Legislature(1997 - 1998)
03/14/1997 09:05 AM Senate HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION & SOCIAL SERVICES COMMITTEE March 14, 1997 9:05 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. COMMITTEE CALENDAR 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 SB 36 - See Senate Health, Education & Social Services Committee minutes dated 2/12/97. SB 85 - See Senate Health, Education & Social Services Committee minutes dated 2/19/97. WITNESS REGISTER Ben Nageak, Mayor North Slope Borough PO Box 69 Barrow, Alaska 99723 POSITION STATEMENT: Stated that proposals to cut or eliminate state school aid for the North Slope Borough School District are unacceptable. Marie Adams-Carroll, Chief Administrator North Slope Borough PO Box 69 Barrow, Alaska 99723 POSITION STATEMENT: Discussed the situation of the North Slope Borough. Rex Rock, Sr., President Timber Corporation Local School Advisory Council in Tikiqaq Point Hope, Alaska POSITION STATEMENT: Urged the committee not to do this. Marieh Sahageak, Junior Barrow High School Point Hope, Alaska POSITION STATEMENT: Urged the committee to maintain the current foundation formula. Rex Rock, Jr. Point Hope, Alaska POSITION STATEMENT: Urged the committee to maintain the current foundation formula. Rebecca Miller, Parent 4870 Southampton Drive Anchorage, Alaska POSITION STATEMENT: Expressed concerns with the program cuts facing Gifted & Talented. Richard Hebhardt, Superintendent City of Skagway School District PO Box 497 Skagway, Alaska POSITION STATEMENT: Discussed the situation in Skagway. Greg Middag, Teacher Ketchikan Gateway Borough School District 643 Sunset Drive Ketchikan, Alaska POSITION STATEMENT: Urged the committee to review the consequences to education and the children. Dennis McCarty Ketchikan Gateway Borough School District 670 Dock Street Ketchikan, Alaska 99901 POSITION STATEMENT: Urged the committee to review the area cost differential and the hold harmless for Ketchikan. Ron Drathman, Member Kenai Peninsula Borough Assembly PO Box 12 Homer, Alaska 99603 POSITION STATEMENT: Discussed how Kenai has fallen through the gap under the current formula. Gordon Castanza, Superintendent Chatham School District PO Box 109 Angoon, Alaska POSITION STATEMENT: Discussed the need to address the area cost differential, impact aid, and the REAA tax. Bob Doyle 1900 Porcupine Trail Wasilla, Alaska 99654 POSITION STATEMENT: Discussed the needs of the Mat-Su School District. Marysia Ochej, Business Manager Southeast Island School District PO Box 8340 Ketchikan, Alaska 99901 POSITION STATEMENT: Discussed the disparity in rural districts. ACTION NARRATIVE TAPE 97-24, SIDE A SB 36 PUBLIC SCHOOL FUNDING SB 85 PUBLIC SCHOOL FUNDING/CHILD CARE GRANTS Number 001 CHAIRMAN WILKEN called the Senate Health, Education & Social Services Committee (HES) to order at 9:05 a.m. and informed the committee that the purpose of the meeting was to discuss the foundation plan proposed last Monday in the subcommittee. Chairman Wilken said that he would entertain a motion to place the CS before the committee. SENATOR LEMAN moved to adopt CSSB 36(HES) for discussion purposes. Without objection, it was adopted. CHAIRMAN WILKEN stated that he has a plan that can be held up to the light for as long as people want to review the plan in order to progress towards a better plan. Chairman Wilken welcomed the teleconference sites. Chairman Wilken then began a sectional analysis. He noted that on page 14, line 8 after "$4,165" the language "for fiscal year beginning 2001" should be added. Chairman Wilken said that a written sectional analysis would be provided before the end of the meeting. Chairman Wilken began to take testimony from those present only for the day. Number 195 BEN NAGEAK , Mayor of the North Slope Borough, informed the committee that he was also a parent of three of which his youngest, 10 years old, wanted to come testify before the committee. That shows the interest in this issue. He noted that Marie Adams- Carroll, the Borough's Chief Administrative Officer, was present as well. The people of the North Slope have lived with the impacts of oil development which have been offset by the mutual benefits to the State of Alaska, the oil industry, and the people living on the North Slope. Mayor Nageak discussed the history of ANCSA and the establishment of the North Slope Borough which he believed recognized that the Inupiat Eskimo people and other North Slope residents deserved to derive some benefit from oil development. That benefit has been through jobs, contracts for oil field services and access to a tax base. Mayor Nageak emphasized that the North Slope oil projects generate the royalty and tax revenue to fund needed state programs which benefit all Alaskans. Mayor Nageak stated that prior to Prudhoe Bay, North Slope residents lived in very primitive conditions. Over the past 25 years, many improvements have been made and education is one of the most important improvements. The residents of the North Slope are committed to quality schools and quality education. Mayor Nageak stressed that "The proposals before the Legislature and this committee to cut, eliminate and zero out any state school aid for the North Slope Borough School District are unacceptable." The Governor and the Legislature should be working towards the common good for all Alaskans. Alaska has the resources to treat all regions fairly and equitably. Number 291 The residents of