Legislature(1993 - 1994)
02/23/1993 03:00 PM House HES
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES
STANDING COMMITTEE
February 23, 1993
3:00 p.m.
MEMBERS PRESENT
Rep. Cynthia Toohey, Co-Chair
Rep. Con Bunde, Co-Chair
Rep. Gary Davis, Vice Chair
Rep. Al Vezey
Rep. Harley Olberg
Rep. Bettye Davis
Rep. Irene Nicholia
Rep. Tom Brice
MEMBERS ABSENT
Rep. Pete Kott
COMMITTEE CALENDAR
HB 66: "An Act relating to municipal property tax
exemptions for certain residences and to property
tax equivalency payments for certain residents;
and providing for an effective date."
HEARD AND HELD
*HB 85: "An Act relating to the public school foundation
program; and providing for an effective date."
HEARD AND HELD
*HB 156: "An Act establishing the educational facilities
maintenance and construction fund; and providing
for an effective date."
NO ACTION - NOT HEARD
*HB 157: "An Act making special appropriations to the
educational facilities maintenance and
construction fund and the mental health trust
income account; and providing for an effective
date."
NO ACTION - NOT HEARD
(* First public hearing.)
WITNESS REGISTER
BRUCE GERAGHTY, Deputy Commissioner
Department of Community and Regional Affairs
P.O. Box 112100
Juneau, Alaska 99811-2100
Phone: (907) 465-4700
Position statement: Made presentation on HB 85
MARIE DARLIN, President
National Association of Retired Federal Workers,
Alaska Federation
P.O. Box 2-1283
Juneau, Alaska 99802
Position statement: Senior citizens depend on tax
exemptions
KEN SWISHER, Executive director
Alaska Municipal League
217 Second St.
Juneau, Alaska 99801
Phone: (907) 586-1325
Position statement: Supported HB 66
DUANE GUILEY, Director
Division of Education Finance and Support Services
Department of Education
801 W. 10th St.
Juneau, Alaska 99801-1894
Phone: (907) 465-2891
Position statement: Answered questions on HB 85
DICK SWARNER
Executive Director of Business Management
Kenai Peninsula Borough School District
148 N. Binkley
Soldotna, Alaska 99669
Phone: (907) 262-5846
Position statement: Supported HB 85
TOM BUZEK
P.O. Box 71810
Chugiak, Alaska 99567
Phone: (907) 745-5408
Position statement: State should fund gifted student
programs
DENNIS WETHERELL, President
Mat-Su Talented and Gifted Association
P.O. Box 876862
Wasilla, Alaska 99687
Phone: (907) 745-2007
Position statement: Opposed HB 85; supported full funding
for gifted student programs
LARRY WIGET, Legislative Liaison
Anchorage School District
4600 DeBarr Road
Anchorage, Alaska 99508-3195
Phone: (907) 269-2255
Position statement: HB 85 is unfair to Anchorage
CARL ROSE, Executive Director
Association of Alaska School Boards
316 W. 11th St.
Juneau, Alaska 99801
Phone: (907) 586-1083
Position statement: Supported HB 85
ELL SORENSEN, Superintendent
Mat-Su School District
P.O. Box 153
Palmer, Alaska 99645
Phone: (907) 746-9200
Position statement: Protested elimination of funding
communities
PREVIOUS ACTION
BILL: HB 66
SHORT TITLE: MUNICIPAL PROPERTY TAX EXEMPTIONS
BILL VERSION:
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
TITLE: "An Act relating to municipal property tax exemptions
for certain residences and to property tax equivalency
payments for certain residents; and providing for an
effective date."
