Legislature(1997 - 1998)
03/17/1997 09:03 AM Senate HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION & SOCIAL SERVICES COMMITTEE
March 17, 1997
9:03 a.m.
MEMBERS PRESENT
Senator Gary Wilken, Chairman
Senator Loren Leman, Vice Chairman
Senator Lyda Green
Senator Jerry Ward
Senator Johnny Ellis
MEMBERS ABSENT
All members present.
OTHER MEMBERS PRESENT
Senator John Torgerson
Representative Allen Kemplen
COMMITTEE CALENDAR
SENATE JOINT RESOLUTION NO. 23
Urging the United States Congress to amend the Social Security Act
so that the higher cost of living in Alaska is reflected when the
per capita income of the state is used as a factor in determining
the federal share of Medicaid costs.
- MOVED SJR 23 OUT OF COMMITTEE
SENATE BILL NO. 36
"An Act relating to transportation of public school students;
relating to school construction grants; relating to the public
school foundation program and to local aid for education; and
providing for an effective date."
- HEARD AND HELD
SENATE BILL NO. 85
"An Act relating to the public school funding program; repealing
the public school foundation program; relating to the definition of
school district, to the transportation of students, to school
district layoff plans, to the special education service agency, to
the child care grant program, and to compulsory attendance in
public schools; and providing for an effective date."
- HEARD AND HELD
PREVIOUS SENATE COMMITTEE ACTION
SJR 23 - No previous Senate action to record.
SB 36 - See Senate Health, Education & Social Services Committee
minutes dated 2/12/97 and 3/14/97.
SB 85 - See Senate Health, Education & Social Services Committee
minutes dated 2/19/97 and 3/14/97.
WITNESS REGISTER
Karen Perdue, Commissioner
Department of Health & Social Services
PO Box 110601
Juneau, Alaska 99801-0601
POSITION STATEMENT: Reviewed the need for SJR 23.
Bob Labbe, Director
Division of Medical Assistance
Department of Health & Social Services
PO Box 110660
Juneau, Alaska 99811-0660
POSITION STATEMENT: Discussed the FMAP.
Dennis Wetherell, Parent
PO Box 514
Palmer, Alaska 99645
POSITION STATEMENT: Suggested that supplemental funding be raised
to 25 percent and maintain the separate
funding categories.
Susan Stone, Parent
PO Box 5891
Ketchikan, Alaska 99901
POSITION STATEMENT: Stressed the need to plan for the needs of
Alaskan children.
Dan Beck, Acting Superintendent
Delta/Greely School District
PO Box 527
Delta Junction, Alaska 99737
POSITION STATEMENT: Suggested that the school tax be extended to
the entire state and that special education
transportation be included.
Syd Wright, retired Principal
PO Box 624
Petersburg, Alaska 99833
POSITION STATEMENT: Stated that the basic problem, the failure to
inflation proof the formula, was not being
addressed.
Dr. Keith Tolzin, Superintendent
Ketchikan Gateway Borough School District
Pouch Z
Ketchikan, Alaska 99901
POSITION STATEMENT: Discussed the situation in Ketchikan.
Lisa Bezenek, Parent
PO Box 6464
Ketchikan, Alaska 99901
POSITION STATEMENT: Urged the committee to take a common sense
approach.
Richard Swarner, Executive Director
Kenai Peninsula Borough School District
148 N. Brinkley
Soldotna, Alaska 99669
POSITION STATEMENT: Expressed concern with the funding community
size, the cost factors, and the student count
date.
Karen Eakes, President
Ketchikan Education Association
636 Main Street
Ketchikan, Alaska 99901
POSITION STATEMENT: Suggested that Alaska should use its wealth to
fund education.
Mike Brown, Parent
734 Monroe
Ketchikan, Alaska 99901
POSITION STATEMENT: Discussed the problems with the area cost
differential.
Karen Hanson-Pitcher
PO Box 5642
Ketchikan, Alaska 99901
POSITION STATEMENT: Discussed the situation in Ketchikan.
Forrest Olemaun, Board President
North Slope Borough School District
PO Box 169
Barrow, Alaska 99723
POSITION STATEMENT: Stated that the legislation before the
committee would devastate the children of the
North Slope.
Tina Corwin, Member
North Slope Borough School Board
PO Box 169
Barrow, Alaska 99723
POSITION STATEMENT: Discussed the situation in the North Slope.
LeLand Dishman, Superintendent
North Slope Borough School District
PO Box 169
Barrow, Alaska 99723
POSITION STATEMENT: Discussed the situation in the North Slope and
suggested creating a committee to review
education funding.
Mike Aamodt, Vice President
North Slope Borough Assembly
PO Box 68
Barrow, Alaska 99723
POSITION STATEMENT: Discussed the situation in the North Slope and
indicated the need to increase educational
funding to all of Alaska.
Carl Rose, Executive Director
Alaska Association of School Boards
Juneau, Alaska
POSITION STATEMENT: Discussed the current foundation and problems
with the proposal.
Kevin Ritchie
Alaska Municipal League
Alaska Conference of Mayors
217 Seward
Juneau, Alaska
POSITION STATEMENT: Discussed the municipalities as the other
partner in education funding.
