Legislature(2001 - 2002)
03/28/2001 01:58 PM 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
ALASKA STATE LEGISLATURE
SENATE HEALTH, EDUCATION & SOCIAL SERVICES COMMITTEE
March 28, 2001
1:58 p.m.
MEMBERS PRESENT
Senator Lyda Green, Chair
Senator Loren Leman, Vice Chair
Senator Gary Wilken
Senator Bettye Davis
MEMBERS ABSENT
Senator Jerry Ward
COMMITTEE CALENDAR
SENATE JOINT RESOLUTION NO. 21
Urging the United States Congress to extend the authorization
date for supplemental block grants to the State of Alaska under
the Federal Temporary Assistance to Needy Families Program.
MOVED CSSJR 21 (HES) OUT OF COMMITTEE
SENATE BILL NO. 154
"An Act relating to mental health treatment facilities; repealing
the termination date of the mental health treatment assistance
program; and providing for an effective date."
MOVED SB 154 OUT OF COMMITTEE
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."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
SJR 21 - No previous Senate committee action.
SB 154 - No previous Senate committee action.
SB 1 - See Community and Regional Affairs minutes dated 3/19/01.
WITNESS REGISTER
Mr. Darroll Hargraves
Executive Director
Alaska Council of School Administrators
326 4th, Suite 404
Juneau, AK 99801
POSITION STATEMENT:
Mr. Jim Nordlund
Division of Public Assistance
Department of Health &
Social Services
PO Box 110601
Juneau, AK 99801-0601
POSITION STATEMENT: Supports SJR 21
Ms. Wendy Hall
Staff to Senator Pete Kelly
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Presented SB 154 for the sponsor
Mr. Elmer Lindstrom
Special Assistant
Department of Health &
Social Services
PO Box 110601
Juneau, AK 99801-0601
POSITION STATEMENT: Supports SB 154
Mr. Mike Powers
Administrator
Fairbanks Memorial Hospital
1650 Cowles
Fairbanks, AK
POSITION STATEMENT: Supports SB 154
Mr. Carl Sanford
Assistant Administrator
Fairbanks Memorial Hospital
1650 Cowles
Fairbanks, AK
POSITION STATEMENT: Supports SB 154
Ms. Liz Lazaria (ph)
Mental Health Unit
Fairbanks Memorial Hospital
1650 Cowles
Fairbanks, AK
POSITION STATEMENT: Supports SB 154
Dr. Hopson
Fairbanks Memorial Hospital
1650 Cowles
Fairbanks, AK
POSITION STATEMENT: Supports SB 154
Mr. Garth Hamlin
Chief Financial Officer
Bartlett Regional Hospital
Juneau, AK
POSITION STATEMENT: Supports SB 154
Senator Robin Taylor
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Presented SB 94
Mr. Jim Holt
Superintendent
Fairbanks School District
PO Box 71267
Fairbanks, AK 99707
POSITION STATEMENT: Supports SB 1
Mr. Jeff Walters
Fairbanks School District
PO Box 71267
Fairbanks, AK 99707
POSITION STATEMENT: Supports SB 1
Mr. David Jones
Finance Director
Kodiak Island Borough School District
710 Mill Bay Rd.
Kodiak, AK 99615
POSITION STATEMENT: Supports SB 1
Mr. Eddy Jeans
School Finance and Facilities Section
Department of Education &
Early Development
th
801 W 10 St.
Juneau, AK 99801-1894
POSITION STATEMENT: Supports SB 1
ACTION NARRATIVE
TAPE 01-28, SIDE A
Number 001
CHAIRWOMAN LYDA GREEN called the Senate Health, Education &
Social Services Committee meeting to order at 1:58 p.m. Present
were Senators Leman, Wilken, Davis and Green. Chairwoman Green
asked Mr. Darroll Hargraves to present to the committee.
UPDATE ON LEGISLATIVE PRIORITIES OF
THE ALASKA ASSOCIATION OF SCHOOL ADMINISTRATORS
MR. DARROLL HARGRAVES, Executive Director of the Council of
School Administrators, informed the committee that school
superintendents from around the state gathered in Juneau over the
weekend to discuss various pieces of legislation and education
policies. He stated the [Governor's] task force on funding had
asked the Department of Education and Early Development (DOEED)
to come up with factors in statute or from the state level that
would assure accountability in Alaskan schools. As a result,
DOEED produced a two-page document entitled "School
Accountability in Alaska" that describes the accountability
measures that rest upon school administrators. In addition,
school administrators, teachers, and parents want their schools
to be accountable. Most people feel their local schools are
doing a good job.
