
have to reduce its services. If the reduction was $1 million,
the reduction in local share would be $500,000. He explained
that under the current system of reimbursement, when districts
save $1, only $.50 comes back to the district, and the other
$.50 goes to other districts. Mr. Jeans summarized that that is
one of the issues districts have raised about the current
system. Districts say it would be beneficial if there were some
way it could keep some of the money it has identified. Mr.
Jeans told members that Chair Gatto's bill would allow this to
occur. He acknowledged that this is not the funding level that
districts want, but it does allow districts that find
efficiencies to keep those funds at the local level - the funds
would not go back to the state to get distributed statewide.
REPRESENTATIVE GARA asked for clarification regarding the
Anchorage School District.
MR. JEANS explained that when he used the Anchorage School
District's reimbursement as an example, he was using it in the
context of the governor's budget. So with the governor's bill,
26 percent of the student transportation would have to be funded
at the local level. The earlier reference to a 20 percent
reduction does not take into account the FY 04 increases, he
reiterated. What the governor's budget does is reimburse
districts at 74 percent of their costs. Mr. Jeans went on to
explain that if the Anchorage School District wants to reduce
their share, for every dollar that the district reduces it, $.50
of that goes back to the state and is distributed statewide. As
a result, other school districts will be reimbursed at 75.5
percent instead of 74 percent, for example. So their rate of
reimbursement goes up because the Anchorage School District
saved some money. Mr. Jeans explained that the opposite is true
too. There will be some school districts that will ask for
additional routes. For every new route that is approved by the
department, there will be a proration for every other school
district in the state. He commented that this will be awkward
because if there was no request for the new route in the FY 04
budget, the request will not even be considered.
Number 2490
REPRESENTATIVE KAPSNER discussed the many reasons the Anchorage
School District cited as reasons for increased costs in pupil
transportation; for example, commercial drivers license permit
fees, background checks, school bus driver physicals,
fingerprinting, commercial drivers licenses, DMV (Division of
Motor Vehicles) fingerprinting processing, fees for class "S"
endorsements, child safety restraints, automatic chains, added
emergency exits, strobe lights, and video cameras. She asked
Mr. Jeans how much of an increase would be justified to meet all
these requirements.
MR. JEANS responded that he cannot answer the question. He
pointed out that most of the requirements have been in place for
a very long time, and that there are questions on some of these
items. For instance, the ratio of video cameras on buses has
not been determined. Should the state pay for a video camera on
every bus or 1 in 10 buses. Can the state afford that, he
questioned. He offered the question of whether there should be
automatic chains on all buses - is it necessary in a community
that has basically all flat ground, or just those that go up on
the hillside.
REPRESENTATIVE WILSON commented that about half the schools will
get increases and half will get decreases. She pointed out that
districts will lose funds as they lose students, but because the
routes will continue to operate, the cost in transportation will
be the same. She said that the school districts who lose
funding will have to take the money from the classroom, and
noted these are the schools that have already made drastic cuts.
She told the members that if the Anchorage School District were
to lose the same percentage of teachers as some of the schools
in her district, Anchorage would actually lose as many as 971
teachers this year. She said she is very concerned about the
disparity between districts.
CHAIR GATTO commented that in his discussions with
transportation directors, he found that districts determine how
far the bus will travel to pickup students. If a student lives
beyond that point, it is the parent's responsibility to
transport their child to school. He added that he was told by
directors that there is a 20 percent economy that could be made
in transportation costs, but it is not something districts want
to do. These savings could be made by eliminating multiple
trips on the same bus route, he said. The problem for the
school district is that all the schools would start at the same
time and that is not something the community wants. He pointed
out that under this bill, the money saved in pupil
transportation can be put into classrooms. The alternative is
even less money, he predicted, adding that that will be
devastating.
Number 2875
REPRESENTATIVE KAPSNER asked why Chair Gatto keeps referring to
the alternative, since the governor cannot unilaterally decree
that student transportation will get less money.
