Legislature(1997 - 1998)
05/11/1998 12:10 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
May 11, 1998
12:10 P.M.
TAPE HFC 98 - 168, Side 1.
TAPE HFC 98 - 168, Side 2.
TAPE HFC 98 - 169, Side 1.
CALL TO ORDER
Co-Chair Therriault called the House Finance Committee
meeting to order at 12:10 P.M.
PRESENT
Co-Chair Hanley Representative Kelly
Co-Chair Therriault Representative Kohring
Representative J. Davies Representative Martin
Representative G. Davis Representative Moses
Representative Foster Representative Mulder
Representative Grussendorf
ALSO PRESENT
Representative Scott Ogan; Representative Con Bunde; Larry
La Bolle, Staff, Representative Richard Foster; Rick Cross,
Deputy Commissioner, Department of Education; Eddy Jeans,
Manager, School Finance Section, Education Support
Services, Department of Education; Bob Doyle, Executive
Director, Business and Operations, Mat-Su School District,
Mat-Su.
SUMMARY
SB 36 An Act relating to transportation of public
school students; relating to school construction
grants; relating to the public school foundation
program and to local aid for education; and
providing for an effective date.
HCS CS SB 36 (FIN) was reported out of Committee
with a "do pass" recommendation and with five
fiscal notes by the Department of Education and a
zero note by the Department of Labor dated
3/10/98.
SENATE BILL NO. 36
"An Act relating to transportation of public school
students; relating to school construction grants;
relating to the public school foundation program and
to local aid for education; and providing for an
effective date."
Co-Chair Therriault MOVED to ADOPT Amendment #6 which would
provide the definition of schools containing an average
daily membership break-number of 100 students.
Representative Foster OBJECTED.
LARRY LA BOLLE, STAFF, REPRESENTATIVE RICHARD FOSTER,
explained that the computer spread specifying the funding
indicates that schools within their district will be
negatively impacted. The final impact is not clear,
consequently, Representative Foster will not support the
amendment.
Co-Chair Therriault reminded Representative Foster that all
districts would be preserved at a previous year's funding;
he reiterated that no district will see a decline in
funding. Mr. La Bolle replied that it could mean that none
of the "additional" funding going into the foundation
program would flow to these districts.
Representative J. Davies interjected that the 50 student
cut-off would more closely match current distribution of
schools.
Representative Kohring advised that Amendment #6 will
create a problem for the Mat-Su Borough school district.
He requested that the Committee modify the definition of
"facility". The alternative site schools in the Mat-Su
area should be counted as school sites and should qualify
for additional funding. Amendment #6 would require that
the alternative school be merged into the high school and
that revenues would be lost for students which represent
that school. He continued, because of overcrowding, there
are now additional leased facilities at Big Lake. He
requested that consideration be given to this concern.
Also, there is a third school in the Russian Village which
would not be counted as part of the facility definition in
Amendment #6.
Representative Kohring distributed an amendment to
Amendment #6. [Copy on File].
BOB DOYLE, EXECUTIVE DIRECTOR, BUSINESS AND OPERATIONS,
MAT-SU SCHOOL DISTRICT, MAT-SU, spoke to the amended
Amendment #6, which would expand the definition of
Amendment #6 to include alternative sites. He explained
the "separate facility" situation referenced by
Representative Kohring.
Representative Martin commented that every person in every
school district wants the State to pay the bill. He
emphasized that the State no longer has that money.
Representative G. Davis suggested that the proposed
legislation would simplify the process and that the
amendment to Amendment #6 would add further complexity when
addressing special needs.
Representative J. Davies agreed with Representative G.
Davis and added that the amended amendment would suggest
negative incentives when creating smaller schools. He
pointed out that in a larger community, there would
continue to be administrative efficiency of scale.
Representative Kohring explained that the Mat-Su School
District has a 55% increased population since 1989. He
maintained that the area is in a severe crisis and that the
proposed formula will not help, although, noted that SB 11
will help by building additional schools. Representative
Kelly commented that Mat-Su is not the only place in the
State which has gone through rapid periods growth,
suggesting that it is a short-term problem which could be
addressed through a bonding package.