MR. HARGRAVES informed the committee that the superintendents
didn't take formal actions during their meeting but they dealt
with three broad topics: the exit exam; teacher recruitment and
retention; and funding. The superintendents came to the consensus
that SB 133 is the appropriate vehicle to carry concerns about
the exit exam, specifically a delay and waivers. Peripheral
issues surrounding the exit exam are curriculum and instruction.
The superintendents would like to commend the Alaskan history
education curriculum bill, HB 171, to the committee. HB 171 has
been thoughtfully put together with the input of a lot of
business people in Anchorage. Some superintendents believe it
could help the rural-urban divide in the state.
CHAIRWOMAN GREEN asked if legislation would be required to
implement an Alaska history curriculum.
MR. HARGRAVES said it would not require legislation; however, the
two larger school districts in the state have been limping along
trying to get it started and both superintendents felt
legislation would help. He noted that critics might feel that
school superintendents are asking for an unfunded mandate, but
teaching a state's history is fairly standard and often required.
CHAIRWOMAN GREEN remarked, "Don't we already have that?"
MR. HARGRAVES said it is not required in statute. School
districts have had trouble with Alaskan materials and Alaskan
texts. The Staff Development Network now has a teacher
preparatory course for Alaska history. DOEED has indicated that
it could take this specific statute, set up standards and put the
material into existing courses.
MR. HARGRAVES said AASA, after serious concerns in past years,
has endorsed the charter school legislation before the
Legislature.
MR. HARGRAVES said the topic of teacher recruitment and retention
was discussed by the superintendents. Alaska has been
experiencing a tremendous problem with teacher recruitment and,
regarding the argument that the shortage is site-specific, he met
with the superintendent of the Anchorage School District who
expects 200 teachers to retire in Anchorage next year, aside from
15 other vacancies. That number doesn't take into consideration
the normal attrition rate. Principals have told him that they
can go through three-page lists of teacher candidates and not
find one available candidate.
MR. HARGRAVES said a teacher shortage does exist. Some measures
under consideration by the Legislature that might help are loan
or interest forgiveness for teachers. The [Governor's] task
force on education funding suggested providing loan forgiveness
for teachers who are not even Alaskans. He pointed out that one
of the businessmen on that task force observed that when private
industry has a shortage of workers, it raises the salary and
announces that raise. However, teachers have fixed salary
schedules.
MR. HARGRAVES informed committee members that the superintendents
spent a substantial amount of time discussing funding issues. It
is his belief that superintendents, principals, and teachers are
a beleaguered group of people in Alaska, simply because of
programs and benefits that have been lost over the years. Two
decades ago, Alaska had the best teacher retirement system in the
nation. Today, that is not true. When potential candidates look
into Alaska's current teacher retirement system, they invariably
find out that other states are better. In addition, schools are
working with fewer staff.
MR. HARGRAVES told the committee that the AASA recommends
increasing the per student allocation in the foundation formula
by $200 this year and an additional $200 for the next five years.
CHAIRWOMAN GREEN asked if they are recommending the per student
allotment be increased by $1,000 over five years.
MR. HARGRAVES said that is correct. He continued by telling the
committee that accountability factors have been established in
statute. When one takes into account that teachers work for
parents and locally-elected boards, the AASA believes the high
number of accountability measures will require some money. This
year, Alaska school districts have had the largest fuel increase
costs in many years. The AASA has calculated that a $200 increase
will exceed inflation by a little bit. Regarding the debate about
funding the foundation formula and other specified funds separate
from the foundation formula, AASA strongly favors putting all
funding in the foundation formula.
There being no questions for Mr. Hargraves, CHAIRWOMAN GREEN
thanked him and announced the committee would hear SJR 21.
