Legislature(1995 - 1996)
04/04/1996 08:05 AM House STA
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
April 4, 1996
8:05 a.m.
MEMBERS PRESENT
Representative Jeannette James, Chair
Representative Scott Ogan, Vice Chair
Representative Joe Green
Representative Ivan Ivan
Representative Caren Robinson
Representative Ed Willis
MEMBERS ABSENT
Representative Brian Porter
COMMITTEE CALENDAR
HOUSE BILL NO. 435
"An Act relating to employment contributions and to making the
state training and employment program a permanent state program;
and providing for an effective date."
- WAIVED OUT OF COMMITTEE
HOUSE BILL NO. 393
"An Act relating to managed care for recipients of medical
assistance; and providing for an effective date."
- WAIVED OUT OF COMMITTEE
* HOUSE BILL NO. 452
"An Act relating to state foundation aid and supplementary state
aid for education; and providing for an effective date."
- PASSED OUT OF COMMITTEE
* HOUSE BILL NO. 545
"An Act relating to the cost-of-living differential for certain
public employees residing in the state and the criteria for
determining eligibility for the differential; and providing for an
effective date."
- HEARD AND HELD
HOUSE BILL NO. 198
"An Act relating to absences from the state and eligibility for
permanent fund dividends; and providing for an effective date."
- SCHEDULED BUT NOT HEARD
HOUSE BILL NO. 546
"An Act providing for and relating to the issuance of general
obligation bonds in the amount of $600,211,000 for the purpose of
paying the cost of acquiring, constructing, reconstructing, and
equipping public schools and of repair and major maintenance of
public school and University of Alaska facilities; and providing
for an effective date."
- SCHEDULED BUT NOT HEARD
HOUSE JOINT RESOLUTION NO. 34
Proposing an amendment to the Constitution of the State of Alaska
relating to the duration of a regular session.
- SCHEDULED BUT NOT HEARD
* HOUSE BILL NO. 490
"An Act relating to grants and other financial assistance
authorized or made by the Alaska Science and Technology Foundation
for the BIDCO assistance program."
- SCHEDULED BUT NOT HEARD
HOUSE JOINT RESOLUTION NO. 61
Opposing the proposed changes in the functions of the federal
Office of Veterans Affairs in Anchorage.
- SCHEDULED BUT NOT HEARD
* HOUSE BILL NO. 304
"An Act relating to geographic differentials for the salaries of
certain state employees who are not members of a collective
bargaining unit; relating to periodic salary surveys and
preparation of an annual pay schedule regarding certain state
employees; relating to certain state aid calculations based on
geographic differentials for state employee salaries; and providing
for an effective date."
- SCHEDULED BUT NOT HEARD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 435
SHORT TITLE: STATE TRAINING & EMPLOYMENT PROGRAM
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-PG ACTION
01/19/96 2488 (H) READ THE FIRST TIME - REFERRAL(S)
01/19/96 2488 (H) LABOR & COMMERCE, HES, STA, FINANCE
01/19/96 2488 (H) 3 FISCAL NOTES (2-DCRA, LABOR)
01/19/96 2488 (H) GOVERNOR'S TRANSMITTAL LETTER
02/07/96 (H) L&C AT 3:00 PM CAPITOL 17
02/07/96 (H) MINUTE(L&C)
02/14/96 (H) L&C AT 3:00 PM CAPITOL 17
02/14/96 (H) MINUTE(L&C)
02/15/96 2772 (H) L&C RPT 2DP 3NR
02/15/96 2773 (H) DP: ELTON, KOTT
02/15/96 2773 (H) NR: ROKEBERG, KUBINA, PORTER
02/15/96 2773 (H) ZERO FISCAL NOTE (GOV)
02/15/96 2773 (H) 3 FNS (2-DCRA,LABOR) 1/19/96
03/21/96 (H) HES AT 3:00 PM CAPITOL 106
03/21/96 (H) MINUTE(HES)
03/26/96 (H) HES AT 3:00 PM CAPITOL 106
03/26/96 (H) MINUTE(HES)
03/29/96 3473 (H) HES RPT 5DP 2NR
03/29/96 3473 (H) DP: BUNDE, TOOHEY, VEZEY, ROBINSON
03/29/96 3473 (H) DP: BRICE
03/29/96 3473 (H) NR: G.DAVIS, ROKEBERG
