04/03/2007 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
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| Adjourn |
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| + | SB 1 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
April 3, 2007
3:37 p.m.
MEMBERS PRESENT
Senator Donny Olson, Chair
Senator Joe Thomas
Senator Gary Stevens
MEMBERS ABSENT
Senator Albert Kookesh, Vice Chair
Senator Thomas Wagoner
COMMITTEE CALENDAR
SENATE BILL NO. 1
"An Act relating to the base student allocation used in the
formula for state funding of public education; and providing for
an effective date."
MOVED SB 1 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 1
SHORT TITLE: INCREASE AMT OF BASE STUDENT ALLOCATION
SPONSOR(S): SENATOR(S) WILKEN
01/16/07 (S) PREFILE RELEASED 1/5/07
01/16/07 (S) READ THE FIRST TIME - REFERRALS
01/16/07 (S) SED, CRA, FIN
02/09/07 (S) SED AT 8:00 AM BUTROVICH 205
02/09/07 (S) Heard & Held
02/09/07 (S) MINUTE(SED)
03/28/07 (S) SED RPT 2DP 3NR
03/28/07 (S) DP: WILKEN, DAVIS
03/28/07 (S) NR: STEVENS, HUGGINS, OLSON
03/28/07 (S) SED AT 8:00 AM BUTROVICH 205
03/28/07 (S) Moved SB 1 Out of Committee
03/28/07 (S) MINUTE(SED)
04/03/07 (S) CRA AT 3:30 PM BELTZ 211
WITNESS REGISTER
SENATOR GARY WILKEN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SB 1 as sponsor.
CARL ROSE, Executive Director
Association of Alaska School Boards
Juneau, Alaska
POSITION STATEMENT: Spoke in support of SB 1.
MARY FRANCIS, Executive Director
Alaska Association of School Administrators
Juneau, Alaska
POSITION STATEMENT: Spoke in support of SB 1.
MELODY DOUGLAS, Chief Financial Officer
Kenai Peninsula Borough School District
Soldotna, Alaska
POSITION STATEMENT: Spoke in support of SB 1.
DEBRA MULLINS, Member
Board of Education
Nikiski, Alaska
POSITION STATEMENT: Spoke in support of SB 1.
GINNY ESPENSHADE
Homer, Alaska
POSITION STATEMENT: Spoke in support of SB 1.
DEBRA KIRK, Member
Parent Teacher Association (PTA)
Kodiak, Alaska
POSITION STATEMENT: Spoke in support of SB 1.
STAN LUJAN, Superintendent
Nome Public Schools
Nome, Alaska
POSITION STATEMENT: Spoke in support of SB 1.
LYDIA GARCIA, Interim Executive Director
National Education Association-Alaska (NEA-Alaska)
Anchorage, Alaska
POSITION STATEMENT: Spoke in support of SB 1.
KATHY CARROW, President
Kenai Peninsula Educational Association
Kenai, Alaska
POSITION STATEMENT: Spoke in support of SB 1.
ACTION NARRATIVE
CHAIR DONNY OLSON called the Senate Community and Regional
Affairs Standing Committee meeting to order at 3:37:02 PM.
Senators Olson, Stevens, and Thomas were present at the call to
order. Senators Kookesh and Wagoner were excused.
SB 1-INCREASE AMT OF BASE STUDENT ALLOCATION
SENATOR GARY WILKEN, Alaska State Legislature, said, since 1998,
the K-12 public school funding formula has distributed state
education dollars based on a per-student allocation [BSA]. SB 1
increases this allocation by $430, establishing a per-student
total of $5,810. SB 1 recognizes that day-to-day educational
costs continue to increase, causing a financial strain on the
school budgets in all 53 school districts. The eight percent
proposed increase will help mitigate these rising cost, allowing
local school boards to direct more education dollars into the
classroom. This legislation does not address the major cost
increases facing each school district this year. The rise in TRS
is over $200 million statewide. To cover that increase, the
allocation will go up $1,000 per student. An alternative bill
will address the other.
SENATOR WILKEN said SB 1 covers inflation and provides funds to
help reduce class size. The fiscal note is about $88.9 million.
The inflation rate in Anchorage was about 4.2 percent for the
first half of 2006, so he used that and added another 2 percent.
It takes care of inflation, but there are rising costs of all
sorts. Last year the amount was about $145 million with $90
million of it for the classroom and the rest for PERS and TRS.
He decided to do the same this year. A lot of school districts
were very appreciative last year, and they reduced class size
and brought back programs and personnel. The state has a surplus
of $1.3 billion. "Let's put it to where we all campaigned and
say it's one of our top priorities."
