HOUSE FINANCE COMMITTEE February 15, 1993 1:30 P.M. TAPE HFC 93 - 22, Side 2, #000 - #547. CALL TO ORDER Co-Chair Ron Larson called the meeting of the House Finance Committee to order at 1:30 P.M. PRESENT Co-Chair Larson Representative Therriault Co-Chair MacLean Representative Foster Vice-Chair Hanley Representative Martin Representative Navarre Representative Parnell Representatives Hoffman, Grussendorf and Brown were not present for the meeting. ALSO PRESENT Larry LaBolle, Chief of Staff, Representative Foster; Representative Irene Nicholia; Duane Guiley, Director, Education Finance and Support Services, Department of Education. SUMMARY INFORMATION HB 45 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. HB 45 was held in Committee for further discussion. HB 90 An Act making corrective amendments to the Alaska Statutes as recommended by the revisor of statutes; and providing for an effective date. HB 90 was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by the Legislative Affairs Agency dated 2/03/93. HB 146 An Act making a special appropriation to the 1 Department of Law to pay a judgment entered into in the case of Southeast Conference v. Hickel; and providing for an effective date. HB 146 was reported out of Committee with "individual recommendations". HOUSE BILL 90 "An Act making corrective amendments to the Alaska Statutes as recommended by the revisor of statutes; and providing for an effective date." Representative Navarre MOVED to report HB 90 out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTIONS, it was so ordered. HB 90 was reported out of Committee with a "do pass" recommendation and with a zero fiscal note by Legislative Affairs Agency dated 2/03/93. HOUSE BILL 146 "An Act making a special appropriation to the Department of Law to pay a judgment entered in in the case of Southeast Conference v. Hickel; and providing for an effective date." Co-Chair MacLean MOVED to report HB 146 out of Committee with individual recommendations. Representative Hanley asked if the recommended change which had been previously discussed was incorporated into the legislation. Representative Navarre replied the numbers had not been changed. The court judgement was the amount listed in the proposed legislation. Representative Therriault questioned if the amount of interest accrued would lock the Legislature into an overpayment. It was noted that the Department of Law would need to address any technical changes. There being NO OBJECTIONS to the motion, it was so ordered. HB 146 was reported out of Committee with "individual recommendations". HOUSE BILL 45 2 "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." Representative Foster provided the Committee with Amendment $3,372.0 million dollars to the single site schools. [Attachment #1]. LARRY LA BOLLE, CHIEF OF STAFF, REPRESENTATIVE FOSTER, stated the amendment would allocate an appropriation to the twenty-one single site districts and indicate the distribution of the allocation. He pointed out that Amendment #1 was supplied from information from last year. He distributed to the Committee the updated information [Attachment #2] which reduces the proposed amendment by $14.5 thousand dollars. Co-Chair Larson asked if the Aleutian Region had a dual site status and inquired if that district would be included in the proposed amendment. Mr. LaBolle noted that last year the Aleutian Region received $49.6 thousand dollars in funding. Representative Hanley suggested that the amendment be technically redrafted to reflect the additional $3 million dollar funding sources. Co-Chair Larson explained the bill would be further discussed in Committee. A proposed C.S. would be drafted incorporating the updated information from the Department of Education. Representative Martin asked if the sponsor of the bill had contacted the HESS Committee which is reviewing the Governor's bill which addresses the single site formula. Representative Martin questioned if the single site schools provide better education as a result of the appropriations. He felt that the administrative costs were out of balance. Representative Navarre noted that changing the foundation program has been discussed for many years and it still has not happened. He asked if any of the single site school districts had lobbyists. Representative Foster replied none of the three which are in his area have a lobbyist. REPRESENTATIVE IRENE NICHOLIA spoke in favor of the proposed amendment. She explained that Galena and Tanana were in her district and both need supplemental funding in order to maintain a basic education program. Last year, Galena lost their half time principal and five teaching positions. Additional cuts would seriously jeopardize school programs. 3 Additional funding cuts would affect both in-service training and travel for teachers and students. Representative Hanley commented that in the current system those communities with high administrative costs are being rewarded. He disagreed with that practice. He expressed his support of early funding at a unit value of $61 thousand dollars for the single site school districts. Representative Martin agreed with Representative Hanley. Representative Nicholia replied that many of the communities were not connected by a road. She said this accounts for the need for superintendents in each single site school district. The reason the districts chose single site status was to allow local control in determining how the money is spent and which teachers are hired. Representative Martin felt the cost for local control was too high. Co-Chair Larson provided information regarding some local school district costs. The average cost for educating a student in Galena was $17,300 dollars per year whereas in Hydaburg the average cost was $11,889 dollars per year. He added that single site school districts allow for flexibility and local control in the decision making process although they do increase the administrative costs. Representative Nicholia pointed out that many of the teachers were new and consequently were lower on the wage scale. Co-Chair Larson pointed out that the average teaching cost in Tanana is $48.435 thousand dollars per year and in Hydaburg the average cost is $36,394 thousand dollars per year. The negotiation of teacher costs does affect the cost of educating each student. Co-Chair Larson asked if the increase to the instructional unit last year provided an increase to each school district in the State. DUANE GUILEY, DIRECTOR, EDUCATION FINANCE AND SUPPORT SERVICES, DEPARTMENT OF EDUCATION, replied the Legislature did approve an increase in unit value last year to $61 thousand dollars. Some school districts in Alaska have experienced a decrease in overall funding because of federal support program requirements. This is an issue affecting many communities in rural Alaska. HB 45 was HELD in Committee. A draft committee substitute including Amendment #1 is to be drafted for consideration. ADJOURNMENT The meeting adjourned at 2:10 P.M. 4 5