Legislature(1995 - 1996)

04/12/1995 01:45 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                         April 12, 1995                                        
                            1:30 P.M.                                          
                                                                               
  TAPE HFC 95-83, Side 1, #000 - end.                                          
  TAPE HFC 95-83, Side 2, #000 - end.                                          
  TAPE HFC 95-84, Side 1, #000 - #617.                                         
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark  Hanley called  the  House Finance  Committee                 
  meeting to order at 1:45 p.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                                                                 
                                                                               
  Larry  Wigget, Anchorage  School District,  Anchorage; Kathy                 
  Hoyt,  Soldotna;  Richard  Swarner,  Kenai School  District,                 
  Kenai;   Steve   McPhetres,   Alaska   Council   of    State                 
  Administrators,  Juneau;  Tom Wright,  Staff, Representative                 
  Ivan;  Bob Bartholomew,  Director, Income  and Excise  Audit                 
  Division, Department of Revenue; Debra Garrish, Juneau; Jack                 
  Fargnoli, Office  of Management  and Budget,  Office of  the                 
  Governor; Dr. Shirley Holloway,  Commissioner, Department of                 
  Education; Edward Rasmuson, National Bank  of Alaska; Robert                 
  Gottstein,  State Board  of Education;  Dale  Staley, Juneau                 
  Board  of Education, Juneau;  Rich McClear, Southeast Alaska                 
  Media Consortium; Willie Anderson, NEA-Alaska.                               
                                                                               
  SUMMARY                                                                      
                                                                               
  HB 230    An Act making appropriations to  the Department of                 
            Education  for  support of  kindergarten, primary,                 
            and secondary education and for community  schools                 
            programs  for fiscal  year  1996  and fiscal  year                 
            1997;    making     appropriations    from     the                 
            constitutional budget reserve fund under art.  IX,                 
            sec. 17(c), Constitution  of the State  of Alaska;                 
            and providing for an effective date.                               
                                                                               
            HB   230  was  HELD   in  Committee   for  further                 
            discussion.                                                        
                                                                               
                                1                                              
                                                                               
                                                                               
  HB 269    An  Act relating to  credits against certain taxes                 
            for  contributions  to certain  public educational                 
            radio and television networks and stations and  to                 
            endowments  for  public   educational  radio   and                 
            television   networks;   and   providing  for   an                 
            effective date.                                                    
                                                                               
            HB   269  was  HELD   in  Committee   for  further                 
  discussion.                                                                  
  HOUSE BILL NO. 269                                                           
                                                                               
       "An Act relating  to credits against certain  taxes for                 
       contributions to  certain public educational  radio and                 
       television networks and stations and to  endowments for                 
       public educational  radio and television  networks; and                 
       providing for an effective date."                                       
                                                                               
                                                                               
  TOM WRIGHT, STAFF, REPRESENTATIVE IVAN  testified in support                 
  of HB 269.  He observed  that the legislation provides a tax                 
  credit for contributions  made to  instate public radio  and                 
  television stations and  networks.   The tax credit  ceiling                 
  was raised  from $100  thousand dollars  to $450.0  thousand                 
  dollars.  The credit is  allowed on 50 percent of  the first                 
  $100.0 thousand dollars in contributions  and 100 percent of                 
  the next $400.0 thousand dollars.  The new limits would also                 
  apply  to  the  university  system  and library  and  museum                 
  acquisitions.   The tax  credit would  be applied  against a                 
  taxpayer's liability under  insurance premiums,  corporation                 
  income, oil and gas production, oil and gas property, mining                 
  licenses and fisheries business taxes.   He explained that a                 
  credit claimed under one of the tax types may not be claimed                 
  under another tax type.                                                      
                                                                               
  Members  were provided with  a proposed committee substitute                 
  for HB  269, Work Draft  #9-LS0937\K, dated 4/3/95  (copy on                 
  file).     Mr.  Wright   explained  that   the  work   draft                 
  incorporates technical changes  requested by the  Department                 
  of Revenue.                                                                  
                                                                               
  Representative Mulder MOVED to adopt Work Draft #9-LS0937\K,                 
  dated 4/3/95.  There being NO OBJECTION, it was so ordered.                  
                                                                               
