Legislature(1993 - 1994)
02/03/1994 09:05 AM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATOR RANDY PHILLIPS introduced SB 232 (SCHOOL CONSTRUCTION BOND D REIMBURSEMENT) and SB 233 (STATE EDUCATION AID: FUNDING COMMUNITIES) as the next order of business. CAROL CARROL, staff to Senator Jay Kerttula, the prime sponsor of SB 232 and SB 233, explained that SB 232 will increase by $90 million the ceiling for state participation in school construction by municipalities. There are several school districts that have already been approved for bonding, but there are three districts that can't go forward because there isn't any capacity left out of the $50 million allocation. It would be more fiscally positive for the state if this could done now because of the current low interest rates. Number 370 SENATOR ADAMS commented that he would like to have rural Alaska participate in this because they have more needs than in the urban areas of the state. CAROL CARROL responded that the $90 million would be available without regard to the population of any municipality. She also clarified that this does not apply to those areas that don't have a tax base and can't go out and bond for themselves. SENATOR ADAMS said regardless of whether there is a tax base or not, there has got be equity and fairness in these pieces of legislation because there are needs out in rural Alaska. Number 400 Ms. Carrol explained that SB 233 takes out of regulation the ability of the Department of Education to waive or delete or add funding communities at their own discretion by putting the definition of "funding community" into statute. Senator Kerttula believes that this will enable the Legislature to review any change that the Department of Education would like to make that would have a fiscal impact on some of the school districts. Number 425 DUANE GUILEY, Director, School Finance, Department of Education, speaking to SB 232, stated that at the present time the Department of Education does not support increasing the debt limit on school construction projects. Through compromise legislation approved by both bodies of the Legislature in the prior session, the department did support reinstating school debt with a cap of $250 million of new project principal. That $250 million was allocated to municipalities based on size. Those allocations provided $133 million of project principal to Anchorage; $67 million to Fairbanks; and $50 million to the remainder of the state. The allocations expire on July 1, 1996, and at the present time there are many outstanding bond project authorizations that have yet to be voted on by the local voters. There is remaining capacity within the $250 million, so the department feels it is premature to increase the ceiling, and there is a strong likelihood that some of the money will come available to be able to fund the remaining projects on their list without increasing the capacity. Number 540 Speaking to SB 233, Mr. Guiley said the position of the Department of Education is that currently the commissioner has the discretion in relation to funding communities and the establishment of the funding communities and the deletion of the funding communities. The State Board of Education has adopted a plan to phase out the funding for very small schools in the state, and that plan calls for the deletion or decertification of funding communities on a five-year schedule out through the year 1999. That would increase the minimum school size to 10. SB 233 sets the minimum school size at eight, and the department would not be able to carry out the plan as is currently approved by the State Board of Education. Decertification this year will save the state $754,000. Based on funding communities that are scheduled to be decertified in 1996 or 1997, the savings would be another $988,000. SB 233 would grandfather in those funding communities and the state would continue to fund $6,637,000 in additional state aid to those funding communities that are exception to the current regulation and proposed statute. Mr. Guiley stated the Department of Education does not support SB 233. Number 600 SENATOR RANDY PHILLIPS stated SB 232 and SB 233 would be held until the following week. Number 605 SENATOR RANDY PHILLIPS brought SB 62 (PUBLIC SCHOOL FOUNDATION PROGRAM) before the committee and stated that testimony would be taken over the teleconference network. ELL SORENSON, Superintendent, Mat-Su School District, testifying from the Mat-Su LIO on SB 232, stated their district continues to have serious crowding problems so they favor a bill that will put more money out there to build schools. He added they are very sympathetic with rural schools that may not be included in this legislation and they would support them being added. Mr. Sorenson also stated support for SB 233, although he did recommend a small change to it. TAPE 94-10, SIDE A Number 001 Mr. Sorenson, commenting on SB 62, said they have some serious reservations with the reduction that it makes to schools with 25 students in average daily membership. Doing away with some of these schools and providing education through other strategies may prove to be equal to a greater expense. Mr. Sorenson said the Mat-Su School District would like to go on record as maintaining the status quo and improving the level of funding for schools as opposed to taking large dollars out. Number 055 SENATOR RANDY PHILLIPS requested that Mr. Sorenson fax his suggested changes to SB 233 to his office. Number 060 MARILYN LEAHY, a school board member in Valdez, stated the board's opposition to SB 62 and their agreement with comments made by Mr. Sorenson on the bill. The legislation could have a very negative impact on the Valdez School District. Number 070 BECKY CHAPEK, a member of the Cordova School Board, referred to the section in the bill relating to the Alaska School Price Index, and stated concern that the index may be based on historic average expenditures of a district. By using the Alaska School Price Index, it appears that districts will penalized and locked into low salary positions. She also urged that the Legislature seek a permanent solution to the single dual site inequities that were put in place when the foundation formula went into being. Number 100 LARRY WIGET, Director of Government Relations, Anchorage School District, said currently, Anchorage has three funding communities: Eagle River, Girdwood, and the Anchorage bowl. He asked if under SB 233 Eagle River would still be considered a separate funding community. DUANE GUILEY acknowledged that it would. Number 125 DONNA EMERSON, the mother of two children who are in their seventh year of using the Centralized Correspondence Study program, testified from Funter Bay. Speaking to SB 62 and the portion that relates to how centralized correspondence is funded, she said there is widespread concern among the families on this program that the secondary portion of the program needs some strengthening in order to continue to meet a student's needs. At present, the correspondence staff is providing services to more students with fewer dollars than any other public school in the state. She urged that the committee allow SB 62 to strengthen the Centralized Correspondence Study program in a conservative manner. SENATOR RANDY PHILLIPS announced that the teleconference testimony was concluded.