Legislature(2005 - 2006)CAPITOL 106

02/10/2005 11:00 AM EDUCATION

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Audio Topic
11:05:32 AM Start
11:07:40 AM HB1 || HB18 || HB73 || HB30 || HB65
12:34:58 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 1(EDU) Out of Committee
Heard & Held
Heard & Held
Moved CSHB 30(EDU) Out of Committee
Heard & Held
Bills Previously Heard/Scheduled
HB 1 - INCREASE AMT OF BASE STUDENT ALLOCATION                                                                                
HB 18 - INCREASE AMT OF BASE STUDENT ALLOCATION                                                                               
HB 73 - INCREASE AMT OF BASE STUDENT ALLOCATION                                                                               
HB 30 - APPROP: K-12 EDU OPERATING/DEBT EXPENSES                                                                              
HB  65-APPROP: K-12 PUBLIC EDUCATION                                                                                          
CHAIR NEUMAN announced that the  committee would be hearing HOUSE                                                               
BILL NO. 1, HOUSE  BILL NO. 18, and HOUSE BILL  NO. 73, which all                                                               
address  the base  student  allocation used  in  the formula  for                                                               
state funding of  public education; as well as HOUSE  BILL NO. 30                                                               
and HOUSE BILL NO. 65,  which are both acts making appropriations                                                               
for K-12 education operating and school debt expenses.                                                                          
CHAIR  NEUMAN stated  that there  would be  general testimony  at                                                               
this meeting.                                                                                                                   
11:07:40 AM                                                                                                                   
CARL ROSE, Executive Director, Association of the Alaska School                                                                 
Boards, stated that he has submitted written testimony and                                                                      
therefore he would be brief in his comments.  He said:                                                                          
     On  Wednesday January  26, [2005],  I was  on an  audio                                                                    
     conference  from Washington  D.C. with  the large  five                                                                    
     school districts  of the state.   We talked  about some                                                                    
     of the inhibiting factors that  we would face this year                                                                    
     with the budgetary process.   We talked about coming up                                                                    
     with  a reasonable  number that  we  could put  forward                                                                    
     because the association had  not resolved itself behind                                                                    
     a set  number. ... The  reason we had this  meeting was                                                                    
     it was our impression that we  were going to try to ...                                                                    
     fund  education  early so  our  attempt  was to  get  a                                                                    
     number out there that we  could all agree with.  Kenai,                                                                    
     Fairbanks, Anchorage,  Mat-Su, and Juneau  were present                                                                    
     at  this meeting.   We  decided on  a number,  and that                                                                    
     number was  [$]4,995.   I put  that number  out online;                                                                    
     ... I've visited  with most of you here  and I'm trying                                                                    
     get  hold of  as  many people  as I  can,  to get  that                                                                    
     number out.   Since  that time  these boards  have gone                                                                    
     back  and  they've  met   in  their  respective  school                                                                    
     districts,  and  they  have   needs  that  exceed  this                                                                    
     [$]4,995.  [$]4,995  was the number we  decided on, and                                                                    
     we wanted to say that this  number does not meet all of                                                                    
     our  needs, but  it does  create a  positive investment                                                                    
     trend  line in  education. ...  Basically what  happens                                                                    
     is, since 1999, we've been  held constant and ... since                                                                    
     2004  we've started  a trend  line  increase in  public                                                                    
     education.  The members who  were present in this audio                                                                    
     conference  recognized the  need  to call  us behind  a                                                                    
     number  that  was  reasonable,  that  was  responsible,                                                                    
     defendable, and that we could  be part of the budgetary                                                                    
     process.  I don't have to  tell you some of the looming                                                                    
     issues that you  have to deal with, and  we simply want                                                                    
     to  be  part  of  that discussion.    We  decided  that                                                                    
     [$]4,995  was  representative  of  a  number  that  was                                                                    
     responsible;  it does  not meet  all the  needs of  the                                                                    
     schools that  were present.   But  they chose  a number                                                                    
     such  as this  to be  able to  move forward,  and since                                                                    
     then  they've   adopted  some  higher  numbers   and  I                                                                    
     appreciate  the   fact,  and   they'll  be   down  here                                                                    
     advocating  for  that  number.    The  Association  for                                                                    
     Alaska  School  Boards  [ASSB]  is  advancing  [$]4,995                                                                    
     because we  think it  creates that  positive investment                                                                    
     stream  in  education.  ... I'm  being  criticized  for                                                                    
     coming in  with a  lower number than  many of  us need.                                                                    
     This was  the determination that was  made; I've shared                                                                    
     it  with  my  membership.   This  weekend  we  will  be                                                                    
     meeting down here  in the ... Treadwell  Room and we're                                                                    
     going to be trying to  get ourselves together to get up                                                                    
     on a  hill to  give a  number.   [$]4995 is  the number                                                                    
     that ASSB is advancing.   We understand that there is a                                                                    
     need for  more, and ...  if we  can stay on  a positive                                                                    
     trend line, over  a period of time we  can recover from                                                                    
     the last decade and a  half of being held constant with                                                                    
     the exception of enrollment increases.                                                                                     
MR.  ROSE asked  that  the committee  move the  bill  out of  the                                                               
committee so that it could move  on to the House Finance Standing                                                               
11:11:10 AM                                                                                                                   
REPRESENTATIVE SALMON asked  if the $4,995 would  fix the eroding                                                               
floor or the  Public Employees' Retirement System  (PERS) and the                                                               
Teachers' Retirement System (TRS).                                                                                              
MR. ROSE  replied that it  would not;  it would only  address the                                                               
basic student  allotment.  He  commented that those  other issues                                                               
will probably be dealt with later.                                                                                              
REPRESENTATIVE GATTO asked if this was a $420 increase.                                                                         
MR. ROSE answered affirmatively.                                                                                                
REPRESENTATIVE  GATTO remarked  that a  $420 increase  translates                                                               
into a "certain number of millions".                                                                                            
MR. ROSE  replied, "That  is correct.   The  actual number  on an                                                               
increase is  $23 million above  the governor's $62 million."   In                                                               
response  to  Representative Gatto,  he  stated  that this  would                                                               
result in a total increase of just over $85 million.                                                                            
REPRESENTATIVE  GARA  commented  that the  five  school  district                                                               
[representatives]  that  met  to   determine  the  $4,995  [later                                                               
returned to their  home districts] and realized that  in order to                                                               
make any  real progress in  student achievement, they  would have                                                               
to come  up with new numbers.   He noted that  Kenai's new number                                                               
was $5,086 to make material  progress, and Anchorage's new number                                                               
was $5,120. He  asked if Mr. Rose knew what  the new numbers were                                                               
for the other three districts.                                                                                                  
MR. ROSE responded that he did  not have these numbers.  He noted                                                               
that many  other districts are  passing resolutions, but  they do                                                               
not meet at the same time.                                                                                                      
11:13:33 AM                                                                                                                   
CHAIR NEUMAN  mentioned that his  office has received  several of                                                               
those numbers  and he will  make sure that  [Representative Gara]                                                               
receives this information as well.                                                                                              
REPRESENTATIVE  GARA  asked  which   of  the  five  large  school                                                               
districts  will  still  face  cuts,  and  which  ones  will  make                                                               
material progress with a base student allotment of $4,995..                                                                     
MR.  ROSE commented  that only  one of  the school  districts has                                                               
agreed  to the  $4,995, while  the other  districts have  varying                                                               
needs.   He said  that class  size is  a critical,  costly issue.                                                               
Regarding student achievement, he remarked:                                                                                     
     We're in an era  of student accountability.... No Child                                                                    
     Left  Behind is  creating a  standard that  we have  to                                                                    
     meet.  Adequate yearly progress  is a target that we're                                                                    
     all trying  to get  to. ... Once  we identify  kids who                                                                    
     are not  meeting the standard, or  not meeting adequate                                                                    
     yearly progress,  what kind of strategies  and programs                                                                    
     do we have in place to  meet those needs, to have those                                                                    
     kids  be successful?   We  have  to do  this above  and                                                                    
     beyond, and  inside of  our current  appropriation. ...                                                                    
     We ... have  a federal impact that  we're dealing with.                                                                    
     We are  doing a lot of  work that is being  mandated on                                                                    
     us, and we have very  little investment to get it done.                                                                    
     The  number that  I  bring  to you  today  is along  an                                                                    
     investment   trend   that   will   require   additional                                                                    
     investment next year.   The question really  is, "Do we                                                                    
     go for all the  money we can get in one  year, or do we                                                                    
     cause a trend  that continues the investment  so we can                                                                    
     recover from  the last  15 years  of flat  funding with                                                                    
     the exception of enrollment increases?"                                                                                    
REPRESENTATIVE  GATTO commented  that  Mr. Rose's  chart makes  a                                                               
very clear statement.                                                                                                           