SJR 21-URGE EXTENSION OF FEDERAL TANF GRANTS
MR. JIM NORDLUND, Director of the Division of Public Assistance,
Department of Health and Social Services (DHSS), stated support
for SJR 21. This resolution supports continuation of supplemental
grants through the state's Temporary Assistance for Needy
Families (TANF) program, established with the creation of the
federal welfare reform law that passed in 1996. That law replaced
open-ended entitlements to states for the AFDC program with a
block grant program for states. The amount of the block grant
was based on the amount of money each state had received for
their AFDC programs in FY 1994, amounting to $63.6 million for
Alaska. The federal law also provided that relatively poor and
rapidly growing states would receive a 2.5 percent annual
increase to their block grants amounts. Alaska is considered to
be a high growth state.
MR. NORDLUND explained that states received the supplemental
increases for four years. Alaska's first block grant in 1998
amounted to $68 million; that amount has increased to $70 million
but it will decrease to $63 million in October, the start of the
federal fiscal year [FY 02]. DHSS obligated $70 million and more
for cash assistance, child care and other programs and now faces
a $15 million deficit. Calculated into that deficit is the $6.9
million that will be lost from federal sources. SJR 21 requests
Congress to continue the supplemental amount at the current
year's level for at least one more year. He informed committee
members that this approach has received a great deal of support
from the National Governors' Association, the National Council of
State Legislatures, and other organizations.
CHAIRWOMAN GREEN asked if other state legislatures have passed
similar resolutions.
MR. NORDLUND nodded affirmatively.
CHAIRWOMAN GREEN asked if a copy of the resolution should also be
sent to President Bush.
MR. NORDLUND said he believes the omission of the President as a
recipient was an oversight.
CHAIRWOMAN GREEN offered to accept a conceptual amendment to add
the President of the United States and the U.S. Secretary of
Health and Human Services to the list of recipients [Amendment
1].
SENATOR LEMAN so moved and, with no objection, the motion
carried.
CHAIRWOMAN GREEN asked if anyone expected to use the TANF funds
when welfare reform was initiated.
MR. NORDLUND said he does not believe any of the states expected
welfare reform to be as successful as it has been. Caseloads have
dropped by over 50 percent. In the initial years, the block grant
balances built up and DHSS was advised by members of Congress
that the state should spend those funds. Caseloads had dropped so
quickly that the states had not had sufficient time to gear up
and use the funds to build up programs. Alaska has built up its
programs and is now dependent on that money. He noted SJR 21
asks for a one-year extension but the whole TANF program is up
for reauthorization by Congress.
Number 1431
CHAIRWOMAN GREEN asked if the Legislature will know anything by
next session.
MR. NORDLUND said it should because the law has to be
reauthorized by October.
CHAIRWOMAN GREEN said she questions whether the state is doing
things it shouldn't be with this money. She said sometimes good
things happen when people are forced to find new ways to run
programs.
MR. NORDLUND said the TANF program is in the process of being
audited and it is possible the audit will determine that a
program, similar to the Head Start program, should not be funded
with TANF money. He suggested amending SJR 21 by removing "the
Head Start Program," on page 2, line 12, and changing $6,900,000
to $6,887,800 on page 1 line 15 [Amendment 2}. He explained that
$6,887,800 is the exact number, while $6,900,000 was an estimate.
SENATOR DAVIS moved to adopt Amendment 2.
There being no objection, CHAIRWOMAN GREEN announced that
Amendment 2 was adopted.
SENATOR LEMAN moved CSSJR 21(HES) from committee with individual
recommendations and its zero fiscal note. There being no
objection, the motion carried.
The committee took up SB 154.
SB 154-REPEAL SUNSET OF MENTAL HEALTH ASSISTANCE
MS. WENDY HALL, staff to Senator Pete Kelly, sponsor of SB 154,
informed the committee that representatives from the Department
of Health and Social Services (DHSS) were available to answer
questions about the bill. She then read the following statement.
The designated evaluation and treatment program [DET]
is a critical component in a continuum of mental health
services in Alaska, particularly for indigent persons
with mental illnesses who are being civilly committed
or met the criteria for civil commitment. Through this
program many poor people with mental illnesses, who do
not qualify for Medicaid, are able to receive services
in community hospitals across the state, closer to
their families and local support systems. Without the
DET program, it would be necessary to transport many
consumers in crises to the Alaska Psychiatric Institute
[API] to receive evaluation and treatment sources.
MS. HALL explained that SB 154 repeals the sunset clause in
statute.
CHAIRWOMAN GREEN clarified that Version A was before the
committee and said this concept is part of an ongoing discussion
about API, which she believes is a great idea.
