Legislature(1993 - 1994)
02/10/1994 09:08 AM Senate CRA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE COMMUNITY & REGIONAL AFFAIRS
February 10, 1994
9:08 a.m.
MEMBERS PRESENT
Senator Randy Phillips, Chairman
Senator Robin Taylor, Vice Chairman
Senator Al Adams
Senator Fred Zharoff
MEMBERS ABSENT
Senator Loren Leman
COMMITTEE CALENDAR
SENATE BILL NO. 62
"An Act relating to the public school foundation program; and
providing for an effective date."
SENATE BILL NO. 232
"An Act relating to reimbursement of bonds issued for school
construction; and providing for an effective date."
SENATE BILL NO. 233
"An Act relating to state aid for education."
PREVIOUS SENATE COMMITTEE ACTION
SB 62 - See Community & Regional Affairs minutes
dated 2/18/93, 4/1/93, 4/6/93 (a.m. & p.m.
minutes), 4/16/93, 2/3/94.
SB 232 - See Community & Regional Affairs minutes dated
2/3/94.
SB 233 - See Community & Regional Affairs minutes dated
2/3/94.
WITNESS REGISTER
Carol Carroll, Staff to Senator Jay Kerttula
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Offered information on SB 232 & SB 233
Duane Guiley, Director, School Finance
Department of Education
801 10th St, Suite 200
Juneau, AK 99801-1894
POSITION STATEMENT: Offered information on SB 232, SB 233
and SB 62
Michael Murphy
P.O. Box 1064
Nome, AK 99762
POSITION STATEMENT: Testified on SB 62
Richard Swarner
148 N. Binkley
Soldotna, AK 99669
POSITION STATEMENT: Testified on SB 233
Deborah Germano
P.O. Box 1511
Homer, AK 99603
POSITION STATEMENT: Testified on SB 233 & SB 62
Marilyn Leahy
P.O. Box 689
Valdez, AK 99686
POSITION STATEMENT: Testified on SB 62
ACTION NARRATIVE
TAPE 94-12, SIDE A
Number 001
The Senate Community & Regional Affairs Committee was called to
order by Chairman Randy Phillips at 9:08 a.m. He brought SB 232
(SCHOOL CONSTRUCTION BOND REIMBURSEMENT) before the committee as
the first order of business.
Number 012
CAROL CARROL, staff to Senator Jay Kerttula, said at the previous
hearing on SB 232, the Department of Education spoke of an excess
capacity that is built into the system, and Senator Kerttula
requests that the committee consider changing the date on page 1,
line 8 to December 1, 1994 so that the excess capacity could be
used after this year's elections. If this were done, it would not
be necessary to increase the capacity that the state would have to
pay.
Number 060
SENATOR TAYLOR moved the following amendment to SB 232:
AMENDMENT NO. 1
Page 1, line 8: Delete "July 1, 1996" and insert in its
place "December 1, 1994"
Hearing no objection, the Chairman stated Amendment No. 1 was
adopted.
Number 082
DUANE GUILEY, Director, School Finance, Department of Education,
explained that SB 7, which was passed last session, carried with it
a $250 million capital project authorization for the department
based upon principal amount of the project. Of that $250 million
that was allocated, $133 million went to Anchorage, $67 million to
Fairbanks and $50 million to the remainder of the state. The
allocation was effective through July 1, 1996.
Currently, there is available capacity of the $250 million
allocation. Of the $50 million that was allocated to the remainder
of the state, there is $14.8 million that has yet to have voter
approval. There is $133 million available in Anchorage. There is
$44.4 million available in Fairbanks. So of the $250 million, the
amount that has actually been voted on and approved by voters to
date includes an amount just short of $36 million in the $50
million group, and in the case of Fairbanks, $22 million has been
approved of the $67 million.
Number 123
SENATOR TAYLOR asked what the cut-off date was for the current
program. DUANE GUILEY answered that under the current program, if
the ballot issue fails, the bond reimbursement authorization is
immediately voided and the department then goes to the next project
on the list. In the case of Anchorage and Fairbanks, they are
currently competing only against themselves until July 1, 1996, but
the amendment changes that to December 1, 1994.
Number 155
SENATOR TAYLOR asked if Mr. Guiley agreed that with the adoption of
the amendment, the additional $90 million was not needed. DUANE
GUILEY acknowledged that was correct.
Number 168
SENATOR TAYLOR moved the following amendment to SB 232:
AMENDMENT NO. 2
Page 1, line 7: Delete "$340,000,000" and reinsert "$250,000,000" "
Page 2, lines 1 & 2: Delete subparagraph (D)
Hearing no objection, the Chairman stated the amendment was adopted
and the two amendments would be incorporated into a C&RA committee
substitute.
Number 187
SENATOR RANDY PHILLIPS closed the public hearing on SB 232 and
stated that the bill would be rescheduled for another hearing.
Number 190
SENATOR RANDY PHILLIPS brought SB 233 (STATE EDUCATION AID: FUNDING NG
COMMUNITIES) before the committee as the next order of business.
CAROL CARROL, staff to Senator Kerttula, presented a brief overview
on SB 233, which will bring into statute what is now in regulation.
She directed attention to an amendment by Senator Kerttula which
clarifies the definition of "funding communities."
Number 238
DUANE GUILEY, Director, School Finance, Department of Education,
said the proposed legislation would not only put the current
definition of "funding communities" into statute, but it would also
grandfather all of the funding communities that exist today that
are an exception to the current regulatory definition. He added
that the department would oppose that change, and that the
department had intended to phase those funding communities out of
the system with the passage of the Alaska School Price Index
concurrent with the change of the foundation statute.
