SHES - 2/3/95 SB 22 APPROP: K-12 SUPPORT; DEBT RETIREMENT  Number 254 CHAIRMAN GREEN introduced SB 22 as the next order of business before the committee. SENATOR HALFORD, Prime Sponsor, expressed the need for a decision on the funding of education by March, before the budget rush. He pointed out that SB 22 lists Mental Health Trust Income as one of the funding sources. He offered an amendment which would change the amount of funding in regards to the student load increase. This change would bring the funding level per unit to that of last year while increasing the cost. Number 292 SENATOR LEMAN asked how education funding, which is the largest portion of the budget, could be increased while other areas absorb budget cuts. All areas of the budget should face the same constraints. The state faces a $300 million to $500 million budget deficit; it would not be fiscally responsible to consider total cost increases even if the cost per unit remains the same. SENATOR HALFORD stated that he wanted to put the question of the foundation formula before the legislature. He expressed frustration in that SB 22 would be adding to the least equitable and understandable formula. The formula should be rewritten. He emphasized the need to deal with the formula soon in order that the municipalities can set their tax rates. SENATOR HALFORD explained that his amendment would correct the Mental Health question. The amendment would be necessary if the committee desired to proceed with the total amount in SB 22. The amendment does not change the total amount; there is only a change in the fund source. Number 340 SENATOR MILLER moved Amendment 1. Without objection, it was so ordered. SENATOR HALFORD clarified that the amendment would change the funding source from the Mental Health Trust to the General Fund. DEBRA GERRISH, a concerned parent, pointed out that there was a paper available which explained the foundation formula. She gave examples of the decline in education in her district: students without books for six weeks, lack of desks, and elementary classes with 28 and 30 students. She urged the committee to increase the foundation formula because inflation decreases the formula when the units of the children are considered. She suggested instituting a school tax and an income tax. SENATOR LEMAN understood Ms. Gerrish's request to increase the amount of the foundation formula. He asked what the fund source should be. DEBRA GERRISH reiterated two possible funding sources: a school tax and an income tax. She informed the committee that the high school parent group would be writing a letter suggesting that the local Board of Education freeze the step in column in the district. SENATOR LEMAN asked Ms. Gerrish if she were willing to pay a portion of the cost of the education of her children. DEBRA GERRISH stated that she would be willing to contribute directly only if there was a sliding scale fee instituted so that parents would contribute only as much as they could afford. WANDA COOKSEY, Small Single Site School District, asked the committee to include the small single site school district in SB 22 in the amount of $3.2 million, as it did last year. SENATOR LEMAN inquired as to the correctness of the amount for the single site schools. SENATOR HALFORD explained that the amount was $3.2 million last year, but the single site amount and list has changed throughout the years. Number 438 WANDA COOKSEY offered the committee a proposed legislative correction which would put single sites into statutes so they would not have to be added every year. She informed the committee that in the previous three years the amount for single sites and the list of single site schools has stabilized. VERNON MARSHALL, Executive Director of the National Education Association of Alaska, thanked Senator Halford for bringing this funding issue before the committee so early. He expressed concern with the contents of the bill. The growth of the student population, school violence, and student respect all need to be addressed. He pointed out that the instructional unit has been increased only once since 1987; there is a need for inflation- proofing in education. He stated that omitting the single site school district does not solve the problem and those children need to be addressed. He urged the committee to address all the problems he cited and increase the area of technology. In conclusion, he said that he was committed to rewriting the formula. Number 504 SENATOR HALFORD clarified that single site schools were not present in SB 22 because the formula does not call for single site schools, they are essentially an addition to the formula. VERNON MARSHALL felt that this issue could be addressed in the rewrite of the formula. SENATOR LEMAN informed the committee that SB 22 is a $800 million General Fund investment plus the $120 million of the other resolution which is a considerable investment. In Alaska, $10,000 to $11,000 is spent per student per year on average which includes local matches for K-12. He suggested that the total cost of education be decreased without hurting the services provided. He related his own good experience in the Alaska school system before there was even oil money. How can the best services be provided in an atmosphere of decreasing revenues? VERNON MARSHALL explained that he felt education should be structured so that student competition can occur in the new century. The world has changed and so should the schools and the instruction of the children. He suggested creating incentives for local school districts to contribute their share to educate their own children. He pointed out that many states have fifty percent or more of their General Fund going towards education, while Alaska contributes thirty-two percent of the General Fund. He explained that Alaska has a unique position; the bush has an increased delivery expense per child which should be addressed in the formula. Mr. Marshall discussed the need to set a goal and then review the approaches and the money needed to achieve the objectives. He stated that educational money should be spent in a manner to allow students the best possibility of becoming viable citizens. TAPE 95-1, SIDE B Number 583 SENATOR LEMAN asked if competition were applied could educational services be better with decreased cost. VERNON MARSHALL felt that the educational system could do better, but it is trying to do its best now. Mr. Marshall felt that public education already faces competition with correspondence courses, private schools, and home schooling. Mr. Marshall explained that parents want development of their children, but increased class sizes creates difficulty in achieving this development for all children. STEVE McPHETRES, Executive Director of the Alaska Council of School Administrators, pointed out that the committee had the Council's paper which expresses their desire to increase the foundation portion of SB 22. He appreciated the sponsor's prompt timing with this legislation. He informed the committee that after attending a parent meeting, the parents' desire to have a safe, healthy environment with acceptable class sizes was apparent. These objectives cannot be achieved with continual cuts in state funding. For example, Fairbanks, Juneau, Kenai, and Kodiak all face $2 million reductions in order to maintain current levels of programs. The reserves have been used, these areas cannot contribute any more. He urged the committee to realize that the cost of maintaining the status quo has increased while cuts continue. SENATOR MILLER moved that SB 22 as amended be moved out of committee with individual recommendations. Without objection, it was so ordered.