MR. ROSE  said that the  chart shows  a positive trend  line from                                                               
2004 going up to 2007.  He said  that he is not talking about the                                                               
2007  appropriation;  that  will  be in  subsequent  years.    He                                                               
reiterated that this  number keeps [this topic]  in the budgetary                                                               
process as part of the discussion and not set aside.                                                                            
CHAIR NEUMAN reminded  the public and the  committee members that                                                               
educational funding,  by the governor's proposal,  would increase                                                               
by $1,021 from 2003 to 2006.                                                                                                    
11:17:04 AM                                                                                                                   
REPRESENTATIVE THOMAS stated that he  had some information on how                                                               
much some  communities are contributing  to hit their  cap level,                                                               
and  he asked  why some  communities don't  contribute more  than                                                               
they do.                                                                                                                        
MR.  ROSE replied  that  this  is a  very  difficult question  to                                                               
answer.  He said:                                                                                                               
     The different  thresholds that we  have [are]  based on                                                                    
     property  value across  the state  and what  people are                                                                    
     willing  to contribute,  and you're  balancing that  up                                                                    
     against  the local  level with  the taxable  properties                                                                    
     and what  they will  be. ... Our  educational community                                                                    
     which is the original  education attendance area [pays]                                                                    
     no  local  contribution  because they  don't  have  any                                                                    
     taxable value.   So that's a pretty broad  spectrum.  I                                                                    
     think that these are local  determinations that are not                                                                    
     only made by  the school board.  As you  well know, the                                                                    
     school  board  is  not   fiscally  autonomous.    We're                                                                    
     dependent  on   our  parent   bodies,  which   are  our                                                                    
     municipalities.   And  it's  that relationship  between                                                                    
     municipalities and school boards  that help to get that                                                                    
     local contribution.   What people  choose to do  at the                                                                    
     local level is purely within  their domain and I really                                                                    
     can't comment on  that.  But I know of  what you speak,                                                                    
     and I've heard this concern elsewhere.                                                                                     
REPRESENTATIVE  THOMAS said,  "I'm  looking at  a  total here  of                                                               
[$]167,995,000  since '02,  ... and  if they're  not [making  the                                                               
maximum] local contribution, we're not  the only one at fault for                                                               
not funding education."                                                                                                         
11:19:12 AM                                                                                                                   
REPRESENTATIVE WILSON commented that  the schools in her district                                                               
have been  hurting for many years,  and they've had to  make cuts                                                               
long before some of the bigger  schools had to start making cuts.                                                               
She said that in her  area, the local municipalities were funding                                                               
up at the cap as long as they could.  She remarked:                                                                             
     It's  a  little  bit  lower  now  because  the  revenue                                                                    
     sharing has  stopped, but up  until that point  many of                                                                    
     them were at the  cap.  And when I look  at some of the                                                                    
     bigger  districts and  see that  ... their  communities                                                                    
     are  not  doing  that,  that is  very  frustrating  for                                                                    
     me.... It's  something that the local  communities, ...                                                                    
     especially those bigger  ones, need to look  at and see                                                                    
     ...  if they're  giving  their all,  like  some of  the                                                                    
     smaller ones are.                                                                                                          
MR. ROSE referred  to a chart that "shows what  was left to reach                                                               
in the cap for some of these communities around Alaska".                                                                        
REPRESENTATIVE GARA stated  that he wanted to be  clear about the                                                               
trend  line,  which  he  said could  be  misinterpreted  by  some                                                               
people.   He remarked that the  schools don't use the  money that                                                               
the [state government] gives to them  for PERS and TRS; that goes                                                               
directly into  a retirement account.   In comparing  state school                                                               
funding to  inflation over the last  five years or over  the last                                                               
ten years, he  said, school funding has  lagged behind inflation,                                                               
if you don't count in the PERS/TRS money.  He stated:                                                                           
     I  don't want  anybody  to walk  out  of here  thinking                                                                    
     we've  been   giving  schools  more  and   more  money;                                                                    
     compared  to their  costs  we've  actually been  giving                                                                    
     them less  and less money.   Two years ago  we actually                                                                    
     cut  their funding  by ten  million dollars,  the total                                                                    
     school budget.   That  doesn't even  include inflation.                                                                    
     Last year we  had a good budget that put  them a little                                                                    
     bit ahead.  Three years  ago it was a hold-even budget,                                                                    
     and four years  ago, and going back  from then, schools                                                                    
     fell behind inflation.  So  the trend line only goes up                                                                    
     if we  add in all  the money  they can't use,  like the                                                                    
     money to count  in inflation and the money  to count in                                                                    
     PERS  and TRS.   You  back those  things up,  the trend                                                                    
     line is going down.                                                                                                        
11:21:30 AM                                                                                                                   
MR. ROSE  responded that this is  the reason for the  request for                                                               
the additional $23 million.   He commented that in the governor's                                                               
proposed  operating  budget, the  money  that  will be  used  for                                                               
instruction and operation  will be decreased from  $46 million to                                                               
$24 million.   He  said, "If  we use the  $62 million,  after the                                                               
PERS and TRS are paid, [it]  is a $24 million increase up against                                                               
the benchmark of $46 million last year."                                                                                        
11:22:17 AM                                                                                                                   
MIKE SIGLER  stated that he  represents Alaska Kids  Count, which                                                               
is  a  parent-led, independent  organization.    He is  also  the                                                               
parent of two  school-age children in Juneau.   He commented that                                                               
in Juneau, the class sizes continue  to grow and "as a result the                                                               
quality  of   our  children's  education  continues   to  erode."                                                               
Harborview Elementary  School, he said, has  a kindergarten class                                                               
of 26 children,  11 of which have special needs.   He stated that                                                               
there  is  a third-grade  class  with  30  children at  Auke  Bay                                                               
Elementary School.  He said:                                                                                                    
     As parents,  we see  the need  for smaller  class sizes                                                                    
     and  know  how  fewer  children in  a  classroom  allow                                                                    
     teachers  more time  for individual  attention to  meet                                                                    
     each  [child's]  learning  needs.   Alaska  Kids  Count                                                                    
     supports  reducing  average  class size  to  reach  the                                                                    
     Juneau  School  Board's  published  class  size  goals.                                                                    
     These are  modest ratios and  do not reflect  an ideal.                                                                    
     For example,  current middle school  class size  ... is                                                                    
     32; the  school district goal  is 30.   It's not  a big                                                                    
     change but it would help in the classroom.                                                                                 
CHAIR NEUMAN reminded Mr. Sigler  that there were many people who                                                               
wished  to testify  and  asked  him to  submit  his testimony  in                                                               
MR. SIGLER continued:                                                                                                           
     Alaska Kids  Count supports  an increase  in foundation                                                                    
     funding  of  approximately  [$]112  million  statewide,                                                                    
     which  is  [$]50  million   more  than  the  governor's                                                                    
     proposed  funding level,  and requires  a base  student                                                                    
     allocation of $5,120, which  matches what the Anchorage                                                                    
     School Board has proposed.   The governor's proposal is                                                                    
     [$]62  million,  an  increase   of  [$]38  million  for                                                                    
     retirement   and  [$]24   million  to   compensate  for                                                                    
     inflation.      Even    assuming   a   $900,000   local                                                                    
     contribution, which in  Juneau does go to  the cap, the                                                                    
     governor's  proposal  requires   $600,000  in  cuts  to                                                                    
     Juneau's schools.  While  Alaska Kids Count appreciates                                                                    
     the governor's  proposal, we ask  the governor  and the                                                                    
     legislature to do more for Alaskan students.                                                                               
11:25:13 AM                                                                                                                   
PEGGY COWAN, Superintendent, Juneau  School District, stated that                                                               
the Juneau  School District  has the same  concerns as  the other                                                               
districts.  She noted that  she can provide information regarding                                                               
cuts  in  writing if  the  committee  members  would like.    She                                                               
     Without  the governor's  proposal  we'd have  untenable                                                                    
     cuts; with the governor's  proposal ... it will require                                                                    
     allocating  all   of  our   fund  balance   except  for                                                                    
     $150,000, which is way less  than 1 percent.  The state                                                                    
     allows 10  percent in fund  balance and we're  going to                                                                    
     be going  down to  a fraction  of a  percent.   We will                                                                    
     also have to make cuts:  staff, in terms in some aides,                                                                    
     councilors,  teachers, and  cut  hazardous bus  routes.                                                                    
     The school  board has  not chosen a  funding level.   A                                                                    
     budget  advisory group  that advised  the school  board                                                                    
     and  met  and  made  some  modest  recommendations  for                                                                    
     increases  in staff,  textbooks, and  technology, which                                                                    
     would add $553, which would  bring it up to [$]5,433 to                                                                    
     the  SA [student  allotment].   At a  minimum we  would                                                                    
     like to eliminate the cuts  that we're making this year                                                                    
     and  help  modestly  with  PTR  {pupil-teacher  ratio].                                                                    
     That number would be [$]5,090.   As Mr. Rose indicated,                                                                    
     ... we've also  been talking to the  ... school board's                                                                    
     association, and our board will  meet, and I imagine it                                                                    
     will be  a compromise of  those numbers.  The  PTR that                                                                    
     we're  suggesting  ...,  the  $5,090,  would  take  our                                                                    
     current primary, kindergarten [to]  second grade, to 20                                                                    
     students from  the 25.   We'd have  25 students  in our                                                                    
     intermediates, and  30s in our  middle school  and high                                                                    
     school,  so  these  are not  extravagant  numbers  that                                                                    
     we're  proposing.   But  they'd  get  back to  what  is                                                                    
     manageable. ...                                                                                                            
MS. COWAN continued:                                                                                                            
     We would  like early funding  if it is  sufficient. ...                                                                    
     Our borough  has funded to  the cap; I'm very  proud of                                                                    
     it and incredibly appreciative of  their support.  Last                                                                    
     year they  had the courage  to raise taxes in  order to                                                                    
     provide the additional money  that ... your legislative                                                                    
     addition  allowed  them  to  add.  ...  We  have  5,314                                                                    
     students.    We  have  328  teachers,  but  that's  234                                                                    
     classroom   teachers,   ...  53   [special   education]                                                                    
     teachers,  11  councilors,  nine English  as  a  Second                                                                    
     Language  teachers,  librarians,   and  music,  and  PE                                                                    
11:28:25 AM                                                                                                                   
REPRESENTATIVE  GARA said,  "Just  so I  understand the  [$]5,090                                                               
number,  that would  let you  avoid cuts  and let  you make  some                                                               
progress on teacher ratios, or just avoid cuts?"                                                                                
MS.  COWAN replied,  "Avoid cuts  and some  progress on  ratios."                                                               
She said that  it would allow the district to  have an average of                                                               
30 kids in the high school  and middle school classes.  She noted                                                               
that  some of  the  shop classes  have to  have  low numbers  for                                                               
safety  reasons.   She said  that it  would allow  the elementary                                                               
school  classes to  have average  size  of 25  students, and  the                                                               
kindergarten classes would  have an average of 20  students.  She                                                               
noted  that Mary  Becker, the  school board  chair, supports  the                                                               
increase and is  next on the witness list, but  Ms. Becker wished                                                               
to give her testimony time to another witness.                                                                                  
11:29:55 AM                                                                                                                   
JOY BEAVER, [student at Juneau Douglas High School], said:                                                                      
     I've  talked  to my  English  teacher  today about  the                                                                    
     things that  she thinks  that should  be changed.   She                                                                    
     says  she agrees  with  me that  we  should reduce  the                                                                    
     class  size and  originally  it's supposed  to be  31.8                                                                    
     average  for a  class, but  in reality  there's ...  38                                                                    
     seniors  in one  class  and 35  juniors  in one  class.                                                                    
     I've  talked to  Mr. Hanley  and  he tells  me that  we                                                                    
     should  have  more  money for  textbooks,  desks,  more                                                                    
     Alaska Native teachers, and training  on racism so kids                                                                    
     won't be  racist. ...  I think  we should  explore more                                                                    
     opportunities to  save more money and  make more money.                                                                    
     So  maybe  we could  get  the  school into  ...  having                                                                    
     fundraisers for next year.                                                                                                 
CHAIR NEUMAN informed  the committee that Ms. Beaver  and some of                                                               
her classmates visited him at his  office earlier in the week and                                                               
he  had  explained  to  the   students  about  how  base  student                                                               
allocation formulas work.                                                                                                       
11:32:06 AM                                                                                                                   
ANDI STORY, Member,  Juneau School Board, and  Alaska Kids Count,                                                               
stated  that she  is the  parent of  two students  in the  Juneau                                                               
School District.  She testified in support of a base student                                                                    
allocation of $5,120, which is the Anchorage School Board's                                                                     
recommendation.  She commented:                                                                                                 
     Our superintendent  spoke well  of ... when  we brought                                                                    
     back the  governor's number to  our district  about how                                                                    
     it would still  mean cuts for Juneau, and  when I would                                                                    
     go out  in the  public, parents  would say,  "Will this                                                                    
     number that  the governor  has given  help us  with our                                                                    
     class  sizes and  other improvements  that we'd  like?"                                                                    
     And  of  course  I'd  have to  say,  "No,  it  didn't."                                                                    
     School boards  across the state wrestled  with, "Should                                                                    
     we  go with  the governor's  number and  use it  in our                                                                    
     planning?", because, if we don't  use it, we would show                                                                    
     massive cuts  and it would really  demoralize staff and                                                                    
     get parents  alarmed again, and they  lobbied hard last                                                                    
     year  for  more  funding   and  [the  legislature  was]                                                                    
     responsive.   But  the  danger ...  of  going with  the                                                                    
     governor's  number is  people  think,  "Oh, this  means                                                                    
     things  are taken  care  of, and  we're  going to  have                                                                    
     improvements," and they won't  call you, and that's how                                                                    
     things are going to happen, is if they call you.                                                                           
MS. STORY continued:                                                                                                            
     As a new  school board member, it's hard  to put things                                                                    
     into context because  I hear that ... we give  a lot of                                                                    
     money to  education, and we're  asking for a  lot more.                                                                    
     And so  what I have  to do  is ... look  for resources.                                                                    
     And I got a hold of  a Education Week, which is put out                                                                    
     by a nonprofit group ...  in Washington D.C., ... [for]                                                                    
     people  who  are  interested in  public  education  and                                                                    
     professionals  and the  public  to raise  the level  of                                                                    
     awareness about what's happening  across the state. ...                                                                    
     They  show ...  that Alaska  ranks  40th out  of 50  in                                                                    
     their education spending per  student, adjusted for the                                                                    
     area cost differential. ... Also  they say Alaska's the                                                                    
     only  state  with a  negative  average  annual rate  of                                                                    
     change  from  1992  to  [2002],  meaning  increases  in                                                                    
     school  spending  did  not  keep  pace  with  inflation                                                                    
     during  that  period. ...  We  did  make progress  last                                                                    
     year,  so  we  are  moving up  and  I  appreciate  that                                                                    
     movement, but it tells me,  in comparison to what other                                                                    
     states  are  spending  on education,  that  we  can  do                                                                    
11:35:11 AM                                                                                                                   
JIM  NYGAARD, Superintendent,  Southeast Island  School District,                                                               
Thorne Bay,  noted that  this is  his first year  in Alaska.   He                                                               
commented that  he is shocked at  the condition of PERS  and TRS,                                                               
and  the  impact  the  deficit  has had  on  the  budget  in  his                                                               
district.  He said, "I  know that, proportionately when I compare                                                               
this district to  Juneau and Anchorage, it's just  a scratch, but                                                               
it's  certainly  a  statewide challenge  and  I  appreciate  your                                                               
support in addressing  some of those issues."   He explained that                                                               
he is  in the process  of developing  next year's budget,  and in                                                               
doing so  he is looking  at "where  the district is  at currently                                                               
and where  the district  was at  last year."   He  commented that                                                               
last year's  huge cuts  in staff and  programs are  shocking, and                                                               
"that's not even  taking into account the additional  hike in TRS                                                               
and PERS for this year, as  well as our health insurance that our                                                               
teachers are dependent  on."  He said that a  lot of his concerns                                                               
have already been addressed, but he emphasized:                                                                                 
     We've become  extremely dependent  on federal  money to                                                                    
     complement some of our efforts,  whether it's trying to                                                                    
     address No Child  Left Behind, [or] some  of our higher                                                                    
     needs  children with  some of  the title  programs. ...                                                                    
     Those programs have all been  cut back. ... The federal                                                                    
     government  promises  to  pay  45  percent  of  special                                                                    
     [education]  costs and  the best  I can  recollect that                                                                    
     they've ever paid was nearly 15  percent.  So we have a                                                                    
     lot of room  that we're making up and,  as our children                                                                    
