Legislature(1997 - 1998)
11/18/1997 05:00 PM Senate HES
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TOWN MEETING ON SCHOOL FUNDING REFORM
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE
SENATE FINANCE COMMITTEE
Wasilla Council Chamber
Wasilla AK
November 18, 1997
5:00 P.M.
SENATE HESS MEMBERS PRESENT
Senator Gary Wilken, Chairman
Senator Loren Leman, Vice-Chairman
Senator Lyda Green
Senator Jerry Ward
SENATE HESS MEMBERS ABSENT
Senator Johnny Ellis
SENATE FINANCE MEMBERS PRESENT
Senator Drue Pearce, Co-Chairman - via teleconference
Senator Al Adams
Senator John Torgerson
SENATE FINANCE MEMBERS ABSENT
Senator Bert Sharp, Co-Chairman
Senator Dave Donley
Senator Sean Parnell
Senator Randy Phillips
ALSO IN ATTENDANCE
Senator Rick Halford
Representative Beverly Masek
COMMITTEE CALENDAR
TOWN MEETING ON PUBLIC SCHOOL FUNDING REFORM
OTHER TOWN MEETINGS ON PUBLIC SCHOOL FUNDING REFORM
Ketchikan - 11/12/97
Anchorage - 11/13/97
WITNESS REGISTER
Dr. Robert Lehman, Superintendent of Schools
Mat-Su School District
125 West Evergreen
Palmer AK 99645
Mr. John Fairfield, School Board Member
425 East Dahlia Ave. #J
Palmer AK 99645-6414
Ms. Annette Rucker, President
Wasilla High School PSTA
701 Bogard Rd.
Wasilla AK 99654
Mr. Carl Schleich, Principal
Snowshoe Elementary School
690 Cope Industrial Way
Palmer AK 99645
Ms. Linda Menard, School Board Member
351 West Swanson, Ste. 1
Wasilla AK 99654
Mr. John Cyr, President
NEA Alaska
114 Second St.
Juneau AK 99801
Mr. Eric Henderson, Principal
Wasilla Middle School
650 E. Bogard Rd.
Wasilla AK 99645
Mr. Peter Burchell, Principal
Alternative High School
1775 West Parks Hwy.
Wasilla AK 99654-6935
Ms. Kathy White Murphy, Teacher
Finger Lake Elementary School
5981 Eek
Wasilla AK 99654
Mr. Desi Mayo, Finance Director
350 East Dahlia Ave.
Palmer AK 99645
Ms. Lela Ayers, President
Mat-Su Education Association
Ms. Wendy Weiland
Mr. Ken Fallon, School Board Member
230 East Paulson, Ste. 68
Wasilla AK 99654
Mr. Voncille Gregoire, Presiding Officer
Chase Community Council
P.O. Box 349
Talkeetna AK 99676-0349
ACTION NARRATIVE
TAPE 97-54, SIDE A
SB 146 PUBLIC SCHOOL FUNDING/CHILD CARE GRANTS
CHAIRMAN WILKEN called the Joint Senate HESS and Finance Committee
meeting to order at 5:00 p.m. and announced they would discuss
education funding reform. He said that the education formula is
one of the top three priorities of the majority caucus. He said it
is his intent to put a bill on the Governor's desk that changes the
foundation formula. He asked for their support in writing the
Governor saying they want a new formula that is simple, fair, and
fixed.
SENATOR HALFORD said he would not vote for more money for the
existing formula unless some progress is made.
CHAIRMAN WILKEN said he wanted people to understand why Senator
Halford feels that way and said he would begin by explaining SB 146
with the use of over-heads.
He said that people aren't happy with what's going in education and
are asking what they are getting for their money. Fairbanks voted
three times on a 30% bond issue to build new schools. People were
commenting that there were places they could drive to that had more
money, but the residents don't pay anything for their schools. The
foundation formula is part of the problem that makes people say
that.
CHAIRMAN WILKEN said he thought they could agree on simplicity and
fairness in education funding, for everyone to pay their fair
share, on government to live up to its responsibility to educate
its citizens, and for all to participate.
He explained the four components of public school funding are State
support, required local contribution, optional local contribution,
and assessment normalization (Statewide mill leveling). Forty-three school dis
Per student funding has long-term benefit to education. He said
its not true that the formula takes money away from the rural areas
and gives it to the urban areas.
