Legislature(2009 - 2010)CAPITOL 106
01/26/2009 08:00 AM House EDUCATION
| Audio | Topic |
|---|---|
| Start | |
| Overview(s): Patrick F. Taylor Foundation Merit Based Scholarship | |
| Overview(s): Required Local Contribution | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE STANDING COMMITTEE ON EDUCATION
January 26, 2009
8:02 a.m.
MEMBERS PRESENT
Representative Paul Seaton, Chair
Representative Cathy Engstrom Munoz, Vice Chair
Representative Bryce Edgmon
Representative Wes Keller
Representative Peggy Wilson
Representative Robert L. "Bob" Buch
Representative Berta Gardner
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Senator Bettye Davis
Representative Michael "Mike" Kelly
COMMITTEE CALENDAR
OVERVIEW(S): PATRICK F. TAYLOR FOUNDATION MERIT BASED
SCHOLARSHIP
- HEARD
OVERVIEW(S): REQUIRED LOCAL CONTRIBUTION
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
PHYLLIS M. TAYLOR, LL.B., Chairman and President
Patrick F. Taylor Foundation
New Orleans, Louisiana
POSITION STATEMENT: Presented the Patrick F. Taylor Foundation
Merit Based Scholarship program.
EDDY JEANS, Director
School Finance and Facilities Section
Department of Education and Early Development (EED)
POSITION STATEMENT: Presented the formula for calculating the
required local contributions to public schools.
ACTION NARRATIVE
8:02:17 AM
CHAIR PAUL SEATON called the House Standing Committee on
Education meeting to order at 8:02 a.m. Representatives Munoz,
Wilson, Edgmon, Keller, Buch, and Gardner, were present at the
call to order. Senator Davis and Representative Kelly were also
in attendance.
8:02:51 AM
^OVERVIEW(S): PATRICK F. TAYLOR FOUNDATION MERIT BASED
SCHOLARSHIP
CHAIR SEATON announced that the first order of business would be
an overview of the Patrick F. Taylor Foundation Merit Based
Scholarship program.
8:04:54 AM
PHYLLIS M. TAYLOR, LL.B., Chairman and President, Patrick F.
Taylor Foundation, introduced the scholarship plan by having the
committee view a video presentation.
8:06:28 AM
[A brief video was viewed by the committee.]
8:15:45 AM
MS. TAYLOR described the success of the Tuition Opportunity
Program for Students (TOPS) plan and explained that it is both
merit- and needs-based. Statistics indicate that children are
interested to attend college, but are unable to plan to further
their education. The at-risk students that TOPS has served, now
represent over 40,000 Louisiana students. Additionally, 20
other states have adopted, and are successfully utilizing, some
version of the Taylor Plan.
8:17:42 AM
[Senator Davis joined the committee.]
8:17:52 AM
MS. TAYLOR continued to explain how students who once took six
years to complete college, are now able to finish a degree
program in four years. She attributes this to the fact that
TOPS provides funding for only four years, has a requirement
that students maintain a certain number of hours each year, and
that high school students aspiring to the plan are fully
prepared to enter college. She reported how statistics
illustrate that graduates of TOPS have gone on to become
productive members of the work force; not necessarily in the
state from which they graduated. Parallels can be drawn between
the needs of students in Alaska and Louisiana, she opined,
including: per capita income, and young people who have not
been considered for post secondary educations. The program
offers support to students who continue on to four year
colleges, community colleges, and technical college pursuits.
Students attending private schools may also receive support.
She cited Wyoming's Hathaway Plan as the most successful Taylor
Plan in existence. It is permanently endowed for $400 million,
and includes a particular needs based aspect, which she
attributes to the level of success it has attained. She
finished by stating:
If there is anything that a state can do to address
all of the ills of its community ... the best
solution, is to keep its young people within the
state, and give them a chance to have a good
education. ... There are now over 300,000 students who
have graduated from Louisiana as a result of the TOPS
program.
8:22:07 AM
CHAIR SEATON asked her to address the topic of reduction and the
necessity of remedial courses in the colleges.