CHAIR GATTO offered his understanding that the governor can do
so.
VICE CHAIR SEATON added that the governor not only has line item
veto power, but also has line item reduction authority. The
governor can reduce student transportation funding by 20
percent, he said. Vice Chair Seaton told members that he spoke
with the Kenai Peninsula Borough School District this morning
and they shared many of the concerns that Representative Wilson
mentioned with respect to declining student population.
Transportation funding is being done by routes, so if, for
example, the student population drops by 5 percent, the routes
will remain the same. Vice Chair Seaton commented that a 20
percent reduction in student transportation is much more
problematic for the Kenai Peninsula Borough School District than
the use of ADM in determining funding. He pointed out that
there is a fairness issue with respect to the cost savings
mentioned. In his district, cost saving efforts in the form of
transporting all the pupils on one bus have already been made,
so districts who have not made those changes will now be able to
do that and put the money saved back in their own [budgets].
That is a fairness issue, he remarked, adding that he does not
see an option.
TAPE 03-19, SIDE B
Number 2949
VICE CHAIR SEATON told the members that he supports moving HB
259 from committee. He said he will be talking with individuals
in his district and hopes that districts will come forward with
their opinions on this bill.
REPRESENTATIVE OGG commented that his district will say that
they have done economies [to reduce transportation costs]. He
said he hopes there will be a section in the bill that
delineates how a district would apply for an increase in
funding. Noting that although Chair Gatto mentioned that there
could be an across the board increase, discussions on the bill
lead him to believe that each district will be faced with its
own particular circumstances. Representative Ogg asked how an
increase in students is addressed.
CHAIR GATTO explained that when the ADM comes in, the district
receives a specific amount of money per student based on the
district's formula. Thus HB 259 would address the rise and fall
of student population: each year the dollar amount per ADM per
district could go up 1 or 2 percent for each student.
REPRESENTATIVE OGG asked whether Chair Gatto envisions
adjustments being done to each individual district or to the
entire state system as a whole.
MR. JEANS replied that the way the bill is currently written,
all districts would be increased by a percentage. He added that
he does not know how it would be possible to adjust an
individual district.
VICE CHAIR SEATON posed a situation in which a district has 3
percent special needs students, and then, through changes of
student population, that special needs population increases to 5
percent. As the bill is currently written there would be no way
for the district to ask for an adjustment.
MR. JEANS concurred that he does not see a mechanism available
in this bill, since it refers to the amount districts were
reimbursed in FY 03 divided by their student population. An
individual school district could not be adjusted without putting
those numbers into the statute.
REPRESENTATIVE OGG pointed out that a change can take place
within a district and there would be no way in this bill to take
that into account. He suggested that a section be added to HB
259 that would address adjustments for individual school
districts.
CHAIR GATTO responded that to some extent, this bill is self-
correcting. If a district has an administrator, bus barn, and
mechanics, even if there is a need for an additional bus, it is
not necessary to add an administrator, bus barn, and mechanics;
only another bus. Conceivably, the district could be better off
because the cost is shared. He pointed out that there could be
the opposite situation where there currently is a need for a bus
and that need ceases to exist.
REPRESENTATIVE OGG indicated that although he wants the [bill]
to move forward, he would like to see language that would say
adjustments can be made through presentations by individual
districts.
Number 2652
VICE CHAIR SEATON asked Mr. Jeans if he sees any problem in
adding that kind of provision to the bill. He added that he
understands that the legislature could put something in statute
that would address individual districts, but asked if there is
some mechanism that could be added to the present bill to avoid
an onerous process.
MR. JEANS replied that the only way he believes that issue could
be addressed is if the legislature were to insert in statute the
actual student amounts allocated for each district. Then those
districts that felt there was a need for an adjustment could
come to the legislature and lobby for that adjustment. He
predicted that if the bill puts this issue back on the
department, then the districts will be right back in a
reimbursable system. He explained that when a district exceeds
the grant amount for their transportation program, it will be
asking the department for more money, whereas if the districts
have found some efficiencies, then the department will not hear
from them.