ACTION NARRATIVE
TAPE 97-26, SIDE A
SJR 23 REFLECT AK. COLA IN FED MEDICAID SHARE
Number 001
CHAIRMAN WILKEN called the Senate Health, Education & Social
Services Committee (HES) to order at 9:03 a.m. and introduced
SJR 23 as the first order of business before the committee.
COMMISSIONER KAREN PERDUE , Department of Health & Social Services,
spoke in favor of SJR 23 which would support a change in the
Federal Medical Assistance Percentage, the cost that the federal
government will share in the state's Medicaid program. This has
been historically identified as an inequity. Currently, for every
$.50 the state spends, the federal government participates with
$.50 in the Medicaid program. Commissioner Perdue explained that
the calculation is according to a formula based on per capita
income in an individual state in relation to the per capita income
in the U.S. Alaska has had exceptions to these calculations such
as the 125 percent poverty level of the federal level. The FMAP
does not recognize the historic measures of change. Alaska
receives the lowest FMAP that can be received, 50 percent, as does
11 other states. The highest FMAP is 77 percent. Commissioner
Perdue said that the FMAP adjustment would result in a lot of money
for Alaska, $37 million for a one time adjustment to $39 million.
This inequity was identified during the federal Medicaid reform
last year by Senator Murkowski in the Finance Committee. However,
the one time savings to Alaska was not realized due to the context
of the Medicaid cap, therefore the bill did not pass. Commissioner
Perdue clarified that there are two issues: the one time
adjustment for the current spending and the perspective savings as
the state continues to invest money into Medicaid. SJR 23 is
consistent with Senator Murkowski's bill and should assist in
addressing this inequity.
Number 119
SENATOR LEMAN pointed out that those percentages in the packet
specify how much higher the cost of living is in Alaska. Senator
Leman thought that more than four Alaskan cities should be in the
20 highest cost areas. Perhaps, that is because not many cities
are identified or is there a size cut off.
BOB LABBE , Director of the Division of Medical Assistance in DHSS,
said that those were just representative. There is not an
exhaustive list of all the cities and the comparisons. Mr. Labbe
offered to provide the committee with a comparison of the price of
a loaf of bread in various cities in Alaska and the lower 48.
Mr. Labbe pointed out that the calculation does change on an annual
basis. Alaska is one of the few states that is at the floor
percentage, 50 percent. The actual dollars will not become
apparent until the accountants do the calculations. In the future,
some years will result in an increase and others a decrease. Mr.
Labbe mentioned that this issue is a priority of the division who
supports this.
Number 175
COMMISSIONER PERDUE commented that this has been a priority for the
Governor, for herself and for Mr. Labbe. She noted that many
technical issues will come up. Commissioner Perdue informed the
committee that several years ago the federal government said that
the department owed them $100 million in the upper limit which is
the difference between what the department pays rural hospitals and
nursing homes and what the Medicare upper limit was. Currently,
there is an opportunity to get this done. Commissioner Perdue
expressed the need to achieve this before becoming involved in the
continued Medicaid restructuring.
CHAIRMAN WILKEN asked if it was important to know why there is a
difference between the federal percentages and the federal medical
assistance percentages in other states. BOB LABBE stated that the
federal percentages apply to some other federal programs as a
result of the restructuring of the welfare reforms block grant.
Mr. Labbe said that the federal percentages column on the left is
what is being reviewed. The importance of the federal medical
assistance percentage is that it varies. Mr. Labbe was unsure that
Alaska would earn 50 percent based on the current formula.
CHAIRMAN WILKEN inquired as to which budget the savings would
surface if this were to happen. COMMISSIONER PERDUE did not
believe that this would happen within the next 60 days. In further
response, Commissioner Perdue believed that this had a better than
50 percent chance to pass since this was taken up last year.
Number 245
SENATOR LEMAN said that he would support SJR 23 in order to support
equity in the program, however his support was not intended to
suggest the need for more federal involvement in welfare or
Medicaid programs. Senator Leman believed that decentralization
and movement away from federal involvement would be better.
SENATOR GREEN pointed out that testimony stated that Alaska and 10
other states are at the 50 percent level, but the packet
information lists 16. BOB LABBE was not sure of the 10. The list
will be effective in October. Perhaps, some have dropped to the 50
percent level due to the improvement in the economy in the lower
48. Mr. Labbe offered to check that.
CHAIRMAN WILKEN said that he would entertain a motion to move
SJR 23 from committee.
SENATOR LEMAN moved to report SJR 23 out of committee with
individual recommendations and the accompanying zero fiscal note.
Without objection, it was so ordered.
COMMISSIONER PERDUE stated that more flexibility for the state
would be appreciated, but as Medicaid reform continues risk must
not be shifted to the state. This is an entitlement program to
which the federal government has an obligation. Care must be taken
in order to ensure that risk is not passed to the state.
SB 36 PUBLIC SCHOOL FUNDING
SB 85 PUBLIC SCHOOL FUNDING/CHILD CARE GRANTS
Number 302
CHAIRMAN WILKEN announced that SB 36 and SB 85 would be the next
order of business.
DENNIS WET HERELL , parent, informed the committee that he was a
member of the 1993 Special Education Regulations Review Task Force.