MS. TAYLOR said that twenty years ago, the Louisiana colleges
had an open enrollment policy. Regardless of high school
performance, any student could enter the college system. This,
she noted, caused many unprepared students to fail and drop out
of college. In an effort to stem this problem, universities
offered remediation courses, requiring a significant amount of
time, effort, and expense. Today there are no remediation
courses taught at Louisiana State University (LSU), based on the
requirement standards that are now maintained for college
entrance. The ancillary benefit, of not offering remediation
classes, is a significant savings to the state. These are
courses that students should have attained proficiency in during
their high school education. Requiring that a student be
properly prepared, she conjectured, gives them a step up and
allows them to finish their college career in four years.
Another reason that a student may take more than four years, is
when they need to be employed while attending college, which a
TOPS student would not find necessary.
8:24:53 AM
CHAIR SEATON asked for clarity of the minimum standards and core
curriculum requirements.
MS. TAYLOR responded that a 2.5 grade point average must be
maintained in high school, and the minimum score for the ACT
[originally known as the American College Testing Program,
Inc.], or Scholastic Aptitude Test (SAT) be attained.
CHAIR SEATON stated his understanding that because students have
met the requirements, remedial classes are no longer necessary
at the college level.
MS. TAYLOR elaborated that, in some cases, high schools were not
offering the necessary classes for students to be appropriately
prepared for college, making the remedial classes altogether
necessary. It is an additional "plus" of the Taylor Plan that
this situation has been corrected at the high school level.
8:26:34 AM
REPRESENTATIVE GARDNER asked if assistance is exclusive for
attendance to Louisiana schools.
MS. TAYLOR said that only schools in Louisiana are eligible.
She clarified for the committee that Wyoming has established a
perpetual endowment of $400 million, and made it a permanent
part of the Wyoming state constitution.
8:27:21 AM
REPRESENTATIVE WILSON reported that she has fielded complaints
from Alaskan students who would like to finish a degree in four
years, but that it is not possible given the class schedules,
and asked how the Taylor Plan meets this type of problem.
MS. TAYLOR said that the program has not experienced a lack of
required classes being offered at a four-year college to allow
for a timely graduation. Her previous point, she said, was in
reference to appropriate high school class offerings. She
suggested that if this situation exists, perhaps the issue needs
to be addressed with the college administration.
8:28:40 AM
SENATOR DAVIS queried the enrollment policies, and remedial
class needs of Louisiana universities, other than LSU, and
requested a statistical report.
MS. TAYLOR agreed to provide the committee with a report packet
that will detail the information by university and year. She
specified that colleges, outside of LSU, do not require the same
entrance standards and are still experiencing a need for
remedial classes. The flexible admission standards, although
not the same open enrollment policy once utilized, still result
in the arrival of unprepared students.
8:29:39 AM
CHAIR SEATON said that TOPS information will be posted on the
committee web page for easy statewide access, and asked that the
statistical packet will contain an analysis of the percentage of
students who graduate and remain in-state.
MS. TAYLOR underscored that the foundation has no personal
agenda behind offering this plan, other than to further national
educational standards. In reply to the Chair Seaton's question,
she said that there has not been specific tracking of students
who remain in-state for employment. The university alumni
associations are being requested to participate in gathering
this type of information, for future reference.
8:31:40 AM
CHAIR SEATON said that the top 10 percent of graduating high
school students, within Alaska, are served by Project GRAD,
providing them the opportunity to attend the University of
Alaska (UA). Project GRAD, currently being run as a pilot
program on the Kenai Peninsula, has the benefit of addressing
cultural needs.
MS. TAYLOR stressed that the Taylor Foundation is interested in
learning how the plan can work in Alaska. Student motivation
continues to be a national problem, she said, and any plan that
addresses this issue is of interest to the foundation.
^OVERVIEW(S): REQUIRED LOCAL CONTRIBUTION
8:33:58 AM
CHAIR SEATON announced that the final order of business would be
an overview by the Department of Education and Early Development
(EED) regarding required local contributions.
8:34:13 AM
The committee took a brief at ease from 8:34 a.m. to 8:35 a.m.
8:35:25 AM
EDDY JEANS, Director, School Finance and Facilities Section,
Department of Education and Early Development (EED), explained
how local contribution effort is required under the current
public school funding formula. Since 1988 the, standard
contribution has been a 4 mill tax rate. Through the funding
formula, he said, EED calculates an entitlement based on a
number of different adjustments for each public school,
including: size, location, and the special needs population.
The adjusted average daily membership (ADM) is then multiplied
by the base student allocation (BSA), which is set in statute,
to arrive at the product known as basic need. Directing
attention to the committee packet handout, titled "Components of
Basic Need (Who Pays?), he explained that basic need funding is
drawn from three components: 1) .004 mill required local
contribution, 2) federal impact aid, and 3) state aid.
8:37:36 AM
MR. JEANS continued on page 2, and said that, in FY2002, a
change was made for calculating the required local effort.
Since the 2001 enactment of SB 174, 1999 has been used as the
look back/base year to determine the full value of a community.
The base value is compared to the current year full value, to
determine the difference, which is then divided in half and
added back into the base year. The calculation is illustrated
on page 3, using the city of Nome's 2008 full value for the
example. He said the final figure, in this case $238,924,950,
is what the .004 mills is then applied to in order to derive the
required local effort. The Nome example is completed on page 4,
to arrive at $955,700; the amount Nome is required to contribute
to support public school education in the 2010 school year.
8:39:03 AM
REPRESENTATIVE WILSON asked whether the 4 mill rate varies
between school districts.
MR. JEANS responded that the majority of municipal school
districts pay less than a true 4 mill equivalent, as will be
demonstrated on another schedule of the presentation.
8:39:45 AM
CHAIR SEATON inquired if the calculations are based on
individual school districts.
MR. JEANS clarified that the calculations of basic need are
figured at the school level, and are the adjustments done with
regard to economy of scale; noting that the geographic cost
differential is at 20 percent. He said once the calculation has
been completed, the number is multiplied by the base student
allocation, as established in statute, and the product is the
basic need. He reiterated that basic need is paid from three
components including the local contribution. Municipalities may
contribute additional revenue above what is required, with no
effect on the amount of state aid received. He stated his
understanding that today's discussion is limited to the
component that affects the amount of state aid received by a
public school. In response to Chair Seaton's follow-up
question, he said geographic/political subunits vary within
districts. A first class city may have a single building in the
community that is the public school, or there may be multiple
cities and schools, in a district, to be considered. However,
the required local effort is based on the property value within
a borough or first class city. The property values are what
dictate the required local contribution, he explained.
8:41:58 AM
REPRESENTATIVE BUCH queried if the figure presented in the
example using Nome, is proximal or actual.
MR. JEANS replied that the Nome example is based on actual
projections for 2010, representing 676 students.
CHAIR SEATON pointed out that all of the districts are included
in the packet.
8:43:58 AM
REPRESENTATIVE WILSON asked whether the subject of student
fluctuations within a community, would be covered and how that
may effect property taxes.
CHAIR SEATON stated that the educational task force would
include that in a future presentation.
REPRESENTATIVE WILSON added that she feels the inequity is very
unfair and it needs to be addressed this session.
CHAIR SEATON replied, "We will."
8:45:35 AM
REPRESENTATIVE MUNOZ inquired whether Mr. Jeans will have the
opportunity to talk about funding for small schools of under 150
students that are part of a larger district.
MR. JEANS suggested that his presentation "Foundation Formula
101," would prove beneficial to the committee to answer the
questions being raised that are not directly related to the
required local effort; today's topic. In response to Chair
Seaton's agreement, Mr. Eddy said he would schedule the
presentation.
8:46:05 AM
MR. JEANS drew attention to page 9 of the foundation overview
document. He noted that the total of $230 million under Column
C, labeled Required Local Effort, is the amount that
municipalities are required to contribute to public education
within their community. Column C is subtracted from Column B,
labeled Basic Need, and then Column F, labeled Impact AID, is
subtracted from that, he explained, and what is left over is
Column G, labeled State AID.
8:47:14 AM
MR. JEANS further explained that the department now goes back to
1999 - the base year - and calculates 50 percent of the
difference in property value since that time. Prior to 2001,
the department looked at the property value every single year
and required [each municipality] to contribute 4 mills to public
schools. Basically, this provision has provided a tax subsidy
to municipalities that have increasing property value, he said.