  Mr. Wright reviewed  changes incorporated by CSHB  269 (FIN)                 
  as   outlined  in   the  sectional   analysis  prepared   by                 
  Representative Ivan (copy on file).                                          
                                                                               
  Representative Mulder observed that the  fiscal note shows a                 
  loss  of revenue to  the state of $35  million dollars.  Mr.                 
  Wright  emphasized  that  revenue is  currently  being  lost                 
                                                                               
                                2                                              
                                                                               
                                                                               
  through  contributions  to  the  University  of  Alaska  and                 
  libraries.                                                                   
                                                                               
  Representative Brown asked  if the  total potential loss  of                 
  state revenues have been calculated.                                         
                                                                               
  BOB BARTHOLOMEW, DEPURTY  DIRECTOR, DIVISION  OF INCOME  AND                 
  EXCISE AUDIT. DEPARTMENT OF REVENUE  replied that the fiscal                 
  note  was  calculated  by  assuming   that  tax  payers  who                 
  participated in the program in FY  95 would take the maximum                 
  credit allowed in FY 96.  He stated that there is no way  to                 
  estimate  the maximum  loss  revenue  through deductions  by                 
  corporations that are not participating.                                     
                                                                               
  Representative Navarre expressed concern  with the level  of                 
  deduction allowed under the legislation.  He emphasized that                 
  tax  credits allow  appropriations  without the  legislative                 
  process.                                                                     
                                                                               
  Mr. Bartholomew observed that not all corporations have made                 
  contributions.  He did not know if all the corporations that                 
  gave did so at the maximum level.                                            
                                                                               
  Representative Navarre expressed  support for the philosophy                 
  of HB  268.   He expressed  reservations in  regards to  the                 
  level  of  contribution  that  would  be diverted  from  the                 
  general fund by the tax credit.                                              
                                                                               
  In  response  to  a question  by  Representative  Brown, Mr.                 
  Wright  acknowledged that the  sponsor considered setting up                 
  two different contribution deductions.  He stressed that the                 
  sponsor did not want the public broadcasting credit to be in                 
  competition with the credit for the University of Alaska and                 
  libraries and museums.                                                       
                                                                               
  Representative  Brown expressed  reservations in  regards to                 
  the constitutionality  of the  tax credit.   She noted  that                 
  there is a prohibition against appropriating public money to                 
  private  institutions.   She  indicated support  for  public                 
  broadcasting.                                                                
                                                                               
  In  response  to a  question  by Representative  Mulder, Mr.                 
  Bartholomew  stated that  the  state  lost  $944.0  thousand                 
  dollars through  the tax credit  in FY  95.   Representative                 
  Mulder  suggested that  the credit  would  be a  "back door"                 
  appropriation.   He emphasized the  difficult decisions  the                 
  Committee  has  had  to  make  in  regards  to  cutting  the                 
  operating budget.                                                            
                                                                               
  Representative Navarre pointed  out that  there is no  match                 
  requirement for the tax credit.                                              
                                                                               
                                                                               
                                3                                              
                                                                               
                                                                               
  EDWARD RASMUSON, EXECUTIVE DIRECTOR, NATIONAL BANK OF ALASKA                 
  spoke  in support of HB 268.   He noted that the educational                 
  tax  credit  was  passed  approximately  5  years ago.    He                 
  observed  that the  university  system, public  and private,                 
  have used them extensively.   He maintained that the  Alaska                 
  Pacific University and Sheldon Jackson  College would not be                 
  operating without the  tax credit.   He stated that about  a                 
  third of the contributions go to the University of Alaska, a                 
  third  to  the Alaska  Pacific  University  and  a third  to                 
  Shelton  Jackson College.  He  stressed that it is difficult                 
  to quantify how much the State will loose as a result of the                 
  tax credit.    Mr. Rasmuson  urged members  to consider  the                 
  benefit  to   the  state  of  Alaska.     He  stressed  that                 
  contributions will remain  in the state.   He did not  think                 
  that the state would loose $3.5 million dollars as estimated                 
  by the fiscal note.                                                          
                                                                               