Mr. Wetherell was relieved by the language in Section 15 of the CS
which reimburses districts for the cost of special education
related transportation. Mr. Wetherell expressed discomfort with
Section 14.17.420 on page 3 of the CS which provides for special
needs funding. Under this provision, a total of 20 percent
supplemental funding is available which is less than under the
current law. Mr. Wetherell informed the committee that 14.5
percent of students are special education students with
disabilities and another 4.5 percent are gifted. He suspected that
several percent each fall into the bilingual and vocational
education category. Under this proposal, 25 percent of the
students are competing for 20 percent supplemental funding. The
problem is further compounded because students with disabilities
are protected by federal law as is the money to educate those
students. Mr. Wetherell said that it was difficult if not
impossible to reduce funding for students with disabilities.
Therefore, 5.5 percent of the supplemental funding is left to be
split among 10-11 percent of the students. Such a shortage will
pit parent against parent, program against program, and a loss of
services to all. Mr. Wetherell requested that the special needs
funding factor be raised to 1.25 which can be accomplished without
change to the total state contribution to education if the base
student allocation is reduced to $3,640.
Number 348
Mr. Wetherell was uncomfortable with a single pot of supplemental
funding for all groups of special needs students. The 1993 Task
Force discussed non-categorical funding in the context of students
with disabilities only, gifted education was kept separate because
it was not protected by federal law. This separation was done so
as to provide parental leverage at the local level to ensure that
state education funds were spent on the purpose for which the funds
were allocated. The 1993 Task Force did not consider bilingual and
vocational education because those categories do not fall under
special education law. Mr. Wetherell requested that the three
funding categories for the various groups of special needs students
be restored. Mr. Wetherell suggested that supplemental funding
grants in the amount of 14.5 percent for special education, 4.5 for
gifted education, 3 percent for vocational education, and 3 percent
for bilingual education. This would result in a special needs
funding factor of 1.25.
In response to Chairman Wilken, DENNIS WETHERELL said that his
reference to page 3 was regarding special needs funding not
intensive services. The 1993 Task Force reviewed intensive
services as a separate funding category and the numbers of the task
force seem to be similar to those in paragraph (2) of Section
14.17.420.
CHAIRMAN WILKEN inquired as to the source of the increase from 1.20
to 1.25. DENNIS WETHERELL reiterated that 14.5 percent of the
students have disabilities and 4.5 percent are gifted which totals
19 percent of the 20 percent allocation. There are probably 3
percent or more in each category of the vocational or bilingual
categories. Therefore, all the categories total 25 percent. Mr.
Wetherell specified that his calculation was based on the average
number of students in each category statewide. In further response
to Chairman Wilken, Mr. Wetherell clarified that the percentages
for special education and gifted students are a percentage of the
total ADM statewide, but the percentage for bilingual and
vocational students was an approximation.
CHAIRMAN WILKEN informed everyone that those numbers varied from 9-
70 percent of the total ADM depending on the district. Each school
district would classify those categories and there was no auditing
of that. Chairman Wilken said that it was confusing as to the
reason why some school districts had such a disproportionate amount
of students in those categories. If this method continues, some
sort of auditing/verification would be required.
Number 417
SUSAN STONE , parent, was concerned that each year's discussion of
bills on education leave problems unsolved and education less than
it was in the previous year. She noted the inadequate amount of
money sent to Ketchikan which resulted in a divided community
regarding how to spend the inadequate funds. Ms. Stone informed
the committee she was educated in Alaska when Alaska's education
was the envy of others. Ms. Stone discussed the losses in
Ketchikan schools and the shame she felt with what is considered
adequate for Alaskan schools. Parent groups are caught up in
attempts to raise money rather than learning activities to enhance
the learning experience. Ms. Stone expressed anger that
Ketchikan's counselors leave the elementary schools when Ketchikan
is experiencing anguish over job losses to a significant part of
the community.
Ms. Stone noted that the cost of living in Anchorage is lower than
that of Ketchikan. Ms. Stone indicated the need to determine what
it realistically costs to run a school by reviewing the market
forces and educational requirements to determine the salary of
teachers. Perhaps a standard reporting system could be devised in
order to review school statistics from across the state. Ms. Stone
said that Alaska has not kept up in education. She was glad to see
the proposed increase in standards, but there are not enough
resources to do the job. Ms. Stone informed the committee that she
attended school in Alaska before oil money and was mystified that
she had educational experiences that her children never had. Ms.
Stone emphasized the need to plan for the needs of Alaskan
children, not for what they can do without.
Number 472
DAN BECK , Acting Superintendent for the Delta/Greely School
District, said that Ms. Stone had some good points. Mr. Beck
believed that the special needs factor would reduce some of the
reporting requirements for the vocational and gifted education
categories. The Delta/Greely School District has an influx of
Russian and Eastern European students which results in a growing
bilingual population. Mr. Beck said that the district could work
within any funding factor for special needs that the Legislature
determines adequate. Holding transportation separate and removing
intensive needs from the special needs are both positive aspects of
the CS. The school tax for REAAs is also a positive aspect of the
CS. Mr. Beck suggested that the school tax be expanded to include
the entire state because as it stands seasonal employees are
missed. With regard to special education transportation, districts
currently cannot be reimbursed for transportation services for an
extended school year. The extended school year is required by the
IAP and those costs are not reimbursable.
