Legislature(2007 - 2008)SENATE FINANCE 532
02/15/2008 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB240 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 240 | TELECONFERENCED | |
| + | HB 273 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
February 15, 2008
9:08 a.m.
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee meeting
to order at 9:08:12 AM.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Charlie Huggins, Vice-Chair
Senator Kim Elton
Senator Donny Olson
Senator Joe Thomas
Senator Fred Dyson
MEMBERS ABSENT
None
ALSO PRESENT
Senator Gary Stevens; Tim Lamkin, staff to Senator Stevens;
Eddy Jeans, Director, Education Support Services, Department
of Education and Early development; Peggy Cowen,
Superintendent, Juneau Schools; Colleen Jones, Juneau, Great
Alaskan Schools; John Alcantra, Government Relations,
National Education Associations (NEA); Carl Rose, Executive
Director, Alaska Association of Alaska School Boards.
PRESENT VIA TELECONFERENCE
Rachael Livingston, Homer; Liz Downing, Vice President; Kiki
Abrahamson, Homer; Leslie Hajdukovich, President Fairbanks
School Board; Woody Wilson Superintendent, Wrangell Schools;
Joe Banghart, Superintendent, Iditorod School District;
Melody Douglas, CFO Kenai Peninsula Borough School District;
Ladawn Bruce, President of Kenai Peninsula Education
Association (KPEA); Anne Kilkenny, Matsu, Great Alaskan
Schools.
SUMMARY
SB 240 "An Act relating to school funding, the base
student allocation, district cost factors, and the
adjustments for intensive services and average
daily membership calculations; and providing for
an effective date."
SB 240 was heard and HELD in Committee for further
consideration.
9:08:20 AM
SENATE BILL NO. 240
"An Act relating to school funding, the base student
allocation, district cost factors, and the adjustments
for intensive services and average daily membership
calculations; and providing for an effective date."
9:08:28 AM
SENATOR GARY STEVENS, gave an overview of the bill. He
underlined accomplishments of the Joint Legislative
Education Funding Task Force (JLEFT) that resulted in a
consensus on priority recommendations reflected in the bill.
He noted that though there are other pieces of legislation
that address the recommendations of the Task Force; SB240 is
the most important piece. He outlined the 4 pieces
addressed in the bill:
The first section addresses decreased enrollment.
Districts with a significant decrease in enrollment
would have a 3 year "step down" transition for
decreasing funds; adding 75% of the difference in
Average Daily Membership (ADM) for the first year, 50%
in the second year, and 25% in the third year. This
helps school districts ratchet down their budgets over
a reasonable period of time.
The second issue addresses funding for intensive need
students. He acknowledged that the multiplier used
over the years at 5 times the Base Student Allocation
(BSA) has been inadequate. The multiplier is increased
to 9, 11, and 13 times the BSA over the next three
years.
The third area addresses the "District Cost Factor"
(DCF) which would establish equitable funding for
students in distant locations. The bill phases in the
ISER study. In the first year DCF is 50% of the ISER
study and then the remaining 50% is spread out over the
next four years (12.5 percent a year for the next 4
years).
The final piece of the bill is the increases of the BSA
by $100 per student in each of the next 3 years.
9:14:52 AM
Senator Huggins asked about the transportation component.
Senator Stevens said though the issue was acknowledged by
the Task force, it was not addressed due to time
constraints.
Senator Stedman notified the Committee that Amendment 1
would be taken up to address the transportation issue.
TIM LAMKIN, STAFF TO SENATOR STEVENS, observed that the
member's packets contained Amendment 1, which was adopted in
the House. As a point of clarification, he noted that HB
273, companion legislation, was currently in the House Rules
Committee waiting scheduling on the House floor.
AT EASE: 9:17:10 AM
RECONVEINE: 9:18:56 AM
Mr. Lamkin said the pupil transportation recalibrations were
a priority of the Task Force but at the time of concluding
business, contract negotiations were not entirely complete.
The intention of the Task Force was to wait for actual
figures for calendar year 2007. The figures have since come
available and are reflected in the Amendment. The Amendment
also proposes additional adjustments for inflation.
Co-Chair Stedman noted the two fiscal notes: DEED #1
appropriates $112,075.00 for K-12 and DEED #2 appropriates
$161,840.00, for the Alaska Challenge Youth Academy.
Senator Hoffman MOVED to ADOPT Amendment 1. Senator Stedman
OBJECTED for purposes of discussion.
Co-Chair Stedman explained that the Amendment adjusts pupil
transportation costs. Senator Stedman WITHDREW his
OBJECTION.
Senator Huggins OBJECTED and questioned the $500,000 loss to
Matsu.
