Legislature(1995 - 1996)
05/02/1996 08:40 AM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
May 2, 1996
8:40 A.M.
TAPE HFC 96-155, Side 1, #000 - end.
TAPE HFC 96-155, Side 2, #000 - 117.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 8:40 a.m.
PRESENT
Co-Chair Hanley Representative Martin
Co-Chair Foster Representative Mulder
Representative Brown Representative Navarre
Representative Grussendorf Representative Parnell
Representative Kelly Representative Therriault
Representative Kohring
ALSO PRESENT
Eddy Jeans, Division of School Finance, Department of
Education; Tom Boutin, Division of Forestry, Department of
Natural Resources; Willie Anderson, NEA-Alaska; John Walsh,
Staff, Representative Foster; Wanda Cooksey, Single Site
School Districts.
SUMMARY
SB 98 An Act making changes related to the aid to
families with dependent children program, the
Medicaid program, the general relief assistance
program, and the adult public assistance program;
directing the Department of Health and Social
Services to apply to the federal government for
waivers to implement the changes where necessary;
relating to eligibility for permanent fund
dividends of certain individuals who receive state
assistance, to notice requirements applicable to
the dividend program; and providing for an
effective date.
SB 98 was rescheduled to another time.
SB 180 An Act authorizing the commissioner of the
Department of Natural Resources to negotiate and
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enter into timber sale contracts that provide for
local manufacture of high value-added wood
products; and establishing an Alaska Forest
Products Research and Marketing Program within the
Department of Commerce and Economic Development.
HCS CSSB 180 (FIN) was reported out of Committee
with a "do pass" recommendation; and with a fiscal
impact note by the Department of Natural
Resources, 4/26/96; and with a zero fiscal note by
the University of Alaska, 4/22/96; and with a zero
fiscal note by the Department of Community and
Regional Affairs, 4/23/96.
SB 244 An Act relating to state foundation aid and
supplementary state aid for education; and
providing for an effective date."
HCS CSSB 244 (FIN) was reported out of Committee
with a "do pass" recommendation and with a fiscal
impact note by the Department of Education, dated
4/11/96.
SB 289 An Act relating to runaway minors and their
families or legal custodians.
SB 289 was rescheduled to another time.
SCR 23 Relating to long range financial planning.
SCR 23 was rescheduled to another time.
SENATE BILL NO. 244
"An Act relating to state foundation aid and
supplementary state aid for education; and
providing for an effective date."
EDDY JEANS, DIVISION OF SCHOOL FINANCE, DEPARTMENT OF
EDUCATION testified in support of SB 244. He noted that the
legislation would make an adjustment to the regional
educational attendance area (REAA) school districts'
instructional unit value to allow the state of Alaska to
meet the new federal disparity standard which has dropped
from 25 to 20 percent. The legislation has a retroactive
clause which would make the bill effective in FY 96. The
legislation also contains a hold harmless provision for FY
96. The fiscal note is for $311.7 in FY 96 and $20.2 in FY
97.
In response to a question by Representative Martin, Mr.
Jeans explained that variances between school districts is
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based on the amount of impact aid each school district
receives along with their number of instructional units. He
added that all but two school districts apply for and
receive federal impact aid funds. These funds are measured
for all districts when determining state aid. In Anchorage,
Fairbanks and Kodiak the state of Alaska is the applicant
for students that reside on a military base. Funds are
allocated within 45 days of receipt.
Representative Martin referred to deferred maintenance. Mr.
Jeans noted that the foundation program provides funding
that all school districts should be using for preventative
maintenance. Once funds go to the school districts they are
discretionary funds allocated by the school board.
Co-Chair Hanley noted that the Department of Education does
not determine which schools have to be funded in a district.
He asked if the federal formula takes into account
maintenance in school districts on buildings owned by the
military. Mr. Jeans explained that impact aid funds are in
lieu of local taxes. He maintained that the foundation
formula should provide sufficient revenue to cover annual
maintenance. He observed that the rate of reimbursement is
established by one half of the statewide expenditures per
pupil.