03/29/96 3474 (H) 3 FNS (2-DCRA, LABOR) 1/19/96
03/29/96 3474 (H) ZERO FISCAL NOTE (GOV) 2/15/96
03/29/96 3474 (H) REFERRED TO STA
BILL: HB 393
SHORT TITLE: MANAGED CARE PROGRAM FOR MEDICAID
SPONSOR(S): REPRESENTATIVE(S) ROKEBERG
JRN-DATE JRN-PG ACTION
01/05/96 2369 (H) PREFILE RELEASED
01/08/96 2369 (H) READ THE FIRST TIME - REFERRAL(S)
01/08/96 2369 (H) HES, STATE AFFAIRS, FINANCE
03/21/96 (H) HES AT 3:00 PM CAPITOL 106
03/21/96 (H) MINUTE(HES)
03/26/96 (H) HES AT 3:00 PM CAPITOL 106
03/26/96 (H) MINUTE(HES)
03/27/96 3392 (H) HES RPT CS(HES) 2DP 1DNP 2NR 1AM
03/27/96 3392 (H) DP: G.DAVIS, ROKEBERG
03/27/96 3392 (H) DNP: TOOHEY
03/27/96 3392 (H) NR: BUNDE, ROBINSON
03/27/96 3392 (H) AM: BRICE
03/27/96 3392 (H) ZERO FISCAL NOTE (DHSS)
03/27/96 3392 (H) REFERRED TO STATE AFFAIRS
BILL: HB 452
SHORT TITLE: CALCULATION OF STATE AID TO EDUCATION
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-PG ACTION
01/26/96 2541 (H) READ THE FIRST TIME - REFERRAL(S)
01/26/96 2541 (H) HES, STATE AFFAIRS, FINANCE
01/26/96 2541 (H) FISCAL NOTE (DOE)
01/26/96 2541 (H) GOVERNOR'S TRANSMITTAL LETTER
03/05/96 (H) HES AT 2:00 PM CAPITOL 106
03/05/96 (H) MINUTE(HES)
03/14/96 (H) HES AT 2:00 PM CAPITOL 106
03/14/96 (H) MINUTE(HES)
03/18/96 3176 (H) HES RPT CS(HES) 2DP 3NR 1AM
03/18/96 3176 (H) DP: BUNDE, TOOHEY
03/18/96 3176 (H) NR: G.DAVIS, ROKEBERG, VEZEY
03/18/96 3176 (H) AM: ROBINSON
03/18/96 3176 (H) FISCAL NOTE (DOE) 1/26/96
03/18/96 3176 (H) REFERRED TO STATE AFFAIRS
03/30/96 (H) STA AT 10:00 AM CAPITOL 102
03/30/96 (H) MINUTE(STA)
04/04/96 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 545
SHORT TITLE: PUB. EMPLOYEE COST OF LIVING DIFFERENTIAL
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-PG ACTION
03/22/96 3269 (H) READ THE FIRST TIME - REFERRAL(S)
03/22/96 3269 (H) STATE AFFAIRS, FINANCE
03/22/96 3269 (H) 3 ZERO FISCAL NOTES (ADM, REV, DOT)
03/22/96 3269 (H) GOVERNOR'S TRANSMITTAL LETTER
04/04/96 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
RICHARD S. CROSS, Deputy Commissioner
Office of the Commissioner
Department of Education
801 West 10th Street, Suite 200
Juneau, Alaska 99801-1894
Telephone: (907) 465-2800
POSITION STATEMENT: Provided testimony on HB 452.
EDDY JEANS, School Foundation
School Finance
Department of Education
801 West 10th Street, Suite 200
Juneau, Alaska 99801-1894
Telephone: (907) 465-8685
POSITION STATEMENT: Provided testimony on HB 452.
JAMES ELLIOTT, Acting Director
School Finance
Department of Education
801 West 10th Street, Suite 200
Juneau, Alaska 99801-1894
Telephone: (907) 465-2891
POSITION STATEMENT: Provided testimony on HB 452.
VIRGIE FRYREAR, Superintendent
Hoonah City Schools
P.O. Box 157
Hoonah, Alaska 99829
Telephone: (907) 945-3611
POSITION STATEMENT: Provided testimony on HB 452.
WANDA COOKSEY
Address not available
Telephone: Not available.
POSITION STATEMENT: Provided testimony on HB 452.
REPRESENTATIVE CON BUNDE
Alaska State Legislature
State Capitol, Room 108
Juneau, Alaska 99801-1182
Telephone: (907) 465-4843
POSITION STATEMENT: Provided testimony on HB 452.
VERNON MARSHALL, Executive Director
National Education Association - Alaska
114 2nd Avenue
Juneau, Alaska 99801
Telephone: (907) 586-3090
POSITION STATEMENT: Provided testimony on HB 452.
PATRICK GULLUFSEN, Assistant Attorney General
Governmental Affairs Section
Civil Division
Department of Law
P.O. Box 110300
Juneau, Alaska 99811-0300
Telephone: (907) 465-3600
POSITION STATEMENT: Provided testimony on HB 545.
BRUCE CUMMINGS, Labor Relations Specialist
Marine Highway System
Department of Transportation and Public Facilities
3132 Channel Drive
Juneau, Alaska 99801-7898
Telephone: (907) 465-8838
POSITION STATEMENT: Provided testimony on HB 545.