     get diagnosed  with more and more  difficulties, we are                                                                    
     expected to  step up to  the plate on an  annual basis.                                                                    
     The  other  thing  I'd  like  to  address  is:  we  are                                                                    
     dependent on  federal funding for  programs such  as E-                                                                    
     rate,  and  without E-rate  a  rural  district such  as                                                                    
     Southeast Island  District will not survive.   And once                                                                    
     we're dependent  on certain  technologies, to  pull the                                                                    
     rug out  from underneath  us, with  the loss  of E-rate                                                                    
     funding,  for  example,  our district  has  yet  to  be                                                                    
     approved for  our current year.   So planning  for next                                                                    
     year's   program  implementation,   it   really  is   a                                                                    
     struggle.  ... As  you discuss  the  critical bills  in                                                                    
     front  of you  please  remember the  needs of  Alaska's                                                                    
     children.  ... Appropriate  funding  of education  will                                                                    
     allow our kids to reach their greatest potential. ...                                                                      
11:38:57 AM                                                                                                                   
CHARLENE OSTBLOOM,  Tanana Chiefs  Conference (TCC),  stated that                                                               
the conference represents 42 tribes.  She said:                                                                                 
     Within  our  region,  we have  three  single-site,  one                                                                    
     urban and  four REAA [Rural Education  Attendance Area]                                                                    
     school districts.   TCC has been a  strong advocate for                                                                    
     many  years   of  increasing  the   foundation  formula                                                                    
     funding  for  public  schools   and  will  continue  to                                                                    
     testify  on   the  best  legislative  bill   that  will                                                                    
     accomplish this.   We appreciate  the governor  and the                                                                    
     members  of  the  legislative  body  for  starting  the                                                                    
     discussion of  increasing the foundation  formula early                                                                    
     on  in this  legislative session.   We  also appreciate                                                                    
     the governor's  recommendation for  an increase  to the                                                                    
     funding  to Alaska's  public school  system.   With  so                                                                    
     many  bills that  are  before us  today  in support  of                                                                    
     increasing the foundation formula,  it is difficult for                                                                    
     us to  decide which bill  to support.  In  principle we                                                                    
     support  all bills  that  ask for  an  increase in  the                                                                    
     foundation formula  but are unable  at this  early date                                                                    
     to settle on any one.   For the compelling reasons that                                                                    
     were  outlined in  the  Iditarod  Area School  District                                                                    
     Superintendent [Joe] Banghart's  testimony to the House                                                                    
     Special Committee on Education  on February 8, we would                                                                    
     be remiss if  we did not settle for the  bill that gave                                                                    
     the largest increase to Alaska's public system.                                                                            
MS. OSTBLOOM continued:                                                                                                         
     We intend in the days ahead  to give each bill our most                                                                    
     serious  consideration.    At   this  current  time  we                                                                    
     support  [Anchorage  School District  Resolution  2004-                                                                    
     2005-10  entitled "Resolution  in Support  of Increased                                                                    
     State  Funding  of  the Alaska  Public  School  Funding                                                                    
     Program."] ...  The school members are  requesting that                                                                    
     the governor  and ... the legislature  ... increase the                                                                    
     base student  allocation in  the foundation  formula to                                                                    
     [$]5,120,  which  would   provide  an  additional  $112                                                                    
     million in  state support.   For us  this would  be the                                                                    
     best-case scenario.   We will  continue to  monitor the                                                                    
     bills and will continue to testify for an increase.                                                                        
11:41:20 AM                                                                                                                   
ERNIE MANZIE, Superintendent, Valdez School District, remarked                                                                  
that Valdez is perceived as a very fortunate community with no                                                                  
funding issues or problems.  He said:                                                                                           
     While I  think Valdez  has been  fortunate, we  too are                                                                    
     struggling with  funding issues.   We presented  to the                                                                    
     school  board  just  recently a  balanced  budget,  but                                                                    
     while  that budget  was balanced  and it  was based  on                                                                    
     current base student allocation,  it was developed with                                                                    
     educational cuts that  are not in the  best interest of                                                                    
     the district  here. ... We  support an increase  in the                                                                    
     student  base [allocation].  ...  We also  deal with  a                                                                    
     funding  floor; we  certainly  hope  that there's  some                                                                    
     discussion  about  addressing   that  issue  for  those                                                                    
     districts that  still have the floor.   Especially when                                                                    
     we talk  about looking at  PERS and TRS,  fixes running                                                                    
     through the student base allocation.   There are issues                                                                    
     with  districts that  have a  funding floor  with that.                                                                    
     We are  fortunate in Valdez;  this is a  community that                                                                    
     funds  to the  cap  and  has a  long  history of  being                                                                    
     supportive of the education in  the community.  We also                                                                    
     ...  want to  thank  you for  trying  to address  early                                                                    
     funding. ... As  a principal in the past,  many times I                                                                    
     would be looking at staff that  would have to be let go                                                                    
     in  a building  because  of  budget uncertainties,  and                                                                    
     then  two months  later watch  those same  people being                                                                    
     rehired  into  different  buildings.    And  it's  just                                                                    
     frustrating, and  can be disruptive to  the educational                                                                    
     process. ...  As we struggle with  funding, [the Valdez                                                                    
     school district's]  success is being compromised  as we                                                                    
     continue to  wrestle with these  funding issues.   So I                                                                    
     would certainly encourage you  to support the necessary                                                                    
     increase for the school districts.                                                                                         
11:44:25 AM                                                                                                                   
REPRESENTATIVE GARA asked if Mr. Manzie would speak to                                                                          
[legislators] outside of this committee also regarding the                                                                      
funding floor issue.                                                                                                            
MR. MANZIE replied that he will be in Juneau next week and will                                                                 
do that.                                                                                                                        
11:45:08 AM                                                                                                                   
DOUG JOHNSON, Valdez School Board, focused on the funding floor                                                                 
issue and said:                                                                                                                 
     It's not  just us;  it's a  lot of  other districts....                                                                    
     It's a big problem for a  lot of people, and I ask this                                                                    
     year, so we  don't have to go through what  we did last                                                                    
     year with separate  bills ,... it needs to go  away.  I                                                                    
     think it was something that was  set up for a reason in                                                                    
     [1998] ...  but it's taken a  lot of hits for  a lot of                                                                    
     the districts  ... and  I would hope  that if  PERS and                                                                    
     TRS relief  is rolled over  in the student  dollars, at                                                                    
     the minimum, as we do  it, something will be taken care                                                                    
     of so  we do  not have  to just  have the  districts go                                                                    
     with 60  cents on the  dollar, or whatever it  would be                                                                    
     per district.... It  is ... one of  the bigger problems                                                                    
     for some of  the smaller districts here.   For us doing                                                                    
     a budget  is not  fun; we've lost  six teachers  in the                                                                    
     last three  years that we  have not replaced.   We went                                                                    
     through a very tough  negotiation that lasted two years                                                                    
     that  were  quite  strong  and  to  get  our  teachers'                                                                    
     contract back  in line.... We're trying  to cut dollars                                                                    
     on other  things.  The  city takes  care of us  here to                                                                    
     the  cap but  the cap  is depreciating  here as  far as                                                                    
     taxes  are concerned.  ... I  would hope  that when  it                                                                    
     comes to  the ... people  that are running  the funding                                                                    
     floors there,  I'd like  to see  it go  away.   I think                                                                    
     it's something that  needs to go away,  and we're going                                                                    
     to  be trying  to address  that next  week while  we're                                                                    
     down there.  But I would  at least hope that as we roll                                                                    
     things over  that we would  not have to have  people go                                                                    
     back out and,  as you do a bill, that  the PERS and TRS                                                                    
     part of  it does not  count towards the  funding floor.                                                                    
     ... And  then we  get a  dollar-for-dollar of  PERS and                                                                    
     TRS relief without  having to go back  through and take                                                                    
     the chance of losing it.                                                                                                   
11:47:49 AM                                                                                                                   
JENNIE HAMMOND stated that she lives in Nikiski and has a                                                                       
kindergartener and a prekindergartener.  She commented:                                                                         
     I  am excited  that  with [the  education funding]  the                                                                    
     Kenai  School District  will lower  PTR.   This is  the                                                                    
     number one concern of parents  and community members in                                                                    
