02/01/2005 11:00 AM House EDUCATION
| Audio | Topic |
|---|---|
| Start | |
| HB20 | |
| HB13 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 13 | TELECONFERENCED | |
| *+ | HB 20 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON EDUCATION
February 1, 2005
11:04 a.m.
MEMBERS PRESENT
Representative Mark Neuman, Chair
Representative Carl Gatto
Representative Bob Lynn
Representative Bill Thomas
Representative Peggy Wilson
Representative Les Gara
Representative Woodie Salmon
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Ralph Samuels
Representative Mary Kapsner
Representative Max Gruenburg
Representative Paul Seaton
COMMITTEE CALENDAR
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 20
"An Act relating to a separate appropriation bill for operating
expenses for primary and secondary public education and
establishing a date by which the bill must be transmitted to the
governor each year; relating to notice of nonretention for
tenured teachers; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 13
"An Act relating to reimbursement of municipal bonds for school
construction; and providing for an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 20
SHORT TITLE: EDUCATION FUNDING
SPONSOR(S): REPRESENTATIVE(S) SEATON
01/10/05 (H) PREFILE RELEASED 12/30/04
01/10/05 (H) READ THE FIRST TIME - REFERRALS
01/10/05 (H) EDU, HES, FIN
01/24/05 (H) SPONSOR SUBSTITUTE INTRODUCED
01/24/05 (H) READ THE FIRST TIME - REFERRALS
01/24/05 (H) EDU, HES, FIN
01/25/05 (H) EDU AT 11:00 AM CAPITOL 106
01/25/05 (H) -- Meeting Canceled --
02/01/05 (H) EDU AT 11:00 AM CAPITOL 106
BILL: HB 13
SHORT TITLE: SCHOOL CONSTRUCTION BOND REIMBURSEMENT
SPONSOR(S): REPRESENTATIVE(S) GATTO, GRUENBERG
01/10/05 (H) PREFILE RELEASED 12/30/04
01/10/05 (H) READ THE FIRST TIME - REFERRALS
01/10/05 (H) EDU, HES, FIN
01/25/05 (H) EDU AT 11:00 AM CAPITOL 106
01/25/05 (H) -- Meeting Canceled --
02/01/05 (H) EDU AT 11:00 AM CAPITOL 106
WITNESS REGISTER
EDDY JEANS, Director
School Finance
Department of Education and Early Development, EED
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 20; testified in
opposition to HB 13.
DAN BECK, Superintendent
Delta Greely School District
Delta Junction, Alaska
POSITION STATEMENT: Testified in support HB 20.
MARGARET GILMAN, Treasurer
Kenai Peninsula Borough School Board
Kenai, Alaska
POSITION STATEMENT: Testified in support of HB 20.
MELODY DOUGLAS, Chief Financial Officer
Kenai Peninsula Borough School District, KPBSD
Kenai, Alaska
POSITION STATEMENT: Testified in support of HB 20.
ANNE KILKENNY
Wasilla, Alaska
POSITION STATEMENT: Testified in support of early funding;
testified in support of HB 13.
BRUCE JOHNSON, Director
Quality Schools/Quality Students Service (QS2)
Alaska Association of School Boards, AASB
Juneau, Alaska
POSITION STATEMENT: Testified in support of the stabilization
of teaching positions.
JOHN ALCANTRA, Director
Government Relations
National Education Association of Alaska, NEA-Alaska
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 20 with the
amendment of changing the notification date from March 16 to
March 25.
KATHIE WASSERMAN, Policy Coordinator
Alaska Municipal League, AML
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 20.
CINDY SPANYERS, Legislative Liason
Alaska Public Employees Association/American Federation of
Teachers, APEA/AFT
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 20.
KIM FLOYD, Spokeswoman
Matanuska-Susitna Borough School District, MSBSD
Palmer, Alaska
POSITION STATEMENT: Testified in support of HB 13.