JRN-DATE JRN-PG ACTION
01/15/93 84 (H) READ THE FIRST TIME/REFERRAL(S)
01/15/93 84 (H) CRA, HEALTH, EDUCATION & SS,
FINANCE
01/15/93 84 (H) -3 ZERO FNS (2-DCRA, ADM)
1/15/93
01/15/93 84 (H) GOVERNOR'S TRANSMITTAL LETTER
02/09/93 (H) CRA AT 01:00 PM CAPITOL 124
02/09/93 (H) MINUTE(CRA)
02/10/93 286 (H) CRA RPT CS(CRA) 3DP 3DNP 1NR
02/10/93 286 (H) DP: OLBERG, BUNDE, TOOHEY
02/10/93 286 (H) DNP: DAVIES, WILLIAMS, WILLIS
02/10/93 286 (H) NR: SANDERS
02/10/93 286 (H) -3 PREVIOUS ZERO
FNS(DCRA,DCRA,ADM) 1/15
02/22/93 (H) HES AT 03:00 PM CAPITOL 106
02/23/93 (H) HES AT 03:00 PM CAPITOL 106
BILL: HB 85
SHORT TITLE: PUBLIC SCHOOL FOUNDATION PROGRAM
BILL VERSION:
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
TITLE: "An Act relating to the public school foundation
program; and providing for an effective date."
JRN-DATE JRN-PG ACTION
01/22/93 138 (H) READ THE FIRST TIME/REFERRAL(S)
01/22/93 138 (H) HES, FINANCE
01/22/93 138 (H) -FISCAL NOTE (DOE) 1/22/93
01/22/93 138 (H) GOVERNOR'S TRANSMITTAL LETTER
02/18/93 (H) HES AT 03:00 PM CAPITOL 106
02/23/93 (H) HES AT 03:00 PM CAPITOL 106
BILL: HB 156
SHORT TITLE: PUBLIC SCHOOLS & PUBLIC FACILITIES FUND
BILL VERSION: SSHB 156
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
TITLE: "An Act establishing the educational facilities
maintenance and construction fund; and providing for an
effective date."
JRN-DATE JRN-PG ACTION
02/15/93 346 (H) READ THE FIRST TIME/REFERRAL(S)
02/15/93 346 (H) HES, JUDICIARY, FINANCE
02/15/93 346 (H) -ZERO FISCAL NOTE (REV)
2/15/93
02/15/93 346 (H) GOVERNOR'S TRANSMITTAL LETTER
02/22/93 411 (H) SPONSOR SUBSTITUTE
INTRODUCED-NEW TITLE
02/22/93 411 (H) HES, JUDICIARY, FINANCE
02/22/93 411 (H) -ZERO FISCAL NOTE (REV)
2/22/93
02/22/93 411 (H) GOVERNOR'S TRANSMITTAL LETTER
02/23/93 (H) HES AT 03:00 PM CAPITOL 106
BILL: HB 157
SHORT TITLE: APPROP: PUBLIC SCHOOLS/FACILITIES FUND
BILL VERSION: SSHB 157
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
TITLE: "An Act making special appropriations to the
educational facilities maintenance and construction fund and
the mental health trust income account; and providing for an
effective date."
JRN-DATE JRN-PG ACTION
02/15/93 347 (H) READ THE FIRST TIME/REFERRAL(S)
02/15/93 347 (H) HES, JUDICIARY, FINANCE
02/15/93 347 (H) GOVERNOR'S TRANSMITTAL LETTER
02/22/93 412 (H) SPONSOR SUBSTITUTE
INTRODUCED-NEW TITLE
02/22/93 412 (H) HES, JUDICIARY, FINANCE
02/22/93 412 (H) GOVERNOR'S TRANSMITTAL LETTER
02/23/93 (H) HES AT 03:00 PM CAPITOL 106
ACTION NARRATIVE
TAPE 93-20, SIDE A
Number 000
CHAIR TOOHEY called the meeting to order at 3:05 p.m. and
noted members present. She announced the meeting calendar
would include HB 66 and HB 85 and would be teleconferenced
for public hearing. She noted that HB 156 and HB 157 would
not be heard at the meeting. She invited Rep. Bunde to
speak on HB 66.
HB 66: MUNICIPAL PROPERTY TAX EXEMPTIONS
Number 037
REP. CON BUNDE began speaking as SPONSOR of HB 66. He
announced his hope to develop a committee substitute for the
governor's version of HB 66, and, barring that, his
intention to hold HB 66 for more study.
CHAIR TOOHEY interrupted to announce that the committee
would consider the work draft of HB 66.
