Legislature(2005 - 2006)SENATE FINANCE 532

03/09/2005 09:00 AM Senate FINANCE

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09:06:43 AM Start
09:21:50 AM HB1
11:17:13 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
Heard & Held
Moved HB 64 Out of Committee
                     SENATE FINANCE COMMITTEE                                                                                 
                           March 9, 2005                                                                                      
                             9:06 a.m.                                                                                        
CALL TO ORDER                                                                                                               
Co-Chair Wilken  convened the meeting  at approximately 9:06:43  AM.                                                          
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Con Bunde, Vice Chair                                                                                                   
Senator Bert Stedman                                                                                                            
Senator Donny Olson                                                                                                             
Also Attending:  REPRESENTATIVE  MIKE HAWKER;  SENATOR BEN  STEVENS;                                                          
REPRESENTATIVE CARL GATTO;  REPRESENTATIVE MARK NEUMAN; NONA WILSON,                                                            
Legislative  Liaison,   Department  of  Transportation   and  Public                                                            
Facilities; LAURIE  ROBERTS SCANDLING, Principal/Teacher,  Yaakoosge                                                            
Daakahidi  Alternative  High School;  public testimony  on HB  1 was                                                            
presented in the order reflected in the minutes.                                                                                
Attending  via  Teleconference:  From Homer:  STEVE  TAROLA,  Chair,                                                          
Alaska   Board  of  Public   Accountancy;   teleconferenced   public                                                            
testimony  on HB  1 was  presented  in the  order  reflected in  the                                                            
SUMMARY INFORMATION                                                                                                         
HB 64-EXTEND BOARD OF PUBLIC ACCOUNTANCY                                                                                        
The Committee  heard from the bill's  sponsor and reported  the bill                                                            
from Committee.                                                                                                                 
SB 63-USE SEAT BELT ROAD SIGNS                                                                                                  
The Committee  heard from the bill's  sponsor and the Department  of                                                            
Transportation   and  Public  Facilities.  The   bill  was  held  in                                                            
HB 1-INCREASE AMT OF BASE STUDENT ALLOCATION                                                                                    
The Committee heard from  the sponsor and took public testimony. The                                                            
bill was held in Committee.                                                                                                     
Co-Chair Wilken  acknowledged the  presence of the government  class                                                            
from the City and Borough  of Juneau Yaakoosge Daakahidi Alternative                                                            
High School.                                                                                                                    
LAURIE  ROBERTS SCANDLING,  Principal/Teacher,  Yaakoosge  Daakahidi                                                            
Alternative High  School explained that students were  in attendance                                                            
"to see government in action".                                                                                                  
     HOUSE BILL NO. 64                                                                                                          
     "An Act extending the termination date for the Board of Public                                                             
     Accountancy; and providing for an effective date."                                                                         
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Co-Chair  Wilken reminded that  the bill had  been held in  order to                                                            
provide time for further review.                                                                                                
REPRESENTATIVE  MIKE  HAWKER,   the bill's   sponsor,  informed  the                                                            
Committee  that  the  President   of  the  Alaska  Board  of  Public                                                            
Accountancy was available for questions.                                                                                        
STEVE TAROLA,  Chair, Alaska Board of Public Accountancy,  testified                                                            
via teleconference  from Homer, urged  the Committee to support  the                                                            
legislation and report it from Committee.                                                                                       
Senator  Bunde  moved  to  report  the  bill   from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
There being  no objection,  HB 64 was REPORTED  from Committee  with                                                            
zero Fiscal Note #1, dated  January 21, 2005, from the Department of                                                            
Commerce, Community and Economic Development.                                                                                   
     CS FOR SENATE BILL NO. 63(TRA)                                                                                             
     "An Act relating to road signs encouraging the use of safety                                                               
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Co-Chair  Wilken  noted  that  the original  version  of  the  bill,                                                            
Version 24-LS0363\G, is before the Committee for consideration.                                                                 
SENATOR  BEN  STEVENS,  the  bill's  sponsor,  expressed  that  this                                                            
"simple bill"  was developed in response  to a constituent's  desire                                                            
to erect a memorial sign  near the site of an automobile accident in                                                            
which a family member's  life had been lost. While the Department of                                                            
Transportation  and  Public Facilities  (DOT)  has  a Memorial  Sign                                                            
Program,  its funding  is limited  to "Don't  Drink  and Drive"  and                                                            
"Please  Drive  Safely"   signs,  and  would  not  accommodate   the                                                            
constituent's  desire  to  erect  a  sign  stating  "Buckle  Up  for                                                            
Safety".  This bill  would expand  the program  to accommodate  such                                                            
wording and  allow signs to be placed  in the State's right-of-way,                                                             
"near  the location  of  a traffic  fatality  that occurred  as  the                                                            
result of not wearing a seatbelt".                                                                                              
Co-Chair  Wilken understood  that the family  member whose  life was                                                            
lost in the  aforementioned traffic  accident was a young  man named                                                            
Nathan Kampen.                                                                                                                  
Senator  B. Stevens  affirmed  and noted  that he,  rather than  the                                                            
family, is requesting that  the program be referred to as the Nathan                                                            
Kampen Act.                                                                                                                     
Co-Chair  Wilken   clarified  that   although  there  is   a  Senate                                                            
Transportation  Committee   committee  substitute,  the  sponsor  is                                                            
requesting  that  the original  version  of  the bill,  Version  24-                                                            
LS0363\G, be considered.  The difference between the two versions is                                                            
that  the  Senate  Transportation  Committee  committee   substitute                                                            
removed language  in Section 1, page  one, line five, that  reads as                                                            
     SHORT TITLE. This Act shall be known as the Nathan Kampen Act.                                                             
Senator B.  Stevens affirmed. He noted  that although this  language                                                            
was removed  in the Senate Transportation  committee substitute  due                                                            
to policy  issue concerns  about Legislative  intent and  uncodified                                                            
law, that committee has  advised that they would not take issue were                                                            
this Committee to reinstate that language.                                                                                      
Senator  Olson observed  that  the  bill is  accompanied  by a  zero                                                            
fiscal note  even thought each sign  would cost approximately  $500.                                                            
In addition, he  inquired to the process through which  a sign would                                                            
be erected.                                                                                                                     
Senator B.  Stevens deferred  to DOT to respond  to the fiscal  note                                                            
question.  The   memorial  signs  would  be  "by  request"   to  the                                                            
Department, which would  determine whether a sign could be placed in                                                            
the right of way "without  obstructing either traffic or other types                                                            
of  equipment  and not  to  jeopardize the  safety  of  the flow  of                                                            
Senator  Olson asked  whether  regarding the  number  of signs  that                                                            
might be placed and how they would be financed.                                                                                 
NONA WILSON, Legislative  Liaison, Department of Transportation  and                                                            
Public  Facilities,  explained  that  the  application  process  for                                                            
requesting a sign would  allow for a 30-day Department review period                                                            
in which  the Department  would determine  whether  a sign could  be                                                            
placed at  the requested  location. Were  the request approved,  the                                                            
Department would  place the sign in an appropriate  place near or at                                                            
the location of  the accident. While the number of  signs that might                                                            
be requested  is unknown,  funding for the  signs would be  provided                                                            
through the existing Memorial Sign Program.                                                                                     
Senator  Stedman  pointed  out  that  the Transportation   Committee                                                            
committee substitute  also removed  the words "at or near"  from the                                                            
bill in Section 2, page  one, line eight. Continuing, he shared that                                                            
the Department  has erected memorials  and safety reminder  signs at                                                            
dangerous  intersections  in his  community.  That  signage has  not                                                            
generated  negative  public feedback.  He  also noted  that, in  his                                                            
experience, it has been  difficult at times to get the Department of                                                            
Transportation  and  Public  Facilities   to  make  improvements  to                                                            
dangerous intersections.                                                                                                        
Co-Chair Wilken  noted that another difference between  the versions                                                            
is that  the Senate  Transportation Committee  committee  substitute                                                            
included the language "at  or near the site" in Section 1, page one,                                                            
line  five as  compared to  language in  the original  version  that                                                            
specifies "at the site".                                                                                                        
Senator  B. Stevens  characterized  the  language differences  as  a                                                            
"grammatical  choice" as the bill  drafter's usage of the  words "at                                                            
the site" would  be defined to allow  the signs to be erected  at or                                                            
near the site  rather than the more specific "at the  exact location                                                            
of." The objective is to  provide the Department "the discretion" to                                                            
erect the signs where deemed fit.                                                                                               
Co-Chair Wilken stated  that the bill would be held to reconcile the                                                            
differences between the two versions.                                                                                           
Senator Stedman opined  that the Department should "locate the signs                                                            
