Legislature(2003 - 2004)
05/14/2003 09:40 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 202
"An Act relating to school transportation; relating to the
base student allocation used in the formula for state funding
of public education; and providing for an effective date."
This was the third hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated this bill, "revises the method in which
local school districts are reimbursed for pupil transportation
costs. Under this bill, a pupil transportation grant program is
established. In addition it raises the student dollar; an increase
of $159, which is the conversion from LOGs [Learning Opportunity
Grants] to student dollars."
JENNIE HAMMOND, resident of Nikiski, testified via teleconference
from Kenai in opposition to the bill. She expressed concerns that
the Kenai Peninsula Borough School District would "lose" funds as a
result of the transportation provisions. She spoke of academic
programs and other operations that have received reduced funding in
the past several years. She informed that transportation costs
within the district vary by community and that funding should be
assessed based on the cost of each route rather than on the number
of students in a district. She requested this portion of the bill
be "tabled" to garner additional input from affected districts. She
furthered that State, federal and local parties should discuss the
issue of who is responsible for the education of children. She
stated that transportation and foundation formula funding are
different issues that should be addressed independently. She
indicated that as a parent, she is willing to contribute to the
cost of her children's education.
Senator Bunde asked if the Kenai school district has considered
requesting that parents help pay the cost of transporting students.
Ms. Hammond repeated that the matter should be discussed in school
districts across Alaska.
TODD SYVERSON, Assistant Superintendent, Kenai Peninsula Borough
School District, testified via teleconference from Kenai to express
concerns that the District has with this legislation. He stated
this bill would reduce funding for pupil transportation and
informed that the District must transport students 45 miles from
Cooper Landing to Skyview High School, and from Moose Pass to
Seward, regardless of the number of students along each route. He
also told of the special education students that must be
transported, often involving "singleton routes". He explained this
involves picking up only one student and transporting them to the
school equipped to meet their special requirements. He pointed out
this legislation does not address the extra expense of transporting
special education students.
Mr. Syverson supported Co-Chair Wilken's proposed amendment to
inflation proof the funding for pupil transportation funding.
Mr. Syverson appreciated the proposed increase to the base student
allocation, but stressed the amount of the increase is inadequate
to address the needs of the District. He also noted that an area
cost differential is not addressed in this bill.
Co-Chair Wilken requested Mr. Jeans address comments on the
differing costs of routes and special education students' routes.
EDDY JEANS, Manager, School Finance and Facilities Section,
Education Support Services, Department of Education and Early
Development, testified the grant amount awarded to each school
district would be determined by dividing the amount of the FY03
State appropriation by the total number of students enrolled in the
district during FY 03. He stated that therefore, the costlier
routes are already reimbursed in FY 03. He qualified this
legislation does not provide increased funding in the event a
district must add any special education routes or the development
of a new subdivision.
Co-Chair Wilken remarked this has been an important concept the
Committee has considered.
Amendment #1: This amendment inserts a new bill section on page 2,
following line 7 to read as follows.
Sec. 3. The uncodified law of the State of Alaska is
amended by adding a new section to read:
TRANSITION PROVISION FOR TRANSPORTATION FUNDING. In
addition to funding provided for public transportation under
AS 14.09.010, a school district that provides student
transportation is, beginning July 1, 2004, and ending June 30,
2006, eligible to receive additional funding for operating the
student transportation system in an amount equal to funding
provided to the school district under AS 14.09.010 multiplied
by a percentage equal to 50 percent of any percentage increase
during the second preceding calendar year in the consumer
price index for all urban consumers for the Anchorage
metropolitan area, compiled by the Bureau of Labor Statistics,
United States Department of Labor. The index for January 2002
is the reference base index.
Co-Chair Wilken moved for adoption.
Co-Chair Green objected.
Co-Chair Wilken explained this amendment acknowledges that some
school districts would prefer transitional funding to implement the
changes. Therefore, he stated this amendment would increase the
"per pupil grant" for FY 05 and FY 06 calculated from the consumer
price index for Anchorage.
Co-Chair Green asked impacts of this amendment.
Co-Chair Wilken noted a draft fiscal note dated 5/14/03 for the
Pupil Transportation budget request unit (BRU).
Senator Hoffman understood the increase would be one half of two
percent, or a one percent increase.
Co-Chair Wilken clarified the actual amount of the increase could
vary based on the consumer price index for Anchorage.
Senator Hoffman asked why the increase would not be a full percent,
rather than a partial percentage of the consumer price index.
Co-Chair Wilken responded it is a "matter of money", and that
increasing funding for this item could not exceed $1 million.
Co-Chair Green opposed funding items based on any index, as it
would become an "automatic escalator".
Co-Chair Wilken shared the concern about automatic increases, but
expressed that because this legislation would impose a significant
change to the program, this amendment would lessen the fiscal
impact to school districts.
Senator Hoffman pointed out the increase would end after FY 06.
Senator Hoffman moved to amend the amendment to increase the
multiplier percentage of any percentage increase during the second
preceding calendar year from 50 to 75 percent.