SYD WRIGHT , a retired Principal, informed the committee that he had
been an educator all of his life and mainly in Alaska. Mr. Wright
referred to Alaska's poverty of spirit not resources, with regard
to education. Mr. Wright identified the following improvements
under the two proposals: counting students rather than units,
fixing area differentials, removing the cap, incorporating single
site funding, taxing unorganized boroughs, funding the Quality
Schools Initiative, and consolidating gifted and special education
classifications. Those are worthwhile, but minor; schools will not
be significantly better.
Mr. Wright noted that he had testified on the basic flaw of the
foundation program in 1988, 1991, and now. Mr. Wright identified
the problem as the failure to inflation proof the formula. In 10
years the foundation unit was increased once by 1.6 percent, during
the same period Alaska's cost of living increased about 30 percent.
Further the cost of college tuition has increased more than 300
percent and legislators increased their per diem by 50 percent
three years ago and seven percent last year. During his time in
education, Mr. Wright said that he has observed the following:
significantly increased class size, indefinitely deferred
maintenance of school buildings, loss of power to compete for the
best teachers, loss of some of the best experienced teachers due to
early retirement incentives, creation of hiring zero experience for
incoming teachers, loss of music, art and physical education in
elementary schools, reductions in the numbers of administrators
while expecting more teacher evaluation, loss of buying power for
technology, loss of electives in high school, and loss of air
travel in Southeast for extra-curricular teams. Mr. Wright
informed the committee that the national publication Teacher
Magazine graded all 50 states on the state's financial support of
schools in relation to the state's ability to pay - Alaska scored
an F. In conclusion, Mr. Wright challenged the committee to put on
a mantle of leadership.
CHAIRMAN WILKEN requested that everyone on the network fax or mail
testimony to the committee.
Number 553
DR. KEITH TOLZIN , Superintendent of Ketchikan Gateway Borough
School District, thanked Mr. Wright for his comments. Dr. Tolzin
believed that the education tax, special needs and other non-
categorical funding were positive aspects of the proposal. Dr.
Tolzin reiterated the reductions experienced in Ketchikan, but
noted that the district has also attempted to create solutions to
bring spending in line with the available resources. For instance
during bargaining with teachers this year, access to the Masters
column was limited. Contracting the custodial services has also
been reviewed for possible savings. Dr. Tolzin said that the
district should not be reviewing such short-term solutions.
Ketchikan believes that the area cost differential should be
reviewed. Dr. Tolzin urged the committee to attempt a study that
would be completed by January 1998 because districts cannot wait
two years. Dr. Tolzin informed the committee that he was a
proponent of the educational endowment, Alaska is not a poor state.
The tax, if extended statewide, could begin to fund such an
endowment. Dr. Tolzin echoed Mr. Beck's comment regarding taxing
seasonal employees.
CHAIRMAN WILKEN pointed out that page 14, lines 9-13 of the CS says
that the Department of Education must submit a report regarding the
student allocation based on the Consumer Price Index.
TAPE 97-26, SIDE B
SYD WRIGHT said that made him feel better.
LISA BEZENEK , parent testifying from Ketchikan, agreed with Ms.
Stone's comments. Ms. Bezenek was frustrated with the political
process and the children being lost through it all. Ms. Bezenek
explained that her husband brought her to Alaska by expounding the
virtues of the educational system here. There are wonderful
teachers in Ketchikan, but the teachers are strapped. Ms. Bezenek
urged the committee to return to common sense with education.
Perhaps, starting fresh would be an option; determine the cost of
running a school with good programs and determine the amount of
state aid. Ms. Bezenek informed the committee of the signatures
being compiled that illustrate Ketchikan's support for a better
education.
CHAIRMAN WILKEN noted that Ketchikan has been at the table during
each discussion and applauded its involvement.
Number 545
RICHARD SWARNER , Executive Director for the Kenai Peninsula Borough
School District, believed that the CS is the best effort thus far
to deal with the formula. The CS encompasses the following
positive aspects: the separation of the student transportation
costs, the provision that all districts contribute to education
funding, the funding of an area cost differential study, the
concept of different area differentials for various funding
communities, the 20 percent categorical funding, the separation of
the intensive needs funding, the removal of the local effort cap,
and the notion of reviewing the CPI or inflation costs for
education.
Mr. Swarner expressed concern with the funding community size
factors. He pointed out that with a funding community of 21-40
students a factor of 2.2 is applied and with 41-80 students a
factor of 1.9 is applied. That should be reviewed. Also the cost
factors should be such that like communities have similar cost
factors. Under Section 14.17.500, Mr. Swarner suggested that the
student count date be changed to November 15th. Mr. Swarner said
that while it may be appropriate to remove the cap, the Legislature
must ensure that education is funded per the constitution. Mr.
Swarner noted that the Kenai would submit written testimony.
In response to Senator Green, RICHARD SWARNER supported taxation of
all districts.
SENATOR TORGERSON said that he was listening in via teleconference.
