SB 198-INCREASE BASE ALLOCATION FOR EDUCATION CHAIRMAN MILLER announced SB 198 to be up for consideration. SENATOR WILKEN, sponsor of SB 198, said the State of Alaska's education funding formula is based on a specific dollar amount per student. Currently, the base student allocation is $3,940. SB 198 increases this allocation by $50, making the base allocation $3,990. In FY01, the foundation program, which funds K-12 Alaska public schools, will require approximately $19 million less in state aid than the amount authorized in FY00. Several key factors contribute to this drop in state aide while continuing to fund the foundation formula. One is a decline in projected student enrollment which is projected to be about .8 percent; another is a required increase in the local effort per the formula (an increase, depending on where you live, of around 2-5 percent); another is an increase in assessed values across the state; and last, an increase in the deductible impact aid, known as PL 874 money (an increase of $11 million or 15 percent over last year). SB 198 keeps a portion of these savings within K-12 education and provides a modest increase in school funding equally across the state. He encouraged their support. MR. EDDY JEANS, School Finance Manager, Department of Education (DOE), said the Governor has introduced SB 244 which would direct an increase in funding through the quality schools grant component of the foundation program. Specifically, it targets the money to improve student performance. The Department of Education prepared a fiscal note for SB 198 and the $50 increase in the base student allocation equals $10,489,300. He emphasized that he feels strongly that new dollars in the foundation program need to be targeted to improve student performance. He offered to answer any questions at this time. Number 908 MR. JOHN CYR, President, National Education Association - Alaska, stated support for SB 198. NEAA believes the need for more money for schools is critical. It believes the foundation formula needs to be increased. NEAA is also concerned about teacher salaries. More and more young professionals are leaving the state because they can't make a living here. For instance, his son-in-law is moving away with his two grandchildren. He has been teaching in Homer for the last three years but cannot make an adequate living. The same thing is happening to other folks, too; and it's a shame to see it happen. The State needs to provide the basic infrastructure that schools require. Alaska schools need help all over, not just in the quality schools initiative. He urged committee members to pass the bill. Number 1021 MR. CARL ROSE, Executive Director, Association of Alaska School Boards, stated support for SB 198 and made the following comments. The quality of life in Alaska and across the U.S. will be directly proportionate to the quality of the education we provide the young people today. The issue is one of quality and he agrees with the Department of Education that we need to pay strict attention to that. There is a system in place right now and quality initiatives have been introduced that will require additional money. We don't have the option of stopping what we do right now and focus strictly on the quality of improvements. We have to continue providing the services they do right now and, in many cases, schools are doing a good job. Their needs are tremendous and the way the foundation is set up ... we have a strong economy in Alaska and it's reflected in our property values. It calls for more local contributions as a result of declining enrollment and the additional impact aid money. The actual money to public education will be less than what was appropriated last year and the question is not that we have fewer needs today; we have more needs. They support the quality initiatives. He understands the Governor's position, but he is perplexed by the comment that dollars won't be siphoned off or redirected to salaries, maintenance and administration. Students have to be housed somewhere, which is maintenance. Our students have to be taught and that is largely salaries for our teachers. These schools have to be administered; that's not the responsibility of professionals in the class room. They are under tremendous mandates; schools have to be administered to provide the public with some level of accountability. He concluded by saying that schools have great needs and this should get us part of the way there. There is some merit to the Governor's proposal. We are $19 million short and he wanted to do everything he could to get those dollars into our schools, because they need the money. SENATOR WILKEN moved to report SB 198 out of committee with individual recommendations with the attached fiscal note. There were no objections and it was so ordered.