Legislature(1997 - 1998)
04/30/1997 03:34 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 148 - SCHOOL FUNDING ETC./ CHILD CARE GRANTS CHAIRMAN BUNDE announced the next item on the agenda was HB 148, "An Act relating to the public school funding program; relating to the definition of a school district, to the transportation of students, to school district layoff plans, to the special education service agency, to the child care grant program, and to compulsory attendance in public schools; and providing for an effective date. Number 0069 EDDY JEANS, Manager, School Finance Section, Department of Education, referred to a handout titled, "HB 148 School Funding Formula, Overview." The first page outlined the process to determine a district's adjusted average daily membership (ADM). The equalization funding is set in Section 14.17.410(a)(1), starting on page two of the draft legislation, CSHB 148(HES). All adjustments are set in either statute or regulation and the only variable, collected from the school districts under this formula, is the ADM. Number 0159 MR. JEANS stated that the first item on the handout is the size adjustment. Each school district is divided into a funding community. This is the community which is being served with the exception of the larger communities who have high schools being fed by junior high and elementary schools. The next adjustment is the area cost factor which is assigned at the funding community level. In the draft legislation, there are seven different area cost differentials as opposed to current statute which has 23 different cost differentials assigned to each school district. MR. JEANS said the department will repeat steps one and two for a school district. They will look up the size adjustment based on the ADM for that community and the area cost factor which has been set for that funding community. If the process is only done one time because there is only one funding community in that district, then it is a single site school district. There is an additional adjustment for a school district serving less than 900 students. MR. JEANS explained that the next adjustment takes the result and multiplies it times the special needs factor which is 1.20. The next step is to determine the student transportation, as it will be set in regulation and assigned to school districts, located in Section 26. Once this process is completed for all the funding communities within the school district then they are totaled. This final amount is called the district's adjusted ADM. MR. JEANS stated that the intensive funding is taken into consideration. This adjustment involves those students who are severely handicapped and have high costs associated with their education. The draft legislation calls for an allocation of $22,500 for each one of these students, adjusted by the area cost differential for that community. Currently, the state of Alaska has approximately 1,200 of these students. MR. JEANS said that the adjusted ADM is multiplied by the base student allocation. Then the intensive funding is added to determine what is called the district need. The basic formula to determine district need takes the ADM multiplied by the size adjustment multiplied by the area cost factor multiplied by the single site adjustment multiplied by the special needs adjustment multiplied by the transportation adjustment plus the intensive funding allocation. MR. JEANS explained the process to determine state aid. They start with the district's need, subtract the required local effort and end up with the amount of state aid. Number 0350 CHAIRMAN BUNDE asked how many localities have no required local contribution. Number 0362 MR. JEANS answered that there are 19 out of the 53 school districts which do not currently have a required local contribution. Number 0375 REPRESENTATIVE GREEN said the special needs multiplier would tend to increase the differences between a large school and a smaller school as it multiples on a scale greater than one. He asked if the purpose was to help smaller schools and if this same thing could be accomplished by adjusting the funding community size factor. Number 0406 MR. JEANS answered that it could be achieved by adjusting the size factor. The purpose behind the 20 percent allocation for special needs is to identify a pool of money that is available for districts to address special education needs, bilingual needs and the vocational needs for that district. This multiplier creates a pool of resources without one particular name attached to it. Number 0433 REPRESENTATIVE GREEN verified that everyone gets the 1.2 multiplier. MR. JEANS referred to page two of the handout. Number 0439 CHAIRMAN BUNDE wanted to clarify that CSHB 148(HES) also calls for a study of the area cost differential. There are those who feel that the world has changed since that the area cost differential was last calculated. The study would determine how much this area cost differential would be and who would qualify. Number 0467 MR. JEANS stated that the area cost differentials, in current statute, are assigned at a school district level and are based on the 1985 state employee wage differentials with some recommended adjustments by Dr. Nat Cole (Ph.) The Department of Education (DOE) has believed, for a number of years, that the area cost differentials need to be moved down to a funding community level. This addresses concerns expressed by municipalities such as Kenai. Kenai has both large and smaller, remote communities. Currently the city of Kenai has an area cost differential of 1.0 as does that smaller, remote community across the inlet. Number 0516 CHAIRMAN BUNDE explained that not only would the study talk about the amount of the multiplier, but it who would get the specific amount. It would change from the school district to the school. Number 0525 MR. JEANS commented that the DOE wants to study the cost of operating a school, not the cost of living in that district. MR. JEANS said that page two goes through some calculations. They picked the Kashunamiut School District, a single site school district serving the community of Chevak. The ADM for fiscal year 1998 projected 269 students. Referring back to a chart on page one the funding community has a size factor of 1.40. The area cost factor has been determined to be 1.32 for this community. This factor generates $497.11. The base ADM determines the single site adjustment, in this case 1.08. All districts receive the adjustment of 1.20 for special needs. Chevak does have some transportation services, but they are very minimal. When this was taken in consideration of their total budget, it was not measurable. As a result their transportation adjustment was 1.0. MR. JEANS stated that you go through and multiply each one of these and you arrive at the district's adjusted ADM which is the $644.26. The first year of this bill would see a student allotment of $3,400 per student. There are some student transition allocations. Number 0629 REPRESENTATIVE PORTER asked what computation was used to determine the $3,400. Number 0634 MR. JEANS explained that the task is to keep the total money appropriated for education the same, not to increase it. A formula is developed and then the result is backed into the student allocation which keeps the Governor's request of $659 million for the foundation program in fiscal year 1998. Number 0661 REPRESENTATIVE GREEN clarified that the amount was just a portion of that total. Number 0667 REPRESENTATIVE PORTER asked if it was a function of the $644.26. Number 0676 MR. JEANS answered that it is a function of all the adjusted ADMs statewide. The intensive funding had to be backed out of the total amount to arrive at the student allocation. The intent was to keep the same level of funding, to not increase or decrease funding for education. Number 0696 MR. JEANS said Chevak has projected that three students will require intensive services. This intensive service allocation is multiplied times the area cost differential to come up with the figure of 3.96. The intensive allocation is set in the draft legislation at $22,500 so their intensive funding would be $89,100. When this amount is added to the base funding, the district need is $2,279,584. MR. JEANS stated the next thing is a determination of whether or not this district has a required local contribution. There are two ways to measure the required local contribution in the draft statute: 35 percent of the district's need or the equivalent of a 3 mill tax levy on the full and true value as established by the Department of Community and Regional Affairs (DCRA). The lesser of the two is the local contribution. He said 35 percent of Chevak's need would be $797,854, but they do not have a full value determination as established by the DCRA. Therefore, Chevak's required local effort is zero. Zero is subtracted from their need and the state aid is determined to be $2,279,584. Number 0767 REPRESENTATIVE PORTER asked why Chevak did not have full value determination as established by the DCRA. Number 0775 MR. JEANS explained that DCRA provides the full value determination, which is the real and personal property of those communities which have taxing authority. Those are the first class and organized municipalities or boroughs. Chevak is in the category of "unorganized borough." Therefore, they don't have a property value. REPRESENTATIVE PORTER clarified that it is not a matter of the state assessment, but a matter of them being organized and doing their own assessment. Number 0804 MR. JEANS explained that CSHB 148(HES) does have a hold harmless provision to protect districts from dramatic changes due to the change in the formula. The legislation states that in the first year the district will not receive less than 100 percent of what they would have received under the previous formula through their allocation under the single site and through their allocation of transportation. CHAIRMAN BUNDE announced that this meeting would end so that the committee could hold an informal work session. He indicated it would be off the record.
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