The committee took an at-ease from 11:55 a.m. to 12:05 p.m.
REPRESENTATIVE GARA surmised that the intent of the bill is to
allow school districts to find efficiencies in pupil
transportation costs that the district would then be allowed to
keep and put in the classroom. However, this presumes that
there are some schools out there that have not achieved
efficiencies yet. He told members that he believes that there
are school districts out there that have achieved all the
efficiencies they will be able to attain. This bill rewards
those school districts that have been inefficient by giving them
money for their classrooms. If a district is efficient, they
get nothing, he stated.
CHAIR GATTO replied that he does not believe that there are any
school districts that are perfectly efficient. There is a
spectrum between the most and least efficient, he commented.
The way this process has worked in the past is that whenever a
bid is put out to the bus companies, the lower bid was then
forwarded to the department, which has had no choice but to pay
it because transportation costs are 100 percent reimbursable.
Chair Gatto pointed out that there has not been any motivation
for the district to look for even lower bids. This bill is
intended to provide some incentive to school districts to find
efficiencies that can then be put back into the classroom.
Number 2398
REPRESENTATIVE GARA said that he objects to moving ahead with HB
259 because there are no facts to base this approach upon. He
added that he appreciates Chair Gatto's attempt [at finding
funds for education].
REPRESENTATIVE KAPSNER said that she concurs with Representative
Gara's comments that this bill is based on the presumption that
all school districts are inefficient. She asked Chair Gatto
whether, as a school board member, he believes his school
district was inefficient in providing pupil transportation.
CHAIR GATTO responded that he did not have the opportunity to
investigate how his school district ran student transportation.
He added that he had to put his trust in the transportation
director. However, in his discussions with that director, he
was told that there were ways to make efficiencies, but the
community would not agree on them. The parents [of younger
children] did not want their children mixed in with the older
kids because of behavioral issues. One solution that was
considered was installation of cameras; but that leads to extra
money. He pointed out that whatever the district did about
addressing efficiencies, it did not lead to money back in the
district's budget, so without the motivation, these efficiencies
are not likely to happen.
VICE CHAIR SEATON noted that he is not accusing anyone of
building in inefficiencies, rather that there has been a ranking
of priorities. If busing is being reimbursed and the priority
is different starting times [for classes], then saving money on
the bus route is not the priority because it is more convenient
for the schools to start at different times. The motivation is
simply different, he commented. He said his district has looked
at efficiencies by having all the kids ride the same bus. This
bill would move the cost of transportation to a priority concern
for districts.
CHAIR GATTO told members that this should be a school district
decision based on what is reasonable versus what is economical.
REPRESENTATIVE KAPSNER said that since Alaska has one of the
lowest gas taxes in the nation, she assumes [the tax bill] will
be passed. She asked whether this be another hit to school
districts. She commented that a lot of school districts and
contractors will want to renegotiate their contracts so that
school districts pay for the added cost of gas.
Number 2072
CHAIR GATTO replied that the outcome of the gas tax [bill] is
unknown and it would be hard to adjust for that now.
MR. JEANS stated that it is his understanding that the proposed
gas tax does not affect school districts. The school districts
that are running their own fleet are exempt; however, the
contractors are not exempt. He commented that the districts may
want to reopen their contracts and provide the fuel for its
contractors.
VICE CHAIR SEATON pointed out that school districts could
purchase fuel through a statewide contract, at a lower price,
and supply the fuel to contractors.
REPRESENTATIVE KAPSNER said she'd heard that some school
districts were looking at reopening five-year contracts if a gas
tax were to increase [the cost of fuel]. She asked Mr. Jeans to
comment.
MR. JEANS confirmed that his office has already been contacted
by school districts about the possibility of reopening
[contracts].
REPRESENTATIVE GARA asked why the state has not taken over pupil
transportation negotiations for school districts that are not
doing a good job on their own. New contracting staff expenses
could be prorated and the cost could be shared by the districts,
he said.
