Legislature(2005 - 2006)CAPITOL 106
03/22/2005 11:00 AM House EDUCATION
| Audio | Topic |
|---|---|
| Start | |
| HB173 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 173 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON EDUCATION
March 22, 2005
12:00 p.m.
MEMBERS PRESENT
Representative Mark Neuman, Chair
Representative Carl Gatto
Representative Bob Lynn
Representative Bill Thomas
Representative Peggy Wilson
Representative Les Gara
MEMBERS ABSENT
Representative Woodie Salmon
COMMITTEE CALENDAR
HOUSE BILL NO. 173
"An Act relating to school funding and adjusting the district
cost factors; and providing for an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 173
SHORT TITLE: SCHOOL DISTRICT COST FACTORS
SPONSOR(S): RULES BY REQUEST OF LEG BUDGET & AUDIT
02/24/05 (H) READ THE FIRST TIME - REFERRALS
02/24/05 (H) EDU, FIN
03/15/05 (H) EDU AT 11:00 AM CAPITOL 106
03/17/05 (H) EDU AT 5:30 PM CAPITOL 106
03/17/05 (H) -- Meeting Canceled --
03/22/05 (H) EDU AT 11:00 AM CAPITOL 106
WITNESS REGISTER
REX SHATTUCK, Staff
to Representative Mark Neuman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 173 on behalf of Representative
Neuman.
EDDY JEANS, Director
School Finance
Department of Education and Early Development
Juneau, Alaska
POSITION STATEMENT: Answered questions regarding HB 173.
BRADFORD TUCK
Institute of Social and Economic Research
University of Alaska
Anchorage, Alaska
POSITION STATEMENT: Answered questions regarding HB 173.
MATT BERMAN
Institute of Social and Economic Research
University of Alaska
Anchorage, Alaska
POSITION STATEMENT: Answered questions regarding HB 173.
ACTION NARRATIVE
CHAIR MARK NEUMAN called the House Special Committee on
Education meeting to order at 12:00:55 PM. Representatives
Gatto, Wilson, Neuman, and Lynn were present at the call to
order. Representatives Gara and Thomas arrived as the meeting
was in progress.
HB 173-SCHOOL DISTRICT COST FACTORS
CHAIR NEUMAN announced that the only order of business would be
HOUSE BILL NO. 173, "An Act relating to school funding and
adjusting the district cost factors; and providing for an
effective date."
12:01:38 PM
REPRESENTATIVE WILSON moved to bring before the committee, HB
173, version 24-LS0644\A.
REPRESENTATIVE GATTO objected.
12:02:55 PM
REX SHATTUCK, Staff to Representative Mark Neuman, Alaska State
Legislature, said Senate Bill 36, which passed in 1998, required
the Department of Education and Early Development to submit
updated district cost factors. To comply, the department
attempted to use existing cost-factor methods and the results
were not supported by the data, he said. He said the McDowell
Group determined that the methodology was not usable. The
department recommended to the legislature that the cost factors
remain unchanged, as adopted in AS14.17.460 in 1998, until the
new cost models could be developed, he stated. Funds were added
to the FY02 capital budget for the Legislative Budget and Audit
Committee to contract for a new cost study. The American
Institute for Research (AIR) was selected to develop the new
district cost factors, he said.
MR. SHATTUCK stated that in January of 2003 AIR's report was
released to a joint legislative hearing where concerns were
expressed about the accuracy of its data. The institute
responded to criticism of its report, he said, but offered no
revisions. The Institute of Social and Economic Research (ISER)
conducted a peer review that looked at the AIR study and found
that some things were not adequately addressed in the report,
including teacher turnover and estimation of energy costs. An
updated report was submitted.
MR. SHATTUCK said a working group was formed with the directors
of the finance and audit divisions, staff to the chairs of
Legislative Budget and Audit, and Eddy Jeans to review and
suggest format changes for the final report released on February
4, 2005. He said HB 173 would amend AS 14.17.460(a) to bring
district cost factors in line with those published in the
Institute of Social and Economic Research update.
12:06:48 PM
EDDY JEANS, Director of School Finance, Department of Education
and Early Development, noted that Mr. Shattuck's testimony was
accurate.
CHAIR NEUMAN asked Mr. Jeans if there are valid points on both
sides of this issue.