Co-Chair Green and Co-Chair Wilken objected.
A roll call was taken on the motion to amend the amendment.
IN FAVOR: Senator Hoffman
OPPOSED: Senator B. Stevens, Senator Bunde, Co-Chair Green and Co-
Chair Wilken
ABSENT: Senator Olson and Senator Taylor
The motion FAILED (1-4-2)
The amendment FAILED to be amended.
Co-Chair Wilken affirmed his intent that this increase would not
extend beyond FY 06 and that the funding is solely for transitional
purposes.
Senator B. Stevens asked how the increase would be distributed
given that the calculation is different than the method used to
determine the grant funding for each district.
Mr. Jeans referenced the fiscal note, which details the dollar
amount allocated per student to each district. He explained these
amounts would be adjusted by one percent of the consumer price
index for Anchorage.
Senator Taylor clarified that school districts with declining
enrollments would receive reduced funding and those funds would be
reallocated to districts with increased enrollment.
Mr. Jeans detailed the per student allocation would be calculated
for each district utilizing the number of students and the amount
appropriated in the base year of FY 03. He continued that the
actual number of students enrolled in FY 05 would be multiplied by
the per student allocation for that district to determine the grant
amount for FY 05. He affirmed that districts with declined
enrollment would receive fewer funds under this proposal.
Senator Taylor expressed confusion, saying that if the consumer
price index increases dramatically the actual appropriation would
increase but not based on per capita.
Co-Chair Wilken understood that districts with declining enrollment
would receive less of a reduction under the provisions of this
amendment.
Mr. Jeans affirmed.
Senator B. Stevens asked if the baseline for determining grant
funding of FY 03 be utilized for calculating the grant amount for
FY 06.
Mr. Jeans explained the adjustment proposed in this amendment for
FY 06 would be based on the FY 05 appropriation. He clarified the
increase of FY 05 would "roll forward" and the adjustment would be
"added to the prior year".
Co-Chair Wilken furthered the increase would be cumulative.
Senator Hoffman asked when and how often the consumer price index
for Anchorage is determined.
Mr. Jeans replied this information is published on the Department
of Labor and Workforce Development website.
Senator B. Stevens informed the index is calculated annually on
July 1.
Co-Chair Green removed her objection to the adoption to the
amendment and Amendment #1 was ADOPTED.
Amendment #2: This amendment deletes "to school transportation;
relating" from the title of the bill. The amended bill title reads
as follows.
"An Act relating to the base student allocation used in the
formula for state funding of public education; and providing
for an effective date."
This amendment also deletes Section 1 from the bill, amending AS
14.09.010. Transportation of pupils.
Senator Hoffman moved for adoption.
Co-Chair Wilken objected.
Senator Hoffman stated this amendment would eliminate the grant
formula proposed in this bill.
Co-Chair Wilken understood this would "continue the status quo" of
the current system.
Senator Hoffman affirmed.
A roll call was taken on the motion.
IN FAVOR: Senator Taylor, Senator Hoffman and Senator Olson
OPPOSED: Senator B. Stevens, Co-Chair Green and Co-Chair Wilken
ABSENT: Senator Bunde
The motion FAILED (3-3-1)
The amendment FAILED to be adopted.
Amendment #3: This amendment repeals the provisions of Section 1 of
the bill, amending AS 14.09.010. Transportation of pupils., on July
1, 2006.
Senator Hoffman moved for adoption.
Co-Chair Wilken objected for an explanation.
Senator Hoffman pointed out that the impacts of the grant proposal
are unknown. He asserted the proposal is unfair to the school
districts located in his election district. He remarked it would
penalize the districts that have been frugal and kept costs down
and reward the districts that have allowed costs to "run willy-
nilly".
Senator Hoffman stated this amendment would implement the program
for two years, after which it could be evaluated with input from
school districts and a fairer program could be created.
Co-Chair Wilken maintained his objection.
A roll call was taken on the motion.
IN FAVOR: Senator Taylor, Senator Hoffman and Senator Olson
OPPOSED: Senator B. Stevens, Co-Chair Green and Co-Chair Wilken
ABSENT: Senator Bunde
The motion FAILED (3-3-1)
The amendment FAILED to be adopted.
Amendment #4: This amendment increases the base student allocation
from $4,169 to $4,280.
Senator Hoffman moved for adoption.
Co-Chair Wilken objected.
Senator Hoffman remarked, "The cost of education has been stagnant"
and that the National Education Association-Alaska and some school
districts support the amount proposed in this amendment.
Senator Taylor expressed concern about the unknown amount of
education funding that would be appropriated in the FY 04 operating
budget. He reminded that he has supported the proposed increase in
the past and would continue to support it.
Co-Chair Wilken pointed out the fiscal note for this amendment
would be approximately $41 million.
Mr. Jeans affirmed.
Senator Bunde moved to amend the amendment to change the funding
source to earnings of the permanent fund.
Co-Chair Wilken objected.