8:48:11 AM
MR. JEANS called attention to the committee packet and the EED
chart titled "State Cost". He noted that the first column,
labeled FY02 Increased State Aid, reflects the financial benefit
that municipal school districts received in the first year under
Senate Bill 174; approximately $3.6 million. The bill language
established a base year, which has resulted in a compounding
effect that is making funding a more difficult issue. For
example, the $3.6 million went to $9 million in FY 03, $12.5
million in FY 04, and now for FY 10 the department is projecting
a $73.5 million subsidy through the foundation program. The
Education Funding Task Force has had in-depth discussions about
the compounding effect issues.
8:49:30 AM
MR. JEANS then referred to the same committee handout with the
attached chart titled "Mill Equivalent Change," which shows how
mills are to be adjusted across the state. He said the
calculations are the mill equivalent on each district's current
full value, not on the education. For example, based on current
property values, it is projected that in FY10 the Aleutians East
Borough will be required to contribute 3.5 mills to support
public education, Anchorage 2.9 mills, and Bristol Bay will
remain at 4 mills due to declining property values. It can be
seen from this chart, he explained, that those areas
experiencing growth and increased business and personal property
values are getting a greater benefit under this provision than
areas that are not growing.
8:50:31 AM
CHAIR SEATON surmised that the formula provides a balances for
who pays.
MR. JEANS confirmed, "That's exactly correct, it's who pays for
basic need." For instance, had this provision not been passed
in 2001, Aleutians East Borough would have received $62,000 less
in state aid in FY 10 and Anchorage $38.5 million less, as
illustrated by the FY 10 column on the "State Cost" chart.
Also, on the FY 10 column of the "Mill Equivalent Change" chart,
the mill would have remained at 4 throughout. In other words,
prior to 2002, each district was required to contribute the
equivalent of a 4 mill tax levy of its current property values.
However, since 2002 a state subsidy has been creating a
compounding effect. Therefore, the range of the required
contribution from one organized area to another organized area
varies based on how much the community has grown.
8:52:55 AM
CHAIR SEATON highlighted the struggle the [legislature] has had
with geographic cost differentials and observed that the
situation is being reversed with the compounding effect of this
bill. He asked if there is any comparison that can be made, and
whether this offsets the small school differentials such that
the small schools in the Bush are being funded with state aid.
He calculated that that there is a 25 percent differential.
MR. JEANS related, "I guess the way that I've looked at it is:
if we're going to have a required local contribution in the
State of Alaska for municipal governments, it should probably be
uniform." The policy call for the legislature is where to set
the rate. Mr. Jeans related that his concern is due to the
different rates for different parts of the state, and thus a
disparity of benefits among the districts. He then pointed out
that $38.5 billion appears generous for Anchorage schools, until
it is viewed on a per student basis; noting the districts 55,000
students. "To say that they're getting additional funding over
rural schools that wasn't adjusted for in the cost
differentials, I guess I'm just not ready to go there," he said.
8:55:07 AM
REPRESENTATIVE KELLER related that he represents a growing
school district and has an appreciation for the plight it faces.
8:55:33 AM
REPRESENTATIVE WILSON opined that the shift was made to help the
areas that experienced an influx of students. However, the
reality is that when there is an influx of people into an area,
there are more people to help pay the property taxes to raise
the money for the municipality. Conversely, communities that
are losing students have to provide the same services, but there
are less people to pay property taxes. Representative Wilson
characterized the aforementioned as unintended consequences that
deserve review in order to ensure that [the formula] is fair to
everyone.
8:57:23 AM
REPRESENTATIVE EDGMON expressed his agreement with
Representative Wilson's comments. He pointed out that in 2001
the Bristol Bay School District had 285 students and in 2009 it
has declined to approximately 130, but the district is still
required to pay the full 4 mills while the [mill rate] for the
Mat-Su School District is 2.7 and the Anchorage School District
is 2.9. Furthermore, the later two districts heat their schools
with natural gas. He expressed a desire to review the fairness
of this situation.