the North Slope feel that they are under attack on many fronts, one of which is the change to the foundation formula that would take away state education aid for the North Slope. The proposals before the committee threaten the relationship between the North Slope Borough, the state government and oil development. Mayor Nageak believed that Alaska's best economic interests should be reviewed. Alaska's long-term economic interests would not be served if the North Slope School District is denied a fair share of the state education benefits. In conclusion, Mayor Nageak stated that the North Slope Borough and School District wanted to provide quality public services and education not conflict or litigation. Mayor Nageak noted that he would submit additional information to the committee next week. Mayor Nageak then introduced those present at the meeting from the North Slope. SENATOR LEMAN appreciated Mayor Nageak's statements and agreed with much of his testimony. With regard to Mayor Nageak's statement that Alaska has the resources to treat all regions equitably and fairly, Senator Leman believed that the definition of equitable seems to be in the eye of the beholder. Senator Leman said that the committee is trying to determine what is equitable and how to accomplish that equity. One of the underlying themes of this is the need for every region to participate in the cost of education. Senator Leman acknowledged that the North Slope Borough has participated in the cost of education. Senator Leman offered to work with the North Slope Borough on this issue. Number 378 MAYOR NAGEAK said that he was present in order to work on this issue. He noted that cuts have been made over the past years. Mayor Nageak stressed that the North Slope should not be penalized for having the resources to provide for its people. SENATOR WARD referred to the guarantee of equal education, when recognizing a problem would exist if a region was zeroed out of the formula without a fair mechanism. This bill says that it is fair for the North Slope to pay additional money due to certain circumstances. Senator Ward said that he wanted everyone to receive an equal education whether funded by the state or local coffers. MAYOR NAGEAK reiterated that the borough is trying to do the best for its people. Mayor Nageak believed Oliver Leavitt or Marie Adams-Carroll could provide a better response. MARIE ADAMS-CARROLL , Chief Administrative Officer of the North Slope Borough, stated that the students say that any further cuts will severely jeopardize preparation for higher education or vocational training. Not enough of the residents in the North Slope are trained to work in jobs requiring technical training or certification such as teaching. Ms. Adams-Carroll stressed that the schools are the centers of the communities in the North Slope and provide more than just education. The entire family will be impacted by this. Ms. Adams-Carroll informed the committee that the North Slope Borough provides $3 for every $1 provided by the state. The North Slope Borough is contributing to education. MAYOR NAGEAK interjected that the cost of living in the North Slope Borough is high. For example, a $100,000 house in Anchorage would be twice that in the North Slope. Such differences need to be considered. Number 445 CHAIRMAN WILKEN noted that in May of 1996, Fairbanks was faced with the third attempt at a school bond issue for $64 million to build schools. Those who objected to the bond issue pointed out the inequity that exists; the North Slope Borough's assessed value is worth $14 billion with 2,000 students versus Anchorage with an assessed value of $14 billion with 46,000 students or Fairbanks assessed at $3 billion with 16,000 students. Chairman Wilken asked how he could respond to the question that the North Slope Borough does not pay as much as Fairbanks for education. MAYOR NAGEAK said that the North Slope Borough does pay a lot. Everything in the North Slope is expensive and most items that are needed are available in Fairbanks and Anchorage which also require shipping costs. The money spent in the North Slope Borough on education provides a basic education. MARIE ADAMS-CARROLL informed the committee that when the borough was established a cap on the assessed value of the property on the North Slope was also established. Furthermore, there is a cap on the amount that can be used of that property tax for operating costs. CHAIRMAN WILKEN said that he did not want to face the same argument when another bond issue for schools comes before Fairbanks. Chairman Wilken expressed the need to dismiss the question of equity during future bond issues for schools. Number 491 REX ROCK, SR. informed the committee that he was the President of the Timber Corporation, President of the Local School Advisory Council in Tikiqaq, high school basketball coach and parent of four. Mr. Rock, Sr. has been with the Local School Advisory Council for 10 years and this organization provides the most satisfaction for him. Mr. Rock, Sr. stated that the North Slope Borough does not misspend its money and programs have been cut due to declining revenues. Despite the increase in students, the budget has been decreased. Athletics in the villages are not feasible due to the cost of air fare. The bill before the committee will be devastating to the community. Mr. Rock, Sr. pointed out that 40 percent of the revenues generated from the school district employees go to the