1996-06-03                     House Journal                      Page 4658
HB 1006                                                                      
HOUSE BILL NO. 1006 by the House Rules Committee by request of                 
the Governor, entitled:                                                        
                                                                               
An Act relating to transportation of public school students;                  
relating to school construction grants; relating to state foundation           
aid and supplementary state aid for education; and providing for               
an effective date.                                                             
                                                                               
was read the first time and referred to the Finance Committee.                 
                                                                               
                                                                               
The following fiscal note applies:                                             
                                                                               
Fiscal note, Dept. of Education, 6/3/96                                        
                                                                               
                                                                               
The Governor's transmittal letter, dated June 3, 1996, appears below:          
                                                                               
Dear Speaker Phillips:                                                         
                                                                               
Under the authority of art.III, sec.18, of the Alaska Constitution, I am       
transmitting a bill relating to transportation of public school students,      
school construction grants, state foundation aid, and supplementary            
state aid for education.  It is identical to HCS CSSB 244(FIN) am H,           
which passed the House but did not receive Senate concurrence before           
adjournment.                                                                   
                                                                               
                                                                               
This bill is of great financial consequence to the state.  Each year           
Alaska's school districts receive millions of dollars of  federal impact       
aid.  Because Alaska maintains a qualifying education funding scheme,          
it is permitted to reduce state aid to a district by a portion of the          
district's federal impact aid.  For this fiscal year, consideration of         
district impact aid resulted in a savings to the state of approximately        
$35million.                                                                    
                                                                               
                                                                               

1996-06-03                     House Journal                      Page 4659
HB 1006                                                                      
To qualify for this substantial financial benefit in fiscal year 1998, the     
state must have no more than a 20 percent disparity between the                
revenues of our richest and poorest school districts.  The test is based       
on two-year prior data, so we must meet the 20 percent mark in fiscal          
year1996.  Without the changes made by this bill we will fail, and             
will not be permitted to reduce state aid to districts by considering          
their federal impact aid.                                                      
                                                                               
The bill decreases disparity by providing supplemental state aid of            
$500 per instructional unit to regional educational attendance areas           
(REAAs), who are unable to levy taxes to increase revenue for their            
schools.  The supplemental funding will not result in a substantial cost       
to the state because we will increase the state's deduction of federal         
impact aid from 90 to 96 percent for REAAs.  This change will not              
affect city and borough school districts.                                      
                                                                               
                                                                               
The amendments to the foundation formula program are retroactive to            
July1, 1995, to ensure that we achieve the required 20percent                  
disparity for the current fiscal year.  It also contains a hold harmless       
measure so that no district will receive less foundation aid under this        
bill than it would have received under existing law.  The bill also            
addresses two other education issues -- one related to pupil                   
transportation and one to school construction grants.                          
                                                                               
This bill represents an important step toward my goal of achieving a           
foundation formula program that is fair, equitable, and accountable and        
that protects the partnership between state, federal, and local dollars.       
I urge your prompt and favorable action on this bill.                          
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor