05/01/2001 09:41 AM Senate FIN

                                                                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 203(HES)                                                                               
     "An Act making an appropriation to the Legislative Budget and                                                              
     Audit Committee for a study of school district cost factors;                                                               
     and providing for an effective date."                                                                                      
                                                                                                                                
                                                                                                                                
REPRESENTATIVE   PEGGY   WILSON   explained   that  Alaska   has   a                                                            
constitutional  obligation  to  provide  a full  education  for  all                                                            
students.  The  challenge inherent in the mission  is to account for                                                            
diverse geographic, cultural, and economic conditions.                                                                          
                                                                                                                                
Representative  Wilson stated the formula currently  employed, while                                                            
well  intentioned,  has unintentional  consequences.    HB 203  will                                                            
provide factual  answers and  will propose  an independent  study of                                                            
school  cost  differentials  to be  contracted  by  the Legislative                                                             
Budget & Audit Committee at the cost of $350,000 dollars.                                                                       
                                                                                                                                
Senator  Austerman  commented  that in  the  past, there  have  been                                                            
similar studies  based on what is spent in schooling  rather than on                                                            
the actual  costs.  He questioned  if it was the intent of  the bill                                                            
to include cost factors.                                                                                                        
                                                                                                                                
Representative Wilson referenced  Page 1, Line 10:  "The cost should                                                            
be based on cost providing  education in each school district".  She                                                            
continued,   the  cost  should   include   the  cost  of   classroom                                                            
instruction and administrative support.                                                                                         
                                                                                                                                
EDDY  JEANS,   Manger,  School  Finance   and  Facilities   Section,                                                            
Department  of Education and Early  Development, spoke on  behalf of                                                            
the  Department  in  support  of  the  proposed  legislation.    The                                                            
Department is required  to make recommended changes every other year                                                            
to  the cost  differentials  as passed  in SB  36.   The  Department                                                            
fulfilled  its  requirement  this  year  and attempted  to  use  the                                                            
McDowell  methodology,   used  in  establishing  the   current  cost                                                            
differentials.   He noted that the Department found  the methodology                                                            
"flawed" and did not work  for the updating.  The Department request                                                            
that there be funding provided for a study.                                                                                     
                                                                                                                                
Senator Austerman asked  about the changes made in the House Finance                                                            
version of the legislation.                                                                                                     
                                                                                                                                
Senator Wilken  replied that  there has been  an attempt to  measure                                                            
the cost of education as compared to the cost of living.                                                                        
                                                                                                                                
Senator Austerman  stated that  the cost of  keeping a teacher  in a                                                            
remote area will differ  from other places, which will have a direct                                                            
cost link to the budget.                                                                                                        
                                                                                                                                
Senator   Wilken  understood   that  the   study  would  take   into                                                            
consideration variable issues throughout the State.                                                                             
                                                                                                                                
Co-Chair  Kelly suggested  that  the cost  of the  teacher's  salary                                                            
should be included in the cost of education.                                                                                    
                                                                                                                                
Senator  Wilken  agreed.   He provided  a  history of  the  process.                                                            
Senator Wilken  pointed out that there  have only been two  studies.                                                            
One was undertaken  in 1982, a cost of living study.   Another study                                                            
was done in 1987.                                                                                                               
                                                                                                                                
                                                                                                                                
SFC 01 # 91, Side B 10:31 AM                                                                                                    
                                                                                                                                
                                                                                                                                
Senator  Wilken continued  that  the 1987  study  adjusted the  1982                                                            
study.  That  information is what  was used until SB 36 passed.   At                                                            
that time,  there was not  a uniform chart  and accounts being  done                                                            
for the entire State.   The McDowell study undertaken in 1997 & 1998                                                            
updated  all the costs  of education  information  for the State  of                                                            
Alaska.   He hoped  that within ten  years, the  State would  have a                                                            
"rolling model" which constituents could trust.                                                                                 
                                                                                                                                
Co-Chair Donley noted that HB 203 would be HELD in Committee.                                                                   
                                                                                                                                
Representative  Wilson pointed out  that there are only five  states                                                            
in the lower  48 that use  some kind of  a cost differential  study.                                                            
Each one is  different.  She acknowledged  that this is not  an easy                                                            
process.   She added that  the cost of living  in some districts  is                                                            
important  because some  districts have  to provide  housing.   Some                                                            
districts  have  no electricity  or  water.    No teacher  would  be                                                            
willing  to go  to a  school  district  like that  without  adequate                                                            
housing needs being provided for them.