Legislature(2001 - 2002)
04/27/2001 01:37 PM Senate HES
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
HB 203-SPECIAL APPROP: SCHOOL DIST. COST FACTORS
CHAIRWOMAN GREEN announced HB 203 to be up for consideration.
SENATOR WILKEN moved to adopt the SCS CSHB 203(HES) version
O/Cramer/4/26/01. There were no objections and it was so ordered.
SENATOR WILKEN said that he and Representative Wilson had gone over
this bill and agreed on all items but one.
REPRESENTATIVE PEGGY WILSON, sponsor of HB 203, explained that the
study is on school district cost factors. She said she didn't have
a problem with Legislative Budget and Audit overseeing the study.
She said that section 1 was the same, although the wording has been
changed.
She said she called Mr. David Cottrell, a school auditor, and asked
him if the study could be done in the stated amount of time. He
thought it could. A McDowell Group spokesman said the study could
be done and Senator Therriault, Chairman of the Budget and Audit
Committee, said he knew everyone wanted this study and it would be
something the auditors could get to right away.
REPRESENTATIVE WILSON recommended that the committee change the
date back to next year and say that a preliminary report be done by
January 30, with a final report due April 1.
SENATOR LEMAN moved to adopt those dates and an immediate effective
date on page 1, line 9.
SENATOR WILKEN objected saying that this study is really important.
It affects how schools get funded across the state. He thought they
needed to sort some things out first. In 1998, the McDowell Group
found that the 53 school districts didn't even have a common chart
of accounts. This will be the third year that two auditors have
been out trying to get the accounts aligned, so people can compare
costs between districts. He felt the chart of accounts should be
aligned across the state and working as they should be.
He explained when they get some cost comparisons, they boil it down
to a model that projects numbers that are valid for the 53 school
districts. Then it has to get tested to see how real data reacts.
He didn't think that they wanted the preliminary report next year,
an election year, where it will get bogged down in politics. He
said that this would definitely shift some money around and no one
knew where it would go.
SENATOR WILKEN concluded saying, "First of all we need to make sure
the system is in place to measure and, secondly, that the model
works and that it's valid and we have confidence in it. When that
happens, then in '03 we can go ahead and work this into the
foundation formula ...."
CHAIRWOMAN GREEN asked if he was assuming that the information that
comes in will somehow be part of an every other year correction.
SENATOR WILKEN answered in his mind he thought so.
MR. EDDY JEANS, School Finance and Facilities Section, Department
of Education and Early Development (DOEED), commented that SB 36
requires DOEED to review and update the cost differentials every
other year and to make recommendations to the legislature. This
year, DOEED's report used the McDowell methodology (in SB 36) to
update the cost differentials, but DOEED found the methodology was
flawed. DOEED took revised calculations back to the McDowell Group
and asked them to review them. The McDowell Group agreed that the
methodology can no longer be used. Subsequently, the Governor's
Education Funding Task Force has recommended that a new cost study
be done.
SENATOR WILKEN asked which year he was comfortable using for a
report date.
MR. JEANS replied January 15, 2003. He thought that studies in the
past had been hurried projects, which has led to questions about
the validity of the differentials. He didn't expect the cost study
to be based on audited expenditures as previous studies had done.
He envisioned the study to be based on other types of indices that
demonstrate the variance in cost of delivering education around the
state.
CHAIRWOMAN GREEN announced a brief at-ease.
CHAIRWOMAN GREEN called the meeting back to order and asked
Representative Wilson if she wanted to comment on the amendment.
REPRESENTATIVE WILSON said she talked to Senator Therriault about
the Request for Proposal process and is ready to work at getting
the education community on board when session is over.
SENATOR LEMAN said he thought the amendment provided adequate time
or he wouldn't have offered it.
CHAIRWOMAN GREEN called for a roll call vote. SENATOR LEMAN voted
yes; SENATORS WILKEN, DAVIS, and GREEN voted no; and the amendment
failed.
MR. DARROLL HARGRAVES, Executive Director, Council of School
Administrators, said SB 203 has support and looks like an issue
they can look forward to working with in the next few months. He
said the Council supports this bill. "I do know that there are very
few states in the Union who have attempted to take a snapshot of
what's actually happening in schools to set this kind of a
differential. Theoretically, charts of accounts are current
expenditures and should have nothing to do with setting cost
differentials. It should be based on what is happening in the
communities' economy."
He said that in the early '80s, they hired the Stanford Group to
do the foundation funding study for us. It collapsed under its own
weight as it did in other places. They attempted to describe school
districts in terms of money. He cautioned that the language in the
bill will set the philosophy for the direction of the study and is
extremely critical to the results they are going to get.