Number 055
REP. BUNDE said that the original HB 66 moved funding
responsibility for the municipal property tax exemption
program from the state to the municipalities, then left it
up to the municipalities either to continue or terminate the
program. Rep. Bunde said his version of the bill would
grant the municipalities a third option of deferring
collection of property taxes until the property was sold or
the owner died. He said HB 66 offered more options and a
more humane way to address the conflicting needs of
municipalities to collect property taxes and the needs of
retirees to remain in their homes, sometimes on fixed
incomes, despite rising costs of living.
REP. VEZEY asked the advantages of passing this bill over
repealing the state authorizing statutes and leaving
municipalities the option of doing what they will on tax
exemptions.
REP. BUNDE said municipalities are neither encouraged nor
discouraged from any one option, but the governor's bill
would likely encourage municipalities to "zero out" or
terminate their exemption programs, as the municipalities
cannot now afford to fund the program as it exists without
the deferral option proposed in the work draft.
Number 132
REP. VEZEY commented that the committee substitute does not
mandate anything, but lays out alternatives.
REP. BUNDE agreed.
CHAIR TOOHEY announced the meeting was being teleconferenced
to Anchorage, the Mat-Su, Soldotna and Tok. She announced
her intention to hear Bruce Geraghty, then to take testimony
from the remote sites.
Number 146
BRUCE GERAGHTY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMUNITY
AND REGIONAL AFFAIRS, conveyed the department's support for
HB 66. He said the bill is part of the governor's efforts
either to eliminate programs or make them run more
efficiently in the face of declining state revenues. The
state now funds the property tax exemptions for senior
citizens and disabled veterans at 20 percent of what it
costs municipalities, he said. The state pays 85 percent of
the costs of a similar program offering exemptions for
senior citizens and disabled veterans who rent their
residences. He said the department proposes to no longer
require municipalities to operate the rental rebate program,
and instead, to help municipalities establish an optional
property tax exemption program, possibly based on a hardship
needs basis, so that municipalities could fine-tune their
programs to their individual needs. The work draft does not
limit the exemption to property of any particular assessed
valuation, though the current mandated program limits the
exemption to the first $150,000 of assessed value, he said.
MR. GERAGHTY said the department has no problem with Rep.
Bunde's deferral proposal. Mr. Geraghty said it might be
possible to include both property tax deferrals and
exemptions for hardship cases in a final version of the
bill. He stated the Department of Community and Regional
Affairs recommends using the original language in HB 66
concerning exemptions, which cut out the municipalities'
option of exempting more than the first $150,000 of assessed
value. Mr. Geraghty also said he supports a provision in
Rep. Bunde's work draft that would extend the deferral to
spouses who also qualify, which, according to a verbal legal
opinion from the attorney general's office, would work.
MR. GERAGHTY said that under the current mandated program
and in the working draft, tax-exempted property is not
included in the full-value determination for the school
foundation formula or municipal revenue sharing. He noted
he had no problem with that provision, without which
Anchorage would have to pay an additional $1.6 million in
contributions for school funding.
Number 280
REP. G. DAVIS asked why the fiscal note from the Department
of Community and Regional Affairs showed no fiscal impact
for HB 66, though $2.8 million had already been spent in
FY93.
MR. GERAGHTY said the fiscal note shows no cost for the
senior citizens and disabled veterans property tax rebates,
because the cost of the program, which he acknowledged was
about $2.8 million, was not included in the governor's FY94
budget. He added, however, that the renters' rebate program
cost an additional $800,000, making the total cost of the
rebates and exemptions approximately $3.6 million in FY93.
REP. VEZEY asked why it was necessary to pass new laws to
authorize municipalities to do what they could already do on
their own authority.
Number 308
MR. GERAGHTY said the department feels the same way, but
municipal attorneys have told the department municipalities
would not have property tax exemption or rebate programs if
such programs were not specifically permitted in state
statutes.
REP. BRICE asked the Alaska Municipal League's (AML)
position on the work draft of HB 66.
REP. BUNDE said the executive director of the AML planned to
testify on the bill later in the meeting.
REP. B. DAVIS asked why the work draft had a title different
from that of the governor's original bill.
REP. BUNDE responded that the new title addressed the true
value determination issue, making it clear that
implementation of the bill did not affect that determination
process.
Number 347
CHAIR TOOHEY invited public testimony on HB 66.