Representative Kohring MOVED to ADOPT the amendment to
Amendment #6. Co-Chair Therriault OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Kohring, Moses, Hanley
OPPOSED: Mulder, J. Davies, G. Davis, Grussendorf,
Foster, Kelly, Martin, Therriault
The MOTION FAILED (3-8).
Representative Kohring OBJECTED to passage of Amendment #6.
A roll call vote was taken on the motion.
IN FAVOR: G. Davis, Kelly, Martin, Mulder, Hanley,
Therriault
OPPOSED: J. Davies, Foster, Grussendorf, Kohring,
Moses
The MOTION PASSED (6-5).
Representative Grussendorf MOVED to ADOPT Amendment #9.
[Copy on File]. He explained that the amendment would
address concerns in the North Slope Borough transition in
public school funding and the current system of good will.
Representative Mulder OBJECTED. He stated that the
amendment would create a third category option for the
North Slope Borough. Legal drafters were concerned that
this would create a disparity problem, which must be
resolved before passage of the amendment.
Representative Grussendorf explained that the amendment
would address the "ability" of the North Slope Borough to
arrive at what was deposited into educational funding
during the past year. The North Slope Borough is aware of
the problems which could occur with the disparity test. He
acknowledged that this is an unique situation.
Co-Chair Therriault suggested that if a specific problem
arises, the Legislature can then address that concern and
that until there is an absolute need, the concern should
not be brought forward. Representative Grussendorf
recommended referencing the disparity test. Representative
G. Davis commented that it would be an option to use the
local effort.
EDDY JEANS, MANAGER, SCHOOL FINANCE SECTION, EDUCATION
SUPPORT SERVICES, DEPARTMENT OF EDUCATION, spoke to work
draft version "J", Page 3, Line #9. He commented that
language indicates that in addition to the local
contribution required, the city and borough districts,
throughout a fiscal year, may make a contribution of not
more than the greater of or the equivalent of:
? A two-mill tax levy on the full and true value. He
understood that language would be inserted into
Section #1; or
? 23% of that districts basic need for that year,
maintaining the State's ability to meet the federal
disparity test.
He added that #1 would allow those districts which have
extreme property wealth, to contribute money that allows
them to be in the top 5%, excluded from the disparity
calculations. Mr. Jeans pointed out that as Amendment #9
is written, it would not affect the disparity test, but
instead would allow the North Slope Borough to continue to
make contributions, keeping them in the top 5%.
Mr. Jeans noted that there are four districts at the 2-mill
provision: North Slope, Valdez, Unalaska, and Skagway.
Co-Chair Hanley voiced concern on the overall effectiveness
of the North Slope Borough's taxing ability. He believed
that the amendment would be establishing a precedent to tax
in order to make the local effort. Representative J.
Davies questioned how this amendment would provide
authorization for the North Slope Borough to collect any
more taxes. Co-Chair Hanley noted that the amendment
states that they "may make a local contribution". He
stated that it should be clear for the record that the
amendment will not allow them to exceed other existing
caps. Representative J. Davies emphasized that the
language was permission and would not allow them to collect
other taxes.
RICK CROSS, DEPUTY COMMISSIONER, DEPARTMENT OF EDUCATION,
commented that the mechanism is unique and specific to the
school foundation funding formula. The amendment is
written simply to determine the excess local effort which a
district can contribute. The amendment would be specific
to this law and not to the tax code.
(Tape Change HFC 98- 168, Side 2).
A roll call vote was taken on the motion.
IN FAVOR: Grussendorf, Moses, J. Davies
OPPOSED: G. Davis, Kelly, Kohring, Martin, Mulder,
Therriault, Hanley
Representative Foster was not present for the vote.
The MOTION FAILED (3-7).
Co-Chair Therriault MOVED to ADOPT Amendment #10. [Copy on
File]. He stated that the amendment would address the
modifiers to the floor mechanism. Should a district fall
below 95% of the district's average daily membership (ADM),
they would begin to lose at a per capita rate.