Number 1882
VICE CHAIR SEATON asked if Representative Gara is offering an
amendment.
REPRESENTATIVE GARA responded that before the bill is moved out
of committee, he wants to determine whether there are better
approaches to address this problem. He summarized his comments
by saying he does not believe it is a good idea to send a bill
from committee when other alternatives have not been fully
explored.
Number 1818
REPRESENTATIVE OGG moved to adopt Amendment 1, which read
[original punctuation provided]:
line 15
new section 2. Adjustments to the amount of money set
per pupil in this Act shall be done on an individual
district basis.
line 16 change sect 3 to sect 4.
REPRESENTATIVE OGG explained that the purpose of Amendment 1 is
to address the issue of districts inefficiencies; it would allow
those districts that need more funds to bring their case
forward. He said he is concerned about the ambiguity in the way
adjustments would be made. He commented that he does not
believe it is fair to set the rate of reimbursement in stone
based on what the districts are doing right now [FY 03].
Adjustments should be allowed in the future based on individual
districts and their changing needs.
Number 1674
REPRESENTATIVE WILSON objected for the purposes of discussion.
She expressed concern for the extensive work that would be
required of the department to implement Amendment 1; however,
the legislation as written is unfair [to districts]. The
districts need flexibility in making adjustments. She pointed
out that for many districts, even if the ADM drops, the same
services will have to be provided.
VICE CHAIR SEATON asked Mr. Jeans whether the legislature would
really need to adopt the spreadsheet [on pupil transportation]
into statutes as the baseline, which could then be changed.
MR. JEANS replied that that is correct.
CHAIR GATTO responded that he objects to Amendment 1 because
every district would have some justification for adjustments.
The legislature would be dealing with every district, he
asserted.
VICE CHAIR SEATON said that the Mr. Jeans had a good point when
he said that the only districts that would be coming forward are
those that need an increase, and those that saved the money
would be keeping it and using it. He commented that he believes
[Amendment 1] would be an incentive and escalation package for
districts and very hard to administer. He added that he will
not be supporting Amendment 1.
REPRESENTATIVE WILSON commented that she does not believe it
would be necessary to put the spreadsheet in statute. She
pointed out that the Department of Fish and Game administers
many programs through regulation.
REPRESENTATIVE GARA surmised that the intent of Amendment 1 is
to take into account real cost increases, but does not state so
specifically. He asked Representative Ogg if he is correct in
his understanding of Amendment 1.
REPRESENTATIVE OGG commented that he did not want to use
language like "real cost increases" because adjustments could be
up or down. He added that he would not want to predict the
future.
REPRESENTATIVE GARA pointed out that Amendment 1 does not say
what the adjustments are for. The adjustments should be based
on real cost increases or decreases because, without that
language, the legislature would not be giving the department the
guidance it needs to administer the program.
REPRESENTATIVE GARA, in response to Representative Ogg's request
for suggestions, said that the language in Amendment 1 should
include language that says, "adjustments based on cost."
VICE CHAIR SEATON pointed out that [Amendment 1] would mean that
the department would have to analyze, on an on-going basis, any
savings made by a district and then come back and adjust those
savings. This would remove any reason for the bill to go
forward because the intent of the bill is to allow efficiencies
and incentives. He said that this amendment completely changes
the purpose of the bill and eliminates the incentives.
Number 1120
REPRESENTATIVE WILSON commented that this bill is not an
incentive bill; it simply changes the law. Those districts that
gain funds will not change anything, and those districts that
have already made those efficiencies and lose money will have to
take funds from the classrooms, she said.
VICE CHAIR SEATON replied that the incentive is that the
districts get to keep the money instead of sending it back to
the state. However, [Amendment 1] says that the department will
take any money districts are able to save and give it back to
the state.
Number 0955
REPRESENTATIVE WILSON moved to amend to Amendment 1 by deleting
the period after "basis" and adding ", based on real cost
increases or decreases." There being no objection, the
amendment to Amendment 1 was adopted.
