CS FOR HOUSE BILL NO. 45(FIN) An Act making appropriations to the Department of Education for support of kindergarten, primary, and secondary education and community schools programs and for school construction debt retirement; and providing for an effective date. Co-chair Drue Pearce reconvened the meeting, with all members in attendance, at approximately 11:05 a.m. She then directed that CSHB 45 (Fin) be brought on for discussion. A draft SCS CSHB 45 (Fin) dated 3/9/93 was distributed for committee review. Co-chair Pearce also noted a proposed amendment by Senator Kerttula. Directing attention to the draft Senate Finance version of the bill, Co-chair Pearce advised of two major changes. She explained that the House- passed version of the bill mistakenly cited FY 94 numbers. Those were not the numbers contained in the bill passed by House Finance. For single site schools, the Senate Finance version utilizes Dept. of Education numbers for FY 93 ADM. Those are the numbers the House asked be used. Further, the twelve single sites listed in the draft reflect the list of single sites negotiated with the House majority caucus. Co-chair Steve Frank MOVED for adoption of the draft SCS CSHB 45 (Fin). Senator Kerttula OBJECTED. He then inquired regarding single site schools included within the draft, asking if they were the sites highlighted in yellow on a tabulated handout from the Alaska Department of Education. Co-chair Pearce answered affirmatively. She then read the following list of sites which she explained were included in the House bill but not in the Senate Finance draft: Galena, Hoonah, Hydaburg, Kake, Klawock, Pelican, Skagway, Tanana, and Yakutat. The new total for single sites is $2,291,770. The House number, utilizing the correct FY 93 figures would be $3,358,050. Senator Kerttula inquired concerning the basis for removal of the above-listed sites. Co-chair Pearce said, "We worked with the House to negotiate a list, and those were the ones that dropped out." She further advised of original caucus discussion not to include any single sites within the bill. The House bill included all twenty-one. Negotiations between the House and Senate led to the compromise list. Senator Kerttula suggested that some of the poorest districts would be impacted by the cut, specifically noting Klawock. Co-chair Pearce explained that, with one exception, those that were removed are receiving forest receipt moneys. Senator Kerttula noted that Wrangell and Petersburg both receive forest receipt funds as well. He observed that Craig is included in the Senate Finance bill and acknowledged that the district is in "desperate shape." Senator Kerttula reiterated his opposition to adoption of SCS CSHB 45 (Fin). Co-chair Pearce called for a show of hands on the motion. The motion CARRIED on a vote of six to one, and SCS CSHB 45 (Fin) was ADOPTED. Senator Kerttula MOVED for adoption of his amendment. He acknowledged that in light of corrected House funding, the $760,670,230 and $811,929,330 set forth in the third paragraph of the amendment would have to be adjusted to FY 93 numbers. He noted, however, that the basic purpose of the amendment, to increase the instructional unit from $61,000 to $64,000 would not change. OBJECTIONS to the motion and amendment were voiced. Senator Kerttula told members that the instructional unit was negotiated to $61,000 during the past session. In light of the inflationary spiral, it should have been raised to $65,000. The unit had not been raised for five or six years prior to the recent increase. There is great support for an additional increase from the educational community and the public. The increase would approximate $36 million. Given new, unplanned for, funding sources ($1.4 billion), the legislature can afford to modestly raise the instructional unit. It would provide benefits across the board to both urban and rural districts. Senator Kerttula reiterated his support for the increase based on need. Senator Kelly inquired concerning the funding level prior to last year's increase to $61,000. Senator Kerttula answered that it was previously set at $60,000. Co-chair Pearce called for a show of hands on Senator Kerttula's amendment. The motion FAILED on a vote of one to six, and the amendment was NOT ADOPTED. Senator Kelly MOVED that SCS CSHB 45 (Fin) pass from committee with individual recommendations. No objection having been raised, SCS CSHB 45 (Fin) was REPORTED OUT of committee. Co-chairs Pearce and Frank and Senators Jacko, Kelly, Rieger, and Sharp signed the committee report with a "do pass" recommendation. Senator Kerttula signed "increase inst. unit." ADJOURNMENT The meeting was adjourned at approximately 11:15 a.m.