Legislature(1997 - 1998)
12/02/1997 07:00 PM Senate HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 30 MANDATORY INCORPORATION OF CERTAIN BOROUGHS SB 36 PUBLIC SCHOOL FUNDING SB 142 REGIONAL EDUCATIONAL ATTENDANCE AREAS SB 146 PUBLIC SCHOOL FUNDING/CHILD CARE GRANTS SB 193 ADMINISTRATIVE SPENDING LIMIT FOR SCHOOLS SENATOR ADAMS said he would like to be able to give the minority's comments on these bills when they were finished explaining them. SENATOR MILLER welcomed everyone and said he and Senator Adams were in the legislature when the formula was written. SENATOR WARD welcomed everyone and said he was part of the legislature that wrote the formula also, and they have now found that it doesn't work and he's very interested in hearing their comments. SENATOR LEMAN said he was glad they were working with this issue because most of them agree that the present foundation formula is inequitable. The point of disagreement seems to be in the interpretation of what is equitable. He also thought that everyone needed to pay something in terms of a local share towards the cost of education. People in Fairbanks do that, but some people don't. He felt this was important because when people invest directly in education, they will care more about what's coming from it. He is as concerned with the outcome of education as he is with the costs and equity of the foundation formula. He believed this a way to improve education. He thought it was also important that whatever they come up with fits within phase 3 of their long term financial plan. CHAIRMAN WILKEN recognized Mr. Bob Shefchick, Chief Financial Officer, North Star Borough School District and Ms. Cynthia Henry, City School Board Member. He said a number of principals were also attending. He also recognized North Star Borough Assembly members: Mr. Cole Sonefrank, Mr. Mike Young, and representing the mayor, Ms. Nadine Winters. SENATOR TORGERSON welcomed everyone and said his parents homesteaded the Fairbanks Airport. He said the Legislative Budget and Audit Committee had awarded the contract for the area/cost differential study, adding that they have all said one of the stumbling blocks to changing the formula was determining if the area/cost differential was up to 1998 standards. This will be presented to the legislature in January. He explained that the last time the formula was rewritten it was done by Representative Swackhammer about 10 or 11 years ago. It was going to be the fix of all fixes because they were in the same position we are in today of dissatisfaction with how the money is being distributed. It would probably still be a good formula if there hadn't been some federal changes, some mandates on the education system, and most directly, the disparity the federal government put on us because we recognize PL874 funds sending several school districts into a tail spin. SB 30, he explained, would have continued to form the State into boroughs, the main purpose for which was taxation and education. This would get education down to the local level and away from State government. Our Constitution basically says the State will be divided into boroughs. In 1991 the Local Boundary Commission completed a report and SB 30 adopts the boundaries in that report. If areas vote to become boroughs, they fall into existing statutes taking the restriction off of being a third class borough (where the assembly sits as the school board also). If an area decides not to form a borough, the one thing it couldn't do was pay for education. The Department of Community and Regional Affairs would then have meetings throughout the affected areas and decide off a menu of different taxation measures what they would do to meet their equivalency requirement to assessed valuation. Sales tax, property tax, hotel tax, fish tax, are options to a property tax. Senator Wilken's bill proposes a gross payroll tax which is the cheapest way to collect that equivalency because there is no bureaucracy to go with it. He said there was opposition to the mandatory boroughs because people felt government was being forced on them and he hasn't pushed it very hard. He has introduced also SB 142 which does a lot of the same things, but doesn't require a vote; it just adopts the model borough boundary sections. SENATOR TORGERSON informed the committee that 92% of all people in the State pay a local effort of some nature and they receive 70% of the pie. The 8% that aren't required to pay anything receive the balance. This is to him a major inequity. SB 193 is the administrative cap bill, he explained. It says if we can use the foundation formula and use the area/cost differential on that, and if that' good enough to educate our kids, it should be good enough for administration. The low figure in the State is $695 in Ketchikan for both district and school administration; the highest is $6501 in the Aleutians. SB 193 caps the $6501 at about $1794. We have 130,000 kids in school and spend $125 million just in administrative costs. This bill would shift about $21 million back into the classroom. CHAIRMAN WILKEN said one of the main reasons he is working on education is because