03/27/1996 01:50 PM House FIN

  HOUSE BILL 230                                                               
                                                                               
       "An  Act  making  appropriations to  the  Department of                 
       Education  for  support of  kindergarten,  primary, and                 
       secondary education and for community schools  programs                 
       for  fiscal  year  1996 and  fiscal  year  1997; making                 
       appropriations from the  constitutional budget  reserve                 
       fund under  art. IX,  sec. 17(c),  Constitution of  the                 
       State of Alaska; and providing for an effective date."                  
                                                                               
  RICHARD CROSS, DEPUTY COMMISSIONER, DEPARTMENT OF EDUCATION,                 
  voiced support of  the committee  substitute adopted by  the                 
  Committee  on 3/26/96,  which  included the  Governor's FY97                 
  request for  funding of  public education  formula programs.                 
  The legislation includes full funding  of the foundation, an                 
  increase of $6.5 million dollars from the current year.                      
                                                                               
  Mr. Cross pointed  out the changes from  the current budget.                 
  The first change  would address the federal  disparity test,                 
                                                                               
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  changing  the REAA federal impact  aid deduction from 90% to                 
  95%, and  providing supplementary aid  to REAA's based  on a                 
  flat rate unit adjustment of $500 hundred  dollars per unit.                 
  It would increase the unit  value in the REAA's so  that the                 
  disparity  would be  just  under 20%.    The second  notable                 
  change  would  be  the  move  of  the  single  site  funding                 
  foundation.                                                                  
                                                                               
  Co-Chair Hanley clarified that the committee substitute does                 
  not make  the switches  of actually  moving the single  site                 
  schools.  That measure is  contained in separate legislation                 
  which currently is moving through the Legislature.  He asked                 
  if that bill  did not pass,  would it require an  additional                 
  $1.2 million dollar allocation.                                              
                                                                               
  EDDY JEANS, SCHOOL FOUNDATION, SCHOOL FINANCE, DEPARTMENT OF                 
  EDUCATION, stated  it would.   If  the other  bill does  not                 
  pass, there would be an additional $1.2 million requested to                 
  "fix"  the  disparity.    Co-Chair  Hanley  inquired  if  an                 
  allocation amount would need to  be indicated for the single                 
  sites.  Mr. Jeans  replied that the single sites  would need                 
  to be itemized as in prior  years.  Co-Chair Hanley provided                 
  the Committee  with  a Department  handout  indicating  last                 
  year's breakdown.  [Copy on file].                                           
                                                                               
  Mr. Jeans  responded to  Co-Chair Hanley's  comment, stating                 
  that if the amounts indicated on  the handout were moved, it                 
  would be consistent with past practice.                                      
                                                                               
  Co-Chair Foster MOVED the allocation amounts  recommended on                 
  the handout.   Representative Brown  questioned if it  would                 
  adjust the dollar amount in the foundation.  Co-Chair Hanley                 
  thought those would be allocations under additional district                 
  support.    There  being  NO   OBJECTION  to  including  the                 
  allocation, it was adopted.                                                  
                                                                               
  Representative Brown  asked  why the  Department decided  to                 
  short-fund the  pupil transportation  line which  would most                 
  dramatically affect  urban districts.   Mr. Cross  explained                 
  that the pupil  transportation request  was for $30  million                 
  dollars, which was  92% of  the FY96 authorized  level.   He                 
  continued  that  in  preparation  for  the  Governor's  FY97                 
  operating budget and at the same time in an effort to reduce                 
  $35  to  $40  million  dollars,  that  reduction  was  made.                 
  Representative Brown asked  the amount needed to  fully fund                 
  transportation for FY97.   Mr. Cross  replied that the  full                 
  funding estimate would be $33.2 million dollars, as a result                 
  from  increased  costs  over  FY96.    He added  that  pupil                 
  transportation was not the only item selected for reduction;                 
  that program  had not been singled out, indicating that many                 
  reductions were made.                                                        
                                                                               
                                                                               
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  Representative Mulder asked if it was a "fair" assumption of                 
  the Governor  that education  was "fully  funded" given  the                 
  proposed reduction.  Mr. Cross responded that  there is full                 
  funding  of   the  education  foundation   program  in   the                 
  Governor's proposed budget.   He advised that it was  a fair                 
  statement  on  the  part of  the  Governor.   Representative                 
  Mulder  disagreed.    He  stated that  pupil  transportation                 
  should  have   been  included   for  full  funding   status.                 
  Representative   Navarre   countered   that  fully   funding                 
  education specifically means funding  the foundation program                 
  unit value.                                                                  
                                                                               
  Representative  Brown   inquired  where   the  school   debt                 
  retirement  would be  included.   Mr. Jeans replied,  in the                 
  past, it was included in the K-12 support funding, although,                 
  sometimes was addressed through  another appropriation bill.                 
  Co-Chair Hanley stated that it had been included in the FY97                 
  operating  budget; the  $94.7  million dollars  includes the                 
  general obligation debt  as well  as the debt  reimbursement                 
  amount for schools.  It is fully funded at full entitlement.