Number 350
MARIE DARLIN, PRESIDENT, ALASKA FEDERATION OF THE NATIONAL
ASSOCIATION OF RETIRED FEDERAL EMPLOYEES, testified in
Juneau concerning HB 66. She said a survey of the 5,000
members in Alaska, 57 percent of them over 65 years of age,
showed that repeal of the longevity bonus and property tax
exemptions would force 40 percent of them to leave the
state, taking with them their investments and their share of
the $89 million in pensions retirees bring to Alaska each
year. Ms. Darlin said she had distributed a report on
retiree concerns and positions to the members of the
committee. She stated 92 percent of the survey respondents
owned their homes. The federation recommended retaining the
property tax exemption, and, if necessary, lowering the cap
on assessed value, or possibly raise the eligibility age,
she said. Ms. Darlin left copies of a clipping from the
Senior Voice newspaper outlining results of the report on
retiree concerns.
Number 394
CHAIR TOOHEY asked whether seniors generally knew of the
proposed options concerning the property tax exemptions and
rental rebates, and said that she anticipated they would be
received favorably.
MS. DARLIN said senior citizens had not heard of the
proposals, but would consider the deferral as another option
in the programs.
CHAIR TOOHEY said she anticipated that deferrals would
sometimes be more than just an option, because they are a
workable alternative to placing senior citizens in
institutions.
Number 408
KEN SWISHER, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL LEAGUE,
testified in Juneau supporting the working draft of HB 66.
He expressed concern about the proposed change in the
effective date to January 1994. He said that would leave
the existing mandated program in effect without state
funding, repesenting a loss of from $2.5 to $3 million to
the municipal governments in FY94. While property tax
deferrals are a new concept in the legislature, other states
use them as a successful compromise between providing
nothing at all and providing a straight exemption, Mr.
Swisher said. Deferrals allow municipalities to collect the
tax due them, plus an appropriate rate of interest, and
allow property owners to defer paying the taxes out of their
income. He expressed a preference for the state to fund the
tax exemption fully, as the state has more money than the
municipalities. He stated his second preference would be to
add deferrals as an option.
Number 438
REP. BUNDE asked whether making the effective date
retroactive would affect the net gain for municipalities.
MR. SWISHER responded that would presume that all
municipalities would exercise their options to establish a
deferral program. Those that did not would see a net change
in 1994, he said. And, if a municipality could not begin a
deferral program, then it would not recover property taxes
for the fiscal year upon the sale of property, he stated.
Mr. Swisher said having an effective date of 1993 would make
it tight, but doable, for FY94.
REP. BUNDE commented that the state would be glad to fund
the program fully if the participants all contributed their
permanent fund dividend.
REP. G. DAVIS asked if members of the AML had discussed how
many of those municipalities that provide property tax
exemptions to senior citizens in addition to the state
program might offer a property tax exemption.
MR. SWISHER answered no.
Number 468
ROSE PALMQUIST, CHAIRMAN, MATANUSKA-SUSITNA SENIOR CITIZENS
ADVISORY BOARD, testified from Wasilla opposing HB 66. She
said the borough assembly, upon advice of the board, had
passed two resolutions supporting the property tax exemption
with full funding from the state. The assembly did not
support having an election on whether the borough itself
should fund a tax exemption. She said a small but vocal
element of the community opposed to senior citizens benefits
would probably sway borough voters against assuming passing
a borough-funded tax exemption for seniors. She also noted
that she was past president of the Older Persons' Action
Group, which wants the state to fund the property tax
exemptions.
Number 489
CHAIR TOOHEY, hearing no further requests to testify, closed
public testimony on HB 66.
REP. BUNDE announced his intention to provide a clean copy
of HB 66 with revisions the following day, Wednesday,
February 24, at which time he would request a vote by the
committee on the bill.
CHAIR TOOHEY called an at-ease at 3:39 p.m. and recalled the
meeting to order at 3:40 p.m.
HB 85: PUBLIC SCHOOL FOUNDATION PROGRAM
Co-CHAIR BUNDE assumed the chair, announced the committee
would hear HB 85, and noted that the meeting was being
teleconferenced to Anchorage, Barrow, Bethel, Mat-Su, Nome,
Sitka, Valdez, Soldotna, and Tok.
(Members present were Rep. Bunde, Toohey, Nicholia and B.