as close  to the  proximity of the  accident as  possible",  as this                                                            
would be more meaningful.                                                                                                       
Co-Chair Wilken ordered the bill HELD in Committee.                                                                             
     CS FOR HOUSE BILL NO. 1(HES)                                                                                               
     "An Act relating to the base student allocation used in the                                                                
     formula for state funding of public education; and providing                                                               
     for an effective date."                                                                                                    
9:21:50 AM                                                                                                                    
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
REPRESENTATIVE  CARL GATTO, the bill's sponsor, voiced  appreciation                                                            
for the fact that  such "an important bill" as this  has advanced so                                                            
swiftly  through  the committee  hearing  process.  This bill  would                                                            
increase to the  FY 06 base student allocation (BSA)  by $70,100,000                                                            
over the FY 05 allocation.                                                                                                      
Senator Bunde  inquired to the justification  for this proposed  BSA                                                            
amount  as  compared  to the  amounts  proposed  in  Governor  Frank                                                            
Murkowski's budget or by education organizations.                                                                               
Representative   Gatto  stated  that  the  traditional   process  of                                                            
contacting each school  district was conducted in the development of                                                            
this BSA  proposal.  Questions regarding  what BSA  amount would  be                                                            
deemed  appropriate  were  asked in  order  to determine  whether  a                                                            
"certain  percent  increase"  might   be agreeable   throughout  the                                                            
districts.  Consistency in  this regard would  provide comfort  that                                                            
the amount of money being  requested is not being "exaggerated". The                                                            
Governor's  proposal   was  for  a  $61,100,000  increase   and  the                                                            
Education  Committee  recommended  a $65,400,000  increase.  He  had                                                            
questioned the  adequacy of these amounts relative  to fact that the                                                            
schools  had requested more.  The House  of Representatives  Finance                                                            
Committee supported the  $70,100,000 amount recommended by the House                                                            
Health, Education & Social Services Committee.                                                                                  
Senator  Bunde opined  therefore that  the BSA  being requested  is,                                                            
"like we've done in the  past: a combination of our best guesses and                                                            
our wish lists."                                                                                                                
Representative  Gatto agreed.  "We  can say without  hesitation  how                                                            
much money  we would have to allocate  to meet somebody's  wish, but                                                            
the wishes  vary so much" as exampled  by the $152,000,000  increase                                                            
proposed   by  the  National   Education   Association  (NEA),   the                                                            
$111,000,000  proposed   by Alaska  Kids  Count!,   the $85,800,000                                                             
proposed  by the Alaska  Association  of School  Boards (AASB),  the                                                            
$70,100,000   amount   proposed  in   this  legislation,   and   the                                                            
$61,100,000  increase proposed by  the Governor. "If we all  agreed,                                                            
that would  be wonderful, but we can't,  we use different  numbers".                                                            
The amount  provided for education  is balanced by other  factors in                                                            
addition to the BSA.                                                                                                            
Senator Bunde  pointed out that the  BSA money would fund  a variety                                                            
of  education  needs.  To that  point,  he  asked  how much  of  the                                                            
proposed amount "would actually go to the classroom".                                                                           
Representative  Gatto replied  that of the  $70,100,000 amount,  $38                                                            
million would be provided  to the Public Employees Retirement System                                                            
and the Teachers Retirement System (PERS/TRS).                                                                                  
Senator  Bunde  declared  therefore,  that  $38  million  should  be                                                            
removed  from the equation;  as the  focus should  be on the  amount                                                            
provided  to the  classroom.  State law  requires  that the  maximum                                                            
amount of money be provided  to the classroom and the minimum amount                                                            
be  provided  for   administration.  Because  a  number   of  school                                                            
districts are  unable to accomplish this, the amount  being provided                                                            
to classrooms "gets ratcheted down even more".                                                                                  
Representative  Gatto agreed. The  Mat-Su School District  allocates                                                            
90-percent  of its BSA  to the classroom;  however, small  districts                                                            
might only  be able to allocate 65-percent  to the classroom  due to                                                            
higher  operating costs  experienced  in smaller  communities.  This                                                            
might be "the  reason that the State  allocates more money  to Rural                                                            
districts  than to urban  districts". Efforts  are being exerted  to                                                            
reach the correct number.                                                                                                       
Senator  Bunde  commented  "that many  demands"  are placed  on  the                                                            
State's budget.  The windfall the State is experiencing  as a result                                                            
of increased  North Slope crude oil  market prices "does  not really                                                            
exist"  due to the  fact that  the State  has a  six billion  dollar                                                            
PERS/TRS  debt and "owes"  the Constitutional  Budget Reserve  (CBR)                                                            
account  approximately  five billion  dollars. The  State has  "huge                                                            
debts, many  demands, many  interests, many  needs, many wants".  He                                                            
asked the total K-12 education funding being proposed for FY 06.                                                                
Representative  Gatto  responded  that  after  subtracting  the  $38                                                            
million PERS/TRS  obligation, this  legislation would provide  a $32                                                            
million increase to education over FY 05.                                                                                       
Senator  Bunde clarified  that the  question pertains  to the  total                                                            
education budget proposed for FY 06.                                                                                            
Co-Chair Wilken stated  that the total FY 06 education funding would                                                            
equate to $854 million.                                                                                                         
Senator Bunde  stated that  other than the  Permanent Fund  Dividend                                                            
program,  education  is  the  largest  component   funded  by  State                                                            
government.  He  asked whether  a  funding  mechanism  for the  $854                                                            
million has been identified.                                                                                                    
Representative  Gatto replied  that this  is the  reason there  is a                                                            
general  fund. Such things  as resource  development revenues  would                                                            
continue  to  fund  education  into the  future.  He  asked  whether                                                            
Senator  Bunde is  anticipating that,  at some  point, such  funding                                                            
would be unavailable.                                                                                                           
Senator  Bunde responded  that he  was "suggesting"  that we  have a                                                            
finite  budget  and  that  … as  the  demands  and  the population"                                                             
continue to grow, reductions  to other programs would be required in                                                            
order to fund  education. He requested that school  districts convey                                                            
which other  programs should be reduced  in order to fund  education                                                            
or that  they  "join" the  Legislature  in promoting  access to  the                                                            
earnings  of the Permanent  Fund in  order to  provide new funds  to                                                            
support  State services.  He voiced being  "frustrated" with  school                                                            
districts  that "demand money  without being  willing to be  part of                                                            
the solution". He becomes  "extremely frustrated when there are some                                                            
school districts  that make no local contribution"  and furthermore,                                                            
of those school districts  that make a local contribution, only four                                                            
contribute   "100  percent  of  what   they  could  pay".   His  own                                                            
community's school "district  could balance their budget tomorrow if                                                            
they just paid 100 percent of what they're allowed to pay".                                                                     
Senator Stedman  commented  that the proposed  BSA is a 7.5  percent                                                            
increase over  the FY 05 BSA allocation and the FY  05 BSA was a 9.6                                                            
percent  increase   over  FY  04.  This  is  a  two-year   total  of                                                            
approximately  18-percent. While he  supported the momentum  that is                                                            
underway to increase  education funding, he opined  that communities                                                            
should  share in this  responsibility  so that "the  burden"  is not                                                            
entirely shifted to the State.                                                                                                  
Co-Chair Wilken asked that  those presenting public testimony on the                                                            
bill limit their  remarks to no more than three minutes  in order to                                                            
accommodate the 37 individuals who have signed up to testify.                                                                   
PEGGY COWAN, Superintendent,  Juneau School District,  testified via                                                            
teleconference from an  offnet site and expressed that "education is                                                            
the best way to  contribute" to the future of the  State. The City &                                                            
Borough of Juneau  {CBJ) "prioritizes education" as  is reflected by                                                            
the fact  that the community  traditionally  funds education  to the                                                            
allowable  State limit. Property  taxes were  recently increased  in                                                            
order to fund to the new  limit adopted by the State. "That increase                                                            
stopped  devastating cuts  but it  did not provide  resources  to do                                                            
more". The  District continues to  reallocate resources in  order to                                                            
provide  the  best  education  opportunities  it  can. Even  at  the                                                            
proposed $4,919  BSA, the District would be forced  to reduce its FY                                                            
06  budget  by  $300,000.  This  reduction  might  affect  secondary                                                            
counseling,  textbook  budgets, buses,  or custodial  services.  The                                                            
local Community Budget  Advisory Committee recommended a $5,433 BSA,                                                            
and the  Juneau School Board  requested "a  more modest … $5,120  to                                                            