  ROBERT   GOTTSTEIN,   CHAIR,   ALASKA  PUBLIC   BROADCASTING                 
  ENDOWMENT TRUST maintained that more people will be educated                 
  in the state  as a result of  the credit.  He  observed that                 
  the goal of  the Trust is  to wean public broadcasting  from                 
  state support.   He  stressed that  the Trust  will be  more                 
  creditable if funding  is provided  through the tax  credit.                 
  He emphasized that the money will help the Trust to leverage                 
  funding in order to build an endowment for the future.                       
                                                                               
  Mr.  Gottstein  stressed that  Alaska  will remain  a public                 
  schooling state.  He maintained that the public will benefit                 
  from a better educated society.   He asserted that something                 
  needs  to  be  done  to  ensure  that  essential  radio  and                 
  television service  exists in  all  parts of  Alaska in  the                 
  future.                                                                      
                                                                               
  Representative Navarre commended the efforts of Mr. Rasmuson                 
  and Mr.  Gottstein.  He  noted the  competition for  general                 
  fund  dollars,  including K  -  12  education  funding.   He                 
  observed  that  the state  of  Alaska  spends  more  in  the                 
  university system per student  than in K - 12.  He suggested                 
  that  the Committee meet  in executive  session in  order to                 
  more accurately ascertain the potential drain to the general                 
  fund that the tax credit represents.                                         
                                                                               
  Mr. Gottstein  emphasized that  the legislation attempts  to                 
  create  a  mechanism  to  provide  incentives   for  greater                 
  contributions.   He stated  that the mission  is to  attract                 
  outside,  non-state  investment  to  the  recipients  of the                 
  credit.  He  accentuated that they are  seriously interested                 
  in raising outside capital contributions that will result in                 
  more education in Alaska and provide a better assurance that                 
  essential radio and television service will take place.                      
                                                                               
  Mr. Rasmuson observed  that more money  was paid by  outside                 
                                                                               
                                4                                              
                                                                               
                                                                               
  sources to Shelton  Jackson than  the college received  from                 
  inside  Alaska.  He added that  there was as much money paid                 
  from outside  sources to  the Alaska  Pacific University  as                 
  came from inside the state.  He emphasized his desire to see                 
  a better educated work force.                                                
                                                                               
  Representative Mulder emphasized  the need  to balance  what                 
  works with what  is affordable to  the state.  He  suggested                 
  that  the credit amounts to an appropriation from the state.                 
  He reiterated the need to reduce spending.  He asked how the                 
  credit ceiling  was decided.   Mr  Rasmuson stated  that the                 
  ceiling level was arbitrary.                                                 
                                                                               
  Mr. Gottstein emphasized that if the  cap is not raised that                 
  public broadcasting will  be in  competition with the  funds                 
  that are currently being raised.  He stressed that it is not                 
  the intent  to take money  away from universities  which are                 
  already receiving  funds from  the credit.   He stated  that                 
  public radio  and television  is an  educational enterprise.                 
  He maintained that it is appropriate  to include them in the                 
  statute.  He  indicated that a  lower ceiling on the  credit                 
  would be  acceptable.   He urged  the Committee  to adopt  a                 
  level high enough not  to impact current contributions.   He                 
  emphasized  the  need  to ensure  that  public  broadcasting                 
  remains in the state of Alaska.                                              
                                                                               
  Mr. Rasmuson pointed  out that  most corporations in  Alaska                 
  are subchapter (s)  corporations and do not pay state taxes.                 
  He gave a brief history of  the institutions that have taken                 
  advantage of the tax credit.                                                 
                                                                               
  Representative Kelly  suggested that public  broadcasting be                 
  deleted and the current credit ceiling raised.  Mr. Rasmuson                 
  replied that he  would not  support such an  amendment.   He                 
  emphasized  that  public   broadcasting  and   postsecondary                 
  education are both educational items.  He stated that public                 
  broadcasting should  not be  sacrificed for  education.   He                 
  emphasized that they should be treated together.                             
                                                                               
