Legislature(2013 - 2014)CAPITOL 106
02/06/2013 08:00 AM House EDUCATION
| Audio | Topic |
|---|---|
| Start | |
| Overview: Education Funding Outside of the Bsa Formula by Department of Education and Early Development | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 27 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE EDUCATION STANDING COMMITTEE
February 6, 2013
8:02 a.m.
MEMBERS PRESENT
Representative Lynn Gattis, Chair
Representative Lora Reinbold, Vice Chair
Representative Gabrielle LeDoux
Representative Paul Seaton
Representative Peggy Wilson
Representative Harriet Drummond
MEMBERS ABSENT
Representative Dan Saddler
COMMITTEE CALENDAR
OVERVIEW: EDUCATION FUNDING OUTSIDE OF THE BSA FORMULA BY
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT
- HEARD
HOUSE BILL NO. 27
"An Act relating to student counts, unreserved school operating
fund balances, restrictions on school district money, and
estimates for public school funding; and providing for an
effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
ELIZABETH NUDELMAN, Director
School Finance and Facilities Section
Department of Education and Early Development (EED)
Juneau, Alaska
POSITION STATEMENT: Provided the overview on education funding
outside of the BSA formula, on behalf of EED.
MARK LEWIS, Director
Administrative Services
Department of Education and Early Development (EED)
Juneau, Alaska
POSITION STATEMENT: Responded to questions, during the EED
presentation on education funding outside of the BSA formula.
ACTION NARRATIVE
8:02:35 AM
CHAIR LYNN GATTIS called the House Education Standing Committee
meeting to order at 8:02 a.m. Present at the call to order were
Representatives Gattis, Drummond, P. Wilson, and Reinbold;
Representatives Seaton and LeDoux arrived as the meeting was in
progress.
^Overview: Education Funding Outside of the BSA Formula by
Department of Education and Early Development
Overview: Education Funding Outside of the BSA Formula by
Department of Education and Early Development
8:03:04 AM
CHAIR GATTIS announced that the only order of business would be
an overview from the Department of Education and Early
Development (EED) on education funding outside of the base
student allocation (BSA) formula.
8:03:39 AM
ELIZABETH NUDELMAN, Director, School Finance and Facilities
Section, Department of Education and Early Development (EED),
directed attention to the committee packet and a graph, titled
"Unrestricted General Fund Appropriations for K-12 Education,"
to indicate the historical funding progression from fiscal year
(FY) 2009 through the projected funding for FY 14. The bar
graph illustrates the amounts, by year, funding that has been
distributed outside of the formula appropriation. She pointed
out that the annual spending amounts can be read from the table,
at the bottom of the same page, for a more precise figure.
Beginning with the K-12 foundation and pupil transportation
formula funding, she said, the amounts represent the state aid
from the foundation formula and the pupil transportation
formula. These funds come through the public education fund.
The third item on the table is the onetime distributed funds,
which totaled $20 million in FY 12, $25 million in FY 13, and
what is projected to be $25 million in FY 14. Historically, the
state has distributed onetime funding outside of the formula,
and she said that during the seven year period of 2002-2008
there were four years that used this strategy; rather than
incorporate the needed funding immediately into the base
allocation. She then directed attention to the second committee
handout, indicated as a draft document prepared 12/12/12,
listing each school district with the corresponding FY 14
projected amount to be received based on the AADM (adjusted
average daily membership) and the share of the $25 million
onetime disbursement. She explained that, whenever the state
has calculated one-time funding amounts, the calculations are
based on the established formula components taking into
consideration the individual district factors such as size,
operational requirements/cost, and other defining influences.
8:07:37 AM
CHAIR GATTIS asked how the reported disbursements relate
monetarily to the BSA.
MS. NUDELMAN responded that the FY 14, $25 million funding
outside of the formula figure, is equivalent to a raise of
approximately $100.00 in the BSA.
8:08:25 AM
REPRESENTATIVE P. WILSON addressed the PERS/TRS draw down and
asked for the rationale for including it in the report. She
said the raise in the benefit expense was not a fault of the
school districts and the legislature decided several years ago
to handle it separately. Historically, the amount has not been
counted against the schools, but lately it has been appearing in
the reports.
MS. NUDELMAN pointed out that the PERS/TRS funds are included in
the chart, and the FY 14 projection is for $343 million will be
paid into the fund on behalf of the school districts. When the
benefit rates began escalating the state assumed a portion of
the burden. When the rates increased by approximately 40
percent, statute set the district burden, through the foundation
formula, at 12.56 percent, and the state accepted the difference
of about 30 percent. The districts continue to receive this
relief each year and the chart discloses the annual amount
actually paid. The accounting for this benefit has changed, and
will continue to change, due to the directions received from the
nationwide governmental accounting standards board. Currently
it is reported in individual audits for the entities that
receive the benefit, and will be shown in school districts
account disclosures. However, the process that the state
undertook to provide the relief to the districts has not
changed.
REPRESENTATIVE P. WILSON recalled that the decision was made
because it was apparent that the schools could not pay the
benefit debt and continue to function. She asked if it is
counted as part of the comparable $100 raise in the BSA,
previously discussed.
MS. NUDELMAN answered no, and further clarified that the amount
indicated for PERS/TRS on the graph is only the amount paid by
the state.
REPRESENTATIVE SEATON stated his understanding that the total
school district PERS/TRS [shown in the report] is not the school
districts contribution, but the amount that the state
contributes above the school's total. He questioned the
reporting method, considering the PERS/TRS cap that was
established, and asked how this is reflected in other state
agency reports; since the statute was enacted.
MS. NUDELMAN clarified that the amount reported on the bar graph
reflects only the state contribution; districts also contribute
a share, 12.56 and 22 percent, which is not included in this
presentation.
8:15:02 AM
MARK LEWIS, Director, Administrative Services, Department of
Education and Early Development (EED), offered that there is not
a total dollar amount associated in the EED budget for the buy
down of the benefit rate, and suggested that the Department of
Legislative Finance would be a source to provide the figures of
what has been contributed to PERS/TRS on behalf of the state.
The EED rate has remained static, but if there is a varying
contribution rate, to maintain the lower level, it is paid
outside of the department's budget.
REPRESENTATIVE SEATON surmised that the PERS/TRS is paid by the
state, outside of the EED budget and not reflected in the books,
but what it is paid outside of a district's budget it is shown
on the books.
MR. LEWIS agreed that it could be considered in that way;
however, the pay down is on behalf of a state agency.
REPRESENTATIVE SEATON suggested that the reporting method may be
flawed and appears to cause confusion; although this is not due
to a reporting decision made by EED.
CHAIR GATTIS agreed that transparency, on the part of every
department would be helpful.
8:17:45 AM
REPRESENTATIVE P. WILSON stated her understanding that this
benefit pay down amount is not part of what is reported in the
budget sub-committee meetings.
MR. LEWIS said correct, but it is a budgeted item which will
appear in the operating bill; not specific to a department.
REPRESENTATIVE P. WILSON summarized the testimony to mean that
this amount does not appear in any other departmental report,
save EED. If that is the case, she opined that it is not fair.
MR. LEWIS suggested that the reason it has been broken out here
is to provide perspective on the level of support that the
legislature has provided to the districts.
REPRESENTATIVE P. WILSON maintained her opinion and said:
I think it's a way for the department to say to the
school districts: "You're not happy because of what
we're doing, but by gosh look at what we're doing, we
are paying this." And I don't think that that's
right.
8:20:04 AM
ADJOURNMENT
There being no further business before the committee, the House
Education Standing Committee meeting was adjourned at 8:20 a.m.
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