eliminate   cuts  and  to  improve   student  achievement"   in  the                                                            
community.  "The future  of the  State is  in our  students and  the                                                            
future of our  students depends on public education".  She urged the                                                            
Committee to increase the BSA level being proposed.                                                                             
9:34:16 AM                                                                                                                    
Co-Chair Wilken  noted that people are encouraged  to submit written                                                            
comments to the Committee regarding HB 1.                                                                                       
BILL  BJORK, President,  NEA Alaska,  testified  via teleconference                                                             
from Anchorage  and summarized his written testimony  [copy on file]                                                            
that reads as follows.                                                                                                          
     Good  Morning Co-Chair  Wilken, Co-Chair  Green and members  of                                                            
     the Senate  Finance Committee.  For the record my name  is Bill                                                            
     Bjork  and  I serve  as  President  for  the more  than  12,500                                                            
     members of NEA-Alaska.                                                                                                     
     To begin,  let me say  a hearty thank  you and acknowledge  the                                                            
     committee's  efforts last  year in providing  our schools  with                                                            
     funds  to  cover  inflation,  pay  for  the  increases  in  the                                                            
     TRS/PERS  contributions   and  $27 million   for instructional                                                             
     programs. The entire  $82 million was appreciated as it avoided                                                            
     the  vast majority  of proposed  cuts to education  in FY  '05.                                                            
     Last year  under a fragile budget situation,  when there was an                                                            
     expected  draw on the Constitutional  Budget Reserve  (CBR) you                                                            
     still  found the courage  to make a  historic increase  to K-12                                                            
     I  also  applaud the  committee  for  allowing  testimony  from                                                            
     across Alaska  to determine the needs of K-12  education across                                                            
     Alaska  and the level of state  funding to meet those  needs. I                                                            
     am  not going to  spend a lot  of time  describing the  funding                                                            
     needs.  I will  leave  that to  the parents,  teachers,  school                                                            
     employees,   administrators   and  citizens,   who  have   ably                                                            
     described those needs  to other legislative bodies to date. Let                                                            
     it  suffice  to say  that  CSHB  1(HESS)  with a  Base  Student                                                            
     Allocation (BSA) of  $4,919 DOES NOT meet the needs of a single                                                            
     school district in Alaska.                                                                                                 
     As a matter of fact  the statements by legislators to date have                                                            
     all acknowledged that  $4,919 IS NOT ADEQUATE and does not meet                                                            
     the needs  of our schools for  FY '06. It does cover  the costs                                                            
     of the  increase in TRS/PERS  contributions. It does  cover the                                                            
     cost  of  inflation.   It  does  provide  $9  million  for  the                                                            
     classroom.  It  does not  avoid the  PINK SLIPS  being  issued,                                                            
     which will result  in the loss of gifted, young teachers to our                                                            
     classrooms.  Thus, it does simply  let us know early  this year                                                            
     how bad the pain is going to be.                                                                                           
     Rather  than talking  about the  needs of our  schools,  I will                                                            
     take the  time to talk about  the means to adequately  fund our                                                            
     schools. To date the  primary reason provided by legislators as                                                            
     to why CSHB  1 (HESS) is less than last year's  efforts is that                                                            
     there  is no revenue  source. Such rationale  bewilders  me. It                                                            
     makes  no sense  to me  that in  a year  in which  will have  a                                                            
     surplus  of over $300  million and will  not draw a penny  from                                                            
     the  CBR, we are  saying we cannot  do as well  as we did  last                                                            
     year when, in March,  we were expecting to have at least a $150                                                            
     million draw on the CBR.                                                                                                   
     As Sen. Wilken has  stated many times, every other state in the                                                            
     nation  would  be  happy to  have  our "problem."  We  are  the                                                            
     richest  state in the nation.  A more accurate statement  might                                                            
     be  that there  is no  political will  to utilize  the  revenue                                                            
     resources we do have.                                                                                                      
     As a matter  of fact several proposals for revenue  sources are                                                            
     already in bill form  and before this legislature. SB 88 and HB
     143  provide  the opportunity  to  draw from  the  CBR and  the                                                            
     Earnings Reserve Account  (ERA), which total over $4.2 billion.                                                            
     To add  an additional  $50 million to  CSHB 1(HESS) would  only                                                            
     require a  little over 1% of these reserves.  Another option is                                                            
     the POMV approach  contained in HJR 11 and SJR 8. This approach                                                            
     could  generate  monies  far  in  excess  of  the  $78  million                                                            
     additional    funds   needed   to   reach   NEA-Alaska's    BSA                                                            
     recommendation  of $5,315. A  third option is to use  a portion                                                            
     of the FY  '05 windfall funds. With Alaska North  Slope crude a                                                            
     mere six  cents from $50.00 per barrel on March  7, the surplus                                                            
     is conservatively  estimated at $300 million  with no draw from                                                            
     the CBR.                                                                                                                   
     You are  the experts as to the  finances of the state  and I am                                                            
     sure know of many  other options available to establish a long-                                                            
     term fiscal plan for  Alaska, which contains a funding solution                                                            
     to meet Alaska's constitutional mandate to K-12.                                                                           
     On  behalf   of  133,000  students  and  12,500   teachers  and                                                            
     education  support professionals  I implore you to look  at the                                                            
     healthy  financial  situation  and make  a real  commitment  to                                                            
     address   adequate  funding  in  this  budget.   NEA-Alaska  is                                                            
     recommending  a BSA  number of  $5,315. This  level of  funding                                                            
     would  put about $85 million  into the classroom after  meeting                                                            
     PERS/TRS and inflation.                                                                                                    
     Thank you for your time today and I would be happy to attempt                                                              
     to answer any questions.                                                                                                   
TIM  STEELE,  President,  Anchorage   School  Board,  testified  via                                                            
teleconference  from  Anchorage  and  stated  that  the  BSA  amount                                                            
proposed in HB  1 is inadequate. The Board discussed  this issue and                                                            
determined  that for status  quo funding,  the District's  breakeven                                                            
point would be  $5,027 per student. The District's  budget currently                                                            
reflects  reductions in  teachers, administrators,  staff  positions                                                            
and supplies. The District  has submitted a Resolution that requests                                                            
a FY 06 BSA  amount of $5,120. This  amount would allow for  growth,                                                            
some  reversal  in  this  year's  reductions,  would  allow  for  an                                                            
investment  in student  data systems,  textbooks,  and computers  as                                                            
well  as a reduction  in  classroom student  numbers.  He asked  the                                                            
Committee to reconsider  the BSA being proposed in this legislation.                                                            
A BSA of $5,120 would adequately  fund the Anchorage School District                                                            
and most districts in the State.                                                                                                
Senator Bunde  stated that  of the 34 Districts  that provide  local                                                            
funding support  for education, Juneau is one of four  that provides                                                            
100-percent of  the local funds allowable under State  law. He asked                                                            
Mr. Steele whether  he "would support a resolution  asking all local                                                            
school districts to fund  up to 100-percent of what they are allowed                                                            
to fund  under State  law". This  would generate  approximately  $50                                                            
million dollars.                                                                                                                
Mr. Steele responded that,  while the Anchorage School Board has not                                                            
developed  a  formal  position  in this  regard,  he  considered  it                                                            
appropriate that communities  fund what they could. The Municipality                                                            
of Anchorage  provides funds up to  its local allowable limit.  "The                                                            
interpretation   of the  State   cap  as  being  where  every  local                                                            
government ought  to fund, is wrong. That cap is there  to implement                                                            
State law to minimize disparity  between the haves and the have-nots                                                            
in this State".  Were everyone required  to fund to the maximum,  it                                                            
would result in "maximizing  the disparity between the haves and the                                                            
have-nots". That would be inappropriate.                                                                                        
Co-Chair Wilken  communicated that while this is a  good discussion,                                                            
it must  continue at  another time;  attention should  focus  on the                                                            
bill at hand.                                                                                                                   
CARL ROSE, Executive  Director, Association of Alaska  School Boards                                                            
(AASB) testified in Juneau  and commented that while much discussion                                                            
has occurred on education  funding, "the Senate has not been engaged                                                            
in much of the  active discussion". He referenced  the "Base Student                                                            
Allocation  1999-2007"  chart  that  was included  in  the  material                                                            
titled  "Statement by  the Association  of Alaska  School Boards  on                                                            
Foundation  Formula Funding" [copy  on file] dated February  8, 2005                                                            
that he had presented  to the House Special Committee  on Education.                                                            
The chart  reflects that  the BSA funding  was relatively flat  from                                                            
1999 through 2003. The  $159 increase in FY 04 was the first sizable                                                            
