Legislature(2001 - 2002)
03/19/2001 01:30 PM Senate CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 1-FOUNDATION FORMULA INCREASE
SENATOR WILKEN, prime sponsor, testified that this bill increases
the base student allocation for educational funding from $3,940 to
$4,085. The bill recognizes that, due to inflation, it costs more
to operate a school today than it did when the base was set in
1998. The $145.00 increase is composed of two components. The first
is a .9 percent increase that recognizes the inflation rate for
FY01 in Anchorage, AK. The second shows the 13.9 percent
inflationary loss of the per student dollar since FY88. He stated,
"SB 1 takes the 13.9 and divides it by five and suggests a five-
year plan to recoup the purchasing power of the student dollar that
has been lost to inflation since 1988. Multiply $3,940 by 2.78 and
you have SB 1."
SENATOR WILKEN commented that increasingly, parents drop their
children at school and expect to have an educated and well-mannered
child at the end of the day. This costs money and resources. As
performance standards become a reality, schools will be held more
accountable for student learning. Additional classes, remedial
opportunities and programs will make a difference in student
performance but they will also have an impact on the financial
resources of local schools.
SENATOR WILKEN maintained that Alaska's children have the right to
be taught by the very best teachers possible who are held to the
same performance standards as their students. It isn't easy to
recruit and retain quality teachers without adequate funding. This
is particularly problematic for schools that are remote and
isolated. Addressing the teacher shortage experienced in Alaska
means offering salaries and benefits that are competitive in the
professional workforce. K-12 education is a number one priority for
Alaska and should be recognized as such in the state budget.
SENATOR PHILLIPS asked for the total on the fiscal note for SB 1.
SENATOR WILKEN said that if it is added to the 2002 requirement for
the foundation formula it's approximately $30 million. It it's
added to the spending for the 2001 foundation formula it's
approximately $20 million.
SENATOR PHILLIPS said that inflation isn't the only thing that
affects the numbers. It's also based on a per capita or per student
enrollment and that's why there is $10 million less in the coming
fiscal year than the current fiscal year.
SENATOR WILKEN said the reason that $10.5 million less is required
this year has nothing to do with student enrollment. It has
everything to do with an $8 million increase in the amount of money
that organized Alaska is asked to pay for their education. This is
assessed value. There's also about $2.5 million more in Public Law
874 money coming from the federal government.
SENATOR PHILLIPS said there is no 10-year plan or vision for the
State of Alaska and although he doesn't mind doing "something like
this," he's disturbed by the lack of planning. It shows no proof of
leadership.
SENATOR WILKEN shares his frustration but contends that SB 1 offers
a five-year plan for funding K-12 education using inflation as the
guiding economic principle. This legislature cannot pass a 10-year
plan binding the next four legislatures; it needs to work at
melding all 60 legislators' plans on a biannual basis. It doesn't
make sense to hold up educational plans for Alaska's children
because we don't have a guiding master plan for the next 10 years.
"This a component of the ten year plan, a five year plan and a two
year plan. And the fact of the matter is, if we shirk our
responsibility to fund K-12 today we surely will have a difficulty
ten years from now with increased costs due to a non-educated
populace.
CHAIRMAN TORGERSON commented that the Senators were talking about
different things. He doesn't see SB 1 as a five-year plan because
it's continued funding for education.
SENATOR PHILLIPS said that passing SB 1 would obligate future
legislatures to fund it. He would like to develop a vision and then
include SB 1 as a part but without a plan he doesn't see how it
will fit. "It can't go by itself."
SENATOR WILKEN said the bill recognizes the increased costs of
education, teacher shortages and increased costs of accountability.
"This is a one year plan with four more years of suggestions on how
to buy back the power of the student dollar."
SENATOR AUSTERMAN said it's an interesting debate that goes to the
heart of the long-range plan issue. He asked where the $30 million
is supposed to come from.
SENATOR WILKEN said he is encouraging the legislature to fund the
things that are important to him and to the people he represents.
This is what the other 59 legislators are doing as well. If the
money must come from the savings account then so be it; it's a good
use for the savings account. When the savings are gone then another
plan will be devised without taking money away from the working
people of Alaska. It's obvious that the legislature is capable of
solving this type of problem when there is need. The current issue
is the priority placed on the education of Alaskan children, not
where the money comes from.
SENATOR AUSTERMAN agrees that this is a good program and it will
eventually force the development of a long-range plan and make
Alaskan citizens more responsible for education. The savings
account cushion should be used before Alaskans must pay.
Number 226
SENATOR KELLY reminded committee members that there are places in
the budget where there is no discussion about more or less funding.
