Legislature(2001 - 2002)

04/10/2001 02:00 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 203                                                                                                            
                                                                                                                                
     "An Act making an appropriation to the Legislative                                                                         
     Council for a study of school district cost factors;                                                                       
     and providing for an effective date."                                                                                      
                                                                                                                                
REPRESENTATIVE PEGGY WILSON, SPONSOR  testified in support of                                                                   
the  legislation. She  explained  that the  legislation  sets                                                                   
aside $350.0 thousand dollars  for a class differential study                                                                   
on school  district cost factors.  The state of Alaska  has a                                                                   
constitutional  obligation to  provide for  a full  education                                                                   
for all students.                                                                                                               
                                                                                                                                
TAPE CHANGE, HFC 01 - 79, SIDE B                                                                                              
                                                                                                                                
Representative  Wilson observed that  the economic  status of                                                                   
different areas of the state have  changed since 1986. School                                                                   
district  cost  factors  were   last  changed  in  1986.  She                                                                   
maintained that the current formula,  while well intentioned,                                                                   
has  unintentional   consequences.  A  design   error,  which                                                                   
tracked  expenses  as  opposed   to  actual  costs  of  doing                                                                   
business  in each  school district,  has  resulted in  flawed                                                                   
district   cost  factors.   Failure   to  precisely   measure                                                                   
differential   costs  across  the   state  has  resulted   in                                                                   
inequitable funding.                                                                                                            
                                                                                                                                
Representative  Wilson  noted   that  many  questions  remain                                                                   
unanswered  such  as:  What  is  the  cost  of  providing  an                                                                   
education in each school district  as it relates to Anchorage                                                                   
as  a   base?  What  are   the  exact  costs   of  electronic                                                                   
communications in Yakutat? What  is the specific cost of fuel                                                                   
in Dillingham? What are the property  insurance rates in Tok?                                                                   
What does  it cost  to get  a school  fire code inspector  to                                                                   
Angoon?                                                                                                                         
                                                                                                                                
Representative  Wilson maintained that  HB 203 would  provide                                                                   
factual  answers  to  these questions.  HB  203  proposes  an                                                                   
independent study of school cost  differentials. She stressed                                                                   
the need to assess actual costs in each school district.                                                                        
                                                                                                                                
Vice-Chair  Bunde  expressed   support  for  the  study,  but                                                                   
questioned  the   difference  between  the  costs   of  doing                                                                   
business and the cost of providing education.                                                                                   
                                                                                                                                
Representative Wilson  noted that the cost of  doing business                                                                   
differs from school district to  school district depending on                                                                   
the access to services.                                                                                                         
                                                                                                                                
Vice-Chair Bunde  suggested that section 1 be  changed to the                                                                   
"cost of providing  an education in each school  district" as                                                                   
opposed to the "cost of doing business."                                                                                        
                                                                                                                                
Representative Wilson suggested  the addition of "it shall be                                                                   
completed by  contract" on page 2,  line 5. She did  not want                                                                   
the  study to  be left  to the  Department  of Education  and                                                                   
Early Development or a committee.                                                                                               
                                                                                                                                
Representative  John  Davies suggested  the  substitution  of                                                                   
"operating a school" for "doing  business" on lines 9 and 12.                                                                   
Representative Wilson did not object to the recommendation.                                                                     
                                                                                                                                
Representative  Davies MOVED to  insert "operating  a school"                                                                   
and delete "doing business" on lines 9 and 12.                                                                                  
                                                                                                                                
Representative  Croft  argued   in  support  of  the  use  of                                                                   
"providing  an education". He  pointed out  that it  would be                                                                   
possible  to operate  a school  without doing  a good job  of                                                                   
providing education.  He added that it would  be necessary to                                                                   
operate a school in order to provide education.                                                                                 
                                                                                                                                
Representative  John  Davies  pointed out  that  operating  a                                                                   
school includes hiring faculty.                                                                                                 
                                                                                                                                
Vice-Chair   Bunde  summarized   that   the   intent  is   to                                                                   
distinguish between  the cost of  running a business  and the                                                                   
cost  of  education.   Co-Chair  Williams  agreed   that  the                                                                   
question is the actual cost of the school.                                                                                      
                                                                                                                                
Representative  Whitaker  questioned  if  the  intent  is  to                                                                   
distinguish  the  cost of  operating  a  school in  terms  of                                                                   
maintenance and  operation of a  school facility or  the cost                                                                   
of providing an education. He  emphasized that that intent is                                                                   
to  determine   the  cost  of  providing  an   education.  He                                                                   
suggested that "operating a school" may be too restrictive.                                                                     
                                                                                                                                
Representative  Davies MOVED to  AMEND Amendment 1  to insert                                                                   
"providing  an education"  on  line 9.  "Operating a  school"                                                                   
would be retained  on line 12 and insert "actual"  at the end                                                                   
of  line 11.  There  being  NO  OBJECTION, the  amendment  to                                                                   
Amendment 1 was adopted:                                                                                                        
                                                                                                                                
     The study                                                                                                                  
     (1)  should be based on the cost of providing an                                                                         
     education in each school district;                                                                                       
     (2)  should  consider the cost of living,  including the                                                                   
     cost  of   food,  housing,  utilities,   transportation,                                                                   
     medical expenses,  property values, or other  costs that                                                                   
     contribute to the actual cost of operating a school.                                                                   
                                                                                                                                
There  being NO  OBJECTION,  Amendment 1  as  was adopted  as                                                                   
amended.                                                                                                                        
                                                                                                                                
Representative Croft  MOVED to ADOPT Amendment 2:  On page 2,                                                                   
line 3 insert "shall"  and delete "may"; and on  page 1, line                                                                   
5 delete "prepare or." He explained  that the amendment would                                                                   
take out  the option of doing  the study by any  manner other                                                                   
than a contract.                                                                                                                
                                                                                                                                
Representative Wilson  questioned if the date  should also be                                                                   
changed to  allow more  time for the  study to be  completed.                                                                   
Representative  Hudson  argued in  support  of retaining  the                                                                   
date and  pointed out  that the following  year would  be the                                                                   
second year of the legislature.                                                                                                 
                                                                                                                                
Vice-Chair  Bunde  agreed  with  the  intent  of  having  the                                                                   
Legislative Council  contract for  the study. He  pointed out                                                                   
that there may be some expense  involved to assure that there                                                                   
are appropriate guidelines for a contract.                                                                                      
                                                                                                                                
Representative  John  Davies  MOVED  to  AMEND  Amendment  2:                                                                   
delete "or"  and insert  "and" (to  prepare and contract  for                                                                 
the preparation  of a study).  There being NO  OBJECTION, the                                                                   
amendment was  adopted.  There being NO  OBJECTION, Amendment                                                                   
2 was adopted as amended.                                                                                                       
                                                                                                                                
Representative  Whitaker questioned  if the  review would  be                                                                   
done on a  periodic and regular basis.  Representative Wilson                                                                   
observed that SB 36 required a two-year review.                                                                                 
                                                                                                                                
Representative  Wilson referred  to a  study by the  McDowell                                                                   
Group,  which was  compiled  in relationship  to  SB 36.  The                                                                   
study recommended  that the current district  cost factors be                                                                   
maintained  and that  the department's  effort  be placed  in                                                                   
reexamining the  methodology. She emphasized that  the intent                                                                   
of HB 203 is  to make sure that the guidelines  are different                                                                   
and the  actual cost to educate  a child in each  district is                                                                   
ascertained,  so that  the differences  can be reviewed.  She                                                                   
added that the Department of Education  and Early Development                                                                   
and  the  Education's  Foundation Task  Force  recommended  a                                                                   
similar study.                                                                                                                  
                                                                                                                                
Representative  John Davies  expressed  concern  with page  1                                                                   
line  6.  He   MOVED  to  ADOPT  Amendment   3:  delete  "the                                                                   
preparation of a  study of the district cost  factors used as                                                                   
a component" and insert "preparation  of a study recommending                                                                   
district cost factors to be used  as a component". The change                                                                   
would  clarify  that  the  intent  is not  just  a  study  of                                                                   
existing factors,  but that  there should be  recommendations                                                                   
for how it should be fixed. There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
PAT HICKEY, KENAI PENINSULA SCHOOL  DISTRICT, KENAI testified                                                                   
via  teleconference.  He  noted   that  the  Kenai  Peninsula                                                                   
Borough  contains urban  and rural areas.  He encouraged  the                                                                   
contractors  to take  into full  account  the differences  by                                                                   
attendance  areas and  not just  consider the  district as  a                                                                   
whole. He  noted that the cost  of providing an  education in                                                                   
some small communities  have already been compensated  for by                                                                   
economy of scale factors by size,  but tend to be diffused by                                                                   
a district wide application of an area cost factor.                                                                             
                                                                                                                                
