Legislature(1995 - 1996)
02/28/1996 09:05 AM Senate HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE
February 28, 1996
9:05 a.m.
MEMBERS PRESENT
Senator Lyda Green, Chairman
Senator Loren Leman, Vice-Chairman
Senator Mike Miller
Senator Judy Salo
MEMBERS ABSENT
Senator Johnny Ellis
COMMITTEE CALENDAR
SENATE BILL NO. 225
"An Act relating to access to extracurricular school programs by
students who are not attending public schools."
SENATE BILL NO. 188
"An Act relating to reports of suspected child abuse or neglect,
and requiring that, as part of the investigation of the reports of
suspected child abuse or neglect, all official interviews with
children who are alleged to have been abused or neglected be
videotaped."
SENATE BILL NO. 244
"An Act relating to state foundation aid and supplementary state
aid for education; and providing for an effective date."
PREVIOUS SENATE COMMITTEE ACTION
SB 225 - See Health, Education & Social Services minutes dated
2/5/96.
SB 188 - See Health, Education & Social Services minutes dated
2/9/96.
SB 244 - No previous action to record.
WITNESS REGISTER
Diane Worley, Director
Division of Family & Youth Services
Department of Health & Social Services
PO Box 110630
Juneau, Alaska 99811-0630
POSITION STATEMENT: Opposed SB 188.
Jayne Andreen, Executive Director
Council on Domestic Violence & Sexual Assault
Department of Public Safety
PO Box 111200
Juneau, Alaska 99811-1200
POSITION STATEMENT: Discussed concerns with SB 188.
Captain Shiley A. Warner
Detective Division
Anchorage Police Department
4501 South Bragaw Street
Anchorage, Alaska 99507-1599
POSITION STATEMENT: Opposed SB 188.
Shirley Holloway, Commissioner
Department of Education
801 W 10th Street, Suite 200
Juneau, Alaska 99801-1894
POSITION STATEMENT: Discussed funding in the quality framework.
Al Weinberg, Chairperson
Single Site School District Consortium
985 Chevak, Alaska 99563
POSITION STATEMENT: Supported SB 244.
Carl Rose, Executive Director
Association of Alaska School Boards
316 W 11th Street
Juneau, Alaska 99801-1510
POSITION STATEMENT: Supported SB 244.
Willie Anderson
NEA-Alaska
114 Seward Street
Juneau, Alaska 99801
POSITION STATEMENT: Supported SB 244.
Eddy Jeans, School Foundation
School Finance
Department of Education
801 W 10th Street, Suite 200
Juneau, Alaska 99801-1894
POSITION STATEMENT: Reviewed the foundation formula, SB 244, and
answered questions.
ACTION NARRATIVE
TAPE 96-14, SIDE A
SB 225 STUDENT ACCESS TO SCHOOL PROGRAMS
Number 001
CHAIRMAN GREEN called the Senate Health, Education and Social
Services (HESS) Committee to order at 9:05 a.m. and introduced
SB 225 as the first order of business before the committee.
Chairman Green informed the committee that she had talked with
groups interested in working on that legislation over the interim.
Therefore, SB 225 was held.
SB 188 VIDEOTAPE INTERVIEW OF ABUSED MINOR
Number 028
CHAIRMAN GREEN introduced SB 188 as the next order of business
before the committee.
SENATOR MILLER moved that the CS be adopted in lieu of the original
bill. The CS requires mandatory audiotaping while videotaping
would be utilized when possible, that is the only change in the CS.
Hearing no objection, the CS was adopted.
SENATOR SALO asked if more public testimony would be taken.
CHAIRMAN GREEN replied yes.
SENATOR MILLER pointed out that the next committee of referral is
the Senate Judiciary where the entire process would be followed
again.
CHAIRMAN GREEN informed the committee that two individuals at the
last hearing were not able to present their testimony and were told
they would be heard today. If their testimony is not heard today,
Chairman Green ensured that their testimony would be heard in
Senate Judiciary.
