Legislature(2001 - 2002)
02/26/2002 03:01 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
HB 342-EDUCATION FUNDING CHAIR DYSON announced that the next order of business would be HOUSE BILL NO. 342, "An Act relating to appropriations for operating expenses for primary and secondary public education; and providing for an effective date." Number 0748 REPRESENTATIVE STEVENS testified as the sponsor of HB 342. He explained that HB 342 would fund education early, in order for districts to know what kind of funding to expect and thus begin the planning process. Representative Stevens recalled his experience as school board president and borough mayor, and the difficulty of planning without knowing the funding for the coming year. He emphasized the importance of planning in education. He mentioned the shrinking teacher workforce; he pointed out that schools [in other states], which know their funding before [districts] in Alaska do, have the ability to make contracts and commitments before Alaskan districts can. Number 0943 CARL ROSE, Executive Director, Association of Alaska School Boards (AASB), began by thanking Representative Stevens for supporting education. In fact, he recalled giving the same testimony 15 years ago. In the last 15 years a considerable amount of buying power has been lost. Moreover, the ability to plan has been disrupted as a result of inadequate [funding] as well as the increased demands placed on the school system. He pointed out that this turn from accreditation to standards is being done with very few additional resources. MR. ROSE informed the committee that reauthorization of the Elementary and Secondary Education Act (ESEA) represents an explosion in the federal role in public schools. He pointed out that 27 ago years the federal government promised it would provide 40 percent of the cost of special education. However, 27 years later, only 12-17 percent is being received from the federal government. Therefore, the cost of special education is being borne by the state and the local contribution. - a tremendous funding [drain]. "Though the idea is to leave no child behind, the first indications to us are going to be that not only do we ... not understand the implications of ESEA as it relates to Alaska, but in fact we're going to leave a lot of people behind," he charged. Number 1037 MR. ROSE returned to HB 342 and remarked that currently Alaska has tremendous needs. If funding were received early, then [districts] could probably plan. The issue will be one of adequacy. If funding is received early but is inadequate, then the planning will be to reduce programs and staff; Mr. Rose said he felt the ramifications would be counterproductive to what is desired. He predicted that when there is [early] inadequate funding - even with a promise of the ability to return [to the legislature] for dollars available at the end of the session - the shock waves of less money would probably result in paring down. Therefore, Mr. Rose related his belief that Representative Stevens' testimony was accurate during the days when education was adequately funded. The question now is in regard to urgency versus adequacy. MR. ROSE said if funding were adequate, by contrast, the opportunity to plan would be positive. If anything less than what is necessary were received, however, there would be a very different impact on planning. For example, last year the legislature put forward the message that there would be no increase in funding; however, at the end of the [session] almost $200 million was made available through capital construction, maintenance, and operation, as well as the foundation increases and so forth. He stressed that all of those things wouldn't have happened if the money had been appropriated by the first of April. MR. ROSE informed the committee that AASB had met and discussed this legislation. He said, "We appreciate the effort, and I would like to believe that the money upfront being adequate would really be a plus for us." He said, however, that the issue of adequacy is of such importance that he believes the ramifications would be very negative in communities if the money were received early, but with no chance of additional funding. He specified that the association does not support this piece of legislation. Number 1243 REPRESENTATIVE STEVENS remarked that he didn't want to cause unnecessary difficulty for school districts. However, he recalled giving out pink slips during his time as school board president, when the district didn't know what the funding would be. Representative Stevens expressed great concern with regard to the teacher shortage. He related his belief that waiting for funding to come at the end would place the districts in a terrible bind, as it has in the past. Number 1300 MR. ROSE pointed out that the reason this discussion is even occurring is because of the lack of funding in the past. The ability to attract and recruit quality teachers has been greatly hindered for many of the reasons Representative Stevens mentioned. Furthermore, these teachers can make [more] money elsewhere and not face the loss in buying power [that exists in Alaska]. In the past 10-15 years, schools have deferred maintenance and balanced the budget on the backs of employees in salaries and benefits. Mr. Rose reiterated that receiving inadequate funding