Legislature(1993 - 1994)

03/08/1993 09:20 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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  CS FOR HOUSE BILL NO. 45(FIN):                                               
                                                                               
       An  Act  making  appropriations to  the  Department  of                 
       Education  for support  of  kindergarten, primary,  and                 
       secondary education and community  schools programs and                 
       for school construction debt retirement; and  providing                 
       for an effective date.                                                  
                                                                               
  Co-chair Pearce announced  that CSHB 45(FIN) was  before the                 
  committee and  invited John Bitney, staff  to Representative                 
  Larson,  to  join the  committee  at  the table.    She also                 
  directed  the committee's  attention  to  a handout  titled,                 
  "Small   Single  Site  School  District  Funding"  from  the                 
  Consortium of Single Site School Districts.                                  
                                                                               
  JOHN  BITNEY,  staff  to  Representative  Larson, said  CSHB
  45(FIN) provided for the appropriation for the Department of                 
  Education (DOE) to fully fund,  at the $61,000 instructional                 
  unit level, the  foundation formula  for public schools,  as                 
  well as  full funding  for pupil  transportation and  public                 
  school debt  service.  Included  in the appropriation  is an                 
  allocation of $3.3M for single  site school districts across                 
  the state of Alaska.   He said that it was  the intention of                 
  the House, with the  early passage of the  bill, to give  an                 
  indication to school districts of their appropriation  level                 
  for public education for next year.                                          
                                                                               
  Senator Kelly asked  if Section 2 on  page 3 had to  do with                 
  retirement service.  Mr. Bitney agreed that Section 2 listed                 
  the  debt service  that  the state  would  provide to  local                 
  municipalities  for school  construction debt  service.   In                 
  answer to Senator Kelly, Mr. Bitney said that this money was                 
  sent to the local municipalities by DOE.                                     
                                                                               
  DUANE  GUILEY,  Director,  School   Finance,  Department  of                 
  Education, spoke in  support of CSHB  45(FIN).  He said  the                 
  difference between this  bill and the Governor's  budget was                 
  that  this  bill  would  fund  pupil transportation  at  100                 
  percent.  Another  difference is the single  site supplement                 
  in  the Governor's budget  was based upon  FY93 actual daily                 
                                                                               
                                                                               
  membership, whereas, in HB  45, it is based upon  the school                 
  district's projection for  FY94.  He asked  the committee to                 
  support the FY93 amount at $3,358,050 as opposed to the FY94                 
  projection.                                                                  
                                                                               
  Senator Rieger  asked if  DOE was  in support  of additional                 
  district support on page 2.  Mr.  Guiley said DOE was not in                 
  support of the single site supplement but had included it in                 
  the budget two years ago because that money was available.                   
                                                                               
  REPRESENTATIVE  RON  LARSON,  Co-chair  for  House   Finance                 
  Committee,  said that  the committee had wanted the  bill to                 
  be  as  current as  possible, and  had  decided to  use FY94                 
  numbers.    He  said, for  consistency  purposes,  the House                 
  Finance Committee decided it was better to use FY93 numbers,                 
  and that was the reason the  amended CSHB 45(FIN) was before                 
  Senate Finance Committee.                                                    
                                                                               
  Senator Kerttula  said that some southeast  schools received                 
  forest receipts to assist their unique educational problems.                 
  He  asked   if  those   forest  receipts   had  come   under                 
  consideration  when  funding was  given  to the  single site                 
  school  districts.  Representative  Larson said that between                 
  seven and twenty-one schools had  been considered for single                 
  site designation.   Last year, it  was decided that  funding                 
  could  not  be  determined by  forest  receipts  since those                 
  receipts varied  considerably from  year to  year.   Senator                 
  Kerttula  felt that forest receipts  should at least be able                 
  to be estimated so they  might be taken under consideration.                 
  Co-chair  Pearce  asked  Mr. Guiley  if  last  year's forest                 
  receipts would be made available to the committee.                           
                                                                               
  SENATOR  GEORGE  JACKO  asked  why  FY93 figures  were  used                 
  instead of FY94.  Representative Larson said in the past the                 
  prior year's  figures were used  to estimate funding.   FY93                 
  figures were used to remain consistent.                                      
                                                                               
  Senator Rieger asked  if legislative  action had been  taken                 
  last year to create a  new school district.   Representative                 
  Larson explained that  by a popular  vote of the people,  it                 
  was  decided that  the Yupik  School District, not  a single                 
  site  school  district,  and Tanana,  a  single  site, would                 
  operate separately from the REAA.                                            
                                                                               