GEORGE VAKALIS, Assistant Superintendent
Anchorage School District, ASD
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 13.
ACTION NARRATIVE
CHAIR MARK NEUMAN called the House Special Committee on
Education meeting to order at 11:04:38 AM. Representatives
Wilson, Gatto, Lynn, and Thomas were present at the call to
order. Representatives Gara and Salmon arrived as the meeting
was in progress.
HB 20 - EDUCATION FUNDING
CHAIR NEUMAN announced that the first order of business would be
HOUSE BILL NO. 20, "An Act relating to a separate appropriation
bill for operating expenses for primary and secondary public
education and establishing a date by which the bill must be
transmitted to the governor each year; and providing for an
effective date."
11:06:21 AM
REPRESENTATIVE PAUL SEATON, sponsor to HB 20, stated that the
purpose of HB 20 is to address a problem in districts across the
state. He explained that the education budget is delayed until
late in the year forcing school districts to fire teachers and
then attempt to rehire them later. He said, "This is very
disruptive and demoralizing to teachers." He explained that HB
20 requires the governor to submit the education budget
separately by the fourth day of the session, and the legislature
to approve that budget by March 15 of each year. He clarified
that the sponsor substitute for HB 20 changed the date from
April 1 to March 15, because the notification period for
teachers is set at March 16. He explained that Section 2 of the
bill moves the notification date for tenured teachers to March
25, providing a ten-day window for the legislature to act and
the governor to approve. He pointed out that the bill provides
for separate funding of the foundation formula.
REPRESENTATIVE SEATON summarized that the intent of the bill is
to get early funding of education. He noted that while the bill
does not address a dollar amount, it ensures early funding and
the districts will know how much money they have and the status
of their teachers. He pointed out that the committee members
were given copies of the sponsor statement and zero fiscal note
as well as letters of support from the Kenai Peninsula Borough
School District, (KPBSD), the Lower Kuskokwim District, and an
individual teacher. The members also received a letter of
support from the National Education Association of Alaska, (NEA-
Alaska), although, he noted, NEA-Alaska has an issue with the
March 16 date. He concluded that the bill needs to be addressed
so that, "school districts throughout the state have a better
working relationship within the teaching community and that we
don't unnecessarily burden them with disruptive practices."
11:09:56 AM
REPRESENTATIVE GATTO asked if Representative Seaton had received
letters of opposition from any school districts.
REPRESENTATIVE SEATON responded that he did not receive any such
letters.
REPRESENTATIVE GATTO asked if any professional teachers'
associations had commented on the bill.
REPRESENTATIVE SEATON responded that NEA-Alaska wrote a letter
supporting the concept of the bill, however, "they did have a
problem with moving the ... mandatory date for notifying tenured
teachers, from the 16th to the 25th [of March]. They supported
Sections 1 and 3, which is the essence of the bill." He added
that Cindy Spanyers, legislative liason for the Alaska Public
Employees Association/American Federation of Teachers,
(APEA/AFT), will testify on the bill.
CHAIR NEUMAN asked what the major obstacle has been in passing
this type of bill.
REPRESENTATIVE SEATON answered:
One of the problems was [that] the date was April 1
... it's been April 15 in the past, and that really
didn't cure the problem of the statutory requirement
for districts to notify their teachers that they
wouldn't be rehired. ... The bill moves forward that
date to ... March 15 ... and then moves back the date
of the teacher notification ten days, to give a ten-
day window. So what this does is gets us forward of
that so that districts wouldn't have to get into this
crunch of notifying their employees of termination.
11:12:38 AM
REPRESENTATIVE WILSON asked why tenured and non-tenured teachers
have different notification dates.
REPRESENTATIVE SEATON replied that tenured teachers have
specific rights and privileges that are established, whereas
non-tenured teachers are hired on a year-to-year basis.
REPRESENTATIVE WILSON opined that all teachers, tenured and non-
tenured, would like to know whether they have a job the
following year or if they need to apply elsewhere.