increase. The  FY 05 increase was  "considerable". He stressed  that                                                            
the recent upward  trend was not the result of "guesswork,"  but was                                                            
rather the result  of efforts exerted to recover from  years of flat                                                            
funding. However,  the inflation-proofing factor included  in the FY                                                            
05 budget was  inappropriate as education  entities were  not polled                                                            
in FY 05. Education  funding in FY 05 was just beginning  to recover                                                            
and  the application  of the  three-year  average  of the  Anchorage                                                            
Consumer  Price Index  (CPI) "to  a figure  that is  not whole"  was                                                            
inappropriate.  This discussion is approaching its  last stages, and                                                            
were the  proposed $70,100,000  BSA funding  level not increased  by                                                            
March  15, 2005, layoff  notices  would be forthcoming.  This  would                                                            
"curtail opportunities"  for students. The Association is requesting                                                            
a BSA amount  of $4,995 in FY 06.  This would be an increase  of $23                                                            
million over the Governor's  proposed budget. He reminded that while                                                            
the Governor's  FY 04 budget proposal  would have resulted  in a $40                                                            
million reduction  to education, education funding  was increased by                                                            
$159 per student.  The FY 05 budget  specified that education  would                                                            
be funded  on a  hold-harmless  level to FY  04 and  a total of  $82                                                            
million  was provided:  $36 million  of that  provided for  PERS/TRS                                                            
obligations  and   $46  million  was  provided  for  operating   and                                                            
instructional expenses.  The $4,995 BSA requested by the Association                                                            
would total  $85 million: $38 million  for PERS/TRS and $47  million                                                            
to support operation  and instruction. The incline  reflected on the                                                            
aforementioned  chart reflects these  funding levels. The  challenge                                                            
would continue  in FY 07  and the issue  of re-occurring revenue  is                                                            
one that must  be addressed. He "challenged  the Senate"  to improve                                                            
the BSA amount.                                                                                                                 
Senator  Bunde   noted  that  people   living  in  Rural   Education                                                            
Attendance  Areas (REAA)  have communicated  that while "they  would                                                            
like  to  contribute  something  to  their  schools",  there  is  no                                                            
mechanism  established through  which to support  this endeavor.  He                                                            
asked how AASB  would view legislation  that would establish  such a                                                            
mechanism.  In addition,  he  noted, "that  it is  difficult to  ask                                                            
those communities  that do make local contributions  to continue" to                                                            
do so when there are communities that choose not to.                                                                            
Mr. Rose commented that  this question would relate to SB 112-TAX ON                                                            
REAA RESIDENTS.  He shared that many  residents of Rural  areas view                                                            
the  Legislature  as  acting  as the  "oversight  assembly  for  the                                                            
unorganized  borough". They  "have asked to  be taxed and not  to be                                                            
mandatorially  boroughed".   While  AASB  does  not  have  a  formal                                                            
position on  this matter, there is  rising concern among  members of                                                            
AASB  who provide  local  contributions  about  not  addressing  the                                                            
issues of consolidation  and mandatorially boroughing, as mechanisms                                                            
through which  to get people to contribute.  People would  prefer to                                                            
be  taxed as  opposed to  being  forced "to  have  another level  of                                                            
government".  "There  is a  growing  awareness" that  the  organized                                                            
boroughs  and  municipalities  do  contribute  and  "there  is  some                                                            
concern about how do we deal with this in unorganized areas".                                                                   
Co-Chair  Wilken asked  that  this discussion  to  held for  another                                                            
time, as it addresses a separate issue.                                                                                         
LAURI  ROBERTS  SCANDLING,  Principal,  City  &  Borough  of  Juneau                                                            
Yaakoosge  Daakahidi Alternative  High School,  testified in  Juneau                                                            
and shared  that she was born and  raised in Alaska, and  worked for                                                            
25 years in  both the public and private  sector before becoming  an                                                            
educator.  The  alternative  high school  serves  approximately  100                                                            
students who  have dropped out of  school and are at least  16-years                                                            
of age. The proposed $4,919  BSA would incur a $300,000 reduction to                                                            
the Juneau School  District. She reviewed the negative  consequences                                                            
that reduction  would have on the  alternative high school  program,                                                            
and in  conclusion, stated  that the State's  Constitution  requires                                                            
that  students   get  a  free  public   education  and  absent   the                                                            
appropriate funding,  students on the program's wait  list would not                                                            
be delivered this promise.                                                                                                      
Ms. Scandling remarked  that the State has "$30 billion in the bank"                                                            
and when the Permanent  Fund was established, "the  dividend program                                                            
was not even in the conversation",  and now there is discussion that                                                            
a portion of  the earnings of the  Permanent Fund might be  utilized                                                            
to support  efforts to develop a gas  pipeline. She voiced  that she                                                            
would be willing to pay an income tax.                                                                                          
PATTY PICHA, Fairbanks  Council of Parent Teacher Association (PTA),                                                            
testified  via  teleconference  from Fairbanks,  and  stressed  that                                                            
annual  progress  of education  could  not be  accomplished  without                                                            
establishing  "the resources  to accomplish  that  end". She  voiced                                                            
support for a BSA amount  of $5,120. Current needs of the North Star                                                            
School District  include improving  technology and teacher  training                                                            
in  that   regard,   and  smaller   class  sizes.   [NOTE:  Due   to                                                            
telecommunications  difficulties,  the testifier  was disconnected.                                                             
The telecommunications  problem was corrected and  her testimony was                                                            
continued later in the hearing.]                                                                                                
DR. DONNA PETERSON,  Superintendent, Kenai Peninsula  Borough School                                                            
District, testified  via teleconference  from Kenai and stated  that                                                            
the BSA  proposed in HB 1  would allow the  school to pay  its fixed                                                            
obligations  such  as  increased   fuel  expenses  as  well  as  the                                                            
retirement  obligations  for current  employees.    However, due  to                                                            
previous years'  funding shortfalls,  the district had to  eliminate                                                            
70 staffing  positions over the past  three years. While  no further                                                            
staff  reductions  might  occur  at  the  proposed  BSA  level,  the                                                            
District would  be unable to decrease  large class sizes  or replace                                                            
art, vocational, music,  physical education, and other programs that                                                            
were previously  cut. "The amount  proposed in HB 1 simply  won't do                                                            
it". Course  offerings have  been downsized  for approximately  five                                                            
years  despite  District  efforts   to operate   "smarter  and  more                                                            
efficiently"   through   such   means   as   shared   services   and                                                            
administration.  Such  things  as  nursing,  counseling,  and  other                                                            
support  staff have  been downsized  and schools  have been  closed.                                                            
While State graduation  requirements have increased, classrooms have                                                            
suffered  due to a lack of  textbooks, desks,  and "a rich  array of                                                            
opportunities traditionally  associated with schools". Students have                                                            
had  to  pay  quite  "a  price"  due  to  the  lack  of investment.                                                             
Discussions regarding the  cost differential study have been ongoing                                                            
for six  years; the District  has followed  the rules and funded  to                                                            
the cap. Legislators have  told them "to be patient …. and to wait."                                                            
The  Statutory  requirements  adopted in  SB  36 required  the  cost                                                            
differential  review: "it's late,  but it's right. There's  no other                                                            
district  in this  State  as  under-funded  as the  Kenai  Peninsula                                                            
Borough". The 44 schools  on the Kenai Peninsula "need immediate and                                                            
substantial  financial help well beyond"  what is proposed  in HB 1.                                                            
"The bleeding  and hemorrhaging  of  the District  can no longer  be                                                            
contained  by the  band-aide  fixes  being applied  in  the area  of                                                            
funding".  She asked  why the  9,500 students  in  the District  are                                                            
"less valuable" than students in other areas of the State.                                                                      
REPRESENTATIVE   MARK  NEUMAN,  Member,  House  of  Representatives                                                             
Special Committee on Education,  observed that it must be recognized                                                            
that  further  increases in  the  BSA funding  might  "cripple"  the                                                            
State's ability  to address  other education  funding needs  such as                                                            
early  funding  for  education,  special  allocations  for  schools,                                                            
deferred   maintenance,  and   school  construction   bond   package                                                            
proposals in  addition to addressing  the recently revised  district                                                            
cost factors.                                                                                                                   
MARGARET  GILMAN, Parent  and School Board  Member, Kenai  Peninsula                                                            
School Board,  testified  via teleconference  from Kenai and  stated                                                            
that  she "took  offense"  to the  use of  the term  "wish list"  to                                                            
characterize  districts requests.  On the contrary, essential  needs                                                            
include the  hiring of more  teachers so that  class sizes  could be                                                            
reduced. The Kenai  Peninsula Borough School District's  request for                                                            
a BSA  of $5,200  is higher than  other school  districts'  requests                                                            
because the  District is not being  funded equability, according  to                                                            
the  Area  Cost  Study.  As a  Board  member  she  has  lobbied  the                                                            
