2001-02-23                     House Journal                      Page 0410
HB 138                                                                                            
HOUSE BILL NO. 138 by the House Rules Committee by request of                                       
the Governor, entitled:                                                                             
                                                                                                    
     "An Act relating to the delay of the reduction of supplementary                                
     public school funding; and providing for an effective date."                                   
                                                                                                    
was read the first time and referred to the House Special Committee on                              
Education, and the Health, Education & Social Services, and Finance                                 
Committees.                                                                                         
                                                                                                    

2001-02-23                     House Journal                      Page 0411
The following fiscal note(s) apply:                                                                 
                                                                                                    
1.  Fiscal, Dept. of Education & Early Development                                                  
                                                                                                    
The Governor's transmittal letter dated February 20, 2001, appears                                  
below:                                                                                              
                                                                                                    
"Dear Speaker Porter:                                                                               
                                                                                                    
Caring about Alaska's students means caring about ALL students,                                     
regardless of where they live and go to school.  Allocation of public                               
school funding must be equitable, not competitive.  This bill I transmit                            
today suspends a provision that created divisiveness in our school                                  
funding formula by limiting the funding for enrollment increases in                                 
primarily rural districts.  The suspension will be in place pending a                               
comprehensive statewide review of educational costs and specific                                    
recommendations to the legislature to make any necessary adjustments                                
to the formula.                                                                                     
                                                                                                    
This legislation is built on the recommendations of the Education                                   
Funding Task Force.  The current funding formula, which became                                      
effective beginning with the 1998 - 1999 school year, was a major                                   
departure from the previous school foundation formula and resulted in                               
a substantial reallocation of funding from the regional educational                                 
attendance areas in rural Alaska to the urban school districts of the                               
state.  To mitigate the loss of funding to these rural districts, the                               
formula provided a supplementary funding floor to hold those districts                              
harmless from a decrease in funding at 1999 enrollment levels.  At the                              
same time, a school district with a funding floor that has an increase in                           
enrollment from 1999 is eligible for only 60% of the increased funding                              
entitlement.  This formula makes the patently unjust statement that a                               
rural student deserves less school funds than an urban student.                                     
                                                                                                    
Under this bill, all school districts are eligible for 100% of the school                           
funding calculated under the state funding formula for increased                                    
enrollment until fiscal year 2004.  During this time, the Department of                             
Education & Early Development will contract to devise a method for                                  
determining and updating district cost factors using information on the                             
cost of providing educational services.  I will seek additional funds in                            
my fiscal year 2002 amended budget for this study.                                                  

2001-02-23                     House Journal                      Page 0412
This legislation is an investment in Alaska's future.  I urge your                                  
prompt and favorable action on this bill.                                                           
                                                                                                    
                                Sincerely,                                                         
                                /s/                                                                 
                                Tony Knowles                                                        
                                Governor"