Representative Martin believed that the amendment could
exasperate the problem of double counting students. Co-
Chair Therriault explained that the proposed mechanism does
not deal with freezing them or providing extra money
through the formula. It would apply only to those
districts which have an established "floor" and would serve
to decrease that amount as those districts loose students.
It would not impact the amount of money received through
the formula. The trigger for the erosion of the floor is
at a lower threshold than the current statutory figure on
the current funding formula.
Representative J. Davies advised that by adopting the
amendment, the bottom line is that when a district looses a
student, they will loose more than the ADM amount and that
when there is an increase in the student population, the
district will gain less. Representative J. Davies MOVED to
ADOPT an amendment to the amendment, changing Line #14 to
90%. Co-Chair Therriault OBJECTED.
Representative J. Davies explained that a floor is meant to
be a base line adjustment. The operation on the ADM should
sit on top of that adjustment. In the past, the floor
incorporated such aspects as bilingual and bicultural,
which will be removed with passage of the proposed
amendment. It will enter a 20% compromise into the block.
A roll call vote was taken on the motion.
IN FAVOR: Foster, Grussendorf, Martin, Moses, J.
Davies
OPPOSED: Kelly, Kohring, Mulder, G. Davis, Hanley,
Therriault
The MOTION FAILED (5-6).
Representative J. Davies MOVED to change Line 10 to 90%.
There being NO OBJECTION, it was amended.
Co-Chair Therriault asked if there was OBJECTION to
Amendment #10 as amended. Representative J. Davies
maintained his OBJECTION.
Representative J. Davies clarified how Section (e) would
work. Co-Chair Therriault acknowledged that there would be
erosion of the floor and once it was gone, then 100% would
occur. Representative J. Davies inquired the initial
purpose of the floor. Co-Chair Therriault replied that it
was to help bridge from one formula to the next.
Representative J. Davies believed that it would help to
preserve whatever funding level currently exists.
Co-Chair Hanley pointed out that as the formula currently
exists, there are districts which will loose money; those
districts are not loosing money under the proposed
amendment and that they will be held harmless.
Representative J. Davies argued that would depend on "where
one sits", whether or not a district was to loose or gain.
He stressed that the amendment would "compromise the
compromise" and that a rural student would only be worth
60% of what an urban student is worth.
Co-Chair Hanley interjected that current formula indicates
that a rural student is worth 2 to 4 times that which a
urban student is worth. He stressed that this is not
equitable.
Representative Martin stated that the floor creates a weak
situation. Representative J. Davies stated that Amendment
Committee members that it does cost more to run schools in
rural Alaska. To calculate what is equitable should be
based on how much "education" is being given per student.
Under the new formula, the State will be reducing the
amount of dollars that a new student gets in rural Alaska
and shifting that benefit to urban Alaska.
Representative J. Davies MOVED to DIVIDE the question
between Lines #11 and #12. Co-Chair Therriault agreed,
asking the Committee to vote on Amendment #10(a).
A roll call vote was taken on the motion.
IN FAVOR: Kelly, Kohring, Martin, Mulder, G. Davis,
Therriault, Hanley
OPPOSED: Grussendorf, Moses, J. Davies, Foster
The MOTION PASSED (7-4).
A roll call vote was taken on the motion to adopt Amendment
IN FAVOR: Kelly, Kohring, Martin, Mulder, G. Davis,
Hanley, Therriault
OPPOSED: Moses, J. Davies, Grussendorf, Foster
The MOTION PASSED (7-4), Amendment #10 was adopted as
amended.
Representative J. Davies MOVED to ADOPT Amendment #11.
[Copy on File]. Co-Chair Therriault OBJECTED.
Representative J. Davies explained that the amendment would
allow the base student allocation to increase by 1% per
year. Co-Chair Therriault pointed out that it would be an
automatic cost-of-living allowance (COLA) adjuster.
A roll call vote was taken on the motion.