He said it's also not the case that education dollars shrank by
50%. In the last 10 years the amount of money that has been put
into the education formula has increased 51%. At the same time,
the number of students has increased by 26%. So, it looks like the
rate of increased has doubled the number of students. He
reiterated that the problem is with the formula.
The instructional unit is the vehicle by which the legislature
funds education. It is multiplied by $61,000 and that's what is
budgeted.
A survey conducted by the State Board of Education said 81% wanted
education to be funded by a per student dollar. There are only
seven states that fund education by instructional unit; the others
fund by student dollar. SB 146 is a student dollar proposal. It
also requires local contribution before State support is given.
The student dollar times the number of students, plus State dollars
for developmentally disabled, minus required local participation
equals the State public school foundation support. The student
number is to be adjusted for the size of school, area cost
differential (ACD), and special needs.
CHAIRMAN WILKEN said that people understand the concept of a
student dollar. He said that organized areas have give 4 mills of
full assessed value or 35% of basic need. Here, Senator Wilken
explained a number of charts on assessed value before the committee
members.
He explained the federal disparity test limits a 25% spread between
the highest and lowest per student in the State. There are
communities that want to give more, but can't because of the
federal disparity test.
CHAIRMAN WILKEN said his definition of fair share is equal funding
based on assessed value of the organized area. This is an arm's
length evaluation of the wealth of the community. Because
education is one of the priorities for government, everyone should
be funding it equally. He referred to a chart of assessed values
for 1996. The "spread" is $4.5 million - $13.3 billion. This
should be adjusted according to ACDs, size of schools, and special
needs.
SB 146 requires a 3 mill local contribution instead of a 4 mill
qualifier not to exceed 100% of the district's State support, and
then asks if a district can fund its total education requirement
based on their assessed value. In the North Slope's case, there's
an additional $11 million next year.
He asked if anyone had a better way to find a fair share to let him
know.
CHAIRMAN WILKEN displayed a chart of earned wages from the
Department of Labor and noted the REAAs in which $460,991,899 was
earned by 18,341 people. In 1996 this group received $135 million
for education. So 8% of our students get 22% of State education
money with no return.
Two unorganized areas in Alaska have tried to figure out what this
means to them and they have figured that a 1% sales tax in their
area would raise $700,000 and pay for their complete education
requirement. Another area found that a 4 mill levy or 2% sales tax
would pay for their education - which is not a lot - compared to
what the rest are doing. They also have to realize that some areas
just don't have the asset base to pay for their education. In SB
146, under the assessment normalization provision, $90 million
dollars is spread around on the basis of relative wealth versus
number of students.
SENATOR WARD asked for the status of the ACD study.
CHAIRMAN WILKEN said the ACD is a component of the foundation
formula. The McDowell group is conducting a study to determine
what it costs to run a school and the study is due February 1.
SENATOR ADAMS said he thought Senator Wilken's presentation was
basically "the right to steal in daylight." He said the North
Slope Borough receives 1 1/2% of education dollars and SB 146 and
the other legislation takes money away from the North Slope
Borough. The Alaska Constitution states that every Alaskan should
have an education. If there are problems in the school districts,
they should be taken care of.
The North Slope Borough pays the second highest tax rate in the
State. Twenty-four percent of their taxes go to primary education
while they are the second to last in the State's funding. He
thought the majority's legislation robbed one school district to
serve another and that was wrong. It is wrong to say that REAAs
are getting a free ride. Rural Alaska provides all the State with
natural resources like Prudhoe Bay and provides jobs for all
Alaskans. He saw it as a partnership.
SENATOR ADAMS agreed that they needed to look at fairness and
equity, but Senator Wilken's slide presentation was not it. He
said that if schools with a large student enrollment need more
funding money, it could come possibly from the tobacco tax. He
also urged adopting an education endowment fund which is needed in
the long run.
SENATOR WARD noted that the formula was created by politicians and
he thought it was time to look at it to see if it does still work.
He applauded Senator Wilken and Senator Phillips for trying to
figure out what is fair and make it understandable. He hoped that
whatever the legislature approved would be good for at least 10
years. The ACD is what it's all about, he said. He suggested that
the legislature caused the problems and they have an obligation at
this point to fix it.
