HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE March 23, 1999 4:04 p.m. MEMBERS PRESENT Representative Fred Dyson, Co-Chair Representative John Coghill, Co-Chair Representative Jim Whitaker Representative Joe Green Representative Carl Morgan Representative Tom Brice Representative Allen Kemplen MEMBERS ABSENT All members present COMMITTEE CALENDAR HOUSE BILL NO. 17 "An Act relating to the calculation of employee contributions and credited service in the public employees' retirement system for noncertificated employees of school districts, regional educational attendance areas, the Alaska Vocational Technical Center, and the state boarding schools; and providing for an effective date." - MOVED CSHB 17(HES) OUT OF COMMITTEE * HOUSE JOINT RESOLUTION NO. 6 Proposing amendments to the Constitution of the State of Alaska relating to state aid for education. - HEARD AND HELD (* First public hearing) PREVIOUS ACTION BILL: HB 17 SHORT TITLE: PERS CREDIT FOR NONCERTIFICATED EMPLOYEES SPONSOR(S): REPRESENTATIVES(S) BRICE, Phillips, Smalley, Cissna, Croft, Harris Jrn-Date Jrn-Page Action 1/19/99 22 (H) PREFILE RELEASED 1/8/99 1/19/99 22 (H) READ THE FIRST TIME - REFERRAL(S) 1/19/99 22 (H) LABOR & COMMERCE, HES 2/12/99 210 (H) COSPONSOR(S): PHILLIPS 2/24/99 308 (H) COSPONSOR(S): SMALLEY 3/03/99 350 (H) COSPONSOR(S): CISSNA 3/05/99 378 (H) COSPONSOR(S): CROFT 3/12/99 (H) L&C AT 3:15 PM CAPITOL 17 3/15/99 (H) L&C AT 3:15 PM CAPITOL 17 3/15/99 (H) MOVED OUT OF COMMITTEE 3/16/99 467 (H) L&C RPT 7DP 3/16/99 468 (H) DP: HARRIS, CISSNA, BRICE, SANDERS, 3/16/99 468 (H) HALCRO, MURKOWSKI, ROKEBERG 3/16/99 468 (H) FISCAL NOTE (ADM) 3/16/99 468 (H) REFERRED TO HES 3/16/99 468 (H) FIN REFERRAL ADDED 3/16/99 484 (H) COSPONSOR(S): HARRIS 3/23/99 (H) HES AT 3:00 PM CAPITOL 106 BILL: HJR 6 SHORT TITLE: CONST. AM: EDUCATION FUNDING SPONSOR(S): REPRESENTATIVES(S) KOHRING, Coghill Jrn-Date Jrn-Page Action 1/19/99 17 (H) PREFILE RELEASED 1/15/99 1/19/99 17 (H) READ THE FIRST TIME - REFERRAL(S) 1/19/99 17 (H) HES, JUDICIARY, FINANCE 2/05/99 146 (H) COSPONSOR(S): COGHILL 3/16/99 (H) HES AT 3:00 PM CAPITOL 106 3/16/99 (H) SCHEDULED BUT NOT HEARD 3/23/99 (H) HES AT 3:00 PM CAPITOL 106 WITNESS REGISTER RICK HELMS P.O. Box 32912 Juneau, Alaska 99803 Telephone: (907) 789-5951 POSITION STATEMENT: Testified in support of HB 17. SANDY PEVAN P.O. Box 871256 Wasilla, Alaska 99687 Telephone: (907) 376-6198 POSITION STATEMENT: Testified in support of HB 17 and against HJR 6. DUANE GUILEY 2217 East Tudor Road Suite 1 Anchorage, Alaska 99507 Telephone: (907) 562-7372 POSITION STATEMENT: Testified in support of HB 17. DON ETHERIDGE Public Employees Local 71 710 West 9th Street Juneau, Alaska 99801 Telephone: (907) 586-3707 POSITION STATEMENT: Testified in support of HB 17. JOHN CYR, President National Education Association Alaska 114 Second Street Juneau, Alaska 99801 Telephone: (907) 586-3090 POSITION STATEMENT: Testified in support of HB 17 and against HJR 6. BILL CHURCH, Retirement Supervisor Division of Retirement and Benefits Department of Administration P.O. Box 110203 Juneau, Alaska 99811 Telephone: (907) 465-5700 POSITION STATEMENT: Provided information on HB 17. REPRESENTATIVE VIC KOHRING Alaska State Legislature Capitol Building, Room 421 Juneau, Alaska 99801 Telephone: (907) 465-6597 POSITION STATEMENT: Testified as sponsor