Legislature(1993 - 1994)
03/29/1994 09:10 AM Senate CRA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE COMMUNITY & REGIONAL AFFAIRS
March 29, 1994
9:10 a.m.
MEMBERS PRESENT
Senator Randy Phillips, Chairman
Senator Robin Taylor, Vice Chairman
Senator Loren Leman
MEMBERS ABSENT
Senator Al Adams
Senator Fred Zharoff
COMMITTEE CALENDAR
SENATE BILL NO. 62
"An Act relating to the public school foundation program; and
providing for an effective date."
PREVIOUS SENATE COMMITTEE ACTION
SB 62 - See Community & Regional Affairs minutes
dated 2/18/93, 4/1/93, 4/6/93 (a.m. & p.m.
minutes), 4/16/93, 2/3/94, 2/10/94, 3/22/94,
WITNESS REGISTER
Duane Guiley, Director of School Finance
Department of Education
801 W. 10th St., Suite 200
Juneau, AK 99801-1894
POSITION STATEMENT: Offered information on CSSB 62(CRA)
Marla Berg, Staff to Senator Adams
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Offered information on amendments
to CSSB 62(CRA)
Shirley Armstrong, Staff to Community & Regional
Affairs Committee
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Offered information on CSSB 62(CRA)
ACTION NARRATIVE
TAPE 94-25, SIDE A
Number 001
The Senate Community & Regional Affairs Committee was called to
order by Chairman Randy Phillips at 9:10 a.m. He brought SB 62
(PUBLIC SCHOOL FOUNDATION PROGRAM) before the committee as the only
order of business.
Number 020
SENATOR LEMAN moved that CSSB 62(CRA) (version o dated 3/28/94) be
adopted. SENATOR TAYLOR objected for the purpose of asking
questions.
Number 045
SENATOR TAYLOR asked if an adjustment had been made in the Area
Cost Differential or the manner in which Area Cost Differential is
calculated within the formula. DUANE GUILEY responded that the
committee substitute does not require any change to the current
Area Cost Differential.
Number 070
SENATOR RANDY PHILLIPS asked Shirley Armstrong to outline the
differences in the new committee substitute.
SHIRLEY ARMSTRONG, Committee Aide, Senate Community and Regional
Affairs Committee, outlined the following three changes contained
in CSSB 62(CRA):
(1) On page 2, line 2, it requires the Department of
Education to define funding communities to include no less than 16
students in average daily membership. That was changed from 25
students in the first committee substitute.
(2) On page 3, the repealer on the holdharmless that repealed
the current law has been removed from the new committee substitute,
thus retaining the current holdharmless provision in statute.
(3) The effective date of the legislation was changed from
July 1, 1993 to July 1, 1994.
Number 097
DUANE GUILEY explained that current statute provides for a three-
year holdharmless that is phased in at a 75 percent, 50 percent and
25 percent and then zero supplement to a district. By removing
Section 8 it reverts back to the existing statutory holdharmless.
Number 136
SENATOR TAYLOR removed his objection to adopting CSSB 62(CRA).
Hearing no further objection, the Chairman stated the motion
carried.
Number 147
SENATOR TAYLOR offered and moved the following Amendment No. 1:
Page 1, line 5: After "shall" delete"include at least" and insert
"be"
Page 1, line 6: Delete "the lesser of"
Page 1, line 7: Delete "[1]"
Page 1, line 10: Delete "; or" and insert a period (.)
Page 1, lines 11 & 12: Delete paragraph (2) in its entirety
Senator Taylor explained that his amendment would remove the
provision that provides a local community would only be required to
pay up to 4 mills or 50 percent, whichever is least. Mr.Guiley
added that the proposed amendment would affect currently three
districts in the state: North Slope, Valdez and Unalaska. He
suggested leaving paragraph (2) in for purposes of accomplishing
the task and changing that number to 100 percent so that a district
would be required to submit 4 mills or 100 percent of basic need,
or consider some way of recapturing that extra contribution over
and above 100 percent of basic need for redistribution throughout
the state.
Number 215
SENATOR RANDY PHILLIPS called for a hand vote on Amendment No. 1.
Senator Taylor and Leman voted "Yea" and Senators Phillips voted
"Nay." Senator Leman changed his vote to "Nay." The Chairman
stated Amendment No. 1 failed.
Number 227
SENATOR TAYLOR offered and moved the following Amendment No. 2:
Reinsert Section 8 to read as follows:
"* Sec. 8. AS 14.17.031(b) is repealed."
Amend the percentage in the holdharmless provision from 10 percent
to 5 five percent.
DUANE GUILEY explained that Senator Taylor's amendment would
require adding a new section to the committee substitute that would
adjust the existing statute, AS 14.17.031(b). The existing statute
requires the holdharmless to be effective when there is a 10
percent drop in K-12 units. It is a phasing out of the loss over
a period of four years, thereby allowing an opportunity for a
district to adjust their program down to their new student
enrollment number or the new revenue number.
SENATOR TAYLOR added that this would take care of the problem of
the projected enrollment drop by the Sitka school district. Also,
Sitka is the only district in the state that would impacted by the
change.
Number 265
SENATOR RANDY PHILLIPS called for a hand vote on Amendment No. 2.