Co-Chair Hanley provided members with Amendment 1 (copy on
file). He noted that the legislation was amended in the
Senate to pay 100 percent of Anchorage's actual cost in
pupil transportation. Some of Anchorage's buses are driven
by employees and some are on contract. Currently, Anchorage
is reimbursed at 67 percent of their actual operations. The
Senate amendment would result in a $2 - $2.5 million dollars
addition pupil transportion reimbursment for Anchorage. If
the additional amount is not funded by the Legislature the
cost would be reallocated within all the school districts.
An amendment was offered in the House Health Education and
Social Services Committee to reimburse school districts at
the contract level. This amendment would have cost
approximately $200.0 thousand dollars. He noted that the
intent of the legislation is to take care of a disparity
problem and a potential loss of $40.0 million dollars in
federal funds. He stressed that a reevaluation of pupil
transportion costs would be appropriate during deliberations
to rewrite the entire foundation formula. He explained that
Amendment 1 would require that the Department to review both
employee and contract transportation costs.
Representative Mulder noted that Amendment 1 would allow the
Senate title to accompany the legislation. Co-Chair Hanley
emphasized that there would not be a dollar impact or
reallocation effect on the budget.
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Mr. Jeans summarized that the amendment would require the
Department to review the agreement with the Anchorage School
District.
Representative Mulder MOVED to adopt Amendment 1. There
being NO OBJECTION, it was so ordered.
Representative Mulder MOVED to return to the title
transmitted by the Senate with CSSB 244 (FIN) am. There
being NO OBJECTION, it was so ordered.
In response to a question by Representative Martin, Mr.
Jeans explained that the impact aid money appropriated to
school districts is measured against the instructional unit.
He explained that the amount of money that municipalities
contribute over and above 4 mils is the source of disparity.
Representative Martin asked if it is mandatory that local
school districts use impact aid money that they receive.
Mr. Jeans stressed that the funds are being spent in the
schools. He noted that 10 percent of of the impact aid
funding is not deducted in the foundation formula. This 10
percent is counted toward the local contribution. It may
also be used in school district's excess contribution.
WANDA COOKSEY, SINGLE SITE SCHOOL DISTRICT CONSORTIUM spoke
in support of HB 244. She noted that the original
legislation called for a permanent fix for the single site
school district formula. She stressed that single site
school districts would like a permanent fix. She asked that
Sections 3 and 4 of SB 244 be reinstated.
In response to a question by Co-Chair Hanley Ms. Cooksey
confirmed that funding for single site school districts is
contained in the school foundation formula. Mr. Jeans
explained that the allocation to single site school
districts has been based on the formula that the single site
consortium is promoting. The amount is based on the actual
student counts in K - 12. The amendment that the single
site consortium is promoting would put this formula into
statute. He noted that a study in 1988 or 1989 determined
that single site school districts were not provided with
sufficient funding. A table was developed to provide
additional funding. This table has been used for a number
of years to determine single site funding, but it has not
been adopted and placed into statute.
Representative Martin questioned if single site pupils would
receive the same allocation as a student in Fairbanks or
Anchorage. Mr. Jeans explained that they would receive
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additional instructional units. Representative Martin
questioned if the administrative cost is greater for single
site school districts. Mr. Jeans noted that funding was
reduced from single site school districts. When the issue
was revisited a couple of years later it was determined that
the adjustment was excessive. He maintained that the
legislation would correct the over-adjustment.
Representative Martin emphasized the savings in economies of
scale. He noted that there are 17 districts in Southeast
Alaska. He maintained that the legislation would guarantee
more money to single site school districts. Mr. Jeans
pointed out that the legislature already makes these
appropriations through additional district support. He
emphasized that the amendment to add the adjustment to
statute would eliminate the need for single site school
districts to lobby for the money on an annual basis.
Co-Chair Foster MOVED to adopt Amendment 2 (copy on file).
Ms. Cooksey explained that the value of the unit would not
change. The amount of units would be increased. She spoke
in support of Amendment 2. She emphasized that the formula
does not generate an adequate amount of funding.
Mr. Jeans explained that there would be an additional cost
of approximately $3.0 million dollars. Co-Chair Hanley
spoke against the amendment. He stressed that some
communities have decided not to join school districts.
