04/25/2005 05:07 PM Senate 001

SUMMARY                                                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 1(HES)                                                                                                    
                                                                                                                                
     "An Act relating to the base student allocation used in                                                                    
     the formula for state funding of public education; and                                                                     
     providing for an effective date."                                                                                          
                                                                                                                                
     and                                                                                                                        
                                                                                                                                
SCS FOR CS FOR HOUSE BILL NO. 1(FIN)                                                                                            
                                                                                                                                
     "An Act relating to the base student allocation used in                                                                    
     the formula for state funding of public education; and                                                                     
     providing for an effective date."                                                                                          
                                                                                                                                
     HB 1 was heard and HELD in Committee for further                                                                           
     consideration.                                                                                                             
                                                                                                                                
Chair  Representative  Meyer  reviewed  conference  committee                                                                   
rules under Uniform Rule 42.                                                                                                    
                                                                                                                                
Representative Chenault MOVED  to have the Senate recede from                                                                   
their amendments to HB 1.                                                                                                       
                                                                                                                                
Senator Wilken OBJECTED.                                                                                                        
                                                                                                                                
Co-Chair Wilken  explained the intent of the  Senate approach                                                                   
to HB  1. The  Senate has  tied the  passage of  HB 1 to  the                                                                   
passage  of  retirement  reform   legislation  (SB  141).  HE                                                                   
emphasized the  need to address  the retirement  issue, which                                                                   
also affects teachers. He acknowledged  the importance of the                                                                   
issues and  the level of  concern demonstrated by  those that                                                                   
were present and those that had  participated in the process.                                                                   
                                                                                                                                
Representative  Gara spoke in  support of the  House version.                                                                   
He  stressed that  while  the issues  are  serious, they  are                                                                   
separate. He could  not support holding back  money to reduce                                                                   
class  size contingent  on the  right of teachers  to have  a                                                                   
pension. He noted  that the $4,919 [base  student allocation]                                                                   
will  still result  in  layoffs. He  noted  that the  pension                                                                   
issue is moving  and requested that the issues  be considered                                                                   
separately.  He emphasized  that  school  funding had  always                                                                   
been considered as a separate issue.                                                                                            
                                                                                                                                
5:14:39 PM                                                                                                                    
                                                                                                                                
Senator Hoffman  acknowledged the  projected deficit  of $5.7                                                                   
million  in the retirement  system, but  maintained  that the                                                                   
retirement system  is fully funded.  The problem lies  in the                                                                   
health care  component of the  system. He felt that  a better                                                                   
solution would  be splitting the defined contribution  with a                                                                   
tightened defined benefit: 50/50.  He observed that HB 1, nor                                                                   
SB 141  addresses this issue of  the $5.7 million  "hole". He                                                                   
maintained that the issues should  be addressed separately to                                                                   
obtain the best solution.                                                                                                       
                                                                                                                                
5:16:47 PM                                                                                                                    
                                                                                                                                
Senator  Green  stressed that  there  has  been a  number  of                                                                   
discussions since  the previous year. Plans  presented to the                                                                   
TRS and PERS  boards were turned down. The  legislation is an                                                                   
attempt  to strike  a balance.  She spoke in  support of  the                                                                   
retirement investment  plan. She  maintained that  the Senate                                                                   
retirement  proposal would  create  an attractive  investment                                                                   
plan  for  employees. She  observed  that  this is  the  most                                                                   
difficult  issue  that she  had  faced  in  her tenure  as  a                                                                   
legislator. The cost of retirement  is growing. She disagreed                                                                   
that the  TRS and PERS funding  is a separate issue  from the                                                                   
student  base  allocation  and   pointed  out  that  a  large                                                                   
percentage  of [education  funding]  goes toward  retirement.                                                                   
She maintained  that in the  future, only two  teachers would                                                                   
be  hired  for  every  three  of today  if  there  is  not  a                                                                   
solution.                                                                                                                       
                                                                                                                                
5:21:22 PM                                                                                                                    
                                                                                                                                
Representative Chenault observed  the desire for adequate and                                                                   
early funding  of education.  He acknowledged the  importance                                                                   
of resolving the PERS and TRS  issue as "the biggest issue we                                                                   
are going  to face". He noted  that SB 141 is  moving through                                                                   
the  system,  but emphasized  the  attempt  to take  care  of                                                                   
education funding.                                                                                                              
                                                                                                                                
5:23:48 PM                                                                                                                    
                                                                                                                                
Representative  Meyer   noted  the  attempt  to   early  fund                                                                   
education  and  pointed  out that  contingency  language  was                                                                   
added  to HB 1.  He agreed  that PERS  and TRS  funding  is a                                                                   
major issue. He spoke in support of separating the issues.                                                                      
                                                                                                                                
5:25:06 PM                                                                                                                    
                                                                                                                                
Senator Wilken  expressed the  desire to reach  an acceptable                                                                   
conclusion. He pointed to the passage of HB 158.                                                                                
                                                                                                                                
Representative Meyer expressed  the hope that some resolution                                                                   
would occur regarding SB 141.                                                                                                   
                                                                                                                                
5:27:32 PM                                                                                                                    
                                                                                                                                
Representative  Gara  noted that  there  are  two issues  and                                                                   
contingency  language  doesn't   allow  discussion  on  other                                                                   
options short of a complete reforming of the pension plan.                                                                      
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:                                                                                                                       
Senate:   Hoffman                                                                                                               
House:    Gara, Chenault, Meyer                                                                                                 
                                                                                                                                
OPPOSED:                                                                                                                        
Senate:   Green, Wilken                                                                                                         
                                                                                                                                
The MOTION FAILED.