of the three recent bond issues in Fairbanks. He heard from people who said there are school districts they could drive to that don't pay a dime for their education and that there are places in the State that are far richer that pay a fraction of what they pay for education. After he looked at the foundation formula for a while he came to believe it needed to be thrown out because it is generally confusing, overly complicated, and generally unfair to a majority of the people in the State. He asked them to agree on three things: that the things you understand you have a tendency to trust, that we should all be carrying our fair share in regards to State expenses and education, and that it's the duty of any government to first take care of the health and safety of its citizens and secondly to take care of the education of its citizens. SB 146 breaks education funding into four components and with the aid of slides he proceeded to explain this concept. There's a pie; at twelve o'clock is the foundation ($628 million in 1997), three o'clock is required local contribution, the next part is optional local contribution, and the realization that some places will never have the asset base to fund their education and the richer parts of the State have to help the poorer. Tonight he wanted to concentrate on the foundation and required local contribution. He wanted the foundation formula to be simple and fair. CHAIRMAN WILKEN said this bill has been viewed as taking from rural areas and giving to urban areas. He explained using his chart why this wasn't true. He also said that it's not true that the State education dollar had shrunk 30%. Since 1988 State funding has increased 51% and the number of students has increased 26%. So the rate of funding has doubled that of increasing students, although he understands that inflation is part of that. Assuming the cost of living in Alaska has averaged an 2.8% increase over the last ten years, the power of the education dollar today is the same as it was in 1988. There is no 30% shrinkage. He thought people were upset with funding because of the formula which continues to get money but does not benefit a majority of the State. The thing that is important to understand about instructional units is that first you build the unit out of variable and then you fund it. This is the problem. SB 146 talks about the per student dollar, he explained. Forty- three states have student dollar public school funding; seven, including us, have instructional units. He explained his formula with the aid of his slides. He thought this was a voter issue because people who vote value education. They'll understand candidates who have supported more for public education and more who have supported less; and he thought they would vote for people who supported public education. In order to get State funding, organized parts of our state must get 4 mills or the formula equivalent of property evaluation or get 35% of prior year's need. That's not fair. In SB 146 set the mill rate at three, which doesn't decrease the amount of money, or 100% of education requirement, whichever is less. So those who can afford to pay for all their education are asked to do so. The North Slope, Valdez, and Unalaska take advantage of the 35% option which requires about a half a mill. He didn't think that was fair. He explained that the disparity cap is a limit on local participation imposed on us because we accept PL874 money (about $80 million this year from the federal government). PL874 money comes to us in the first place because some locals have property that can't be taxed by law, like Fort Wainright and Eilson. The State accepts that money and spreads it around. There can't be a disparity of more than 25% between your lowest funded and your highest funded school districts, throwing out the top and bottom five. SB 146 just ignores federal money. He did not think the North Slope was paying their fair share which he thought should be based on assessed value which is an arms-length relative evaluation of the wealth or lack of wealth of the community. It has nothing to do with the State and is done locally. It's validated by an objective and judicial process because it can be challenged and taken to court where an agreed figure can be found. It's also a figure that is readily available that can increase or decrease annually. TAPE 97-59, SIDE B [WAS NOT RECORDED] TAPE 97-60, SIDE A CHAIRMAN WILKEN said the North Slope Borough has 37 times the capacity to fund education and they're funding it at one sixteenth of what his district is. He thought there was something wrong with that. He did not think Valdez, Unalaska, or Skagway were carrying their fair share. They need to turn their wealth into education assets. He said it's correct that SB 146 makes them pay for all their education. If the North Slope Borough picked up 100% of their education it would be about 1.8 mills. His district is still at 3 mills. So that is still less than his district. Therefore the definition of fair share is based on assessed value per student. CHAIRMAN WILKEN said there is also concern with the large number of school districts and the duplication in effort to provide services like payroll, purchasing, food service, etc. Fourteen percent of our students are in 70% of our school districts. He thought consolidation needed to be addressed, although not in SB 146. In unorganized areas like Tok there is no way to get any contribution. Referring to a slide of an Alaska Department of Labor ESD reported earned income, he said that 18,341 people make $460 million. That group contributes little or nothing to our education costs and received 21% of the foundation dollar in 1996. This is not fair. They need to contribute to the education of their children. SB 146 asks them to do a simple 3% payroll tax with a fiscal note of $200,000. But taxes aren't very popular with some folks, so there's a bill talking about a menu. It imposes on the REAAs the responsibility to come up with x amount of dollars. There are currently two REAAs, one of which could have a 1% sales tax and fund their entire education requirement. The other could fund it with a 2% sales tax. So he didn't think they were asking for that much. He said that some places are somewhat impaired because of the cap at the local control level. Some parts of the State will never be able to fund their education. So there's $11 million is SB 146 to spread around to the poor areas which comes out of the rich areas. You contribute money to the equalization fund based on relative wealth and withdraw it based on the relative number of students to be educated, he explained. CHAIRMAN WILKEN said at the end of this process he wanted two things: a formula that wouldn't need fixing 10 years from now, and one that is simple and fair. The formula that has been in place for 10 years hasn't done that. SENATOR ADAMS said he "got his street smarts from Fairbanks" because he arrived in 1949. He sold newspapers, briefly attended the University, and tracked satellites at Gillmore Creek. He said one of the things that the Constitution states that the legislature should provide free public education. He said the bill that Senator Wilken puts on the Governor's desk needs to have equity and fairness and not a formula that will provide thievery. The piece of legislation they have provided today robs the North Slope Borough of 1 1/2% of their foundation formula money. Looking at the whole formula, the North Slope Borough is not the problem and is not the solution. The North Slope Borough pays the second highest tax rate in this State of 18.52%. Anchorage pays the first highest; Fairbanks is third. He thought they needed to relook at some of the slides presented with that in mind. The local support of schools in his district amount to almost half of the real and property tax that is collected. State law limits the amount of property tax that the North Slope Borough may collect for its operations, approximately 5.2 mills or $64 million. The Borough dedicates 44% of this amount to primary education. If they pay 44%, he asked, do they pay their fair share? And if they pay 44%, why shouldn't every borough pay that amount. Another point he mentioned is that the North Slope Borough at 63% is the second to the last in State funding received as a percentage of local basic education needs. The only one that beats them is Metlakatla with 61%. Fairbanks is at 79%. School construction for the urban areas in the last five years has totaled $203 million. $7.3 million has been spent in the rural areas. He asked if that was equity. Pupil transportation is not used in the formula and they spend $35 million on a yearly basis. In Bethel $76 is spent per student, in Anchorage $216, and in Fairbanks $322. He said they have no problem with a formula based on need, but only if the rest of the formula is based on need and not a student head count. SENATOR ADAMS said he thought the payroll tax was a very regressive measure. The 1997 federal profit and guidelines for an Alaskan family of four is just above $20,000. He asked if you take the formula designed by the chairman, the taxed owed on that would be $600 and would it be right to tax a poor family. One of the biggest REAAs in his district shows that a private employee earns less than $11,000. He asked if that person should have to pay $330 to the State while we are not subject to the employment tax. He thought research needed to be done on this issue. This tax would unnecessarily hit the poorest workers who live in the most expensive part of our State. He thought they needed to look at long-term ideas and solutions. He agreed that there didn't need to be administration for 53 school districts. There is nothing wrong with using the Constitutional Budget Reserves Fund which has approximately $3.3 billion and nothing wrong with putting a cap to the Permanent Fund Dividend to a vote of the people - with the balance going into an education endowment fund. He said there is nothing wrong with a school tax concept (of maybe $25) like we used to have for $10 per year. Almost $1 billion in wages leaves the State of Alaska with people who utilize the public facilities and pay nothing. North Slope Borough services are based on property tax, not an oil tax, the