EDDY JEANS, DIRECTOR, EDUCATION SUPPORT SERVICES, DEPARTMENT
OF EDUCATION AND EARLY DEVELOPMENT, addressed Senator
Huggins concerns. He explained that the grant amounts were
recalibrated based on FY 07 actual pupil transportation
costs. When contracts were renegotiated in FY 06, the
contract costs decreased for Matsu, which left a surplus in
revenues over expenditures in their FY 07 financial
statement. He elaborated explaining that the Anchorage cost
price index (CPI) was built into the contracts.
Additionally, because the FY 07 actual costs were used for
the recalibration for FY 09 budget, adjustments were made
for inflation for FY 08 and FY 09. The provision also
adjusts the pupil transportation amount by the Anchorage CPI
for FY 10 and FY 11 at which time contracts will be at the
end of their 5 year period.
Senator Huggins assumed that there would not be a deficit
due to the binding contract, which is in place.
Mr. Jeans said he could not guarentee there would not be a
deficit and explained that the grant program is tied to
student enrollment. Funds increase if enrollment increases,
and decrease if there is a decrease in enrollment. He
reiterated that the recalculation is based on actual costs
for FY 2007, which is the first year of a 5-year contract.
Senator Huggins asked if funding would be adequate provided
there are no changes in student enrollment.
Mr. Jeans responded that there is adequate funding as long
as the district did not add routes. If the district added
routes without any change in student population, then their
contracts would increase with no adjustment in funding.
Senator Huggins clarified that he wanted to ensure there was
a mechanism to address the transportation issues for new
schools and those with increased enrollment.
Senator Huggins WITHDREW his OBJECTION.
There being NO OBJECTION, Amendment 1 was adopted.
9:25:15 AM
RACHAEL LIVINGSTON, HOMER, thanked the Committee for their
work. She emphasized the importance of a higher BSA as well
as additional transportation funding and urged the Committee
to pass the bill.
LIZ DOWNING, VICE PRESIDENT, KENAI PENINSULA SCHOOL BOARD
thanked the Committee for establishing the Joint Legislative
Education Funding Task Force (JLEFT) and spoke in support of
the bill. She specifically supported municipal sharing and
unfunded liability. She added her support for the
consortium for digital learning and the creation of standing
Committees in both the House and Senate, for education. She
underlined that the increase in BSA is imperative and added
that she would like to see a $200 increase. She asserted
that even if the BSA was at $200 the funding for the
initiatives would be underfunded by $300,000.
th
KIKI ABRAHAMSON, HOMER testified with her 5 grade students.
She supported an increase in the BSA at $200. She
underlined the importance of the funding need, stating that
Charter Schools have been underfunded by $200 per student
for 11 years.
LESLIE HAJDUKOVICH, PRESIDENT FAIRBANKS SCHOOL BOARD,
testified in supported of the JLEFT recommendations. She
specifically noted the importance of forward funding
emphasizing that it allows for better planning. She
supported an increase of the BSA to $200 per student.
WOODY WILSON SUPERINTENDENT, WRANGELL SCHOOLS, testified in
support of the recommendations of the JLEFT. He expressed
concern over the potential shortfall in pupil transportation
funding. He explained that approximately 20% of schools are
negotiating pupil transportation contracts and the actual
costs are not yet known. The formula is based on FY 07
calculations. He expected there would likely be a shortfall
and as a result funds will need to be taken from the
instructional budget to support contractual transportation
obligations. He further commented that with the absence of
student improvement grants, the increase of $100 BSA only
allows for the current budget. He maintained that it is not
an actual increase in funds. He added that energy costs,
salaries and insurance have increased. In conclusion, he
urged an increase in the BSA to $200.
JOE BANGHART, SUPERINTENDENT IDITOROD SCHOOL DISTRICT,
addressed the Committee from his high school classroom. He
thanked the Committee for the establishment of JLEFT. He
commented on two areas of the bill: The step down funding
and the increased BSA. He emphasized that the BSA is not
enough even at $200, due to the high cost of energy coupled
with student decline. He further addressed maintenance
costs. He asserted that the increase in the BSA will go to
energy costs not to the classroom.
MELODY DOUGLAS, CFO KENAI PENINSULA BOROUGH SCHOOL DISTRICT,
commended the JLEFT for their work and supported the
recommendations. She encouraged the establishment of a
special Committee for education. She felt the most
significant action would be to effectuate the
recommendations in statute.
LADAWN DRUCE, PRESIDENT OF KENAI PENINSULA EDUCATION
ASSOCIATION (KPEA), concurred with the comments made by
Melody Douglas regarding the creation of a separate
Committee for education and the establishment of the JLEFT
recommendations in statute. Her final comments urged the
Committee to accept the governor's recommendation of the BSA
at $200.