TAPE 97-54, SIDE B
MR. JOHN FAIRFIELD, parent and school board member, remarked that
the four criteria Senator Wilken outlined in his sponsor statement
said there is no new money for a new formula. He supported the
fairness issue and said that SB 146 alone would not solve the
schools' problems. The consensus of Mat-Su, Kenai, Fairbanks, and
Anchorage school districts was that while the funding formula needs
to be addressed because it hasn't met their needs in the recent
past, they cannot be satisfied with the "pie" being the same size
that it is now. It has to be expanded somehow, quite possibly
through income or sales taxes.
MR. FAIRFIELD clarified that he supported the idea of fairness in
changing the formula, but the number of dollars needed to be
bigger.
SENATOR ADAMS stated that his bill reintroduces the school tax and
makes it $25. Before the tax was repealed, it was $10. Everyone
who works in Alaska would pay for use of the State's vital
services.
MR. FAIRFIELD said he supported it.
SENATOR HALFORD asked how much more money would be enough.
MR. FAIRFIELD replied that recently every year they have been
cutting vital programs in education. He has good reasons to spend
50% more than the districts are getting.
SENATOR HALFORD asked if the figure should be $120,000 for each
instructional unit.
MR. FAIRFIELD replied that $120,000 would be enough.
CHAIRMAN WILKEN explained that he had to assume, when working on
this legislation, that there would be no new dollars to expand
with. The legislature needed to learn to trust the formula so they
could put more money into the pot.
MR. FAIRFIELD responded that he understood what they are saying,
but he was afraid when they say there is no new money that
education has a very low priority in the legislature.
SENATOR LEMAN commented that education wasn't a low priority. When
there were budget reductions across the board, education received
an increase.
MR. CARL SLACK, school principal, commended them for tackling the
foundation formula. He agreed with the fairness issue, but feared
that Senator Wilken's plan pitted one district against another. He
asked if SB 36 or SB 146 would pass a court challenge that would be
inevitable from the North Slope Borough.
He supported the educational endowment fund. He thought a payroll
tax where everyone who works in Alaska contributes was fair. If
the present formula had kept up with inflation, it would be $87,000
per unit. He agreed that the formula needed to be fair, but the
pie needs to be larger also. He said that the needs of the many
children who are coming into their schools are changing
significantly from when he first came 13 years ago.
He said he thought their plan took from one government and gave to
another, but not from individual school districts.
CHAIRMAN WILKEN proposed a payroll tax in the unincorporated areas,
not across the State. He added that the legislature put $628
million into the foundation last year and in 1986 they put $409
million in. The problem is making the instructional unit reflect
the educational needs of the State.
SENATOR TORGERSON explained legislation that required one school
district per model borough. Local funding efforts would be
required.
MS. ANNETTE RUCKER, Mat-Su school board member, asked how to get
money into the schools to get teachers the supplies they need. She
said she is sick of selling chocolate bars and running raffles. It
makes her angry to have to revert to this kind of fund raising to
provide an education for our children.
She stated that she is also a tax-preparer and that teachers are
the only employees she sees who are asked to provide expendable
supplies on a yearly basis. Mechanics can buy tools and keep them
from year to year. She sees routinely elementary school teachers
spend $2 - $4 thousand per year on stickers, books, and maps, etc.
She read a letter from the Borough Manager and Borough Mayor that
was given to the Governor three weeks ago. The letter says there
was a 40% increase in students since 1990. They should have had
the equivalent of eight schools built there, but they have had one.
She said that all the PTAs are standing together to urge the
legislature to do something this year that is acceptable to
everyone. They were elected to do that and they are expected to do
that.
She wanted to know why a payroll tax couldn't be done state-wide.
She urged the legislators to quite fighting and to work with the
Governor on an acceptable solution. She offered to help in any way
she could.
SENATOR HALFORD thanked her for her comments and said that SB 11,
relating to school construction, is not dead and that it's in the
House.
MS. RUCKER said that her children need the funding in schools right
now. In five years it will be too late for them.
CHAIRMAN WILKEN said he thought there was a good chance that the
legislature would pass legisaltion providing for the construction
of schools this year.
MR. JOHN CYR, President, NEA Alaska, said that it's true that the
raw dollars going into the foundation formula has increased by 51%
and the student population has increased 26%. But he thought it
was clear that the extra money went towards categorical funding for
special education students, increased transportation, bi-lingual
education which sorely needed the money. He didn't think there
were more dollars for regular education.