Mayor said. They have a right to use the revenues from the property tax to meet their crucial human needs. The people of Fairbanks also have a right to use the property tax as they see fit. The members of the State legislature should not dictate how local tax based revenues are used. SENATOR ADAMS said that taking one school district's education funding is not right and that's what these proposals do. They reallocate and redistribute tax revenues from one community to another community. He does not have a problem putting money into a good solution. We need to recognize and respect the difference between school districts. When legislators took the oath of office they stated that everyone should have equal opportunity in education. He concluded saying that we need to work together on other Alaskan issues as well as education and the proposed formula pits them against each other. Ninety percent to 95% of Alaska's funding comes from rural Alaska. If some Anchorage legislators want to have 40% of the education funding because they have 40% of the population, maybe rural Alaska should have 90% - 95% of the budget for their particular problems like education and water/sewer, he remarked. SENATOR TORGERSON reminded them that in the unorganized areas of the State there's $3.2 billion that's currently not being taxed. He has poor people living in his district also and the tax is not directed at poor people. It's directed toward people who can and should pay. He agreed with Senator Adams on the taxation of nonresidents if they could find a constitutional way to do that. He was also concerned that something might happen to the ANWR tax base in the future. SENATOR TORGERSON said he thought in 1963 they should have organized the whole State into boroughs operating under 4 mills. SENATOR LEMAN said he wasn't one of the Anchorage legislators who was trying to get 40% funding. He had merely pointed out that they have 40% of the students and get 30% of the funding. He recognizes the requirement for the area cost differential. SENATOR ADAMS responded that Senator Randy Phillips has stated on the Senate floor and in committee that 40% should go to Anchorage because they have 40% of the people. He asked how they could assess boat in the harbor in Whitier versus snow machines in Minto. Did they want to hire an army of assessors because rural Alaska has never been assessed, he asked. MR. BOB SHEFCHIK, Assistant Superintendent for Business and Finance in Fairbanks and President of the Alaska Association of School Business Officials, said they did get seven board members to agree on four or five things, but they haven't endorsed any legislation, yet. They feel that there should be an equitable tax burden between organized municipalities and unorganized REAAs, although there aren't any easy answers to that. Categorical funding should be considered as a percentage of enrollment. Funding intensive needs students separately is good because students with multiple handicaps are not hard to identify and are very expensive to serve. In small districts, particularly, the burden would be large. Current accounting of students to generate money causes problems in program delivery because the formula penalizes districts for actually delivering services in a better way outside of the categories. The current formula requires designing a program to maximize dollars. They all agree the formula should be simple. He said there is no mechanism in the current formula to account for increased costs over time and Senator Wilken's bill requires that it be reviewed annually. Finally the cost differential should reflect the cost of running schools in a community, not just the cost of goods and services necessarily. SENATOR ADAMS explained that one of the things that's happened in the last 10 years is that our impact aid is down $10 million. He asked if the State should pick up that decease as it continues. MR. SHEFCHIK replied that the Board hadn't taken a position on that, although it has caused problems for them. SENATOR ADAMS asked how his school district prioritized special education, bilingual or vocational education. MR. SHEFCHIK replied that right now the categorical funding provided by the State is insufficient to meet the needs of any of those programs. So they develop the program and allocate the money whether it be from categorical funding, local sources, or general State aid. SENATOR ADAMS asked if the legislature cut those three categories, would his school district make a public statement supporting those particular programs. MR. SHEFCHIK said he couldn't speak for the Board, but their actions support them now. SENATOR TORGERSON commented that Senate Finance Committee has spun off all the job training and vocational programs of all budgets and is taking a separate look to see where they need shoring up. There is about $65 million that goes to the Department of Education that's outside of the funding formula that comes back to the districts. There's a lot of belief that that needs some massaging along with the foundation formula. About $100 million goes to those programs now and they don't seem to be receiving $100 