Davis.)
Number 503
DUANE GUILEY, DIRECTOR, DIVISION OF EDUCATION FINANCE AND
SUPPORT SERVICES, DEPARTMENT OF EDUCATION, testified in
Juneau and provided an overview of HB 85. He said he would
briefly explain all elements, but would concentrate on the
Alaska School Price Index (ASPI), which he said had
generated lots of interest. The ASPI is the department's
attempt to update the current Area Cost Differential (ACD),
designed to achieve an incremental increase in state school
aide in accordance with the location-based differences in
the cost of providing education.
(Rep. G. Davis returned at 3:42 p.m.)
MR. GUILEY referred to sections of the bill concerned with
the vocational education (voc-ed) and talented and gifted
(TAG) student programs, which he said were an attempt to
provide a flat rate of funding per student based on a
simplified formula. He said the department intends to
repeal regulatory requirements on plans of service,
individual education programs and compliance monitoring, to
eliminate the need for weighting classes, calculating
student full-time equivalents and other administrative
requirements, and to increase funding for voc-ed programs.
Mr. Guiley said the bill includes "hold harmless" provisions
whereby a district would not receive less than its FY93
level of funding under the current law for three years,
regardless of how the new basic need levels were calculated
under the new foundation formula. At the end of the three
years, a section in the new law would take effect reenacting
the ASPI based on the increase in cost of an education
program, he said.
MR. GUILEY referred to a section of HB 85 changing the due
date of the student enrollment projection. The current law
requires schools to submit an enrollment estimate for the
following year before the actual count of the current year's
enrollment, which he said leads to awkward enrollment and
budget revisions. He mentioned a section of the bill which
holds the districts harmless for any decreases in enrollment
in one year by allowing them to use the current or prior
year's enrollment, whichever brought it more money. This is
an effort to relieve the districts of having to plan their
budgets without knowing their final enrollment count, which
determines their foundation formula funding, he said.
Number 530
MR. GUILEY handed out pie charts showing the components of
the ASPI. He stated that districts are concerned about the
ACD because it is based on the cost of operating a
household, not a school district. The current index is
based on information from 1983 and 1984, and has not been
updated in statute since, though the original study was
updated in 1988, he noted. The ASPI committee arose from
the Alaska 2000 finance committee, which felt it did not
have enough time to fully consider the ADC, Mr. Guiley said.
Another task force was formed, and charged with defining the
types of expenditures necessary to deliver an educational
program, then defining how to measure incremental cost
increases over a base. The committee established the base
as the eight districts that now receive 1.0 in their ACD,
and compared the types of educational program costs to the
average of that base, he said.
MR. GUILEY said the components of the ASPI are: certified
salaries and benefits at 65 percent; non-certificated
salaries and benefits at 20 percent; and non-personnel costs
at 15 percent. There are further breakdowns in each
component, he said. The ASPI is based on districts' audited
average expenditures for 1989 and 1992. Mr. Guiley stated
that the changes in the price differential program adds
$12.4 million to the total cost of the foundation formula in
the first year. That is due primarily to the increases for
some districts over their current 1.0 classification, but
also due to increases for other districts that had been held
at lower amounts, and to increases for some single-site
districts that had previously received single-site
supplements. He commented that the department would make a
presentation the following day to the State Board of
Education for final adoption of a table for single site
support.
REP. BUNDE said he had heard that the Anchorage and Mat-Su
school districts would retain their classification at 1.0 of
the ACD, which would nonetheless lose money under the
proposal because they would have fewer units. He asked how
much districts that previously had multiple units would see
their funding drop.
MR. GUILEY said he believed Rep. Bunde was referring to the
definition of "funding community." The department intends
to level the playing field and apply statutes and
regulations consistently to all districts as the new
foundation law takes effect, and to eliminate some of the
funding communities previously approved as exceptions to
existing regulations, Mr. Guiley said. Eliminating those
exceptions would not result in revenue losses, but would
result in overall increases for Anchorage and Mat-Su school
districts under the proposal.
REP. BUNDE said he may have gotten incorrect information.
Number 597
REP. VEZEY asked why the proposal would result in a net
increase in funding, when a new cost index should be revenue
neutral. He asked why the average cost would be greater
than 1.0.
