Legislature(1997 - 1998)
11/24/1997 01:30 PM Senate HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
TOWN MEETING ON SCHOOL FUNDING REFORM SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE SENATE FINANCE COMMITTEE Bethel AK November 24, 1997 1:30 P.M. SENATE HESS MEMBERS PRESENT Senator Gary Wilken, Chairman Senator Loren Leman, Vice-Chairman Senator Jerry Ward SENATE HESS MEMBERS ABSENT Senator Lyda Green Senator Johnny Ellis SENATE FINANCE MEMBERS PRESENT Senator John Torgerson Senator Al Adams SENATE FINANCE MEMBERS ABSENT Senator Drue Pearce, Co-Chairman Senator Bert Sharp, Co-Chairman Senator Dave Donley Senator Sean Parnell Senator Randy Phillips ALSO IN ATTENDANCE Senator Lyman Hoffman COMMITTEE CALENDAR TOWN MEETING ON PUBLIC SCHOOL FUNDING OTHER TOWN MEETINGS ON PUBLIC SCHOOL FUNDING Ketchikan - 11/12/97 Anchorage - 11/13/97 Wasilla - 11/18/97 Soldotna - 11/19/97 Fairbanks - 12/2/97 WITNESS REGISTER THE FOLLOWING PEOPLE TESTIFIED: Mr. Willie Kasayulie, President Yupiit School District P.O. Box 51100 Akiachak AK 99551-0100 Mr. Bob Herron, Chairman Lower Kuskokwim School District P.O. Box 602 Bethel AK 99559 Ms. Kathy Sampson-Kruse P.O. Box 287, #3042 Bethel AK 99559 Mr. Mike Williams P.O. Box 27 Akiak AK 99552 Mr. Dario Notti P.O. Box 2175 Bethel AK 99559 Mr. Ed Gilley, School Superintendent 985 KSD Way Chevak AK 99563 Mr. Elia Sallaffie P.O. Box 324 Bethel AK 99559 Mr. Jaque Longpre', ASB Representative Bethel Regional High School Bethel AK 99559 Ms. Lucy Sparck P.O. Box 267 Bethel AK 99559 Mr. Pete Schaefer Kotzebue AK Ms. Marie Carroll, Chief Administrative Officer North Slope Borough Mr. Leland Dishman North Slope Borough School District P.O. Box 169 Barrow AK 99723 Ms. Becky Gay 3000 C Street, #200 Anchorage AK 99503 Mr. John Weise, Superintendent Yupiit School District Ms. Agnes Phillips, Mayor P.O. Box 2111 Bethel AK 99559 Mr. Bob Medinger P.O. Box 305 Bethel AK 99559 Mr. Will Updegrove P.O. Box 2073 Bethel AK 99559 Ms. Joan Hamilton P.O. Box 1275 Bethel AK 99559 Mr. Richard Kern P.O. Box 6071 Napaskiak Mr. Chris Fuedell P.O. Box 788 Bethel AK 99559 Mr. Julius Pleasant P.O. Box 989 Bethel AK 99559 Mr. Paul Sugar Bethel AK 99559 ACTION NARRATIVE TAPE 97-56, SIDE A CHAIRMAN WILKEN called the Joint Senate Health, Education and Social Services and Finance Committee meeting to order at 1:30 p.m. and announced they would discuss education funding. SENATOR HOFFMAN welcomed everyone to Bethel. SENATOR LEMAN said he hoped people would be thinking during this discussion about equity and what is fair across Alaska. He also wanted them to consider that parents pay and participate in the cost of education because he believes that when parents are actively involved in education, their children do better, SENATOR ADAMS said he appreciated the senators from urban areas coming to Bethel although he disagrees with the way the legislation was put together. He said the high enrollment problem is not just in urban areas; it's in rural areas also and this is a problem that they need to solve. He hoped that they had solutions to offer along with their testimony. TAPE 97-56, SIDE B SENATOR ADAMS offered capping the Permanent Fund dividend and using the excess for education or using some of the tobacco tax as alternatives to be discussed. He said we need to stop pitting Alaskans against Alaskans which is what he thought this legislation did. SENATOR WARD said he wanted to talk about funding education in an equitable and fair manner. SENATOR TORGERSON said the area/cost differential study is the their way of recognizing higher cost of living throughout the State. Last year the legislature awarded $275,000 to the McDowell Group to study the area/cost differential. They also did the last area/cost differential he informed them. The study is due February 1 and will be one of the main components to any foundation formula rewrite. SB 30 Mandatory Incorporation of Certain BoroughsSB 36 Public School Funding SB 142 Regional Educational Attendance Areas SB 146 Public School Funding/Child Care Grants SB 193 Administrative Spending Limit For Schools SENATOR TORGERSON said they would be discussing SB 36, SB 146, SB 193, SB 142, and SB 30. His attempt with SB 30 was to make the rest of the State form up into boroughs as they did in 1963 under the first original mandatory borough bill which created the boroughs we have today. Eight of them were created in the first legislation and since then eight more have been generated on their own. They were formed for basically two purposes - taxation and education. If they would have divided the rest of the State into boroughs, it would be a lot easier today to go forward with the equity issue. SB 30 is an attempt to adopt the model borough boundary report that the Hickel administration did dividing the State into boroughs that was completed in 1991. The model borough boundaries set a time line for districts to have a vote on whether or not to form a borough. If the districts choose not to have a borough, the State would assess an education tax, a mill rate of 4.5 mills. So everyone would be paying for education. It wasn't forcing government onto the borough areas. SB 30 got stopped in the House and he has reintroduced SB 142 which basically takes the vote part out. It adopts the model borough boundary report and says a local effort for education of 4.5 mills must be paid no matter where you live in the State. It also calls for only one school district per model borough boundary to consolidate school districts. SB 142 is in the Finance Committee and is another approach for taxation in rural Alaska and would drop the number of school districts from 53 down to 34. He said he hears from a lot of people that there is no taxation in rural Alaska. However, there