local village store which is owned by the corporation. This bill will force the district to cut almost all of the classified positions. In a community of 1,000 with high utility costs, Mr. Rock, Sr. foresaw many becoming dependent upon the government for support. Mr. Rock, Sr. believed this bill to be a quick fix for the urban areas and he urged the committee not to do this. MARIEH SAHAGEAK , a Junior at Barrow High School, said that any of the proposed bills will have a devastating effect on the North Slope Borough School District and the quality of education for the students. There will be impacts on community gatherings because the schools are open to the villages. Ms. Sahageak noted that budget reductions cut programs that would make students a better candidate for a college education. There are already difficulties in the North Slope Borough due to travel and medical expenses. Ms. Sahageak urged the committee to support her education and maintain the existing foundation formula funding. Number 546 SENATOR LEMAN commented that most people recognize that the existing formula is not equitable, the disagreement is regarding where to fix the formula. How equity is defined poses a problem. Senator Leman said that his objective was not to devastate the North Slope Borough schools. REX ROCK, JR . , student from Tikiqaq High School, explained that he and Ms. Sahageak were chosen to represent students in the North Slope on this potentially devastating issue. Mr. Rock, Jr. assured the committee that the North Slope Borough does not misspend money; simple things that urban students do on a regular basis cost a lot in the North Slope. For example, a basketball game would require flying several hundred miles. Extra-curricular activities are so costly, that such events are limited. Mr. Rock, Jr. reiterated the high cost of food on the North Slope, sometimes 100-300 percent higher than in urban areas. He also noted that a student's social life is entirely dependent on the school. Mr. Rock, Jr. pointed out that school supplies must be flown into the North Slope and often the transportation costs exceed the cost of the item. The utility costs for some schools exceed the amount of state dollars that would be sent to those schools under the proposals. Further, water costs are high and most students shower at the school. Most villages do not have public water and sewage systems. He asked if the committee would feel any responsibility for forcing the North Slope Borough to cut programs. TAPE 97-24, SIDE B Research clearly shows that it is cheaper to educate an individual rather than to incarcerate the individual. Mr. Rock, Jr. believed that any legislation that reduced the North Slope Borough School District funding by large amounts would not allow those students the opportunity to obtain an education providing for the ability to make a decent living. Those students would then look to the government for support. Mr. Rock, Jr. said that he had high aspirations for himself and his fellow students, whom he believed could have a positive impact on the world if afforded the opportunity to obtain a quality education in the North Slope. Mr. Rock, Jr. echoed Ms. Sahageak's comments regarding maintaining the current school foundation funding formula which has stood the test of time. If the urban schools need more money, Mr. Rock, Jr. urged the committee to provide additional money; do not attempt to fund the success of some students by destroying the futures of others. Number 567 SENATOR LEMAN noted that of the eight communities in the North Slope Borough, all have some measure of a public water supply system. Perhaps, Mr. Rock, Jr. was referring to a fully pipe water system. Senator Leman also noted that there is a substantial improvement project underway currently. MARIE ADAMS-CARROLL clarified that the North Slope Borough does not have piped water systems, except in the community of Barrow. She noted the environmental difficulties for the development of piped water systems. Currently, the villages have water treatment facilities and the water is trucked to homes. Outside of Barrow, the honey buckets are still in use. MAYOR NAGEAK reiterated that in many villages, students clean themselves at the school because that is the only place with available water. REX ROCK, SR. explained that the water sewer project utilized a vacuum system that probably saved the North Slope Borough $30 million. Mr. Rock, Sr. hoped the same time would be taken on this issue rather than shoving it down the borough's throat. CHAIRMAN WILKEN hoped that Mr. Rock, Sr. would not leave Juneau feeling as if anything was being shoved down anyone's throat, that is not the purpose. SENATOR GREEN acknowledged the North Slope Borough's fear of losing programs and services. Senator Green emphasized that those losses have already happened in other districts; personnel, classified employees, programs, and classrooms have already been lost. This is everyone's problem, not just the North Slope Borough. The key is to move towards a solution, using the legislation as a vehicle to assure that education provides an equal opportunity for everyone. REX ROCK, SR. pointed out that the school in his community was built in 1979 and now discussions are being held about cutting opportunities to children in the North Slope, whereas those opportunities have been had in the urban areas for years. SENATOR GREEN assured Mr. Rock, Sr. that this is still a discussion