MR. GUILEY responded that the state school price index
committee was charged first with defining educational
expenditures, then developing a method of comparing the
expenditures in 54 districts to a base. Most past studies
have arbitrarily assigned a base, sometimes Anchorage, he
said. The committee suggested that a better base would be
the eight districts currently at 1.0, as that would allow
each district to go higher on that scale if they could prove
their costs were higher than the base, he said.
TAPE 93-20, SIDE B
Number 000
MR. GUILEY said seven districts are scheduled for increases
above 1.0 under the new formula. The formula was not
designed to redistribute revenue, but to obtain defensible
data to be used as a basis for comparison. Though there was
initially no discussion of preventing any district from
taking funding cuts through a hold harmless provision, the
commissioner decided during the process of developing the
formula that districts should not face immediate cuts
without the opportunity to reduce expenses to meet the new
funding levels, Mr. Guiley said.
Number 023
REP. VEZEY asked if the new formula would not bring less
money to any district.
MR. GUILEY stated that was correct in terms of the
foundation formula. Some single site districts worried that
the single site supplemental appropriations have been
outside the foundation formula law, but the hold harmless
provision concerns only the funding from the foundation
formula, he said. Some single site districts will see their
total state funding receipts drop, but not the funding
provided through the foundation formula.
REP. VEZEY explained the proposal results in a net increase
in education funding, using the existing $61,000 per
instructional unit.
MR. GUILEY agreed, saying it would bring a $12.4 million
increase in education funding the first year, or $9 million
if the department ended the existing $3.4 million single
site supplement built into the budget. The amount of
increase would drop as the hold harmless provisions phased
out, he said.
REP. VEZEY asked whether the new formula would penalize
those school districts able to operate at lower costs by
subsidizing the other, less-efficient districts.
MR. GUILEY said the department did not intend to penalize
efficient systems, but was trying to provide money with few
strings attached, such as the flat-rate funding for voc-ed
and TAG programs without compliance provisions.
Number 081
REP. NICHOLIA asked whether the table the department planned
to present to the State Board of Education the following day
would reduce the single site districts' funding.
MR. GUILEY commented that single site schools would not be
funded at 100 percent under the proposal and might receive a
supplement of $80,000 instead of $125,000 as in past years.
He repeated that they would receive no less in foundation
formula funds. He said the department had not tried to
force an index to provide current levels of funding, but to
provide a defensible and justified formula.
Number 115
REP. NICHOLIA asked why the department wanted to change from
ACD to the ASPI, and how it will benefit the state.
MR. GUILEY responded that the department made the change to
achieve revenue equality, and tried to do so by basing the
cost differential plan on educational costs, not household
costs. He added that the costs were based on surveys of
such costs in each district in 1989 and 1991, information
much more up to date than the 1983 data now in use.
Number 145
REP. NICHOLIA asked Mr. Guiley's definition of equity.
MR. GUILEY said an Alaska 2000 committee was to have tried
to define a basic quality education in Alaska. He stated
that 10 years ago, equity meant more money for everyone.
The department is now trying to distribute revenue based on
defensible data, he said.
Number 170
REP. NICHOLIA asked Mr. Guiley to tell her the important
components of Alaska 2000.
REP. BUNDE interrupted, saying the question was quite broad,
and the committee would discuss the components of Alaska
2000 other than funding at another time.
Number 180
DICK SWARNER, EXECUTIVE DIRECTOR OF BUSINESS MANAGEMENT FOR
THE KENAI PENINSULA BOROUGH SCHOOL DISTRICT (KPBSD),
testified in favor of HB 85. He said it is clear something
is wrong with the foundation formula when the KPBSD reached
the funding cap in 1989-90 and has remained there since, as
he expects other districts to do in time. He mentioned a
long list of ways in which the funding cap was hurting the
district: a forced increase in the student-teacher ratio by
three students two years ago, the forced absorption of 130
additional students next year without new staff; the
inability to buy new textbooks or equipment; and low
salaries.
(Rep. Nicholia departed at 4:01 p.m.)
