SB 240-EDUCATION FUNDING  8:08:58 AM CHAIR STEVENS announced the consideration of SB 240. TIM LAMKIN, staff, Senator Stevens, sponsor of SB 240, presented an overview. He said the Joint Legislative Education Funding Task Force (JLEFT) that met this summer forwarded five pieces of legislation. The first a three-year step-down funding mechanism for schools that face a decrease in their Average Daily Membership (ADM). The second component is an increase in the current multiplier [of 5 times Base Student Allocation (BSA)] for intensive services to 9, 11 and 13 over the next three years. The third component is a phase-in of the Institute of Social and Economic Research (ISER) District Cost Factor (DCF) numbers and finally an increase of $100 per year to the BSA over the next three fiscal years. 8:11:05 AM EDDY JEANS, Director, School Finance, Department of Education and Early Development, presented an overview of the task force conclusions and said the governor is supportive of the task force's work. He said that adopting the results of the ISER study means adopting the increases over a five-year period, 50 percent the first year and then 12.5 percent the following four years. It also proposed that declining enrollment be held harmless. He said the piece that's missing from the bill is people transportation re-calibration. He said the governor announced her education funding package in December and basically endorses the work of the task force with one minor adjustment. She would like to see the BSA increased to $200 per student over the three year period. The $100 increase represents about a 2 percent annual increase. Inflation has been running 3 percent or more. The $200 level represents a 4 percent increase so it would be slightly ahead of inflation. CHAIR STEVENS said he appreciated the governor's interest in increasing the BSA but he said he would be comfortable with the $100 increase. He said he also prefers not to include people transportation at this time since it will probably find its way into the bill in the Finance Committee. 8:15:05 AM SENATOR HUGGINS asked what the growth trend line was for funding and said he was concerned that it does not seem to be sustainable over time. MR. JEANS replied that the state had pro-rated the foundation program only once in 1987, when all state funding was pro rated 10 percent due to oil prices dropping. He said education should be the budget's highest priority. 8:18:03 AM JOHN ALCANTRA, Government Relations Director, NEA-ALASKA (National Education Association-Alaska), said this past weekend 400 of the 13,000 members met in Anchorage and the members would like to see the $200 increase. He recalled growing up in Anchorage when there were no fees for public school and for things that provide a well-rounded education, for example, to play sports, buy science equipment or join the band. His widowed mother with 10 kids could not have afforded any of those fees. This bill could address those problems. CHAIR STEVENS reiterated that he's not opposed to the $200 level, but that it's more appropriate to be addressed by the Finance Committee. 8:22:27 AM MARY FRANCIS, Executive Director, Council of School Administrators, said the council's Resolution Number 16 supported the task force's recommendation. It also supported a $200 BSA with a three-year implementation of the District Cost Factor (DCF). CHAIR STEVENS commented that he was blown away by the cost of special education. 8:24:53 AM SENATOR WILKEN said he appreciated the fact that the Council of School Administrators is one of the few organizations that supported using the earnings from the Permanent Fund to fund government. 8:25:27 AM BRUCE JOHNSON, Director, Alaska Association of School Boards (AASB), said his organization supports the bill. 8:28:24 AM SENATOR HUGGINS asked him what he recommended concerning the audit of the special needs component. MR. JOHNSON replied that the association sees it as an appropriate role for the Department of Education and Early Childhood Development. Districts need time frames that allow enough lead time to implement audits effectively. Their job is to secure as much money as they can within the guidelines. It is more punishing to children than it is to districts when there are errors. 8:31:02 AM DAVE JONES, Kodiak, said as a participant of the task force, that he supported moving the bill. 8:33:20 AM SENATOR WILKEN said that when the bill gets to the Finance Committee, they should have Mr. Jeans talk about the Moore study [Moore, et al. v. State of Alaska]. The judge found that the state was funding education adequately although some districts were found to need better student preparation for exit exams. The judge who ruled on the conclusions based on the study has scheduled a final hearing for June. SENATOR HUGGINS said he is looking forward to finally funding early education this session. SENATOR HUGGINS moved to report SB 240 from committee with individual recommendations and the attached fiscal note(s). SENATOR WILKEN objected and added that he agreed with changing the BSA with the proviso that funding is from new money and not taken from someplace else. He also agreed with the step-down provision. He didn't agree with the basis for the BSA. He also said the ISER study is not understandable or defendable and he did not support the bill moving forward. 8:39:17 AM CHAIR STEVENS said the bill may not be perfect but moves the issue forward. 8:39:40 AM SENATOR OLSON joined the meeting and said that he fully supports moving the bill forward. 8:40:38 AM CHAIR STEVENS called for a roll call vote. Senators Davis, Olson, Huggins and Stevens voted yea; Senator Wilken voted nay; and SB 240 moved out of committee.