GREG O'CLARAY, Director of Legislative and Governmental Affairs
Marine Engineers Beneficial Association
124 Front Street
Juneau, Alaska 99801
Telephone: (907) 586-6040
POSITION STATEMENT: Provided testimony on HB 454.
ACTION NARRATIVE
TAPE 96-46, SIDE A
Number 0015
The House State Affairs Committee was called to order by Chair
Jeannette James at 8:05 a.m. Members present at the call to order
were Representatives Green, Ogan, Ivan, Willis, Robinson and James.
Member absent was Representative Porter.
HB 435 - STATE TRAINING & EMPLOYMENT PROGRAM
The first order of business to come before the House State Affairs
Committee was HB 435.
CHAIR JEANNETTE JAMES announced she wanted to waive HB 435 from the
House State Affairs Committee. She asked if there were any
objections from the committee members. Hearing no objection, it
was so waived from the committee.
HB 393 - MANAGED CARE PROGRAM FOR MEDICAID
The next order of business to come before the House State Affairs
Committee was HB 393.
CHAIR JAMES announced HB 393 had already been waived from the House
State Affairs Committee. Therefore, no action today was necessary.
HB 452 - CALCULATION OF STATE AID TO EDUCATION
The next order of business to come before the House State Affairs
Committee was HB 452.
CHAIR JAMES called on Richard S. Cross, Department of Education, to
present the bill.
Number 0112
RICHARD S. CROSS, Deputy Commissioner, Office of the Commissioner,
Department of Education, said he was here to discuss the committee
substitute for HB 452 (9-GH2043/C). He explained the committee
substitute was essentially the same system in place today for
calculating state aid to schools except for one notable exception.
The exception was the payment to regional education attendance
areas (REAA) of $500 per unit to ensure that the state met the
federal disparity test for the 1996 to 1997 school year.
Furthermore, in-order-to recover the money that was required to
make that $500 payment, the committee substitute increased the
deductible federal impact aid for those districts by 5 percent.
Therefore, by increasing the deductible, the state recovered a
large portion of the payment that would be made to increase the
value of the unit in those districts. Moreover, he explained in
the original bill the calculation for the single site school
districts was included in the foundation. The department strongly
recommended that it be placed back into the bill for two reasons.
The first was based on the calculation of the federal disparity
test. The federal government had looked at the single site issue
for a number of years now and had encouraged the state to
incorporate an all encompassing calculation for the foundation
payment. The second was based on the payment. It had become a
consistent course of business. He reiterated the department
recommended replacing the single site calculation back into the
bill. He thanked the committee members for their time.
Number 0355
CHAIR JAMES asked Mr. Cross to respond to the fiscal note. She
wondered if more money was being added to the formula funding.
Number 0379
MR. CROSS replied the calculation of increasing from 90 percent to
95 percent for the deduction did not exactly match the payment to
the REAA's. Therefore, the fiscal note represented the difference
between the $500 payment unit and what would be recovered from the
deductible increase.
Number 0439
CHAIR JAMES asked Mr. Cross if the amount given to the single site
school districts affected the disparity test?
MR. CROSS deferred to Eddy Jeans, Department of Education, to
answer the question.
Number 0465
EDDY JEANS, School Foundation, School Finance, Department of
Education, explained the single site allocation was based on a
formula that had been before the legislature a number of times.
The table (Sec. 4) was deleted from the original bill (9-GH2043.A)
creating the committee substitute (CSHB 452(HES) 9-GH2043/C). He
reiterated the department would like to reinstate that section back
into the bill. The single site allocations did affect the
disparity test because they were not associated with the
instructional units. Therefore, they increased the unit value of
those school districts. Whereas, if the table was adopted and put
back into the foundation formula, the instructional units then
generated those dollars. Those dollars would not have any value
outside of the unit value itself, however.
Number 0538
CHAIR JAMES said she understood the formula, but had never
understood how the single site formula affected the disparity test.
Number 0580
MR. CROSS replied disparity did not depend on the amount of units
received. It depended on the value of the unit. Therefore, if a
district was given more units, a disparate situation was not always
the case. If the unit value was increased, however, then a problem
existed. If more units were paid as opposed to increasing the
value of a unit then a wide disparity was not being created.
Number 0648
REPRESENTATIVE CAREN ROBINSON explained she objected to deleting
Sec. 4 in the original bill (9-GH2043.A) when it was in the House
Health, Education and Social Services Committee. She wondered what
the ramifications were by not including the table in the bill.
Number 0666
MR. JEANS replied the Department of Education was put on notice by
the U.S. Department of Education to include the payments in the
foundation formula. The payments that were being made outside of
the formula were circumventing the equalized plan. That was why
the department recommended that those payments be included in the
bill. Furthermore, it increased the value of the unit. The
appropriation was made outside of the formula now so that the
districts still had the same number of units. However, the
additional revenue outside of the formula increased the unit value
which was what caused the disparity.