The committee took an at-ease from 12:30 p.m. to 12:35 p.m.
CHAIR GATTO told the members that he is not satisfied with the
way Amendment 1 [as amended] reads and asked the members to vote
no on it.
VICE CHAIR SEATON pointed out that Amendment 1 [as amended] will
leave districts where they are now, whereby the department will
make increases and decreases based on real costs in pupil
transportation.
REPRESENTATIVE OGG told members that if Amendment 1 [as amended]
is not adopted, the payment of pupil transportation will be set
in stone.
VICE CHAIR SEATON disagreed with Representative Ogg's point, and
said he believes that the bill as currently written allows for
school districts to come back for increases in transportation
funding each year. He pointed out that a bill can be introduced
at any time to change the base amount paid. For instance, there
could be a request for a 2 percent across the board increase. A
separate bill could also be introduced to address a district's
increase or decrease based on specific circumstances. He said
he believes Amendment 1 [as amended] will introduce a system
whereby continuous adjustments will be made by the department.
CHAIR GATTO pointed out that the foundation formula comes before
the legislature every year with no built-in increases. This
funding could come before the legislature in the same way each
year.
REPRESENTATIVE GARA stated that the difference between this bill
and the foundation formula is that when changing the foundation
formula, only one number needs to be changed; however, under
this bill there will need to be 40 to 50 adjustments to reflect
districts' real costs and to compensate for inflation.
CHAIR GATTO responded that many of these changes could be
addressed in an across the board increase. He said he agreed
that if every district came back to the legislature with a
request it would be a quagmire. He suggested as an option
offering the same percentage increase as the foundation formula.
Number 0383
REPRESENTATIVE OGG commented that under the bill as currently
written, it is not clear what will happen. An across the board
increase for large school districts might be fine, but small
school districts would have to convince a lot of people that an
increase is warranted.
VICE CHAIR SEATON pointed out that there has been discussion
about increases based on percentages; however, there could be a
change based on the number of pupils, similar to how LOGs
[Learning Opportunity Grants] are administered.
Number 0250
A roll call vote was taken. Representatives Wolf, Gara,
Kapsner, Ogg, and Wilson voted in favor of Amendment 1, as
amended. Representatives Seaton and Gatto voted against it.
Therefore, Amendment 1, as amended, was adopted by a vote of 5-
2.
Number 0082
REPRESENTATIVE GARA moved Amendment 2.
TAPE 03-20, SIDE A
Number 0001
VICE CHAIR SEATON read Amendment 2 [original punctuation
provided]:
At
P. 2, line 16, insert a
new Sec. 3:
In the case where a district's ADM decreases from
a prior year, the prior year's ADM shall be utilized
in determining the amount under AS 14.09.010 unless
the Department makes the following finding: That
pupil transportation costs have decreased by an amount
proportionate to the decrease in ADM.
Number 0063
CHAIR GATTO objected to Amendment 2.
REPRESENTATIVE GARA explained that the committee has heard
testimony that some school districts have two-, three-, four-,
and five-year school bus transportation contracts. A
circumstance could occur under this bill, unless it is amended,
where, in 2003, a school district has an ADM of 500; however, in
2004, the ADM goes down by 30 students, but the school
district's costs do not go down. Amendment 2 would say that
unless the school district's actual costs go down in a
proportionate amount to the ADM, the amount reimbursed to the
school districts will not go down. Before the pupil
transportation funding is decreased, the department must make
sure that the lower ADM has resulted in lower costs to the
school district.
VICE CHAIR SEATON posed a situation wherein there were three
years of successive decreases. Is it the intent of Amendment 2
to go back to the original point at which the district's
attendance started to fall or would Amendment 2 take effect
after the second year of a decline in ADM.
REPRESENTATIVE GARA replied that he would want it done in a way
that says pupil transportation reimbursement only goes down if
costs go down, commensurate with ADM. He commented that he is
unsure how to address the question Vice Chair Seaton raised.
