Legislature(1995 - 1996)
02/20/1995 09:05 AM Senate HES
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SHES - 2/20/95
SB 70 PUBLIC SCHOOL FOUNDATION PROGRAM
Number 001
CHAIRMAN GREEN called the Senate Health, Education and Social
Services (HESS) Committee to order at 9:05 a.m. and introduced
SB 70 as the first order of business.
JERRY BURNETT, staff to Senator Randy Phillips, reviewed the
testimony he gave to the committee on Saturday, February 18, 1995.
Number 083
SENATOR SALO asked Mr. Burnett if the numbers from the school price
index of a few years ago would be used as the new differential for
next year. JERRY BURNETT expected that would be a new study which
would result in some changes to those numbers in the previous
study. The school price index would go into effect for the fiscal
year 1997 which would allow time to update the numbers.
SENATOR SALO commented that changing the area cost differential has
been politically difficult for the legislature to do in the past.
She asked Mr. Burnett how Senator Phillips viewed that issue as
operating within the Department of Education or the State Board of
Education. JERRY BURNETT anticipated that it would be somewhat of
a political situation, no matter who changed the differential.
Senator Phillips would prefer some type of a consensus building
format.
SENATOR SALO asked if SB 70 and its elements would meet, or make
the federal disparity test issue more difficult. JERRY BURNETT
replied that Duane Guiley, from the Department of Education, has
indicated that SB 70 would reduce the disparity between school
districts. However, Mr. Burnett stated he could not answer that
question exactly.
Number 144
SENATOR SALO asked what Senator Phillips suggests would happen to
the students in the 35 schools that would close as a result of
enacting SB 70. JERRY BURNETT responded that there are a number of
alternative service delivery methods, such as Centralized
Correspondence Study. These students will be funded at the same
level as the rest of the school district while the funding site
will not receive additional funding. Depending on the district,
the district may still receive $5,000 to $10,000 per student.
SENATOR SALO stated the students would just have to move. JERRY
BURNETT said that the students would not have to move. He
clarified that the school district would still receive funding for
the students, but the district would not receive additional funding
for that site.
SENATOR SALO guessed that these 35 schools would close under SB 70.
JERRY BURNETT specified that decision to close or not would be made
by the local school board; the state would not make that decision.
SENATOR LEMAN asked what incentive SB 70 has to keep salary costs
down for districts. JERRY BURNETT responded that at this point,
there no incentive in the school price index to keep salary costs
down.
SENATOR LEMAN asks if such an incentive could be added to SB 70.
JERRY BURNETT said that Senator Phillips indicated that
incorporating an incentive to keep salary costs down would be
appropriate for the committee to discuss.
Number 215
DUANE GUILEY, Department of Education (DOE), stated that under the
current foundation law, students served on a correspondence model
are added to the largest funding community within each school
district, if that district has a district level correspondence
program. The department has no authority to close a school under
current statute, only the local school board can close a school.
SENATOR SALO asked Mr. Guiley, in his opinion, how many of the 35
schools would close as a result of the change in funding specified
in SB 70. DUANE GUILEY guessed, given the history of some of the
districts, that perhaps half of the 35 schools would close while
the other half would remain open.
SENATOR MILLER asked Mr. Guiley if he could speak to the federal
disparity tax. DUANE GUILEY explained that anything generating
more units for the urban districts would compress disparity down to
a smaller number. In urban districts with a high level of tax
support, local contributions are distributed across fewer units.
Therefore, any change in the formula giving more units to urban
areas would compress disparity, as long as the rural schools do not
receive equivalent unit increases. SB 70 does increase the number
of units to urban areas while decreasing the units in rural areas.
Number 264
SENATOR SALO asked Mr. Guiley to explain his statement that the
disparity would be less. DUANE GUILEY explained that revenue is
currently distributed to districts based on instructional units.
The disparity measure in the State of Alaska is based upon the
relative value of each instructional unit, not a per student
spending level. The state and local revenue is divided by the
number of instructional units a district receives to get an average
unit value for a particular district. Disparity is measured
through the revenue generation through the formula.
CHAIRMAN GREEN inquired as to what happens to a facility when a
district closes a school. DUANE GUILEY noted that most of the
facilities are state owned. The local district must maintain a
facility for one year after closure at the end of which the
facility reverts back to the state. Facilities have been moth-
balled, destroyed, and permanently transferred to the community.
There is currently no standard process for dealing with closed
facilities. In some cases, facility ownership reverts back to
local native corporations.
Number 300
CHAIRMAN GREEN recalled hearing concern voiced at Saturday's work
session regarding instances in which the school also serves as a
community center. She asked if there was an option for communities
to continue using a facility as a community center. DUANE GUILEY
explained that under DOE's disposal procedure, any building owned
by the department can be put up for sale, for transference to
another state entity, or for transference to the local community.
SENATOR SALO asked if DOE had a position on SB 70. DUANE GUILEY
replied that the department did not have a position on SB 70 at the
present time.
SENATOR LEMAN pointed out that the date counting average daily
membership under Section 9 would not be a good date for Elmendorf
Air Force Base and Fort Richardson. He asked if it would be
possible for the military schools to count students on a different
date than other schools.
DUANE GUILEY explained that Section 9 deals with the estimate for
the following school year, not the current school year. The date
was changed in SB 70 because under the current law districts had to
estimate the number of students for the upcoming year before
determining the enrollment in the current year. Section 9 would
allow districts to determine their current enrollment in order to
make projections for the following year. Section 10 and 11 deal
with counts for the current year and the sections would allow a
district to submit written request to the Commissioner to use a
different count date for the current year for determining revenue.
The department's interpretation has been that everyone uses the
same count date within the district. Mr. Guiley suggested that if
the count date posed a problem, then an amendment or a regulatory
interpretation could address the problem. DOE has offered to allow
entire districts to change their count period.
SENATOR SALO asked if the department had explored other models of
school planning which would make the disparity issue more solvable
in the future. JERRY GUILEY stated that DOE has been looking at
various scenarios, but nothing to present at the current time.
Number 359
SENATOR SALO mentioned New Mexico's equalization formula, and
commented that their formula seemed simpler than Alaska's formula.
JERRY GUILEY pointed out that New Mexico wants to employ Alaska's
formula.
CHAIRMAN GREEN called a brief at ease and then inquired as to the
will of the committee regarding SB 70.
SENATOR LEMAN felt that SB 70 could be moved from committee and the
Finance Committee could address the concerns regarding
incorporating incentives to keep salaries down. SENATOR SALO
disagreed with Senator Leman; she expressed the need to work on
SB 70 in HESS due to the bill's policy issues as well as financial
ramifications. She hoped the bill would be held.
Number 398
SENATOR LEMAN made a motion to discharge SB 70 from the Senate
Health, Education & Social Services Committee with individual
recommendations. SENATOR SALO objected to the motion.
A roll-call vote was taken which resulted in Senators Green, Leman,
and Miller voting "Yea" and Senator Salo voting "Nay." Senator
Ellis was not present. The motion passed, therefore SB 70 was
moved out of the HESS committee and forwarded to the next committee
of referral.
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