Number 1668
SENATOR LEMAN asked why the legislature put a sunset date on the
bill in 1999.
CHAIRWOMAN GREEN thought it was done for financial reasons.
MR. ELMER LINDSTROM, Special Assistant to the Commissioner of
DHSS, recalled the sunset date was included because the state had
received a federal grant that was non-continuing. A portion of
that grant was earmarked for DET costs, but the Legislature was
aware that the federal funds would not be available in 2002. In
the meantime, DHSS has located another funding source to continue
the program.
CHAIRWOMAN GREEN asked Mr. Lindstrom to review the fiscal note.
Number 1735
MR. LINDSTROM said the rules for fiscal notes have changed so
that the cost of an entire program is to be shown, even though
the funds might be included in the Governor's, House or Senate
budget. He thought, as of yesterday, the DET program was fully
funded in the Senate version of the operating budget.
CHAIRWOMAN GREEN asked for verification that SB 154 will have no
additional fiscal impact, other than the amount included in the
operating budget.
MR. LINDSTROM said it will not.
Number 1833
MR. MIKE POWERS, administrator of the Fairbanks Memorial Hospital
Denali Center, told the committee that three years ago the
hospital completed a strategic plan, of which a major platform
was community accountability. Hospital staff, public safety
officials, and social service workers attended planning sessions
and, as a community, identified psychiatric program excellence as
a key effort. The DET funds were instrumental to the hospital's
ability to offer its psychiatric program. About the same time,
Senator Kelly introduced legislation allowing limited state
dollars to four communities to help protect one of the most
vulnerable segments, the working-poor mentally ill. That funding
mechanism has proven to be very cost effective - it has minimized
the cost borne by multiple state agencies. He urged committee
members to support SB 154.
MR. CARL SANFORD, assistant administrator at Fairbanks Memorial
Hospital, informed the committee that two years ago he was very
involved in the mental health infrastructure at the hospital and
around the state, particularly the transfer of mentally ill
patients from the Fairbanks community to API for treatment. At
that point in time, the predominant issue was open funding. In
1999, 70 patients were transported out of Fairbanks. In 2000, 5
to 7 individuals were transferred to API for care, providing
dollar savings to the public safety and correctional sectors and
allowing troopers to remain in the community. In addition,
patients receive timely access to care and do not delay the
decision to seek care as often.
MS. LIZ LAZARIA (ph), nurse manager on the Mental Health Unit at
Fairbanks Memorial Hospital, told the committee she would like to
speak to the personal side of the benefits of the DET program.
One patient in the mental health unit is a 23 year old with
schizophrenia. It is very important for the family to be involved
with the treatment and follow-up of this patient. This patient
is likely to be hospitalized several times during his lifetime.
The unit has developed a treatment plan with family members that
provides family support. She urged committee members to support
SB 154.
CHAIRWOMAN GREEN asked Ms. Lazaria whether that patient would
have been transported if the DET program was not available in
Fairbanks.
MS. LAZARIA said it is highly likely the patient would have been
transferred to API as the patient is on a 30-day commitment. The
DET program supports keeping the patient in the community.
DR. HOPSON, a psychiatrist from Fairbanks, stated support for SB
154. As a member of the medical staff at Fairbanks Memorial
Hospital and the medical director of Mental Health, one of his
goals is to support and direct the development of an acute care
mental health system, which provides the highest level of care to
its patients and support to their families.
DR. HOPSON said when treatment is delayed or a mental illness is
untreated, the patient may decompensate to the point that
involuntary treatment through court commitment is required. That
process not only adds costs but may require a longer length of
treatment due to the fact that he or she may be seriously
decompensated. He believes that passage of SB 154 will allow for
earlier interventions, earlier hospitalizations, shorter lengths
of stay, and less cost to the patient, family and taxpayers.
Earlier treatment of patients, from a physician's standpoint, is
the ultimate goal and will provide the highest quality of mental
health care in the Interior.
MR. GARTH HAMLIN, Chief Financial Officer at Bartlett Memorial
Hospital, stated support for SB 154.
SENATOR LEMAN moved to pass SB 154 from committee with individual
recommendations.
CHAIRWOMAN GREEN announced that with no objection, SB 154 would
move to its next committee of referral. The committee took a
brief at-ease and then Chairwoman Green handed the gavel to Vice-
Chair Leman and the committee took up SB 94.