VICE CHAIR SEATON said he is just looking for clarification on
what Amendment 2 would entail.
REPRESENTATIVE GARA responded that the intent of Amendment 2 is
that the amount the department will reimburse school districts
will not go down until they achieve costs savings commensurate
with the reduction in ADM.
REPRESENTATIVE WILSON told the committee that every school that
is decreasing in ADM is going to show a decrease in funding in
costs to the schools because that is all they have. For
example, if a district has dropped 30 students, the district
will get that much less in funds, and it does not have any more
money to spend so it will look like their costs have decreased,
she said.
REPRESENTATIVE GARA said he thinks he may agree with the point
Representative Wilson is making, but needs clarification.
REPRESENTATIVE WILSON used the example of a school district that
has 500 students and receives a set amount of money per student.
If the district loses 30 students, it will get less funding
because of that loss [in ADM].
Number 0413
VICE CHAIR SEATON pointed out HB 259 is only talking about pupil
transportation costs and not about foundation funding.
REPRESENTATIVE WILSON responded that for the schools that are
dropping in ADM, there will not be more money to spend except
what they get in funding.
VICE CHAIR SEATON restated his previous comments. For example,
he said, if a district has [existing] bus routes, and then loses
students, the bus routes are still maintained, therefore the
district has not decreased transportation costs. What Amendment
2 says is that the district would not lose any money for pupil
transportation. Of course, the foundation formula will go down
as the ADM goes down, but HB 259 simply addresses pupil
transportation [funding] and not the foundation formula or
compensation to the districts for the number of students.
REPRESENTATIVE WILSON asked how the districts would prove that
their costs did not go down. She said if this goes into effect,
all the districts that [have an increase in students] are going
to get more funds, and all the districts that are losing
students will get less.
CHAIR GATTO responded to Representative Wilson's comments that
if a district loses 30 students, the district will tell the
state that the cost for pupil transportation has not decreased.
Who has the burden of proof? Will the department go to each
district, review their budget and bus routes, or will the
department accept whatever is provided to them. He said the
point of HB 259 is to allow the districts a free enterprise
system in which to provide [transportation] the best way it can
with what it has. What Amendment 2 does is slowly and
incrementally wind the districts and state back to where they
are now, he stated. Chair Gatto warned that Amendment 2 will
result in the districts receiving a 20 percent cut in
transportation costs, whereas it is his hope that transportation
funding will stay level. He reiterated that intent of HB 259 is
to ensure that school districts do not take a reduction. Every
time an amendment is added that complicates the bill, it is a
threat to the legislature's ability to avoid a reduction, he
opined.
Number 0632
REPRESENTATIVE GARA summarized that if the committee does not
adopt Amendment 2, the state will start taking money away from
the school districts whose costs are not going down. He said he
cannot support a bill that is based on a false premise, that
being that costs go down when ADM goes down. Representative
Gara told members that Amendment 2 is an attempt to avoid a
penalty to those school districts whose costs do not go down
when their ADM goes down. He referred to Chair Gatto's question
about whose burden it is to prove that costs have gone down
before funds are taken away from school districts. That would
be the state's burden, he opined, since this is the state's
proposal. If the state wants to take money away from school
districts, it should have to prove its case that costs have gone
down.
REPRESENTATIVE WILSON said that all school districts have
contracts with transportation companies that are based on the
service that is provided, not on ADM. If school districts get
less funding for student transportation, then they will have to
make up those funds because they are under contract with the
transportation company. No one is going to be able to prove
that districts' costs have dropped because, as long as they are
under contract, there will not be a decrease in costs.
REPRESENTATIVE GARA commented that the purpose of Amendment 2 is
to address the reality that Representative Wilson just pointed
out. If the districts' costs do not go down, then the
department does not take funds away from them. Without
Amendment 2, if a district has a long-term student
transportation contract and the costs do not go down, the state
will be taking money away from that school district. Amendment
2 in essence says: do not take money away from school districts
that have long term busing contract unless the state can show a
reduction in costs commensurate with ADM.