Legislature on  behalf of the needs of students, and  in response to                                                            
the requests to  adequately fund the Kenai District,  they were told                                                            
"to  be  patient  and  to  wait  for  the  Area  Cost  Study  to  be                                                            
completed". Reports  conducted as far back as 1984  reflect that the                                                            
District  is  under-funded.   Now  that  the  Area   Cost  Study  is                                                            
completed,  the  "patience  is over".  "The  students  in the  Kenai                                                            
Peninsula  have   been  losing  ground  rapidly"  and   have  missed                                                            
opportunities  in  "instruction,   exploration,  and  care"  due  to                                                            
inadequate  funding that  has resulted  in  overcrowded classrooms,                                                             
course offerings limited  to core classes, un-staffed libraries, and                                                            
reduced  administration  and  nursing positions.  She  implored  the                                                            
Committee  to fund  the  Area Cost  Study,  which would  provide  an                                                            
equitable education  for all of Alaska students and  to fund the BSA                                                            
at an adequate level.                                                                                                           
Ms. Picah continued her  earlier testimony by stressing that Alaska,                                                            
being resource  rich and strategically  located, attracts  a variety                                                            
of advanced  technology to  the State. Please  provide students  the                                                            
opportunity  to compete for  those jobs by  offering them a  quality                                                            
education.  "Please  continue  to explore  funding  options  through                                                            
which to support the state's greatest resource… its children".                                                                  
SUE   HULL,  Member,   Fairbanks   School   Board,   testified   via                                                            
teleconference from Fairbanks,  and asked the Committee to support a                                                            
BSA of a minimum  of $4,995 per student  and to continue  the upward                                                            
funding  trend referenced  by  Mr. Rose  of AASB.  Things that  have                                                            
impacted student  learning include:  outdated math books  which have                                                            
contributed to the district's  math testing scores to be below those                                                            
of other  schools;  large core  class sizes;  and budget  restraints                                                            
that are  not allowing  the district  to address  its high drop  out                                                            
rates. Even thought  the State has competing funding  challenges, it                                                            
should be recognized  that the State "is in an enviable  position in                                                            
terms of  options" that are  unavailable to  other states. A  BSA of                                                            
$4,995 per  student would assist in  getting schools back  on track.                                                            
NORM WOOTEN, Representative,  Kodiak Island Borough  School District                                                            
Board of  Education, testified  via teleconference  from Kodiak  and                                                            
urged support  for a  BSA of $4,995  per student.  This level  would                                                            
allow  the District  to maintain  its  current program  levels.  The                                                            
Borough  has been  contributing  to the  allowable  State limit.  He                                                            
invited the  Members to visit the  District to review how  the money                                                            
is being spent.                                                                                                                 
DAVE JONES, Finance Director,  Kodiak Island Borough School District                                                            
(KIBSD),  testified  via  teleconference   from  Kodiak  and  voiced                                                            
appreciation  for last year's funding  level as it allowed  teachers                                                            
to concentrate  on teaching kids rather than worrying  about loosing                                                            
their  jobs. The District's  largest  expenses are  fuel and  health                                                            
insurance obligations.  While the District has been  contributing to                                                            
the allowable  State limit,  the proposed  higher limit would  allow                                                            
the  Borough to  contribute  an additional  $500,000.  However,  the                                                            
Borough does not  have that amount of money available.  Therefore, a                                                            
BSA of  $4,995  would allow  the District  to continue  its  current                                                            
program this year and provide  time to further address means through                                                            
which to fund to the new limit.                                                                                                 
KATIE   GAVENUS,   Senior,   Homer  High   School,   testified   via                                                            
teleconference  from Homer, and spoke  to "the irony of having  this                                                            
meeting during  the school  day" when those  affected are unable  to                                                            
attend. During  her 12-years  of education  in Homer, she has  "been                                                            
blessed with having  many amazing teachers and staff"  to work with.                                                            
However, budget  reductions have negatively  affected the  education                                                            
offerings  on the Kenai  Peninsula,  and she wondered  how her  high                                                            
school  education  would have  differed  had adequate  funding  been                                                            
available. The  differences might have included a  fulltime language                                                            
teacher or  nurse, lab tables  in the advanced  science classes,  an                                                            
array  of elective  courses, or  an adequate  number of counselors,                                                             
more custodians,  and adequately funded extracurricular  activities.                                                            
These "basic needs have  not been met" even though the Borough funds                                                            
education  to  the allowable  local  limit.  She "feels  robbed"  of                                                            
receiving  a "quality  well-rounded  education".  While  "it is  too                                                            
late" for her, actions  to provide adequate and equitable funding to                                                            
districts should be taken  that would benefit younger students. This                                                            
is "a simple request, not a wish list".                                                                                         
GINNY ESPENSHADE,  Parent, testified  via teleconference  from Homer                                                            
and  urged  for adequate  and  equitable  funding  of the  BSA.  The                                                            
recently completed Area  Cost Study provides evidence that the Homer                                                            
School  District "and  others has  been consistently  and  seriously                                                            
shortchanged year  after year". Education funding  must be addressed                                                            
now. Raising  the BSA  and phasing  in cost  differentials would  be                                                            
good steps.  The Alaska  Constitution  stated that  all persons  are                                                            
equal   and  entitled   to  equal   education   opportunities.   The                                                            
Legislature  is   required  to  establish  and  maintain   a  public                                                            
education  system for  all  students in  the State.  She  referenced                                                            
several education lawsuits  to that point. She also noted that Homer                                                            
is one of four  communities in the  State that provides the  maximum                                                            
local contribution  to education, yet the District  "is the one most                                                            
shortchanged by your cost differential system".                                                                                 
10:16:28 AM                                                                                                                   
RICK   SMERIGLIO,   Resident    of  Moose    Pass,   testified   via                                                            
teleconference  from  Seward  and  voiced  being  worried  that  the                                                            
State's quality of education  has been declining. Local civic groups                                                            
were  recently required  to  raise  funds to  provide  new math  and                                                            
physics books  and computer  software for  the schools. Funding  for                                                            
such items should  be provided, as these items should  not be viewed                                                            
as "extras". Education  funding decisions should be non-partisan and                                                            
the  focus should  be  on increasing  overall  funding  rather  than                                                            
focusing on "non-productive  squabbles" about which  communities are                                                            
or  are  not   providing  adequate   local  contributions   or  cost                                                            
differentials.  A seven-percent increase  is inadequate because  the                                                            
State is still  making up "for decades of decline".  Student/teacher                                                            
ratios  are increasing.  The revenues  generated  by the  escalating                                                            
price of North  Slope oil could be used to increase  school funding.                                                            
Public  money  is  always  tight  and  there  are  always  competing                                                            
priorities; but public education should be the highest priority.                                                                
10:18:55 AM                                                                                                                   
SANDY  WASSILIE,  Vice President,  Kenai  Peninsula  Borough  School                                                            
Board,  testified   via  teleconference   from  Seward  and   voiced                                                            
appreciation  for the Members'  attention  to providing "equitable,                                                             
adequate, and  early funding for education. Ideally  it should be in                                                            
that order".  Cost differentials  for her area  have led to  serious                                                            
inadequacies  of  funding; a  BSA  of $4,919  would  be helpful  but                                                            
inadequate  "to meet  education mandates  and  achievement gaps"  as                                                            
there are too few teachers  and course offerings. She urged that the                                                            
BSA  be  increased  to  $5,200  based   on  the  current  Area  Cost                                                            
Differential.  The recently completed Area Cost Differential  update                                                            
is encouraging  as it  does take  into account  the operating  costs                                                            
experienced  in Rural areas. Adequate  education funding  should not                                                            
be viewed as a cost, but  as an investment. Students should be being                                                            
prepared  now  for  any  natural  resource  development   employment                                                            
opportunities that might be forthcoming.                                                                                        
SAMMY CRAWFORD,  President,  Kenai Peninsula  Borough School  Board,                                                            
testified  via  teleconference  from  Kenai and  stressed  that  the                                                            
proposed funding  level is inadequate and would result  in increased                                                            
class  sizes,  curriculum  offering  and  textbook  reductions,  and                                                            
further reductions  in teacher and  administrative staff  positions.                                                            
Vocational,  music,  arts  and  other  programs  have  already  been                                                            
reduced.  She reviewed  administrative  staff reductions  that  have                                                            
already occurred.  The local borough has consistently  funded to the                                                            
maximum allowable  limit. School funding is carefully  monitored and                                                            
while stipends  are paid, such things as travel are  not. People are                                                            
leaving  the district  as they  are feeling  "helpless and  hopeless                                                            
