Legislature(1993 - 1994)
03/08/1993 09:20 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
MINUTES SENATE FINANCE COMMITTEE March 8, 1993 9:20 a.m. TAPES SFC-93, #30, Side 2 (end-000) SFC-93, #36, Side 1 (000-356) CALL TO ORDER Senator Drue Pearce, Co-chair, convened the meeting at approximately 9:20 a.m. PRESENT In addition to Co-chair Pearce, Senators Jacko, Kelly, Kerttula, Rieger, and Sharp were present. Senator Frank arrived while the meeting was in progress. ALSO ATTENDING: Senator Robin Taylor, sponsor of SB 43; Darsie Beck, Alaska Environmental Lobby; Representative Ron Larson, Co-chair for House Finance Committee; John Bitney, staff to Representative Larson; Duane Guiley, Director, School Finance, Department of Education; Steve McPhetres, Executive Director, Alaska Council of School Administrators; Vernon Marshall, Executive Director, National Education Association-Alaska; Mike Greany, Director, and Karen Rehfeld, Fiscal Analysts, and other analysts, Legislative Finance Division; and aides to committee members. SUMMARY INFORMATION CSSB 43(RES) - An Act establishing a grant program relating to transplantation of elk; and providing for an effective date. CSSB 43 work draft dated March 3, 1993 was ADOPTED for discussion purposes. Senator Taylor, sponsor of SB 43 testified in support of the bill. Darsie Beck, Alaska Environmental Lobby, testified in opposition. CSSB 43(FIN) was REPORTED OUT of committee with unanimous consent. CSHB 45(FIN) - An Act making appropriations to the Department of Education for support of kindergarten, primary, and secondary education and community schools programs and for school construction debt retirement; and providing for an effective date. Testimony was heard and discussion was had on CSHB 45(FIN). Those testified in support were Representative Ron Larson, Co-chair House Finance Committee; John Bitney, staff to Rep. Larson; Duane Guiley, Director, School Finance, Department of Education; Steve McPhetres, Alaska Council of School Administrators; and Vernon Marshall, National Education Association-AK. CSHB 45(FIN) was HELD in committee until Wednesday, March 10, 1993. CS FOR SENATE BILL NO. 43(RES): An Act establishing a grant program relating to transplantation of elk; and providing for an effective date. C0-CHAIR DRUE PEARCE announced that CSSB 43(RES) was before the committee and invited Senator Robin Taylor, sponsor of the bill, to join the committee at the table. A work draft dated March 3, 1993 was distributed for the committee's review. SENATOR STEVE RIEGER MOVED for adoption of the CSSB 43 work draft dated March 3, 1993. No objections having been raised, the CSSB 43 work draft dated March 3, 1993 was ADOPTED. SENATOR ROBIN TAYLOR asked the committee to consider the work draft in lieu of the original bill. He said he feared that the Department of Fish & Game (DF&G) would not perform a follow up on the previously successful transplant of elk as specified in the original bill. He said since the recent transplant in 1987, or as long ago as 1927, when elk had been transplanted to Afognak Island, that DF&G had made no effort to study the effect of elk on indigenous species. Even though studies have not been done, DF&G still maintains that a study is needed to determine if competition exists between elk and other deer families. He felt DF&G had already reached the conclusion that elk and deer compete for the same food. He maintained that DF&G felt the elk transplant would fail and it had not. He wanted DF&G to start managing the existing elk population and determine when the first hunt might be sustained. He suggested that the elk could provide a source of food for the residents of southeast Alaska, and could cut trails through which deer and other game could pass. He maintained that deer and elk seemed to be able to co-exist quite well. CSSB 43 would make it mandatory for DF&G to transplant a certain number of elk on Kruzof Island, Gravina Island, Cleveland Peninsula, and Prince of Wales Island in a specified period of time. He estimated that it would cost approximately $1,000 per animal. Senator Taylor passed to the committee photographs and showed a video of existing transplanted elk. He informed the committee that in 1987, of the 52 elk transplanted, approximately half survived. He estimated that the elk population today is approximately 100 to 120 animals. SENATOR JAY KERTTULA pointed out that CSSB 43 called for an appropriation but asked if there would be any public contribution. Senator Taylor maintained that there would be a significant local contribution and effort, even though CSSB 43 did not contain the 50 percent match or grant language of the original bill. Senator Kerttula asked if there was any additional cost other than the handling cost of $1,000 per animal. Senator Taylor said that the state may have to exchange goats for the elk as was done in the past transplant but