He said kids have the same right to education no matter where they
live. They have a right to take classes that don't have 50 kids in
them and to take classes with real science equipment in them. The
ACD study is absolutely critical because fairness is important, but
it is against reason to expect that they don't also need more money
to keep students competitive.
CHAIRMAN WILKEN responded that no one is suggesting that the
legislature doesn't want to put new money into the formula.
MR. CYR responded that he didn't mean taking new money from Senator
Adams' district to give to his.
SENATOR TORGERSON asked what he thought about equalization across
Alaska.
MR. CYR said he wouldn't comment until he knew what exactly that
means. One of keys they have dealt with across the State is local
control.
SENATOR LEMAN said the delivery of government education is the most
expensive education they have. He asked if Mr. Cyr had done
studies on why it's expensive and why it's increasing.
MR. CYR said he didn't think private schools were held to the same
standard as public education. They don't need certified teachers,
their buildings don't have to conform to the same codes. He
thought it was hard to quantify what private education costs were
because the differences are so vast.
SENATOR LEMAN said he thought everyone should look at the
requirements that aren't improving the delivery of education.
MR. CYR said if improve education could be delivered at a reduced
cost, it should be done.
MR. ERIC HENDERSON, Principal, Wasilla Middle School, said he
thought there was plenty of money to go around the State.
TAPE 97-55, SIDE A
He liked the idea of a payroll tax. He said our children are our
best renewable resource and that should be our top priority. He
applauded SB 11; although he thought it should be 70%/30% rather
than 50%/50%. The valley cannot afford a 50%/50% because there
just aren't the buisnesses. He said that he spends a lot of time
in the classroom and he wanted to know what administrative costs
the legislators were talking about when saying administration is
top heavy.
MR. HENDERSON said that no other system in the world deals as well
as we do working with a "total society." No other school system
has to do that in the world. Our system takes all kids, no matter
what level or ability and tell them they can be successful.
He said the valley schools are having a lot of growing problems
explaining his school's addition and still needing five portables
to accommodate the number of students that jumped from 650 to 875
kids. He thought that anyone in the valley would want to pay a tax
that is earmarked for schools and kids.
SENATOR ADAMS commented that along with the money in the Permanent
Fund, there is an easier funding source, the Constitutional Budget
Reserve which is surplus of $3.3 billion. All it takes is 15 votes
in the Senate and 30 votes in the House to solve the problems. He
said there was money around, but it was a matter of people sitting
down and trying to solve the problem instead of fighting each
other.
SENATOR WARD commented that the money the legislators appropriate
absolutely belongs to the people of Alaska and they are elected to
spend it on their behalf.
MR. HENDERSON responded that the legislators' job was to provide
for their children.
MR. PETER PERSCHALL said the works with kids who sometimes don't
fit into the regular school system. The Mat-Su, like other
districts, has a lot of kids who are in a lot of different crisis.
It's not just an educational issue; it's community issues. He said
he is proud of the 19 districts he has worked with in the last 10
years to establish programs for at-risk kids. Some people may
question the integrity of three students in Unalaska and how
unimportant it might seem, unless one of those three children were
one their biological children that wasn't fitting in.
He said the costs of education have gone up since 1988. There is
an amount of money that has to go to quality programs. He said his
major expense is teachers, but the teachers are the ones who work
with the kids.
He commented on the costs to incarcerate and educate one youth in
McGloughlin. With the same amount of money two of his graduates
could go to Harvard University. This is the kind of disparity that
happens when you ignore kids or don't meet their needs. You can
run cheap, but you can't run on nothing, he concluded.
MS. KATHY WHITE MURPHY said she is a parent of a second grader and
an eighth grader and is a first grade teacher at Finger Lake
Elementary School. As citizens of the valley, they are willing to
take fiscal and character responsibility to improve education
there. She has heard that it is not enough to reorganize the
foundation formula and that it is important to simplify things.
She supported fairness and equity. She thought any solution would
have to be multi-faceted and that more money was needed in the pot
and people are saying they are willing to pay more.
MS. MURPHY said it would be easy for legislators to listen to a
vocal minority that is saying they are paying too many taxes and
the schools aren't doing their job, but she has taught in the
valley for 12 years and has worked extensively with parents and
that is not the view that she hears. Nine out of ten people favor
looking at ways to utilize in a responsible way the resources we
have in this State. We are the wealthiest State in the union and
there is no reason we can't have current and up-to-date text books.