DARROLL  HARGRAVES,  EXECUTIVE  DIRECTOR, ALASKA  COUNCIL  OF                                                                   
SCHOOL ADMINISTRATORS testified  via teleconference. He spoke                                                                   
in  support of  the  legislation. He  pointed  out that  cost                                                                   
differential  studies have  been done  in a  true attempt  to                                                                   
determine   the  cost   of   doing  business   in   different                                                                   
geographical  areas  of  the  state.  The  audits  of  school                                                                   
districts were  used in SB  36 in an  attempt to  assess what                                                                   
school districts were actually  spending. He pointed out that                                                                   
a  school  district,  which held  tough  on  salaries  though                                                                   
negotiation  would be disadvantaged.  The cost  differentials                                                                   
were based  on what  "is" not  on the  "true" costs  of doing                                                                   
business.  He  recounted  a  gift  from  an  oil  company  of                                                                   
computers. He  tried to ship  the computers to  one community                                                                   
and found that  they could only be shipped  strapped into the                                                                   
passenger seats at  the full price of a  passenger transport.                                                                   
Another school district was able  to pick up the computers at                                                                   
no cost.  He concluded  that there  are true  costs of  doing                                                                   
business from  one community to  another. He emphasized  that                                                                   
the   cost  differentials   must  reflect   true  costs.   He                                                                   
maintained that cost differentials in SB 36 were in error.                                                                      
                                                                                                                                
EDDY JEANS,  MANGER, SCHOOL  FINANCE AND FACILITIES  SECTION,                                                                   
DEPARTMENT  OF  EDUCATION  AND  EARLY  DEVELOPMENT  spoke  in                                                                   
support of the  legislation. The department would  like to be                                                                   
involved in  the development  of the RFP  to assure  that all                                                                   
the  cost   factors  are  looked   at  and  considered.   The                                                                   
department  would  also like  to  assure that  a  methodology                                                                   
results in  a tool that  can be used  on an ongoing  basis to                                                                   
update  the cost differentials  as required  by statute.  The                                                                   
Department  of  Education  and   Early  Development  was  not                                                                   
involved in  the last selection.  The Legislative  Budget and                                                                   
Audit Committee contracted the last selection.                                                                                  
                                                                                                                                
Representative  Hudson  noted  that  nothing  would  preclude                                                                   
consultation  with  the  Department of  Education  and  Early                                                                   
Development on the  RFP. He did not think  that (consultation                                                                   
with  the department)  needed to  be in  the legislation  but                                                                   
expressed  a  desire  that the  contractor  confer  with  the                                                                   
department  in determining  what elements  should be  brought                                                                   
forward in the contract.                                                                                                        
                                                                                                                                
Representative   Croft  observed   that  the  Department   of                                                                   
Education and  Early Development was not consulted  last time                                                                   
and  pointed out  that serious  mistakes were  made. He  felt                                                                   
that it should be in the intent language.                                                                                       
                                                                                                                                
Representative  Whitaker  maintained that  the  intent is  to                                                                   
strike a balance  and determine a basis for  the equitability                                                                   
of  the  formula.  If  the  project   becomes  too  vast  and                                                                   
"potentially  politically  involved"   then  it  would  be  a                                                                   
disservice. He  added that it  would also be a  disservice if                                                                   
the study does  not provide for input that  is meaningful. He                                                                   
suggested that the intent should be carefully worded.                                                                           
                                                                                                                                
Representative Hudson  MOVED to ADOPT Amendment 4:  add a new                                                                   
subsection:   (6)  Shall  confer   with  the  Department   of                                                                   
Education  and Early Development  in preparation  of  the RFP                                                                   
for this study.                                                                                                                 
                                                                                                                                
Representative Guess pointed out  that a new subsection would                                                                   
refer  back to  the study.  She suggested  that the  language                                                                   
would be in the wrong place.                                                                                                    
                                                                                                                                
Representative   John  Davies   suggested  an  amendment   to                                                                   
Amendment 4,  to add the language  on page 1, line  5: insert                                                                   
after  "Council"  "in  consultation with  the  Department  of                                                                   
Education and Early Development".                                                                                               
                                                                                                                                