ANNE KILKENNY, MATSU, GREAT ALASKAN SCHOOLS testified in
support of the JLEFT recommendations. She provided examples
of funding cuts to the Kenai School District and the impact
on services. She emphasized that a $100 BSA increase was
not enough and supported the Governor's proposal of a $200
BSA increase. She asked the Committee to apply the funds
calculated for FY 09, to FY 10. She noted examples of how
this would assist in serving the students of the Matsu
district.
9:50:26 AM
Senator Stevens pointed out that the proposed funding
results in a $252 million increase for K-12. He expressed
concern in attempting to increase the BSA to $200 and
stressed the degree of consensus and support for the
recommendations outlined in the bill. He felt if parties
were adamant about the increase, the entire bill may be
compromised.
PEGGY COWEN, SUPERINTENDENT, JUNEAU SCHOOLS, testified in
support of the bill. She underlined the importance of the
increase for intensive need students noting that 3% of
Juneau's students make up that population. She further
pointed out that often funds allotted for the general
student body are used to fund intensive student needs. She
noted that currently Juneau is at half of one percent of the
cost differential in statute. The adjustment from the ISER
study would be 14.5 percent, which more closely reflects the
difference in the cost of providing services in Juneau. The
Juneau Board of Education supports an increase of $100 in
BSA along with the JLEFT recommendations. She echoed Mr.
Wilson's comments regarding the timing and funding of pupil
transportation negotiations. Though she supported the
recalibration of transportation funds she maintained the
amount would not offset costs. She concluded that all
planning and expectations were based on the assumptions that
the approach to PERS and TERS would be made permanent and
urged the Committee's support.
COLLEEN JONES, JUNEAU, GREAT ALASKAN SCHOOLS, testified in
support of the bill and acknowledged two important
recommendations from the JLEFT: The increased costs of
providing education in Alaska's unique geographic regions of
the state with the recommended phase out factors; and the
phase in of increased funding for intensive needs students.
She noted the provision moves funding toward actual costs of
serving high need students. She continued to stress the
importance of forward funding of education for planning
purposes. She urged the Committee to consider an additional
increase in the BSA, or outside the formula, in learning
grant opportunities. She reiterated previous speaker's
comments regarding high energy costs and added that costs of
materials are rising faster than inflation.
JOHN ALCANTRA, GOVERNMENT RELATIONS, NATIONAL EDUCATION
ASSOCIATIONS (NEA), applauded the efforts of the Committee
and JFELT. He acknowledged the delicate balance of
negotiations and consensus regarding the recommendations
outlined in the bill. He read from Fiscal Note #1: "The
Legislature funded 50 percent of ISER in FY 2008 outside the
formula for approximately $50 million and the School
Improvement Grant for approximately $20 million. If the $70
provided in FY 08 is taken into consideration, then the
actual increase in FY 09 over FY 08 is approximately $42
million dollars". He elaborated saying that the real
increase in new money for FY 09 is $42 million. He asserted
that if the BSA is increased to $200 it would provide
another $22 million for K-12, increasing new money to
approximately $64 million. He acknowledged comments by
Senator Stevens regarding the $252 million increase, but
maintained that $70 million should be subtracted out of that
number. He noted the significance of the Legislature
dealing with educational funding early in the session.
10:03:37 AM
CARL ROSE, EXECUTIVE DIRECTOR, ALASKA ASSOCIATION OF ALASKA
SCHOOL BOARDS, testified in support of the bill and said he
was honored to have served on JLEFT. He noted the three
major education issues left on the table from the last
Legislative session: foundation formula, unfunded liability,
and revenue sharing. He acknowledged that the AASB
understands that SB 240 is part of a larger picture. There
was a one time temporary fix in 2007. He underlined that
the only statutory reference for public K-12 education with
regarding foundation formula is FY 07. He said it is
critically important to incorporate the entire package in
statute.
In closing Mr. Rose emphasized that AASB supports the
package contained in SB 240. The organization supports a
$200 increase to the Base Student Allocation and a three-
year phase-in for the District Cost Factor, but not at the
expense of the package. He maintained that SB 240 is the
most important bill of the session addressing the education
of Alaska's children.
10:07:39 AM
EDDY JEANS, DIRECTOR, EDUCATION SUPPORT SERVICES, DEPARTMENT
OF EDUCATION AND EARLY DEVELOPMENT, supported the bill with
one modification to the bill: an increase of the BSA from
$100 to $200, for three years.
Senator Stedman acknowledged the legislation would not be
the "silver bullet" to solve all problems, but felt the
legislation would be a forward step.
SB 240 was heard and HELD in Committee for further
consideration.
AT EASE 10:14:02 AM
RECONVENED: 10:14:20 AM
ADJOURNMENT
The meeting was adjourned at 10:14 AM
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