is wealth out there, although it isn't necessarily in all villages, but collectively it's worth about $3.2 billion. A good portion of that is the pipeline. There is a substantial amount of employment that generates around a half a billion dollars in payrolls. Some people are concerned about eliminating school districts (SB 193) because local effort means local control. He agrees with this to some degree and therefore SB 193 says you can have as many school districts as you want, but he is going to tell them how much they can spend on administrative costs. He reported that their administrative costs for both districts and schools combined run from a low of $695 to a high of $6,501 per student. Their districts run in size from a 31 student school district (Pelican) to 50,000 which is Anchorage. SB 193 is an attempt to equalize that without getting into a debate about how many school districts we have. This takes one simple philosophy: if you can take the unit value and times it by the area/cost differential (ACD) and that's o.k. for our kids, you should be able to take the same fixed number for administration and take the same area/cost differential for administration. This would save $21 million across the State. CHAIRMAN WILKEN referring to his slide handout said SB 146 breaks down the education funding into four components: State support - $638 million (foundation funding), required local contribution which has to be done in order to get the foundation funding, optional local contributions, and assessment normalization (mill levying) for those areas that won't ever be able to fund their education and need help from some of the wealthier districts. The State support speaks to the issue of simplicity and the required local contribution speaks to the issue of fairness with everyone paying their fair share. SENATOR WILKEN said they aim to put a bill on the Governor's desk that he will be able to sign. He said this is top priority for them and there really is something happening. He said one of the big issues is that some people say they can drive to a school district from Fairbanks which doesn't pay anything for their education. He said it's time to build more schools in Fairbanks and that's his motivation. When he first looked at the foundation formula he thought it might need just a little tweaking, but when he got into it, he found that it had to be thrown out and started all over again. He asked that they agree on three things before they begin: that they can trust the simple things and distrust the complicated things, that everyone can pay their fair share, and that education is one of the top priorities of the government. The first priority is the health and safety of the citizens and the second is education. SB 146 is not an urban/rural issue, he said. He explained figures on some of the charts in his handout. This is not an attempt to take away from the rural communities and give to the urban. CHAIRMAN WILKEN said he has heard that the foundation formula has been inflation proofed and how it has shrunk by 30% over the last 10 years. He suggested this is not the case. In the last 10 years the money put by the State general fund towards education has increased 51%; the number of students they have been asked to educate has increased by 26%. So the rate of funding has doubled. The question is where did the money go and he answered that it went to a formula that was broken. He said the other seven states that use instructional units have found it doesn't work either. So he wants to work toward the per student dollar and spread the money fairly and equally. SB 146 makes this a per student allocation adjusted for size, cite, and special needs, plus developmentally disabled dollars which are fixed, minus the local contribution equaling $628 million. Forty-three other states think the per student dollar is better than the instructional unit. He thought this was because the voter who is in favor of education understood the student dollar concept better than the instructional unit. He explained that in order to get State support there is a required local contribution. Organized areas have to give at least 4 mills of their assessed value or 35% of their prior need in order to qualify. The new formula suggests a 3 mill qualifier or a 100% prior need whichever is less. The people he represents in Fairbanks are paying 4 mills to qualify and they pay 8 mills in total toward education. This is a problem in the North Slope because they chose the 35% rather than the formula qualifier and pay about a half mill, about 1/16 of what the people he represents are paying. This is not fair. Another problem is in accepting federal money there is a limitation on the amount of money that can be put into education which four school districts have reached the cap on, Ketchikan, Kenai, Juneau, and Sitka. The problem is that Unalaska, Valdez, and North Slope aren't paying what the people he represents pay. So he has attempted to define fair share based on assessed value. It's a measure of wealth across the State. It is validated through a civil and a judicial process. If he doesn't like what his house is assessed at, he complains about it and when it's all over, they have agreed on what it's worth. It's information that is readily available and increases or decreases annually to reflect changes both up and down. CHAIRMAN WILKEN discussed a graph of the unorganized areas. He said some people are asking why we have 54 school districts in the State. One school district found that a 2% sales tax would fund their complete education requirement. This is just a suggestion that is well within their reach, he said. SB 146 takes $90 million and spreads it around from the more rich communities to the less rich. You put