Legislature(1995 - 1996)

02/20/1995 09:05 AM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                       February 20, 1995                                       
                           9:05 a.m.                                           
  MEMBERS PRESENT                                                              
 Senator Lyda Green, Chairman                                                  
 Senator Loren Leman, Vice-Chairman                                            
 Senator Mike Miller                                                           
 Senator Judy Salo                                                             
  MEMBERS ABSENT                                                               
 Senator Johnny Ellis                                                          
 COMMITTEE CALENDAR                                                            
 SENATE BILL NO. 70                                                            
 "An Act relating to the public school foundation program; and                 
 providing for an effective date."                                             
 SENATE BILL NO. 83                                                            
 "An Act relating to the appointment and removal of the commissioner           
 of education; and providing for an effective date."                           
  PREVIOUS SENATE COMMITTEE ACTION                                             
 SB 70 - See Health, Education & Social Services minutes dated                 
 SB 83 - No previous senate committee action.                                  
  WITNESS REGISTER                                                             
 Jerry Burnett, Aide                                                           
 Senator Phillips                                                              
 State Capitol                                                                 
 Juneau, Alaska, 99801-1182¶                                                   
 POSITION STATEMENT:  Presented an overview of SB 70.                          
 Duane Guiley, Director                                                        
 School Finance, Department of Education                                       
 801 W. 10th St.                                                               
 Juneau, Alaska 99801-1894¶                                                    
 POSITION STATEMENT:  Clarified portions of SB 70.                             
 Janice Gregg Levy, Assistant Attorney General                                 
 Human Services Section, Department of Law                                     
 P.O. Box 110300                                                               
 Juneau, Alaska 99811-0300¶                                                    
 POSITION STATEMENT:  Discussed legal aspects of SB 83.                        
  ACTION NARRATIVE                                                             
 TAPE 95-7 , SIDE A                                                            
 SHES - 2/20/95                                                                
           SB  70 PUBLIC SCHOOL FOUNDATION PROGRAM                           
 Number 001                                                                    
 CHAIRMAN GREEN called the Senate Health, Education and Social                 
 Services (HESS) Committee to order at 9:05 a.m. and introduced                
 SB 70  as the first order of business.                                        
 JERRY BURNETT, staff to Senator Randy Phillips, reviewed the                  
 testimony he gave to the committee on Saturday, February 18, 1995.            
 Number 083                                                                    
 SENATOR SALO asked Mr. Burnett if the numbers from the school price           
 index of a few years ago would be used as the new differential for            
 next year.  JERRY BURNETT expected that would be a new study which            
 would result in some changes to those numbers in the previous                 
 study.  The school price index would go into effect for the fiscal            
 year 1997 which would allow time to update the numbers.                       
 SENATOR SALO commented that changing the area cost differential has           
 been politically difficult for the legislature to do in the past.             
 She asked Mr. Burnett how Senator Phillips viewed that issue as               
 operating within the Department of Education or the State Board of            
 Education.  JERRY BURNETT anticipated that it would be somewhat of            
 a political situation, no matter who changed the differential.              
 Senator Phillips would prefer some type of a consensus building               
 SENATOR SALO asked if SB 70 and its elements would meet, or make              
 the federal disparity test issue more difficult.  JERRY BURNETT               
 replied that Duane Guiley, from the Department of Education, has              
 indicated that SB 70 would reduce the disparity between school                
 districts.  However, Mr. Burnett stated he could not answer that              
 question exactly.                                                             
 Number 144                                                                    
 SENATOR SALO asked what Senator Phillips suggests would happen to             
 the students in the 35 schools that would close as a result of                
 enacting SB 70.  JERRY BURNETT responded that there are a number of           
 alternative service delivery methods, such as Centralized                     
 Correspondence Study.  These students will be funded at the same              
 level as the rest of the school district while the funding site               
 will not receive additional funding.  Depending on the district,              
 the district may still receive $5,000 to $10,000 per student.                 
 SENATOR SALO stated the students would just have to move.  JERRY              
 BURNETT said that the students would not have to move.  He                    
 clarified that the school district would still receive funding for            
 the students, but the district would not receive additional funding           
 for that site.                                                                
 SENATOR SALO guessed that these 35 schools would close under SB 70.           
 JERRY BURNETT specified that decision to close or not would be made           
 by the local school board; the state would not make that decision.            
 SENATOR LEMAN asked what incentive SB 70 has to keep salary costs             
 down for districts.  JERRY BURNETT responded that at this point,              
 there no incentive in the school price index to keep salary costs             
 SENATOR LEMAN asks if such an incentive could be added to SB 70.              
 JERRY BURNETT said that Senator Phillips indicated that                       
 incorporating an incentive to keep salary costs down would be                 
 appropriate for the committee to discuss.                                     