about  the quality  of  our  schools". She  urged  that  the BSA  be                                                            
increased  and  that  consideration   be  given  to  the  Area  Cost                                                            
PETE SWANSON,  Principal, McNeil Canyon Elementary  School in Homer,                                                            
testified in  Juneau and spoke to  his concern about the  percent of                                                            
the BSA that would be provided  to the classroom. Teaching positions                                                            
have been  reduced  from seven  to five  at his school,  and he  has                                                            
watched the  staff "continue to do  with less". This school  and two                                                            
other  schools in  the State  were selected  as  2004 national  Blue                                                            
Ribbon  Schools; however  it is doubtful  that the  school would  be                                                            
able to  repeat that  performance.  He reviewed  his administrative                                                             
history and  noted that due  to funding reductions  he also  teaches                                                            
classes.  An increase  in the  BSA would  allow  schools to  provide                                                            
programs that are needed.                                                                                                       
LESLIE  CAMPBELL,   Principal,  Anne   Wein  Elementary   School  in                                                            
Fairbanks   and  President-Elect   of  the   Fairbanks  Principals'                                                             
Association, testified  in Juneau and shared that in her 28 years of                                                            
being an educator in the  State, she has watched school funding "ebb                                                            
and flow".                                                                                                                      
10:29:04 AM                                                                                                                   
Ms.  Campbell voiced  concern  about  the overall  funding  process;                                                            
specifically  that  sustainability  is an  issue, as  no  long-range                                                            
plans are being developed  to adequately fund education needs in the                                                            
future. "There is a great  disparity of need" between districts. Her                                                            
Title  1 School  has  approximately  414 kids,  and  when she  first                                                            
became  principal,   the  student  population  spoke   19  different                                                            
languages.  The school is "courageously"  meeting the guidelines  of                                                            
the federal No  Child Left Behind Act, and has made  adequate yearly                                                            
progress for the  past two years while doing it with  less. Math and                                                            
replacing textbooks  that are falling  apart are the school's  focus                                                            
this  year.  25-percent   of  the  student  population   is  Special                                                            
Education  and a high percentage  of students  have limited  English                                                            
proficiency. The  school has an excellent staff but  staff retention                                                            
is a concern.  Increasing student/teacher ratios is  also a concern.                                                            
Corporation  managers  develop  long-range   plans  and maintaining                                                             
sustainability  should  be the  Legislature's  challenge.  A BSA  of                                                            
$4,919  is  insufficient.  Teachers   strive  to create   productive                                                            
members of society.                                                                                                             
10:32:43 AM                                                                                                                   
DEB  GERMANO testified  via  teleconference  from Homer  and  voiced                                                            
being  frustrated   by  the  fact  that  some  communities   do  not                                                            
contribute  to  education   funding.  She  is  proud  of  the  Kenai                                                            
Borough's local  contribution to education. People  on the Peninsula                                                            
have been waiting  for the Area Cost  Differentials to change.  Were                                                            
the Area Cost Differentials  taken into account, the BSA proposed in                                                            
HB  1  could   be  tolerated.  Districts   around  the  State   have                                                            
experienced  cost increases.  However,  "there  is no  reason why  a                                                            
child  on the  Kenai Peninsula  is  funded at  a lesser  level  than                                                            
children in the Mat Su  Valley". "It is time to address this issue".                                                            
10:36:16 AM                                                                                                                   
HEATHER LINGQUIST,  Parent and former Teacher, Moose  Pass School on                                                            
the Kenai  Peninsula  testified via  teleconference  from an  offnet                                                            
site and informed the Committee  that since three area schools share                                                            
one administrator, that  administrator is onsite at each school only                                                            
one day a week.  Teacher positions  at the school have been  reduced                                                            
from  three to  two;  however,  student counts  are  increasing  and                                                            
Kindergarten through  fourth grade students are in  one class. "This                                                            
is ridiculous", and the  situation would worsen the next school year                                                            
as the school is slated  for only one-and-a-half teaching positions.                                                            
The area  high school  in Seward  has been forced  to eliminate  its                                                            
entire music and  drama program, and depends on the  local community                                                            
for "survival".  There is no excuse  for not providing our  children                                                            
"the best education  possible". Not investing in our  children "will                                                            
come back to haunt us".  They are "a priceless commodity". The State                                                            
expends more  than $60,000  a year to house  a prisoner;  therefore,                                                            
the State should be able  to spend $5,200 per student for education.                                                            
She suggested  adding  $38 million  to the  BSA to  replace the  $38                                                            
million   that   would  fund   the   Public   Employees   Retirement                                                            
System/Teachers Retirement System (PERS/TRS).                                                                                   
10:39:44 AM                                                                                                                   
{NOTE: The following testifiers  presented their remarks in Juneau.]                                                            
MARY HAKALA, Parent and  Coordinator of Alaska Kids Count!, spoke to                                                            
an issue of class  size, as it is of "great importance  to parents".                                                            
"Class  size  matters";  large  class  sizes   negatively  affect  a                                                            
student's  ability "to get  the help they  need when they need  it",                                                            
and students must "be challenged".  She referenced written testimony                                                            
[copy  on file]  from  Carol Pratt,  an  English Teacher  at  Juneau                                                            
Douglas High School,  who could not present the testimony  in person                                                            
as she  was teaching. The  testimony depicted  the magnitude  of the                                                            
job, including  the fact that while  she has seats for 31  students,                                                            
there are 38 students in  her Senior English class. Also enclosed in                                                            
Ms.  Pratt's  packet was  an  example of  an  essay rubric  and  two                                                            
student essays for that  assignment. She challenged the Committee to                                                            
read them and  think about how long it would take  a teacher to read                                                            
and grade 99 student essays.                                                                                                    
Ms. Hakala  urged the Committee to  consider the Alaska Kids  Count!                                                            
recommendation  that the  BSA be  increased to  $5,120 per  student.                                                            
This  would assist  in  providing "improvements  in  our  children's                                                            
Co-Chair Wilken  acknowledged the efforts of volunteers  such as Ms.                                                            
MIKE FORD, Member,  Alaska Kids Count!, spoke to the  organization's                                                            
recommendation   for  a  per  student  BSA  of  $5,120.   While  the                                                            
Legislature overviews  the entire State budget, Alaska  Kids Count!,                                                            
in contrast,  is at "the opposite  end", as they see the  affects of                                                            
education  funding  at  the  classroom  level: its  affects  on  the                                                            
teachers, the  students, and the challenge  of satisfying  State and                                                            
federal education  requirements with the resources  they have. Those                                                            
resources are inadequate.  In a recent nationwide study on education                                                            
funding  and support,  Alaska is ranked  30 out  of 50 states.  Were                                                            
this  placement  graded it  would  earn  a C-.  This grade  must  be                                                            
improved  to at least  a B or  a C+. This  would require  additional                                                            
funding.  Classroom improvements  are the  Organization's goal.  The                                                            
State's public  school system  is an economic  block for the  State,                                                            
and providing  a quality  education to students  would, in  the long                                                            
run,  produce "immeasurable  benefits"  to  the State.  "The  public                                                            
school system pays dividends far beyond the Permanent Fund".                                                                    
10:45:06 AM                                                                                                                   
PJ FORD  SLACKT, Principal,  North Pole  High School, characterized                                                             
her school,  the third largest high  school in the Fairbanks  School                                                            
District, as being  one of its "last comprehensive  high schools" as                                                            
it  provides  basic  classes,  in-house  vocational   programs,  and                                                            
Advanced  Placement classes.  The funding  "cuts have been  severe".                                                            
She voiced  appreciation for the Legislature's  action last  year in                                                            
attempting to  minimize the funding reductions in  the FY 05 budget.                                                            
None-the-less,  North  Pole High  School  did receive  less  funding                                                            
while  at  the  same  time,  experiencing  an  increase  in  student                                                            
enrollment.  Due to FY 05  funding constraints,  the school  lost an                                                            
assistant principal, an  activities director, and four teachers. The                                                            
school  has  one  of  the  largest  student/teacher  ratios  in  the                                                            
district:  one Spanish  class has  40 students,  and a core  English                                                            
class has 38  students, every period.  Staff is exhausted.  The time                                                            
of  year  that the  Legislature  is  addressing  school  funding  is                                                            
stressful,  as the end result  to her might  be additional  staffing                                                            
reductions.  The School's student  body includes college  bound kids                                                            
as well as  vocational students: they  are the future of  the State.                                                            
She hoped  that the  array of  course offerings  that are  available                                                            
today would continue to be available to students in the future.                                                                 
Co-Chair  Wilken   thanked  the  testifier  for  her   comments  and                                                            
commitment  to education.  He also  noted that the  North Pole  High                                                            
School Football Team won the State Championship.                                                                                