  Mr. Gottstein speculated  that more than  50 percent of  the                 
  benefit will go to higher education.                                         
                                                                               
  Representative  Martin  suggested that  the  state's general                 
  fund contribution to the University  was reduced in response                 
  to increased contributions in  the form of tax credits.   He                 
  thought there would  be no net  gain in terms of  University                 
  funding.      He   observed  that   the   University   is  a                 
  responsibility  of  the state.    He expressed  concern that                 
  other non-profit organizations would want to be added to the                 
  credit.                                                                      
                                                                               
  Mr. Rasmuson did not  think that corporations would  give to                 
                                                                               
                                5                                              
                                                                               
                                                                               
  other organizations.                                                         
                                                                               
  (Tape Change, HFC 95-83, Side 2)                                             
                                                                               
  Representative  Parnell  queried  the  long  term  plan  for                 
  phasing out state funding.                                                   
                                                                               
  Mr. Gottstein replied that the plan is to create a mechanism                 
  to provide a substantial trust that will throw off income in                 
  lieu of federal  and state  funding.  He  observed that  the                 
  state  contributes $7.2  million  dollars to  public  radio,                 
  television and RATNet.   He noted  that they are asking  for                 
  less  in  FY  96  than  was  appropriated  in  FY  95.    He                 
  acknowledged that the  state contribution  must be  reduced.                 
  He stated that the  goal is to raise $100.0  million dollars                 
  for the endowment.  He emphasized that it would be easier to                 
  raise  money if  there  was  some money  in  the  bank.   He                 
  stressed that incentives to attract  private capital must be                 
  developed.  He reiterated that the contribution amount could                 
  be reduced.                                                                  
                                                                               
  Mr. Rasmuson emphasized that there are not many corporations                 
  that pay taxes in the state of Alaska.                                       
                                                                               
  In  response  to a  question  by Representative  Mulder, Mr.                 
  Gottstein  stated  that   a  five   year  sunset  would   be                 
  reasonable.   He did not support a  sunset in regards to the                 
  education contribution.                                                      
                                                                               
  Representative  Navarre noted  that  the legislation  allows                 
  credits to individual stations as well as to the  endowment.                 
  He  expressed  concern  that  the   system  will  suffer  as                 
  contributions  are allocated  to individual  stations.   Mr.                 
  Gottstein felt that  the majority of contributions  would go                 
  to the endowment.  He stated  that most of the contributions                 
  to  the University are  given to endowments.   He emphasized                 
  that  contributions  to  the  endowment  will   protect  the                 
  principal investment.                                                        
                                                                               
  Mr.  Rasmuson observed  that most stations  do not  have the                 
  luxury  of   setting   money   aside   for   an   endowment.                 
  Representative Navarre expressed  concern that the Anchorage                 
  television  station  and  other urban  radio  stations could                 
  create competition for the endowment.                                        
                                                                               
  Mr. Gottstein emphasized that essential  service needs to be                 
  protected.   He stated  that contributions  to rural  Alaska                 
  would  be  to the  same  end,  of ensuring  that  service is                 
  provided.   He  did not think  that urban  broadcast centers                 
  would receive significant  contributions, since  substantial                 
  commercial competition exists in those areas.                                
                                                                               
                                                                               
                                6                                              
                                                                               
                                                                               
  Representative  Kelly  asked   if  underwriting  on   public                 
  broadcasts will amount to commercials.                                       
                                                                               
  RICH MCCLEAR, SOUTHEAST ALASKA MEDIA CONSORTIUM replied that                 
  Congress set  in the Communications Act  specific parameters                 
  which  limit  underwriting  to things  that  do  not mention                 
  price, adjectives that  are comparative or superlative,  and                 
  do not  amount to a call to  action.  He did  not think that                 
  federal guidelines would be relaxed.                                         
                                                                               
  HB 269 was HELD in Committee for further discussion.                         
  HOUSE BILL NO. 230                                                           
                                                                               
       "An  Act  making  appropriations to  the  Department of                 
       Education  for  support of  kindergarten,  primary, and                 
       secondary education and for community schools  programs                 
       for  fiscal  year  1996 and  fiscal  year  1997; making                 
       appropriations from the  constitutional budget  reserve                 
       fund under  art. IX,  sec. 17(c),  Constitution of  the                 
       State of Alaska; and providing for an effective date."                  
                                                                               