     the district, which is why I  can ask that you even add                                                                    
     more  into  the foundation  formula.    With this,  the                                                                    
     commitment  by the  Kenai School  District is  to lower                                                                    
     the PTR even  more, bringing back some  of the teachers                                                                    
     we  lost three  years ago.   Some  of our  schools have                                                                    
     classes of over 30 students.   The teachers are doing a                                                                    
     terrific  job but  this  is  not fair  to  the kids  or                                                                    
     teachers.    It  is  sending a  mixed  message  to  our                                                                    
     children,  that education  is not  the priority  of the                                                                    
     state.  [$]5,200  is the amount the  district says they                                                                    
     need, if not  more.  School board members  are there in                                                                    
     Juneau;  they have  all the  facts.   Please listen  to                                                                    
     them.  Parents have told them their concerns.                                                                              
MS. HAMMOND continued:                                                                                                          
     Please  support  forward  funding.   This  would  allow                                                                    
     school districts to plan their  budgets and to not lose                                                                    
     teachers due to pink slips.   In order to make children                                                                    
     first, we must  put aside everything in  order to truly                                                                    
     do just that.  I volunteer  in my son's class, and I am                                                                    
     the coordinator  for the Box Tops  and Campbell's Soups                                                                    
     Labels  For   Education.    I  help   with  the  parent                                                                    
     preschool program  at Nikiski Northstar and  go the PTA                                                                    
     and  school board  ...  meetings.   Plus  I  am on  the                                                                    
     instructional committee at Nikiski  Northstar.  I truly                                                                    
     do not know  what else I could do to  let you know that                                                                    
     the  education funding  for  Kenai  School District  is                                                                    
     lacking in  adequate funding due  to the cost  of doing                                                                    
     business in the Kenai Peninsula.                                                                                           
11:49:54 AM                                                                                                                   
MARY FRANCIS, Executive Director, Alaska Council of School                                                                      
Administrators, had the following comments:                                                                                     
     I had  a meeting on  Tuesday with the ASA  Board, which                                                                    
     is   the   superintendent's    association   board   of                                                                    
     directors, and ... I wanted  to speak to the issue that                                                                    
     some  of you  have spoken  to me  privately about,  and                                                                    
     that is the frustration ...  you feel about getting the                                                                    
     districts and the superintendents  in the districts and                                                                    
     the  school boards  to settle  on a  particular number.                                                                    
     My  board,  the   superintendents'  association  board,                                                                    
     discussed the  reason that  that's difficult.  ... Each                                                                    
     district   has  it's   own  unique   circumstances  ...                                                                    
     Recently,  with  federal government  budgets  released,                                                                    
     that is  going to  greatly impact  vocational education                                                                    
     at the  state level and  the local level....  [That] is                                                                    
     another  example  of  a   moving  target;  people  just                                                                    
     learned about  that this  week.   And so  now all  of a                                                                    
     sudden districts  that perhaps were relying  on federal                                                                    
     Carl  Perkins money  are  suddenly  saying, "...Now  if                                                                    
     we're  going  to  have a  decent  vocational  education                                                                    
     program, we're going to have  to cough up money in that                                                                    
     area too."  So I  just wanted to share that information                                                                    
     with the committee and of course we support increased                                                                      
     base student allocation.                                                                                                   
11:52:37 AM                                                                                                                   
BILL  BJORK,  President,  National Education  Association  Alaska                                                               
(NEA-Alaska),  commented   that  he   has  submitted   a  written                                                               
testimony  as well.    He  said that  the  committee members  are                                                               
seeing different  requests from districts around  the state which                                                               
reflect the different needs among  Alaska's school districts.  He                                                               
remarked, "This is going to  continue until we finally agree upon                                                               
what it  will take  to meet  Alaska's constitutional  mandates to                                                               
...  establish and  maintain a  public education  system open  to                                                               
all."   He explained that the  second issue he'd like  to address                                                               
is class size.   He asked the committee not  to divide the number                                                               
of students by the number  of certificated employees because that                                                               
doesn't reflect true class size.   He pointed out that the number                                                               
of  certificated employees  includes councilors,  librarians, and                                                               
others who deliver  essential services to students, but  do so in                                                               
smaller groups  or with  individuals.  He  said, "The  class size                                                               
question is,  'How many  students are in  each classroom  as each                                                               
grade level?'  ... True  class size  is the  critical information                                                               
for you during your deliberation."                                                                                              
11:54:25 AM                                                                                                                   
REPRESENTATIVE  THOMAS  asked  Mr.  Bjork  if  he  or  NEA  would                                                               
"support going into the permanent fund to fund education."                                                                      
BILL  BJORK  replied  that  last   year  [the  NEA]  supported  a                                                               
mechanism  by which  earnings from  the permanent  fund could  be                                                               
used in a  way, "but it's a complicated issue  and we don't think                                                               
that this  is an issue  necessarily for this  year.  But  ... the                                                               
long-term funding for state government  and the required services                                                               
may require us to look at that hard choice into the future."                                                                    
11:55:27 AM                                                                                                                   
REPRESENTATIVE  THOMAS  commented,  "I  don't want  to  leave  my                                                               
children burdened with a big problem."                                                                                          
BILL  BJORK  responded  that  the  children  of  Alaska  get  one                                                               
opportunity at  a quality education and  if they are going  to be                                                               
qualified for  well-paying jobs  into the  future, they  need the                                                               
best public  schools possible.   He said, "We  think of it  as an                                                               
opportunity rather than a problem."                                                                                             
11:56:18 AM                                                                                                                   
CHAIR NEUMAN  closed testimony with  the reminder that  those who                                                               
wish to testify can do so at the next committees.                                                                               
11:56:40 AM                                                                                                                   
REPRESENTATIVE  GATTO stated  that as  the  sponsor of  HB 1,  he                                                               
would like to  offer Amendment 1, which changes  the student base                                                               
allocation to $4,896.                                                                                                           
REPRESENTATIVE WILSON asked to please clarify this.                                                                             
CHAIR  NEUMAN explained  that this  amendment would  make a  $307                                                               
increase per student.                                                                                                           
11:57:50 AM                                                                                                                   
REPRESENTATIVE GATTO  clarified that his Amendment  1 is actually                                                               
a committee substitute.   [He moved to adopt CSHB  1, Version 24-                                                               
LS0001\F, Mischel, 2/9/05].                                                                                                     
REPRESENTATIVE THOMAS  asked if  that was a  motion to  adopt the                                                               
11:58:10 AM                                                                                                                   
CHAIR  NEUMAN replied,  "I believe  that was  a motion  to adopt.                                                               
Any  objections to  this?"    There being  no  objection, CSHB  1                                                               
Version F was before the committee.                                                                                             
11:58:34 AM                                                                                                                   
The committee took an at-ease from 11:58 to 11:59 a.m.                                                                          
11:59:48 AM                                                                                                                   
CHAIR  NEUMAN clarified  that CSHB  1 Version  F was  adopted for                                                               
discussion,  and  stated that  the  CS  increases the  governor's                                                               
original  proposal  of $63  million  to  about $65  million;  the                                                               
governor's increase  was a  6.5 percent  increase over  last year                                                               
and the CS is a 7 percent increase over last year.                                                                              
12:00:42 PM                                                                                                                   
REPRESENTATIVE GATTO stated that the previous student base                                                                      
allocation was $4,576, and the allocation proposed in Version F                                                                 
is $4,896, a $320 increase.                                                                                                     
12:02:09 PM                                                                                                                   
CHAIR NEUMAN commented:                                                                                                         
     Our main  purpose today  here is to  try and  make sure                                                                    
     that  we do  as much  as we  can to  move this  process                                                                    
     along.   This is the first  step in a long  process.  I                                                                    
     think what we're going to try  and do here today ... is                                                                    
     to try  and provided  further incentive for  a two-year                                                                    
     funding for  schools, extension of the  70/30 bonds for                                                                    
     packages,  possibly pay  off the  floor.   We have  not                                                                    
     received  yet  the   legislative  budget  and  auditing                                                                    
     findings  that are  related to  the  cost of  education                                                                    
     increases  last   year  yet.  ...  There's   a  lot  of                                                                    
     unanswered questions  out there yet....   I have talked                                                                    
     to  some  of  the  school districts  and  some  of  the                                                                    