12:08:40 PM
MR. JEANS said that the Department of Education and Early
Development wasn't excited about the passing of Senate Bill 36,
and he noted that "looking at one component of the foundation
program in isolation of the entire program causes problems, and
now you're all being faced with how to address that." The study
done by AIR and submitted to the legislature, if implemented,
"would actually save the state about $4 million." School
districts and the Legislature expressed concerns about
deficiencies in the AIR study. That is why the legislature
commissioned the peer review by ISER, he said. The ISER report
states that a significant piece of the model is teacher
compensation, and that it underestimated the true differences
between many school districts and Anchorage. The legislature
commissioned a second study, he said, and the results of that
study are HB 173. "To implement the results of that study would
increase foundation approximately $82 million," he said.
12:11:03 PM
CHAIR NEUMAN asked if all school districts except Anchorage
would get money.
MR. JEANS stated that the legislature could adopt these cost
differentials and not put any money into the foundation program.
"If you do that, in essence, what the department would have to
do is pro-rate the base student allocation." It would
redistribute the existing resources, and the larger districts
would have to pay for that redistribution, he said.
12:12:27 PM
REPRESENTATIVE THOMAS asked about the many years it took to get
this data.
MR. JEANS said, "We've attempted to do it a number of times."
REPRESENTATIVE THOMAS said the delay agitates the problems for
rural communities, and he suggested compensating them.
12:14:26 PM
REPRESENTATIVE GARA stated that his instincts say that the ISER
report correctly states that the smaller schools have been under
funded. He said the $82 million would hold Anchorage harmless
and then bring every other school ahead. Anchorage would stay
at last year's budget, he speculated.
12:15:22 PM
MR. JEANS stated that he has a problem with the terminology of
holding Anchorage harmless. To simply implement the cost
differential changes would add $82 million to the foundation
program. "I don't see that as holding Anchorage harmless."
12:16:07 PM
REPRESENTATIVE GARA asked if Anchorage would receive the same
amount of funds as it did last year if $82 million are added to
the program.
MR. JEANS stated that the Anchorage school district would not
see an increase in budget based on the cost differential study,
as long as enrollment stayed the same.
REPRESENTATIVE GARA said it would leave Anchorage in a $20
million deficit if that happens.
CHAIR NEUMAN said it would not be fair to assume that
Anchorage's cost have not increased from last year.
12:18:24 PM
REPRESENTATIVE WILSON stated that based on the two studies, the
funding has not been fair to many school districts. It is
realistic to help out Anchorage because most members "that are
in this body" are from Anchorage. "But we have to fix this
problem, because we are not being fair to some kids in this
state."
12:20:15 PM
CHAIR NEUMAN said that no one knew how expensive heating oil
would be and how that has affected schools.
REPRESENTATIVE GATTO stated that there was an instructional
unit, and then SB 36 said the instructional unit was wrong, and
then the AIR study said SB 36 was wrong, and now the ISER study
says the AIR study is wrong. It is confusing, he said. The
newest study always seems to criticize the previous study. "I
walk into classrooms in big districts and I see 35 kids in a
classroom. That's what I see, if it isn't 40. Then I walk into
classrooms in rural districts and I see 12 kids. The ISER study
is saying that we need to take money from the classrooms with 35
kids and redistribute it so that the classrooms with 12 kids get
more of the money."
12:22:55 PM
BRADFORD TUCK, Institute of Social and Economic Research,
University of Alaska, Anchorage, said there are two areas where
recommendations were different from AIR's assessment: energy
costs and personnel compensation. He thinks that ISER has done
a credible job in terms of assessing relative cost differences
for teachers and administrators. He said ISER attempted to
estimate what it would cost to obtain and retain teachers of
comparable qualifications.
12:27:30 PM
REPRESENTATIVE GARA asked for the highest difference in pay
between Anchorage and another school.
MR. TUCK said that the greatest differential would be 67 percent
and that the Yupiit, North Slope, and Yukon Flats districts are
in that ballpark.
12:29:31 PM
REPRESENTATIVE WILSON said that some contend that class size is
the critical factor. But some schools have a mix of grades in
one class, or they may have an extremely limited range of class
offerings. Those are some of the things she would like to fix,
but those data aren't used to help with decision-making.
MR. TUCK said that is a real problem, and he is not sure how the
study dealt with "those micro-details." The study looked at
teacher positions, but not with class size.
MATT BERMAN, Institute of Social and Economic Research,
University of Alaska, Anchorage, said that Mr. Jeans noted the
problems with looking at only one component of the foundation
formula, without looking at the whole index.
12:32:34 PM
REPRESENTATIVE THOMAS said Senate Bill 36 was harmful to rural
communities, and the makers of it intended it that way.
REPRESENTATIVE GATTO said it is difficult to impugn motives to
people five years ago.
[HB 173 was held over.]
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Education meeting adjourned at 12:33:51 PM.
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