SENATOR WILKEN referred to a chart showing that education
funding has increased 47 percent since 1999, and it includes
PERS and TRS. This year there are 129,900 students in Alaska,
fewer than in 1999.
3:42:49 PM
SENATOR WILKEN said there is double digit growth in the student
dollar, and Alaska is educating about 2.5 percent fewer
students. He said the bill won't pass but it's a number to talk
about, and it will make people comfortable with the $90 million
going to the classroom. He expects the school districts to put
it to good use with lower class sizes and adding vital services.
3:44:25 PM
SENATOR THOMAS asked about the inflation rate.
SENATOR WILKEN said a Department of Labor analyst calculated it.
The actual CPI for Anchorage for fy06 was 3.2 percent.
SENATOR THOMAS said the bill doubles it, taking two years into
consideration.
SENATOR WILKEN said the number gets footballed all over the
place at the end. "We're not far from where we were last year;
let's just do what we did last year and we certainly have as
much money in the bank, if not more."
3:46:06 PM
CHAIR OLSON asked if the ISER [Institute of Social and Economic
Research] cost-differential study is incorporated into the bill.
SENATOR WILKEN said cost differentials have no place in the
bill. The only way the legislature can get at the public
education fund is with the student dollar. He said it doesn't
touch the district cost factors, but it runs the student dollar
through the foundation.
CHAIR OLSON asked about the PERS and TRS issue and about keeping
it within the BSA or outside the allocation.
SENATOR WILKEN said the number is so large this year that the
student dollar would have to be increased by $1,000. As the PERS
and TRS monster gets tamed, people will lose track of that if it
is put in the student dollar. PERS and TRS should be paid with a
check that doesn't go through the student dollar.
3:48:11 PM
CHAIR OLSON asked, "So, the general thought process is to put it
outside the base student allocation?" Senator Wilken concurred.
CARL ROSE, Executive Director, Alaska Association of School
Boards, said his association has six priorities. The largest is
the retirement issue and the second is the BSA, "and we adopted
the figure of [$5,810]." He said he would like to see SB 1 move
today. Of great concern for equity is the district cost factors
that haven't been revisited for a long time. "Intensive needs"
is a large issue for the association, he said. There has been
testimony that "currently we're at five times the BSA. We have
testimony showing that expenses are anywhere from eight to ten
times the BSA, so intensive needs is a critical issue for some
of our larger school districts." Vocational education and work
force development are others that are mentioned in the 20
percent block grant, "but we really don't have the capacity to
address it because that block grant is taken up completely by
special education. And a bi-product of that is that within that
20 percent block grant you've got special education, bilingual
education, and vocational education. With the state of
immigration in America today, bilingual education is really
difficult for us to address. Most of our efforts are coming from
general funds, so there is a lot of pressure on the general
fund." Another concern is for early or forward funding. He wants
investment into the education fund to build up enough money to
forward fund. He said the association supports SB 1 and wants it
moved to the finance committee where some of the other issues in
his testimony can be addressed.
3:50:37 PM
SENATOR THOMAS said a recent poll shows that the gasline ranks
number one because it pays for everything, and number two is K
though 12 education. He said he has looked at the funding, and
it amounts to a lack of funding. "What can we do because there
seems to be little movement towards actually fully funding
education…not only in K through 12, but pre-schooling and higher
education?" He asked Mr. Rose how the legislature and governor
should fund education, because the resource money is not going
to cover it, and it is only declining. Revenue projections
decline for 2010. He asked for suggestions.
3:52:15 PM
MR. ROSE said he just laid out six buckets and there is not
enough water to fill them all. Retirement liability looms huge
for the future. The way the schools are funded is through the
BSA, "so that's a critical issue." He spoke of reviewing the
cost differential with two studies, which hasn't been revisited,
"so it's been eight years since that was put in place." If there
were any disparities, they have been exacerbated by now, he
added. It threatens the integrity of the foundation formula, he
opined. He said the issue of "intensive needs" has come along
recently, and the costs are huge. There isn't enough money to
address all the needs, so the legislature will set priorities,
"and I think many of the things I've just mentioned here are
going to receive some consideration, but I don't think we have
enough money to do it all."
3:53:52 PM
MARY FRANCIS, Executive Director, Alaska Association of School
Administrators, said her association supports the increase to
the BSA. Her members are superintendents, principals, and school
finance officers, and they also support "the other
'addressments' that have been previously mentioned." She added
that the association supports a long-term fiscal plan that
includes sources of financing other than declining gas revenues
to support education. She urged the committee to move the bill.
