Legislature(1993 - 1994)
03/24/1994 09:07 AM Senate CRA
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SENATE COMMUNITY & REGIONAL AFFAIRS
March 24, 1994
9:07 a.m.
MEMBERS PRESENT
Senator Randy Phillips, Chairman
Senator Robin Taylor, Vice Chairman
Senator Loren Leman
Senator Al Adams
MEMBERS ABSENT
Senator Fred Zharoff
COMMITTEE CALENDAR
SENATE BILL NO. 62
"An Act relating to the public school foundation program; and
providing for an effective date."
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, 2/10/94, 3/22/94.
WITNESS REGISTER
Duane Guiley, Director of School Finance
Department of Education
801 W. 10th St., Suite 200
Juneau, AK 99801-1894
POSITION STATEMENT: Offered information on
CSSB 62(CRA)
ACTION NARRATIVE
TAPE 94-24, SIDE A
Number 001
The Senate Community & Regional Affairs Committee was called to
order by Chairman Randy Phillips at 9:07 a.m. He brought SB 62
(PUBLIC SCHOOL FOUNDATION PROGRAM) before the committee and asked
Duane Guiley to explain the differences between the original bill
and the proposed committee substitute.
Number 010
DUANE GUILEY, Director of School Finance, Department of Education,
directed attention to a schedule he prepared which outlines the
differences in the two versions of the legislation.
The original version of SB 62 requires the Department of Education
to develop the Alaska School Price Index, which is intended to be
a replacement for the current Area Cost Differential within state
statute. The committee substitute retains the original Area Cost
Differential.
In the original version funding for Centralized Correspondence
Study is based on the elementary and secondary foundation formula.
The committee substitute retains the existing system, which bases
the revenue only on the elementary school formula.
The original SB 62 suggests that funding for vocational education
should be based on a weighting factor multiplied by each student
enrolled in grades 9 - 12. The committee substitute leaves the
current system unchanged, which is based on approximately .004
instructional units for each child who receives vocational
educational.
The original SB 62 suggests limiting the number of children that
can be identified for funding purposes at 4.5 percent of the K-12
population and multiplying that number times a weighting factor
(.012) to be specified in regulations. The committee substitute
leaves gifted and talented funding unchanged at .025 units per
student enrolled in gifted and talented program.
The original SB 62 requires a 4 mill local tax levy or 35 percent
of basic need. The committee substitute suggests that the 35
percent of basic need would be increased to 50 percent of basic
need, thereby affecting only those very well wealthy districts in
the state (North Slope, Valdez and Unalaska). The 4 mill levy
contribution would remain unchanged.
In the original SB 62, there is no reference to funding communities
in the statutes. The committee substitute provides that funding
communities must have a minimum of 25 students in average daily
membership.
In the original SB 62, the elementary and secondary formulas remain
unchanged with the divisor for large schools at 13, for secondary
at 17, for elementary students at 17. The committee substitute
provides that the elementary student divisor is reduced from 17 to
16, thereby awarding more money for the larger elementary schools
by reducing the number of students needed to generate a unit.
In the original SB 62, whether or not a district was a single
funding community was considered in developing the Alaska School
Price Index. The committee substitute provides that a single-site
school district with an ADM of 900 or less shall receive between
6 - 12 percent additional K-12 units.
The original SB 62 changes the reporting date for the succeeding
year's enrollment from October 15 to November 20, thereby providing
the department the opportunity to enhance its projections, as well
as provide the opportunity for the district to first calculate
their current year enrollment before they are required to make
their projection. The committee substitute contains the same
change.
The original SB 62 contains a holdharmless provision of three years
after the implementation date so that no single district would
experience a decrease in revenue for three consecutive fiscal years
after adoption. The committee substitute does not contain a
holdharmless provision and the existing holdharmless is repealed.
In the original SB 62 and in the committee substitute as well, a
district may request to use the preceding year's ADM for good
cause, which includes reduction in student enrollment.
In the original SB 62, the requirement for the department to review
each district's plan of service for gifted students is repealed.
The committee substitute leaves that section of law unchanged,
which would require the department to continue to review a gifted
and talented plan of service.
Number 190
SENATOR ADAMS said the original bill leaves the local contribution
requirement unchanged, and he prefers that to changing it from 35
percent of basic need to 50 percent as is provided in the committee
substitute. He suggested changing the allowable local effort from
23 percent of basic need to 24 or 25 percent of basic need rather
than changing the local contribution factor, and he asked what
impact that would have on the school districts. DUANE GUILEY said
the department has testified in favor of a House bill that would
increase the allowable local contribution from 23 percent excess to
24 percent excess. There is also another piece of legislation that
would increase the allowable excess from 23 percent to 25 percent.
The department has testified that it has concern over increasing it
all the way to 25 percent in that the actual disparity is not known
until nearly a year after the fact and it would require retroactive
refunds of any excess contribution, or it would eliminate the
district's opportunity to receive state aid. In the committee
substitute, by increasing the minimum from 35 percent to 50
percent, it results in a savings to the state, whereby providing an
opportunity for increased allowable excess presents no opportunity
for savings to the state, but does provide additional revenue to
the districts that have that opportunity.
Number 220
SENATOR TAYLOR suggested leaving the local contribution requirement
unchanged as was done in the original bill except to the add the
words "whichever is greater." He said if it is made mandatory that
each community must contribute 4 mills of tax or 35 percent,
whichever is greater, it provides a very significant savings to the
state.
Number 245
SENATOR ADAMS asked for an update on PL 81-874. DUANE GUILEY
answered that based on a conversation with the Governor's Office in
Washington, D. C., it appears that the markup on the Senate side
may begin sometime in late March or early April. There is some
thought that the bill may be amended significantly on the Senate
side. The department is hopeful that it will be amended to the
point that the disparity will be retained at 25 percent, providing
the opportunity for the state to continue to do the deduct. He
said the department will keep the committee advised on the status
of PL 81-874.
Senator Adams also requested more information on the holdharmless
section of the bill (Section 8).
Number 266
SENATOR LEMAN moved that CSSB 62(CRA) version E be adopted as a
working document. SENATOR ADAMS objected, stating he believes the
original bill should be the version amended. SENATOR RANDY
PHILLIPS stated there would be a hand vote on the motion. Senators
Phillips and Leman voted "Yea" and Senators Adams and Taylor voted
"Nay." The Chairman stated the motion failed.
SENATOR RANDY PHILLIPS asked the committee members if they feel the
school foundation formula needs to be rewritten. Senator Adams
answered "No" and Senators Taylor Leman and Phillips said they
believe it needs to be rewritten.
Number 336
SENATOR LEMAN commented that he agrees that everybody ought to be
contributing toward the cost of education and he doesn't believe it
is being done now and it is not be done fairly. However, proposing
this and making it happen is another thing.
SENATOR ADAMS stated that he does not want to change the school
foundation formula at this time because the input of various school
districts have not been placed in this foundation change at this
particular time.
Senator Adams also asked for a cost breakdown on changing the
divisor for elementary student formula from 17 to 16, as well as
suggesting that single site language needs to be included in the
bill.
Number 358
SENATOR RANDY PHILLIPS spoke to the overcrowding conditions in the
Anchorage school district, stating that they have over 40 percent
of the student enrollment in the state, but they receive only about
29 percent of the funding. He added that he would like to rewrite
the school foundation formula with the current funding and that is
what the committee substitute was all about.
Number 378
SENATOR RANDY PHILLIPS stated SB 62 would be back before the
committee the following Tuesday, and he then adjourned the meeting
at 9:35 a.m.
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