Number 0724
CHAIR JAMES asked Mr. Jeans what was the support for the difference
in a unit value for a single site school district and a non-single
site school district? She further wondered why a single site
school district needed more money. She asked, was it because of
the geographical location, for example?
Number 0800
MR. JEANS said it was based on an economy of scale. The foundation
program provided instructional units for a site. It was not enough
for a single site school district to cover administrative expenses,
for example. In the case of a multiple site school district there
was enough front loading to provide additional money for its
administrative expenses. A single site school district, on the
other hand, did not have the benefit of using the table more than
once.
Number 0862
CHAIR JAMES wondered if there were ways for a single site school
district to reduce its costs by combining administrative services,
for example.
Number 0907
MR. JEANS replied many of the superintendents of single site school
districts also taught classes and acted as the business manager,
for example. Whereas, in a larger school district those functions
were specialized.
Number 0929
CHAIR JAMES wondered where were the additional administrative
expenses.
Number 0945
MR. CROSS replied it was the ratio of the administrative cost to
the total cost of the operation. Therefore, the larger a district,
the smaller the ratio. The department preferred to compensate
those districts with more units. The district, however, needed to
makeup that ratio. Therefore, the percentage of a district's total
business function, as a percentage of its' total operation, must be
higher.
Number 0997
REPRESENTATIVE ED WILLIS asked Mr. Cross if the changes in the
committee substitute tilted towards the rural school districts
compared to the urban school districts?
Number 1029
MR. CROSS replied the single site calculation would not cause a
tilt. The only change in the bill that shifted funds was the
payment to the REAA's to meet the disparity requirements, and the
department proposed a mechanism to try to recover those dollars.
The only real shift would be the $223,800 in the fiscal note, out
of an over $600 million program.
Number 1078
CHAIR JAMES wondered if there would have been a fiscal impact by
taking out the single site school districts because the bill would
cover more. She thought there should have been a reduction in the
fiscal note.
Number 1116
MR. JEANS replied the Department of Education did not build the
single site table in HB 452 (9-GH2043.A). It was currently built
into the department's budget. Therefore, it was an appropriation
made by the legislature annually. The fiscal note dealt only with
the adjustments to the REAA school districts and the increase in
the $500 per instructional unit.
Number 1145
CHAIR JAMES said, for the record, she was interested in fairness
and equity throughout the state for education. She did not want
her questions to be construed that she separated the urban and
rural school districts. However, she wanted to understand this
issue to answer to her constituents in her district. She stated
she understood the concerns in the urban areas, but was very
sensitive to the needs in the rural areas.
Number 1192
REPRESENTATIVE JOE GREEN wondered why the administrative services
in the single site school districts could not be combined.
Number 1223
MR. CROSS replied that issue had been studied before. He said he
would be glad to forward the results of the most recent study to
him. In theory, one would think it would save money, when in fact
it really did not.
REPRESENTATIVE GREEN asked if it would save $223,800?
Number 1269
MR. JEANS replied the $223,800 addressed the change in the formula
that increased the deductible impact aid to regional education
attendance areas. It did not have to do with the single site
school district issue. He said the single site was already built
into the budget for FY 97. Moreover, the legislature had been
appropriating funds annually to the single site school districts
since 1988, with the exception of 1991. He reiterated the fiscal
note dealt with the change to the REAA's to meet the federal
disparity test. He reiterated it did not deal with the single site
issue.
Number 1310
CHAIR JAMES asked if there were any superintendents for a rural
school district not located in the same area?
Number 1333
JAMES ELLIOTT, Acting Director, School Finance, Department of
Education, replied, "yes." He cited a superintendent for the
Chugach School District that lived in Anchorage. He also cited a
superintendent for the Yukon-Koyukuk School District that lived in
Fairbanks.
Number 1349
REPRESENTATIVE IVAN IVAN wondered if the bill was being amended to
include the single site school districts.
Number 1373
CHAIR JAMES explained the section (Sec. 4) that dealt with the
single site school districts was deleted from the original bill in
the House Health, Education and Social Services Committee. If the
committee substitute was to pass, the single site school districts
would continue to be funded as they were currently.
Number 1400
MR. CROSS stated there were only three states in the country that
included their federal payments as a part of their foundation. He
cited Alaska was the biggest player at $35 million, out of a more
than $600 million program. He cited Kansas was only $8 million,
out of a more than $1 billion program. Therefore, it was a high
stake for Alaska. He asserted the state must meet the disparity
test.
Number 1444
CHAIR JAMES said, for the record, her district was concerned how
the impact aid was divided among the districts. She thanked the
department for its cooperation by providing information to help her
understand this issue. She explained the state applied for the
impact aid as a whole for a larger portion compared to each
district applying individually. Therefore, when the formula
funding was presented to each district, the difference was reduced.
She believed the calculations were equitable, and explained it was
more of a control issue for the districts.