3:55:10 PM
MELODY DOUGLAS, Chief Financial Officer, Kenai Peninsula Borough
School District, said, "We're in support of any additional
funding coming to schools." The increase to her budget by SB 1
would be $6 million, and that would allow reinstating the
staffing formula to the current year. In the budget process she
ended up increasing class sizes by four students per class. "You
can imagine how unpalatable that situation is." She said her
board approved the preliminary budget last night, "and we are
moving our budget with an increase to our class sizes on to our
borough assembly." She said she supported the previous comments
and wants the bill moved to finance committee to talk about full
implementation of the ISER district cost factors and a
reproducible method for updating the district cost factors
periodically as outlined in SB 36. The PERS and TRS issues have
been well stated. The Kenai Peninsula School District has been a
good steward of educational funding and has closed one school
with another slated for closing. She said she has not heard of
any other school district in Alaska trying to close schools, "so
we are very well aware that we are over capacity and we're
working to address that matter."
3:57:37 PM
SENATOR STEVENS said her district doesn't fair well because of
the area cost differential. He asked her to compare her district
to Anchorage's district, and noted she has schools that are off
the road system. He asked about the loss of students.
MS. DOUGLAS said the district has realized an ongoing two
percent decline in enrollment for the last ten years. It has
created a significant challenge. She said the in-place district
cost factor is 1.004, although they are discussing maintaining
the one-quarter implementation of ISER that was enacted by the
legislature for this year. Anchorage is at 1.000. Kenai has four
schools that are off the road system. "They are, quite frankly,
on par with nearly all of our totally remote rural schools in
Alaska." Because the district cost factor has not been adjusted
as mandated by SB 36, "we feel that we have been harmed
significantly and we're looking for that matter to be addressed
by the legislature this year."
4:00:10 PM
SENATOR THOMAS asked if other things need to be adjusted.
MS. DOUGLAS listed retirement issues, the district cost factor,
intensive needs, vocational education, the bilingual program,
and pupil transportation costs. They will transfer approximately
$500,000 to operate the pupil transportation program, she said.
DEBRA MULLINS, Member, Board of Education, Nikiski, said she is
speaking for herself. She asked the committee to support SB 1
and take the increase in the BSA into consideration. The
financial situation on the Kenai Peninsula has been suffering
for years. It is a far-flung school district, but it has "quite
a status with regards to the state of education of our students
amongst school districts in the state." She said she is proud to
represent the schools in her district, especially in Nikiski.
Her three children came from Nikiski schools and are quite
successful. She said she would like to continue to see the
students' progress, and it concerns her to see the programs
dismantled. The boost in the BSA could maintain the current
program, she stated. Another boost might reestablish further
programs. She encouraged the committee to pass SB 1.
4:03:51 PM
GINNY ESPENSHADE, Homer, said she fully supports any increase in
the BSA to help with class size and the programs that have been
lost, like auto mechanics and foreign language. For some
students it is too late to recapture those opportunities.
Increasing the BSA makes it easier to be fair to districts, like
hers, that have been shortchanged for so many years, and it can
be done without impacting other districts.
4:04:58 PM
CHAIR OLSON asked if she has children in the schools.
MS. ESPENSHADE said she has a senior at Homer High School.
SENATOR STEVENS said he hopes she will continue to be an
advocate for schools even when her children leave the system.
DEBRA KIRK, Member, PTA, said her kids entered the school system
when state funding declined. She has watched the programs being
pulled away. There is a limited learning program, and she thinks
that extended learning is essential. All Alaskans have a vested
interest and "our future will only be as good as our children's
education." She said counselor and nurse times were cut back.
The school hasn't had an elementary music program for the last
five years. "For some reason our money got put elsewhere." She
said she is on the arts curriculum committee, and the arts
programs are not a frill and have been denied to the students.
4:08:14 PM
STAN LUJAN, Superintendent, Nome Public Schools, said he
supports the bill. The state needs to feed more money into the
[BSA], other than just raising it. "By spending down our TRS and
our [PERS] down to percents that could pour more money back into
the student-based assessments--the allocations that we have-is
going to be really important, because that's two ways we can
feed money back into the [BSA]." The cost of living--the ISER--
needs to be addressed for Nome and all rural communities.
Shipping costs have doubled due to fuel costs. It depletes the
teacher core. He wants teachers trained in order to increase
student achievement and reduce student/teacher ratios. With TRS
costs going up, "we want to keep our teachers longer and longer,
but that is costly to us." To improve teacher quality, those
teachers should stay. "We used to be top salary across the
nation, and now we're down anywhere from 10 percent to 50
percent … if you compare salary schedules." He added, "We've
been working hard at busting our budget to get our teachers up
thth
to the 40, 50 percentile so at least we're appealing enough to
new recruits." That means more money has to go into TRS, which
takes funds from teacher training. It is a quandary on how to
increase the academic quality of the programs, especially in the
bush. It needs a combination of raising the ISER, increasing the
student allocation, buying down PERS and TRS, and that's only a
beginning. There could be some compromise so everyone wins.