that $1,000 per animal should include veterinarian costs, crates, etc. SENATOR TIM KELLY asked for clarification on the cost of the transplant of the elk and asked if the state was funding the transplant at 100 percent. Senator Taylor said that he would appropriate any additional funding needed out of discretionary funds to complete the transplant. Senator Taylor explained that if the state had to fund it at 100 percent it would not happen. He projected that approximately 50 percent of the cost would be funded by volunteer labor and contributions as it had in the last transplant. DARSIE BECK, Alaska Environmental Lobby, spoke in opposition to CSSB 43, on the grounds that transplanting elk was a biological threat, and that the economic costs and potential impact on subsistence users far outweighed any benefits. He said introduction of foreign species into a eco-system frequently have disastrous ecological and economic consequences. He offered examples in other parts of the world of the damage it has caused. He said that wildlife biologists they have talked to do not endorse CSSB 43. The greatest threat seems to be the spread of disease to other wild animals and humans. He said that transplant figures from DF&G showed that the cost per elk was $5,000. He called the committee's attention to page 2 of the fiscal note for DF&G that said "costs for a five year program to accomplish the above goals would range from $200.0 to $250.0 per year." The Alaska Environmental Lobby suggested it would be less expensive for the state of Alaska to fund elk hunting trips for individuals outside the state than to transplant elk. Discussion followed between Senators Kerttula, Kelly, Taylor and Mr. Beck regarding various diseases, their transmission, and whether elk were indigenous to Alaska. SENATOR BERT SHARP MOVED for passage of CSSB 43(FIN) from committee with the accompanying fiscal note. No objections having been raised, CSSB 43(FIN) was REPORTED OUT of committee with a zero fiscal note for the Department of Fish & Game. Co-chairs Pearce, Frank, and Senator Sharp signed the committee report with a "do pass" recommendation. Senators Kerttula, Kelly, Jacko and Rieger signed a "no recommendation." Recess 9:35am Reconvene 9:37am CS FOR HOUSE BILL NO. 45(FIN): An Act making appropriations to the Department of Education for support of kindergarten, primary, and secondary education and community schools programs and for school construction debt retirement; and providing for an effective date. Co-chair Pearce announced that CSHB 45(FIN) was before the committee and invited John Bitney, staff to Representative Larson, to join the committee at the table. She also directed the committee's attention to a handout titled, "Small Single Site School District Funding" from the Consortium of Single Site School Districts. JOHN BITNEY, staff to Representative Larson, said CSHB 45(FIN) provided for the appropriation for the Department of Education (DOE) to fully fund, at the $61,000 instructional unit level, the foundation formula for public schools, as well as full funding for pupil transportation and public school debt service. Included in the appropriation is an allocation of $3.3M for single site school districts across the state of Alaska. He said that it was the intention of the House, with the early passage of the bill, to give an indication to school districts of their appropriation level for public education for next year. Senator Kelly asked if Section 2 on page 3 had to do with retirement service. Mr. Bitney agreed that Section 2 listed the debt service that the state would provide to local municipalities for school construction debt service. In answer to Senator Kelly, Mr. Bitney said that this money was sent to the local municipalities by DOE. DUANE GUILEY, Director, School Finance, Department of Education, spoke in support of CSHB 45(FIN). He said the difference between this bill and the Governor's budget was that this bill would fund pupil transportation at 100 percent. Another difference is the single site supplement in the Governor's budget was based upon FY93 actual daily membership, whereas, in HB 45, it is based upon the school district's projection for FY94. He asked the committee to support the FY93 amount at $3,358,050 as opposed to the FY94 projection. Senator Rieger asked if DOE was in support of additional district support on page 2. Mr. Guiley said DOE was not in support of the single site supplement but had included it in the budget two years ago because that money was available. REPRESENTATIVE RON LARSON, Co-chair for House Finance Committee, said that the committee had wanted the bill to be as current as possible, and had decided to use FY94 numbers. He said, for consistency purposes, the House Finance Committee decided it was better to use FY93 numbers, and that was the reason the amended CSHB 45(FIN) was before Senate Finance Committee. Senator