DIANE WORLEY, Director of the Division of Family & Youth Services
(DFYS), said that she had reviewed CSSB 188(HES). The department
maintains its opposition to the bill due to the mandatory aspect of
the bill. The mandatory provision makes the implementation of the
bill unwieldy and practically impossible to implement in some parts
of the state. Furthermore, the safety of children would be placed
in jeopardy if a taped interview was not possible and the
investigation of the child abuse could not be continued. She
offered to answer any questions.
Number 078
SENATOR SALO indicated that requiring audiotaping rather than
videotaping made the bill less wieldy. DIANE WORLEY agreed, but
the bill continues to focus on videotaping as the primary mode of
recording when possible. That focus on videotaping carries a large
fiscal note. Ms. Worley pointed out that one of the goals of DFYS
is to do more audiotaping, but the mandatory aspect of the bill
could create problems in rural areas or when the recorder breaks
down. The division fears that an investigation would have to be
stopped and the child be placed in danger because of the lack of
the audiotape.
JAYNE ANDREEN, Executive Director of the Council on Domestic
Violence & Sexual Assault, stated that the council has grave
concerns with SB 188. SB 188 creates difficulty when working with
the child in an abuse or neglect case, especially those persons
required to report the case or work with the child. Ms. Andreen
informed the committee that often children will make a passing
comment or a direct disclosure during a group presentation or play
time. The child needs to have a place where he/she feels safe
disclosing such information. Stopping the process in order to
videotape the child, breaks down the process for the child. Ms.
Andreen felt that this would actually circumvent the council's
ability to take care of children.
Number 128
SENATOR MILLER moved that CSSB 188(HES), version F, be moved out of
committee with individual recommendations.
SENATOR SALO objected. She expressed concern with the possibility
that cases may be lost. Perhaps, encouraging the department to
utilize more audio and videotaping without mandating it would be a
possibility. Senator Salo expressed concern with the focus of the
trial turning to the technological aspects of the tape, as
literature from other states who have moved in this direction has
indicated. She hoped those issues would be reviewed in Senate
Judiciary. Senator Salo removed her objection.
CHAIRMAN GREEN noted that Lauree Hugonin was present and asked if
she would like to testify on SB 188 or she could testify in the
next committee, Senate Judiciary. Ms. Hugonin decided to present
her comments in Senate Judiciary.
Number 170
SENATOR LEMAN said that he shared some of Senator Salo's concerns.
He wanted to ensure that the notes of the passing comments of the
initial disclosure could be maintained and kept as evidence. That
concern could be addressed and worked on further in Senate
Judiciary.
SENATOR MILLER agreed that was the intent. Senator Miller believed
that everyone agreed on the direction of the legislation, sometimes
pressure on the department is needed in order to achieve that
direction. He was willing to work with the department.
Hearing no objection, CSSB 188(HES) was moved from committee with
individual recommendations and accompanying fiscal notes.
The following written testimony was submitted for the record:
February 9, 1996
Senator Lyda Green
State of Alaska Senate
State Capitol
Juneau, Alaska 99801-1182
Dear Senator Green,
I was present, and wishing to testify, during the Health, Education
and Social Services committee meeting today; however, I was not
given that opportunity. I am now conveying to you my adamant
opposition to the passage of Senate Bill 188.
I am currently Captain in charge of the Anchorage Police
Department, Detective Division. I have been a police officer for
20 years. I am also secretary of the Steering Committee for the
Southcentral Alaska Chapter of the National Committee to Prevent
Child Abuse.
Senate Bill 188 signifies a giant step backward in the protection
of children who are sexually and physically abused. This bill ties
the hands of law enforcement and will, if passed, prevent the
investigation and prosecution of many child abusers.
Currently, detectives of the Anchorage Police Department videotape
interviews with children who are victims of abuse. That is, when
the children can be brought to the police department for the
interview. We have had situations where the child is so
traumatized by the abuse that our only option was to interview the
child at the hospital, the school, the home, or the church.
Forcing a child in under certain circumstances would be nothing
less than cruel on our part. And to lose the ability to further
the investigation and presentation for prosecution is unthinkable.
If we have an adult victim of a physical or sexual assault we are
not videotaping them. We are taking great care to afford them the
dignity they deserve and prevent them further trauma and
humiliation by the system. Why would we want something less than
that for the children?