SB 94-EDUCATION FUNDING
SENATOR ROBIN TAYLOR, prime sponsor of SB 94, thanked Chairwoman
Green for her help on SB 94 and on education issues in general.
He noted a committee substitute to SB 94 was prepared that makes
major changes to accommodate concerns expressed at the last
hearing.
SENATOR DAVIS moved to adopt Version O as the working document
before the committee. There being no objection, the motion
carried.
SENATOR TAYLOR explained that Section 1 of Version O changes the
federal impact aid deduction from 100 to 95 percent. It adds a
provision for a specific allocation for school nurses so that
those districts without a school nurse will have one in the
future. It also adds funding for vocational education but
changes it from 3 percent of specific allocation multiplied
against the formula to 2 percent, with the other 1 percent
allocated for school nurses. He stated he has no objection to
changing those numbers, but he believes that vocational education
has been on the short end of the stick and needs to be emphasized
and improved. In addition, he pointed out none of the schools
within his Senate district have a school nurse.
Number 2334
VICE-CHAIR LEMAN referred to page 3, line 3, and asked about the
special needs factor change from 1.20 to .20.
SENATOR TAYLOR deferred to the drafters for an explanation. He
said that Section 2 merely makes the language changes necessary
to encompass Section 1. A portion of Section 1 that was of
concern to many is that it would require the North Slope Borough
to pay the same four mil minimum level that other school
districts in the state currently pay before they receive any
funding from the State of Alaska. This would have allowed for
significant additional revenues to be redistributed throughout
the formula to assist other districts. Based on conversations
and testimony, he reduced that from a four mil levy maximum
requirement to four mils or 100 percent of the local cost of
education, whichever is less. Existing law provides that the
local community would have to pay 45 percent of the total cost of
education. He stated:
So we've changed it from 45 to the full 100 percent,
but not taken any additional funds that would have been
generated. This leaves you short on the numbers within
these bills for education funding by about $21 million
of additional funding that would have been available to
help make sure no children were left behind any place
else in the state. As I said, Section 2 makes the
changes necessary to comply with Section 1. Section 3
merely adds the changes necessary to provide for a
specific allocation for nurses. Section 4 accommodates
both the nursing and vocational education and changes
the words from 'product' to 'number.' I assume that's a
linguistic change that was necessary for the
computation...
Section 5 requires a biennial study by the Department
of Education that will be submitted to the legislature
and establishes parameters from which the study must be
done. It says the Department of Education already has
significant auditing and numbers before it on what the
cost of education is and that they should use then
specific aspects of consumer price indexes and it lists
four or five different methods of determining that
information.
In other words, do you have to go out and find out what
it costs to do business in that district? What is the
cost of living, the cost of food, utilities,
transportation? Once they have done that and achieved
those objective numbers, they then establish the amount
of area cost differential for each community using
Anchorage as the base. It's the way our current formula
works but our current formula's never been adjusted in
14 years so, as a consequence, even though prices may
change, go up or go down in a given community, we have
no way of tracking that and every time we're told
they're going to do something about it - we've sat now
as a legislature for three years waiting for an
adequacy study to be completed. Well they completed
the adequacy study and the Governor's Task Force
reported to this committee at a very recent hearing -
and all of the comments on area cost differential were,
we can't figure it out and we don't know what it is,
but the current system is totally broke on area cost
differential and, as a consequence, we should do
another study. That will be the fifth study since I've
been in the legislature with no changes."
CHAIRWOMAN GREEN asked Senator Taylor if the kind of study he
envisions can be derived at by gathering information that is
currently available.
SENATOR TAYLOR said that is correct. He noted that most of the
information is available through Alaska's Department of Labor and
is currently used for labor contracts and other state government
areas that require a level of objectivity in the way funds are
allocated for geographic differentials.
SENATOR LEMAN pointed out the Consumer Price Index (CPI) is not
referenced in the bill and that he prefers the replacement
language because the CPI tends to overstate the actual increase
in costs by as much as 1.1 percent, according to the Michael
Boskin (ph) study. Part of the reason is that it does not
account for changes in the way people live that are more
efficient. He felt if the CPI is used, that increase will be
institutionalized.