MR. SWARNER said the changes in the ACD did not address the
need for increases in the instructional unit value to meet
inflation. He expressed support for the changes in the TAG
and voc-ed programs, which will cut paperwork, and the
changes in enrollment estimates. He concluded by saying the
bill needs more consideration, and that the ASPI more
accurately reflects educational costs than the ACD. He
disputed allegations that the new formula regards districts
that pay teachers more than do other districts.
Number 300
TOM BUZEK testified from Anchorage concerning the TAG
portion of HB 85, opposing provisions that would give school
boards discretion to fund TAG programs or not. He said he
favors current laws mandating that schools serve TAG
students as special needs students. The proposed budget
allocates 4.5 percent to TAG programs, and he favored
regulation to ensure the money is spent on TAG students. The
budget for the Mat-Su school district's 1993-94 school year
cuts TAG funding by half to approximately $300,000, while
voc-ed funding would increase to $900,000, Mr. Buzek said.
Without regulations mandating an independent, funded TAG
program, he would prefer to see TAG remain under special
needs programs, where it receives guaranteed funding, he
said.
Number 344
DENNIS WETHERELL, PRESIDENT OF THE MAT-SU TALENTED AND
GIFTED ASSOCIATION, testified from Anchorage opposing HB 85.
He wanted to retain guaranteed minimum funding for TAG
student services. While voc-ed and special education are
guaranteed a minimum of one instructional unit under the
bill, TAG funding is entirely set by administrative
regulations to be developed by the Department of Education,
he said. Mr. Wetherell protested the diversion of already
limited TAG funds to voc-ed programs. TAG students only
receive a maximum of three hours of advanced instruction per
week, he said.
LARRY WIGET, LEGISLATIVE LIAISON TO THE ANCHORAGE SCHOOL
DISTRICT, testified from Anchorage on HB 85, saying it would
mean less money for the district. He said the district
counts on at least $61,000 per instructional unit to meet
growing demands, and would support rewriting the foundation
formula to be more equitable to Anchorage. The ASPI would
allow for less equitable distribution of funds, he said.
Anchorage would receive $474,000 of the $12.4 million
increase in funding under the ASPI. The $12.4 million could
increase the foundation formula to $62,000 per unit. Each
$1,000 increase in the unit value would mean $3.75 million
more for Anchorage, compared to the $474,000 it would get
under the ASPI. Anchorage faces a projected deficit of up
to $13 million, so the district needs all the help it can
get, Mr. Wiget said. He asked the legislature to rewrite
the ASPI to make it more equitable to the Anchorage School
District.
Number 405
CARL ROSE, EXECUTIVE DIRECTOR OF THE ASSOCIATION OF ALASKA
SCHOOL BOARDS, testified in Juneau in support of HB 85 as
long as it is adjusted to better meet association concerns.
He stated the association has long recognized the need to
revise the foundation program to provide equity. He said
some districts may have received too much state money and
others have not received enough because of where certain
lines have been drawn. Mr. Rose said the actual formula
proposed by the Department of Education appears to represent
a comprehensive review, but he questioned the data points.
The association recommends placing the new formula in
statute, not regulation, following final review to forestall
lobbying against the department as it wrote regulations.
According to Mr. Rose, the association recommended that the
legislature consider annual adjustments to counter the
effects of inflation. The association also recommended
dealing with as many problems, such as the single-site
districts, as possible in the bill because of the difficulty
of achieving reform. Mr. Rose said the bill achieves a fair
and equitable distribution of state resources and addresses
many longstanding concerns.
REP. BUNDE asked a clarifying question about the
association's recommendations.
Number 468
CHAIR TOOHEY asked the purpose of a meeting scheduled for
the following day.
MR. ROSE said it was a meeting of the state Board of
Education, at which the board would try to adopt a scale in
connection with the ASPI.
REP. BUNDE asked if the Association of Alaska School Boards
had a position on funding of TAG programs.
MR. ROSE stated that the association members felt that the
changes in voc-ed and TAG programs represented a tradeoff,
and the advocates for each constituency would probably
appeal to the committee on their own behalf.
