Legislature(2005 - 2006)CAPITOL 106
03/29/2005 03:00 PM House HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| HB128 | |
| HB13 | |
| HB31 | |
| HB186 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 128 | TELECONFERENCED | |
| += | HB 13 | TELECONFERENCED | |
| + | HB 31 | TELECONFERENCED | |
| + | HB 186 | TELECONFERENCED | |
HB 13 - SCHOOL CONSTRUCTION BOND REIMBURSEMENT 4:22:42 PM CHAIR WILSON announced that the next order of business would be HOUSE BILL NO. 13 "An Act relating to reimbursement of municipal bonds for school construction; and providing for an effective date." REPRESENTATIVE CARL GATTO, Alaska State Legislature, one of the prime sponsors of HB 13, described the incredible growth of student populations in the Matanuska-Susitna ("Mat-Su") valley. He said that the question of what to do with these new students needs to be addressed. House Bill 13, he relayed, allows for the affected communities to bond for a certain amount of money and for the state to match those bonds. REPRESENTATIVE GATTO explained that three schools would be built in the Mat-Su valley as a result of HB 13. When the community was polled to assess the support of this project, he said, there was 75 percent support [for bond debt reimbursement]. He added that 60 percent of those polled did not have children in the school system. REPRESENTATIVE MAX GRUENBERG, Alaska State Legislature, one of the prime sponsors of HB 13, said that the bill will benefit many areas that can participate in bond debt reimbursement. He said that in Anchorage, when the voters were polled about the school debt reimbursement, they overwhelmingly approved bonding. He mentioned that HB 13 simply extends the "sunset" date in existing law and would provide funds for bond debt reimbursement through fiscal year (FY) 06. REPRESENTATIVE CISSNA indicated that HB 13 appears to impact only larger communities, and questioned whether this legislation could serve to [force] people to move to the more populated areas in Alaska. She opined that [Alaska] needs smaller communities, and asked for an explanation as to how HB 13 won't jeopardize such. 4:31:04 PM REPRESENTATIVE GRUENBERG said that the intent of HB 13 is not to adversely affect small communities. He stated that he would not object to an amendment that would enable smaller communities to take part in the benefits of this legislation. REPRESENTATIVE CISSNA offered her belief that it would be impossible for smaller communities to take advantage of legislation such as this. She opined that the ability of smaller communities to protect themselves is dissipating, and that there is small likelihood that the committee will be able to produce an appropriate amendment in quick fashion. REPRESENTATIVE GRUENBERG indicated, nonetheless, that he would be amenable to such an amendment. REPRESENTATIVE GATTO said that small communities can utilize direct appropriations to pay for 100 percent of new-school construction or existing-school renovation. He emphasized that more and more students are coming to the Mat-Su Valley and the community is trying to catch up. He pointed out that the alternative [to the construction of new schools] is using "portables", but that they are significantly inferior and have many undesirable features. CHAIR WILSON inquired as to why these schools did not take action earlier as the population increased. REPRESENTATIVE GATTO suggested that Kim Floyd would be better able to address that question. 4:38:56 PM REPRESENTATIVE ANDERSON pointed out that there is a disparity [between rural and urban schools]. He posited that this legislation, in addition to helping the Mat-Su community, will help other communities like Anchorage and Kenai. REPRESENTATIVE GRUENBERG said that in Anchorage, there is a multi-year plan that has been somewhat predicated on the continuing ability of the state to assist communities to plan their capital projects many years in advance. The state, hopefully, within its means, will continue to do some bonding to help out those communities that do not have a large tax base. He relayed that when he talked with members of the Bush caucus, there was interest in establishing a legal framework to have such done on a sustainable basis, that those caucus members would like to see some legislation in place that would allow them to do that on a continuing basis, to plan for capital [projects] in non-municipal areas. 4:41:50 PM KIM FLOYD, Public Information Specialist, Public Information and Media Relations, Matanuska-Susitna Borough School District, Matanuska-Susitna Borough, explained that the Mat-Su community has realized that they are going to have to take on additional bond debt for schools, even in the face of rapidly increasing assessments and rising property taxes. She referred to the aforementioned poll, and characterized the results of that poll as phenomenal. She respectfully asked the committee to remember that the new students coming into the district are from all over Alaska, from both urban and rural communities. She emphasized that these students, along with those already living in the community, should have equal opportunities for a quality education, and that overcrowded schools are not the best learning environments. MS. FLOYD, in response to a question, stated that the Mat-Su community has come to terms with the fact that they are growing more rapidly than was ever expected. She said: We had just bonded for $58 million dollars in schools the year before, and increasing assessments resulted in higher property taxes. We had lots of testimony, at the time, of people saying, "please don't raise my taxes anymore, you are going to tax me out of my home." ... That, based on increasing local contributions for the operating costs in schools, really made it difficult for us to go forward with bonds, and we do not believe that at that time our community was at the point where it would have accepted additional bond debt. ... The only conversation we've been having in our community, lately, is about growth and how to deal with it, so I think that that poll that we recently conducted [illustrates] ... that we are maturing as a community and that we all know that we are locally responsible too - not just asking for help from the state, [but] for