Number 1532
REPRESENTATIVE GREEN said he would appreciate a copy of that
formula explanation to take back to his constituents in his
district. His constituents believed there was a funding disparity
between the rural and urban school districts.
Number 1554
CHAIR JAMES said it was a fact that it was more expensive per unit
for smaller operations. If the state would stop dividing the
school children between rural and urban, and start concentrating on
the cost of an equitable education for each student, the cost of
the rural school districts would not be an issue. She said, "if I
had my choice to put kids in rural schools or urban schools. I
would choose urban schools, any day."
Number 1596
REPRESENTATIVE GREEN agreed that no child should be deprived of an
education because of funding when another child received a benefit
as a result of funding. He suggested that the House State Affairs
Committee make sure that the single site school districts were
doing all that they could to streamline the administrative
expenses.
Number 1624
MR. ELLIOTT said a number of the single site school districts
contracted their services to economize. Furthermore, it was
important to remember that the dollar value was different in the
rural areas compared to the more urban areas.
CHAIR JAMES called on the first witness in Juneau Virgie Fryrear,
Hoonah City Schools.
Number 1666
VIRGIE FRYREAR, Superintendent, Hoonah City Schools, thanked the
committee members for their attention today. She said the single
site school districts were discouraged that Sec. 4 was deleted from
the original bill because it was a good "fix" for the foundation
formula. The single site school districts wanted to stop coming to
the legislature to "whine" for their money. There were 21 school
districts impacted by this piece of legislation. She explained she
had worked in both REAA and single site school districts, and
stressed it was important to consider the special services of a
school district. She cited the Hoonah City Schools spent $47,000
per year to contract for special services - psychologists and
speech therapists, for example. Moreover, the section (Sec. 4)
that was deleted from the original bill was supported by a variety
of education associations, such as the National Education
Association - Alaska. She urged the committee members to reinstate
the section.
CHAIR JAMES called on the first witness via teleconference in
Kentucky, Wanda Cooksey.
Number 1808
WANDA COOKSEY said the amount of money in the budget this year
would not be taken from new legislation. She explained the cost
was in the Governor's budget. She further explained the
legislature had funded the single site school districts every year,
except one, since the formula was on the books. Furthermore, the
table in the section that was deleted had been used for several
years to calculate the grant amount that went to school districts.
Number 1902
REPRESENTATIVE ROBINSON moved to reinstate the original Sec. 4 back
into the bill. She did not understand why it was removed
originally.
Number 1928
CHAIR JAMES said unless we adopt the CSHB 452(HES), the original
bill was before the committee members. Therefore, the motion might
not be necessary. She asked her staff to check the proper
procedure.
CHAIR JAMES suggested a motion to adopt the original bill, to make
it perfectly clear, for the record.
Number 2006
REPRESENTATIVE ROBINSON moved to adopt HB 452 (9-GH2043.A) for
consideration. Representative Green objected, of which discussion
followed.
Number 2027
REPRESENTATIVE IVAN said he was effected by this piece of
legislation. He supported the language to include the table for
the single site school districts and would vote accordingly.
Number 2045
REPRESENTATIVE ROBINSON said HB 452 (9-GH2043.A) was a fiscal issue
as well. It was in the best interest of all the school districts
that the bill move to the House Finance Committee where there was
more knowledge of the budget to make the final decision.
Number 2076
REPRESENTATIVE GREEN objected to moving the original bill because
it already passed the House Health, Education and Social Services
Committee that dealt directly with education issues. He felt it
was undoing the committee process and stated "you might as well
just bring everything to the Floor."
Number 2100
CHAIR JAMES replied that was why multiple committees existed. Each
committee was responsible for passing a bill that felt it was the
best.
CHAIR JAMES recognized the presence of Representative Con Bunde,
Co-chair, House Health, Education and Social Services Committee,
and asked him to join the committee members at the table.
Number 2128
REPRESENTATIVE GREEN stated the committees were named accordingly,
and each should deal with the portion of a bill it was named for.
The process was not established to redo the changes of a committee.
Number 2154
REPRESENTATIVE CON BUNDE explained the single site school districts
were rolled into the formula to camouflage or lower the level of
discussion. A decision had not been made, however. Therefore, it
should be considered separately until an overall policy decision
was made. There were two issues involved, the formula and the
single site school districts. He recognized the roll of each
committee, and he would not be offended if the House State Affairs
Committee wanted to change the bill.
Number 2205
CHAIR JAMES said the House of Representatives just passed the FY 96
budget this week which included the Governor's budget on funding
for education including the single site school districts.
Therefore, it appeared, the Majority had approved single site
school districts already. She could not predict the next
legislature, however. She wondered, if by including the
calculation for single site school districts in the bill, did it
become a part of the formula unit amount to allow for disparity.
Number 2254
REPRESENTATIVE BUNDE replied the question was whether to continue
funding single site school districts as a separate item, as in the
past, or to submerge them into a formula so that they were less
visible.