CHAIR GATTO responded that that practice is done with the
foundation formula. If a district's student enrollment goes
down, the state does not tell them to close the school or fire
teachers. Every district's costs stay up, even if there is a
loss in students.
CHAIR GATTO said this bill makes it incumbent on the district to
determine how it handles student transportation based on how
much per student it receive. If a district loses students, it
loses in the [foundation] formula and in student transportation
funding. He commented that it is important to establish some
criteria that lets the state evaluate the costs that make sense
to the state as well as to the districts. With Amendment 2, no
one will lose any money because every district will show that
even though there are fewer students, the costs did not go down.
Number 0965
A roll call vote was taken. Representatives Gara and Kapsner
voted in favor of Amendment 2. Representatives Seaton, Gatto,
Ogg, Wilson, and Wolf voted against it. Therefore, Amendment 2
failed to pass by a vote of 2-5.
Number 0988
REPRESENTATIVE GARA moved to adopt Amendment 3, which read
[original punctuation provided]:
p 1 line 14
Delete "$1200"
Insert "$1500"
Number 1001
CHAIR GATTO objected.
REPRESENTATIVE GARA pointed out that according to testimony,
there are some districts that spend upwards of $1,450 per
student for pupil transportation. The committee has not heard a
shred of evidence that those school districts are spending too
much or that those costs are either justifiably or unjustifiably
high, he asserted. He opined that before the state takes money
away from those school districts, the legislature needs to hear
why costs are too high. The committee has not heard that
evidence. Amendment 3 says that the school districts are
allowed to spend what they have been spending.
Number 1076
A roll call vote was taken. Representatives Gara and Kapsner
voted in favor of Amendment 3. Representatives Seaton, Gatto,
Ogg, Wilson, and Wolf voted against it. Therefore, Amendment 3
failed to pass by a vote of 2-5.
Number 1145
REPRESENTATIVE Ogg moved to report the proposed CS for HB 259
[the version labeled CSHB 259(EDU), 23-LS0767\V], as amended,
out of committee with individual recommendations and the
accompanying fiscal notes.
Number 1152
REPRESENTATIVE GARA objected.
A roll call vote was taken. Representatives Seaton, Gatto, Ogg,
and Wolf voted in favor reporting Version V, as amended, out of
committee. Representatives Wilson, Gara, and Kapsner voted
against it. Therefore, CSHB 259(EDU) was reported out of the
House Special Committee on Education by a vote of 4-3.
REPRESENTATIVE WOLF, later in the meeting, told the committee
that although he does not want to hold HB 259 up, he needs to
talk with community members about their thoughts on the bill.
VICE CHAIR SEATON returned the gavel to Chair Gatto.
The committee took an at-ease from 1:01 p.m. to 1:04 p.m.
HB 233 - INCREASE EDUCATION FUNDING
Number 1223
CHAIR GATTO announced that the final order of business would be
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."
CHAIR GATTO said he believes there is not enough time for the
committee to discuss the bill at this time. The meeting was
recessed at 1:10 p.m. to a call of the chair.
CHAIR GATTO called the meeting back to order at 1:11 p.m.
Present at the call back to order were Representatives Gatto,
Seaton, Wilson, Ogg, Wolf, Gara, and Kapsner.
Number 1792
REPRESENTATIVE SEATON moved to adopt [Amendment 1]: on page 1,
line 6, delete "$4,150" and insert "$4,168".
CHAIR GATTO announced that without objection, Amendment 1 was
adopted. He said that HB 233 [as amended] is straightforward in
that it changes the base student allocation from $4,010 to
$4,168.