REPRESENTATIVE SEATON commented he shares this opinion and that
he thinks the districts use this date for notifying mainly non-
tenured teachers because tenured teachers are very seldom laid-
off. He said, "Not knowing what their budget is, [the
districts] use this statutory date for tenured teachers as the
date by which they want to notify their non-tenured teachers."
REPRESENTATIVE WILSON stated that because of decreased funding,
there are school systems that have had to continually cut back.
She remarked that she knows of at least four school systems that
have had to cut back to where they have only tenured teachers
left.
11:16:31 AM
REPRESENTATIVE GARA said that there always seems to be tension
between early funding and adequate funding. He continued:
It seems somehow the forces during the legislative
session somehow get to the point where we can get a
better school budget later in the session ... but we
have the tension because we don't want the school
districts to send out the pink slips, so we also want
to get it to them early and the challenge has always
been to try and find a way to get them both...
REPRESENTATIVE GARA promoted changing the statutory date when
school districts have to submit funding to their municipal
governments.
REPRESENTATIVE SEATON explained that it would be a disservice to
make teachers wait for notifications until May 1, and that they
would miss opportunities for other jobs. He stated that the
intention is to move the process forward so that if people have
to be laid off, they have the best window of opportunity to get
the best job possible.
REPRESENTATIVE GARA said that completing the budget by March 15
would be a complicated issue and asked if it could get done by
March 15, each year. He then inquired as to creating coverage
by statute for PERS/TRS and inflation costs.
11:22:12 AM
REPRESENTATIVE SEATON stated that covering PERS/TRS and
inflation proofing is another issue. He advocated for dealing
with each district and it's needs, individually. He opined that
district issues need to be dealt with each year. He explained
that the purpose of this bill is to segregate the education
budget as a separate budget, excluding the costs of other
operating considerations.
REPRESENTATIVE WILSON said that the municipality fiscal year
ends June 30th and that their budget is planned around the
school budget. She commented that she is in support of HB 20
and thinks that it will make a big difference for schools in the
long run.
REPRESENTATIVE GATTO stated that schools are subject to laws of
supply and demand and that now, the supply of teachers is
relatively low, and the demand is relatively high. He advocated
for creating an environment for teachers that offers certainty
in their job placement. He expressed his appreciation for [HB
20].
11:27:40 AM
EDDY JEANS, Director, School Finance, Department of Education
and Early Development, (EED), stated that the EED is supportive
of the concept of early funding, but would make specific
recommendations regarding the March 15 date. He pointed out
that on page 1 line 9, it is stated that the governor submits an
appropriations bill to the legislature limited to carry out
"Alaska Statute 14.17". He explained that "14.17" is the
foundation program and that language would limit the ability to
include pupil transportation, schools for the handicapped, and
other K-12 components. He clarified that he did not have a
written amendment, but that the word "limited" restricts the EED
from submitting a bill beyond the foundation program.
CHAIR NEUMAN asked Mr. Jeans to submit his suggestions to the
committee, in writing.
11:29:26 AM
REPRESENTATIVE THOMAS inquired as to the language associated
with "Alaska statute 14.21.77".
MR. JEANS explained that the provision referring to statute
"14.21.77" deals with reductions in workforce. He explained
that it offers criteria for districts to meet for eligibility to
fire tenured teachers. He continued, "so, the way the statute
is laid out is if you think you are going to have less funding
through the appropriation mechanism, or fewer students, you must
notify tenured teachers by March 15 of the potential that
they'll be laid off. In terms of non-tenured teachers, you have
'til the end of the school year to provide them with notice."
11:31:51 AM
REPRESENTATIVE THOMAS commented that the language [in HB 20] is
difficult to understand.
