Legislature(2003 - 2004)
03/29/2004 03:30 PM Senate RES
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SJR 31-FEDERAL FUNDING FOR EDUCATION
VICE CHAIR THOMAS WAGONER called the Senate Resources Standing
Committee meeting to order at 3:30 p.m. Present were Senators
Kim Elton, Fred Dyson, Ben Stevens, Ralph Seekins and Vice Chair
Thomas Wagoner. The first order of business to come before the
committee was SJR 31.
SENATOR GENE THERRIAULT, sponsor, said the statistics used in
this resolution were based on the Utah Legislative Council's
fiscal office statistics and he would be referencing a number of
charts during his comments, which follow.
SJR 31 is related to urging the United States Congress
to compensate the State of Alaska for the effect of
federal land ownership on the state's ability to fund
public education. This legislation stems from a
resolution adopted in July of 2002 by the Executive
Committee of the Council of State Governments-West
(CSG-WEST) urging its membership of 13 states to
support and pass joint resolutions expressing how
federal land ownership hinders western states' ability
to fund education. Chairman Ogan and myself are
members of that committee.
The CS before you had one change that was made in
State Affairs and that was adding another "whereas"
paragraph to page 2, line 27, which ties this
resolution to the overall efforts of CSG-WEST and the
other 12 member states. Since this effort began, all
13 states have introduced similar resolutions and all
but four - California, Washington, Colorado and Alaska
- have passed them. This initiative is the result of
research and preparation by the legislature [indisc.}
of the State of Utah....
The Western Governors' Association (WGA) has also
endorsed this resolution, which has been termed APPLE
from the Action Plan for Public Land and Education.
Western states, as a group, are falling behind in
education funding when measured in growth of real per-
pupil expenditures during the period of 1979 - 1998.
Eleven of 12 of the states with the lowest real growth
in pupil expenditure are western states. The growth
rate of rural per-pupil expenditures in the 13 western
states is less than half - 28 percent versus 57
percent - of that, in the 37 other states. Look at
graph 1. On average, enrollment in western states is
projected to increase dramatically while the growth
rates in other states is projected to actually
decrease (graphs 2 and 3)....
In western states the state and local taxes, as a
percentage of personal income, are as high or higher
than other states (graphs 4 and 5). In 1998-99,
western states had 11.1 percent versus 10.9 percent
for the eastern states. In western states, commitment
to education as a percentage of the state budget is
equal to that of other states. In year 2000, western
states' contribution was 32.6 percent versus 32.7
percent for the eastern states. (That is a percentage
of total funds (illustrations 6 and 7).
The problem lies with the federal government and the
enormous amount of land it owns in western states. If
an imaginary line was drawn from Montana to New
Mexico, no state east of that line has more than 14
percent of its land owned by the federal government.
No state west of that line has less than 27 percent of
their land federally owned - with the exception of
Hawaii. Four western states have more than 62 percent
of their land federally-owned. Alaska is one of those
- Idaho, Nevada and Utah (graphs 8 through 11). Number
8 shows that if you draw that imaginary line north to
south, those states that are to the west are the ones
that have the high percentage of federal ownership....
The primary ways that federal land ownership impacts
funding of education in western states is through
enabling acts and property taxes. Most enabling acts
for western states including Alaska promise to give
the state five percent of the proceeds from the sale
of federal land for the benefit of public education.
In 1977, the federal government abandoned its original
policy to dispose of public lands depriving the states
of public education funding estimated to be over $14
billion. This resolution does not recommend that
federally owned lands be sold, only that the states be
compensated as promised. States are not allowed to
assess property tax on federal lands impacting western
states in the amount of over $4 billion annually. The
federal government does provide payment in lieu of
taxes - PILT money - as we know, and we receive some
PILT money here in the State of Alaska, since states
cannot tax federal lands. But the amount of PILT
payments to states in 2001 was only 4 percent of the
annual property tax revenue lost by western states.
This resolution proposes to, number one, create
legislative awareness; two, educate the public; three,
build a western states coalition; and four, petition
Congress to compensate western states. In summary, the
western states are financially harmed in a significant
way by the amount of federal land ownership. The
conclusion is that federal land ownership hinders
western states' ability to fund public education.
That brings us to the question of what is next. CSG-
WEST has formed the APPLE initiative steering
committee, which is chaired by Speaker Marty Stevens
with the Utah House of Representatives and I am also a
member, as President of the Alaska State Senate to
that steering committee. The steering committee will
work like a strategic planning group who will press
the case in Congress and the judiciary. The first
meeting of the steering committee will be in the CSG-
WEST annual meeting that is scheduled to take place in
Anchorage this fall.
SENATOR KIM ELTON said the whereas clauses all talk about the
issue for western states including Alaska, but the resolve just
urges Congress to appropriate just compensation to the State of
Alaska only with copies sent to our congressional delegation. He
asked why just compensation for the other 12 states couldn't be
included.
SENATOR THERRIAULT replied that he wasn't sure, but that would
be a good question for Brian Alread, the Utah Legislative
research staff person who worked on this resolution.
MR. BRIAN ALREAD, Office of Legislative Research, Utah,
responded that there is no official directive limiting this
resolution to the various states.
I think it's simply a matter of each state identifying
the issue in their state and becoming part of a larger
coalition....I don't think there's any reason to not
expand that language if you chose to do so.
SENATOR THERRIAULT pointed out that specific language was added
on page 2, lines 27 - 30, about other states' efforts in passing
the joint resolution on their individual state, but he felt this
resolve could be opened to allow the State of Alaska to advocate
on behalf of the entire group.
SENATOR RALPH SEEKINS noted that Alaska is unique in that
another 47 million acres have been withdrawn from the tax base
by federal fiat, even though they are private lands. He wondered
why they wouldn't ask the federal government to apply the same
formula to those lands.
SENATOR THERRIAULT replied that the committee could consider
adding another whereas clause pointing out the difference if it
desired.
SENATOR SEEKINS reiterated that those lands were removed by
federal requirement and the effect is the same as if they were
federal lands outside of the state's tax system.
VICE CHAIR WAGONER agreed and added that those lands were
supposed to go off of their protected status after 25 years, but
Congress authorized it for another 25 years; then asked, "Why
aren't we receiving compensation because a lot of that land lies
in the unorganized areas, also, of the State of Alaska?"
SENATOR SEEKINS recalled that Texas was the last state to be
admitted to the union without being forced to grant lands to the
federal government as a condition of statehood.
VICE CHAIR WAGONER asked if the committee was interested in
adding another whereas on this issue or put it in separate
legislation.
SENATOR SEEKINS replied that he would prefer dealing with it as
a separate issue. He moved to pass CSSJR 31(STA) from committee
with individual recommendations and attached fiscal note. There
were no objections and it was so ordered.
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