Legislature(1995 - 1996)
02/20/1995 09:05 AM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE 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 2/18/95. 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 format. 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 down. 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 formula. 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.