     leaders of the educational  communities, and a priority                                                                    
     to  them right  now  is  to make  sure  that this  does                                                                    
     continue through  the process.   There will  be further                                                                    
     time  to  talk  on  this;  it will  be  going  to  your                                                                    
     committee and HHES [House  Health, Education and Social                                                                    
     Services  Standing Committee]  next. ...  It is  pretty                                                                    
     important that we try and  move this along as per their                                                                    
12:03:31 PM                                                                                                                   
CHAIR NEUMAN turned attention back to the CSHB 1 Version F.                                                                     
REPRESENTATIVE GARA [made a motion to adopt] Amendment 1 labeled                                                                
24-LS0142\G.1, Mischel, 2/10/05.                                                                                                
REPRESENTATIVE THOMAS objected.                                                                                                 
REPRESENTATIVE GARA explained that Amendment 1 erases the                                                                       
remaining years of the "falling floor" in the foundation                                                                        
formula.  He said:                                                                                                              
     Currently  this  year  there  still  remain  13  school                                                                    
     districts  that will  continue to  lose  funding.   The                                                                    
     community  of Valdez  will  lose  another $119,000  for                                                                    
     their base student allocation  money.  Communities from                                                                    
     Pelican  to  Iditarod  to the  Lower  Kuskokwim  school                                                                    
     district will  lose substantial sums  of money.   These                                                                    
     are places  that are grappling with  rising fuel costs,                                                                    
     ... some of which have  lost even their basic fine arts                                                                    
     curriculum,  just  to  maintain  the  basic  levels  of                                                                    
     services in  their communities.   And so for a  cost of                                                                    
     roughly  $2 million  we can  eliminate  ... the  future                                                                    
     impact  of this,  what's  called  the 'falling  floor'.                                                                    
     And the reason  that's so important is if  you tried to                                                                    
     come  up  with a  base  student  allocation number  for                                                                    
     these 13 school districts ...  that would equate to the                                                                    
     amounts  of money  that they're  losing in  the falling                                                                    
     floor, that  number would be something  like $6,000 per                                                                    
     student,  and we  obviously can't  afford  to do  that.                                                                    
     But for these  13 school districts we  can protect them                                                                    
     at a  cost of about  $2 million by just  preventing the                                                                    
     foundation formula from continuing to fall.                                                                                
12:05:46 PM                                                                                                                   
REPRESENTATIVE GATTO  clarified that  it is  also referred  to as                                                               
the  "eroding  floor".    In  order  to  give  the  committee  an                                                               
historical  perspective of  this, he  pointed out  that when  the                                                               
funding  formula  was established,  it  seemed  that some  school                                                               
districts were receiving too much money.  He said:                                                                              
     The  way they  made  the adjustment  on districts  that                                                                    
     received too  much money was  to say, "We will  not cut                                                                    
     the amount of money you're  receiving.  We will keep it                                                                    
     there  and  we will  call  it  a  floor."   But  as  we                                                                    
     increase money  for these  schools that  were receiving                                                                    
     too  much money,  we  will erode  the  floor until  the                                                                    
     floor is  completely eroded and  then the  formula will                                                                    
     become  the same  for everyone.  ... The  way they  did                                                                    
     that  was to  say, "We'll  give  you 60  cents on  each                                                                    
     increase  dollar rather  than  a dollar  for a  dollar,                                                                    
     until  you   have  essentially  finished   eroding  the                                                                    
     floor."  So  there was a justification  for doing this;                                                                    
     if  we were  to at  this  moment wipe  out the  eroding                                                                    
     floor, we would  essentially be giving a  bonus to some                                                                    
     schools but not others, which,  while it's a fine idea,                                                                    
     ... that  money has  to come  from somewhere,  and that                                                                    
     money would come from some  other school districts that                                                                    
     did not  qualify for having the  eroding floor present.                                                                    
     ... It  was justified back  then; it was agreed  to ...                                                                    
     by  the  districts  that had  the  eroding  floor  that                                                                    
     simply  avoided  the  immediate penalty  of  a  drastic                                                                    
     reduction in favor of the eroding floor.                                                                                   
12:07:49 PM                                                                                                                   
REPRESENTATIVE GARA responded  that he has heard  from several of                                                               
the districts  "that are suffering  from the eroding floor".   He                                                               
noted that Alaska  Gateway is no longer able to  provide any fine                                                               
arts  instruction,  and  that the  Iditarod  School  District  is                                                               
facing  a $500,000  deficit this  year and  this would  help them                                                               
with at least $100,000 worth of it.   He stated that all of these                                                               
communities are suffering; many  are facing increased fuel costs.                                                               
He commented,  "For a very small  amount of money we  can protect                                                               
some  school districts  that  really aren't  ...  bathing in  the                                                               
luxury of excess funds but are  ... suffering from the reality of                                                               
inadequate funds."                                                                                                              
12:08:50 PM                                                                                                                   
REPRESENTATIVE  SALMON remarked  that  all  the school  districts                                                               
that the  committee had heard  testimony from had asked  for more                                                               
money.   He  pointed  out  that the  legislature  could spend  $2                                                               
million  to  help  these  school  districts  "get  out  of  their                                                               
financial mess."  He continued:                                                                                                 
     The problem is not only  with the big school districts;                                                                    
     we're  having  real  problems  in  the  smaller  school                                                                    
     districts. ... It's  a money problem, both  of them are                                                                    
     money problems, and we should  look at that favor, that                                                                    
     Senate Bill 36, never did  the rural community any good                                                                    
     to begin with.                                                                                                             
12:09:57 PM                                                                                                                   
CHAIR NEUMAN  recognized the comments offered  by Representatives                                                               
Salmon  and Gara.   He  recommended that  they put  together some                                                               
type of bill that addresses the eroding floor issue alone.                                                                      
12:10:18 PM                                                                                                                   
REPRESENTATIVE  THOMAS commented  on the  [eroding floor  issue]:                                                               
     People have different  ideas of how it  happened, and I                                                                    
     was there, and I'm not going  to go into the details of                                                                    
     it but  we didn't support  it then and I  don't support                                                                    
     the idea  now.  I think  with No Child Left  Behind all                                                                    
     you do is continue to open  that gap in the areas.  And                                                                    
     if I knew  for sure those were the  problem districts I                                                                    
     think we're  remiss for  not addressing  this.   But [I                                                                    
     asked Representative  Salmon] earlier about  putting in                                                                    
     a  bill  to  address  it separately.    And  I've  been                                                                    
     talking to  people; I think  we don't need a  waiver in                                                                    
     Alaska  for  No  Child  Left  Behind  as  long  as  you                                                                    
     continue to treat  the rural districts and  some of the                                                                    
     school districts  [fairlike]. And it was  perceived ...                                                                    
     that they  were getting excess money;  my understanding                                                                    
     was, back  then it was  more about a  bilingual problem                                                                    
     and special  needs. ... My  memory of that ...  and I'm                                                                    
     trying to  be very quiet on  that because I know  a lot                                                                    
     of the history and I could get in trouble later on.                                                                        
12:11:31 PM                                                                                                                   
REPRESENTATIVE LYNN objected to Amendment 1.                                                                                    
12:12:14 PM                                                                                                                   
REPRESENTATIVE  WILSON  commented  that   this  problem  [of  the                                                               
eroding  floor] came  about because  some districts  thought that                                                               
rural districts were getting too much money.  She said:                                                                         
     It's  ridiculous  to  think   that  some  schools  were                                                                    
     getting  too  much  money.  ...   I  don't  think  that                                                                    
     probably was  really happening. ... But  anyway we have                                                                    
     to deal  with what  we have  now. ...  I agree  that we                                                                    
     should get rid  of this problem.  We should  get rid of                                                                    
     this ... I think it's  a good amendment.  [But] because                                                                    
     we've got so  many different things and  so many issues                                                                    
     that we're dealing with right  now, I'm concerned about                                                                    
     what we're passing  on to finance. ... It  is a problem                                                                    
     though; there's no doubt about it.                                                                                         
12:13:21 PM                                                                                                                   
REPRESENTATIVE  THOMAS objected  to  Amendment  1 and  reiterated                                                               
that he has offered  to be a cosponsor of a  bill to address this                                                               
issue rather than put it on HB 1.                                                                                               
A  roll call  vote was  taken.   Representatives Gara  and Salmon                                                               