  SHIRLEY HOLLOWAY, DR., COMMISSIONER, DEPARTMENT OF EDUCATION                 
  testified in  support of  full funding  for education.   She                 
  observed that the public  has demanded better schools.   She                 
  asked  that dollar  decisions consider  the consequences  to                 
  student  learning.  She stated that student learning will be                 
  adversely impacted by  a funding level that does not include                 
  money for increased enrollment.   She observed that students                 
  have special needs  that require  additional services.   She                 
  maintained that  ground will  be  lost if  funding does  not                 
  remain stable.  She stressed that innovations and risks have                 
  been  made to  keep  kids  in school,  do  a  better job  at                 
  preparing students and raise standards.   She discussed some                 
  innovations being made by teachers and parents.                              
                                                                               
  Commissioner   Holloway  noted  that   the  State  Board  of                 
  Education is  committed to reviewing the  foundation formula                 
  in order to provide recommendations to the Legislature.                      
                                                                               
  Representative  Martin  noted  the  amount  of  overhead  in                 
  education funding.  He suggested  that savings could be made                 
  if school  districts were  combined.  Commissioner  Holloway                 
  stated that the Board  has started a dialogue in  regards to                 
  combining school districts.                                                  
                                                                               
  LARRY WIGGET,  ANCHORAGE SCHOOL  DISTRICT testified  via the                 
  teleconference network.  He stated that the Anchorage School                 
  District opposes  HB 230.    He stressed  that the  District                 
  supports the $61.0 thousand dollar instructional unit level.                 
  He  maintained that HB  230 would  result in  a loss  to the                 
  Anchorage School District of  $4.0 million dollars in  FY 96                 
                                                                               
                                7                                              
                                                                               
                                                                               
  and $9.0 million dollars in FY 96-97.   He observed that the                 
  Anchorage  School  District  is  the  80th   largest  school                 
  district in the United States and the largest in Alaska.  He                 
  emphasized  the  need  to pursue  computer  technology.   He                 
  stated that  Anchorage has the second lowest student cost in                 
  Alaska.                                                                      
                                                                               
  Representative  Grussendorf  observed  that  Sitka  has  the                 
  lowest student cost in the state.                                            
                                                                               
  In  response  to  a question  by  Representative  Brown, Mr.                 
  Wigget noted that student ratios would increase if HB 230 is                 
  enacted.    He  discussed ramifications  of  a  $4.0 million                 
  dollar reduction to the Anchorage School District.                           
                                                                               
  KATHY  HOYT,  SOLDOTNA  testified   via  the  teleconference                 
  network.  She  spoke in opposition to HB 230.   She compared                 
  the cost of supporting individuals in the criminal system to                 
  educating a high school  student in Alaska.  She  noted that                 
  89 percent  of the nation's  criminals are high  school drop                 
  outs.    The high  school  drop  out rate  in  Alaska is  33                 
  percent.  It  costs approximately $32.0 thousand  dollars to                 
  incarcerate a prisoner annually.   In Anchorage in 1991,  it                 
  cost  $4,050  thousand  dollars  to  educate a  high  school                 
  student.  She  insinuated that it  is cheaper and better  to                 
  provide  education   than  to  pay   for  institutionalizing                 
  offenders.                                                                   
                                                                               
  RICHARD  SWARNER,  EXECUTIVE DIRECTOR,  BUSINESS MANAGEMENT,                 
  KENAI   PENINSULA   SCHOOL   DISTRICT  testified   via   the                 
  teleconference network.   He testified  in opposition to  HB                 
  230.   He  testified in  support of the  Governor's proposed                 
  $61.0 thousand dollar foundation formula instructional unit.                 
  He  stressed  that  the  foundation   program  needs  to  be                 
  reviewed.  He observed that the  Kenai School District is up                 
  against the local effort cap.   He noted that assessed value                 
  in the  Borough has dropped 5.87 percent.  He noted that the                 
  cost  per  pupil  over  10 years  has  only  increased  1.44                 
  percent.   He noted  that Kenai  School District  employee's                 
  salaries have not been raised in  four years.  He emphasized                 
  that 38 percent of their school district's budget comes from                 
  local contributions.                                                         
                                                                               