Number 478
KAREN EAKES , President of the Ketchikan Education Association,
commended the comments of Ms. Stone and Mr. Wright. She informed
the committee that she was a 30 year resident of Ketchikan and a
teacher with 26 years of experience of which 21 have been in
Ketchikan. Ms. Eakes noted the lip service given to the importance
of education, however the actions are not consistent with those
words. There has been a continual decline in educational services
in Ketchikan due to 10 years of flat funding, inflation, and
inaccuracies in the local area cost differential. Ms. Eakes
reiterated that Ketchikan does not have librarians, nurses,
counselors, daytime custodians, or a classroom instructional aid in
the elementary schools. Ketchikan only has half-time music and
physical education in the elementary schools. Ms. Eakes noted the
cuts at the middle school and high school level as well. In total,
there have been some 50 staff cuts in Ketchikan over the past 10
years. All educational staff are stretched to the limit.
Furthermore, many of the buildings and playgrounds in Ketchikan are
inadequate and substandard. The district's technology is minimal
and outdated, except at the high school. Ms. Eakes urged the
committee to support the hold harmless provision for the coming
school year. The closure of the pulp mill accentuates an already
critical funding situation. Ms. Eakes informed the committee that
the School Board is reviewing draft budget proposals that range in
cuts of $470,000 in the status quo to over $2 million in a 90
percent funding situation. Alaska is wealthy and it is time to use
that wealth to support and increase the educational funding.
MIKE BROWN , parent, urged the committee to support the hold
harmless provision for Ketchikan. Mr. Brown noted that he had
submitted written comments to the committee last week. Mr. Brown
said that Ketchikan and other communities have an area cost
differential that does not reflect the cost of living of the area.
He did not believe that Ketchikan was being provided equal
protection as specified in the Alaska Constitution. Further, the
CS says that the area cost differentials will be legislated which
Mr. Brown believed would be a failure. Mr. Brown suggested that
regulations should be enacted in order to provide the flexibility
to change the area cost differentials in regulation.
CHAIRMAN WILKEN thanked everyone on the teleconference network.
KAREN HANSON-PITCHER , 25 year resident of Ketchikan and parent,
echoed the concerns discussed by Ms. Eakes regarding the cuts in
programs and positions in Ketchikan. The parents in Ketchikan have
been supportive and have attempted to provide what is eliminated
through the cuts. Parents and businesses raise money for
technological purchases for the schools, even so, much of the
computer equipment available would be considered outdated. Ms.
Hanson-Pitcher expressed the need to provide a basic education.
Ms. Hanson-Pitcher told the committee that her husband attended
school in Ketchikan before the oil money and had more programs than
their child does now. Education in Ketchikan is eroding due to the
decrease in funding.
Ms. Hanson-Pitcher understood the federal movement to be towards
equitable funding; making the funding in ghetto and inner city
schools equitable to the funding in affluent suburbs. That seems
to be the intent of the state legislation as well, but that is not
what is happening. The Ketchikan district is similar to the ghetto
schools down South as more funding is lost. Alaska should be able
to do better.
Number 355
FORREST OLEMAUN , Board President of the North Slope Borough School
District, said that the legislation before the committee could have
a devastating affect and would infringe on the constitutional
rights of the children of the North Slope. Mr. Olemaun suggested
that when reviewing the foundation formula bills, the committee
consider recommending the appointment of a task force to evaluate
the facts and figures of the formula. The task force should
include legislative and DOE representation, school business
managers, superintendents, educators, and individuals from all
parts of Alaska.
Mr. Olemaun stressed that when considering this or any other
formula the real issue, educating children, should not be
forgotten. The education system on the North Slope has almost
reached the ability to compete in the global market place. Mr.
Olemaun reiterated that should this legislation pass, it would have
devastating results on the North Slope's educational resources;
"where would the Legislature go the next time they feel a need to
increase the revenue to their constituents."
SENATOR LEMAN noted that this was his ninth legislative session and
much testimony has been taken on this issue over the years. Why
would a task force with the make up Mr. Olemaun specified decide
upon a different conclusion or recommendation than the Legislature?
FORREST OLEMAUN did not have an answer, but felt that if all the
facts and figures were provided to the people of Alaska the state
would be headed in the right direction for all children in Alaska.
SENATOR LEMAN appreciated Mr. Olemaun's testimony as well as prior
testimony from the North Slope. He also understood the impact
facing the North Slope Borough School District. Senator Leman
ensured Mr. Olemaun that the committee would listen to those
effected which is what is happening now.
SENATOR GREEN mentioned that many present participated in a task
force two years ago which resulted in three plans being brought
forth. All three plans were rejected. Senator Green emphasized
that the CS is a starting point and now the focus should be on how
to make it better. Senator Green commended the Chair on all his
work.
Number 260
CHAIRMAN WILKEN informed Mr. Olemaun that Fairbanks had a bond
issue in May 1996 which asked the people of the Fairbanks Northstar
Borough whether they wanted to build new schools by spending 100
percent of their own money, $64 million, or ask the state to pay 70
percent of that. Some people tried to defeat the bond issue; one
of the issues brought forth was regarding equity. How can
Fairbanks be asked to spend money on schools when there are
boroughs with a value four times greater with one-eighth of the
students who pay very little for education? This is a place to
start. Chairman Wilken hoped that Mr. Olemaun would appreciate his
problem of how children are educated in the Interior of Alaska.