million at the end. CHAIRMAN WILKEN responded that they had looked at impact aid in the last three years and it has increased 19% to $80 million in 1998. There hasn't been an erosion of impact aid although it could happen. MR. SHEFCHIK said that the ones impacted in Fairbanks, Anchorage, and Kodiak are primarily military bases. SENATOR ADAMS noted that the money for the foundation formula has increased by 51%, but ADMs have only increased by 24%. He asked if that was caused by the economic crash in the mid 80s. MR. SHEFCHIK replied that it was caused by the change in assessed values in organized areas and the fact that categorical (special needs students) areas of funding have risen faster than the general population. SENATOR ADAMS asked since the State of Alaska doesn't calculate inflation, what would be the amount the State would have to pay to each school district today starting from 1991. MR. SHEFCHIK replied that he didn't know. SENATOR ADAMS asked if it would be about $74,000. MR. SHEFCHIK said it would be in the amount of $70,000 - $80,000. SENATOR ADAMS then asked if they were short funding education. MR. SHEFCHIK answered it felt that way to him in March of every year when he was trying to balance the budget. SENATOR TORGERSON responded that it wasn't right to look at it like that. Every year they increased the amount to education, although not necessarily the funding formula, to about 15% above ADM. He asked if his district has had to reduce because of the federal disparity. MR. SHEFCHIK replied that they are a long ways away from the cap. MR. DON STEIN said that in-home schooling is left out of the formula and there is good teaching done in the home schools, especially in North Pole. He wanted them to get their share of school funding. TAPE 97-60, SIDE B MR. SHEFCHIK explained that it costs about $300 per month to send a child to a private school. SENATOR LEMAN commented that he is very supportive of home schooling in Alaska. He thought there were things they could do to encourage people to be able to participate a in full menu of educational choices. MS. BONNIE WILLIAMS said she served on the Borough Assembly from 1988-91 and experienced one aspect of the school formula which was approaching the cap. At the same time the legislature was looking for places to reduce the budget and were considering reducing the formula or not increasing it. She figured out a way to get around the State law, but she thought it was wrong to have a State law that causes local government officials acting in good faith to figure out some way to get around the laws so they can do what they are supposed to do. She supported that particular aspect of SB 146. She likes the fact that the REAAs would now be contributing. She thought it wasn't exactly fair, but it was more fair. They would never get any kind of tax system that was absolutely fair to everyone. She also like the simplicity. She commented that she thought school officials may have misused accounts in order to acquire enough money to operate. She suggested having a means to alter the amount without having to change the statute for special developmental students. MS. WILLIAMS said that the legislature hadn't kept pace with inflation for education, and it's not the school districts that have suffered, but the University of Alaska. FY 85 had $169.8 million in general funds, FY 98 had $166.9 in general funds and at the same time inflation went over 37%. SENATOR ADAMS asked if she wanted to just eliminate the section on the cap limitation, AS 29.45. MS. WILLIAMS replied yes. SB 146 does that so if local districts want to tax themselves more, they could. MR. ADAMS responded that the problem with eliminating it is if Anchorage and Fairbanks rob the North Slope Borough of its 1 1/2%, the North Slope Borough would tax the oil industry to recover that money with a hidden tax and he didn't think the majority would want to do that. SENATOR TORGERSON said there was a survey in the school districts and 100% of the boroughs said to remove the cap and 72% of the school boards said to leave some sort of cap in place. He said we do want to do away with the federal cap that's placed on them because of the way we use and accept PL874 funds. This decline (27%) has affected all of their budgets. MR. RICH SEIFERT said he thought everyone in the room would agree that the distribution of the Permanent Fund dividend is fair and for all intents and purposes that is a negative tax. He noted that according to census figures 31.4% of the population is under 18 years of age or 191,098 people. They each pay an income tax on their Permanent Fund dividend of $71, a total of $13,567,000, to the federal government. None of the taxed portion would go to the IRS if we capped the dividend below the federal unearned income ceiling which was $600 last year. If they capped it at $599 to escape the taxable limit, minors who don't have other income wouldn't have to pay taxes any more or even file. He suggested we should do this because 31% of our population requires compulsory education, needlessly pays taxes, and contributes no revenue to their required education. Why not use