Legislature(1993 - 1994)

02/03/1994 09:05 AM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 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                                                                    
 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.                                                                

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