DAN BECK, Superintendent, Delta/Greely School District,
("DGSD"), stated that he supports HB 20. He explained that the
"DGSD" does not intend to fire any teachers this year due to
rapid growth. He explained that the "DGSD" is planning on
hiring highly qualified teachers to fill those positions, but
the budget is unknown. He described the formation of the
district's budget:
We have to start with our projections in REAA's [Rural
Education Attendance Area] somewhere around the first
part of January putting the budget together; even
though that budget is not passed in the final state by
the board until June, we have to have it in the state
close enough where we can go out to hire in March and
since personnel makes up most of the budget, it is
critical to have that information early. I think that
Eddy Jeans had a really good point on moving the date
in this bill back to March 1 ... we support the bill,
in totality. We were in the position a couple years
ago where we did lay off tenured teachers under the
new reduction in force, and it's difficult, it's time
consuming, and I wouldn't wish that on anybody else in
the state.
MARGARET GILMAN, Treasurer, Kenai Peninsula Borough School
Board, expressed support for Representative Seaton's HB 20. She
related that as a school board member, she appreciates known
funding before hiring decisions are made. She said that in the
current situation, with current funding, there is a tremendous
level of uncertainty during the spring of each year and teachers
are fearful of losing their jobs. She offered a suggestion of
planning the budget one year in advance so that staffing would
be known for the upcoming school year.
MELODIE DOUGLAS, Chief Financial Officer, Kenai Peninsula
Borough School District, (KPBSD), stated that the KPBSD Board of
Education has adopted a legislative priority in support of this
type of action. She said the Board of Education supports
recommendations moving the date forward to March 1 and leaving
the notification date for hiring at March 16. She related that
it is disruptive in school districts to go through these
processes and it affects children in the classroom when staff
are worried about their job status. She said that moving the
date could hinder the hiring process; job fairs start in March
and run through April and May. She opined that it is essential
to stabilize education and beneficial to fund early. She echoed
Mr. Jeans's recommendation that this bill should be amended to
reflect all K-12 programs, and that those programs are important
in the planning process from a budget standpoint. She expressed
thanks in being given the opportunity to comment and encouraged
support of HB 20.
11:38:45 AM
Anne Kilkenny stated that she is an active volunteer in the
Kenai school system and agrees with the aforementioned reasons
for early funding. She opined that [early funding] would reduce
anxiety and uncertainty, help districts properly budget and make
the system more efficient. She said that she appreciates the
debate generated by this bill and the reasons for early funding
have good merit.
11:42:37 AM
BRUCE JOHNSON, Director, Quality Schools/Quality Students
Service, (QS2), Association of Alaska School Boards, (AASB),
stated that the AASB does not have a position or a resolution on
this particular concept. He continued:
we've had one in the past ... we certainly agree with
Representative Seaton that it would do many things in
terms of stabilizing our teaching force and assuring
people that they have positions and in no way would we
want to ... discredit this ... adequacy is really what
we are after as an association. We will be working on
this issue with our membership ... urging districts to
weigh in on this issue in a way that makes sense for
them personally in their own circumstances.
REPRESENTATIVE GATTO asked Mr. Johnson if he thinks that we are
trading one problem for another because education funding is
tied to our budget, our budget is tied to the price of oil and
the price of oil is unpredictable. He stated that he understood
that being present for funding decisions later in the session
when the price of oil is known is desirable.
MR. JOHNSON opined that education has been well served during
times of scarcity. He stated that it is a trade off and schools
can benefit from early funding and from contributing to funding
decisions when the projections are known.
JOHN ALCANTRA, Director, Government Relations, National
Education Association of Alaska, (NEA-Alaska), stated that [NEA-
Alaska] represents about 12,500 public school employees around
Alaska. He applauded Representatives Seaton, Chenault, and
Wilson and thinks the forward funding concept is a great idea.