8:58:30 AM
CHAIR SEATON pondered the wisdom of using 1999 as the fixed year
base.
MR. JEANS stated that if the formula were calculated on a one or
two year look back, it would help areas that are experiencing an
influx of growth immediately. It appears that there have been
unintended consequences incurred by stipulating 1999 as the base
year. He said the state is paying an additional $73.5 million,
in FY2010, than it would had this provision not been adopted.
Also, by using this artificial, low required local contribution,
some municipalities are getting closer to their local cap. In
the next two or three years, hub cities, such as Anchorage, will
be achieving their caps and, he predicted, seek financial relief
from the legislature. He clarified that law disallows
additional local contributions due to the cap. This occurs
because the bottom part of the formula creates an artificially
low requirement. For example, citizens are being asked to
contribute $800 to public schools on a $200,000 home in areas
where the required local effort is four mills. Where the mill
rate is lower, as in Anchorage, the contribution is less. He
stressed that wages don't always rise with the value of a home,
and opined that there should be a uniform application to
calculate the required local effort, without using a base year
established 10 years ago.
9:02:39 AM
MR. JEANS directed the committee's attention to the table, in
the committee packet, titled "National Center for Education
Statistics" [Table 1.] In 2006, audited revenues from local,
state, and federal sources indicate that Alaska is ranked number
five nationally, with 24.3 percent of its revenue for education
coming from local sources. This percentage includes operating
and special revenue funds, but not capital expenditures such as
bond reimbursement.
9:04:01 AM
CHAIR SEATON clarified that Alaska ranks five from the top of
the states with the least local effort [towards supporting
education.]
9:04:49 AM
REPRESENTATIVE WILSON asked for a comparison to other states
that takes into account the fact that Alaska does not have a
state income tax.
MR. JEANS stated that the formulas across the nation vary and
there is no easy means for comparison; however, it is clear that
when comparing local support for public schools, Alaska ranks
fifth in the nation. In response to a question, Mr. Jeans
confirmed that the last column of the table indicates the [17.0]
percentage of federal support received by Alaska.
9:06:39 AM
CHAIR SEATON asked whether this percentage includes Federal
Impact Aid.
MR. JEANS said that the percentage includes all federal sources,
Federal Impact Aid, and special revenues.
9:07:07 AM
REPRESENTATIVE BUCH requested Alaska's ranking of state and
federal support for education.
MR. JEANS said that the department will provide that
information.
9:07:39 AM
CHAIR SEATON asked whether there are calculations on what the FY
10 spreadsheet would look like if "we carried it forward one
year or two years."
MR. JEANS offered to provide a projection; however, he opined
that a one-year "look-back [is] going to be around the four [or]
five million dollars, just like the first year was. If you add
a two-year look-back, it's going to be somewhere around ten
[and] fifteen."
9:09:06 AM
CHAIR SEATON theorized on how a new borough, formed in 1999,
would not have a tax base. He asked whether, in that case, the
new borough would only be paying on 45 percent of the assessed
valuation "forever."
MR. JEANS agreed that it appears the statute would require a 4
mill contribution; clearly, such a scenario would require
guidance from the legislature.
CHAIR SEATON further asked whether this situation is the same as
the annexation of new property.
MR. JEANS said no, and stipulated that with annexation, the
borough already has a base; therefore, the annexed property
would only provide 50 percent of the increased value.
9:10:36 AM
REPRESENTATIVE WILSON observed that Wrangell became a borough
last year and asked whether its contributions will be changed.
MR. JEANS answered no, because Wrangell's property values will
be rolled forward.
9:11:44 AM
CHAIR SEATON spoke of the $100 increase in the base student
allocation and asked for the projected cost of that increased
allocation.
MR. JEANS noted that the $100 increase per student amounts to a
little over $22 million annually. Additionally, there are
increases scheduled for FY 10 and FY 11.
CHAIR SEATON surmised that the relative impact is that this
change requires approximately four times the amount of state
funding than does the increase in the base student allocation.
MR. JEANS agreed, and pointed out that the funding increases in
the base student allocation, cost differentials, and intensive
needs total $57 million.