If there is a specific problem identified I would be infavor of
addressing that problem, through training, or supervision, or
protocol. I can tell you when a case comes in where a custody
battle rages we look very closely at why a person is reporting. We
neither assume it is a false allegation, nor do we assume it is
genuine; but we do look at all possibile motives. The percentage
of false reporting is very low in comparison to the genuine reports
of abuse we receive. These cases are identified through an in-
depth, skilled and professional investigation.
Whereas, I have no objection to an expedient investigation into
allegations of child abuse, I do object to potentially losing the
ability to investigate and send forward for prosecution cases where
the probable cause exists that a child has been abused - only
because a videotaped session was not possible or practical.
Whereas, on the face this bill appears to support the interest of
the children, in reality it will cause many great harm. Please do
not pass SB 188. I agree with all those who testified in
opposition, today. The best approach is the enhancement of
training and the establishment of protocol. Thank you.
Sincerely Yours,
Captain Shirley A. Warner
Detective Division
SB 244 CALCULATION OF STATE AID TO EDUCATION
CHAIRMAN GREEN introduced SB 244 as the next order of business
before the committee.
Number 197
SHIRLEY HOLLOWAY, Commissioner of the Department of Education,
thanked the committee for the opportunity to discuss SB 244 with
the committee. SB 244 is before the committee because Governor
Knowles is committed to ensuring that the school funding formula is
fair, equitable, accountable, and protects the partnership between
state, federal, and local dollars. Secondly, SB 244 is before the
committee because the Federal Impact Aid Law has lowered the
allowable disparity standard to 20 percent. Commissioner Holloway
explained that in order for Alaska to consider the impact aid when
calculating the State's portion of school funding, Alaska would
have to meet the 20 percent federal disparity test in fiscal year
1996. To meet that 20 percent federal disparity test, the
department requested $1.2 million in supplemental funding, $500 per
instructional unit, for REAAs who are at the bottom of the
disparity table. If the disparity test is not met, Alaska would
face a cost of $35 million per year. Commissioner Holloway pointed
out that prorating the $35 million in FY 98 would result in a
deduction of $2,850 per instructional unit, otherwise the gap would
have to be filled with general funds.
Commissioner Holloway emphasized that the State Board of Education
is committed to revising the Alaska foundation program. She noted
that some of the committee members had participated in a funding
task force which did not reach a consensus. The task force did
recommend a minimalist approach to the State Board of Education and
encouraged the board to continue working on a more substantial
rewrite. The board has a committee of the whole which is working
towards substantial changes to the foundation formula to be ready
for the next legislative session.
SB 244 is a short-term fix to the foundation formula. SB 244
addresses the disparity test by providing for the supplementary aid
to REAAs as well as offsetting the cost of the supplementary aid by
increasing the amount of impact aid deductible from REAAs from 90
to 95 percent. Single site funding is also incorporated in the
formula under SB 244.
Number 243
Commissioner Holloway pointed out that quality schools and quality
education is driven by the funding mechanism. Therefore, a funding
strategy must be driven by a strong, well-articulated instructional
philosophy. Commissioner Holloway emphasized that rewriting the
foundation formula is a complex task. Commissioner Holloway said
that funding drives the standards approach. She laid out the
following points which create her "Four Legged Stool":
* Efforts in the area of student standards and assessment of
those standards should be continued and increased.
* Family and parental involvement in schools should be
increased.
* Standards which drive the preparation of the educators or
professionals with regards to how they are licensed and
relicensed.
* School based accreditation model is being reviewed under
school standards.
Commissioner Holloway emphasized that merely redistributing the
money does not address the issue of quality. Tying quality to
money is important to consider.
Commissioner Holloway stated that the State Education Policy was
created in Alaska Statutes by the legislature. The State Education
Policy says that the purpose of education is to ensure that all
students will succeed in their education and work, create
worthwhile and satisfying lives for themselves, exemplify the best
values of society, and be effective in improving the character and
quality of the world around them. In order for this policy to
become a reality, funding should be viewed in the quality
framework. In conclusion, Commissioner Holloway noted that many
staff members were present for other technical questions.
Number 289
AL WEINBERG, Chair of the Single Site School District Consortium,
supported SB 244 for the reasons stated by Commissioner Holloway.