He described a recent [NEA-Alaska] assembly where 400 elected
delegates set policy for the year and passed a resolution for
adequate and forward funding of education. He opined that the
suggestions made by the administration and Eddy Jeans suggesting
the March 1/March 5 date and leaving the tenure date at March 16
were good and hopes they will be considered. He thanked the
committee for hearing this bill and opined that it is an
important concept. He stated that [NEA-Alaska] has had
resolutions of support in the past and mentioned the letter from
PRESIDENT BJORK of NEA-Alaska, within the committee packet,
which applauded Sections 1 and 3 of HB 20. He explained that
[NEA-Alaska] supports changing the date from March 16 to March
25. He thanked Representative Seaton and the other co-sponsors
for moving [HB 20] forward.
11:47:27 AM
REPRESENTATIVE GARA asked Mr. Alcantra if the resolution is for
early and adequate funding. He questioned if the [NEA-Alaska]
resolution supports a stand-alone early funding bill, or if
there is a caveat saying that the [NEA-Alaska] supports early
funding if adequate funding can be provided.
MR. ALCANTRA stated that the NEA-Alaska supports early funding
if it is adequate. He said that the [NEA-Alaska] believes there
is room in this budget for fiscal year (FY) 06 and future
budgets to adequately fund K-12 public education as well as fund
it early so districts know what they are going to get. He
related that the NEA-Alaska thinks that the two can go hand in
hand and expects that they will and that this is another year
where legislators will put K-12 education as the number one
issue.
REPRESENTATIVE GARA asked if NEA-Alaska supports the bill only
if there is a guarantee of adequate funding.
11:49:15 AM
MR. ALCANTRA stated that NEA-Alaska supports the bill. He
described the letter in the committee packet as verification of
the support of early funding. He explained that the NEA-Alaska
believes that early and adequate will be coupled and go hand in
hand.
KATHIE WASSERMAN, Policy Coordinator, Alaska Municipal League
(AML), stated that AML has identified forward education funding
as one of the priorities for this year, and stands behind HB 20
in full support. She said that there are some trickle down
effects that inhibit municipalities from going forward when
there is not forward funding on education. She explained that
many small communities make their revenues from rentals to
teachers and if they can't identify how many teachers will be in
their community, it impacts their budgets. She said that if
[the notification date] were changed to June 1, it would be very
difficult for school boards and municipal councils to come
together and make decisions by July 1. She concluded that the
AML is in full support of HB 20.
11:51:10 AM
CINDY SPANYERS, Legislative Liaison, Alaska Public Employees
Association/American Federation of Teachers, (APEA/AFT), read
written testimony as follows [original punctuation provided]:
Among other bargaining groups in state service,
city/borough governments, and with the University of
Alaska, we represent employees within Anchorage,
Valdez, Juneau, and Petersburg school districts.
Their professions ranges from para-professionals to
maintenance workers; school nurses to school
librarians; teachers and special education providers,
and administrative personnel.
But I am also here on behalf of my seven-year old son
and his second-grade classmates at Auke Bay
Elementary.
I would like to begin by thanking HB 20's sponsor,
Representative Seaton, and members of this committee
for making education a priority. Last year, several
of you who served on this committee took
responsibility for securing on of the biggest
increases in educational funding. During the course
of these discussions, you also realized the quandary
local school districts and the local governments face
when establishing their budgets and meeting their
obligations in a timely fashion.
I appreciate any efforts you can do to help school
districts become fully funded early enough to make
solid plans for the forthcoming school year. HB 20 is
a big step in the right direction.
Again, thank you for your efforts to help provide the
best education to our children.
[HB 20 was held over.]
11:53:38 AM
HB 13-SCHOOL CONSTRUCTION BOND REIMBURSEMENT
CHAIR NEUMAN announced that the next order of business would be
HOUSE BILL NO. 13 "An Act relating to reimbursement of municipal
bonds for school construction; and providing for an effective
date."