10:49:29 AM                                                                                                                   
ERICA  KLUDT-PAINTER,   Principal,  Stedman  Elementary   School  in                                                            
Petersburg, stated  that the Petersburg School District  encompasses                                                            
Petersburg  and Mitkof Island and  provides K-12 education  programs                                                            
to approximately 630 students.  The schools meet the adequate yearly                                                            
progress  standards.  While the  District  is proud  of its  program                                                            
offerings,  it is concerned that years  of flat funding have  eroded                                                            
programs. The District  is "in a crisis right now". Areas of concern                                                            
that  must be  addressed include:  the  development of  a long  term                                                            
stable fiscal plan for  funding education in the State and a plan to                                                            
address the increasing  fixed costs of such as insurance, retirement                                                            
plans,  maintenance,  and  fuel costs.  These  fixed costs  must  be                                                            
addressed  in order to allow  the District  to continue an  adequate                                                            
level of  service. At the  proposed per student  BSA of $4,919,  the                                                            
District  would be  required to  use a  minimum of  $300,000 of  its                                                            
reserves,  and would still  have an $84,000  program shortfall.  She                                                            
stated that  currently the District's  library is either  staffed by                                                            
volunteers or  is closed; counselor positions have  been eliminated;                                                            
course offerings  have diminished;  and  special education  students                                                            
needs continue to challenge  the District. As an educator, community                                                            
member, and a  parent, she is concerned about future  school program                                                            
Senator Bunde  noted that Senator  Wilken has proposed legislation,                                                             
SB 88-POLICY ON GENERAL  FUND REVENUE SHORTFALL, that would provide,                                                            
if adopted, a bridge until  a long-term fiscal plan for the State is                                                            
LISA  PRINCE SMITH,  Principal,  Wonder  Park Elementary  School  in                                                            
Anchorage,  informed  the  Committee  that  this  400-plus  students                                                            
school  is a Title  I school in  the South  Mountainview section  of                                                            
Anchorage.  Approximately   70-percent  of  the  school's   students                                                            
qualify  for free  or reduced  school lunches.  She  noted that  the                                                            
Anchorage  School District  did not  fund the  educators' travel  to                                                            
Juneau. The  Anchorage School District  would require more  than the                                                            
proposed  per student  BSA of  $4,919 to  maintain  status quo.  Her                                                            
Title  I  school  has  experienced  "tremendous   decreases  in  our                                                            
school".   One  second-grade   classroom   students'  ethnicity   is                                                            
comprised of  six bi-racial, five  Asian, four Alaska Native,  three                                                            
Black,  two Hispanic,  and  one White  student;  nine  do not  speak                                                            
English  and four  are  in Special  Education  services.  The  well-                                                            
qualified teacher  of that class requested help at  the beginning of                                                            
this school year.  This is an example of future problems  the school                                                            
would  be   encountering   as  more  foreign   borne  children   are                                                            
anticipated.  On behalf  of the  principals  of the  twelve Title  I                                                            
schools  in Anchorage,  she is requesting  an increase  in the  BSA,                                                            
especially  to benefit  those  students who  do not  speak  English.                                                            
School must  comply with  the federal No Child  Left Behind  Act and                                                            
ensure that  non-English speaking  students move forward.  This is a                                                            
daunting  task as more  foreign language  speaking children  arrive.                                                            
The school recently  lost $70,000 in funding due to  non-compliance.                                                            
Overall Title  I funding, which is  established by federal  mandate,                                                            
has diminished  approximately 13-percent over the  last three years.                                                            
The  funding  levels and  allocations  are  established  by  federal                                                            
mandate  with 60-percent  of  the  funds going  to the  school,  20-                                                            
percent supporting school  improvements, five percent designated for                                                            
highly qualified  status, ten percent for professional  development,                                                            
and  five   percent  allocated   for  administration.   Funding   is                                                            
diminishing while  the school's diversity is increasing.  Therefore,                                                            
an increase in the BSA would be appreciated.                                                                                    
10:56:46 AM                                                                                                                   
SHEILA  JUDGE  HALL,   Principal,  Campbell  Elementary   School  in                                                            
Anchorage expressed that,  while the school is not a Title I school,                                                            
it could be characterized  "as a Title I type school  because of the                                                            
needs  in   the  community".  Prior   full-time  employee   position                                                            
reductions  have  increased  fourth through  sixth  grade  classroom                                                            
sizes  to  between  29 and  30  students.  Teachers  continue  their                                                            
efforts to conduct individual  student assessments and to teach data                                                            
driven curriculum; however,  this would require an increase in staff                                                            
development and  interventions for students who are  non-proficient.                                                            
The school  also has a  high population of  special education  needs                                                            
students.  More support to  assist these  students is required.  The                                                            
school utilizes  the Safe & Drug Free Schools funds  and there is an                                                            
increasing  need for anti-bullying  curriculum and assets  building.                                                            
Teachers  have  been trained  in  these areas;  however,  absent  an                                                            
increase  in teacher positions  and a reduction  in student/teacher                                                             
ratios,  the need for  these programs  would continue  to grow.  She                                                            
asked that the BSA be increased.                                                                                                
10:59:18 AM                                                                                                                   
Senator Bunde  asked whether the school's population  has increased.                                                            
Ms. Hall responded that  the "very transient" student population has                                                            
ranged between  490 and 500 students.  The fact that there  has been                                                            
an increase  in the number  of out-of-state  students this  year has                                                            
additionally challenged the school.                                                                                             
BARBARA NAGENGAST,  President, Alaska Association  of Principals and                                                            
Principal,  Spring Hill Elementary  School in Anchorage,  and Alaska                                                            
Association of Elementary  School Principals expressed that teachers                                                            
are working hard  to meet federal and State education  requirements.                                                            
Principals  accept responsibility  for raising  student achievement                                                             
and work hard  to use available funds  efficiently and effectively.                                                             
Other  resources  are  also  used.  The  Legislature,  parents,  and                                                            
communities  "expect  that".  Parents   and  principals  want  their                                                            
children taught  in a safe environment;  it "takes money  to create"                                                            
that  environment.  Parents  desire that  their  child's  individual                                                            
needs be met: this "requires  smaller class sizes". 29 children in a                                                            
third grade classroom is  too many. Implementing the recommendations                                                            
of current research about  effective instruction for core classes is                                                            
very  expensive.  Keeping  an  adequate  technology  base  has  made                                                            
tracking  students progress  easier; however,  it is important  that                                                            
the  technology be  upgraded,  both for  the administration  of  the                                                            
programs  but also in delivering  instruction  to children.  "All of                                                            
these things help children  succeed academically". However, the most                                                            
important element is hiring  and retaining "highly qualified staff".                                                            
This  also  requires  funding.  In  the  22-years  since  she  first                                                            
enrolled  her own  children in  the Alaska  school  system, she  has                                                            
watched  the system be  negatively affected  by declining  revenues.                                                            
Legislative  support is needed to  keep education a priority  in the                                                            
State. We do  not "have a wish list,  we have a reality of  need. We                                                            
can't afford  to continue to cut teachers"  and reduce intervention                                                             
programs.  Without an increase  in funding,  the educational  system                                                            
decline  "would  have long  term  affects  on  the economy  of  this                                                            
11:04:36 AM                                                                                                                   
JOHN  POTHAST, Principal,  Sky  View High  School  in Soldotna,  and                                                            
President-Elect, Alaska  Association of Secondary School Principals,                                                            
spoke  on behalf  of the  550 students  in  his high  school and  on                                                            
behalf of  the Association's  319 school  administrators. He  voiced                                                            
appreciation  of the efforts to address  education funding  early in                                                            
the Legislative  Session.  A BSA of  $4,919 per  student "is  a good                                                            
start;  however, it's  not quite enough".  In his  six years  as the                                                            
high school principal,  the number of teachers has been reduced from                                                            
40 to 28 teachers,  home economics,  vocational education,  library,                                                            
music,  art, counselors,  and other  programs have  been cut.  While                                                            
some of this  is due to declining  enrollment, declining  revenue is                                                            
also a factor. In his position  as President-Elect of the Principals                                                            
Association,  he has worked  with colleagues  across the nation.  He                                                            
attested that  not one administrator is "afraid of  accountability",                                                            
for such  things  as money  that is  provided and  for student  test                                                            
scores. However,  sufficient funding must be provided  to accomplish                                                            
these mandates.  Schools have  continued to  do more and more  "with                                                            
less  and  less".  However,  "the  sustainability   of  that  cannot                                                            
continue". He  likened it to putting enough gas in  one's car to get                                                            
from  point A  to  point B  but  never changing  the  oil,  checking                                                            