and problem solving should begin rather than rejection. CHAIRMAN WILKEN emphasized that this is not an attempt to diminish Mr. Rock, Jr. nor Ms. Sahageak's educational opportunities, experience, or results of their education. There is a problem that needs resolution. Chairman Wilken thanked the students for being present and involved. Number 498 REBECCA MILLER , parent, appreciated the complexity of the problem before the committee. Ms. Miller expressed concern with the possibility that Gifted & Talented programs may be cut under this legislation. These programs are very beneficial to the students, Ms. Miller's daughter in particular. These students are the future leaders. Ms. Miller suggested that if these programs must be cut, the language could be specific so as to follow the students through their education. Ms. Miller was concerned that these programs would become so narrow that only a few children could take advantage of them. Ms. Miller stressed that if the funding is not present from the Legislature, then the programs will not exist. In response to Senator Ward, Ms. Miller informed the committee that she was from Anchorage and discussed the programs with which her daughter was involved. If the teachers are not present, all the children suffer and furthermore, without the programs for the children to reach towards a mediocre education system will result. RICHARD HEBHARDT , Superintendent of the City of Skagway School District, informed the committee that he would be representing the district as well as the municipality. The Legislature's drive to close the fiscal gap is commendable. He applauded the committee's efforts to create a funding system that treats all school districts equitably, but the quality of education should not be sacrificed in an attempt to balance the budget. The debate should turn towards the remedy for the funding inadequacies and inequities that exist. Mr. Hebhardt recommended that any formula should account for the erosive effects of inflation. The operational costs of Alaskan school districts have increased nearly 30 percent since 1988, while state support has been less than two percent. Any formula should recognize that several municipalities already make a significant local contribution to public education, Skagway included. Mr. Hebhardt posed the question, how much is enough - how much more can be given without diluting other necessary community services? The City of Skagway currently contributes about 39 percent to the school's operating budget. Under the current foundation formula plan, next year the City of Skagway would contribute 52 percent to the school's operating budget. Mr. Hebhardt believed that a more fair and equitable state funding strategy be developed which fully acknowledges local effort and capacity while enabling the provision of basic and fundamental education for all. If this is not achieved, the City of Skagway will continue to be adversely effected and the installation of the much needed vocational education program will face further postponement. Mr. Hebhardt said that this proposal would only exacerbate the financial distress currently experienced by the Skagway School District. As this proposal or others for funding education are discussed, Mr. Hebhardt indicated the need for sensitivity to those communities like Skagway who are already doing more than its fair share. The establishment of an educational endowment is meritorious due to its potential to fully fund education in a reasonable time. Mr. Hebhardt stated support for the establishment of an education facilities fund and an increase in the tobacco tax. In conclusion, Mr. Hebhardt stressed the need to work together on this issue. SENATOR LEMAN understood that due to the transitional funding in CSSB 36(HES) there would not be a change in local contributions for two years. RICHARD HEBHARDT reiterated that using the current foundation formula, the city would contribute a total of 52 percent to the school's operating budget if the city continues to contribute to the 23 percent supplemental allowed. Mr. Hebhardt said that simply illustrates that the City of Skagway is doing its fair share. The community needs some relief, state support. SENATOR LEMAN noted that other communities were in the same situation as Skagway. He requested the calculations. RICHARD HEBHARDT said that he could provide those for the committee. Number 373 GREG MIDDAG , resident and teacher in Ketchikan, informed the committee that he came to Juneau with a group of parents, teachers and school board members to lobby with the Ketchikan Liaison Group. Mr. Middag said that the Ketchikan Gateway School District stresses that in addressing school funding the Legislature must revise the area cost differential to bring it in line with the changes in the cost of living in various communities throughout the state. The current area cost of living differentials are based on a 1985 study. A 1996 economic trends publication issued by the Department of Labor illustrates how significantly those area cost differentials have changed. For example, a June 1996 Department of Labor report said that the cost living in Ketchikan is approximately the same as that in St. Mary's or Bethel while exceeding the cost of living in Dillingham, Nome and Kodiak. However, the area cost differential for Ketchikan is one while the area cost differentials for Bethel, Dillingham, and others is significantly and substantially higher. Mr. Middag