Representative Navarre noted that Craig and Klawock share
services between school districts. He spoke in support of
additional funding for single site school districts, but
pointed out that there are other inequities in the formula.
He noted that Kenai receives the same area cost differential
as Anchorage, despite the fact that some schools in the
Kenai School District must have supplies flown in. He
stressed that area cost differentials need to be addressed.
A roll call vote was taken on the MOTION to adopt Amendment
2.
IN FAVOR: Grussendorf, Kelly, Kohring, Foster
OPPOSED: Martin, Mulder, Navarre, Parnell, Therriault,
Hanley
Representative Brown was absent from the vote.
The MOTION FAILED (4-6).
WILLIE ANDERSON, NEA-ALASKA spoke in support of SB 244. He
expressed concern with Section 5. He noted that Section 5
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would place a sunset on the foundation funding system. He
noted that there has been discussion regarding the disparity
in single site districts for more than six years. He
cautioned that there could be uncertainty and chaos if the
rewrite does not occur before the sunset. He noted that
there have been attempts to rewrite the formula in the
Senate for the past three years. He urged that Section 5 be
deleted. He expressed support for the rewrite of the
formula.
Representative Martin questioned if the sunset should be
changed to 1998. Mr. Anderson stated that 1998 would be
better than 1997. He emphasized that a sunset is not needed
if there is a commitment to rewrite the formula.
Representative Martin noted that the sunset provides
pressure to rewrite the formula. He MOVED to delete "1997"
and insert "1998".
Representative Navarre spoke in support of a sunset. He
emphasized that the sunset will provide a catalyst to focus
on amending the formula. He pointed out that the
Legislature can change the sunset next year.
A roll call vote was taken on the MOTION to adopt a sunset
date of 1998.
IN FAVOR: Kohring, Martin, Foster
OPPOSED: Mulder, Navarre, Parnell, Therriault, Grussendorf,
Kelly, Hanley
Representative Brown was absent from the vote.
The MOTION FAILED (3-7).
Representative Martin MOVED to report HCSSB 244 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
HCS CSSB 244 (FIN) was reported out of Committee with a "do
pass" recommendation and with a fiscal impact note by the
Department of Education, dated 4/11/96.
SENATE BILL NO. 180
"An Act authorizing the commissioner of the Department
of Natural Resources to negotiate and enter into timber
sale contracts that provide for local manufacture of
high value-added wood products; and establishing an
Alaska Forest Products Research and Marketing Program
within the Department of Commerce and Economic
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Development."
TOM BOUTIN, DIRECTOR, DIVISION OF FORESTRY, DEPARTMENT OF
NATURAL RESOURCES spoke in support of SB 180. He noted that
the Committee has reviewed the House version, HB 344.
(Tape Change, HFC 96-155, Side 2)
Mr. Boutin explained that the Administration supports the
deletion of amendments made in the Senate Finance Committee.
He provided members with Amendment 1 (copy on file).
Amendment 1 would deleted the amendments adopted by the
Senate Finance Committee. He explained that the prior
versions limited regional contracts to 3 per year. The
Senate Finance Committee changed the limit to two. He noted
that the Administration supports 3 contracts per year. He
added that Amendment 1 would reinstate language requiring
that the "area of the sale must be designated for forestry
purposes by a valid, existing area plan." He noted that
Kenai and parts of Southeast Alaska do not have area plans.
The amendment would also add, "the existence of adequate
protection measures to ensure the sustainability of fish and
wildlife habitat and populations and continuation of other
uses of the area subject to the negotiated sale."
Representative Kelly MOVED to adopt Amendment 1. There
being NO OBJECTION, it was so ordered.
Representative Kelly MOVED to report CSSB 180 out of
Committee with individual recommendations and with the
accompanying fiscal notes.
HCS CSSB 180 (FIN) was reported out of Committee with a "do
pass" recommendation; and with a fiscal impact note by the
Department of Natural Resources, 4/26/96; and with a zero
fiscal note by the University of Alaska, 4/22/96; and with a
zero fiscal note by the Department of Community and Regional
Affairs, 4/23/96.
ADJOURNMENT
The meeting adjourned at 9:30 a.m.
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