  Senator Kerttula said that last  year the instructional unit                 
  had been  set at  $61,000.   Varying districts using  backup                 
  information had said that figure was not high enough because                 
  of the inflationary  spiral and other  costs.  He asked  how                 
  that funding could  be accomplished  without increasing  the                 
  instructional unit.   Representative  Larson said that  CSHB
  45(FIN) was a  $3.2M increase over the  Governor's proposal.                 
  He said the increase has been caused by a greater percent of                 
  gifted  and  talented, and  special  ed children  within the                 
  school  districts,  not  necessarily  from  an  increase  in                 
                                                                               
                                                                               
  enrollment.    Mr.  Guiley submitted  that  the supplemental                 
  request for FY93 is $6.4M, and of that, $5.1M is an increase                 
  in special ed.                                                               
                                                                               
  STEVE  MCPHETRES,  Executive  Director,  Alaska  Council  of                 
  School Administrators  (ACSA),  spoke  in  support  of  CSSB
  45(FIN).   He said  that early  funding for  schools was  of                 
  great  benefit  to  the teachers  and  school  districts for                 
  planning and  preparation for  the coming school  year.   He                 
  said  that  there  was  a  need   for  an  increase  in  the                 
  instructional unit values  but ACSA did appreciate  the fact                 
  that this bill fully funded  instructional units at $61,000,                 
  and  recognized  the  single  site  school  districts.    He                 
  explained that in 1986, the  legislature recognized that the                 
  educational formula  was in  need of  adjustment.   He hoped                 
  that DOE would  come forward with  a new formula, but  until                 
  then, he  hoped the committee  would pass  CSSB 45(FIN)  for                 
  early funding for schools.                                                   
                                                                               
  Senator  Rieger  asked  for an  explanation  of  single site                 
  school districts.  Mr. McPhetres said a multiple-site school                 
  district has a multiplication factor  that is different from                 
  single  site school districts,  and increases  its potential                 
  for higher instructional unit values.   Senator Rieger asked                 
  if the single site  funding brought equality to  single site                 
  schools.  Mr.  McPhetres said  that the educational  formula                 
  needed to be changed instead of a one-time a year funding to                 
  try   to  equalize  that  funding.     He  added  that  some                 
  communities do not have a tax  base and therefore are unable                 
  to  adequately fund their  educational needs.   In answer to                 
  Senator Kerttula, Mr.  McPhetres said that ACSA  did support                 
  an increase in the instructional unit.                                       
                                                                               
  VERNON  MARSHALL,  Executive  Director,  National  Education                 
  Association-Alaska, spoke in  support of CSSB 45(FIN)  since                 
  it did not cut funding to schools.  He said NEA-AK supported                 
  an increase in the  instructional unit to $67,000.   He said                 
  student  enrollment  is increasing,  and  some needs  in the                 
  school  districts  are   not  being   met  by  the   $61,000                 
  instructional unit.  He said that NEA-AK also supports early                 
  funding so that school districts may budget and plan for the                 
  coming  school  year.    In   response  to  Senator  Kelly's                 
  question,  Mr.  Marshall  said that  NEA-AK  supported other                 
  programs such as student lunch programs but the  funding for                 
  those programs was not meeting all the needs of the students                 
  either.    He suggested  that  a breakfast  program  in some                 
  schools is necessary so that children may attend school with                 
  a healthier attitude.                                                        
                                                                               
  Senator Kerttula made note that funding for tuition students                 
  had been reduced in SB  45.  He wanted to point out that not                 
  all items had been increased.                                                
                                                                               
  Senator Rieger  asked  Mr. Guiley  if  there was  an  actual                 
                                                                               
                                                                               
  increase in special  ed student enrollment or had special ed                 
  reclassification  caused the funding  increase.   Mr. Guiley                 
  said that there definitely was  an increase in the  incident                 
  rate for special ed students in schools.  He said one reason                 
  may be that  schools are doing  a better job of  identifying                 
  special ed  students.   Although schools  are audited  every                 
  five years, he could  not speak to the justification  of the                 
  increased  incident  rate.    Discussion  followed   between                 
  Senator Rieger and Mr. Guiley  regarding students chosen for                 
  special ed, and the funding and restrictive environment that                 
  follows those students.                                                      
                                                                               
  At this time, Mr. Guiley provided the committee with  copies                 
  of  a memo  dated  January 7,  1992,  listing the  requested                 
  forest receipts  data (copy of file).  He said that the memo                 
  may have been  written in  1993.  He  explained that  forest                 
  receipt money goes straight  to the borough or city,  and by                 
  state statute, a  certain portion of that money  is required                 
  to be  set aside  for schools.   He  believed the  remaining                 
  portion is used for roads.                                                   
                                                                               