 Number 215                                                                    
 DUANE GUILEY, Department of Education (DOE), stated that under the            
 current foundation law, students served on a correspondence model             
 are added to the largest funding community within each school                 
 district, if that district has a district level correspondence                
 program.  The department has no authority to close a school under             
 current statute, only the local school board can close a school.              
 SENATOR SALO asked Mr. Guiley, in his opinion, how many of the 35             
 schools would close as a result of the change in funding specified            
 in SB 70.  DUANE GUILEY guessed, given the history of some of the             
 districts, that perhaps half of the 35 schools would close while              
 the other half would remain open.                                             
 SENATOR MILLER asked Mr. Guiley if he could speak to the federal              
 disparity tax.  DUANE GUILEY explained that anything generating               
 more units for the urban districts would compress disparity down to           
 a smaller number.  In urban districts with a high level of tax                
 support, local contributions are distributed across fewer units.              
 Therefore, any change in the formula giving more units to urban               
 areas would compress disparity, as long as the rural schools do not           
 receive equivalent unit increases.  SB 70 does increase the number            
 of units to urban areas while decreasing the units in rural areas.            
 Number 264                                                                    
 SENATOR SALO asked Mr. Guiley to explain his statement that the               
 disparity would be less.  DUANE GUILEY explained that revenue is              
 currently distributed to districts based on instructional units.              
 The disparity measure in the State of Alaska is based upon the                
 relative value of each instructional unit, not a per student                  
 spending level.  The state and local revenue is divided by the                
 number of instructional units a district receives to get an average           
 unit value for a particular district.  Disparity is measured                  
 through the revenue generation through the formula.                           
 CHAIRMAN GREEN inquired as to what happens to a facility when a               
 district closes a school.  DUANE GUILEY noted that most of the                
 facilities are state owned.  The local district must maintain a               
 facility for one year after closure at the end of which the                   
 facility reverts back to the state.  Facilities have been moth-               
 balled, destroyed, and permanently transferred to the community.              
 There is currently no standard process for dealing with closed                
 facilities.  In some cases, facility ownership reverts back to                
 local native corporations.                                                    
 Number 300                                                                    
 CHAIRMAN GREEN recalled hearing concern voiced at Saturday's work             
 session regarding instances in which the school also serves as a              
 community center.  She asked if there was an option for communities           
 to continue using a facility as a community center.  DUANE GUILEY             
 explained that under DOE's disposal procedure, any building owned             
 by the department can be put up for sale, for transference to                 
 another state entity, or for transference to the local community.             
 SENATOR SALO asked if DOE had a position on SB 70.  DUANE GUILEY              
 replied that the department did not have a position on SB 70 at the           
 present time.                                                                 
 SENATOR LEMAN pointed out that the date counting average daily                
 membership under Section 9 would not be a good date for Elmendorf             
 Air Force Base and Fort Richardson.  He asked if it would be                  
 possible for the military schools to count students on a different            
 date than other schools.                                                      
 DUANE GUILEY explained that Section 9 deals with the estimate for             
 the following school year, not the current school year.  The date             
 was changed in SB 70 because under the current law districts had to           
 estimate the number of students for the upcoming year before                  
 determining the enrollment in the current year.  Section 9 would              
 allow districts to determine their current enrollment in order to             
 make projections for the following year.  Section 10 and 11 deal              
 with counts for the current year and the sections would allow a               
 district to submit written request to the Commissioner to use a               
 different count date for the current year for determining revenue.            
 The department's interpretation has been that everyone uses the               
 same count date within the district.  Mr. Guiley suggested that if            
 the count date posed a problem, then an amendment or a regulatory             
 interpretation could address the problem.  DOE has offered to allow           
 entire districts to change their count period.                                
 SENATOR SALO asked if the department had explored other models of             
 school planning which would make the disparity issue more solvable            
 in the future.  JERRY GUILEY stated that DOE has been looking at              
 various scenarios, but nothing to present at the current time.                
 Number 359                                                                    
 SENATOR SALO mentioned New Mexico's equalization formula, and                 
 commented that their formula seemed simpler than Alaska's formula.            
 JERRY GUILEY pointed out that New Mexico wants to employ Alaska's             
 CHAIRMAN GREEN called a brief at ease and then inquired as to the             
 will of the committee regarding SB 70.                                        
 SENATOR LEMAN felt that SB 70 could be moved from committee and the           
 Finance Committee could address the concerns regarding                        
 incorporating incentives to keep salaries down.  SENATOR SALO                 
 disagreed with Senator Leman; she expressed the need to work on               
 SB 70 in HESS due to the bill's policy issues as well as financial            
 ramifications.  She hoped the bill would be held.                             
 Number 398                                                                    
 SENATOR LEMAN made a motion to discharge SB 70 from the Senate                
 Health, Education & Social Services Committee with individual                 
 recommendations.  SENATOR SALO objected to the motion.                        