REPRESENTATIVE GATTO, sponsor to HB 13, stated that [HB 13]
deals with school debt reimbursement. He related that in his
own district, 13 years ago, two schools were built when school
debt reimbursement was "90/10" with the state funding 90 percent
and the local district funding 10 percent. Since then, he
explained, the state has reduced the amount of money it supplies
for reimbursement; the state now funds 70 percent. He described
the Mat-Su borough and its growth rate of 500 students each
year, requiring the construction of new schools. He related the
importance of all districts to find a source of revenue to fund
new schools. This bill, he said, takes the previous statutes
which "sunsetted" on January 1, 2005, and extends the "sunset"
date. He clarified that this gives the borough time to
introduce bonding legislation.
11:56:20 AM
REPRESENTATIVE GRUENBURG invited the [committee] to add things
that would benefit educational capital construction. He
explained that this needs to be accomplished this year in
Anchorage, in the Mat-Su, and in other parts of the state. He
emphasized that [educational capital construction] is one of the
most important issues facing the municipalities.
REPRESENTATIVE SALMON asked how this bill affects rural school
districts.
REPRESENTATIVE GRUENBURG responded that this is legislation
that is needed in certain parts of the state. He said:
the last time this was done, there was a contingent
effective date clause put on the bill ... the
provision that was at issue here, the amendment, had
... a contingent effective date that said this
language, extending the 60 to 70 percent school debt
reimbursement, would become effective, if and only if,
the voters approved the bond issue that contained
bonding for rural schools ... this would not become
effective unless two things happened ... the
legislature passed the other provision ... that other
provision authorized bonds to be put to the voters at
the next general election and it would only become
effective if the voters approved those bonds. It tied
the two together even though they couldn't do it in
the same bill ... so, we can work with you and people
from all parts of the state to craft a plan that will
be a win-win for everybody, particularly in this year
of high oil prices.
12:00:53 PM
CHAIR NEUMAN asked Representative Gruenburg to explain how
schools would be funded and how an unorganized borough will
manage to get their part of the debt bond reimbursement.
REPRESENTATIVE GRUENBURG explained that the state floats bonds
and pays the cost of repaying those bonds. In the areas that
have the bonding capacity, he said, the state pays a smaller
percentage because the municipality has the ability to pay the
rest. He described projects receiving a 60 or 70 percent
reimbursement depending on whether they meet certain
construction specifications. He said the municipality has the
ability to pay a partial match but in the areas that don't, the
state pays the full cost.
12:02:33 PM
In response to Chair Neuman's question, Representative Gruenburg
clarified that municipalities do not have the ability to propose
construction. He explained that voters know every project
they're funding.
CHAIR NEUMAN asked how funding for schools is appropriated.
REPRESENTATIVE GRUENBURG said that in the past cash was used for
schools. Now, he related, bonds will be used and this spreads
the cost of projects over time. He pointed out that as the
generations that use those schools reach maturity, they bear
part of the cost of repaying the bonds.
REPRESENTATIVE GARA stated that money will not reach the
unorganized boroughs. He discussed that when the bond bill
passed, it was decided that the money would go to all districts.
12:05:29 PM
REPRESENTATIVE GRUENBURG explained that he would like to make
this part of a broader package of legislation.
REPRESENTATIVE GARA clarified that this bill, without any
amendments, is strictly for the organized boroughs.
REPRESENTATIVE GATTO stated that there is a need to construct
schools and whether or not this bill covers all of the needs in
districts, it deals with an existing need that is easily
identifiable. He explained that it is simply a matter of
extending a "sunset" date to existing legislation that was
already approved and functioning.
12:08:12 PM
REPRESENTATIVE GARA stated that though he supports [HB 13] there
are portions in the state that won't benefit from this bill. He
inquired as to the bond package and if it allows school
districts unlimited bonding capacity.
12:09:02 PM
REPRESENTATIVE GRUENBURG stated that under [HB 13] there is no
cap. When the package of legislation passed, he related, the
amounts of the bonds were known and it was known how much was
going to be bonded for all of the projects.