Kerttula said that some southeast schools received forest receipts to assist their unique educational problems. He asked if those forest receipts had come under consideration when funding was given to the single site school districts. Representative Larson said that between seven and twenty-one schools had been considered for single site designation. Last year, it was decided that funding could not be determined by forest receipts since those receipts varied considerably from year to year. Senator Kerttula felt that forest receipts should at least be able to be estimated so they might be taken under consideration. Co-chair Pearce asked Mr. Guiley if last year's forest receipts would be made available to the committee. SENATOR GEORGE JACKO asked why FY93 figures were used instead of FY94. Representative Larson said in the past the prior year's figures were used to estimate funding. FY93 figures were used to remain consistent. Senator Rieger asked if legislative action had been taken last year to create a new school district. Representative Larson explained that by a popular vote of the people, it was decided that the Yupik School District, not a single site school district, and Tanana, a single site, would operate separately from the REAA. Senator Kerttula said that last year the instructional unit had been set at $61,000. Varying districts using backup information had said that figure was not high enough because of the inflationary spiral and other costs. He asked how that funding could be accomplished without increasing the instructional unit. Representative Larson said that CSHB 45(FIN) was a $3.2M increase over the Governor's proposal. He said the increase has been caused by a greater percent of gifted and talented, and special ed children within the school districts, not necessarily from an increase in enrollment. Mr. Guiley submitted that the supplemental request for FY93 is $6.4M, and of that, $5.1M is an increase in special ed. STEVE MCPHETRES, Executive Director, Alaska Council of School Administrators (ACSA), spoke in support of CSSB 45(FIN). He said that early funding for schools was of great benefit to the teachers and school districts for planning and preparation for the coming school year. He said that there was a need for an increase in the instructional unit values but ACSA did appreciate the fact that this bill fully funded instructional units at $61,000, and recognized the single site school districts. He explained that in 1986, the legislature recognized that the educational formula was in need of adjustment. He hoped that DOE would come forward with a new formula, but until then, he hoped the committee would pass CSSB 45(FIN) for early funding for schools. Senator Rieger asked for an explanation of single site school districts. Mr. McPhetres said a multiple-site school district has a multiplication factor that is different from single site school districts, and increases its potential for higher instructional unit values. Senator Rieger asked if the single site funding brought equality to single site schools. Mr. McPhetres said that the educational formula needed to be changed instead of a one-time a year funding to try to equalize that funding. He added that some communities do not have a tax base and therefore are unable to adequately fund their educational needs. In answer to Senator Kerttula, Mr. McPhetres said that ACSA did support an increase in the instructional unit. VERNON MARSHALL, Executive Director, National Education Association-Alaska, spoke in support of CSSB 45(FIN) since it did not cut funding to schools. He said NEA-AK supported an increase in the instructional unit to $67,000. He said student enrollment is increasing, and some needs in the school districts are not being met by the $61,000 instructional unit. He said that NEA-AK also supports early funding so that school districts may budget and plan for the coming school year. In response to Senator Kelly's question, Mr. Marshall said that NEA-AK supported other programs such as student lunch programs but the funding for those programs was not meeting all the needs of the students either. He suggested that a breakfast program in some schools is necessary so that children may attend school with a healthier attitude. Senator Kerttula made note that funding for tuition students had been reduced in SB 45. He wanted to point out that not all items had been increased. Senator Rieger asked Mr. Guiley if there was an actual increase in special ed student enrollment or had special ed reclassification caused the funding increase. Mr. Guiley said that there definitely was an increase in the incident rate for special ed students in schools. He said one reason may be that schools are doing a better job of identifying special ed students. Although schools are audited every five years, he could not speak to the justification of the increased incident