Legislature(2001 - 2002)
02/27/2002 01:33 PM Senate CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 264-MUNICIPAL BOND REIMBURSEMENT
JERRY BURNETT, Staff to Senator Lyda Green, introduced the bill
and read the following sponsor statement into the record:
Senate Bill 264 would authorize 70 percent state
reimbursement for $113 million dollars of school
projects that are funded by voter authorized debt
issued by local government. The authorization would be
distributed among school districts in the following
manner; $50 million for projects in Anchorage, $15
million for projects in Fairbanks, $13 million for
projects in Mat-Su, $10 million for projects in Kenai
and $25 million for projects in smaller school
districts in organized Alaska. The amounts are intended
to equal $1,000 in projects per student rounded to the
nearest million dollars in each district.
Debt reimbursement is one of the methods that have been
used to fund school construction in Alaska for a number
of years. Debt reimbursement has a unique advantage
over other financing methods in that it allows for
maximum local involvement and input in the decision of
which specific projects should be funded. Municipal
debt reimbursement insures that the projects funded in
a school district are the highest priority of the
voters in that district. Projects need to meet state
standards for approval but do not need to be funded in
the state's priority order.
SB 264 is not intended to serve as a complete school
funding package. School districts in unorganized Alaska
cannot use debt reimbursement. Individual school
projects are often larger than the authorization in SB
264 for any school district. Other funding methods,
such as general obligation debt, must be used for most
school construction and major maintenance in Alaska.
Municipal debt reimbursement is, however, the best
method for many school districts to build and maintain
the facilities most important to the people in their
community.
EDDY JEANS, Finance Manager for the Department of Education and
Early Development, said he was available to answer questions. For
the record, he wanted to state that the Legislature has done a
fine job at funding school construction the last two years and
they have followed the department's priority list. He clarified
that this bill would only fund school construction projects in
municipal school districts once there is both voter and
department approval.
SENATOR LINCOLN said she realizes this is for organized Alaska,
but wanted to know how this affects the Kasayulie Case in which
the judge said that schools in the unorganized areas are treated
unfairly in terms of bonding for school projects. She asked
specifically what this bill does to correct that discrepancy.
MR. JEANS said he isn't a lawyer and can't make any specific
comments, but the judge has been looking at the appropriations
the Legislature has been making in the last two years and has
looked favorably on the mechanisms. Additionally, he was pleased
that the Legislature has followed the department's list. He
expected the judge to continue to watch through this session and
that is why the Governor introduced his funding proposal, which
follows the department's priority list and includes municipal and
rural school districts.
SENATOR LINCOLN said she didn't hear an answer to her question so
she restated it.
MR. JEANS said this piece of legislation does not provide any
funding for rural education attendance areas that do not have the
capacity to bond. It provides a funding mechanism for municipal
school districts that have bonding capacity.
SENATOR LINCOLN asked if the department is supportive of this
legislation knowing about the judge's analysis.
MR. JEANS said he has not had that conversation with the
governor's office. The Governor has submitted his own legislation
that funds the department's priority list for both urban and
rural school districts.
CHAIRMAN TORGERSON stated for the record, "So it won't go
unchallenged, I do not agree with the judge's case on Kasayulie.
We proved, by numbers, that he was using the wrong set of
numbers. The facts in point are not correct so, therefore, his
ruling is not correct."
There was no further testimony.
CHAIRMAN TORGERSON announced it was his intent to move the bill
since it was largely a finance issue.
SENATOR KELLY made a motion to move SB 264 and accompanying
fiscal note from committee with individual recommendations.
There being no objection, SB 264 moved from committee.
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