Legislature(1993 - 1994)
03/30/1994 01:41 PM Senate HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CHAIRMAN RIEGER called the Senate Health, Education and Social Services (HESS) Committee to order at 1:41 p.m. He introduced SB 301 (REVISE FOUNDATION FORMULA, SMALL SCHOOLS) as the first order of business before the committee. SENATOR TAYLOR, Prime Sponsor, explained that SB 301 addresses two major concerns: a significant drop in the Sitka school district's enrollment and funding for small single site school districts. He read his sponsor statement. He commented on the continuing battle over the single site issue. SB 301 amends the funding formula for education in Alaska, which seems to be a big issue. He suggested repairing the entire single site issue. He noted the various lists of single site schools who need financial aid, B.A. Weinberg's list should be reviewed. He anticipated an additional decrease of 100 students in the Sitka school district. SENATOR ELLIS asked if Senator Randy Phillips' bill would be before the HESS committee. CHAIRMAN RIEGER noted that Senator Phillips' bill had just been passed out of the Community & Regional Affairs (C&RA) committee, and would be before HESS. CHAIRMAN RIEGER agreed that Sitka's problem was immediate. The reason SB 301 would not be moved today was to allow further consideration of section 2. Number 122 SENATOR ELLIS asked if SB 301 was related to the "hold harmless" provision regarding property value assessments. That "hold harmless" provision would require the state to make up the difference when property value assessments fall below a certain level. The student would not feel the effects of the decrease in property values. He thought that once property values increased the state would continue to pay that increased amount of support. DUANE GUILEY, Department of Education (DOE), informed the committee that the "hold harmless" to which Senator Ellis referred has not been adopted. The "hold harmless" in SB 301 exists in current statutes. He explained that the "hold harmless" in SB 301 refers to when a district has a 10 percent loss in K-12 units, which may be the direct loss of students or the loss of students identified in supplemental education categories. The "hold harmless" in SB 301 is not related to the one referred to by Senator Ellis. He noted that the formula automatically annually adjusts for the differences in assessed property value two years prior; as property values go up in a community, state aid goes down. The basic need stays the same, so the community would make up a greater share when property values are high. SENATOR SALO inquired as to the position of DOE on SB 301. DUANE GUILEY noted support, contingent upon funding, from the State Board of Education to the single site bill in the House. The department nor the board has a position on a change to the "hold harmless." Currently, only the Sitka school district would be effected by this change due to its scheduled 7 percent reduction in K-12 units. Mr. Guiley noted that three other districts would be eligible under the 10 percent: Adak, Aleutian Region, and Southeast Island. SENATOR SHARP asked how many students are in Adak. DUANE GUILEY stated that the projected enrollment for Adak next year is 150 students, which is down from 550 this year. The Navy predicts that there would be no students at Adak by July 1. SENATOR SHARP asked how much funding would Adak receive with 150 students under the 10 percent rule. DUANE GUILEY explained that Adak would receive 75 percent of the revenue they would have received with 550 students. The following year they would receive 50 percent of the revenue for 550 students, the next year they would receive 25 percent of the revenue, and the fourth year they would receive zero. Number 215 SENATOR SHARP asked when that funding would end. DUANE GUILEY said that under current statutes the school district would continue to receive the money after there are no students. SENATOR SHARP inquired as to the number of students of single site school districts. DUANE GUILEY said that he would provide that information for the committee. The "hold harmless" in statute is based on the percentage change in K-12 units, which may come from varying things such as the number of students or the profile of the student body. Mr. Guiley clarified that in Sitka the 5 percent reduction in K-12 units is actually a decrease in students. SENATOR LEMAN expressed the need to consider a maximum trigger which would make the three or four year phase out inappropriate. DUANE GUILEY said he would review that situation. Mr. Guiley noted that there had been discussion of creating a secondary "hold harmless" where the loss is greater than 10 percent and the district would receive less than 75 percent. Mr. Guiley pointed out that contractual obligations are often more that 75 percent of the budget; the timing of the circumstances is very important as to whether the district could absorb the loss and adjust the program. SENATOR SHARP requested the actual case history of Adak. DUANE GUILEY said he would provide that to the committee. SENATOR SALO thought that a maximum would be difficult to arrive at because of the deadline information. She requested that Mr. Guiley suggest other statutory ways that an Adak situation could be handled while giving the department flexibility. Sending money to places without students is absurd. CHAIRMAN RIEGER held SB 301. SENATOR ELLIS commented that he supported the change, but without a comprehensive re-write of the formula his attitude changes. He inquired as to the plan on the overall re-write. CHAIRMAN RIEGER said that as of yet, there was not a plan.
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