TINA CORWIN , North Slope Borough School Board Member, said that any
of the foundation formula bills would devastate the North Slope,
especially when remembering when students were sent to schools in
other cities or states. Ms. Corwin also recalled the plane crash
in 1971 in which several rural students were lost. The children of
the North Slope deserve to receive an education at home with their
families. Ms. Corwin informed the committee that the North Slope
Borough School District is one of the major employers in the
villages. The passage of any of the bills would impact the economy
of those villages which already have a low employment rate. Ms.
Corwin pointed out that education costs on the North Slope are
expensive. The North Slope would prefer to spend less money on
those things the urban areas take for granted. Providing an
education to urban students is much cheaper than in rural villages.
The North Slope has 10 schools in its district, and seven of those
can only be accessed by plane. Ms. Corwin suggested working on the
formula together to help all Alaskan students.
SENATOR LEMAN was sorry for the loss of those students in the 1971
crash. Senator Leman noted that the Mt. Edgecombe type education
has been a successful model and there is a waiting list of students
who want to participate. He also agreed that educating students in
their own community is good. Senator Leman suggested that the Mt.
Edgecombe type of education be reviewed in order to learn from it.
Number 153
TINA CORWIN pointed out that it cost more for children to attend a
BIA school than to attend school in Barrow. Ms. Corwin believed
that it cost $20,000 per student at Mt. Edgecombe. SENATOR LEMAN
was not sure about those numbers and requested those numbers and
comparisons taking into account all the facilities. Senator Leman
agreed that Mt. Edgecombe is expensive, but believed that it may
not be far more expensive than some of the communities. TINA
CORWIN agreed that it would range between different schools on the
North Slope.
SENATOR LEMAN said that the Mt. Edgecombe school would not be for
everyone, but that opportunity should be provided. A number of
leaders in Alaska were educated at Mt. Edgecombe.
FORREST OLEMAUN pointed out that any school would be successful if
allowed to limit the number of students in attendance as well as
picking those students.
LELAND DISHMAN , Superintendent of the North Slope Borough School
District, commended the students from the North Slope that
testified at the last meeting. Those students were chosen at
random and only had two hours notice. Mr. Dishman stated that any
counsel from Mr. Wright would be beneficial. Mr. Dishman informed
the committee that the North Slope district is about the size of
Michigan with a population of 2,550 students. The district has 10
schools, three of which are located 300 air miles from Mr.
Dishman's office. Mr. Dishman feared that the students of the
North Slope would lose the opportunity to attend accredited schools
and receive an adequate education with the passage of this bill.
This loss would be ironic since Alaska is considering forcing all
of its schools to become accredited. Mr. Dishman reiterated the
possible loss of jobs due to the passage of this bill which would
ultimately result in increases in public assistance and welfare
rolls statewide. Further, the district's curriculum would be
reduced and students would not have the opportunity to attend
specialized classes which are preparation for work or college. Mr.
Dishman said that these students would not have the chance to live
the American dream.
Number 058
Mr. Dishman noted that one of the goals for Project 2000 is that
every child will enter school ready to learn by the year 2000. The
national and state goals also indicate the need for students to be
able to use the technology to participate in the world market and
obtain admission to quality colleges. Another national and state
goal is to improve parental involvement in the schools. The
passage of this bill would virtually eliminate all those goals,
isolating the students of the North Slope, and their parents would
be consumed with feeding the family by subsistence means. Mr.
Dishman indicated that the board chairman had mentioned the
possibility of the violation of the students of the North Slope's
constitutional rights, perhaps he meant their civil rights. Even
rural students have rights protected by the constitution.
In conclusion, Mr. Dishman emphasized that he supported equity,
however nothing is so inherently unequal as attempting to equalize
unequals. Mr. Dishman suggested that a committee of urban and
rural experts in school finance, cost of living, economic
viability, technology, and civility be created in order to develop
a plan that would fund education without dividing the state along
rural and urban lines. Mr. Dishman suggested that everyone work
together to create quality education statewide.
TAPE 97-27, SIDE A
SENATOR WARD said that there would not be such a committee. He
suggested that Mr. Dishman determine what such a committee would
have developed as a fair and equitable solution and provide that to
the HESS committee.
LELAND DISHMAN pointed out that there has been much discussion
about some schools losing art, music, and physical education
teachers. The elementary schools on the North Slope do not have
such. With regards to overcrowding, the Barrow schools has 25-30
students in a classroom and in the village schools one teacher has
15-18 students from four grades. Mr. Dishman informed the
committee that to have a school board meeting, noting the air
travel involved, costs $20,000.
With regards to Chairman Wilken's predicament, Mr. Dishman pointed
out that Chairman Wilken was referring to capital project money and
equating it to foundation money; those two are not tied together.
Mr. Dishman understood the bond issue problem. In every community
on the North Slope, the people voted schools as the number one
priority.
Number 044
SENATOR WARD understood that education is the number one priority
for communities statewide. Senator Ward reiterated the need for
Mr. Dishman to report his recommendations to the HESS committee
because no other committee will be created.
CHAIRMAN WILKEN believed that everyone was aware of the high costs
in the North Slope. With regards to Mr. Dishman's comments that
the passage of these bills would result in a decrease in funding
for the North Slope, Chairman Wilken asked Mr. Dishman if he had
given thought to how the North Slope Borough could participate more
to education.