the taxed portion of their dividends to establish and endow and education a trust rather than giving it to the feds. At least another $98.5 million would come from the adults. MS. MEG NORDALE, President, Fairbanks Council of PTAs, said she also sits on the State Board of Managers for the Alaska PTA. One of their priorities was equitable funding across the State along with additional funding for education. They want the best use of the resources available for all of the children in the State. She said there needed to be public trust for quality schools. She asked where inflation fell in with their numbers. She would also be concerned about asking one particular area of the State to fund 100% of their education costs and wondered if they would follow programs like the Governor's quality initiative if the State is not contributing any dollars to their school district. She supported combining administrative costs in smaller school districts. SENATOR ADAMS asked her where additional funding could come from. MS. NORDALE replied that there was some discussion of the endowment. SENATOR ADAMS said calculating inflation in since 1991 would bring the unit up to $74,000 and asked if she thought the legislature should look at that and if the school districts were happy with their funding today. MS. NORDALE responded that every year in Fairbanks they get the $61,000, but every year they have to cut. Their district has done a good job of preserving low class size and programs. She is concerned that at this point have they cut all the administrative support necessary for teachers to do their jobs the most effective way. MS. FREDI BUFFMEIR, Alaska Association of Elementary School Principals, said looking at the foundation formula has stimulated healthy discussions. The public and legislature have a strong desire for increased accountability by its schools. The changes including evaluation, content standards, teacher performance standards, and testing represent a huge challenge for our schools, but done well, they will be positive for kids. However, implementation of these things will cost and she urged the legislature to look at ways of funding the staff development that's going to be needed to implement the standards. MR. ANDRE LORELL, President, Alaska Association of Secondary School Principals, congratulated Senator Wilken on his understanding of this issue and his new approach. He thought Senator Adams approach represented the status quo. They need to communicate about how equity is going to be played out in various different school settings. The cost of implementing changes needs to be factored in. Being asked to do more with less is beginning to impact what is going on in the classroom. He wanted the legislature to focus on recognizing high performance schools and not just the problems. He felt that the committee needed to look at the numbers being presented by different people and find out why they differ for clarification. He testified that school enrollment and funding had gone up, but it hadn't kept pace with inflation. He is concerned how implementation of a new foundation formula would come into play with phase three of the five-year plan of the legislature. SENATOR TORGERSON asked how the Secondary School Principals would fix correspondence study. MR. LORELL said he felt some districts are operating a viable correspondence school where there is staff benefiting students who live locally. Other districts are running programs in which the students do not live in the geographic area. If there's going to be correspondence, it shouldn't hurt the districts that have legitimate and viable correspondence programs, but it shouldn't benefit districts that are looking for another way to generate funds for their district. CHAIRMAN WILKEN said he didn't think the majority would take money away from K-12 education in order to balance the budget. He shares his concern about assessment normalization which needs to be a little less political. There needs to be a disparity plan that will survive a court challenge. SENATOR TORGERSON said he thought there would always be court challenges. One legislature cannot bind another. MR. SCOTT CALDER said he is concerned with funding for special circumstances where it was not applicable to the general population. TAPE 97-61, SIDE A MR. CALDER concluded by saying that there is great support for providing the best we can for kids by figuring out what we need and then figuring out how to best provide it. MR. COLE SONEFRANK thanked Senator Wilken for bring these issues forward and thought their approach was good. He thought that clearly something needed to be done with the cap for some parts of the State. He didn't think doing away with it entirely was a good idea, however. He is concerned that they are attacking the North Slope Borough in the name of fairness. He doesn't have a problem with having the rich folks pay when they can. He's concerned that it pits rural against urban. CHAIRMAN WILKEN said that they had wrestled with what is a fair share and have come up with a flat mill rate and assessed value. They have challenged people around the State to define what