  DEBRA GARRISH,  JUNEAU testified  in opposition  to HB  230.                 
  She expressed concern  with the quality of  state education.                 
  She observed that  the student/teacher ratio is  high, books                 
  are obsolete  and that  teachers have  been laid  off.   She                 
  suggested  that  state  school  and   income  taxes  be  re-                 
  instituted.    She  maintained that  HB  230  sacrifices the                 
  education and future of children in the state.                               
                                                                               
  JACK FARGNOLI, OFFICE  OF MANAGEMENT  AND BUDGET, OFFICE  OF                 
                                                                               
                                8                                              
                                                                               
                                                                               
  THE GOVERNOR testified in support of the Governor's proposal                 
  for full funding.  He stated  that the Governor is concerned                 
  with the function  of the  bill and the  funding source  the                 
  bill uses.   He observed that  the two year forward  funding                 
  mechanism would be disadvantageous in respect to the state's                 
  reserves.  He maintained that the state's ability to respond                 
  to cash flow problems  will be inhibited.  He  observed that                 
  if the second year's funding remains  in the general fund it                 
  would not  provide any  of the  constancy or  predictability                 
  that true forward funding would provide.  He stated that the                 
  Governor does not support forward funding.  He stressed that                 
  the state is facing a $300 to $400 million dollar deficit in                 
  cash projections.   He expressed concern  that the work  and                 
  purpose of  the Long Range Fiscal Planning Commission not be                 
  truncated or prejudged.                                                      
                                                                               
  Mr. Fargnoli discussed the effect that the legislation would                 
  have on the  Constitutional Budget Reserve Fund.   He stated                 
  that the Governor  prefers that education is  funded through                 
  the general fund as all other items.                                         
                                                                               
  (Tape Change, HFC 95-84, Side 1)                                             
                                                                               
  In  response  to a  question  by Representative  Martin, Mr.                 
  Fargnoli agreed that the state's cash  flow problem would be                 
  diminished by  funding  education  from  the  Constitutional                 
  Budget Reserve Fund.   He stated that there is  no consensus                 
  in regards to leveling expenditures  or altering revenue in-                 
  flows.                                                                       
                                                                               
  STEVE  MCPHETRES,  EXECUTIVE  DIRECTOR,  ALASKA  COUNCIL  OF                 
  SCHOOL ADMINISTRATORS testified in opposition of HB 230.  He                 
  spoke in support of the  $61.0 thousand dollar instructional                 
  unit.    He  observed  that   parents  are  concerned  about                 
  education.   He stressed that  the state is  not broke.   He                 
  referred to the Alaska Permanent Fund Dividend Program.                      
                                                                               
  Representative  Therriault  suggested  that rural  Alaskan's                 
  will  support the re-institution  of an income  tax over the                 
  use of their permanent  fund dividends.  He observed  that a                 
  15 percent state  income tax  would only cover  half of  the                 
  state's deficit.  He emphasized  that a combination of taxes                 
  and spending cuts are needed to balance the budget.                          
                                                                               
  Mr.  McPhetres  stated   that  school  administrators  would                 
  welcome  dialogue  in  regards  to  raising  revenues.    He                 
  emphasized that "all the cards have got to be placed on  the                 
  table."                                                                      
                                                                               
  WILLIE ANDERSON,  NEA-ALASKA testified  in opposition to  HB                 
  230.  He  observed that if  the instructional unit had  kept                 
  pace with increases in the cost  of living the instructional                 
                                                                               
                                9                                              
                                                                               
                                                                               
  unit would now  be $81,318 thousand  dollars.  He urged  the                 
  Committee  to  "do  the  right  thing  by  our  kids."    He                 
  maintained that we must educate our children and look to the                 
  future.  He suggested that revenues could be raised  through                 
  taxes or  capping permanent fund dividends.  He stressed the                 
  need for quality education.                                                  
                                                                               