Mr. Weinberg emphasized support of the inclusion of the
supplementary formula within the foundation formula which addresses
the adverse effects of the current formula on single site school
districts. This would eliminate the need for small single site
schools to lobby for individual supplemental grants every year
which has been the practice since 1987. The supplement accounts
for approximately 6-12 percent of the state aid for a single site
school. Mr. Weinberg pointed out that without that supplemental
funding, the single site schools would face reductions in what
programs could be offered.
CARL ROSE, Executive Director of the Association of Alaska School
Boards, supported SB 244. He mentioned that early on the
association had concerns that many were forming principle-based
opinions without realizing the impact of not meeting the disparity
standard. Mr. Rose stated that the future of public education
requires a long-term approach, but in the short-term SB 244 is
essential. Qualifying for impact aid in FY 98 is critical. Mr.
Rose said that the association supported the bill, especially the
single site portion. Many of the small school districts depend
upon the single site and the supplemental appropriations it
receives.
Number 334
SENATOR SALO asked Mr. Rose what he felt was the main problem with
the current funding formula.
CARL ROSE said that the formula was inadequate. The way education
is delivered in Alaska is dollar driven. Most school boards view
funding in terms of increments, $55,000 to $60,000 which is the
cost of a teacher with benefits. Education means teachers; there
is a tremendous need for more teachers. Mr. Rose pointed out that
many of the unfunded mandates drain off the money received to
provide education which is obtained through regular instructional
dollars generated through K-12. Regular instructional dollars are
spent on transportation, augment special education, etc.
Practically every mandate without a fiscal note from the department
has a fiscal note at the local level. Increased demands regarding
responsibility and accountability at the local level increases the
cost of local school districts which is not identified by the
department. Funding at the local level is inadequate in order to
maintain a quality education. Many of the school districts have
reduced to bare minimums which is effecting the quality of
education at the local level.
SENATOR SALO asked if Mr. Rose was referring to the $61,000 unit as
being inadequate. CARL ROSE replied yes.
Number 365
WILLIE ANDERSON, NEA-Alaska, supported SB 244. Sections 1-3 are
short-term solutions. The long-term solution is to rewrite the
instructional unit value in order to deal with the current
disparity in Alaska. Section 4, the single site provision, deals
with the long-term solution. He urged the passage of SB 244 to the
Senate Finance committee. Mr. Anderson reiterated that without
passing this supplemental funding, Alaska would face costs in
excess of $35 million. SB 244 addresses a necessity which is
immediate.
SENATOR SALO asked Mr. Anderson what he felt was the main problem
with the existing foundation formula. WILLIE ANDERSON explained
that when the formula was passed in 1986, the $60,000 per
instructional unit was adequate at that time. Since FY 87,
inflation has eroded the dollar value of that instructional unit.
The legislature has not set an appropriate pace to increase the
instructional unit in order to accommodate those increased
inflationary costs. Mr. Anderson pointed out that school districts
have had to supplement that with local funding and cutting
programs. In short, the instructional unit is too low to meet the
current needs in Alaska.
Number 412
EDDY JEANS, Division of School Finance for DOE, began his review of
the sectional analysis. Section 1 of SB 244 would increase the
deductible impact aid for REAA school districts from 90 to 95
percent.
CHAIRMAN GREEN requested that Mr. Jeans review what that impact
meant.
EDDY JEANS explained that the state's share of the foundation
program would be reduced by approximately $1,018,348. Section 2 of
SB 244 would allocate $500 per instructional unit to all REAAs
which would return funds to the REAAs without instructional units
attached to those funds. Therefore, the value of the instructional
unit for REAAs would be increased.
CHAIRMAN GREEN asked if per adjusted unit referred to per
instructional unit. EDDY JEANS clarified that per adjusted unit
referred to all the instructional units (K-12 instructional units,
special education, bilingual vocational education) adjusted by
their area cost differentials.
CHAIRMAN GREEN asked if there was information illustrating the net
difference. EDDY JEANS directed Chairman Green to the sheet
attached to the fiscal note which specifies the effects of Section
1 and Section 2. The general fund cost is projected to increase
about $223,827.