LELAND DISHMAN said that the North Slope is capped at 20 mills from
which the borough taxes at 18.50 and of that $60 million is capped
for operations. For every $1 the state contributes, the North
Slope Borough contributes $3. Mr. Dishman stressed that the money
received from the state would not operate Barrow High School and
the Polluck Elementary School. Therefore, eight schools must be
operated from the funds of the North Slope Borough. Mr. Dishman
informed the committee that the difference between what is taxed at
18.50 and 20 mills is surplus money that the oil companies have to
pay that goes to the state. Mr. Dishman noted that he has sat on
many committees regarding education funding, every committee
determined that there was a funding problem not a distribution
problem.
CHAIRMAN WILKEN recommended that some thought be given to other
funding sources within the North Slope Borough. With regards to
bonds, Chairman Wilken said that bonds are votes about dollars.
Bonds are a snapshot of the feeling on a particular issue.
Chairman Wilken said that equity asks that citizens in the state
participate to pay for their own education to the extent that they
are able. Able is defined by the assessed valuation of the
organization. Chairman Wilken said that was being requested from
all, including the North Slope Borough.
Number 162
MIKE AAMODT , Vice President of the North Slope Borough Assembly,
discussed how he came to be a resident of the North Slope Borough.
He is the owner of a small construction firm and since 1987 he has
been involved in retirement planning for various groups. Mr.
Aamodt informed the committee that he had reviewed the proposed
school district budgets each year since he began on the assembly in
1985. Program elimination strips the children of the North Slope
of equitable educational opportunities and destroys employment
opportunities for residents. In the current budget proposal the
district will provide a basic education comparable to that in the
urban areas, more than just the basics is necessary. Intramural
sports, proms, clubs, etc. are important for children. Mr. Aamodt
asked the committee if it could imagine children going to a high
school prom with 10 teenagers in the entire class; the North Slope
Borough School District combines several schools together. Mr.
Aamodt mentioned that a bus cannot be taken across town, the state
has not tied towns in the North Slope with a road system as is the
case in other districts.
Mr. Aamodt reiterated that the proposals before the committee would
place the North Slope Borough back to the time when either the BIA
or the state ran the schools. Those systems were inadequate and
inequitable. Mr. Aamodt discussed the time when he worked for the
state school system before the Borough took over. There was not
enough paper for use in the classrooms, ice had to be brought in
from a lake 12 miles away in order to have water in school and
honey buckets were used. During that time, two teachers attempted
to teach 10 subjects at four grade levels in high school. Mr.
Aamodt stressed that was only 20 years ago.
Number 250
Mr. Aamodt discussed the district's goal of providing equity in
education and the Borough Assembly's support of education. Funding
from the state level should be increased and standards should be
raised in the rural areas to the level of the North Slope in order
to come closer to those in urban areas. The schools on the North
Slope are approaching what he and his wife experienced as high
schoolers more than 30 years ago when he and his wife graduated
from Anchorage schools. The proposals before the committee
resulting in a reduction in programs would destroy the basic
economic fabric of the village economies. Mr. Aamodt noted that
the district is attempting to replace certified people coming from
outside with permanent residents, however the separation previously
experienced creates difficulties in sending children away to
college. The North Slope is close to producing graduates not
hampered by the memory of separation which would increase those
residents getting certified for school positions. Mr. Aamodt
reiterated that the schools provide a large portion of the
employment in many communities which these proposals would
eliminate.
Mr. Aamodt pointed out that the North Slope did not benefit from
oil revenue which went to the state in order to help municipalities
with their basic needs as well as to fund the permanent fund
program. The North Slope Borough was established to prevent the
continuation of inequality. Mr. Aamodt discussed the high property
taxes in the North Slope. In conclusion, Mr. Aamodt pointed out
that the state is mandated to provide education for Alaskan
children. The proposal ignores that responsibility for the North
Slope who is expected to provide 100 percent of the funding.
Currently, the formula provides a portion of basic education and
the North Slope provides the rest. Mr. Aamodt emphasized that
basic education is defined differently in urban areas and rural
areas. Mr. Aamodt suggested that the committee increase funding
for all of Alaska, but not at the expense of a few districts.
Furthermore, a permanent fund was developed in order to help the
state in times of decreasing resources.
Number 325
SENATOR LEMAN commented that he could imagine a class with 10 teens
because he graduated with 16 students in Unalaska. Senator Leman
also agreed that property taxes in the North Slope were high. He
asked if a 2,000 square foot house close to $400,000 in value
results in $200 per square foot. MIKE AAMODT explained that he
became an assembly member because of this issue. Mr. Aamodt built
the house and acknowledged that if a contractor were hired the
house would have cost close to $200,000. The house is $96,000 in
value, it is not worth $400,000. When building a house in the
North, for every $1 spent on materials add another $1.5 for freight
on that material.
SENATOR LEMAN found it difficult to believe Mr. Aamodt's statement
that the North Slope did not benefit from oil revenue. MIKE AAMODT
explained that the state receives royalty from the North Slope's
oil development. The North Slope has the tax base which Mr. Aamodt
acknowledged as revenue, however it's not revenue that comes to the
state and is given back to the North Slope in the form of major
municipal assistance. Mr. Aamodt said that the North Slope does
receive some assistance, but the state has not helped much with
water and sewer projects. Revenues come to the state, the North
Slope Borough just assesses taxes.