transmission  fluid,  doing  tune-ups or  other  maintenance  needs.                                                            
Education  has  not  been  funded  to  the  appropriate  level,  and                                                            
continuing  the current  trend would  not allow for  "the oil  to be                                                            
changed".  Extra help  is required.  He urged that  a higher  BSA be                                                            
considered.   Schools   on  the   Kenai  Peninsula   would   require                                                            
approximately $5,000 per student to maintain status quo.                                                                        
DENISE   GREEN-WILKINSON,   Principal,   Polaris   K-12  School   in                                                            
Anchorage;  State  Coordinator,  Alaska  Association   of  Secondary                                                            
School  Principals;  and Co-Chair  on  the  National No  Child  Left                                                            
Behind  Task Force,  commented that  the increase  proposed in  this                                                            
bill would "simply hold  us from going backwards". Class sizes would                                                            
be  impacted;  the  ability  to  adequately   provide  supplies  and                                                            
equipment would  be negatively affected;  the federal No  Child Left                                                            
Behind requirements  would further burden schools;  and professional                                                            
development  of  staff would  be  difficult  to maintain  and  carry                                                            
forward  into the classroom.  Continuous training  is required.  The                                                            
Anchorage School District is recommending a BSA of $5,120.                                                                      
11:10:29 AM                                                                                                                   
ANDREA (ANDI)  STOREY, Parent  and Member,  Juneau School Board  and                                                            
Member, Alaska  Kids Count!, recounted  her written testimony  [copy                                                            
on file} as follows.                                                                                                            
     My name  is Andrea Story,  I am a Mother  of two in the  Alaska                                                            
     Public School system.  I am a Member of the Juneau School Board                                                            
     and I am a Member of Alaska Kids Count!.                                                                                   
     I  am testifying  today in  support of  increasing the  Student                                                            
     Base Allocation  to $5,120. The  current amount of the  Student                                                            
     Base Allocation  is $4,919, that means 300,000  dollars in cuts                                                            
     to the Juneau School  district. This also assumes the City will                                                            
     fund to the  new CAP, which is a $900,000 increase.  If they do                                                            
     not, it will mean  more cuts. Juneau traditionally funds to the                                                            
     Cap. 43  percent of our education  budget is paid by  the City.                                                            
     As a School Board  member I watch closely your decision on what                                                            
     to   appropriate  to   public  education   .As  you  know   the                                                            
     Legislature  appropriates,  the School  Board allocates.  I can                                                            
     tell you  that as a School Board member I find  this to be made                                                            
     up of difficult  decisions. For instance in Juneau,  since I've                                                            
     been  on  the Board  parents  are advocating  for  lower  class                                                            
     sizes,  that was one of the main  reasons I ran for  the Board,                                                            
     to  lower class  sizes.  In the budget  process  last year  the                                                            
     Board  to balance the  budget planned  to cut three bus  routes                                                            
     whose  students live 1.5 miles  or closer to school.  The Board                                                            
     listened  to parents testifying  about safety concerns  and how                                                            
     they worry for their  5, 6, 7 year olds safety as they walk 1.5                                                            
     miles  to school. We  received 2 petitions  signed by  over 140                                                            
     parents  requesting  that  their bus  service  not  be cut.  We                                                            
     funded  the buses at the expense  of being able to lower  class                                                            
     sizes  in three primary classrooms.  I see how there  are tough                                                            
     choices to  make. Right now the budget shows  a 300,000 in cut,                                                            
     which  we passed by  reducing the 3 school  bus routes  that we                                                            
     funded  last   year  and  reducing  the  3  Dropout   Counselor                                                            
     As a  new Board Member,  I hear that  education does receive  a                                                            
     huge  amount of money,  it is the 2nd  largest expenditure  for                                                            
     our state. So I ask  myself, "Are School Boards asking too much                                                            
     money  for our schools?" I went  looking for sources  comparing                                                            
     what other  state are doing. I know it is a big  expense to all                                                            
     states.  I know children  are expensive  to educate. I  went to                                                            
     Education  Week, which  is a non-profit  organization  based in                                                            
     Washington,  D.C. who's  purpose is to  raise the level  of the                                                            
     public  and  professionals  information  on  issues  concerning                                                            
     education.  For the last nine years they have  done a State-by-                                                            
     State Report  card. This year's report card,  which is adjusted                                                            
     for regional  cost differences  rates Alaska 30th out  of 50 in                                                            
     the amount  of money spent on education (www.edweek.org).  This                                                            
     tells  me that Alaska is below  average in the amount  of money                                                            
     our  state spends  on education.  It  tells me  that it is  not                                                            
     unreasonable  for School Boards  and principals and  parents to                                                            
     be asking for more money in the Student Base Allocation.                                                                   
     In  Juneau  our  school  site councils  have  put  an  unfunded                                                            
     critical  needs list together for if we had increased  funding.                                                            
     It  shows  what  is  wanted,  the  amount  it  costs,  and  the                                                            
     additional  foundation   formula  amount  needed  to  get  that                                                            
     service. For example  to enhance graduation success which helps                                                            
     meet  NCLB  requirements,  an  English  as  a  Second  Language                                                            
     Teacher  costs  61,000  [dollars],  that is  an increase  of  8                                                            
     dollars.  Summer School Support is 75,000 dollars,  an increase                                                            
     of 10 dollars to the  foundation, the 3 Dropout Counselors cost                                                            
     172,000 [dollars]  an increase of 23 dollars to the foundation.                                                            
     To reinstate the buses it would be 33 dollars.                                                                             
     Funds are also needed  to enrich the basic educational program.                                                            
     Lowering  class size  in Juneau to Board  policy costs  978,000                                                            
     dollars  or 128 dollars  in additional  foundation formula.  My                                                            
     point  is, every dollar amount  that the Legislature  increases                                                            
     the foundation formula,  that has a direct benefit to resources                                                            
     available  to the  school districts  you  represent across  the                                                            
     state. My  point is also that School Boards struggle  with what                                                            
     to fund as there are many unfunded critical needs.                                                                         
     I urge  you to appropriate a  Student Base Allocation  of 5,120                                                            
     dollars. Thank you for listening.                                                                                          
11:14:18 AM                                                                                                                   
KRISTEN  ROMANOFF,  Parent, Member  of Alaska  Kids  Count!, and  an                                                            
educator,  noted that  many have  spoken  to the  importance of  the                                                            
classroom experience  for children  and the affect of class  size on                                                            
that experience. To further  that issue, she shared being personally                                                            
"alarmed" about  the number of families  who have relocated  or plan                                                            
to relocate  to other states  or are reluctant  to return to  Alaska                                                            
because  of  the  condition   of  the  State's  education   program.                                                            
Student/teacher  ratios,   the student  allocation,   and  education                                                            
qualities are  issues of concern. "It is ironic" that  the State has                                                            
spent  tremendous   resources  attracting   people  to  the   State,                                                            
providing  Permanent  Fund  Dividends,  and  attractive   retirement                                                            
benefits,  yet has  insufficiently  funded  education  for the  last                                                            
decade.  The  consequences  are  disturbing.  "The  State's  economy                                                            
depends on  working, dedicated families"  staying in the  State. The                                                            
Education  system should be  a priority and  an "equitable  and high                                                            
quality education" should  be provided. She urged an increase beyond                                                            
what is proposed.                                                                                                               
11:17:13 AM                                                                                                                   
AMY  SKILLBRED,  Parent,  voiced  appreciation   for  the  testimony                                                            
provided  by school  administrators  "to  change,  incrementally,  a                                                            
trend, over time, to increase  the funding". However, as a parent of                                                            
children currently  in the school system, the need  to change now is                                                            
more imperative.  Her child's  high school  classes are overcrowded                                                             
and there is  a shortage of textbooks.  "Basic things are  missing".                                                            
Her middle  school child  also has  large class  sizes. "That's  not                                                            
good enough".   As a parent, she is asking that legislators  "make a                                                            
positive  difference  in  the  classrooms  next  year"  rather  than                                                            
implementing an upward  trend over the next five years. If the State                                                            
could  use the  Permanent  Fund to  develop its  resources,  funding                                                            
should be available  to support the  education needs of the  State's                                                            
"most valuable  resources", its children. The money  could be found.                                                            
Senator Bunde  noted, for clarification purposes,  that the earnings                                                            
of the Permanent  Fund are used for  resource development  purposes.                                                            
Ms. Skillbred  affirmed that she was aware that the  earnings rather                                                            
than the principal of the Permanent Fund are utilized.                                                                          
There being  no further testifiers,  Co-Chair Wilken announced  that                                                            
public testimony  on this bill has  concluded. The bill was  HELD in                                                            
Co-Chair Wilken adjourned the meeting at 11:19 AM.                                                                              

Document Name Date/Time Subjects