Senators Taylor, Leman and Phillips voted "Yea." The Chairman
stated Amendment No. 2 was adopted.
Number 275
SENATOR TAYLOR offered and moved the following Amendment No. 3:
Reinsert the Area Cost Differential language that was deleted from
the original bill (Section 3 of SB 62).
DUANE GUILEY explained that if the state were to undertake a study
similar to the McDowell study that was done in 1983, current
estimates are that an update to that study could cost as much as $1
million if the same firm and same type of process is used. The
1988 update cost the state approximately $250,000. He said the
section in the original SB 62 provides an opportunity for the
department to develop a new Alaska School Price Index for the
purpose of replacing the current Area Cost Differential. It would
be developed through regulation and it does not mandate another
study, so the opportunity would exist for the department to review
the 1988 McDowell update and simply suggest that it be adopted as
the new Alaska School Price Index.
SENATOR RANDY PHILLIPS voiced his concern that an update could cost
up to $1 million. SENATOR TAYLOR responded that could happen only
if they opt to go out and are authorized by the Finance Committee
to undertake a new study. The department can do it by regulation
internally.
Number 300
SHIRLEY ARMSTRONG pointed out that Section 1 of the original SB 62
should also be added back in as part of the amendment as the two
sections work together.
SENATOR TAYLOR amended Amendment No. 3 to include Section 1 of the
original SB 62. SENATOR RANDY PHILLIPS called for a hand vote on
Amendment No. 3. Senators Leman, Taylor and Phillips voted "Yea."
The Chairman stated Amendment No. 3 was adopted.
Number 337
SENATOR TAYLOR moved Senator Adams' Amendment No. 1:
Delete existing Section 1 and replace with:
"*Section 1. AS 14.17.025(b)(2) is amended to read: 24 {23}
percent of the district's basic need for the fiscal year under AS
14.17.021(b), as adjusted AS 14.17.225(b)."
MARLA BERG, staff to Senator Adams, explained that instead of
changing the local contribution requirement it would change the
allowable local effort from 23 percent to 24 percent. Senator
Adams believes that this would address a problem for some of the
school districts in the state without making drastic changes to the
existing formula. DUANE GUILEY pointed out that the amendment
would increase local capacity throughout the state by approximately
$15 million over and above existing capacity.
Number 360
SENATOR TAYLOR stated he has consistently opposed an increase in
the cap until there is a rewrite of the formula because he believes
it is still inequitable, so he will continue to oppose an increase.
Number 398
SENATOR RANDY PHILLIPS called for a hand vote on the adoption of
Senator Adams' Amendment No. 1. Senators Phillips, Leman and
Taylor all voted "Nay." The Chairman stated the amendment failed.
Number 402
SENATOR RANDY PHILLIPS brought the following Senator Adams'
Amendment No. 2 before the committee:
Page 2, line 2: Delete "16" and replace with "8"
MARLA BERG explained that Senator Adams is recommending reducing
the number of the average daily membership of students from 16 to
8. As drafted, the committee substitute would save approximately
$5 million, but would have a very negative impact on many school
districts. The amendment would save the state $1.1 million and
would reduce the impacted school districts to seven. SENATOR RANDY
PHILLIPS pointed out that the average daily membership was 25 and
was reduced down to 16 in the committee substitute.
SENATOR RANDY PHILLIPS called for a hand vote on Senator Adams'
Amendment No. 2. Senators Phillips, Leman and Taylor all voted
"Nay." The Chairman stated the amendment failed.
Number 425
SENATOR TAYLOR offered and moved the following Amendment No. 4:
Page 2, line: Delete "16" and replace with "10"
Senator Taylor explained that his amendment would give the
department up front what they were going to do in the year 2000
anyway.
SENATOR RANDY PHILLIPS called for a hand vote on Amendment No. 4.
Senator Taylor voted "Yea" and Senators Leman and Phillips voted
"Nay." The Chairman stated the amendment failed.
Number 442
SENATOR RANDY PHILLIPS brought the following Amendment No. 3 by
Senator Adams before the committee:
Page 2: Delete Section 3 and renumber the following sections.
MARLA BERG explained the amendment deletes Section 3 which relates
to changing the devisor from 16 to 17. She added that Section 3
will cost the state $11.7 million with most of the benefit going to
urban communities.
SENATOR RANDY PHILLIPS called for a hand vote on Senator Adams'
Amendment No. 3. Senators Leman, Taylor and Phillips voted "Nay."
The Chairman stated the amendment failed.
Number 452
SHIRLEY ARMSTRONG pointed out that in the original SB 62, Section
3 speaks to the Area Cost Differential, but on page 4, line 14,
Section 6 speaks to the Alaska School Price Index. Mr. Guiley has
suggested adding language which says that the department shall
establish the Alaska School Price Index by regulation.
SENATOR TAYLOR moved a conceptual amendment that the language
within the legislation be amended to reflect that the department
may accomplish both the survey and the method of calculating
through regulations. Hearing no objection, the Chairman stated the
conceptual amendment was adopted.
Number 472
SENATOR TAYLOR moved that CSSB 62(CRA), as amended, be passed out
of committee with individual recommendations. Hearing no
objection, it was so ordered.
There being no further business to come before the committee, the
meeting was adjourned at 9:45 a.m.
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