Number 391
CARL ROSE , Executive Director of the Alaska Association of School
Boards, said that he would provide the committee with written
testimony. Mr. Rose said that he subscribed to Albert Einstein's
philosophy that "no problem can be solved by the same consciousness
that created it." The foundation was not designed to survive 10
years of inadequate funding with a 30 percent loss in buying power.
Mr. Rose suggested that the foundation offset some of the down turn
in the economy in the 1980s in some of the municipalities. The
foundation provided some needy municipalities with additional state
aid. Now many of the municipalities have increased the property
value and as a result the foundation is working as designed; the
foundation is reducing state aid to those areas with increasing
property values.
Mr. Rose clarified that equity is being defined in terms of
population and how money should be distributed. No proposals in
the last two years address the 30 percent loss in buying power.
The 39 districts which must be held harmless under this proposal
are evidence of not addressing that 30 percent loss in buying
power. Mr. Rose expressed concern that there have been goals
stated, but there are no answers for the changes taking place. He
echoed Mr. Wright's comment that there are some positive aspects,
but those only add up to a small percentage of the problem. How is
the remaining money distributed minus the 30 percent loss in buying
power? Mr. Rose said that the answer is 39 school district being
held harmless in the first year and over time the hold harmless
will be decreased and an increased local contribution through the
mill rate will balance that. That moves toward a decreased state
contribution and an increased local contribution or an increase in
state mandates and a decreased state contribution and an increased
local contribution. Mr. Rose stressed that the aforementioned
problem should be addressed.
Number 445
Mr. Rose acknowledged some good in the proposal before the
committee, but the simplicity is lost when the numbers are
generated. With regards to equity, for many equity is the status
quo and any departure from that creates problems which may
encourage litigation. Mr. Rose did not believe that the courts
should decide how to fund Alaska's schools. He understood the
fiscal gap and the resources of the state. The problems before the
state require an abundant way of thinking. Mr. Rose said that
there are solutions to these problems, although those solutions may
not be politically palatable. There is a scarcity mentality today,
there is not enough money which creates winners and losers, and
haves and have-nots. Mr. Rose encouraged the committee to review
how to place Alaskans in a position to be viable to the economy and
the future. Mr. Rose offered to work with the committee.
SENATOR LEMAN encouraged Mr. Rose to review why costs are high and
determine how to provide a service at a less cost.
CHAIRMAN WILKEN said that one of the definitions of equity is the
ability of a district to pay for its education. He inquired as to
Mr. Rose's definition of equity. CARL ROSE explained that for many
districts what it currently receives is reality. A departure from
that would raise serious questions. Requiring everyone to pay for
education is a good move, however that does not equate to the
actual numbers that get run.
CHAIRMAN WILKEN stated that it was enlightening to read the Mat-Su
decision by Justice Rebenowitz. That decision seemed to say that
there is no equal protection clause for education under the Alaska
Constitution. How education is funded is a majoritarian issue that
must be dealt with through the Legislature which is occurring now.
Number 495
KEVIN RITCHIE , Alaska Municipal League and the Alaska Conference of
Mayors, noted that municipalities are the state's other partner in
funding education. Currently, the State of Alaska funds about 75
percent of the cost of education and municipalities fund about 25
percent. Over the past years, the amount the municipalities
contribute has increased substantially. Mr. Ritchie stressed that
this is a state and municipal issue. He thanked Chairman Wilken
for committing to talk with the Alaska Municipal League and the
Conference of Mayors on April 1. Mr. Ritchie passed out some
information to the committee which illustrated that municipalities
face the same lack of resources as the state. The chart
illustrated that there was a significant decline in revenues to the
state in 1986, there was a decrease in the state contribution.
Over the next three years up until 1992, the state contribution was
brought to the level of 1986. During that same time, there were
significant cuts in services in municipal schools but there was
also a significant increase in local contribution to schools. The
state's contribution flattened out after 1992 which accounts for
the 30 percent loss in buying power. Mr. Ritchie pointed out that
the gap is being filled by municipal governments and that increase
is unlikely to continue.
The next graph illustrates the funding of schools in 1996 with 1986
dollars. Municipalities have not totally offset the loss of
purchasing power which is a result of the resources in communities.
Mr. Ritchie said that municipalities and school districts have done
much to create efficiency in programs, but both have also had to
cut programs and staff. The last chart of the handout reviews
trends in municipalities in general. Mr. Ritchie explained that
the property tax issue has to do with the relationship between the
state and municipalities. Mr. Ritchie acknowledged the work of
some of the legislators in dealing with problems the municipalities
have. The Conference of Mayors and the Municipal League have the
same perspective as the state. Mr. Ritchie said that the basic
goal, providing basic education, should be the determinant of
whether the allocation process is fair or not.
SENATOR LEMAN asked Mr. Ritchie if he could use the same time
periods used in his charts to determine the actual state dollars
versus municipal dollars as well as the federal component.
TAPE 97-27, SIDE B
CHAIRMAN WILKEN thanked everyone for the testimony. Chairman
Wilken said that he would take the committee's lead regarding the
pending course. The bill will be before the committee again on
Wednesday. There being no further business before the committee,
the meeting was adjourned at 11:25 a.m.
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