Number 435
EDDY JEANS continued with the sectional analysis. Section 3 of
SB 244 is a technical amendment to reference the instructional unit
tables for elementary and secondary students. CHAIRMAN GREEN asked
why that would be necessary. EDDY JEANS explained that Section 3
would amend the current reference which breaks out the allocation
of instructional units for K-12. Currently, the foundation formula
has two sections under AS 14.17.041. One of those sections is the
combined table for K-12 and the second section splits elementary
and secondary tables for instructional units. This merely combines
those into a single reference under AS 14.17.041. In response to
Chairman Green, Mr. Jeans stated that this change has no financial
impact.
Mr. Jeans pointed out that Section 4 of SB 244 places the single
site table into the foundation formula as a permanent solution.
The department felt that now is the time to move single sites into
the table as a permanent solution.
CHAIRMAN GREEN asked why that was not done previously. JIM ELLIOT
stated that Dr. Nat Cole, an architect of the current program, had
said that the costs of the program had been underestimated.
Number 467
SENATOR SALO believed that SB 244 is necessary and is a good
temporary solution. In order to adequately address the needs of
education in Alaska, more money placed on the unit value is
necessary. If $1,000 per unit was added for all schools in Alaska,
what would that cost Alaska? EDDY JEANS said that it would cost
approximately $13 million.
SENATOR SALO commented that in her time in the Legislature, she had
seen $13 million spent in areas far less important than education.
More could be done for education with a $1,000 increase on the unit
value. She asked if disparity would be skewed if in addition to
this, an equal $1,000 was placed on the unit value. EDDY JEANS
said that increasing the unit value would not adversely effect
disparity, but this fix is necessary in order to raise the lower
end of the school districts in the disparity computation.
SENATOR SALO agreed that this was needed in order to temporarily
solve the problem. She favored increasing the instructional unit
by $1,000.
Number 493
SENATOR LEMAN said that he heard Mr. Jeans refer to 12,700
statewide total units on the chart, but the chart says 12,309; is
there an adjustment somewhere? EDDY JEANS said that he was
referring to
FY 97. He believed that the committee may not have that
information and he offered to provide that information.
EDDY JEANS began a review of the briefing paper. He informed the
committee that Alaska receives approximately $70 million in impact
aid funds of which $30 to $35 million is recognized in the
foundation formula annually. In FY 96, $35 million will be
recognized and FY 97 is projected to recognize $30 million. Mr.
Jeans explained that the Impact Aid Law was reauthorized in 1994
which lowered the disparity standard from 25 to 20 percent. The
reauthorization also changed the year in which the disparity
standard was measured to two years prior. Before the
reauthorization, disparity was measured at the end of the year.
Now the disparity must be measured for consideration in two years.
Therefore, in order for the department to continue to deduct impact
aid for FY 98 the 20 percent disparity must be met in FY 96. Mr.
Jeans noted that the department has forwarded a supplemental
request of $1.2 million, $500 per instructional unit to REAAs, in
order to meet the disparity for FY 96. SB 244 would place that
allocation in law which would buy time while the foundation formula
is being rewritten. SB 244 would take effect in FY 97 and would
have the same basic allocation. Mr. Jeans projected that the 20
percent disparity would be met in FY 97 and Alaska would be
eligible for impact aid in FY 99.
Number 526
CHAIRMAN GREEN asked if enough time had passed, since the
reauthorization in 1994, in order to find anyone to be
noncompliant. EDDY JEANS said that reauthorization set the
disparity standard at 25 percent which has always been met. In
FY 98, the standard decreases to 20 percent.
CHAIRMAN GREEN asked if use of the disparity standard was
widespread when the standard was 25 percent; were people found to
be noncompliant and removed from receiving impact aid? EDDY JEANS
informed Chairman Green that only three states consider impact aid
in their foundation formula. Mr. Jeans explained that states apply
to consider impact aid in their formulas and fall in and out of
compliance.
CHAIRMAN GREEN asked if there was a penalty for noncompliance.
EDDY JEANS stated that the penalty would be that the impact aid
could not be considered in the foundation formula which would
create a $30 to $35 million gap. That gap would require proration
of the instructional unit value or a supplemental legislative
appropriation. CHAIRMAN GREEN asked if the money still comes.