 A roll-call vote was taken which resulted in Senators Green, Leman,           
 and Miller voting "Yea" and Senator Salo voting "Nay."  Senator               
 Ellis was not present.  The motion passed, therefore SB 70 was                
 moved out of the HESS committee and forwarded to the next committee           
 of referral.                                                                  
 SHES - 2/20/95                                                                
        SB  83 COMMR OF ED TO SERVE AT GOV'S PLEASURE                        
 CHAIRMAN GREEN introduced  SB 83  as the next order of business               
 before the committee and called the first witness.                            
 Number 412                                                                    
 JAN LEVY, Assistant Attorney General in the Department of Law,                
 stated she was present to answer legal questions regarding SB 83.             
 SENATOR MILLER asked if there is anyone from the administration               
 present to defend SB 83.  Upon realizing that no one was present              
 from the administration, Senator Miller suggested allowing the                
 Board of Education to give a one year contract, rather than a five            
 year contract.  One year contracts would be preferable rather than            
 the provision in SB 83.                                                       
 SENATOR SALO agreed with Senator Miller that the major issue behind           
 SB 83 was the contract issue.  She expressed her belief that the              
 selection process for the Commissioner of DOE has not been a mere             
 political appointee in the past.  She asked Ms. Levy if SB 83 would           
 change the procedure used to select the commissioner.  JAN LEVY               
 stated that SB 83 would not make any changes to the selection                 
 process for the Commissioner's for DOE.                                       
 SENATOR SALO asserted the importance of the commissioner of DOE to            
 be more than a mere political appointee.  She expressed the need to           
 eliminate the possibility of having to pay off a contract.  This              
 change seems to address these concerns.                                       
 Number 451                                                                    
 SENATOR MILLER thought that the language "at the pleasure of the              
 Governor" would make the commissioner a political appointee.                  
 CHAIRMAN GREEN stated that SB 83 would appear to solve a current              
 problem, however, it brings other questions to her mind.  She asked           
 who was the head of DOE.                                                      
 JAN LEVY clarified that the head of DOE is the Board of Education             
 which is determined by the legislature.  The constitution allows              
 the legislature to create a board as the head of a principal                  
 department, and that is what it has done in this case.  The                   
 constitution also provides that the legislature may, by law, permit           
 a board that is at the head of a department to appoint a principal            
 executive officer.  She noted the one caveat; the person appointed            
 as principal executive officer of the department would be subject             
 to the approval of the governor.                                              
 CHAIRMAN GREEN asked if the principal executive officer would be              
 the head of the department or the executive officer of the board.             
 JAN LEVY stated that the commissioner would be the principal                  
 executive officer of the department.  The governor appoints the               
 board of education.  So the board and the governor would most                 
 likely have a philosophically cohesive plan.  Although members to             
 the Board of Education are appointed for five-year terms, by                  
 statute members serve at the pleasure of the governor.                        
 CHAIRMAN GREEN stated that currently, the commissioner is subject             
 to the instruction of the board.  JAN LEVY believed the board could           
 ask the commissioner to resign, but currently the board can only              
 ask the commissioner to resign with cause.  SB 83 would give the              
 board more leeway in asking a commissioner to resign.                         
 Number 499                                                                    
 SENATOR MILLER thought SB 83 would cause the commissioner of DOE to           
 have two bosses: the Board of Education and the governor.  He felt            
 SB 83 would make the commissioner more of a political appointee               
 than the current method.                                                      
 SENATOR SALO thought the intent of SB 83 was to ensure that the               
 commissioner of DOE would not be in an ultra-protected category.              
 Perhaps, one solution would be to specify that the board shall not            
 offer a contract for a term exceeding the term of the sitting                 
 governor.  She recommended holding the bill to explore that option.           
 CHAIRMAN GREEN  agreed and expressed the need to have input from              
 the administration.                                                           
 SENATOR LEMAN concurred with Senator Salo's concern and proposed              
 solution.  He also expressed concern with determining at whose                
 pleasure the commissioner serves.  He suggested that the                      
 commissioner should serve at the pleasure of the board which would            
 leave the question:  Should removal of a commissioner be for cause            
 or at the pleasure of the board?  He was disappointed that there              
 was no one present representing the governor's office.                        
 Number 525                                                                    
 CHAIRMAN GREEN said that SB 83 seemed to require multiple changes             
 in statute.  She agreed that SB 83 should be held in committee.               
 She noted that the committee had requested representation from the            
 governor's office.  The committee would request input from the                
 governor's office again.  She noted the agenda of the next meeting.           
 There being no further business before the committee, the meeting             
 adjourned at 9:50 a.m.                                                        

Document Name Date/Time Subjects