A roll call was taken on the motion to amend the amendment.
IN FAVOR: Senator Bunde, Senator Hoffman and Senator Olson
OPPOSED: Senator B. Stevens, Senator Taylor, Co-Chair Green and Co-
Chair Wilken
The motion FAILED (3-4)
The amendment FAILED to be amended.
A roll call was taken on the motion to adopt the amendment.
IN FAVOR: Senator Hoffman, Senator Olson and Senator Taylor
OPPOSED: Senator Bunde, Senator B. Stevens, Co-Chair Green and Co-
Chair Wilken
The motion FAILED (3-4)
The amendment FAILED to be adopted.
Co-Chair Wilken recalled a discussion between himself and Mr. Jeans
regarding instituting a specific funding amount into statute rather
than a funding formula.
Mr. Jeans explained the option of listing in statute a specific
dollar amount to be appropriated to each school district. He
cautioned against this practice, warning that individual districts
would begin lobbying for an increase to their district. He
furthered that it would be difficult to justify funding changes to
one districts without reviewing all districts.
Senator Taylor countered that rather than assigning a specific
funding amount to each school district, this legislation institutes
a formula based on number of students enrolled during FY 03. He
expounded on the inequity of this system to school districts that
have declining enrollment.
Senator Hoffman recalled provisions included in the legislation
establishing the foundation funding formula to address the "eroding
floor" in an attempt to achieve equity. He asked whether a similar
provision has been considered for this formula program as well. He
exampled that an upper limit of $1,000 per student could be phased
in so that over a period of time, "restraints" could be imposed to
address those routes currently costing $1,200 per student.
Co-Chair Wilken asserted that changes would not be made to increase
funding to this program. He pointed out this has been a "cost plus"
program across the State and he surmised that program managers
would identify sufficient funding to operate routes as efficiently
as possible.
SFC 03 # 96, Side A 12:52 PM
Co-Chair Wilken continued that decisions on how to efficiently
deliver education services must be made locally by school boards
rather than by the legislature. He predicted this legislation would
result in a "vast improvement" in the operation of the pupil
transportation system and funds saved that could be spent "in the
classroom".
Senator Taylor agreed with Co-Chair Wilken's concerns about the
rising costs of pupil transportation and pointed out that until
recent years, the legislature has not fully funded these expenses.
He surmised this caused the costs to rise dramatically and
inefficiencies especially in larger school districts with
"economies of scale". He stressed that much of the expense is the
result of federal mandates and compliance with the Americans with
Disability Act requirements.
Senator Taylor referenced the hold harmless provision intended to
limit the impact to the two largest school districts from the
consolidation of the LOGs into the funding formula. He asserted
that a hold harmless provision should be adopted for the proposed
pupil transportation grant formula to limit the impact to schools
with declining enrollment.
Co-Chair Wilken agreed this proposal does not include a hold
harmless provision, although "token" funding would be allocated to
limit the impact. He cited the higher costs of transporting certain
special needs students and the significant percentage this
comprises of the total pupil transportation expenditures. He
referenced a spreadsheet titled, "Department of Education and Early
Development, Reimbursable Transportation Costs Per Student (Regular
V. Sped)--FY 02, May 8, 2003".
Mr. Jeans qualified the information on the spreadsheets was
gathered from each school district and includes transportation of
all special education students, not just those requiring additional
assistance, such as full time aid workers or wheelchair lift.
Mr. Jeans reiterated that the higher cost of transporting special
education students is included in the base formula. He relayed the
concern of school districts is their "profile" would change "so
dramatically" as to be negatively affected by this program. He
stressed that 100 percent of the special needs expenses are
currently reimbursed by the State.
Senator Taylor asked how special education student transportation
cost increases would be addressed in contract negotiations.
Mr. Jeans responded these costs are currently reimbursed calculated
by dividing the student population by the total transportation cost
per district to determine the allocation for each district. He
explained that this formula does not make adjustments if the
percentage of special needs students in a district increases.
Senator Taylor commented that currently, the funding is provided
based on the needs of students and that under this proposal future
funding would be provided based on the total number of students,
regardless of their special needs.
Mr. Jeans affirmed, and again voiced the concern of school
districts that the amount of funding does not increase if the
percentage of a district's population that has special needs
changes.
Senator Bunde surmised that such percentage increases have not
occurred in the past.
Mr. Jeans affirmed.
Senator Taylor agreed with Senator Bunde that such changes have not
occurred historically on statewide average. However, he remarked
that the percentage change considerably in smaller school districts
when "a family moves to town" that has one or more special needs
children.
Co-Chair Green offered a motion to report the bill, as amended from
committee with accompanying and new fiscal notes.
There was no objection and CS SB 220 (FIN) MOVED from Committee
with fiscal note #1 of $32,136,600 for the Department of Education
and Early Development, K-12 Support BRU, Foundation Program
component, and a new fiscal noted dated 5/14/03 of $10,745,600 for
the Department of Education and Early Development, Pupil
Transportation BRU and component.
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