Number 2278
CHAIR JAMES asked the Department of Education if she explained the
formula issue correctly?
MR. CROSS replied, "you were real close." He explained there was
no difference in the amount of money paid to a single site school
district. However, the difference was they would be included in
the formula to allow for additional units. If they were out of the
formula, the unit value would increase. Furthermore, increasing
the unit value affected disparity, while paying for more units did
not affect disparity. Therefore, the department preferred that the
calculation be made within the formula.
Number 2323
REPRESENTATIVE BUNDE stated if the unit value went up they received
more money.
CHAIR JAMES replied so does everyone else.
REPRESENTATIVE BUNDE replied, "I know." He asked, do we want to
continue to pay for the expensive units?
Number 2328
CHAIR JAMES explained funding for single sites was like political
"football." Sometimes it was approved as part of the budget, and
sometimes it was not. Therefore, "do we really want to continue
playing football or do we want to include them in the formula?"
Furthermore, the question was also did it have meaning or no
meaning? If it did have meaning, it should be included. If it did
not have meaning, it should not be included.
Number 2372
REPRESENTATIVE BUNDE replied Chair James summed the issue up as he
saw it. By including the single site school districts in the
formula, it "blessed" them so that it was not necessary to worry
about the issues of high administrative expenses, the inequity
between urban and rural school districts, and the inefficiencies,
for example. By not including the single site school districts in
the formula, it left the issues visible to be addressed by the
legislature.
Number 2388
REPRESENTATIVE ROBINSON stated, by keeping the single site school
district table in the bill, policy was being set.
Number 2396
REPRESENTATIVE BUNDE said the House State Affairs Committee would,
yes, be setting policy that single site school districts were good
and needed to be taken off the "burner."
Number 2404
REPRESENTATIVE ROBINSON reiterated the bill would be forwarded to
the House Finance Committee that would make the final decision.
Number 2415
REPRESENTATIVE BUNDE replied the House Finance Committee could also
choose to not include the single site table as well.
Number 2418
REPRESENTATIVE ROBINSON said she also believed that there were
urban communities that could "tighten their belts." The rural
communities should not always be blamed.
Number 2436
REPRESENTATIVE BUNDE replied that was not what he said. He cited
the Juneau School District was asking its teachers to take a 6
percent decrease. However, he believed the money should be taken
out of the administrative budget of which single sites had a larger
budget for compared to other sites. It was a local call, however.
Number 2455
REPRESENTATIVE IVAN said he did not agree with Representative Bunde
that single site school districts had a high overhead cost. He
said it was a given in a state the size of Alaska that the strength
of the dollar in the urban areas versus the rural areas would be
different, for example.
TAPE 96-46, SIDE B
Number 0015
REPRESENTATIVE GREEN stated he understood there was a difference in
cost between the urban and rural areas. He was concerned, however,
that each single site school district had a superintended when it
was not necessary, for example. He said it appeared a
superintended could cover several rural sites, for example, which
was part of the administrative expenses.
Number 0078
CHAIR JAMES explained the Fairbanks area was sympathetic to the
rural areas because it felt disenfranchised at times because it was
not located in Anchorage. She cited when the state budget was cut
the state offices in Fairbanks were closed and moved to Anchorage.
Furthermore, testimony regarding a new correctional facility in
Anchorage indicated it would cost less there. She said, "we can't
move the whole state to Anchorage." She further stated, people
lived where they lived, and the services they needed should be
addressed. Therefore, the House State Affairs Committee was an
appropriate place to address that issue.
Number 0123
REPRESENTATIVE BUNDE said he did not disagree with most of what he
heard here today. He further stated there was a finite amount of
money for education. He cited the single site school district in
Galena where the superintendent spent most of his time writing
grants so that the students received a power notebook computer. He
wondered if a grant writer that made $100,000 per year was needed?
He said it was a policy decision. He further cited there were two
single site school districts in Southeast that were separated
because of the clans. He believed, educationally, single site
school districts were not defensible.
Number 0196
CHAIR JAMES stated it was possible to legislate to merge single
site school districts. She felt Representative Bunde was comparing
apples and oranges. She agreed with Representative Green and
Representative Bunde regarding the administrative expenses,
however. The expenses should be as minimal as possible. She said
she was going to further research the issue of the location of the
superintendent to determine if it was more cost effective for one
to live in a urban community, for example.
CHAIR JAMES thanked Representative Bunde for his time.
Number 0264
REPRESENTATIVE BUNDE replied, "thank you." He said the House State
Affairs Committee had a good grasp of the issue.
Number 0271
REPRESENTATIVE ROBINSON said she was glad to finally understand
what was done in the House Health, Education and Social Services
Committee even though she was a member. She asked the Department
of Education to come to the table to further address the issues
Representative Green discussed.
CHAIR JAMES asked Mr. Cross to join the committee members at the
table.