money into the pot based on your relative wealth and get money out based on your relative number of students. If your relative wealth is greater than your relative number of students to educate, you contribute something to the fund. If your number of students is more than your relative wealth, you take money out. CHAIRMAN WILKEN explained that we operate under the federal disparity law which affects 70% of our school districts, but we don't want a federal judge to dictate to us. We can define what is disparity in Alaska and this is the attempt to begin that process. SENATOR ADAMS noted that there is always another position to a presentation and the one they just heard was done by the majority. He represents people who are in the minority. He reminded the committee that they took an oath of office stating that every Alaskan should be provided with an education and he agreed with this. He didn't think they should consider taking somethings away from some school districts to give to others. He didn't think the payroll tax in the proposed legislation going to only people living in rural areas would be constitutional. Every Alaskan across the State should pay that. A sales tax is a local option and should be left to the local communities. He explained that the proposed legislation takes away the 1/2% that goes to the North Slope school district. However, the North Slope Borough pays the second highest mill rate next to Anchorage. He said the North Slope is second in ones paying their fair share in education. One of the problems they have is that they are right up to the cap. He did not think this legislation was a fair and equitable way to solve overcrowding and high enrollment. SENATOR TORGERSON responded that he didn't agree that a sales tax is a local option and that the payroll tax would be unconstitutional. There are four boroughs that have come up with an equivalency way to beat their local effort and this is up to the local people. [TAPE IS INDISCERNIBLE] He noted that it is not unconstitutional to have a payroll tax to pay the equivalent to match the rest of the State if the legislature wants to impose that type of tax. TAPE 97-57, SIDE A MR. WILLIE KASAYULIE, President, Yupiit School District, said many of the schools in the rural areas were built in the 1960s under the Bureau of Indian Affairs. He said they keep hearing that there isn't enough money to educate our children, our most valuable resource, and pointed out that the Permanent Fund is up to billions of dollars and continues to earn interest. We think we're poor, but we are rich. He supported an education endowment. He said it wasn't equal to have extra curricular activities in Anchorage and none in the bush communities. He said they want their children to be smart and to participate in those activities because that's an option they can take and make a career out of if they want to. He agreed that other sources of funding needed to be identified and it isn't necessary to take away from one district to give to another. He said we are talking about the future leaders of Alaska, both native and non-native. MR. BOB HERRON, Chairman, Lower Kuskokwim School District, said despite what the graph says, they are loosing dollars every year and if they want a good product, children growing up and leading this State, they have to spend more money. SENATOR LEMAN explained they are operating on a five-year financial plan for reducing our budget deficit. Some people say we don't have a deficit, but we do have one when you take recurring revenues and our annual expenses into account and set aside the earnings of the Permanent Fund and the pension funds as off limits. He said they have been following the reduction plan, but have not reduced the funding to education. They have increased it which indicates some level of what they are doing in terms of support. He said there isn't a correlation between improving education and just spending more money on it. He said they may have to increase funding for certain programs, but the first thing we should work on is how to improve what we have. CHAIRMAN WILKEN responded saying there was an Alaskan education survey done in 1995 by the Board of Education of 1,370 people, 30 out of every election district, and 47% had kids in school at the time of their interview. He thought it was a good snapshot and the Governor is probably looking at it when proposing his changes in education. One of the questions was if the money to education was increased significantly tomorrow, would it improve the quality of education. Two out of three people said no. That should concern us. SENATOR ADAMS asked if anyone in this room was surveyed. He said he can't find anyone who responded to this survey. He thinks someone made it up. MS. KATHY SAMPSON-KRUSE said she is the mother of eight children, seven have gone to school in Bethel. She does not support any of the proposals that are called "school reform." She thought that they, in fact, take from those who have the least and in her region the number of people who have the least is growing. She asked at what human cost did equity pay for itself. She noted that they are going to loose all the bi-lingual funding and all of their teacher aides adding that and their immersion program has been successful so far. They might also loose the services of their school social worker which are dire. She did not think they could speak about education without including a lot of elements in Alaska like tribal sovereignty. She asked the legislators to give the voters a right to say whether or not they want a constitutional right to vote on school funding and offer the solution of establishing a PFD earning account. She did not think they could cut the pieces of the pie any smaller. MR. MIKE