Where does the money go? EDDY JEANS replied yes. Mr. Jeans
explained that the school districts apply for the impact aid and
receive it directly. All but two school districts in Alaska,
Skagway and Pelican, receive impact aid funds.
Number 549
SENATOR SALO indicated that the benefit would be uneven. EDDY
JEANS agreed. The school districts receiving a lot of impact aid
funds would tend to receive a windfall if the unit value were
prorated. The larger municipalities, who contain the majority of
the instructional units, would be penalized the most by the
proration of the unit value. Mr. Jeans specified that he was
speaking in general terms.
SENATOR MILLER surmised that those districts receiving the most if
nothing changed would be the rural areas. The rural areas would
receive the bulk of the money because of the nontaxable lands.
EDDY JEANS agreed that would be correct for the districts receiving
the bulk of the impact aid funds.
SENATOR SALO asked if Mr. Jeans was assuming that if the formula
was not fixed and Alaska lost the ability to deduct the impact aid,
Alaska would prorate the unit rather than the state providing the
$35 million. EDDY JEANS said that he was not assuming either,
these are the options if the department is not allowed to consider
the impact aid.
Number 570
SENATOR MILLER asked what the overall effect on the disparity test
would be if this portion did not pass and the money was redirected.
EDDY JEANS pointed out that the driving force here is the
consideration of the impact aid funds. If impact aid funds are
eliminated from the current formula, the federal disparity test
does not have to be met; however, one could assume that Alaska
would be in court over equity in funding due to the wide variances.
CHAIRMAN GREEN directed Mr. Jeans to page 3 of 3 in the "Disparity
Computations."
TAPE 96-14, SIDE B
CHAIRMAN GREEN asked Mr. Jeans to explain why there are several
districts that are above the top end. EDDY JEANS explained that
the impact disparity standard allows the exclusion of the top five
richest districts, the top five percent, as well the bottom five
percent. That is based on the method of allocating funds which is
the instructional unit method in Alaska. Therefore, the top five
percent of instructional units is excluded. Mr. Jeans informed the
committee that the foundation program has a provision for those
districts with extremely high property wells: North Slope, Valdez,
and Unalaska. Such districts are allowed to go beyond the 23
percent limitation of basic need.
Number 578
SENATOR SALO asked if those districts would be limited to the four
mill. EDDY JEANS stated that those three districts' required local
effort is 35 percent of the basic need from the prior fiscal year.
Additionally, those districts are allowed to contribute the
equivalent of a 2 mill tax levy. There is a limitation on their
local contribution.
Mr. Jeans pointed out that the other districts at the top of the
chart, on page 2 of 2, are single site school districts that have
been receiving supplemental appropriations outside of the
foundation formula as well as contributing at or very near their
local cap. Those districts are Hoonah, Hydaburg, Wrangell,
Skagway, Unalaska, and Kake. Mr. Jeans specified that there are no
instructional units attached to the supplemental appropriations
which increases the unit value and therefore, those districts are
at the high end. Assuming SB 244 passes and the single site table
is moved into the foundation formula, some of these single site
districts will fall below the high indicator because instructional
units would then be attached to the funds being allocated.
In response to Senator Salo, Mr. Jeans named Kake and Skagway as
districts that would fall in the middle section once their dollars
are attached to the foundation formula. Once the instructional
units are added to those districts, the value of their
instructional unit would be less than Juneau. The disparity would
probably not be changed, but more districts would be within the
range.
Number 541
CHAIRMAN GREEN asked if a single site district could receive
funding from one of the other 64 categories and continue to qualify
for single site funding. EDDY JEANS clarified that the disparity
test is run on all revenues received by school districts in the
school operating fund. Therefore, the disparity test would include
all revenues reported by the school districts in their operating
fund which would include single sites.
SENATOR SALO said that Unalaska looks to be a district that is not
suffering. Why is Unalaska on the single site list? EDDY JEANS
noted that when providing supplemental aid to a group of districts
requiring additional aid, sometimes districts that do not need
additional funds are included. Those districts are included
because they meet the criteria set for single sites which seems to
be the case with Unalaska. Mr. Jeans informed the committee that
the single site school districts have an ADM range of 1-900. The
Unalaska school district has about 360 ADM.
