Legislature(2007 - 2008)HOUSE FINANCE 519
03/28/2007 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB 137 WAS SCHEDULED BUT NOT HEARD. | |
| HB168 | |
| HB218 | |
| HB72 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 72 | TELECONFERENCED | |
| *+ | HB 218 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 137 | TELECONFERENCED | |
| += | HB 168 | TELECONFERENCED | |
HOUSE BILL NO. 72
An Act relating to the district cost factors for state
funding of public education; providing for an effective
date by repealing the delayed effective date of sec. 6,
ch. 41, SLA 2006; and providing for an effective date.
3:24:26 PM
REPRESENTATIVE MIKE CHENAULT, SPONSOR, stated that HB 72 was
written to enact the cost differential factors for State
school funding. HB 72 implements 100% of the Institute of
Social and Economic Research (ISER) Study. He stated that
if the ISER numbers are correct, it would mean $10 million
dollars a year for the Kenai District. The lack of those
funds has caused a terrible discrepancy.
Co-Chair Chenault commented his school district was being
unfairly represented by the current available cost
differential numbers. He addressed some items that would be
lost in his school district's funding which were not met.
th
His district is the 4 largest in the State & while they do
have many elementary schools, they do not have a nurse or
drug prevention specialists. Kenai has smaller schools but
also has a larger land mass. Since SB 36 was put into
effect, the district is in drastic need. He hoped that HB
72 would provide an effort to move forward & offered to
answer questions of the Committee.
3:29:47 PM
Co-Chair Meyer pointed out that Anchorage is used as the
base level to determine the Base Student Allocation (BSA).
He inquired if the legislation passed, would Anchorage's
funding be reduced. Co-Chair Chenault responded that if the
BSA was raised with an increase to the cost differential,
then Anchorage would not be affected. If the funds were
taken from the current cost base and no new monies were
added, then Anchorage would be reduced.
Representative Gara addressed a lack of achievement
occurring in the Anchorage schools. After basic courses,
the elective options are grim. The needs in big school
districts are not as bad as the other & that he supported
moving forward to address cost differentials. He asked if
HB 72 was implemented and the PERS/TRS rate was paid down,
would all school district's BSA be at $77 million dollars.
Co-Chair Chenault replied that it would depend on how the
numbers were moved around. If the Public Employees
Retirement System/Teacher's Retirement System (PERS/TRS)
issues were addressed, then the larger districts would
receive more by moving the funding outside the formula.
Currently, with the funding inside the foundation formula,
the numbers are dispersed according to the cost
differential. He objected to that model, commenting that
the numbers should change. He encouraged that the entire
concept be addressed including the PERS/TRS issue.
3:33:38 PM
Co-Chair Meyer informed those waiting online that there
would be no public testimony at this meeting. He indicated
that an arranged time and date would be selected to discuss
the matter.
Representative Thomas commented he represented 12 school
districts and thought the bill could provide millions of
dollars for the past eight years. Over that period, the
total amount was over $90 million dollars.
Vice Chair Stoltze looked forward to continued discussion.
He realized it was not an option for some small school
districts, while the larger ones like Kenai, have more
stnd
options. He represents the 1 and 2 largest school
districts in the State. He questioned the options for
districts smaller than Kenai, who opt for smaller schools
and the "trade-offs" associated with those choices.
3:39:08 PM
Co-Chair Chenault advised that smaller schools were the
District's choice with four high schools. The distance
between those schools is vast; some are 75-miles apart.
They could consolidate but the parents want to see their
children at schools closer to home with less traveling time.
Smaller distances build community and not having the funding
has made the school district more responsible. He
guaranteed that there are no excess dollars in that district
& congratulated his borough. The community has funded to
the cap allowed. He urged raising the BSA, stressing that
his district should no longer be penalized.
3:44:32 PM
Representative Nelson added her gratitude to Co-Chair
Chenault for the bill. She pointed out that ¾ of the ISER
study would amount to $72.5 million dollars. The full
implementation of the ISER study would be a little over $97
million dollars. She encouraged school districts to put
forward their additional energy costs since the study was
commissioned. The air study was released in 2003 based on
2002 prices. The ISER study was released in 2005 based on
2004 prices. She thought that the "loaf" had grown even
more. When SB 36 was written, the price of crude oil was
$12.31 dollars per barrel, and today it is at $57 dollars
per barrel.
Co-Chair Chenault said he could not speak to the fuel issue
& pointed out that the other ¼ of the loaf was placed in the
operating budget. He realized that fuel & energy costs have
increased throughout the State.