early would really cause a hardship because of the layoffs that would result. Mr. Rose expressed hope that there will be time to plan once there is knowledge with regard to the amount of money. MR. ROSE recalled his days as a school board president in Skagway. He related his belief that this discussion is in regard to obtaining the money from the borough assembly in enough time to plan. The foundation money could be counted on, but the local contribution was in question. Based on the local contributions, the school board could return to the borough assembly and request more funds. In these cases, rarely have pink slips been put out. He noted that nontenured teachers can be released without that notice. However, the current [challenge] is actually getting teachers in Alaska's schools. Mr. Rose said he hoped that by the end of session there would be a better financial picture, when it would be appropriate to take whatever measures necessary. CHAIR DYSON commented on his finding Mr. Rose's remarks to be incredibly insightful. Chair Dyson asked if Mr. Jeans would say that money has been added to the K-12 package late in the session most of the time. Number 1485 EDDY JEANS, Manager, School Finance and Facilities Section, Education Support Services, Department of Education & Early Development (EED), pointed out that when money is added, it is due to a change in the current law. Mr. Jeans said in his tenure with EED, the only time the Foundation Formula has been underfunded statutorily was in 1987, when it was prorated approximately 10 percent. When there has been increased funding, it has typically come at the end of session. MR. JEANS noted that HB 342 would require the legislature to make an appropriation, although it doesn't specify at what level. Therefore, the legislature could meet its statutory obligation by making an appropriation of one dollar. Mr. Jeans said school districts have become accustomed to, and do plan on, full funding of the statutory requirement in the foundation program statute as it stands today. The districts aren't building budgets on increased revenues through SB 1 or on the $12 million in LOGs [Learning Opportunity Grants] that are outside the foundation program. Those adjustments have to be made after the legislative session is over. Number 1575 REPRESENTATIVE JOULE asked, if HB 342 passes, whether anything would prohibit the legislature from increasing the Foundation Formula at the end of session. MR. JEANS replied no. This legislation would require the legislature to make an appropriation, the intent of which would be to make an appropriation based on the law that is on the books as of April 1. In further response to Representative Joule, Mr. Jeans clarified that the underfunding of education was due to the drop in the oil prices that resulted in an across-the-board 10 percent cut to all state programs. Number 1628 REPRESENTATIVE KOHRING said he didn't see a problem with this legislation if there is an opportunity to fund education an additional amount if the initial amount is inadequate. With the appropriation by April 1, the districts can plan accordingly. Therefore, Representative Kohring said he feels HB 342 is sound legislation. REPRESENTATIVE WILSON surmised that the schools are afraid of HB 342 because there are some legislators who would say that education had been funded and no more was necessary. However, more and more demands are being made of the schools without providing extra funding. REPRESENTATIVE JOULE agreed that all the increases for education funding have come in the final days of the session. Furthermore, these increases have been tied to the three-quarter vote. "Having served on the minority, ... if there's been one thing that we've leveraged the three-quarter vote for, it has been education," he said. However, he questioned how long the three-quarter vote would be available, [especially] in regard to doing something different with the Constitutional Budget Reserve (CBR), which could eliminate the three-quarter vote leverage. REPRESENTATIVE JOULE remarked that he could see how it would be advantageous to deal with the budget early, especially if the legislature didn't close itself off to dealing with issues in the waning hours. However, if legislators felt there was a base of education funding, then anything else would be "fair game." Number 1800 REPRESENTATIVE STEVENS said he felt that Representative Joule had highlighted the issue, which is the use of the CBR and the question of how long that will last. The indication is that the CBR will last to 2004. If this legislation is premature, it is only a year or two premature. Therefore, Representative Stevens said he felt it was a bit risky for AASB to say it will wait until the end. "I'm just afraid if you prevail in this that you may win and lose," he said. MR. JEANS pointed out that in a previous committee hearing, as well as this one, he has heard that HB 342 is an early funding bill for education. However, he stressed that HB 342 does not fund all the education programs in the department, but merely provides an early appropriation for the foundation program. The committee took an at-ease from 3:35 p.m. to 3:39 p.m. CHAIR DYSON announced that the sponsor of HB 342 had requested that it be held. [HB 342 was held over.]
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