WILLIAMS said he is here as a parent and he thought the presentation was very slick and misleading in terms of the money that is being generated from the REAAs. The villages in Lower Kuskokwim are not rich just by looking at the unemployment and the condition of the fishing of Akiak. That particular information is misleading. All the money that seems to come into their areas are going into Fairbanks and Anchorage. He invited them to go to his communities to see the conditions they have. We do not need to pit school districts against each other, he said. We need to be here for our children. As a State we have $23 billion and we can afford to increase school funding. He didn't think it was a true picture that there was more money going into our children. Their traditional society had a good system of education for their children and the transition from being hunter/gatherers has been going on in the last 30 - 40 years. SENATOR WARD said no one has any intention of taking any money away from anybody. The original formula was thought up in Juneau and can be changed, but they need to know exactly what needs to be changed. He explained that a lot of people have told him that they don't want to loose their permanent fund dividend to pay for an education system that they are not 100% sure of. SENATOR HOFFMAN said the Senate Democrats made a proposal for the endowment of education out of earnings from the Permanent Fund, but it was not to reduce the Permanent Fund Dividend principal. The dividends would not decrease; however, they might not increase as fast as they might otherwise. In the first three months of this year the Permanent Fund earned $1 billion, he emphasized. It's anticipated that this year it will earn $2.8 billion. They propose to let the voters decide whether they want to spend some of the $2.8 billion earnings to set up an endowment for our children. SENATOR HOFFMAN asked if he thought the voters should be allowed to vote on the endowment. MR. WILLIAMS replied that definitely they should vote on it. He would hate to see us in the same condition 10 years from now. CHAIRMAN WILKEN said he would like to hear from him what he considers would be a fair share from everyone around the State. MR. WILLIAMS added that they have worked hard on all the issues and strongly felt that any standards they set now should come with fiscal notes from now on. MR. DARIO NOTTI noted that it all depends on who pays for the survey as to what the outcome is going to be and who interprets them. The State Constitution is where we get the idea that the State owes all an education and he felt that maybe we should change that along with the part about subsistence and Indian country. He said in Bethel they figured a 2% sales tax would cover their contribution if they went to a first class city. With Senator Torgerson's bill they asked themselves why they should go through all the expense of coming up with an administration and then in a couple of years get dragged back into the borough school district. He asked if the 1% sales tax would go to the REAA school district or just Bethel. CHAIRMAN WILKEN answered just Bethel. MR. NOTTI questioned whether the proposed income tax would be on the people who earned their money in rural Alaska or on those who educate their children in rural Alaska. Many people educate their children in different districts than where they earn their living. He noted that the legislature waivers between community state-wide responsibility and local responsibility. Fairbanks would not be able to pay much more than 3%, but Senator Adams' kids would do real well with 100% funding. He likes the formula the way it is. MR. ED GILLEY, School Superintendent, Chevak, said their school project is a $26 million project. It has no football stadiums or baseball fields, and no ice hockey rinks. It's a basic school designed in the bush and that's what it costs to educate 270 children. Seventy percent of the funding for Fairbanks was paid by other folks. In the case of REAAs the federal lands they live on can't have taxes raised by law. Of the Title 8 monies that come to the State (about $69 million this year) 96% are captured by the Department of Education. They take those funds away from the rural areas and distribute it to school districts that do not have federal properties per se. He said they need to take some of the earnings from the Permanent Fund (not the principal) as Governor Cowper proposed, and let it grow for 10 years and just the interest on that would fund education. Take a small part of that and put it aside for school construction. He said in the last five years they have allocated funds for bonded indebtedness for $243 million. At the same time they have put $7 million into schools in rural Alaska. That is not fair and he asked why they hadn't funded more schools in rural Alaska. The Robinhood concept of taking from the rich and giving to the poor has never worked, he commented. In addition, when they talk about school improvement, the parents in the survey they quoted were asked what was the number one reason they would put more money into education, and they answered smaller class sizes. He urged them to look at Kentucky and Tennessee's better schools program where they teach basic skills first and computer skills next. He said the money Senator Wilken quoted as being appropriated just isn't there. Most of the money went into student growth. The level of actual dollars to spend on education and what they can buy with those dollars has actually decreased. Nobody wants to take from anybody else. They want to do what's right with the formula which was designed to be funded adequately to take care of inflation, but they haven't been funded by the legislature, except for once in 1991. He