CHAIRWOMAN GREEN asked what language he thought was important to
get.
MR. HARGRAVES replied, "These terms reflect what you're going to
spend to keep your household going…. I look at what the cost of
those items are to get things into the community…."
CHAIRWOMAN GREEN asked him to look at line 10 to see if that's
improved language.
MR. HARGRAVES said he thought it was an improvement.
CHAIRWOMAN GREEN said she didn't understand what he was advocating
for.
MR. HARGRAVES summed it up by saying, "Don't look at the audited
budgets of school districts to set cost differentials."
CHAIRWOMAN GREEN asked if that was the issue that caused the
McDowell study to be called into question.
SENATOR WILKEN answered that it was a matter of opinion. It wasn't
perfect, but it was a quantum leap over the report from 1982. He
agreed with Mr. Hargraves. "It's not a question of what we spend
today, but what should we spend. I think that's addressed in line
10 when it says, 'Should be based on the cost providing an
education in each school district."
SENATOR WILKEN said he wasn't sure they could do this report. He
was concerned that they were imposing what the schools boards
should be doing from the top down. He didn't think that meant it
shouldn't be started.
MR. HARGRAVES said he thought the language was O.K. as long as it
has the right philosophy behind it. He repeated his major point,
"The chart of accounts and audited budgets really shouldn't have
much play in setting a cost differential."
CHAIRWOMAN GREEN said she didn't know how they could avoid that.
SENATOR WILKEN said he thought it was part of the equation. He
agreed with Mr. Hargraves that the study shouldn't be driven by
what is being spent, but on what should be spent.
CHAIRWOMAN GREEN said she didn't think the language expressed what
he way saying. She asked everyone for suggestion for better
language.
Number 1169
MR. JEANS said that he didn't think more wordsmithing was
necessary. It provides a little guidance highlighting some areas
that need to be looked at when considering the indices for cost
differentials. He thought cooperative effort was needed in
developing the RFP to ensure that it does what they want it to
before it hits the street.
CHAIRWOMAN GREEN asked if the language in section 1 gave DOEED
authority to work with the study.
MR. JEANS said he thought it did and that item 1 gives them
additional guidance. He thought they shouldn't get any more
prescriptive.
CHAIRWOMAN GREEN asked what language allowed them to work with the
different school districts.
MR. JEANS replied that he intended to do that through the
Department of Education and that was in the intent language.
SENATOR WILKEN moved amendment #2 on page 1, line 6, to delete "to
prepare and contract for the preparation" and to insert "enter into
a contract for" and, on page 2, to delete line 4 to conform with a
Department of Law concern.
SENATOR LEMAN suggested deleting "and" on page 2, line 4 and to
insert "and" on line 1 and change the semicolon into a period. The
committee indicated approval of the change in wording.
CHAIRWOMAN GREEN asked if there were any further objections. There
were no further objections and amendment #2 was adopted.
SENATOR LEMAN moved amendment #3 on page 1, line 14 to delete
"between" and insert "among" and do the same thing on page 2, line
3. He also asked on page 1, line 12, if there was a cost
differential for the shipping of school materials and supplies.
REPRESENTATIVE WILSON replied that it depends on several things,
but if you run out of something and have to run to the local store
to get it, it will cost more in some areas than in others.
SENATOR LEMAN said he wanted to compare costs in more than a lineal
way. He wanted to compare more than Anchorage to Wrangell; he
wanted to compare Wrangell to Petersberg and Barrow to Ketchikan
and Bethel.
CHAIRWOMAN GREEN asked if there was opposition to amendment #3.
There were no objections and it was adopted.
CHAIRWOMAN GREEN asked on page 1, line 10, if specifically saying,
"the cost of shipping school materials and supplies," implies that
that's the only extraordinary cost you would consider? She thought
it would make much more sense to say, "the cost of the school lunch
program, the cost of school materials and supplies, shipping,
transportation costs."
She would have preceded that with a phrase "such as" so they don't
get so narrow in meaning.
REPRESENTATIVE WILSON replied that the language at the end of line
12, "other costs that relate directly or indirectly to the
operation of the school," covers a multitude of things.
MR. JEANS said he thought the language allowed them a lot of
flexibility.
CHAIRWOMAN GREEN said she wanted it on the record that this
language was meant to be very, very inclusive.
SENATOR LEMAN moved amendment #4 to delete "shipping" on page 1,
line 12. There were no objections and it was so ordered.
SENATOR WILKEN moved to pass SCS CSHB 203(HES) from committee with
attached fiscal notes and individual recommendations. There were no
objections and it was so ordered.
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