voted in  favor of Amendment  1.  Representatives  Gatto, Neuman,                                                               
Lynn, Thomas, and Wilson voted  against it.  Therefore, Amendment                                                               
1 failed by a vote of 2-5.                                                                                                      
12:14:25 PM                                                                                                                   
REPRESENTATIVE GARA moved [to adopt] Amendment 2.                                                                               
REPRESENTATIVE LYNN objected.                                                                                                   
REPRESENTATIVE GARA said:                                                                                                       
     This is the  education committee.  We're  the ones that                                                                    
     have  heard testimony  from the  school districts.   At                                                                    
     this point in  the session, this is  the committee with                                                                    
     the  most expertise  on what  the  schools' needs  are,                                                                    
     what we need to do  to enhance student achievement.  If                                                                    
     another  committee decides  at  some  point that  under                                                                    
     their purview  there's something wrong with  this bill,                                                                    
     then   they'll   express   those  concerns   in   those                                                                    
REPRESENTATIVE GARA continued:                                                                                                  
     Frankly, I'm  convinced by the [Alaska  Kids Count] and                                                                    
     the  Anchorage  School  District  testimony  about  the                                                                    
     education funding number that  they requested.  I think                                                                    
     this is  a year  where we  have a  chance to  make real                                                                    
     progress.   This is a  year where we shouldn't  just be                                                                    
     happy  with the  status quo  [that] 50  percent of  our                                                                    
     low-income students  fail the state's  benchmark exams.                                                                    
     This is  a year we  shouldn't be happy with  the status                                                                    
     quo that ...  Alaska sends a smaller  percentage of our                                                                    
     students to college than 47 other states.                                                                                  
REPRESENTATIVE GARA explained  that Amendment 2 is  an attempt at                                                               
a  compromise number  for base  student allocation  based on  the                                                               
number  requested by  the Kenai  Peninsula School  District.   He                                                               
pointed out that  their request was a base  student allocation of                                                               
$5,086, which is close to  what the Anchorage School District and                                                               
Alaska Kids Count  had recommended of $5,120.   He commented that                                                               
a $5,086  base student allotment  would add about $40  million to                                                               
the  governor's budget  request.   He  said  that the  governor's                                                               
request  and  the current  committee  substitute  propose a  very                                                               
similar amount, and  would require a K-12 school  budget of about                                                               
$820 million.  He said:                                                                                                         
     For  $820 million,  we've heard  from school  districts                                                                    
     that  will make  essentially no  progress; in  very few                                                                    
     school  districts  slight   progress;  in  many  school                                                                    
     districts,  large steps  backwards.   So  we can  spend                                                                    
     $825 million  to do  very little, or  we can  spend ...                                                                    
     $860  million to  do something  real.  ... This  number                                                                    
     would  allow the  Kenai  Peninsula  School District  to                                                                    
     restore some  teachers they've cut over  the last three                                                                    
     years.   It would allow  other school districts  to add                                                                    
     some  teachers, to  come up  with a  palatable teacher-                                                                    
     student ratio.   It  would allow us  to make  some real                                                                    
     progress.   If we don't  adopt a number like  this ...,                                                                    
     the impression  among everybody is  going to  be [that]                                                                    
     we've  spent more  money on  schools,  what do  schools                                                                    
     have to show  for it. ... Their  response, in fairness,                                                                    
     is going to  be: we didn't give them any  money to hire                                                                    
     more teachers.   We gave them money to  deal with their                                                                    
     retirement   problem;  that   money's   going  into   a                                                                    
     retirement account.   We gave  them money to  deal with                                                                    
     some  of the  problems of  inflation.   We didn't  give                                                                    
     them enough  money to deal with  increasing fuel costs,                                                                    
     because we  changed the law  a few  years ago in  a way                                                                    
     that  doesn't give  school districts  full compensation                                                                    
     for their  fuel costs.  ... This  number builds  a fair                                                                    
     compromise.  I'm hopeful that  as the bill goes through                                                                    
     the committee process, people  will give more attention                                                                    
     to the  slightly higher number  that some of  the other                                                                    
     school districts have asked for.  ... I think this is a                                                                    
     responsible way  to deal with  some of  the educational                                                                    
     problems in  the state and  to at least make  some real                                                                    
     progress.   And  I think  that  is the  charge of  this                                                                    
REPRESENTATIVE GARA moved [to adopt] Amendment 2.                                                                               
12:18:18 PM                                                                                                                   
REPRESENTATIVE LYNN commented:                                                                                                  
     I would  have to disagree  that this committee  has the                                                                    
     most  expertise  in education.    Perhaps  we have  the                                                                    
     greatest  focus  on education  ...  that's  what we  do                                                                    
     here.  But  I wouldn't want to  denigrate the expertise                                                                    
     of other  committees.... We have  to take  the proposed                                                                    
     amount  ...  and  put that  into  the  larger  picture.                                                                    
     Everything else has to be funded in this state.                                                                            
12:19:15 PM                                                                                                                   
REPRESENTATIVE WILSON asked, "How much money are we talking                                                                     
about here?"                                                                                                                    
REPRESENTATIVE  GARA replied  that  the  governor's proposal  and                                                               
Representative  Gato's  bill,  if   left  unamended  would  spend                                                               
roughly $825 million  on K-12 this year.  He  stated out that his                                                               
amendment would spend about $865  million; about $40 million more                                                               
than the governor's budget.                                                                                                     
CHAIR  NEUMAN noted  that  the  amendment is  to  spend $200  per                                                               
student more than proposed in the  CS, which equates to about $40                                                               
million in revenue for the entire state.                                                                                        
12:20:16 PM                                                                                                                   
REPRESENTATIVE   SALMON   commented    that   the   experts   and                                                               
professionals  who are  testifying are  the ones  who advocate  a                                                               
higher number.   He said,  "We need  to start listening  to these                                                               
people.     We're  not   experts  here   but  these   people  are                                                               
CHAIR NEUMAN stated that this is  just the tip of the iceberg and                                                               
there are  many other educational  needs out there and  they will                                                               
be weighed in further committees, "but  we do need make sure that                                                               
we get this moving  along so that they can have  their time to do                                                               
that.   We've  not  received the  numbers  from the  budget/audit                                                               
committee on numbers  that they're expecting back  tomorrow."  He                                                               
noted  that  he  has  been  in touch  with  some  of  the  school                                                               
districts and the leaders of  the educational community; "that is                                                               
their recommendation also."                                                                                                     
12:21:27 PM                                                                                                                   
REPRESENTATIVE GARA said:                                                                                                       
     If we don't  adopt Amendment 2 and we go  with the bill                                                                    
     as it  reads, the  testimony has  been that  the Copper                                                                    
     River  School District  will have  to  engage in  cuts,                                                                    
     that  the  Anchorage  School District  will  engage  in                                                                    
     cuts,  that the  Kenai Peninsula  School District  will                                                                    
     engage in  cuts, that districts representing  more than                                                                    
     have  the  people in  the  state  will end  up  cutting                                                                    
     staff, and  thereby ... helping  reduce the  ability of                                                                    
     students to achieve.                                                                                                       
12:22:05 PM                                                                                                                   
A  roll call  vote was  taken.   Representatives Gara  and Salmon                                                               
voted in  favor of Amendment  2.  Representatives  Gatto, Neuman,                                                               
Lynn, Thomas, and Wilson voted  against it.  Therefore, Amendment                                                               
2 failed by a vote of 2-5.                                                                                                      
12:22:45 PM                                                                                                                   
REPRESENTATIVE THOMAS  commented that  he doesn't think  that the                                                               
legislature  or the  state should  be responsible  for inflation.                                                               
He said, "Has the local  contribution gone up with inflation? ...                                                               
I don't  think it has, and  I don't think that  [legislators are]                                                               
the only  sole responsible people  for every time  inflation goes                                                               
up."  He  advocated local contribution increases  and noted, "I'm                                                               
a property owner and ... I  support education so it wouldn't hurt                                                               
me to pay another $100 or whatever it would be."                                                                                
12:23:35 PM                                                                                                                   
REPRESENTATIVE  GARA pointed  out that  local contributions  have                                                               
gone up, he said, however:                                                                                                      
     that doesn't give the state  the excuse not to have its                                                                    
     contribution stay  up with costs  too.  I'm  not saying                                                                    
     that the state  has done a bad job.   Last year ... all                                                                    