SENATOR TAYLOR said DOEED has very good numbers; it audits every
single school district every year. It also has, through the
Department of Labor and federal entities, significant objective
evidence to turn to. He agreed that the CPI can overstate the
increase, but it is only 1 percent. If that is balanced against
the actual expenditures, he believes DOEED can come up with a
truer number of the actual cost that would not require an
increase in general funds but, instead, would require a
reallocation of funds. He felt the shifts would be subtle,
depending on the costs in each community, and would be readjusted
every two years. He pointed out that he selected two year
intervals to provide stability for budgeting purposes in case
dramatic shifts occurred. He stated this approach is better than
one that was politically set 14 years ago and has not been
changed since.
Number 2075
SENATOR WILKEN disagreed that the area cost differentials (ACD)
have not been changed in 14 years. He stated:
Senator Taylor now, twice, has discussed the fact that
the DCF - ACDs haven't been changed in 14 years.
That's not correct. They were changed under SB 36,
under the McDowell study. The McDowell study was
brought about by the fact that the prior ACDs that
Senator Taylor is speaking of were built in 1984. They
were done for a Department of Labor study. They
sampled 19 of our 40 election districts. That 1984
study - the Legislature was then under pressure in '85,
'86, and '87, and when the Legislature in '87 came up
with the formula that we changed three years ago, they
needed - what Senator Taylor is talking about - and
that was some sort of differential of living - cost of
living across Alaska. It took that Labor study in 1984
and they brought it to the bill that changed the
formula and made it an instruction unit formula in
1987. They then went further than that and they made
another adjustment at the committee table, politically,
to gerrymander the ACDs to the benefit of certain areas
of the state and then we lived under that system until
we changed the formula in 1997 or 1998.
So, to suggest that we haven't done anything in 14
years is not quite correct. When the Department went
out, under the McDowell study, the Department went out
to study the cost of living. What they found was that
across our 53 school districts there simply was a basic
requirement of accounting missing and that was a chart
of accounts that's uniform across the state of Alaska.
That surprised the McDowell study and they expressed
their surprise in the study and that has since launched
an effort over the last three years for the Department
to go out and, under regulation now, to have in place a
chart of accounts so that we can start to compare
across districts so that we can do what the Senator
wants, and that is to figure out what is the cost of
education so we can fairly compare 53 districts across
the state. That process isn't ongoing and I certainly
support that and I know Senator Taylor does too. I
want to make sure that - we haven't forsaken this issue
of ACDs but we have certainly found that we couldn't
rely on the data we had, nor could we rely on the
accounting system that was in place since 1987 and
we're certainly trying to correct that.
SENATOR TAYLOR said he agrees with Senator Wilken except that he
disagrees that this was a beneficial change to every district in
the state. He believes that with a new chart of accounts that
will be audited annually and plowing in the additional factors,
DOEED can determine what the numbers should be.
SENATOR WILKEN said, as everyone knows from what was done with SB
36, that this isn't that big of a project but it has to be valid.
He reminded Senator Taylor that the McDowell study verified that
80 percent of the budgets of school districts across the state
was used for wages, salaries, and benefits so that it is the 20
percent that has to be quantified. He pointed out there is a
difference between the cost of living and providing education in
an area. For example, some towns have 30 miles of road so gas
costs are low compared to a town with 4,000 miles of road.
SENATOR TAYLOR responded:
And I think all we're really talking about is providing
within the formula a mechanized way of accomplishing
this and having it done by the professionals and not
done by the politicians. It shouldn't wait for us to
make a decision here and then have that decision get
structured politically. These are kids. They shouldn't
be left behind and they're going to continue to be left
behind if we leave it up to the legislature to do this.
That's why my suggestion is, de-politicize this. Give
us some objective numbers. And I really don't care
what the formula is as long as it's a fair formula, and
[indisc.] accordingly. That's what we've provided in
this bill....
Number 1838
CHAIRWOMAN GREEN asked, "...are both of these ideas - the part
that went on in SB 36 and this type of (indisc.) - are they both
impacted by the same idea that we're not measuring necessarily
what it costs to live there but we're measuring what we have to
spend when we're there?"
SENATOR TAYLOR said it is both and that, in essence, they have to
look at what is truly the cost of education within that
community. He pointed out there are costs that are unique to
education and they need to be tracked. He informed the committee
that Commissioner of Education Marshall Lind ordered all school
districts to use the same chart of accounts in 1978 but we are
just now getting there.