Number 0295
CHAIR JAMES asked Representative Green to restate his concerns for
the department.
Number 0303
REPRESENTATIVE GREEN said, due to today's communication technology,
it should be possible to combine the functions of the
superintendent between single site school districts. There was an
economy of scale issue also involved.
Number 0332
MR. JEANS replied the law stated that every school district should
have a superintendent.
REPRESENTATIVE GREEN said that needed to be changed.
MR. JEANS further stated a balance was necessary regarding
Representative Green's economy of scale concern. He did not know
what was the exact balance, but would support any discussion and
study to determine that. He further explained the superintendents
that lived in Anchorage and Fairbanks mentioned earlier were not
for single site school districts.
Number 0407
REPRESENTATIVE ROBINSON said she was aware of bills that were
completely changed as a result of the committee process then gutted
to return to the original bill in the House Finance Committee, for
example. It was the prerogative of the committees to make changes.
She believed the responsibility of the House State Affairs
Committee was to reinstate Sec. 4 in the bill because it was a
responsible state issue. She had no doubt it would be removed if
the House Finance Committee did not agree with it.
Number 0443
CHAIR JAMES said she agreed with Representative Robinson that her
scenario was a possibility. She said, however, if there was a
problem, this was the wrong way to address it. There was the
possibility to change the law to combine single site school
districts, for example.
Number 0487
REPRESENTATIVE OGAN said he agreed with Representative Green. He
said this issue was controversial and he was concerned about
"locking" it into a piece of legislation. He agreed it needed to
be addressed in the future with legislation. He would vote against
the motion.
Number 0546
REPRESENTATIVE IVAN asked for an at ease.
CHAIR JAMES called for a five minute at ease.
CHAIR JAMES called the House State Affairs Committee meeting back
to order and asked for a roll call vote to adopt the original
version of HB 452 (9-GH2043.A). Representatives Ogan and Green
voted against the motion. Representatives James, Ivan, Robinson
and Willis voted in favor of the motion. The original version of
HB 452 (9-GH2043.A) was adopted.
CHAIR JAMES called on the next witness in Juneau, Vernon Marshall.
Number 0582
VERNON MARSHALL, Executive Director, National Education Association
- Alaska (NEA - Alaska), said the association supported HB 452 as
an opportunity to correct the federal disparity issue. He
explained that NEA - Alaska had produced materials and a position
statement to help further explain this issue. The association was
concerned if the disparity was not corrected there would be a pro-
ration impacting the instructional units and the school districts.
He cited there would be a $2,800 impact on the instructional unit.
There had only been one increase in the instructional unit which
occurred in 1992, and raised the unit by $1,000. He said this
impacted the children. A child did not choose where he was born,
and the impacts were real for both urban and rural Alaska. The NEA
- Alaska, therefore, encouraged the committee members to not loose
ground on the fight to maintain the $61,000 instructional unit.
Furthermore, if the value of the instructional unit was adjusted
for inflation it was only worth $48,000. He reiterated the
association supported HB 452.
Number 0712
CHAIR JAMES asked if there was any more discussion. Hearing none,
she called for a motion to move the bill from the committee.
Number 0720
REPRESENTATIVE ROBINSON moved that HB 452 (9-GH2043.A) move from
the committee with individual recommendations and attached fiscal
notes. Representative Ogan objected. A roll call was taken.
Representatives Ogan and Green voted against the motion.
Representatives James, Ivan, Robinson and Willis voted in favor of
the motion. The bill was passed out of the House State Affairs
Committee.
CHAIR JAMES announced the House State Affairs Committee meeting
would adjourn today at 9:30 a.m. due to a Majority Caucus meeting.
HB 545 - PUB. EMPLOYEE COST OF LIVING DIFFERENTIAL
The next order of business to come before the House State Affairs
Committee was HB 545.
CHAIR JAMES called on Patrick Gullufsen, Department of Law.
Number 0800
PATRICK GULLUFSEN, Assistant Attorney General, Governmental Affairs
Section, Civil Division, Department of Law, said he was here to
answer any questions regarding HB 545.
CHAIR JAMES stated HB 545 was intended to preclude the ferry
workers that lived outside of Alaska from collecting a cost of
living allowance differential (COLA).
CHAIR JAMES called on Bruce Cummings, Department of Transportation
and Public Facilities.
Number 0834
BRUCE CUMMINGS, Labor Relations Specialist, Marine Highway System,
Department of Transportation and Public Facilities, said HB 545 was
an attempt to clarify the residency requirements and eligibility
standards for receipt of a COLA called for in the collective
bargaining agreements and statutes. The law required that the
system pay for different rates for those residing in Alaska versus
outside of Alaska creating controversy. He reiterated the bill
would more clearly enunciate the criteria by which people would
qualify by following the criteria of the permanent fund dividend
qualification. It also allowed for the adoption of regulations
under the Administrative Procedure Act (APA) which could vary from
the current permanent fund dividend regulations. He explained, at
the outset, the system would adopt the permanent fund dividend
criteria by reference. Furthermore, organized labor did endorse
this idea.