     of a  sudden we were  faced with this  massive PERS/TRS                                                                    
     problem that  nobody anticipated  and we're  faced with                                                                    
     it  again in  the next  few  years. ...  I think  maybe                                                                    
     we'll  have  to find  a  funding  source to  deal  with                                                                    
     PERS/TRS  problem,  maybe  outside  of  the  foundation                                                                    
     formula or outside of this  budget. ... But if you back                                                                    
     out the  money that we've  put into retirement  and ...                                                                    
     the  money  that's  gone  to  covering  inflation,  our                                                                    
     contribution has  resulted in cuts to  school districts                                                                    
     over the years.                                                                                                            
12:24:31 PM                                                                                                                   
REPRESENTATIVE  GATTO  commented,   "When  the  [governor]  first                                                               
proposed these increases to education  ... those numbers were met                                                               
with  great  applause  and this  committee  has  increased  those                                                               
numbers somewhat,  obviously not  as much  as some  members would                                                               
have  preferred,  but  nonetheless, higher  than  the  governor's                                                               
original proposal."                                                                                                             
12:25:07 PM                                                                                                                   
REPRESENTATIVE WILSON  remarked that  the committee  members have                                                               
been talking  about early  funding for  the schools,  which would                                                               
need to  be moved through  the Senate in the  next 21 days.   She                                                               
     I am  willing to  move this bill  forward just  ... for                                                                    
     the sake  of early  funding.  But  I'm very  upset with                                                                    
     this;  we haven't  dealt with  the  eroding floor,  ...                                                                    
     we've got  more to do  to really figure out  what we're                                                                    
     going to  do about PERS and  TRS. ... There's a  lot of                                                                    
     things in  education yet that  we as a  ... legislature                                                                    
     have  a responsibility  to take  of  and I'm  concerned                                                                    
     that some  of this  isn't getting taken  care of  and I                                                                    
     just want to  carry that forward, that we  need to deal                                                                    
     with some of this.                                                                                                         
12:26:04 PM                                                                                                                   
REPRESENTATIVE LYNN commented:                                                                                                  
     We've got  to get  on with this....  We've got  to keep                                                                    
     the lights  on in  our schools, we've  got to  keep the                                                                    
     staff we need, we've got  to avoid those pink slips for                                                                    
     teachers,  and we've  got to  educate  our kids,  which                                                                    
     really is the  highest priority of anything  that we do                                                                    
     here. ... We  need to take action today; it  may not be                                                                    
     the  figure that  all  of  us would  like,  but it's  a                                                                    
     figure to get it started. ...                                                                                              
12:27:34 PM                                                                                                                   
REPRESENTATIVE GARA pointed out that  there has been no objection                                                               
to moving  the bill  or any  effort by  any committee  members to                                                               
slow  down the  process.   He stated  that he  agrees with  early                                                               
funding but also agrees with adequate funding.                                                                                  
12:27:59 PM                                                                                                                   
CHAIR  NEUMAN  moved  to report  CSHB  1,  [Version  24-LS0001\F,                                                               
Mischel, 2/9/05] from  the committee.  There  being no objection,                                                               
CSHB  1(EDU) was  reported from  the House  Special Committee  on                                                               
12:28:24 PM                                                                                                                   
REPRESENTATIVE  WILSON  moved  [to  adopt CSHB  30,  Version  24-                                                               
LS0193\F,  Utermohle, 2/9/05  as  the working  document].   There                                                               
being no objection, Version F was before the committee.                                                                         
12:28:42 PM                                                                                                                   
REPRESENTATIVE GARA commented that he had not seen the bill yet.                                                                
CHAIR NEUMAN explained that this  is an allocation bill that goes                                                               
along with  CSHB 1.   He said, "For  the record, it  does include                                                               
funding  for the  amounts that  were  approved by  the voters  in                                                               
Anchorage and  around the  state last  year for  their additional                                                               
70/30 grants, or debt bond reimbursements."                                                                                     
12:29:43 PM                                                                                                                   
REPRESENTATIVE GARA stated,  "I have no idea  where these numbers                                                               
came  from.   I don't  know ...  if they  were tailored  to match                                                               
Representative Gatto's  committee substitute  or what  the number                                                               
in the foundation  formula, the $762 million, reflects.   I don't                                                               
know how that relates to a base student allocation."                                                                            
CHAIR  NEUMAN responded  that the  numbers were  prepared by  the                                                               
administration.  He  said, "They have to  follow certain formulas                                                               
as  to  where   the  money  goes,  and   this  matches  committee                                                               
substitute  1."   He noted  that [Eddy  Jeans, Manager  of School                                                               
Finance  and  Facilities,  Department   of  Education  and  Early                                                               
Development] helped prepare the numbers.                                                                                        
12:30:28 PM                                                                                                                   
REPRESENTATIVE  GARA commented,  "There's an  amount of  money in                                                               
the  foundation  program  that  must relate  to  a  base  student                                                               
allocation we're choosing.  How can  we vote on the proper amount                                                               
of money  to put  in the foundation  program without  knowing ...                                                               
what base student allocation we're voting on?"                                                                                  
CHAIR NEUMAN  responded, "I believe  the base  student allocation                                                               
that just passed on [CSHB 1] was  a [$]4919."  He deferred to the                                                               
staff of the bill sponsor.                                                                                                      
12:30:55 PM                                                                                                                   
TOM  WRIGHT, Staff  to Representative  John Harris,  Alaska State                                                               
Legislature,  testified  on   behalf  of  Representative  Harris,                                                               
sponsor of CSHB 30.  He explained,  "The amount passed in HB 1 is                                                               
found  in  Section   4  of  the  appropriation   bill,  which  is                                                               
contingency  language  based  upon  the  passage  of  a  bill  to                                                               
increase the  student base allocation  to an amount equal,  or at                                                               
least [$]4,896.  And that's where these numbers are taken from."                                                                
REPRESENTATIVE GARA objected and said:                                                                                          
     I'm not going to slow down  this bill; I'm going to let                                                                    
     it  out  so  we  can continue  our  discussion  of  the                                                                    
     education budget.   It seems to me that  ... the number                                                                    
     can't accidentally  meet the  number that  was proposed                                                                    
     in   Representative   Gatto's   committee   substitute;                                                                    
     somehow it  exactly matches that  number.  So  it seems                                                                    
     that  members of  this committee  have decided  upon it                                                                    
     without  discussion  before  this committee  or  during                                                                    
     this   committee.     If  this   is  going   to  be   a                                                                    
     collaborative process  where all members have  input, I                                                                    
     would  suggest this  isn't  the best  way  to go  about                                                                    
     things.   It  seems  like both  of  these numbers  were                                                                    
     worked on  with only  some of  the members  involved in                                                                    
     the discussions.                                                                                                           
12:32:06 PM                                                                                                                   
REPRESENTATIVE WILSON commented  that this is the  first time she                                                               
had   seen  this   [committee  substitute].      She  asked   for                                                               
clarification from  Chair Neuman that  the CSHB 30  matched [CSHB
CHAIR NEUMAN answered affirmatively.                                                                                            
REPRESENTATIVE WILSON  commented, "So  [CSHB 30] just  takes care                                                               
of  other things  that are  covered  in the  formula anyway:  the                                                               
boarding   home   grants,   the   youth   in   detention,   pupil                                                               
transportation.  This just has all that rolled into one?"                                                                       
MR. WRIGHT  responded that this  was correct.   He said  that the                                                               
numbers  correspond to  what is  being proposed  for fiscal  year                                                               
2006.  Also included in CSHB  30, he explained, is $65.35 million                                                               
based  on the  legislation  that [the  committee] had  previously                                                               
passed.   He  added  that  [later] there  will  be discussion  of                                                               
PERS/TRS, not  just on the school  district level but on  a state                                                               
level; he  commented that  it's going  to be  a major  topic this                                                               
legislative session.   He said  that this  is the beginning  of a                                                               
process, and  this probably isn't  going to be the  final number,                                                               
but the  committee has made an  effort to come up  with what they                                                               
think is  a reasonable number.   Any  committee has a  purview of                                                               
education,  he remarked,  and they'll  be  making assessments  as                                                               
12:34:22 PM                                                                                                                   
REPRESENTATIVE THOMAS moved to report [CSHB 30, Version 24-                                                                     
LS0193\F, Utermohle, 2/9/05] with individual recommendations and                                                                
attached fiscal note.  There being no objection, CSHB 30(EDU)                                                                   
was reported from the House Special Committee on Education.                                                                     
[CSHB 1, Version 24-LS0001\F, Mischel, 2/9/05, was reported from                                                                
the committee as CSHB 1(EDU) earlier in the meeting.  HB 18, HB
73, and HB 65 were held over.]                                                                                                  

Document Name Date/Time Subjects