CHAIRMAN GREEN inquired as to how the disparity test would be
impacted by increasing the required local match to 5 mill. EDDY
JEANS referred her to the "Disparity Computations." Mr. Jeans
explained that the 4 mill requirement is contained within the
$61,000 unit value; it is basically an allocation of revenue
sources. The unit value of the $61,000 determines basic need, the
total money that a district should receive. The required local
effort is subtracted and 90 percent of the eligible impact aid is
deducted in order to determine the state allocation. Simply, this
is an allocation of revenues, of resources.
CHAIRMAN GREEN asked if the required local contribution is
increased and the excess local is decreased, could it be calculated
so that Alaska does not fall out of disparity as rapidly. EDDY
JEANS said that the cap could be lowered and stay within disparity.
The department has the authority to reduce that cap through
regulations. Many districts did not like this option. Mr. Jeans
explained that this would basically reduce the local contributions
in some districts which would lower their cap and the amount
budgeted over that local cap would be returned to the municipality.
Number 486
SENATOR SALO thought that Chairman Green was referring to
increasing the local cap which would place Alaska out of disparity.
EDDY JEANS clarified that increasing the local cap would increase
disparity. The excess local cap causes disparity. Page 3 of 3
illustrates that allowing the excess local contribution of 23
percent creates disparity.
CHAIRMAN GREEN acknowledged that Mr. Jeans had utilized all the
possible scenarios; there is nothing else that could be utilized?
EDDY JEANS was unaware of any other possibilities under the current
formula.
CHAIRMAN GREEN requested that Mr. Jeans explain why those districts
receiving additional funding for special education and Indian lands
do not count that income when determining disparity. EDDY JEANS
informed the committee that through the Impact Aid Law, school
districts are awarded an additional 25 percent for students
residing on Indian lands and an additional 50 percent for special
education students. Those additional monies are added to the base.
The federal law and regulations of the Impact Aid Program excludes
those funds from being considered. Mr. Jeans explained that the
deductible amount of impact aid must be measured in the formula as
part of the disparity standard, not the full amount.
CHAIRMAN GREEN referred to the Budgeted Earnings Investments column
of the preliminary disparity test. Those districts with zeros in
that column, does that mean there are no funds that receive
interest? EDDY JEANS said that those districts do receive earnings
on investments and other local revenues which are reflected in
column M on page 2. Those monies are included in the disparity
computation. Mr. Jeans pointed out that when the total revenues in
column R is divided by the instructional unit in column S, column
T illustrates that the REAAs have revenues in excess of $61,000.
That is why the disparity problem can be corrected with the $500
per instructional unit allocation to the REAAs.
Number 433
CHAIRMAN GREEN noted that some districts still show nothing in
column M and H. If that were required to be calculated, would it
make disparity less of a problem? EDDY JEANS reiterated that those
revenues are included in the disparity test. For that reason, the
disparity standard of 20 percent can be met with the $500 per
instructional unit.
SENATOR SALO noticed that some districts do not have the
investments that a borough would. EDDY JEANS agreed. Those would
be central treasuries.
CHAIRMAN GREEN asked if there is a process which would illustrate
that the department is working toward correcting the formula, if
SB 244 or anything similar did not pass. Would Alaska then be
exempt from this? EDDY JEANS believed that the Impact Aid Law
required a substantial rewrite of the foundation formula submitted
to the U.S. Department of Education for their review and approval
before current year data could be used to compute the disparity
test. The State of Alaska would also have to ensure the U.S.
Secretary of Education that the monies withheld would be refunded,
if Alaska failed the disparity test.
SENATOR SALO believed that Alaskan schools were placed in jeopardy
because the instructional unit had not been increased over time to
account for inflation. If SB 244 is not passed, a big mess would
result. Senator Salo felt it essential to at least deal with the
issues in SB 244. She indicated that Senate Finance would be the
appropriate place to struggle further with this bill.
CHAIRMAN GREEN said that she wanted to hold SB 244 for another
week.
SENATOR LEMAN indicated that he had some ideas that could be
reviewed and would contact Mr. Jeans later.
There being no further business before the committee, the meeting
was adjourned at 10:14 a.m.
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