Legislature(1999 - 2000)
03/03/2000 09:01 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
MINUTES SENATE FINANCE COMMITTEE March 3, 2000 9:01 AM TAPES SFC-00 # 45, Side A & B SFC-00 # 46, Side A CALL TO ORDER Co-Chair John Torgerson convened the meeting at approximately 9:01 AM PRESENT Co-Chair John Torgerson, Co-Chair Sean Parnell, Senator Pete Kelly, Senator Loren Leman, Senator Randy, Senator Green Phillips, Also Attending: EDDY JEANS, Manager, School Finance and Facilities Section, Department of Education and Early Development; CARL ROSE, Executive Director, Association of Alaska School Boards; VERNON MARSHALL, Executive Director, NEA Alaska; RICK CROSS, Commissioner, Department of Education and Early Development. Attending via Teleconference: From Eagle River: DEBBIE OSSIANDER, Anchorage School Board; NANCY DAVIS, Eagle River PTA; From Greely: DAN BECK, Greely School Board; ART GRISWOLD, Borough Incorporation Committee; From Nome: KAREN LIGON; From Fairbanks: DEBBIE COOK, Chinook Charter School; MIKA MACH, Chinook Charter School; ROYCE CHAPMAN, Fairbanks School Board; CYNTHIA HENRY, President, Fairbanks School Board; CARTER CRAWFORD; From Homer: SCOTT WHEAT and RICK HARNESS; From Kenai: PATRICK HICKEY, Kenai School District; CATHERINE DELACEE, President, Soldotna Elementary Sight Council; From Petersburg: ELIZABETH BACOM, President, Petersburg School Board; From Seward: MALCOLM FLEMING, Principal, Seward High School. SUMMARY INFORMATION SB 95-SCHOOL GRADE LEVELS The Department of Education and Early Development, along with members from the public testified. The bill was held in committee. SB 105-PUBLIC SCHOOL FUNDING The Sponsor, along with members from the public testified. A committee substitute was adopted. The bill was held in committee. SB 198-INCREASE BASE ALLOCATION FOR EDUCATION The Sponsor, along with members from the public testified. The bill was held in committee. SB 244-QUALITY SCHOOL GRANT FUND INCREASE The Commissioner of Department of Education and Early Development, along with members from the public testified. The bill was held in committee. SENATE BILL NO. 95 "An Act relating to the combination of grades that constitute junior high, middle, or secondary school." Senator Phillips explained that this legislation would provide a mechanism to alleviate an overcrowding situation in an Anchorage high school. DEBBIE OSSIANDER, Anchorage School Board testified via teleconference from Eagle River. She stated that this legislation addresses a specific problem in the Anchorage school district. She noted that those schools, which are more geographically isolated than the ones in the Anchorage bowl, are being unfairly impacted by current regulations. She explained that Chugiak High School is the most overcrowded in the Anchorage School District, but under current regulations it is impossible to qualify for state reimbursement to address the problem. She pointed out that this current legislation would make less stringent the requirements to qualify for relief. She then gave specific characteristics of Chugiak High School's overcrowding situation. EDDY JEANS, Manager, School Finance and Facilities Section, Department of Education and Early Development stated that this legislation's related fiscal note reflects the increased eligibility for districts to qualify for additional monies for major maintenance or construction. He added that this legislation allows the allocation of secondary square footage for six graders who are located in middle schools. He noted that overall the system implemented by this legislation would allow reimbursement under the debt retirement program or the school construction grant program as appropriated by the legislature. He then outlined the fiscal note figures more specifically. He explained that these figures would not be retroactive. Senator Phillips explained that the figures referenced in the fiscal note would be the maximum potential of monies necessary to rectify this overcrowding problem. He then gave a general overview of other school districts statewide that are also nearing saturation. Mr. Jeans outlined the reasons behind a reduction of funds from $26 million to $18 million related to this legislation's fiscal note. He explained that the fiscal note was originally prepared under the assumption that all six-grade students would move to a middle school concept, reflecting the maximum possible increase in eligibility if this concept was initiated. Senator Wilken referred to page three, lines 15 - 23, and asked for an explanation for the proposed language addition. This section reads: (A) projected long-term student enrollment that indicates the district has inadequate facilities to meet present or projected enrollment or has unhoused students; for purposes of this subparagraph, (i) students are considered unhoused if the students attend school in temporary facilities; and (ii) sixth grade students shall receive the space allocation given to secondary students when the sixth grade students are housed in a middle school, junior high school, or high school that includes the sixth grade; Mr. Jeans explained that this language would give districts secondary space allocation if the students are housed in a middle school. He noted that students are considered unhoused under section (i) if the students are in portable or temporary facilities. He then explained the square foot ramifications of this language. Senator Wilken asked if this section would change the global definition of "unhoused" students in Alaska. Mr. Jeans responded that he would do additional research to answer this question. Ms. Ossiander