Representative  Hudson WITHDREW  Amendment 4.  Representative                                                                   
Davies MOVED to ADOPT amended  Amendment 4, by Representative                                                                   
Hudson:  insert after  "Council"  "in consultation  with  the                                                                   
Department of  Education and Early Development".  There being                                                                   
NO OBJECTION, it was so ordered.                                                                                                
                                                                                                                                
Representative  Guess  noted   that  five  states  have  cost                                                                   
differentials,  each with different  methodologies.  There is                                                                   
no agreement on the best way to  determine an education price                                                                   
index. New research shows that  an expenditure-based model is                                                                   
the worst  way. She  discouraged the  use of an  expenditure-                                                                   
based model. She acknowledged  the difficulty of producing an                                                                   
unbiased model but emphasized  the creation of a clear model.                                                                   
She  spoke  in  support  of  a   cost  differential  that  is                                                                   
updateable with data outside of the department.                                                                                 
                                                                                                                                
Representative  Hudson  MOVED to  report  CSHB  (FIN) out  of                                                                   
Committee.                                                                                                                      
                                                                                                                                
CSHB  203 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation.                                                                                                           
#hb193                                                                                                                        
HOUSE BILL NO. 193                                                                                                            
                                                                                                                                
     "An Act relating to the primary election; and providing                                                                    
     for an effective date."                                                                                                    
                                                                                                                                
AVRUM GROSS,  JUNEAU, stated that he  was a member of  a task                                                                   
force appointed  by the  Lieutenant Governor  to address  the                                                                   
fact that the  state's primary election law  ceased to exist,                                                                   
after  the last  primary, due  to  a decision  of the  United                                                                   
States Supreme  Court (California  Democratic Pary et  al. v.                                                                   
Jones, Secretary of  State et. Al.. (530 U.S.  567, 2000). He                                                                   
added  that emergency  regulations,  which  responded to  the                                                                   
decision, expired.                                                                                                              
                                                                                                                                
Mr. Gross explained  that the Court ruled that,  while states                                                                   
with blanket primaries could continue,  political parties had                                                                   
the right to change the rules  to limit participation. Alaska                                                                   
has operated  under blanket primary  law. The task  force was                                                                   
established to deal  with the fact that parties  have to have                                                                   
input into  who would participate  in the selection  of their                                                                   
candidates.  He reviewed  the makeup  of the  task force  and                                                                   
concluded that it was nonpartisan.                                                                                              
                                                                                                                                
The  Task  Force's intent  was  to  make the  minimal  change                                                                   
necessary to  existing law. Public  testimony was  taken from                                                                   
all parties and the Department  of Law. The recommendation of                                                                   
the Task Force  was that all voters  be allowed to  vote in a                                                                   
party's  primary unless  the  party notified  the  lieutenant                                                                   
governor, by September  1, that the primary  would be closed.                                                                   
To  the extent  that  party registration  was  an issue,  the                                                                   
registration would have to be  established 30 days before the                                                                   
election, which  is the deadline  for voter registration.  He                                                                   
indicated that  the proposal received support  from the major                                                                   
parties.  A  blanket  primary   was  chosen  because  it  was                                                                   
traditional in Alaska  and it would allow the  maximum number                                                                   
of  people to  participate in  the primary.  The state  would                                                                   
stand for  maximum participation  subject to a  party's right                                                                   
to  close.  The original  bill  [based  on the  Task  Force's                                                                   
recommendations]  was  changed  in the  House  State  Affairs                                                                   
Committee  and the process  reversed.  Under the House  State                                                                   
Affairs  version,   all  primaries  would  be   closed  (only                                                                   
Republicans  could  vote  in republican  primaries  and  only                                                                   
Democrats could  vote in  democratic primaries) unless  their                                                                   
party opened the primary.                                                                                                       
                                                                                                                                
The   House   Judiciary   Committee   further   amended   the                                                                   
legislation to state  that independents could also  vote in a                                                                   
party's primary.                                                                                                                
                                                                                                                                