  Senator Jacko asked if there were any other arrangements  in                 
  the state for severance  taxes.  Mr. Guiley said  there were                 
  other localities that had their own severance tax but forest                 
  receipts  is a  federal  program with  legislation  attached                 
  stating how  those funds must be used.  He explained that of                 
  the thirty-two organized  school districts, only  about two-                 
  thirds have  a property  tax that  comes up  to four  mills.                 
  Some  districts  have  other   types  of  taxes--hotel   bed                 
  receipts, raw fish tax, and sales tax.                                       
                                                                               
  In answer to  Senator Kelly, Mr.  Guiley said that he  would                 
  provide data  dating back to  1988, showing the  increase in                 
  special  ed  funding  per  district  by year.    Mr.  Guiley                 
  explained  that  if   three  students   are  classified   as                 
  intensive,  it would generate one unit of funding or $61,000                 
  to the district.  Discussion  followed between Senator Kelly                 
  and Mr. Guiley  regarding school  districts that were  above                 
  the norm because of their percentage of special ed students.                 
  Mr. Guiley explained that DOE did not place  a limit for the                 
  district on  the number of students that could be classified                 
  as special ed.                                                               
                                                                               
  Senator  Rieger  asked  where  Alaskan  students   stood  in                 
  relation to  other states  in regard  to SAT  or other  test                 
  results.  Mr. Guiley said that he  did not have the data but                 
  would provide it to the committee.  Senator Kerttula offered                 
  that Mat Su area students' test  results had risen, and some                 
  were at the top of the national standings.                                   
                                                                               
  Co-chair  Frank  asked  how  the  Governor's budget  request                 
  compared to prior years lists by DOE for the single and dual                 
  site school districts.   Mr. Guiley said in FY92  there were                 
  direct  appropriations  of  $2,131.0  and  that  amount  was                 
                                                                               
                                                                               
  attributed to fifteen single site city and borough districts                 
  only, excluding  REAA's.  In  answer to Co-chair  Frank, Mr.                 
  Guiley said that  DOE has never  gone on record in  complete                 
  support of the single site supplement,  in that DOE does not                 
  have the data to  support 100 percent for all  the districts                 
  on the list.  The only thing the districts have in common is                 
  their size, and that  they only have one  funding community.                 
  Mr.  Guiley supplied  the  committee with  a list  of school                 
  districts showing  the  prior year's  funding  and  national                 
  forest receipts dated March 9, 1993 (copy on file).                          
                                                                               
  Senator  Jacko  asked what  figures  DOE supports  for pupil                 
  transportation.  Mr. Guiley said  that the Governor's budget                 
  set aside a proration of 10 percent equaling $25,718,100.                    
                                                                               
  Senator  Rieger  asked  the  logic  behind having  different                 
  lists.  Mr.  Guiley said that the Governor had  asked DOE to                 
  prepare a budget that fully funded education.  He went on to                 
  explain a short history of legislative school funding.                       
                                                                               
  In answer  to  Senator Rieger,  Mr. Guiley  stated the  very                 
  small districts  that have  values  of less  than $100.0  in                 
  support of each student were  St. Mary's, Hydaburg, Klawock,                 
  Nenana, Kake and Hoonah.   The statewide average runs $241.0                 
  in  support of  each student.    In the  range of  $100.0 to                 
  $200.0  in  support  of  each  student are  Tanana,  Galena,                 
  Yakutat, Craig and  Nome.  The required  local contribution,                 
  for example, for  Nenana is  equal to $60,449.   The  single                 
  site supplement would more than  make up their contribution.                 
  Senator Rieger asked  if that  was the ratio  for the  other                 
  single site  school districts.  Mr. Guiley  answered that it                 
  was dependent upon full value  determination and not related                 
  to student population.                                                       
                                                                               
  Co-chair Pearce asked  John Bitney, staff to  Representative                 
  Larson, if  the numbers  that DOE proposed  in their  budget                 
  presentation  to the legislature  differs somewhat  than the                 
  numbers that the House Finance Committee finally settled on.                 
  She   wanted   to   know  if   the   difference   was  pupil                 
  transportation.    Mr.  Bitney said  that  the  reduction in                 
  funding   was   the   difference   between   the   increased                 
  instructional unit value and the  original unit value single                 
  site school districts received.                                              
                                                                               
  In answer to  Senator Jacko, Mr.  Bitney said that the  bill                 
  that   passed  the   House   included  funding   for   pupil                 
  transportation not including an administrative fee.                          
                                                                               
  With  no  further  testimony to  be  heard,  Co-chair Pearce                 
  announced that CSHB 45(FIN) would be held in committee.  She                 
  also  announced   that  Senator  Kerttula's   amendment  #1,                 
  increasing the formula  level per unit,  would be held  with                 
  the bill.                                                                    
                                                                               
                                                                               
                         Recess 10:30am                                        
                        Reconvene 10:32am                                      
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 10:32 a.m.                        
                                                                               

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