gave the committee a packet of materials with all this information. From 1986 through the present the total revenue per pupil before adjusting for inflation, a combined level of resources from the Ketchikan Borough and the state, has increased by $161 per student or about 2.8 percent. When adjusted for inflation during the 11 year period that this formula has been in place, the total per pupil funding has decreased by $1,693 or 30 percent to $4,010 since 1986. The situation becomes even more dire when realizing that the amount of state aid for a student before adjusting for inflation since 1986 has decreased by 13.2 percent from 39, $159 in 1986 to $3,433 in 1997. When adjusted for inflation, per pupil state aid has decreased by $1,612; a loss of 40.7 percent in the amount of money that can realistically be put towards children's educations. Mr. Middag said that the Ketchikan and North Slope districts are very nearly the same on a lot of issues. Ketchikan has lost 53 positions over the past seven years and expects to lose somewhere between 5 and 30 teachers next year. Ketchikan cannot provide an appropriate level of educational experience. After contacting many legislators, Mr. Middag believed that there is a majority agenda to deal with the state's fiscal gap and certainly the state needs to be able to spend its money carefully and wisely. The permanent fund has been inflation proofed and the per diem of legislators has increased over 60 percent, a needed increase, but the children of the State of Alaska have been lost in the equation. No matter what is done with this funding formula, the portion is too small. The children of Alaska and Ketchikan and Nome and Skagway are falling further behind. Mr. Middag agreed with an increase in standards and testing for teachers and students and a curriculum based on high expectations, but the future of our state with continued irresponsible cuts in education should be reviewed. Alaska probably has more money than most countries in the world, as a surplus. Mr. Middag urged the committee to review what is being done to education and the children. Number 299 SENATOR LEMAN said that he rather classify what Mr. Middag referred to as an agenda as a plan, a long-range plan which he believed to be good for Alaska. GREG MIDDAG informed the committee that a Representative explained that the majority plan over the course of the next five years will not increase the basic foundation formula dollars to the children of Alaska. Such action would result in 16 years with an increase of $161 in Ketchikan. At the end of that five years instead of being $1,700 short per student over time, in terms of actual buying power that the district can put towards education, the district will be significantly further behind. Frankly, the needs of the children in Alaska cannot be met without significant help which was needed yesterday. CHAIRMAN WILKEN hoped that this was the start to the correction of the problem. DENNIS MCCARTY , testifying from Ketchikan, emphasized that Ketchikan needs a bill this year that addresses the area cost differential and the hold harmless. Ketchikan is almost at a five percent student loss which will reach 10 percent or greater by next Fall. Ketchikan fully funds the local contribution at 40 percent of the budget which is one of the highest in the state. Ketchikan is the next to the lowest in per capita contributions from the state. Ketchikan is doing more than its fair share. Mr. McCarty pointed out that the Department of Labor statistics report that Ketchikan has a 19 percent higher cost of living than Anchorage, while Ketchikan is funded at the same level. Mr. McCarty emphasized that Ketchikan has nothing left to cut, except teaching positions and privatization of the custodial staff. Mr. McCarty informed the committee that Ketchikan faces cutting 30 teachers with the 10 percent loss in students due to the closure of the mill. Ketchikan cannot handle a delayed or partial implementation of funding reform; a solution is needed this Spring. Mr. McCarty noted that the state helped Sitka with the hold harmless when it experienced drastic changes in its population. Mr. McCarty hoped the Legislature would review the hold harmless for Ketchikan. Number 198 RON DRATHMAN , Kenai Peninsula Borough Assembly member and parent, emphasized that this legislation is important for Kenai and Mat-Su Boroughs who traditionally fall through the gap. Under the current foundation formula, the Kenai Peninsula Borough is taxing at the maximum level permitted. Still, teachers and programs are being lost. Mr. Drathman informed the committee that he also chaired the Alaska Municipal League Legislative Subcommittee on Education & Local Power which has placed this issue number one. The legislative committees are meeting in Juneau April 1-3. Mr. Drathman invited the committee to participate in the meeting on April 2 when this issue will be discussed. Mr. Drathman requested that a spreadsheet for the next five years under this proposal be provided. GORDON CASTANZA , Superintendent of Chatham School District, said that he would like the committee to appoint a task force to work on drafting new area cost differentials soon. The longer it takes the more adversely impacted the Chatham School District will be. Mr. Castanza encouraged the committee to increase the area cost differential by at least 30 percent which is what has been lost since 1985. With regard to REAA