noted that Mississippi, the poorest state in the nation spends 51% of their money on education, and we spend 30% and we act like we're broke. He concluded saying don't cut funding. Look at the quality programs and put more money into education. Fix the things that are wrong with the formula and continue on. MR. MYRON NANENG, President, Village Council Presidents, said when the State took over education they did not make a big capital investment. They took over facilities that needed repair. Many of the people in the villages were promised many things by the State of Alaska and look at where they are at today. Urban centers feel that they contribute more to education, but they haven't. A majority of people who pay taxes in Anchorage do not necessarily work in Anchorage. TAPE 97-57, SIDE B [WAS NOT RECORDED] TAPE 97-58, SIDE A He said to look at how the State is taking money away from people in the villages and asked how much they are getting back for what they pay for. MR. ELIA SALLAFFIE, Bethel resident, invited the Committee members to go out to his schools and talk to the students, the ones who are inside and asked them about the quality of their educations and the conditions. He stated if they are really for education, there should be no political barriers; it should be one whole like the piece of pie they are using in the handout. SENATOR LEMAN said it was incorrect when he stated when the Republicans came into control the list for school construction pushed them down the list. He explained that list is controlled by the administration and Department of Education. MR. JAQUE LONGPRE', ASB representative from Bethel High School, said it seems to him that they support this bill because their areas benefit from it. However, for every gain there is in the world there is a loss. The need of money per student varies throughout the State. It costs more to fund 15 sites for 1,000 students than it does for one site for 1,000. So it makes sense that rural Alaska needs more money per student. It puzzles him why they fight to not give them the money while rural Alaska provides a majority of State revenue in oil and fisheries. He asked why did rural Alaska generate the majority of State revenue, but gets minority representation. He said he has walked the halls of Lathrop High School in Fairbanks and it is not suffering. Rural teachers are working as hard as they can with inadequate funding. They don't have choir, track, hockey, or football that the urban schools take for granted. MS. LUCY SPARCK said the traditional western education has not done well in the rural areas. The way education is delivered could be better. When their children leave the native communities to go to college and to urban areas it is hard for them to adjust to another environment. They are faced not only with a new school, but a new culture. In the end, she said, they cannot have less money to do a better job. They need to add more for the upcoming students in their villages. In the long run when looking at equity of economics the cost of development is very high in rural Alaska compared to urban areas. Urban areas are benefiting from rural Alaska economically, not just in education. MR. PETE SCHAEFER, Kotzebue, said he wanted to speak about equity and equality. He thought he thought everything was all tied together and separating education was really unfair when looking at all the associated costs coming with it like for fuel, transportation, construction, and heat. He said no real dollars had been available in bush Alaska for capital construction. It has been pointed out that the curriculum has also been unequal. This puts the sparse population of rural Alaska at a significant disadvantage. A rural tax for rural schools is not equal because of the population. MS. MARIE CARROLL, Chief Administrative Officer, North Slope Borough, asked for unanimous consent that the text of Mayor Benjamin Nayak's keynote speech of November 20 at the Rural Development Conference's meeting be made a part of the committee's hearing record. CHAIRMAN WILKEN noted they had a copy of that speech and it would be part of the hearing record. MS. CARROLL said this speech addressed two very important subjects: the fundamental importance of a properly funded system of public schools for all children who live in Alaska and on the North Slope; the second is that those who live in rural and urban areas of the State are in different ends of the same economic boat. This means that everything that damages one group also damages the other. They must, therefore, work to insure that both rural and urban Alaska continue to share in the benefits of our growing natural resources based economy. North Slope oil provides the revenue for more than 80% of the cost of State government and programs such as education. People living on the North Slope bear the burden of accommodating oil development on their lands and waters. North Slope must receive a fair shake of State aid for education and other essential public services. They strongly oppose legislation that would reduce or eliminate their right to receive State aid for their children and their 10 public schools. This unfair treatment is being proposed in legislation pending before this committee. They do accord a high priority to education. Their schools are new because in the past they didn't have any. They had to send their children away to high school. Rural residents should not be punished because they invest in education and accord their children's teacher the highest priority. The North Slope borough is the second largest local property tax rate in the State, 18.52 mills. When the property rate is applied against the very high cost of homes on the North Slope, the individual tax burden exceeds that of