SENATOR LEMAN asked how to compare what is being delivered in one
district with another because different districts do things
differently. He pointed out that some districts offer smaller
class sizes while others offer a computer station for each
student. He asked Senator Taylor if it is his intent that when
comparing from area to area, equivalent delivery of education is
compared.
SENATOR TAYLOR said it is. He repeated that he firmly believes
DOEED has the expertise to do that today because the department
has specialists who know what it should cost in a given
community. He said he has worked with the Department of Labor
and DOEED to try to come up with a series of qualifiers that
would provide objective numbers from which to create a worksheet.
Number 1623
SENATOR LEMAN pointed out another concern is that one school
district may have a different policy when it comes to negotiating
employee contracts. For example, if employee contracts account
for 80 to 85 percent of district costs, would there be some
standardization or oversight of that percentage. He cautioned
that if a district wanted to increase its area cost differential,
it could just negotiate higher contracts.
SENATOR TAYLOR said he has not attempted to address that because
those decisions are left to local control.
SENATOR TAYLOR continued describing SB 94. Section 6 provides for
a declining fund adjustment to allow for a gentle slope to
compensate for declining enrollments in school districts that are
suffering from a reduction in student population. He maintained
that the foundation formula provides well for increases in
student population but districts "fall off of cliffs" if their
enrollment declines. The legislature attempted to set percentiles
- a school had to lose more than 10 percent of its population
before it got help. That number was then reduced to five or
seven percent. He replaced the percentage with language that
says if school enrollment is declining, the school will receive
75 percent for that phantom child the first year, 50 percent the
second year, and 25 percent the third. That would provide three
full years to adjust contracts with educators. He indicated that
he is flexible on those numbers but his goal is to make a gentler
transition for schools.
Number 1450
SENATOR LEMAN asked if that mechanism will kick in if any decline
in enrollment occurs because the bill says the decline must be 4
percent or more.
SENATOR TAYLOR said his preference is to go to zero percent. He
continued explaining the bill. Section 7 sets the base student
allocation. His original bill included a $210 increase. Because
Senator Wilken, in SB 1, had a $145 increase he inserted $145 in
the committee substitute, but at one point he was going to leave
it blank and let the committee decide the best number. The
Governor's bill increases the allocation by $115. He added that
the fiscal notes increase the cost by $30 million if no revenues
are collected by requiring a higher percentage of pay from the
rich tax-base districts. He explained that if the federal aid
impact deduction was at 100 percent, about $12 to $13 million
would be added back into the formula and reduce the fiscal note
to about $20 million. He hoped for a $50 million increase but
because of the emotion surrounding the North Slope Borough issue,
he modified that amount for the sake of agreement.
SENATOR TAYLOR then explained that Section 8 contains the same
language. It changes the threshold level on what was called the
single site argument - it only impacts two districts, Wrangell
and Petersburg. He noted that is an arbitrary number and there
should probably be a better way of handling declining
enrollments.
SB 1-FOUNDATION FORMULA INCREASE
CHAIRWOMAN GREEN thanked Senator Taylor and asked Senator Wilken
to present SB 1.
SENATOR WILKEN, sponsor of SB 1, said that SB 1 is the most
efficient bill regarding school funding. It simply increases the
student dollar amount. He feels the case has been made by
constituents that increased funding is needed for many good
reasons. He asked that Jim Holt come forward and testify.
MR. JIM HOLT, Superintendent of the Fairbanks School District,
informed the committee that he has been with that school district
for 30 years. He said he understands the reluctance of the
Legislature to open up the formula in SB 36. The complexities
described by Senator Taylor make that obvious. He also
understands the Legislature's reluctance to tie the student
dollar to a permanent inflation factor because the question of
what inflation factor to use continues. He noted that grant
funding allows the Legislature to target specific educational
issues, hold school districts accountable, and not worry that the
additional funding is being spent on salaries rather than
students but it has become critical that additional funding be
placed in the student dollar.
MR. HOLT said no matter what numbers one believes, the bottom
line is that inflation has eaten away at the educational dollar.
