Legislature(2003 - 2004)
05/18/2003 11:20 AM House FIN
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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
CS FOR SENATE BILL NO. 202(FIN)
"An Act relating to school transportation; relating to
the base student allocation used in the formula for
state funding of public education; and providing for an
effective date."
SENATOR GARY WILKEN, SPONSOR, spoke in support of SB 202.
The legislation raises the Base Student Allocation (BSA) and
addresses pupil transportation through a grant system. He
noted that learning opportunity grants that had accumulated
over the last three years were converted into the student
dollar, which added $2.2 million [to the BSA]. He provided
members with a chart of pupil transportation costs from FY
97 to FY 04 (copy on file). Pupil transportation was funded
at $32.8 million in FY97. The request for FY04 is $58.1
million. The cost of pupil transportation has increased 77
percent; the increase in student population, over the same
time, has increased by 5 percent. The Anchorage Cost of
Living has gone up 14 percent.
Senator Wilken gave a brief history of attempts to address
pupil transportation. In 2000, Senator Torgerson, while he
was the Co-Chair of the Senate Finance Committee, proposed a
grant program, which was not accepted by the Administration.
A second approach was developed to split the increase, which
was not agreed on by the school districts. So nothing was
done. The next Administration issued cuts of 20 percent,
which held. The current grant proposal is a response to
those reductions. He maintained that the issue is one of
managing money. He observed that school districts have been
asked to manage pupil transportation costs, but maintained
that because the school districts have not had their "toes
held to the fire" that there was no motivation to reduce
costs. Under the legislation, school districts would be
asked to present their bills. The rates would be calculated
based on their costs and the number of students. School
districts would be able to keep any savings, which could be
used for other district funding.
EDDY JEANS, MANGER, SCHOOL FINANCE AND FACILITIES SECTION,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT provided
information on the legislation. He explained that the costs
are being passed on to the state of Alaska under the current
reimbursable system. Providers know that the state is
holding the checkbook. He felt that contractors would be
more disposed to bargain if they knew that school districts
had a limited amount of funding.
Vice-Chair Meyer asked how the formula would take into
account special needs children. Mr. Jeans explained that
districts are currently being reimbursed for these routes
and maintained that they would continue to be reimbursed.
Representative Berkowitz asked how the goods and services
that go into cost increases would differ from the basket of
group of goods and services that go into a consumer price
index. Mr. Jeans observed that the Anchorage CPI is built
into every transportation contract. Contracts are negotiated
on a five-year cycle and contractors are aware that it is
100 percent reimbursable by the state. He pointed out that
insurance and fuel costs were built into contracts over the
five-year period.
Representative Berkowitz noted that there was a 77 percent
increase in costs, with only a 5 percent increase in
students. Mr. Jeans responded that the five-year contracts
contain a reimbursement for new buses, which were not offset
later.
CARL ROSE, ASSOCIATION OF ALASKA SCHOOL BOARDS, testified in
support of the current version of the bill, as opposed to
the March 6 Governor's proposal. He emphasized that adequacy
was not enough, and stated that every school district was
currently reducing programs and opportunities for children.
He pointed to the No Child Left Behind Act and the Alaska
Quality Initiative and urged legislators to support the
educational system. He stressed that the future of Alaska's
young citizens are at stake.
JOHN ALCANTRA, NATIONAL EDUCATION ASSOCIATION OF ALASKA,
spoke in support of the legislation. He noted that putting
funding into the BSA allows districts stability of funding
and helps them meet some of the requirements of state
standards. He observed that NEA-Alaska has advocated for a
BSA of $4,280 per student since July of last year.
Mr. Alcantra maintained that $4,280 is a conservative
estimate. It asks for one year of inflationary costs and one
year of unmet needs as identified by business leaders such
as Roger Con, Jim Palmer and Carl Marrs in a report
published two years ago. These leaders asked for a BSA
increase of about $365 per pupil over 5 years plus increases
to deal with the erosion caused by inflation. He noted that
NEA recognizes the budgetary situation of Alaska, but
pointed out that there is a constitutional mandate to fund
education. He concluded that the legislation is another step
closer to the goal of adequately funding K-12 education for
FY 04.
Mr. Alcantra observed that the budget for FY 03 was based on
$20.50/barrel oil and a CBR draw of approximately $950
million. Oil averaged over $28/barrel for the first 10
months of this Fiscal Year, which means the CBR draw will be
about $400-450 million less than anticipated. He pointed out
that K-12 education needs just $28 million or 6 percent of
the CBR savings.
Mr. Alcantra stressed that the increase in the Base Student
Allocation is a short term, one-year fix. He noted that NEA-
Alaska believes the education community should take the
remainder of the school year to identify pupil needs under
the state standards and the No Child Left Behind law. This
data would be the basis for a long-term fix to education
funding. He suggested an addition of $23 million to increase
the pupil allocation. He suggested that the CBR draw had
been decreased due to increased oil prices, and emphasized
this might provide the short-term fix to the foundation
formula. He summarized that the bill would add only about
$2.2 million in new funding for K-12 education in FY 04 and
observed that it would fall short of the needs of the next
year.
JIM FOSTER, ASSISTANT SUPERINTENDENT, GALENA CITY SCHOOL
DISTRICT addressed the affects of the bill on his school
district. The Galena City School District would lose $459
thousand [if the legislation were enacted without
amendment]. There are twelve losers in under the proposal.
The next largest loser is the Valdez School District, which
loses $60 thousand. There were 41 "winners". He noted that
learning opportunity grants in his district pay for a number
of important programs. He requested a provision to hold
districts that would stand to lose harmless. He maintained
that a hold harmless provision would have a minimal cost to
the state.
Co-Chair Harris asked what would happen if student
allocation were increased and the learning opportunity
grants were eliminated in the next year. Mr. Foster stated
that the problem would still exist. He noted that Galena had
3,600 children in the Correspondence Program, outside of the
foundation formula. They would only receive 80 percent of
this funding if it were rolled into the formula, which is a
considerable loss, especially in view of the timing of the
action. He noted that they were not informed about the
change until May 14, after planning and contracts had been
implemented.
Co-Chair Williams stated that they would work on these
provisions with Mr. Jeans.
CSSB 202 (FIN) was HELD in Committee for further
consideration.
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