confirmed that students in portable facilities in Anchorage have been considered "unhoused." Senator Phillips advised that the Anchorage School District, along the Department of Education and Early Development will work with demographers in order to further refine this fiscal note. He then gave examples of overcrowding and growth of community sectors, both of which reflect a need for this legislation. Mr. Jeans clarified that the numbers outlined in the fiscal note reflected the additional amount of money allowed for eligible reimbursement. He continued that the level of reimbursement would depend on the funding mechanism that the legislature passes. He added that this legislation would change entitlement for school districts, affecting the related project priority process. NANCY DAVIS, Eagle River PTA (Parent Teacher Association) spoke to the fiscal note and noted that this district's highest priority was to secure funding for a second high school in North Anchorage. She noted that the district currently has nine portable facilities at this high school. Co-Chair Torgerson ordered the bill HELD in committee. CS FOR SENATE BILL NO. 105(HES) "An Act determining the facilities constituting a school for purposes of public school funding; and providing for an effective date." Senator Taylor stated that this legislation corrects problems with SB 36, legislation passed in a previous session changing the foundation funding formula for public schools. He pointed out that Petersburg barely qualified for the enrollment requirement set out in SB 36. He continued that in the community of Wrangell there were three funding units for elementary, middle and high schools. He noted that because of this, Wrangell would not receive any significant funding, but rather were required to institute special taxation programs to make up for the shortfall. He added that Petersburg or Wrangell have never taken advantage of the previous school basic funding formula. He explained the characteristics of a new committee substitute not presently before the committee, which would provide for a decline on the present funding mechanism at 75 percent, then to 50 percent, and finally to 25 percent. He asserted that these funding percents were created for the purposes of bringing Petersburg and Wrangell to current levels of necessary allotted monies. Senator Phillips affirmed that this legislation would only affect three communities, these being Petersburg, Wrangell and Delta Greely. He wondered how much each community paid for their schools. Senator Taylor responded that these communities pay up to the cap and above, some of which; is paid out of the city coffers. He continued that Wrangell increased its real property taxes by 20 percent, all of which was spent on education. A discussion ensued between Senator Taylor and Senator Phillips regarding the non-tax paying status of Delta Greely. Senator Wilken gave a historical overview of school funding for Petersburg and Wrangell, as well as Delta Greely as illustration of the inequities between tax based and non- tax based communities, which progressed into a general discussion about how school expenses are funded statewide per established formulas. Senator Taylor, Senator Phillips, Senator Green and Senator Leman participated in this discussion. Senator Green referred to discussions from last session regarding the Department of Education and Early Development's hesitancy to amend SB 36, until the overall effects of this legislation could be weighed on a statewide basis. Mr. Jeans responded that this is still the department's position. He noted that the department does recognize the effects to a school system that falls below the established formula number. He noted that when a community has more than 750 students in their system, this community has the benefit of counting three schools, if three schools presently exist. He continued that with a drop of students, this community can only count on funding for two schools, which can be a substantial cut. He remarked that a three-year transition formula as proposed in this current legislation might be inappropriate, but rather a one-year transition might be in order. Senator Green asked if the department could foresee any other community falling into this similar situation. Mr. Jeans responded that the two communities closest to this cut-off figure are Petersburg and Delta Junction. He then responded to various questions about a proposed study regarding cost differentials, which this study is slated to be completed next year. Senator Wilken referred to the efforts of two Accountants, who are presently trying to align the state's chart of accounts. Mr. Jeans responded that in addition to SB 36, the legislature appropriated additional resources for the hire of two internal auditors who are compiling comparable data between school districts. He added that different school districts were accounting for certain types of expenditures inconsistently with other school districts. He summarized that these efforts were an attempt to make these accounts more uniform. DAN BECK, Greely School Board testified via teleconference from Greely. He stated that his community was in the process of creating a borough. He noted that Greely would need help with funding their schools once this transition takes place. He outlined the funds that Greely has lost in this past year because their student enrollment fell below the cut-off formula. He stressed that unless Greely can get some relief, the community will have to lay off 19 teachers and one administrator. He spoke to additional shortfalls. Tape: SFC - 00 #45, Side B, 9:49 AM Mr. Beck responded to a question posed by Senator Leman regarding the district's ADM (Average Daily Membership) number at 1022 students, putting them over the threshold. Mr. Beck noted this number was closer to 891 students. Senator Phillips asked what the timeline was related to Greely becoming a borough. Mr. Beck responded that the charter would be submitted within six weeks. ART GRISWOLD, Borough Incorporation Committee testified via teleconference from Greely reiterated this six-week estimate. He continued that after the necessary signatures were collected, it would be up to the Boundary Commission to set a date for a hearing, and it would probably be within 90 to 120 days after this hearing that a final vote would take place. KAREN LIGON, Nome Public Schools, testified via teleconference from Nome. She stated that in Nome they absorb the Nome Youth Facility, which is a youth correctional institution. She added that educational services are provided here for a capacity of 6 to 12 students. She spoke about an alternative high school with a student population that fluctuates from 25 to 35 students there as well. She stressed that it is hard to provide adequate services to these small schools when it is a requirement to count them as part of a larger school, which has the highest ADM. DEBBIE COOK, Chinook Charter School testified via teleconference from Fairbanks. She stated the school's concern with SB 105 dealt specifically with section 1.3, which states: (3) in a community with an ADM of greater than 450 , each facility that is administered as a separate school shall be counted as one school, except that each alternative school with an ADM of less than 200 shall be counted as a part of the school in the district with the highest ADM. She stated that this section continues to treat charter schools with less than 200 students for funding purposes, as if the students are enrolled in the school with the largest ADM in the district. She asserted that this creates an inequity with smaller schools. She gave various examples of how the Chinook Charter School lacks many of the programs of these larger schools and along with the established funding formulas, this charter school has a harder time meeting their costs. SCOTT WHEAT testified via teleconference from Homer and stated that he supports this legislation, especially from a rural perspective. RICK HARNESS testified via teleconference from Homer to support this bill. He spoke to the possibility of cutting staff in Homer schools because of funding shortfalls, something, which affects the whole community. He also stressed that funding charter schools takes away monies that could be used in the public school system. PATRICK HICKEY, Kenai School District, testified via teleconference from Kenai. He addressed the issue of how schools are categorized by this legislation. He suggested that having a charter school with 26 students, while funding it along with a community of 600 students in a larger high school creates an inequitable situation. He concluded that charter schools should be treated like any other. Senator Green responded to Co-Chair Torgerson's concern that the testimony was turning into a charter school debate. She pointed out that this legislation in earlier versions did make reference to charter schools and inferred that some of the testifiers were referring to this older version. ELIZABETH BACOM, Petersburg School Board testified via teleconference from Petersburg. She highlighted the negative fiscal impacts created by declining enrollment, while using the two-school formula as versus the three- school calculations as was testified to previously. She listed all those programs that the district stands to loose, as a result and those that they have already lost. She also outlined how Petersburg has had to shore up their resources to save existing funding. MIKA MACH, Chinook Charter School, testified via teleconference from Fairbanks regarding the inclusion of charter schools into this legislation. She requested that a benchmark be included in section 3 to cover the Chinook Charter School. CARL ROSE, Executive Director, Association of Alaska School Boards stated that the association supports this legislation, although they are concerned that a present state funding policy exists under a foundation formula. He noted the benchmark change from 750 to 450 ADM, his main point being that whatever the benchmark, it needs to be consistent from one school district to the next. Senator Phillips asked Mr. Rose to address the inequity created by two tax paying jurisdictions that are presently requesting relief, along with another community, Delta Greely, a non-paying tax community. Mr. Rose responded that he does agree that an inequity exists, but suggested that this issue be addressed through another avenue. A lengthy discussion ensued between Mr. Rose, Art Griswold and Senator Phillips regarding this issue. Senator Wilken made a motion to adopt SB 105, 1-LS06AA\T as the committee substitute. Hearing no objection, it was so moved. Co-Chair Torgerson ordered the bill HELD in committee. SENATE BILL NO. 198 "An Act increasing the base student allocation component of the public school funding formula; and providing for an effective date." Senator Wilken as sponsor gave an overview of this legislation. He noted that this bill simply provided that an additional fifty dollars be added to the student dollar for K-12 foundation formula. He pointed out that the foundation formula puts a demand on state resources in the amount of $19.96 million dollars less than the year