Number 500
ELL B. SORENSEN, SUPERINTENDENT OF THE MAT-SU SCHOOL
DISTRICT, testified in Juneau concerning HB 85, saying it
did not provide for equitable distribution of the increase
in funds. He said he would support the bill if it did not
cut funding for funding communities. He argued that equity
in state funding should be by program, not by distribution
of funds, and that the changes under ASPI do not distribute
the $12.4 million equitably. The Anchorage and Mat-Su
districts serve more than half the state's students, but
receive only $1 million of the $12.4 million, because the
bill removes the allowances for funding communities, he
said. The Kenai school district's funding communities are
smaller than the Mat-Su district's, so the loss of funding
communities hurts the Mat-Su district more. Further, when
the new ASPI is applied to the districts, Kenai gains $1.2
million, and Mat-Su gains $200,000, Mr. Sorensen said.
MR. SORENSEN explained that when the Mat-Su district got new
funding communities two years ago, they were built into how
the district is run, and to pull them out would leave the
district with a $4 million shortfall. That deficit would
make it impossible to maintain the district's comprehensive
high schools, which could mean the loss of voc-ed, art or
music programs for the resultant lower enrollments, he said.
It would also mean the loss of 35 teachers and a total of
60-90 employees, the addition of up to three students per
class when some middle schools already have 35 students, he
said. According to Mr. Sorensen, the ASPI makes sense, but
he asked the committee to retain funding communities.
REP. VEZEY said he believed HB 85 and its guarantee against
loss of funding was simply a way of increasing education
funding.
MR. SORENSEN said it was difficult to tell which districts
would win or lose over the long run under HB 85. If there
was a movement toward funding per child, then the larger
districts could benefit over time. Nome, for example, loses
no money in the change, but might lose more over the long
run by loss of its single-site supplements.
REP. VEZEY asked whether the ASPI is not a straight linear
analysis based on a cook book of costs.
MR. SORENSEN said the numbers that went into the ASPI are
good numbers, and the formula is defensible as an index of
educational costs, and is a positive development. He noted
the combination with other issues makes the question of
equity more complex.
REP. VEZEY clarified his question, asking whether the ASPI
was a straight comparative index, or whether there was any
statistical adjustment for deviation from a norm or
standard.
MR. SORENSEN said he could not respond and would rather
defer to Mr. Guiley.
REP. VEZEY said a straight index would reward districts that
have not controlled their costs by allowing them a higher
cost basis and not comparing them to more efficient
districts.
Number 050
REP. B. DAVIS asked Mr. Sorensen whether he would be happy
with HB 85 if his district retained funding communities as
well.
MR. SORENSEN answered yes. In such a case the Mat-Su
district would realize a $4 million increase in state
funding, which would make him very happy.
REP. B. DAVIS asked Mr. Guiley why the funding communities
were dropped.
MR. GUILEY answered by saying the funding communities were
dropped because they were exemptions to existing regulations
that consider a unified city-borough a single funding
community. Anchorage has three funding communities, one
each for Anchorage, Girdwood, and Eagle River, even though
each area is part of a single city-borough, just as Juneau
has a single funding community for all the schools in the
city and borough of Juneau, he said. In the areas outside a
unified city-borough, as in the Mat-Su school district,
funding communities are defined as a high school and all of
the elementary schools that graduate students to that high
school, Mr. Guiley said. Incorporated cities within a
borough, such as Wasilla or Palmer in the Mat-Su borough,
are awarded a separate funding community, he said. The
department wanted to eliminate as many exceptions and apply
the law consistently across the state, he concluded.
Number 100
REP. B. DAVIS asked how much more HB 85 would cost if the
exception were not removed and the funding communities for
the Mat-Su district were left intact.
MR. GUILEY answered that the funding communities represent
about $7.5 million, and the fiscal note for the bill would
rise to a total of approximately $20.5 million in the first
year.
REP. B. DAVIS asked Mr. Guiley to explain how he could claim
the bill had a "hold-harmless" provision when it appeared
Anchorage and Mat-Su districts were losing money.
MR. GUILEY responded by saying the "hold harmless" provision
means that no district will receive less in net foundation
formula funds in FY94, FY95 and FY96 than they did in FY93.
He further stated that the Anchorage and Mat-Su districts
are scheduled for increases in funding under the proposal.
Hearing no further requests to testify, REP. BUNDE closed
public testimony on HB 85, announced the bill would be held
over for further study, and ADJOURNED the meeting at 4:43
p.m.
| Document Name | Date/Time | Subjects |
|---|