12:10:13 PM
EDDY JEANS, Director, School Finance, Department of Education
and Early Development, (EED), stated that he would like to make
clarifications on the previous discussion. He said that there
were two bills that were passed in 2002:
one was a state "geo" bond package that had a list of
schools of approximately $171 million dollars that
required a statewide vote of all Alaskans before the
state would issue state "geo" bonds to pay for that
$171 million dollars in school construction throughout
Alaska. Contingent upon an affirmative vote, which
did occur, the debt reimbursement program was extended
for a two year period, no caps, that allowed
reimbursement of 60 or 70 percent, dependent on the
individual project. If it met the Department of
Education's eligibility criteria, it qualified for 70
percent reimbursement; if the district wanted to go
beyond the department's eligibility criteria, the
project was eligible for 60 percent reimbursement.
The debt reimbursement program also required that you
get those bonds approved by the local voters, so there
was a two step approval process there, one at the
local level and one at the state of Alaska level.
Once that approval occurred ... then the local
municipality can go and issue bonds for a minimum for
10 years, and the state will reimburse on the
principal and interest of those bonds over the life of
those bonds, subject to annual appropriation by the
legislature. "HB 2003" also required the Department
of Education to prepare a report back to the
legislature next January ... on the effectiveness of
this dual system, the "geo" bonds for the rural
schools and the debt reimbursement program for the
municipal school districts.
The department is opposed to this piece of legislation
because we believe that we need to have time to do our
analysis to give you good information in your decision
making process ... through the last two years, the
department and municipal governments have approved
$728 million dollars in construction projects in
municipal school districts ... so we need time to do
our analysis, to be able to tell you what the long
term fiscal impacts on the state will be for this
program before we go and extend it again. And the
legislation actually foresaw us needing that time, and
provided us that time through the intent language to
do this report.
12:13:24 PM
CHAIR NEUMAN asked about how this could affect bonds that the
state is trying to move forward on.
MR. JEANS said that he would defer that question to the
Department of Revenue, as they are the experts in that area.
REPRESENTATIVE WILSON asked if the Department of Revenue has
been asked about their position in this situation.
REPRESENTATIVE GRUENBURG stated that he realizes the necessity
of doing this study, but as there is additional money now, and
the [monetary] situation is unpredictable from quarter to
quarter, the study conducted may not be valid in the near
future.
12:15:12 PM
MR. JEANS commented that the State of Alaska will be paying on
the debt reimbursement program for 10 to 20 years. He explained
that the debt reimbursement budget this year is $88 million, and
school districts have not issued all of the bonds for the $728
million that have been authorized in the last two years. He
said that the state's annual obligation for those bonds is
unknown until the analysis is complete.
REPRESENTATIVE THOMAS inquired as to how many schools need to be
built and/or replaced and if other communities report to the EED
if they are in need.
MR. JEANS explained that the EED does not receive applications
from all of the school districts so it is difficult to
accurately give a statewide need number. He commented that the
EED has a school construction list and a major maintenance list
that have been prioritized for the legislature. He expressed
his surprise that the debt reimbursement program authorized over
$700 million in projects two years ago. He explained that the
two proposals went together two years ago, and what is being
asked now is, how would we move forward and fund grant projects
for REAA's while funding debt projects. He concluded that this
piece of legislation extends the debt program two additional
years.
12:17:58 PM
REPRESENTATIVE THOMAS mentioned that the reason the school
district in Haines got behind was the lack of money from the
state over the years of rebuilding and remodeling schools.
REPRESENTATIVE SALMON asked Mr. Jeans how much time he needed to
complete the analysis and if he was opposed to HB 13.
MR. JEANS said that the EED is required to provide a report back
to the legislature next January. He stated that the EED is
opposed to this bill.
12:20:08 PM
REPRESENTATIVE GATTO clarified that the EED is opposed to the
bill because the analysis is not complete.