CHAIR SEATON stressed that education funding should be a
statewide component that is fair across the state, and he
encouraged discussion of the philosophy of education funding.
The Education Funding Task Force is counting on this committee
to review this complicated issue and determine a fair and
equitable plan for all of Alaska's children, he said.
9:15:24 AM
MR. JEANS concluded his presentation and then referred to a
letter to the governor from Mr. Dan Bockhorst, Borough Manager,
Ketchikan Gateway Borough. In summary, the letter explains that
when boroughs were [incorporated] in the state they were
promised not to be penalized [monetarily] by the incorporation.
Mr. Brockhorst stated that "required local effort" is a broken
promise and the Ketchikan Gateway Borough has been disadvantaged
in the amount of over $5 million - the amount of the required
local contribution to schools. Although the governor's response
to the letter is unknown, Mr. Jeans recalled that in 1988 the
Matanuska-Susitna Borough brought an unsuccessful lawsuit
against the state over a similar provision. He opined that the
required local contribution is legal. Moreover, taking the
required local effort out of the formula would leave the state
with two options: 1) providing additional state money to make
up the difference or 2) prorating to school districts the
remaining amount of money. Mr. Brockhorst's suggestion to
remove required local contributions would reduce the education
budget by approximately $290 million; $230 million of local
funds, and $60 million in Federal Impact Aid.
9:18:36 AM
CHAIR SEATON referred to the response from Lynne Smith, Special
Staff Assistant, Department of Commerce, Community & Economic
Development (DCCED), to Mr. Brockhorst and asked Mr. Jeans to
determine whether the letter includes a request for a legal
opinion [on the legality of the required local contribution.]
He further asked for a comprehensive explanation of Federal
Impact Aid, its philosophy, the source of funding, and its
distribution, percentages, and caps, if any.
9:20:03 AM
MR. JEANS said that Federal Impact Aid is in lieu of local
property taxes. The federal government pays to support schools
in areas of the state that are non-taxable due to federal laws
or regulations, such as communities in lands that were conveyed
under the Alaska Native Claims Settlement Act (ANCSA), or
communities within the Tongass National Forest. Federal funds
contribute to public schools on behalf of residents living on
non-taxable land, based on the resident student population.
Payment is made directly to school districts and is treated as a
local contribution, with some restrictions. About $60 million
statewide is received through this program for a total of $120
million to school districts; however, the department does not
consider the $60 million as a local contribution under the
funding formula.
9:22:24 AM
CHAIR SEATON assumed that military bases are considered non-
taxable and asked where that funding is reflected.
MR. JEANS clarified that military base funding is counted in the
state funding formula and "is in addition to the 4 mills." The
department budget starts with [the amount of] basic need,
subtracts [the payments of] required local effort and impact
aid, and the remaining balance is the amount of state aid. He
reminded the committee that Federal Impact Aid is non-taxable
and, as such, has nothing to do with the 4 mill local tax.
9:23:52 AM
REPRESENTATIVE GARDNER asked for an explanation of school
districts that have no mill rate requirements as shown on the
chart titled Mill Equivalent Change.
MR. JEANS explained that the areas that do not have a mill
number are the Regional Education Attendance Areas (REAAs) that
are not organized and do not have taxing authority. Clearly,
there are REAAs in the state that do have tax bases; however,
they are not incorporated and are not required to make a local
contribution. In response, Mr. Jeans further explained that
there are also areas that do not receive Federal Impact Aid
because they do not qualify or they have elected not to apply.
9:25:26 AM
CHAIR SEATON observed that the percentage of aid for Haines
[shown on page 9 of the Public School Funding Program Overview,
Updated January 2009] seemed to be a conflict.
MR. JEANS assured the committee that the information provided in
the overview will be clarified during the Foundation Formula 101
presentation. In response to a question, he said the ratio
calculation, based on the actual local contribution and divided
by the required local contribution, is required by the federal
government.
9:27:41 AM
MR. JEANS, in further response, informed the committee that the
state can deduct 90 percent of the eligible impact aid. An REAA
is one category of the nineteen unorganized school districts
within the state; there are fifty-three school districts in all.