The Health, Education, and Social Services (HESS) Budget has
formulas attached to it that increase every year. Costs are
increasing and the number of people signing up for services is also
going up. This is what drives most of the budget discussion and yet
it isn't ever questioned. It's a mistake to throw the contingency
of a long-range plan in front of high priority needs for two
reasons. "They're high priority needs. We're down here to do just a
couple of things and one of them is to educate our children."
Second, there is no such thing as a long-range plan. There is only
a plan that is in front of each legislature and, two years at a
time, legislators make decisions about what is before them at the
time. It's not possible to devise a long-range fiscal plan that
will solve future needs of the state. Decisions about need will be
based on the situation at hand.
SENATOR LINCOLN said she is pleased to hear discussion about a long
range fiscal plan as the Democratic Minority has been urging. She's
disturbed that the educational plan is being piecemealed when there
should be a package.
She asked what affect this legislation has on the supplemental
funding floor and what the Governor's task force has recommended.
She's in favor of increasing the base student allocation but she
wants to know what else is needed to educate Alaskan students and
get them through the qualifying exams.
CHAIRMAN TORGERSON cautioned that he would allow latitude in
responding to the question but that the Governor's Task Force
wasn't before the committee.
SENATOR WILKEN said SB 1 has no affect on the supplemental funding
floor. He had no comment on the task force.
TOM ANDERSON, Anchorage School Board member, testified in support
of the concept. He pointed out that inflation has increased about
30 percent in the last ten years while state funding has increased
just five percent. Property assessments have increased markedly,
placing an increased burden on property owners in organized
boroughs to pay for education. Assessments have increased over $8
million statewide. Ten years ago the state paid 73.7 percent of the
budget while local taxes paid 23.7 percent. This year the state
will pay 62.5 percent and local tax will pay 3.3 percent.
MR. ANDERSON said teacher and principal salaries are no longer
competitive causing positions to be open in the Anchorage system.
At the same time, there is a significant increase in the need for
special education and English as a second language (ESL) services.
These are both expensive programs to implement and maintain.
Finally, the Learning Opportunity Grant that was given has been
helpful but isn't sufficient to enable them to meet the mandates of
the Quality Schools Initiative. They are also struggling with
changing curriculum to add standards based instructional materials.
This involves increased time and teacher training. He noted the
board supports making education a priority in any plan.
ERNIE HALL, Educational Funding Task Force member and member of the
State Board of Education, testified in support of SB 1. Senator
Wilken covered most of the issues addressed by the funding task
force and SB 1 is a vehicle to fund what they have recommended.
CHAIRMAN TORGERSON asked what the recommendation was for this
year's increase in the foundation formula.
MR. HALL said it was approximately $34 million.
CHAIRMAN TORGERSON said that the fiscal note for the legislation is
$28.945 million and there is a list of what each district
anticipates it will receive.
He asked whether there were any questions for Mr. Jeans.
SENATOR LINCOLN wondered where that money will come from to pay for
the approximately $29 million over the next five years.
EDDY JEANS, Finance Manager for the Department of Education and
Early Development, said the department doesn't know where the money
will come from at this time. On the fiscal note, it's been costed
out as a general fund increase.
SENATOR LINCOLN asked how the department came up with $28.975
million, while the task force figure is $34 million.
MR. JEANS said the task force went through a laundry list of items
that districts haven't received sufficient funding for over the
last several years due to increased costs. When that list was
costed out, it came to $34.6 million.
[Tape malfunction.]
SENATOR AUSTERMAN moved SB 1 and fiscal note from committee with
individual recommendations.
CHAIRMAN TORGERSON said the bill will be heard in the Health
Education and Social Services (HESS) committee but it is primarily
a finance bill. He asked whether there were objections.
SENATOR PHILLIPS objected because there is no vision or long term
plan in place and he feels that is necessary before any large
appropriations are made. He believes policy could be set this year
to be followed by future legislatures.
CHAIRMAN TORGERSON said planning is necessary but educational
funding shouldn't be held up until a long-range plan is
implemented. He supports moving the bill.
SENATOR LINCOLN said she, too, is concerned about the lack of long
range plans but education is a top priority for the state and those
needs must be addressed regardless. It is her hope that the Senate
HESS Committee will delve into the issue further.
SENATOR KELLY asked when the minority was going to put out its
plan.
SENATOR LINCOLN said it has been discussed in open caucus every
year.
CHAIRMAN TORGERSON said there was objection to moving the bill and
asked for a roll call. Senators Lincoln, Austerman, Kelly and
Chairman Torgerson voted yea and Senator Phillips voted nay. The
motion to move the bill passed four to one.
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