a fair share is if they don't like what they see. MR. SONEFRANK responded he wasn't sure they could make it quite as simple as just assessed value. He thought they might have to put another factor in there and deciding what that factor is their problem - whatever it takes so the North Slope Borough isn't pitted against the Fairbanks North Star Borough. SENATOR TORGERSON asked on the equity issue if Big Delta should have to pay anything. He shared a lot of Senator Adams concerns, but the longer they wait to do anything, the more the disparity gets wider and wider and wider. MS. JODI OLMSTEAD said she didn't really trust things that went on with our bureaucrats because they have their ideas and decisions made before they come to town and they leave when the agenda has been spoken. She thought they didn't care and that nothing was done to meet the needs of her comments. Her concern is using numbers that don't exist. There are a lot of drop-outs and kids who fall through the cracks or special needs children who are at home because their needs can't be met at school. Academics is failing us she said. She provided the committee with some books and pamphlets on endowments and ideas for money from Governor Knowles which confused her because he suggested getting the money from the budget reserve and the Permanent Fund. Her biggest fear is his five-year welfare plan. Right now she said all of them can't educate her son, who is currently in the hospital, because he is a special needs child. He doesn't learn the way society chooses to teach. She was concerned that children were taken out of schools for drug use, perhaps, and put into nonacademic-learning situations and that is not going to help them. She has heard at a lot of PTA and other meetings that there aren't the people on buses and in schools to control children. In conclusion she said that her concern was that even with all the money the needed they wouldn't educate her son and other like him. MS. NANCY WEBB said she had concerns with the 20% for special education and asked how they thought that would work when there may be ups and downs every years with special education children who are not always easy to identify. CHAIRMAN WILKEN explained that the formula was set because approximately 19% is the current percentage. It sets a standard foundation upon which local governments can build. If they have lingual, special education, gifted and talented, etc. and want to do more with that 20% per student, it's a local decision. As an example, in Bethel they are teaching Yupik as a second language, but he wasn't sure the State should be asked to fund that entirely at the expense of categorical funding somewhere else which is what is happening today. MS. WEBB asked why the developmental disabilities be treated separately. CHAIRMAN WILKEN said the developmentally disabled is fixed at $22,500 per student and wouldn't be dealt with in the foundation formula. MRS. CAM CARLSON supported getting rid of the law requiring every school district to have a superintendent because you didn't need a superintendent for just one building or even three buildings. She supported reimposing a cap on administrative costs for each school district, consolidating the smaller school districts, and repealing the hold harmless provision. She agreed with Senator Leman's comments on the radio this morning and particularly that there should be a local contribution to education. She thought local involvement was necessary so their was community concern with the facts, figures, and how the money is spent. She said we need to make sure that educational funds are delivering what they are supposed to be. She was concerned that school construction would cost more just because more money was available. She particularly disagreed with an endowment. Education should have to go up against every other program in the State for evaluation when monies are being handed out. No program should have a free ride. She was concerned with extended day kindergartens with 29 students per class. She thought that the teachers could teach half days; they could be spending less money and the student teacher ratio would be smaller. She wanted the legislature to look into this because now people who want half day kindergarten can't get it. SENATOR ADAMS said they all need to respect each others opinions. He hoped after six hearings around the State they would do something about this issue. They need to address over-crowding and new enrollment and this takes money. It doesn't stop at just charts and saying there is no money to give. There is money to take care of this. There needs to be money for new schools. Portables like the ones in Mat-Su are unsafe and there is sufficient money to take care of that as well as deferred maintenance which is a problem all around the State. One of things we don't even measure is quality of education which should also be put forth, he said. SENATOR TORGERSON urged people to continue to contact their legislators regarding their thoughts on this issue as it works its way through the legislative process. He advised that witnesses begin to comment on the actual bills.