every other Alaska community. Their resident tax burden is more than one third higher than in Anchorage. It is more than twice as high as Juneau, Fairbanks, Ketchikan, and others. It is important to understand that the North Slope Borough pays 37% of the cost of meeting their basic education needs as opposed to only 23% in Anchorage and 21% in Fairbanks. They are doing all they can locally to support their children's education. They are not trying to buy them a superior education, but are trying to provide them with the same education urban children take for granted. It costs more money to do that in rural areas. With a fair share of education funds they can succeed. Rural and urban areas need to work together in educating our children, she concluded. MR. LELAND DISHMAN said he has talked long and hard with him about the inequities across the State, not necessarily just in school funding, but in facilities and opportunities for kids and the excessive cost of travel. The North Slope has produced tremendous wealth for the State over the years and we have all seemed to get along fairly well and benefited from that. It appears of late that a number of legislators feel it would be in their best interests to go ahead and "butcher the goose" and take all the eggs at one time and live happily for a few days without looking at the consequences. He said the bills before the committee are doing nothing but splitting the rural and urban folks. In talking about equal and unequal there is nothing as inherently unequal as trying to equalize unequalness. It cannot be done. Senator Phillips said in a conversation to him that they were just rearranging the furniture, so to speak, but MR. DISHMAN responded that it was rearranging deck chairs on the Titanic. It's a sinking ship and it's going to go down. We do not need to rearrange furniture, we need to buy more. We need to buy lifeboats and put money into the programs that will allow our schools to maintain buoyancy and not sink. He commented that the statistics saying there has been a 51% increase in the cost of education and a 26% growth in student population were questionable based on the fact that in 1988 the State of Alaska had flow through money to the school districts and asked them to pick up the cost of teacher retirement, about $25 million which came out of the legislature into the foundation program to the local districts. Mt. Edgcumbe, a wonderful school, was a legislative cost and was not charge against the foundation in the 80's and now it's charged against the foundation. Busing had some major changes and those costs came from the legislature through the foundation. So that additional 51% funding is a disguise for all the added charges that have been taken out of the foundation. MR. DISHMAN questioned why their graphs went back to 1986 and figured because that's when we had a major down-turn in the economy in this State and when it went down, the major urban areas had a down-turn in their tax base and their budgets were in bad shape. There wasn't enough tax money to continue operating schools. He thought that out of the generosity of their hearts the legislature stepped up and put in a significant amount of money, particularly in urban areas. Rural areas didn't loose anything because they didn't have anything. He said the truth is that they have been generous through the years with urban Alaska and he has enjoyed their fellowship. He pleaded that they don't pit urban against rural. On the North Slope, he said, they spend all their money trying to improve the quality of education. It is more expensive because he has to fly 300 miles in three different directions to get to some of his outlying schools. However, they try to provide quality programs that are comparable to some of the smaller schools in Anchorage. He concluded by asking that common sense prevail and to work together. CHAIRMAN WILKEN thanked him and responded that he didn't have an answer on Mr. Edgcumbe or transportation, but he would talk to him about the other two when they get together. MS. BECKY GAY said she works for the North Slope Borough and recently ran the Resource Development Council. She assured Bethel and outlying areas that what they are hearing is not the prevailing Anchorage attitude. It is the legislature externalizing an internal problem that Anchorage has facing its own school district. She said they do not think like that. No one wants to take money from one local district and give it to another. This is not how things are supposed to work in America. They know rural Alaska faces a much different delivery system and a much different situation which is more costly. She has just returned from Ketchikan where there were mayors, assembly, city council, and the Municipal League from around the State and she did not hear one person asking for this Robinhood attempt. Many people were questioning the numbers and the perspective of the legislature. This is not starting at the local level. Local people believe that local property taxes belong to the locality. This may be a Republican way of getting around the no new tax pledge that they have made. This is just taking someone else's taxes which is no different than charging new taxes. Regarding the survey they are talking about, she wondered if anyone thought of asking the voters if taking money from the school districts would improve education. She thought that would also be a no answer. In Anchorage the school district, itself, is unequitable. The bush people need to understand that. MS. GAY said in conclusion that everyone knows if Alaska goes to a per capita equalizer, particularly in education, it would be very bad for the bush. She thanked them for coming out to Bethel, but said she couldn't support any of the