Number 260
SENATOR TAYLOR commented that there are regulations and the formula
is in statute, and yet the state is funding $6 million worth of
schools that don't meet that formula. DUANE GUILEY acknowledged
that was correct and that it was based on the decision of a prior
commissioner. CAROL CARROL added that previous to this request by
Senator Kerttula, the commissioners of the Department of Education
had a certain amount of discretion. Using that discretion they
approved funding communities in various districts, increasing the
amount of money that went to those districts. Those districts
built that money into their educational system. Senator Kerttula
believes that the commissioner should not have the discretion to be
able to effect the amount of money that would go to one community
based on his decision and by sometimes reversing the decision of
another commissioner.
Number 320
SENATOR RANDY PHILLIPS stated testimony would be taken over the
teleconference network.
MICHAEL MURPHY, a member of the Nome School Board testified from
Nome on SB 62 (PUBLIC SCHOOL FOUNDATION PROGRAM). Referring to
page 1, lines 5 and 6, he asked if the basic need was going to be
based on the current School Price Index. DUANE GUILEY responded
that the reference would replace the current area cost differential
for a new area cost differential called the Alaska School Price
Index and it would refer to basic need as basic need is defined in
statute. In the case of the Nome School District that would
exclude the single site supplement appropriation. The department
has worked for over two years in an attempt to develop an Alaska
School Price Index, however, there was no consensus to go forward
with an Alaska School Price Index. MICHAEL MURPHY commented that
until they can come up with an Alaska School Price Index that
everyone can agree upon, he thinks it is a waste of time to try to
implement this legislation.
Number 408
RICHARD SWARNER, testifying from Kenai on SB 233, voiced concern
with changing the funding communities, particularly for the Kenai
Peninsula Borough School District. If the area cost differential
is not going to be changed, they are not interested in any of their
funding communities disappearing. However, the district is
interested in changing the foundation formula to address some of
the inequities that they believe exist.
Number 438
DEBORAH GERMANO, testifying from Homer on SB 233, agreed with Mr.
Swarner's concern that SB 233 would be harmful to their school
district without any area cost differential changes.
Speaking to SB 62, Ms. Germano stated her concern with the section
relating to the gifted and talented program and the language that
will cut dollars in half for the program.
Number 465
SENATOR RANDY PHILLIPS informed Ms. Germano that there was a C&RA
committee substitute that would be sent to her, and he thought that
she would be pleased with the change to that section of SB 62.
Number 470
MARILYN LEAHY, a member of the Valdez School Board testifying from
Valdez, stated the school board's opposition to Section 1 of the
draft CSSB 62(CRA). The Legislature is considering bills that
reduce the amounts of funding to the foundation formula, as well as
reducing the amount of monies that go to the municipalities, and
they don't believe it's fair to be changing the foundation formula
itself when all the budget levels are threatened to be reduced.
Number 490
SENATOR RANDY PHILLIPS announced that the committee would continue
with testimony on SB 233.
DUANE GUILEY said the Alaska 2000 Finance Committee originally
recommended that no funding community exist with less than 16
students. The State Board of Education adopted a plan that would
require funding communities to be a minimum of 10 students by the
year 1999, so over a five-year phase out they are phasing out small
funding communities. There were three funding communities that did
not exist this year because there were less than five students, and
that generated a savings of $754,000 in FY 95.
Mr. Guiley also discussed a handout showing 20 funding communities
that appear to be elementary schools feeding into secondary
schools. If these funding communities are eliminated and the
schools are merged into one community, the estimated reduction in
the foundation obligation is approximately $6.6 million dollars.
TAPE 94-12, SIDE B
Number 030
SENATOR RANDY PHILLIPS asked Mr. Guiley if he would prepare some
charts relating to the current foundation formula and explain them
at the next hearing on the legislation, and Mr. Guiley acknowledged
that he would.
The next order of business was an overview on SB 62 (PUBLIC SCHOOL L
FOUNDATION PROGRAM).
DUANE GUILEY, Director, School Finance, Department of Education,
said the proposed committee substitute would make some significant
changes in the original version of SB 62.
Section 1 would require a new contribution level of 50 percent
from cities and boroughs as opposed to the 35 percent in statute.
It would leave the original 4 mills in tact so that only those
wealthy communities in the state, North Slope, Valdez and Unalaska
would be require to contribute 15 percent more to reach the 50
percent mark.
Number 095
SENATOR TAYLOR commented that unless everybody is going to be put
on the same level playing field as far as assessment valuation and
mandated payment, he doesn't think the legislation does what he is
testifying to. DUANE GUILEY clarified that the current statute
requires a minimum of 4 mills or 35 percent. The committee
substitute would require the same 4 mills or 50 percent, so the 4
mills would be in effect for all communities in the state with the
exception of the three funding communities that currently generate
more than 35 percent of their budget if they assessed a 4 mill tax.
Mr. Guiley continued with his overview of the proposed committee
substitute.
Section 2 would increase the minimum funding community size
to 25 students.
Section 3 would change divisor in the elementary school
formula from the current 17 down to 16 thereby requiring one less
student to generate an instructional unit at the elementary level.
Section 4 would provide for single site funding in communities
less than 900. It would provide a increased percentage of K-12
units on a decreasing scale as the community grows. Section 5
retains the original requirement for the projection date change to
November 20 as opposed to the current October 15. Section 6
provides the 20-day count from the same year be allowed as a
substitute.
Number 195
SENATOR RANDY PHILLIPS closed the hearing on SB 62 and stated it
would back before the committee at a later date.
There being no further business to come before the committee, the
meeting was adjourned at 10:11 a.m.
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