MR. JEANS stated that he can't say whether the EED is opposed
with the analysis. He expressed that the EED wants to complete
the analysis so that a good recommendation can be provided to
the legislature. He said that extending the debt reimbursement
program for an additional two years without caps, will incur
additional long-term liability on the State of Alaska.
REPRESENTATIVE GARA stated that the prioritization of school
districts that can qualify for debt reimbursement is left up to
the local communities. It is assumed, he explained, that if the
local community will pay 20 or 30 percent, then it is an
important project and is paid for by the state. He inquired as
to how local projects are ranked.
12:21:42 PM
MR. JEANS said that under the debt reimbursement program that
just "sunsetted", there was no ranking process and there were no
caps in place. He explained that if there was local approval,
the project was submitted to the EED and approved for 60 or 70
percent reimbursement. He described the grant program and that
the EED prioritizes projects based on need and projects are
submitted to the governor and the legislature for consideration.
He pointed out that the department does not provide a 100
percent reimbursement for any school, even the REAA's who are
required to make a 2 percent contribution to their schools.
REPRESENTATIVE GRUENBURG asked if there is any federal money for
this program.
MR. JEANS replied that they are state funded programs and are
subject to annual state appropriation.
In response to Representative Thomas's question, Mr. Jeans
stated that REAA's contribute through their state foundation aid
or their federal impact aid dollars.
12:24:04 PM
KIM FLOYD, Spokeswoman, Matanuska-Susitna Borough School
District, (MSBSD), stated that in the past five years alone,
MSBSD schools have averaged annual enrollment growth of 450 to
500 students and bond debt reimbursement is essential to
insuring that students are educated in safe and effective
learning environments. She explained that this rapid growth has
placed significant strain on existing facilities; more than 13
percent of the total enrollment, or about 1800 students, are
taught in temporary facilities. She said that the school board
has been actively working with developers and major contractors
in the boroughs to determine current and future school needs.
She said that she understands the state's concern with total
bond indebtedness, "however, we have been extremely good
stewards with our bonding projects. We haven't taken advantage
or treated the program as if it is an open checkbook, and I
truly hope that our conservative approach won't hurt us now when
we need it most. Without schools our community will be faced
with solutions as drastic as double shifting our Palmer and
Wasilla area elementary schools, for that reason among others we
ask for full support from the legislature for extending this
program, again, we are not responsible for the growth, but we
must respond and we owe it to our children to do so."
CHAIR NEUMAN asked Ms. Floyd to inform the committee on any
steps that have been taken by the MSBSD in moving forward on any
bonding.
MS. FLOYD stated that the MSBSD has been conservative. She
explained that if there is state support, then the MSBSD will
decide how to move forward with funding. She related a bond
package is anticipated for three elementary schools that if
opened next year, would be full. She said that it is unknown if
that will go through without any state reimbursement.
12:27:32 PM
REPRESENTATIVE GATTO inquired as to the "assembly" passing a
bond package that is contingent upon the state's passing HB 13.
MS. FLOYD said that is unlikely as the MSBSD is a conservative
area.
ANNE KILKENNY explained the overcrowding issues in the
elementary schools. She emphasized that the bond debt
reimbursement is absolutely critical for the Mat-Su area. She
commented that, as a parent, she wants her child in a safe
environment and in a class with a reasonable number of children.
12:31:08 PM
GEORGE VAKALIS, Assistant Superintendent, Anchorage School
District, (ASD), stated that the ASD supports the reinstatement
of this bill for many reasons including major maintenance of
older facilities, and schools in need of major renovation and/or
replacement. He said that debt reimbursement is necessary in
order to make this happen, and in the past, the legislature has
supported debt reimbursement programs. He explained that the
ASD wants this bill reinstated at the 60 and/or 70 percent level
to allow flexibility for the districts to serve qualifying
schools as well as school related facilities.
[HB 13 was held over.]
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Education meeting was adjourned at 12:33:53
PM.
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