legislation. MR. JOHN WEISE, Superintendent, Yupiit School District, said he received all of his public schooling in Bethel under the territorial and State school systems. He remembers going to the new Kilbuck school and how good it was to move from the pool hall to a nice building with flush toilets. Now the school is so crowded that they hold classes in the bathroom. Another exciting time for schools was the creation of REAA system from the SOS system where all of rural Alaska was under one governance structure. The REAA system gave them more say with local boards and people they would elect. He thinks a lot of focus is on student learning, but he thought today it was on buildings and maintenance and whether or not urban and rural areas are equitable. Rural areas started at the first percentile and have made a 30% gain in test scores since the advent of State schools. Urban areas with a bell curve starting at the 50th percentile are still there. The increase in education has been in the rural areas. The question of equity today is to decide what a dollar is worth to a rich man compared to a poor man. Senator Wilken's proposal treats everyone alike; they are either all rich or all poor. But they know that's not true. What they should really be talking about is student learning. TAPE 97-58, SIDE B MR. WEISE said let's be the state that is the leader in the nation in technology as he thought they were going to be 20 years ago. Instead we are loosing ground. We are getting into battles between rural and urban areas that he never heard about when he was young. MS. AGNES PHILLIPS, Bethel Mayor, said her concern in taking money away from rural areas is that they won't be allowed to spend the same amount of money on each child considering the greater expense in living in the outer areas. She said many people live in the bush because all the foods they value are available out there for their families. She said she had two sets of children. Her younger children get a good education in Bethel and her older ones got a good education in Fairbanks. She hoped they had a good disposition toward all their children in Alaska as if they were their own. All parents want a good education for their own whether they live in the bush of a town. MR. BOB MEDINGER, Principal, School District 70, thanked them for coming to the bush to listen to them. To compare their area economically to the North Slope is tough. In LKSB they are facing a $8 - $10 million cut, 18 - 20% of their budget. He said they are just "chopping teachers" because you can't chop janitors who are needed. His wife, a fourth grade teacher, has 33 kids in her class and one aide for an hour a week. They know fourth grade teachers in Anchorage who don't have 33 kids in their classrooms. It's obvious if they cut more teachers, the numbers will go up. His professional people are doing everything possible to give their kids the best education they can. The numbers they are talking about are absolutely devastating. MR. MEDINGER said that the endowment and budget reserve are prime funding sources. If their constituents do need some level of fair share to be paid, he asked them to get some real numbers and work together with Senator Adams and Senator Hoffman and look at what some of the options really are out here in terms of a possible mill rate or sales tax. Some of the numbers they have are just not going to work. MR. WILL UPDEGROVE highlighted some of the cost factors that go into education in the bush saying he sometimes does living cost surveys for the University of Alaska. The latest one he did in September showed Bethel at a rate 50% higher than either Fairbanks or Anchorage for feeding a family of four. People from the bush come to Bethel to buy their groceries because it's like Anchorage in comparison to their stores in the bush. In that survey the water and sewer rates are five to seven times higher per month in Bethel than Fairbanks. Electricity, even with the subsidy from the State, runs over 15 cents per kilowatt hour versus eight cents in Anchorage and Fairbanks. He urges them to consider, not only the differences in the cost of doing education throughout the State, but also the parity in meeting the needs of the children, in a sense, no matter what they cost or where they are. Bethel does get some of the funds for school busing, but looking at the LKSD as a whole it receives about $76 from the State on a per student basis. Anchorage receives $216 and Fairbanks gets $322 per student. If that were an equitable distribution of funding, Bethel would be able to take its share and still have $675,000 remaining for direct educational programs. But it's not equitable, because some villages don't have to bus kids, but they do in Fairbanks and Anchorage. These differences need to be met on a state wide basis. They should look at these same sorts of factors on a state wide basis and provide for them. MR. UNDEGROVE said he encouraged them to think about an educational endowment. It doesn't make sense to him to say there is no new money for education, that it's not fiscally sound, or it's not a good investment. If the legislature is going fulfill the State mandate to establish and maintain a system of public schools open to all the students of the State, they need to do so by not looking at the lowest common denominator or providing for the basic need, but seeking to promote the highest possible degree of excellence in education from all students. MS. JOAN HAMILTON thanked them for coming to Bethel and said she speaks as a parent. She said she had asked other parents why they didn't testify before other committees on education and the answers have been that no matter what the money is their children would still get a poor education. This has been said