  Representative Kelly  questioned if NEA-Alaska  would accept                 
  downward  negotiations  in  teacher's  pay.    Mr.  Anderson                 
  pointed out that  increases were not  taken in 1986 -  1987.                 
  He stressed that teachers or public schools employees should                 
  not carry the whole burden.                                                  
                                                                               
  Representative Parnell stressed that education funding  will                 
  increase by $200 million dollars over the next five years at                 
  the current rate.   He emphasized  that we need to  reinvent                 
  how  we provide  government  and education.   He  urged NEA-                 
  Alaska  to  join  in rethinking  the  delivery  of education                 
  services.  He stressed that he has a deep concern  about the                 
  children of Alaska.                                                          
                                                                               
  Mr.  Anderson  agreed  that   education  delivery  must   be                 
  rethought, but  emphasized  that it  cannot  be  transformed                 
  overnight.    He  observed  that  technology can  assist  in                 
  education delivery.   Representative Parnell emphasized  the                 
  need to start working towards doing something now.                           
                                                                               
  ROBERT GOTTSTEIN, ALASKA STATE SCHOOL BOARD spoke in support                 
  of full funding for education.   He acknowledged the need to                 
  do  more  with less.   He  stressed  that solutions  must be                 
  found.    He noted  that there  are  54 school  districts in                 
  Alaska.  He suggested that the number of school districts is                 
  not cost  effective.   He observed  that the  correspondence                 
  school program costs about  $1.5 hundred dollars.   It costs                 
  about  $7.5  hundred  dollars  to  teach  a  student in  the                 
  Anchorage  School District.  He maintained that the level of                 
  parent involvement makes  the difference.  He  stressed that                 
  principles and teachers cannot replace parents.  He observed                 
  the value  of  quality parents  and emphasized  the need  to                 
  provide  opportunities  to  improve parenting  skills.    He                 
  acknowledged the  need for change.  He asserted that success                 
  will be greater if  funding is protected than if  it is cut.                 
  He  stated  that the  state  of  Alaska must  invest  in our                 
  children,   their  parents  and   in  creating  an  economic                 
  opportunity for everyone in the state.   He stressed that if                 
  the state does more for children the public will do more for                 
  the state.  He maintained that revenue will not be raised by                 
  making the  state less worthy.   He stated that  there is no                 
  area  in state  government more worthy  than education.   He                 
  expounded that the  way out of this dilemma is  to make sure                 
  that  everyone  has a  value received  from  the state.   He                 
  maintained  that  there  is no  better  opportunity  than to                 
                                                                               
                               10                                              
                                                                               
                                                                               
  provide a value education.                                                   
                                                                               
  Representative Grussendorf  noted the  need to  maximize the                 
  revenue that  is due  the state  of Alaska.   Mr.  Gottstein                 
  stated that  an Anchorage survey  showed that if  the public                 
  was  guaranteed educational  opportunities  for everyone  in                 
  their  family,  including postsecondary  education,  then 85                 
  percent would be willing to give up their dividend and begin                 
  to pay taxes.                                                                
                                                                               
  DALE  STALEY, PRESIDENT,  JUNEAU  SCHOOL BOARD  testified in                 
  support  of  full  funding  for education.    He  noted that                 
  nurses,   counseling   services,  janitorial   services  and                 
  teachers have been  reduced in  the Juneau School  District.                 
  He  observed  that the  District  will  not be  able  to lay                 
  teachers  off  in the  coming year  since most  are tenured.                 
  There  are  only  8  non-tenured  staff  and  3  non-tenured                 
  administrators.   He observed that  the District's  teaching                 
  staff is experienced and well educated.  He observed that if                 
  the state reduces funding to the Juneau School District, the                 
  local contribution  must  also be  reduced.   He noted  that                 
  Juneau's local contribution has been at its cap for  several                 
  years.  He acknowledged  the need to do more with  less, but                 
  asserted that it cannot be accomplished in the next three or                 
  four months.                                                                 
                                                                               
  HB 230 was HELD in Committee for further discussion.                         
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 3:52 p.m.                                           
                                                                               
                                                                               
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