CHAIR OLSON asked what Mr. Lujan sees happening in a year, in
five years, and in ten years to attract teachers.
MR. LUJAN said a lot of people considering moving to Nome or
Dillingham base decisions on the quality of the schools. He
spoke of recruiting people to work at the hospital, and "we have
to provide pre-engineering programs, and pre-calculus programs
and an ROTC program, and art, and music, and those kinds of
things, because if we don't, I can't attract people to our
community." He said people might come up without their family
for only a year or two, and the tax base declines. It becomes a
domino effect. The municipality is stretched for funds because
of lack of revenue sharing. It becomes a tug of war, he said.
4:14:00 PM
LYDIA GARCIA, Executive Director, NEA-Alaska, Anchorage, said
the BSA increase is good. NEA-Alaska is happy about the bill,
but would like to see an increase to [$5,953]. The state has
about 132,000 students in K-12 public schools, and the BSA is
$5,380 per student, which costs $932 million annually. The
inflation rate is calculated at 3 percent annually, she said,
which means $29 million to address the FY08 inflation costs.
Every dollar increased to the BSA costs about $208,000. "In
rough terms, 1 million produces a $5.00 increase to the BSA" She
noted that $1.00 on the price per barrel of crude yields
approximately $60 million in revenue for the general fund. The
education funding gap created by inflation from 1983 to 2002 is
estimated at $600 million. To fund just one seventh of the gap
would require $115 million or a BSA of $5,953-an increase of
$573. It is not realistic to fill the gap of two decades in just
one year. If every year inflation and retirement obligations are
covered, and $85 million is added, by the year 2014 Alaska's
schools will be back up to adequate funding levels, she said. It
is about the future of the educators and students. She agrees
with Mr. Lujan's testimony. Adequate funding leads to class size
reduction, more individual attention, safe schools, early
intervention, materials, vocational training, and technology.
4:18:34 PM
CHAIR OLSON said Alaska has an alarming 30 percent dropout rate,
and he asked how that would be affected by raising the BSA.
MS. GARCIA said that amount of funding would allow the
institutions to provide better resources and more individual
attention. That provides better potential for success.
CHAIR OLSON asked about studies from other parts of the country.
MS. GARCIA said each state has unique challenges.
SENATOR THOMAS asked if curriculum changes have an impact on
retaining students.
MS. GARCIA said more money, time, and staff would provide closer
attention and greater curriculum, which would greatly impact
student performance and success in the learning environment.
SENATOR THOMAS asked if funding from different agencies for
vocational education will be helpful to identify students and
give them the opportunity to pursue something that is more to
their interest than the traditional curriculum.
4:21:12 PM
MS. GARCIA said she is an advocate for providing the basic
learning for all students. Having vocational opportunities is
also important. Students have different needs, so to address
that diversity, "we certainly can't lose."
SENATOR THOMAS asked for data on school funding of other states.
KATHY CARROW, President, Kenai Peninsula Education Association,
with 600 members, said she echoes Ms. Garcia's testimony. "The
$5,810 does bring us within $150 of the NEA target number, which
is $5,953." The Kenai borough school district passed its budget
with a 12 percent cut of certified teachers. The remaining
teachers need to pick up for those leaving. Teachers serve on a
number of different committees, including staff development
planning, student interventions, and curriculum development.
"Having these professionals in the building to provide these
services is a benefit to all of the students, but as we lose
teachers, then those remaining teachers need to pick
up…additional committee work." The large class size demands more
time and impacts effectiveness. There have been class sizes of
30 to 35, and that isn't the best for kids. She is concerned
about having the financial resources to provide good education
to the community's benefit. She appreciates the legislation and
would like members to be open to increasing the BSA amount.
4:26:37 PM
MARY HAKALA, Great Alaska Schools Citizen's Coalition, a
grassroots advocacy network, said members invest time and energy
by volunteering in schools. "We urge you to invest in the
classroom." Go beyond PERS/TRS and inflation, and go to where
the funding makes a difference at the classroom level. She noted
that the 600-student middle school in Juneau has nine working
microscopes. She asked for money beyond maintenance funding that
brings a breath of fresh air into the classroom.
SENATOR THOMAS moved SB 1 from committee with individual
recommendations and attached fiscal note(s). There being no
objection, the motion carried.
The committee adjourned at 4:29:27 PM.
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