making sure that our needs are met. 4:48:07 PM REPRESENTATIVE SEATON said that several years ago, a proposition went through that addressed the needs of rural and urban school construction and maintenance by offering a three-year window for municipalities to bond with 70 percent reimbursement if they were on the priority list and with 60 percent if they weren't. He pointed out that that proposition created balance between rural and urban communities, and asked how HB 13 will address the needs of rural communities. REPRESENTATIVE GRUENBERG acknowledging that addressing rural needs has not yet occurred in the committee process, though he has been in touch with Bush caucus members and expects to hear back from them [soon]. REPRESENTATIVE CISSNA emphasized that her concern is that by providing more funding for urban communities, it creates disincentives for remaining in rural communities. She said that she hopes that if people are moving to Anchorage or the Mat-Su it is not because services are being eliminated in rural Alaska. 4:52:30 PM REPRESENTATIVE GRUENBERG said he believes that [rural communities] will make their interests known as HB 13 progresses, and that their needs could be addressed later in the legislative process. CHAIR WILSON remarked on the fiscal note attached to HB 13. She then asked how much the construction of four new schools would cost. REPRESENTATIVE GATTO offered his understanding that each elementary school would cost $12 million, that the estimated cost for a high school in the Mat-Su is $45 million or $50 million, and that the costs associated with construction and maintenance in Anchorage would be additional. He commented that the Kenai and Mat-Su school districts have rural schools, and that money is [already being] spent to build schools in rural areas. 4:55:09 PM EDDY JEANS, Director, School Finance, Department of Education and Early Development (DEED), with regard to the [indeterminate] fiscal note, stated that no new bonds will be issued in time for the 2006 "reimbursement year," and that the DEED has not yet determined what the total cost associated with HB 13 will be. CHAIR WILSON asked whether the DEED [will make] monetary decisions regarding the allocation of funds [related to HB 13]. MR. JEANS clarified that the legislature will make the decision regarding when to discontinue allowing reimbursement under this program; what HB 13 would do is extend for another year and a half the program that just "sunsetted" in December. He explained that the program would provide 70 percent reimbursement for eligible projects that qualify for that amount if the building of a school is beyond the department's eligibility criteria. He said that the department will get estimates from the school districts, build a budget, and submit that budget to the legislature for an appropriation; it will then be up to the legislature to determine at what level to fund that request. REPRESENTATIVE SEATON offered his understanding that a recent calculation came to roughly $200 million for Mat-Su and Anchorage. He asked what the debt schedule would be if those [communities] were reimbursed at 70 percent. MR. JEANS replied that it would vary depending on the term of the bond issues, on the interest rate that the districts were able to secure, and then, ultimately, on the total principal amount that is authorized. 4:58:10 PM REPRESENTATIVE KOHRING stated that his concern is that the Mat- Su could suffer if other areas get issued bonds first, and asked whether such would be possible. MR. JEANS explained that the way the debt reimbursement program has worked is that there is no priority, and that it is dependent on whether or not the local voters approve a project. The next step, he said, is for the department to do an evaluation to determine the reimbursement level, either 70 or 60 percent, and then it becomes a reimbursable project. He added that this [program] applies strictly to municipal school districts. REPRESENTATIVE KOHRING commented that it is his understanding that bond debt reimbursement occurred on a "first come, first served" basis. MR. JEANS said that this particular bill doesn't place any caps; it simply extends the program another year and a half, and is open to all municipalities across the state. REPRESENTATIVE SEATON asked what amount of funding was allocated as a result of the aforementioned proposition. MR. JEANS said that $728 million was allocated over a two-year period. In response to another question, he said, "If you move forward without dealing with the rural issue, ... this simply extends the urban communities' ability to bond for another year and a half; it doesn't provide a whole lot of leverage for the unorganized areas." 5:02:25 PM REPRESENTATIVE SEATON opined that the cost involved with the passage of HB 13 would be considerably higher than the estimated amount. He said that he cannot support HB 13 because of the problem of equity between rural and urban districts. He expressed a preference for holding the bill over until the issues raised thus far have been addressed. REPRESENTATIVE ANDERSON opined that the passage of HB 13 is time sensitive, and relayed that he would question studies which say that there isn't equity in funding. He then advocated for legislation that would consolidate school districts. REPRESENTATIVE GARDNER said that she is concerned about equity issues, but thinks, too, that [the passage of HB 13] is a time sensitive matter. 5:06:50 PM REPRESENTATIVE SEATON posited that [in passing HB 13], the limited monies that are available for education will be put into urban districts that are able to bond. REPRESENTATIVE CISSNA expressed a preference for holding the bill over in order to try and create more balance. She emphasized that although she does not want to take anything away from the Mat-Su or other communities that are growing, there are other parts of the state that are desperately [in need as well]. CHAIR WILSON indicated a preference for holding HB 13 over. REPRESENTATIVE GRUENBERG said he is committed to working with people from the Bush communities on the issue of equity, and asked that HB 13 be moved to the Finance Committee. CHAIR WILSON stated that HB 13 would be held over.
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