REPRESENTATIVE SEATON, as the Chair of the subcommittee on HB
233, gave a brief explanation of how the subcommittee came up
with the amount for the increase in base student allocation. He
said HB 233 as amended rolls the LOGS (Learning Opportunity
Grants) of $23.3 million into the formula, along with $3.9
million from legislation pertaining to the "two-year
kindergarten" program, into the base student allocation. Of
that $3.9 million, $2.2 million will hold harmless those
districts that would have lost money by going from the per
student allocation to the adjusted student allocation, and the
remaining $1.7 million was added into the formula. Those funds
are already in the House budget.
CHAIR GATTO commented that the subcommittee did an amazing
amount of work in finding ways to increase the formula without
removing funds from some other area.
REPRESENTATIVE SEATON told the committee that the subcommittee
also took $8 million of lapsed foundation formula money from
this year and rolled it into a new LOG grant which is based on
the adjusted ADM. These new LOGs equal $38 per student.
REPRESENTATIVE GARA asked for confirmation that the $8 million
in lapsed foundation formula money is not included in the $4,168
base student allocation.
REPRESENTATIVE SEATON confirmed that it is not included in the
base student allocation figure; it is a one-time appropriation
that is kept outside of the formula.
REPRESENTATIVE GARA asked if it would be necessary to amend the
proposed House budget in order to pass HB 233 [as amended] out
of committee - the committee cannot just state that an
appropriation will be made.
REPRESENTATIVE SEATON responded that the $8 million will have to
be included in the capital budget. He added that it is the
intent of the subcommittee to go to the House Finance Committee
on this because that has been the process the LOGs have gone
through [in the past].
Number 2016
REPRESENTATIVE KAPSNER said she appreciates the work the
committee did on this bill, but disagrees that the funds were
not taken from some other areas. The subcommittee took $3.9
million from the two-year kindergarten program which she
wholeheartedly supports.
REPRESENTATIVE SEATON clarified that the subcommittee was trying
to stay within the education budget. That does not mean that
funds did not come from some other program; rather, they did not
come from some other budget outside of the Department of
Education and Early Development.
REPRESENTATIVE KAPSNER said that she objects on behalf of the
Bering Strait School District.
REPRESENTATIVE GARA said that a few of the members have been in
support of increased funding for education. He said his
position has consistently been that the base student allocation
should rise to $4,303 per student to account for inflation
dating back to 1998. A number of legislators voted for that on
the House floor a couple of weeks ago and it did not pass. He
said that given the reality of the proposals that have been
introduced and not passed, and the reality that this is an
increase over the House budget that did pass, he said he is
supporting HB 233 [as amended] with the qualification that he
thinks the state can do much better. He said this allocation is
better than what the House passed out, and so he will vote to
move the bill out of committee. He added that he appreciates
the work Representatives Seaton and Wilson did on the bill.
Number 2123
REPRESENTATIVE GARA moved to report the proposed committee
substitute for HB 233, as amended, out of committee with
individual recommendations and the accompanying fiscal notes.
REPRESENTATIVE KAPSNER said that she does not want to object,
but wants to reiterate that she is in strong opposition to
taking money away from the two-year kindergarten program. She
said she is personally opposed to taking money out of a program
that allows four-year-olds to attend pre-kindergarten and
kindergarten classes, because so many Alaskans do not have
access to preschool or head start; many Alaskans do not come
from a "print-rich environment," and many Alaskans are not
English-language proficient. She said she believes this is
setting kids up to fail because it is clear that there is a
group of kids that needs fostering. They need to become
comfortable in the classroom and have access to books and
reading. In order for these kids to pass the third grade
benchmark, they need to get comfortable reading. She said that
is the basis for her objection; she said, however, that she will
vote for the bill.
REPRESENTATIVE OGG said he would like to see a 2 percent
increase in the foundation formula, but that is not possible
this year. He commended the subcommittee on its work.
Number 2336
CHAIR GATTO asked if there were any objections to reporting HB
233, as amended, from committee. There being none, CSHB
233(EDU) was reported out of the House Special Committee on
Education.
ADJOURNMENT
Number 2377
There being no further business before the committee, the House
Special Committee on Education meeting was adjourned at
1:25 p.m.
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