IN FAVOR: Moses, J. Davies, Grussendorf, Foster
OPPOSED: Kohring, Martin, Mulder, G. Davis, Kelly,
Therriault, Hanley
The MOTION FAILED (4-7).
Representative Kohring MOVED to ADOPT Amendment #12. [Copy
on File]. Co-Chair Therriault OBJECTED. Representative
Kohring explained his concerns regarding State funding for
correspondence study. Co-Chair Therriault noted that in
the bill, a flat rate would be used for correspondence
across the State. The proposed amendment would change
that by providing a higher rate for the "in" district
versus the "out" of district.
A roll call vote was taken on the motion.
IN FAVOR: J. Davies, Foster, Kohring
OPPOSED: Martin, Mulder, G. Davis, Grussendorf,
Kelly, Hanley, Therriault
The MOTION FAILED (3-7).
Representative Kohring MOVED to ADOPT Amendment #13. [Copy
on File]. He stated that the amendment would provide
Intent Language to address the shortfalls in funding due to
miscalculations in the public school funding formula
through supplemental appropriations.
Co-Chair Therriault OBJECTED. He voiced concern with
meeting the unaddressed student enrollment with
supplemental appropriations. He pointed out that the bill
does contain language to address the adjustment of student
count or incorrect reporting.
Representative J. Davies pointed out that the proposed
language would allow districts which experienced an
increased enrollment during the year, to be able to apply
for supplemental funding during the year. He noted that
the proposed formula provides for a single count period so
as to avoid a teeter-totter effect. This amendment would
lead to confusion.
Representative Kohring pointed out that the Department of
Education should establish criteria regarding when the
reports should be remitted by the school districts. He
added that the amendment would help the rapidly growing
school districts.
A roll call vote was taken on the motion to adopt Amendment
IN FAVOR: Moses, Mulder, Foster, Kohring
OPPOSED: J. Davies, G. Davis, Grussendorf, Kelly,
Martin, Therriault, Hanley
The MOTION FAILED (4-7).
(Tape Change HFC 98- 169, Side 1).
Representative Kohring MOVED to ADOPT Amendment #14. [Copy
on File]. He stated that the amendment would authorize
funding for temporary overcrowding and emergency
assessment.
Representative J. Davies asked how costs would be mitigated
for overcrowding. Representative Kohring replied that
costs would be associated with renting a portable facility
and would be reflective that the initial foundation formula
dollars will not be adequate to cover the needs of the Mat-
Su Borough. Representative J. Davies asked if the
amendment would provide for supplemental funding over and
above the increment given on the per student basis.
Representative Kohring acknowledged it would and that it
would be used for operations.
Representative J. Davies explained that there are many
other districts loosing under the proposed formula and that
the amendment would address only the needs of one specific
school district. Representative J. Davies OBJECTED to
Amendment #14.
A roll call vote was taken on the motion.
IN FAVOR: Kohring
OPPOSED: J. Davies, G. Davis, Foster, Grussendorf,
Kelly, Martin, Moses, Mulder, Hanley,
Therriault
The MOTION FAILED (1-10).
Representative J. Davies WITHDREW Amendment #15. [Copy on
File].
Co-Chair Therriault MOVED to ADOPT Amendment #16, a change
to Page 8, Line 10, raising the per student dollar amount
to $3940 dollars. There being NO OBJECTION, it was
adopted.
Representative Mulder MOVED to report HCS CS SB 36 (FIN)
out of Committee with individual recommendations and with
the accompanying fiscal notes. Representative J. Davies
OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: G. Davis, Foster, Kelly, Martin, Mulder,
Therriault, Hanley
OPPOSED: Grussendorf, Kohring, Moses, J. Davies
The MOTION PASSED (7-4).
HCS CS SB 36 (FIN) was reported out of Committee with a "do
pass" recommendation and with five fiscal notes by the
Department of Education and a zero fiscal note by the
Department of Labor dated 3/10/98.
ADJOURNMENT
The meeting adjourned at 4:20 P.M.
H.F.C. 10 5/11/98 p.m.
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