to her over and over again. She noted that they have 1,300% higher rate of suicide among Alaska native boys between 15 - 24, and a high rate among the girls, than in the rest of Alaska. When you talk about suicide it means there is no hope. She is a product of boarding schools and passed her eighth grade exam third of thirteen. So she got a good education and there really wasn't any money. She realized as she was looking at the committee that she saw two friends and four enemies and she apologized for that because it is contributing to the problem and not the solution. For the sake of their children they don't need to pit urban against rural, but she tends to be for the underdog; and rural right now is the underdog. MR. RICHARD KERN, teacher and parent, said that he is also a Regional Director for NEA Alaska. Two of the reasons he went into education is that he loves working with children; they have no guile, they know they don't know everything yet, and they are willing to learn. He came to this meeting today in the same state of mind. He wanted to learn something about economics. What he hears is that by spending less we can fix it and do more. Things of greater value have that value from his perspective because the design is better, the amount of care in manufacturing it is better, and the amount of time given to that manufacture is better. All of those factors have a cost associated with them. He thinks it's true of education as well. He fails to understand how paying less for those kinds of items that are so valuable to what they do in education is going to fix what is wrong if there is, indeed, anything wrong. One thing he found on listening to Senator Wilken on Gavel to Gavel that $15 million could be raised from a tax on out-of-state workers in the Bristol Bay area; and his response was that $15 million wasn't a lot of money as far as the deficit is concerned. However, he understood Senator Torgerson say today that $20 million is a significant sum of money when we are looking at administrative costs that can be saved. Fifteen million dollars would pay for 150 social workers in the State or a new school in Bethel to replace Kilbuck. He concluded saying that he has an appreciation now that real money is between $15 and $20 million. MR. CHRIS FUEDELL, Bethel teacher, said he hoped this was not the only bush location they would have a discussions in on this subject. He appreciated Dr. John Weise's comments, particularly the 1% to 30% test score information. He thought it was important to keep in mind that they are making progress. He said there are disparities within every district and within every community. He invited them to visit the Kilbuck school with its buckling hallways, tiny classrooms, leaky ceilings, and no gymnasium where 600 children go to school. To Senator Leman's question of how to improve education he responded that they each have their own answers, but most of them who daily struggle with this question know that funding cuts to any child's school will not help. Most thinking people realize that a community can support the school and the children or they need to build more prisons. No one likes to think that someone is taking a free ride on their coat tail or that urban children don't have equity with this area's rural children. The bottom line is just a reflection of the State and community that creates it. It takes a village to educate a child; it also takes the tools to work with. He urged them to, please, keep giving them those tools. Nationally, there has been a huge slippage in Alaska's financial commitment to children in schools. Fairly recently they were leaders in that commitment. With such a large bank account there is no rational reason our children should be short-changed. MR. JULIUS PLEASANT, Inupiat, said he has six children. He is a Bethel School Board member and welcomed them. He said education costs money, but so does ignorance. There is nothing like the equal treatment of unequals. MR. PLEASANT said he appreciated their coming here and thought that they all meant well. He urged the committee to not look so much at the dollars, but to look at the human resources, the young developing minds. MR. PAUL SUGAR, Bethel teacher, said he has very strong ties to Fairbanks. He graduated from UAF and has many friends there. He thought everyone here has strong ties to all of their communities, because that is the inherent nature of Alaska. First, he is a little bit baffled that we Alaskans have a tremendous amount of creativity and ingenuity and he is amazed that the financial solutions we have come up with are solutions that every state in the lower 48 is flocking away from because of the inherent inequities in them, like using property taxes to pay for education. We look to the legislators as our leaders, he said, and they swore to uphold the Constitution which is for every single person and every single child. This sets up the community feeling in the entire State, everyone in their leadership roles as legislators and community members, to work together to raise all of our children. He urged them to find ways to leave the politics of division behind and stop looking at ways to divide the pie and start finding ways to make more pies. CHAIRMAN WILKEN asked for closing comments. All the attending members thanked everyone for turning out and said they were glad to have this opportunity. SENATOR TORGERSON remarked that the definition of equity seems to be a real big hangup and on who should pay and who shouldn't. He urged them to follow the process and stay involved. CHAIRMAN WILKEN said thank goodness that the issue was on the table and they now have the chance to do something about it. He thanked everyone for their participation and adjourned the meeting.