participation and the school tax, how will the constitutional obstacle of a dedicated tax be overcome? For the REAAs, this tax would be regressive in particular in Chatham School District which does not have resources for extraction. The funding equity issue and the ability of the REAAs to raise revenues and taxation would create the need to revisit California's landmark case. If the school tax raised $5 million that would be divided among the 21 REAAs at $238,000 per REAA which would probably be fractionalized according to the size of the REAA. Number 090 With regard to the federal impact aid, Mr. Castanza stressed to the committee that the amount of federal impact aid continues to dwindle. For example, in the past the Chatham District received over $1 million in federal impact aid while the current amount is $400,000. He noted that President Clinton's budget includes $100 million less in federal impact aid with no distributions for Section 8,002 monies. Mr. Castanza pointed out that the Chatham School District is surrounded by federal lands. Even with diminishing federal impact aid, the district must provide first class service in order that the Glacier Bay National Park Superintendent can attract quality employees. The Glacier Bay National Park nor the National Parks Service are helping offset the impact of such demands. Mr. Castanza informed the committee that the Chatham School District has been assessed a $650,000 repayment to the federal impact aid office for overpayment given in FY94 and FY95. If there is a linking between the federal impact aid and the state basic need, where will the $650,000 come from to pay the government. In response to Chairman Wilken, Mr. Castanza said that the California case regarding a dedicated tax was Serrano v Priest. The $650,000 is not related to the Federal Forest Service Allocation. The $650,000 came about because all of the REAAs were required by the Federal Impact Aid Office a few years ago to recalculate and identify the land from which children of Native extraction were living. TAPE 97-25, SIDE A Number 003 BOB DOYLE , testifying from Mat-Su, ensured the committee that the Mat-Su district has done much to achieve local responsibility and accountability. Administrative overhead has been reduced in the Mat-Su district. There have been hard freezes in the salaries of the classified employees and the salary increases for teachers have been restricted. Further health insurance has been frozen and capped, new hires have been restricted, and the district has participated in the early retirement program. Mr. Doyle said that Mat-Su needs some help from the Legislature. Shifting money from one district to another could be a partial solution; however there should be an increase in money for enrollment increases, an adjustment for inflation, and a fair and equitable area cost differential. Mr. Doyle stated that he liked the simplification, the minimum school size, the change in the count date, and some form of supplemental equalization in the proposal before the committee. Mr. Doyle believed that there are areas in Alaska that have a more difficult time raising money through assessed valuation. In conclusion, Mr. Doyle informed the committee that when he graduated from East High in Anchorage there was a good school system with little oil revenue. Now there is a tremendous amount of oil revenue in Alaska, while school systems have needs that are not being met. Number 070 MARYSIA OCHEJ , Business Manager for Southeast Island School District and parent, informed the committee that she has worked in Southwest Alaska in rural schools for almost five years. She has worked for the Southeast Island School District for over six years. The disparity between the two areas was apparent when she moved to Southeast Alaska. Ms. Ochej said that the area cost differential was inadequate and the area cost differential in the proposal remains inadequate. In the Southeast Island School District some schools do not have access to roads, scheduled air service, or regular fuel delivery. Currently, there is difficulty in communicating with three of the schools in the district. Therefore, additional money is required to meet the basic need. Ms. Ochej discussed the obstacles faced by rural schools such as expensive in-service days and travel for centralized testing. Ms. Ochej stated that the Legislature is charged by the Constitution to provide an equitable education for all students in Alaska. The proposals before the committee appear to shift money from rural districts to urban districts. Is balancing the budget more important than providing a quality education to the children of Alaska? Ms. Ochej asked the committee if it was prepared to pay for the consequences - "Would you prefer to pay for jail in the future or education in the present?" Rural children have the same needs as those in urban areas. Ms. Ochej said that if the budget cannot be balanced, then education should be funded in order to provide a basic quality education for all Alaska's children. CHAIRMAN WILKEN apologized for not being able to get to those remaining on the teleconference list, but those people will be on the top of the list for Monday's meeting. Chairman Wilken informed the committee that the Department of Labor is developing the numbers to isolate those in REAAs outside of first class home rule cities. There being no further business before the committee, the meeting was adjourned at 10:55 a.m.