9:28:18 AM
REPRESENTATIVE BUCH observed that the committee must face the
dilemma of an economically and geographically diverse state. He
expressed his hope that members will be able to raise their
understanding of the capabilities of each region.
9:29:17 AM
REPRESENTATIVE KELLER asked for the definition of "impact aid
percent."
MR. JEANS responded that the impact aid percentage is the
required local contribution divided by the actual local revenue
collected to support public education in those communities. For
example, he noted that the Aleutians East Borough is eligible
for $718,000. Its impact aid percentage - the required local
effort divided by the actual local contribution - yields 35.72
percent. The department multiplies $718,000 by 35.72 percent,
then multiplies the product by 90 percent to arrive at the
deducted amount of $230,000. Furthermore, if the Aleutians East
Borough were an REAA, the calculation would be $718,000
multiplied by 90 percent. He then remarked:
Because they make a local contribution above what
they're required to do, we calculate that ratio, that
ratio is extended over to the impact aid, so they get
the same benefit under the impact aid program that
they get with their own local revenue.
REPRESENTATIVE KELLER observed that a local contribution serves
to lower the percentage, and also as an indicator that the local
residents are "kicking in."
9:32:29 AM
REPRESENTATIVE BUCH turned the committee's attention to the
influence of energy costs on school district's budgets and
requested information from the Alaska Energy Authority (AEA)
regarding its findings on local energy costs. He suggested that
the committee obtain a more comprehensive view of possible long-
term local impacts on the cost of education.
CHAIR SEATON informed the committee that a task force mission
has been identified to scrutinize energy costs and the
foundation formula. He stated his intent to bring up this issue
at a later date.
9:35:37 AM
REPRESENTATIVE EDGMON asked whether the 2004 Institute of Social
and Economic Research (ISER) study, that investigated the energy
cost differential, could be reviewed by the committee.
MR. JEANS advised that the energy component within the
geographic cost differential is to measure the relative
difference in costs throughout the state, not to compare the
rising costs of energy. Therefore, addressing increasing energy
costs and its effect on the cost of education is better
accomplished by supplemental appropriations.
REPRESENTATIVE EDGMON brought up the question of the energy cost
environment for 2009.
MR. JEANS offered to provide statewide energy cost data and to
explain how it fits as a component in the overall operating
budget. Energy costs routinely represent between less than 5
percent and up to 17 percent of the total operating budget.
REPRESENTATIVE BUCH reiterated the previous point that the
impact of energy costs on different regions must be part of the
overall view.
CHAIR SEATON added that high fuel costs punish Bush communities
for the year after purchase, whether the price of oil goes down
or not.
9:39:56 AM
REPRESENTATIVE MUNOZ asked whether there have been community
incentives for energy efficiency in school projects through
Capital Improvement Projects and Debt Reimbursement grants.
MR. JEANS answered that grant programs are available for energy
efficiency efforts; unfortunately, those projects are not ranked
as high as projects for life, safety, and code upgrades, on the
department's priority list.
CHAIR SEATON asked whether new schools are required to be built
to an energy efficiency code level.
MR. JEANS said no, however, districts tend to employ architects
who have energy efficiency in mind. One issue that arises is
that new schools are generally larger than the ones being
replaced, and energy costs increase due to the expanded size of
the facility even though it is built to be energy efficient.
9:42:21 AM
REPRESENTATIVE WILSON expressed surprise that larger schools are
being built considering the current loss of population.
MR. JEANS assured the committee that every school construction
project is based on student population and projected population;
some schools are presently operating at 200 percent of building
capacity.
CHAIR SEATON noted the points of discussion for future meetings.
9:44:09 AM
ADJOURNMENT
There being no further business before the committee, the House
Standing Committee on Education meeting was adjourned at 9:44
a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Overview of Required Local Contribution and Taylor Foundation.pdf |
HEDC 1/26/2009 8:00:00 AM |
|
| Components of Basic Need |
HEDC 1/26/2009 8:00:00 AM |
|
| Taylor Plan Materials 1.pdf |
HEDC 1/26/2009 8:00:00 AM |
|
| Taylor Plan Materials 2.pdf |
HEDC 1/26/2009 8:00:00 AM |