Representative  John Davies  observed that  the HJUD  version                                                                   
partially opened  the primary  and questioned if  a political                                                                   
party  could chose  to  close  their primary  to  independent                                                                   
voters.  Mr.  Gross  affirmed  that they  could  close  their                                                                   
primary to independents. He summarized  that the HJUD version                                                                   
allows parties to  close or open their primaries  as they see                                                                   
fit. The original  bill opened primaries and  required action                                                                   
by a party to close them.                                                                                                       
                                                                                                                                
In response  to a question  by Representative  Lancaster, Mr.                                                                   
Gross  clarified that  once  a change  occurs  it remains  in                                                                   
force  until the  party  changes it.  Changes  must occur  by                                                                   
September of  the proceeding year.   This provision  was also                                                                   
contained in the original task force bill.                                                                                      
                                                                                                                                
TAPE CHANGE, HFC 01 - 80, SIDE A                                                                                              
                                                                                                                                
In  response to  a  question  by Representative  Hudson,  Mr.                                                                   
Gross clarified that  a [candidate] could not  chose to allow                                                                   
all voters if their party restricted the ballot.                                                                                
                                                                                                                                
Mr. Gross  observed that the more  a primary is  narrowed the                                                                   
"purer" the  candidates become,  but emphasized that  "at the                                                                   
same  time  the  less  chance  they have  to  win  a  general                                                                   
election because they don't have  support from a large number                                                                   
of people."                                                                                                                     
                                                                                                                                
Representative  Whitaker  clarified  that  a  party's  ballot                                                                   
would be  open to  nonpartisan and  undeclared voters  unless                                                                   
the party  closes it. Mr.  Gross agreed and interjected  that                                                                   
it would not be open to any other registered party members.                                                                     
                                                                                                                                
Co-Chair  Mulder  noted  that  the  Court  decision  requires                                                                   
action by the Legislature.                                                                                                      
                                                                                                                                
Representative John  Davies observed that Court's  action was                                                                   
in  response to  requests by  the  Republican and  Democratic                                                                   
parties in Alaska  and other states. Mr. Gross  observed that                                                                   
an initiative  in California  began the [court's  involvement                                                                   
in] blanket primary law.                                                                                                        
                                                                                                                                
SARAH  FELIX,  DEPUTY  ATTORNEY GENERAL,  DEPARTMENT  OF  LAW                                                                   
provided information  on the legislation. She  explained that                                                                   
a question arose during deliberations  in the House Judiciary                                                                   
Committee  regarding   "no  party"  petition   candidates  on                                                                   
primary  election ballots.  Under  current law,  unaffiliated                                                                   
candidates overlooked must appear  on the primary ballot. The                                                                   
House Judiciary Committee decided  that they would not appear                                                                   
on  the  primary  election  ballot.  Unaffiliated  candidates                                                                   
would only appear  on the general election ballot.  She noted                                                                   
that an  amendment to AS  15,25,150, the filing  deadline, is                                                                   
needed.  The filing  deadline  was  left at  June  1. If  "no                                                                   
party" candidates  do not  appear on  the primary ballot  the                                                                   
deadline would not  be June 1. The filing deadline  should be                                                                   
the  date  of  the  primary  election.  Legal  opinions  have                                                                   
indicated  that "no  party"  candidates could  be  held to  a                                                                   
earlier filing date.                                                                                                            
                                                                                                                                
Co-Chair  Mulder   stated  his  intention  to   entertain  an                                                                   
amendment to address the issue.                                                                                                 
                                                                                                                                
Ms.  Felix explained  that "no  party"  candidates are  those                                                                   
that do not belong to a recognized  political party. Some may                                                                   
belong  to a  political group,  which is  an organization  of                                                                   
people of a  political affiliation that has  not achieved the                                                                   
status of  a recognized political  party and some may  not be                                                                   
representing any  group. Alaska has six  recognized political                                                                   
parties. Discussion  ensued regarding  the qualifications  of                                                                   
recognized parties.                                                                                                             
                                                                                                                                
Co-Chair   Mulder   observed   that   under   the   amendment                                                                   
certification would be required  by the primary election date                                                                   
in order to be eligible for the November election.                                                                              
                                                                                                                                
Representative  John  Davies  MOVED  to  ADOPT  a  conceptual                                                                   
amendment to move  the date in AS 15.25.150  to be consistent                                                                   
with  the primary  election date  for filing  for "no  party"                                                                   
candidates. There being NO OBJECTION, it was so ordered.                                                                        
                                                                                                                                
HB  193  was   heard  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  

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