Number 0904
CHAIR JAMES said she was distressed by the intent of HB 545. She
wondered if the intent was to change the regulations.
Number 0928
MR. CUMMINGS replied the bill would allow the Department of
Administration to propose, and through the APA, to adopt
regulations. He did not know what the regulations would be,
however. The criteria for the permanent fund dividend did not
cover all of the possibilities of the Alaska Marine Highway System
such as the alternative life styles of vessel employees, for
example. Therefore, the law would allow for the adoption of
additional regulations that could be different from the current
permanent fund regulations.
Number 0984
CHAIR JAMES said she would feel more comfortable if the bill was
more specific than less specific. She understood the need to
embellish the criteria, but felt they would need to be changed by
law and not regulations.
Number 1025
REPRESENTATIVE GREEN wondered how the system would determine a fair
differential pay by using the permanent fund dividend requirements.
Number 1050
MR. CUMMINGS replied the amount of the differential was currently
negotiated by bargaining agreements. Therefore, HB 545 would not
affect the amount of the differential. He explained the bill would
allow an individual to qualify for the COLA if he qualified as a
resident under the permanent fund dividend program.
Number 1090
REPRESENTATIVE GREEN asked if the pay was the same for those living
anywhere in the state?
Number 1097
MR. CUMMINGS replied the answer was both "yes" and "no." Title 39
of the Alaska State Statutes addressed pay for state employees
based on where they worked. The Marine Highway System was an
anomaly, however. The employees were not paid based on the
location of their fixed duty station, they were paid on where they
resided. Therefore, there were only two rates of pay - residential
and nonresidential.
Number 1163
CHAIR JAMES asked Mr. Cummings to explain to the committee members
the inefficiency in the system that allowed this to happen.
Number 1179
MR. CUMMINGS explained the system was paying the COLA differential
on a good faith basis. The system only required a narrative form
of eligibility of a name and an address. The system did not have
substantial resources to investigate reported eligibility.
Therefore, unless there was reasonable suspicion, an investigation
was not conducted. It was hard to investigate because of potential
"shadow" residencies.
Number 1296
CHAIR JAMES asked Mr. Cummings if the department had thought of not
including a COLA?
Number 1310
MR. CUMMINGS said he could not speak for the department.
Therefore, he spoke on behalf of himself. He said he was not
convinced the allowance was necessary now, but that was not the
sentiment 15 years ago when the statute was enacted. It was
enacted to provide an incentive for more vessel employees to live
in the state of Alaska. Currently, only about 50 employees out of
700, reside outside of Alaska. He did not know if the numbers
would change if there was a differential or not.
Number 1404
CHAIR JAMES said she did not see any benefit these days to
encourage people to move to Alaska because there were already
enough benefits such as no state income tax, for example.
Number 1458
REPRESENTATIVE ROBINSON asked Mr. Cummings if the reservation
employees were included in HB 545? She was concerned about the
employees that had to move to Seattle because that was where the
office was according to debate several years ago surrounding the
permanent fund eligibility requirements.
Number 1489
MR. CUMMINGS replied "no" they were not affected by HB 545. The
office no longer existed in Seattle. If there was an office in
Seattle their pay would be based on the geographical differentials
provided for in AS 39.27.020. He agreed with Chair James that the
incentive was much smaller compared to 15 years ago. The cost of
living differentials were much smaller for Seattle and Southeast,
for example.
Number 1548
CHAIR JAMES explained due to time constraints HB 545 would be
scheduled for the next hearing on April 9, 1996. There was time
for one more witness, however.
Number 1563
REPRESENTATIVE IVAN explained he would reserve his questions for
the next scheduled hearing.
CHAIR JAMES called on the next witness in Juneau, Greg O'Claray,
Marine Engineers Beneficial Association.
Number 1576
GREG O'CLARAY, Director of Legislative and Governmental Affairs,
Marine Engineers Beneficial Association, said the association
supported HB 545. He agreed with Chair James, that if the
legislature was to eliminate this provision in statute, it would
relieve a lot of stress between employees. He explained in 1963 a
policy was established to require an employee to move to Alaska
within four months of employment. It was considered
unconstitutional by the courts, however. Therefore, this had been
a problem for the system for years. The law enacted in the 1970's
did not adopt criteria for state residency which further
contributed to the problems.
Number 1693
REPRESENTATIVE GREEN asked Mr. O'Claray if the people living in
Alaska received a 20 percent increase or did the people living
outside of Alaska receive a 20 percent decrease when the
legislation was enacted in the 1970's?
Number 1709
MR. O'CLARAY replied an increase was negotiated.
Number 1730
ADJOURNMENT
CHAIR JAMES adjourned the House State Affairs Committee meeting at
9:30 a.m.
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