rate. Discussion followed between Senator Rieger and Mr. Guiley regarding students chosen for special ed, and the funding and restrictive environment that follows those students. At this time, Mr. Guiley provided the committee with copies of a memo dated January 7, 1992, listing the requested forest receipts data (copy of file). He said that the memo may have been written in 1993. He explained that forest receipt money goes straight to the borough or city, and by state statute, a certain portion of that money is required to be set aside for schools. He believed the remaining portion is used for roads. Senator Jacko asked if there were any other arrangements in the state for severance taxes. Mr. Guiley said there were other localities that had their own severance tax but forest receipts is a federal program with legislation attached stating how those funds must be used. He explained that of the thirty-two organized school districts, only about two- thirds have a property tax that comes up to four mills. Some districts have other types of taxes--hotel bed receipts, raw fish tax, and sales tax. In answer to Senator Kelly, Mr. Guiley said that he would provide data dating back to 1988, showing the increase in special ed funding per district by year. Mr. Guiley explained that if three students are classified as intensive, it would generate one unit of funding or $61,000 to the district. Discussion followed between Senator Kelly and Mr. Guiley regarding school districts that were above the norm because of their percentage of special ed students. Mr. Guiley explained that DOE did not place a limit for the district on the number of students that could be classified as special ed. Senator Rieger asked where Alaskan students stood in relation to other states in regard to SAT or other test results. Mr. Guiley said that he did not have the data but would provide it to the committee. Senator Kerttula offered that Mat Su area students' test results had risen, and some were at the top of the national standings. Co-chair Frank asked how the Governor's budget request compared to prior years lists by DOE for the single and dual site school districts. Mr. Guiley said in FY92 there were direct appropriations of $2,131.0 and that amount was attributed to fifteen single site city and borough districts only, excluding REAA's. In answer to Co-chair Frank, Mr. Guiley said that DOE has never gone on record in complete support of the single site supplement, in that DOE does not have the data to support 100 percent for all the districts on the list. The only thing the districts have in common is their size, and that they only have one funding community. Mr. Guiley supplied the committee with a list of school districts showing the prior year's funding and national forest receipts dated March 9, 1993 (copy on file). Senator Jacko asked what figures DOE supports for pupil transportation. Mr. Guiley said that the Governor's budget set aside a proration of 10 percent equaling $25,718,100. Senator Rieger asked the logic behind having different lists. Mr. Guiley said that the Governor had asked DOE to prepare a budget that fully funded education. He went on to explain a short history of legislative school funding. In answer to Senator Rieger, Mr. Guiley stated the very small districts that have values of less than $100.0 in support of each student were St. Mary's, Hydaburg, Klawock, Nenana, Kake and Hoonah. The statewide average runs $241.0 in support of each student. In the range of $100.0 to $200.0 in support of each student are Tanana, Galena, Yakutat, Craig and Nome. The required local contribution, for example, for Nenana is equal to $60,449. The single site supplement would more than make up their contribution. Senator Rieger asked if that was the ratio for the other single site school districts. Mr. Guiley answered that it was dependent upon full value determination and not related to student population. Co-chair Pearce asked John Bitney, staff to Representative Larson, if the numbers that DOE proposed in their budget presentation to the legislature differs somewhat than the numbers that the House Finance Committee finally settled on. She wanted to know if the difference was pupil transportation. Mr. Bitney said that the reduction in funding was the difference between the increased instructional unit value and the original unit value single site school districts received. In answer to Senator Jacko, Mr. Bitney said that the bill that passed the House included funding for pupil transportation not including an administrative fee. With no further testimony to be heard, Co-chair Pearce announced that CSHB 45(FIN) would be held in committee. She also announced that Senator Kerttula's amendment #1, increasing the formula level per unit, would be held with the bill. Recess 10:30am Reconvene 10:32am ADJOURNMENT The meeting was adjourned at approximately 10:32 a.m.