If it cannot be tied to some kind of factor that takes that into
consideration, the Legislature will periodically need to adjust
that amount. For example, Fairbanks has had the second warmest
winter on record. Even under those conditions, the fuel oil bill
for the school district cost $200,000 more this year than last,
purely due to inflation. He cannot use grant funds to pay that
bill. He pointed out that raising property taxes to pay for
school bonds is not a well received idea by retirees on fixed
incomes. Likewise, all school superintendents in this state have
been running their districts on a fixed income for almost all of
the last 12 years. Every time there is an increase in inflation,
fuel bills or teacher salaries increase and districts can spend
less on the students. He asked legislators, when considering
additional funding for education, that all of that money not be
put into quality schools grants and learning opportunity grants,
but to consider increasing the student dollar.
Number 963
SENATOR LEMAN said he disagrees that the $200,000 increase in the
fuel bill was due to inflation. Rather, it was an increase in
the price of fuel. He noted both have the same effect on
spending power.
SENATOR WILKEN asked Mr. Holt to describe to the committee what
the learning opportunity grants fund.
MR. HOLT said the quality school grant that the Fairbanks School
District received first was used to offer summer school for the
first time in Fairbanks in about 20 years. The learning
opportunity grants have allowed the Fairbanks district to fund
special programs, particularly in reading, and hopefully next
year in math, for elementary students who are unable to keep up.
MR. JEFF WALTERS stated support for SB 1 and increases in funding
for education. The Legislature must acknowledge losses due to
inflation over the last 10 years. He said employees in his
district are being squeezed by inflation, rising health costs,
expectations of student performance on the high school qualifying
exam and more. If districts do not get an increase, they will
lose safety monitors on school buses, supplies and equipment, and
the pupil-teacher ratio will have to be raised in grades 4
through 12. That seems counterproductive in light of state
mandated exams. In addition, attracting and retaining high
quality teachers is critically important across the state. He
feels districts need a long range solution to funding, not a stop
gap measure.
Number 806
SENATOR LEMAN informed Mr. Walters that the Legislature fully
funded pupil transportation so to draw any link between SB 1 and
pupil transportation is a misrepresentation.
CHAIRWOMAN GREEN noted that crossover on budgets can cause
confusion.
MR. DAVE JONES, Kodiak Island Borough School District Director of
Finance, stated support for SB 1. He has calculated the amount
of state revenue per student for each year since 1989. With
quality schools initiative funds and the learning opportunity
grants included, the Kodiak school district is receiving $30 less
per student than it did in 1989. Over that same time period,
inflation has increased over 30 percent. In addition, fuel costs
have increased 56 percent since 1990. The lack of inflation
proofing has resulted in severe cuts in Kodiak. Over $1 million
has been cut in the last two fiscal years and Kodiak is facing
another $500,000 next year if it receives no additional revenues.
Passage of SB 1 will eliminate the need for further cuts and
might allow the district to reinstate some of the programs cut in
recent years.
Number 677
CHAIRWOMAN GREEN announced that both SB 94 and SB 1 will be
scheduled in committee again next week. She pointed out that the
issue of supplemental equalization has been discussed at the Mat-
Su school district. She plans to review that issue at the next
meeting also.
MR. EDDY JEANS, School Finance and Facilities Section, DOEED,
stated support of SB 1. However, he suggested the committee
consider rolling the learning opportunity grants into SB 1 as
part of the ongoing funding formula so that school districts do
not have to lobby for that money every year.
CHAIRWOMAN GREEN asked if that creates a lot of work.
MR. JEANS replied, "It keeps it interesting, Madame Chairman. I
think you would remember the single site issues that we debated -
single site funding on an annual basis for about 10 years." He
pointed out that money is being allocated to districts at the
same time quality school grants are allocated. The allocation
methods are a little bit different but the monies are being
targeted for the same purposes. If the money is going to be
allocated to DOEED, it would prefer to have the money in the
formula.
MR. JEANS said that SB 1 and the learning opportunity grants are
very close to the funding level recommended by the [Governor's]
funding task force. The only thing missing is about a 1.5 percent
annual increase for the next five years, also recommended by the
task force.
CHAIRWOMAN GREEN announced both bills will be heard on Monday and
that next Wednesday, the committee will begin discussing the
State of Alaska's reliance on Medicaid.
SENATOR WILKEN asked if the committee will be discussing the
competency exam again.
CHAIRWOMAN GREEN said it would not. She then adjourned the
meeting at 3:28 p.m.
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