There is no reason that she has to spend $5,000 out of her own
pocket every year to supplement the educational budget within her
district.
Regarding salaries, she has received very little additional
compensation over the 12 years she has worked here. She thought
that school employees took a responsibility in the eighties when
there were some revenue short-falls within their own profession to
share that. There were no additional raises or getting recognized
for additional time or education served.
She urged the legislators to work together, not take resources away
from one area of the State and give it to another, and to take a
leadership role and make some decisions on how to use our
resources.
SENATOR GREEN asked what things her own private money was going for
that would typically be paid for out of the school budget and what
would happen if she didn't do it.
MS. MURPHY answered that she and other teachers try to have an
integrated curriculum and to do this they sometimes need text books
that aren't available within the school. Her allocation for
discretionary funds is about $200 per year and sometimes she finds
reading supplies that are around $500.
SENATOR GREEN asked if she would have gotten help 10 years ago for
similar requests.
MS. MURPHY replied that she probably would have, but she was
teaching special education at the time which had a bigger budget.
She now needs bulletin boards, a lot of art supplies, and rewards
and incentives.
SENATOR HALFORD asked where Mat-Su was regarding the cap.
CHAIRMAN WILKEN responded that Mat-Su was at about 80%.
SENATOR HALFORD replied that they have the capacity at the local
level to put more into education.
MR. DESI MAYO, Finance Director, Mat-Su Borough, said they have
provided a little over $23 million of local support to the Mat-Su
school district, $1 million in renovation and renewals, and
$600,000 in unreimbursed debts. They are within a half million
dollars of the cap, he said.
CHAIRMAN WILKEN said he had heard the same testimony from many
people and that's why he was here to address it.
MS. LELA AYERS, President, Mat-Su Education Association, said that
she is proud to represent those teachers and they are very
energetic and talented. She supported the comments the committee
had already heard.
MS. WENDY WEILAND said she taught for over 20 years and there are
inequities in the facilities between here and Valdez. She noted
that charter schools and private schools don't have to take
children with diverse needs. This changes, not only the cost, but
the kind of educational opportunities they can provide.
SENATOR LEMAN asked her to identify some of the differences in
Valdez.
MS. WEILAND replied class size, programs, and facilities. In
Valdez there are 20 - 21 students per class and they have new text
books.
DR. ROBERT LEHMAN, Superintendent, Mat-Su Borough, said the issue
for all kids is to have a quality educational program. He agreed
that there needs to be some equity and fairness in the formula, but
not at the expense of anyone else. It also makes sense to do
something about the size of the pie.
TAPE 97-55, SIDE B
He thought there needed to be equity in contributions from both
local and State sources.
MS. LINDA MENARD, School Board Member, said she liked the 3 mill
qualifier, the school tax, and supported year-round schooling
because the population was growing so fast. She said they would
need dollars for transportation, too, since there are lots and lots
of roads. She urged them to fund SB 7.
SENATOR WARD commented that information he has says that year-round
schooling saves money.
MS. MENARD responded that it is an expensive process and is more
expensive. The operating costs are more than the capital savings.
SENATOR HALFORD noted that the problem they have with the Municipal
League is that they don't want to argue among themselves. So, they
come to the legislature with one thing they can agree on - that
they need more money.
MR. KEN FALLON, School Board Member, supported equitability and
fairness.
SENATOR LEMAN asked what the costs were that were not adding that
much benefit to education. He noted an expenditure by the State of
$30,000 for construction of an outhouse.
MR. VONCILLE GREGOIRE, newscaster, said he attended school in
luxembourg, Belgium, and Britain. When he attended school in
Luxembourg and Britain he went from 7:00 a.m. to 6:00 p.m., not
2:30 p.m. like in the U.S. He didn't think kids in the U.S. put in
enough time to learn the things they should know.
SENATOR TORGERSON said there is a subcommittee in Finance looking
into these issues.
SENATOR HALFORD commented that the formula was changed 10 years ago
and was changed less than 5%. He informed them of how hard the
formula had been to change then, politically.
SENATOR GREEN said that everyone's input and continuing solutions
to the state of education are very, very important.
CHAIRMAN WILKEN thanked everyone for their participation and
adjourned the meeting at 8:00 p.m.
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