Representative Kelly inquired if there was an option to cap
some districts. He worried about a double jump. Co-Chair
Chenault addressed capping, noting that the bill was
introduced at 100% of the ISER Study. The number is not
known as they have not been able to settle on what should be
considered. He hoped to get 100% but did not know if that
was the correct number. The process is intended to help
districts address their cost factors and PERS/TRS; it is
hoped to settle upon a number to provide school districts
with the opportunity to move forward.
3:50:19 PM
Representative Kelly stated for the record that some
districts are too small for the funding that they receive.
He voiced serious concern with future increased funding, yet
agreed that the current system is not adequately working.
3:51:57 PM
EDDY JEANS, DIRECTOR, SCHOOL FINANCE, EDUCATION SUPPORT
SERVICES, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT,
offered to answer questions on the fiscal note or queries on
how the State got to where it is.
Co-Chair Meyer addressed the BSA and how those numbers would
affect Anchorage.
Mr. Jeans observed that one would have to go back to SB 36,
in which the McDowell Group made it clear that those numbers
were based on the manner that school districts were spending
at that time. The McDowell Group recommended that the issue
be revisited in a couple years. The Legislature assumed
that burden and commissioned the study and then asked ISER
to do a peer review. Based on the peer review, the
Legislature took those recommendations & asked ISER to rerun
the numbers. There were two areas of great concern, the
first being how the air group calculated the energy portion
of the index. They used a lot of criteria for adjustment.
ISER recommended going back to the financial statements and
using what the districts are currently spending as the
measure. He noted that the largest component was addressing
the teacher compensation component. ISER recommended making
an adjustment for longevity, experience and teacher
turnover.
3:56:13 PM
Mr. Jeans noted that in the peer review, ISER was clear
about the adjustments that were needed. The Legislature
paid for those adjustments. Everyone thought they went too
far the other way, which he agreed with. Mr. Jeans pointed
out frustration with the cost differentials. The total
package needs to be a complete rewrite. He did not support
a 100% cost differential as the correct formula. He looked
forward to a dialogue on the issue.
3:57:34 PM
Co-Chair Meyer reiterated concerns and worried about a
possible cut to Anchorage. Mr. Jeans explained that if the
cost differentials were adopted and not funded, there would
be redistribution and Anchorage would get less; however,
funding the cost differentials, Anchorage would not loose
any funding. It will be a correction to the formula, which
needs to be made.
3:58:24 PM
Representative Joule referenced teacher salaries and
questioned the benefit of offering a single bargaining unit.
Co-Chair Meyer interjected that was not an appropriate
question at this time. Mr. Jeans added that some states
have a built in a salary schedule the State is willing to
pay and that anything beyond that is picked up at the local
level.
3:59:27 PM
Representative Gara requested a chart indicating the affect
to each school district if the bill were passed. Mr. Jeans
offered to provide that. Co-Chair Meyer agreed and
suggested several different scenarios shown in the chart
with the PERS/TRS outside and then one with it included in
the formula, one with the cost differential implemented and
then not funded.
Representative Kelly questioned the Department's legislative
efficiencies. Mr. Jeans noted the Statute requires the
Department to look at cost differentials and then make
recommendations to the Legislature. The Department has
requested funds to do that; the Legislature elected to take
on the task to define cost differentials. He said he sat on
the Legislative Budget & Audit (LBA) Subcommittee, which
defined the areas.
Representative Kelly asked if the Department's methodology
would reflect less than 100% of the application to the
formula. Mr. Jeans said he did not believe the 100% ISER
cost differentials were the real numbers nor did he believe
that those were the accurate differentials, and thought it
was less.
4:02:58 PM
Representative Hawker mentioned the amount of public
testimony taken during the LBA Committee and concerns voiced
by adopting the ISER results. Mr. Jeans agreed that was a
fair representation.
4:04:29 PM
PEGGY COWAN, SUPERINTENDENT OF SCHOOLS, JUNEAU BOROUGH
SCHOOLS, CITY & BOROUGH OF JUNEAU, stated that the proposed
legislation is critical to the Juneau School District and
Juneau students. The Juneau community funds education to
the maximum allowed & looks to the Legislature for measures
of adequacy and fairness. Since 1998, everyone has lived
with the rates established in SB 36, loosing ground in terms
of educational programs provided. The ISER study may not be
perfect but the SB 36 rates are flawed. She urged that the
Legislature take action. Each community has different needs
& educational funding should do the same.
4:06:37 PM
Vice Chair Stoltze requested information on what the
bargaining units have obligated their legislators to do. He
worried how the request would fit into the overall, State
budget priorities.
HB 72 was HELD in Committee for further consideration.
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