before. He noted that this legislation recognizes that part of this money, if not all of it, is education. He continued that this $19.96 million is generated by three things: the first, Alaska has fewer students, federal monies have increased since last year, and through the efforts in the last decade of this legislature and others, the assessed value of Alaska continues to grow. He summarized that these three aspects contributed to a $20 million dollar reduction to the state's resources. He felt as though the increase in funding outlined in SB 198 would provide relief to various communities. MALCOLM FLEMING, Principal Seward High School testified via teleconference from Seward. He pointed out how this district is slated to loose three regular teachers and one special education teacher due to falling enrollments, along with the effects of budget cuts. He added that if they had been able to use the funding formula from 1996 - 1997, the district would presently have four more teachers on staff. He outlined the additional effects budget cuts would have on the Seward school district. ROYCE CHAPMAN, Fairbanks School Board testified via teleconference from Fairbanks. He noted that the Fairbanks district is faced with a $4 million-dollar gap in funding. He declared that the district made up $3 million of this deficit through cuts to administrative areas, which did not have a direct affect on student programs. He gave an overview of other such efforts, including shortfalls anticipated in the future. CYNTHIA HENRY, President, Fairbanks School Board testified via teleconference from Fairbanks. She stated that the board recently held two public hearings and heard from 80 citizens regarding the Fairbanks school budget. She noted that every participant requested the reinstatement of those programs already cut because of budget shortages. She explained that the district would eventually ease subsidies to their charter school contingents. She spoke to loosing children from the district due to program cuts. Tape: SFC - 00 #46, Side A, 10:36 AM CARTER CRAWFORD, testified via teleconference from Fairbanks. She stated her support for SB 198 and education generally as a high priority. She added that education should not be considered an expense just because it is a budget item. She countered that drops in enrollment should be an opportunity for districts to increase Alaska's commitment to existing students. PATRICK HICKEY testified via teleconference from Kenai. He noted that Kenai's property taxes have increased to the point where the state should realize a reduction of revenue at $781,000 next year. He stated his support for this legislation. Catherine DeLacee, President, Soldotna Elementary Sight Council, testified via teleconference from Kenai. She stated that the Council unanimously supports this legislation. She stated that the local school there had to "pink slip" four teachers recently and she noted that teachers have had to pay for supplies out of their pockets for the last three years. SCOT WHEAT testified via teleconference from Homer and voiced his support for this legislation. RICK HARNESS testified via teleconference from Homer. He stated his support of the previous testimony. DEBBIE COOK testified via teleconference from Fairbanks. She stated wholeheartedly her support for this legislation in face of budget shortfalls. She felt as though education of Alaskan children should be its highest priority. CARL ROSE, Executive Director, Association of Alaska School Boards stated that the state has been on the move to improve the quality of education in Alaska. He noted that the intent of previous legislation namely, SB 36 was to inject $26 million into the education system. He asserted that this legislation was to offset enrollment declines and increased property values as a local contribution to education. He stated that his organization supports this legislation because the weight of money generated by it will go towards the children directly. VERNON MARSHALL, Executive Director, NEA (National Education Association) Alaska stated that his organization supports the $50 increase as allowed for by this legislation. He added that the NEA would gladly support an amendment to raise the basic student allocation to $4,040 in an effort to restore the $19.17 million as recommended by the governor. He noted that this money would go a long way to preparing students for the 2002 exit exams. He also stated a concern with the quality schools initiative as presented in SB 244. He pointed out that this effort would require additional personnel, materials and training. He outlined the specific related cost ramifications of this initiative as well. SENATE BILL NO. 244 "An Act increasing the eligible maximum amount for quality school grant funding for school districts; and providing for an effective date." RICK CROSS, Commissioner, Department of Education and Early Development stated that this legislation provides an increase from $16 to $52 of the quality school grant in the public school foundation formula. He noted that the ultimate impact of this increase would total $7,552,000. He asserted that this legislation provides money to school districts using a different mechanism than SB 198, which the department also supports. He continued that this legislation provides quality school grant increases that targets money for specific purposes, meaning to improve student performance. He cited that this money was for districts to provide necessary programs ensuring a high level of student success for exit exams. ADJOURNED Senator Torgerson adjourned the meeting at 11:00 AM.