of HJR 6. RANDY LORENZ, Researcher for Representative Vic Kohring Alaska State Legislature Capitol Building, Room 421 Juneau, Alaska 99801 Telephone: (907) 465-6597 POSITION STATEMENT: Presented information on HJR 6. SUSAN STITHAM, Vice Chair State Board of Education P. O. Box 80913 College, Alaska 99708 Telephone: (907) 479-5046 POSITION STATEMENT: Testified against HJR 6. LINDA ANDERSON P.O. Box 872092 Wasilla, Alaska 99687 Telephone: (907) 376-6721 POSITION STATEMENT: Testified in support of HJR 6. STANLEY TUCKER 1001 Dellwood Wasilla, Alaska Telephone: (907) 373-3454 POSITION STATEMENT: Testified in support of HJR 6. ROY BURKHART P.O. Box 204 Willow, Alaska 99688 Telephone: (907) 495-6337 POSITION STATEMENT: Testified in support of HJR 6. JUNE BURKHART P.O. Box 204 Willow, Alaska 99688 Telephone: (907) 495-6337 POSITION STATEMENT: Testified in support of HJR 6. PHILIP REEVES, Assistant Attorney General Human Services Section Civil Division (Juneau) Department of Law P.O. Box 110300 Juneau, Alaska 99811 Telephone: (907) 465-4136 POSITION STATEMENT: Testified on HJR 6. ACTION NARRATIVE TAPE 99-23, SIDE A Number 0001 CO-CHAIRMAN DYSON reconvened the House Health, Education and Social Services Standing Committee meeting at 4:04 p.m. Members present at the call to order were Representatives Dyson, Coghill, Whitaker, Green, Morgan, Brice and Kemplen. HB 17 - PERS CREDIT FOR NONCERTIFICATED EMPLOYEES Number 0020 CO-CHAIRMAN DYSON announced the next order of business as House Bill No. 17, "An Act relating to the calculation of employee contributions and credited service in the public employees' retirement system for noncertificated employees of school districts, regional educational attendance areas, the Alaska Vocational Technical Center, and the state boarding schools; and providing for an effective date." Number 0040 REPRESENTATIVE TOM BRICE, Alaska State Legislature, sponsor of HB 17, presented the bill with an amendment. He said this committee moved this bill out last session, but it ran out of time in the Senate Rules Committee and died. This bill addresses an inequity that exists in school districts. Currently certified employees have a nine-month contract, and get a year of retirement credit, but the classified employees, which includes janitors, office staff and maintenance workers, also have a nine-month contract but only get nine months of retirement credit. Classified employees are not eligible for unemployment insurance either. This bill would allow those employees to voluntarily buy into the PERS (Public Employees Retirement System) the extra two or three months of service for retirement. Currently a nine-month employee has to work nearly 40 years to reach a 30 year retirement. Included in this bill are the employees of the Alaska Vocational Technical Center, boarding schools, regional education attendance area (REA) schools and the amendment includes the special education service agency (SESA). CO-CHAIRMAN COGHILL asked if the stipulation for buying in to this would change unemployment eligibility. REPRESENTATIVE BRICE said it would not change unemployment eligibility, but it would take the step to address the inequity that exists for these employees. Number 0300 REPRESENTATIVE WHITAKER commented that it is a good bill but he is concerned with the attached fiscal note. He wondered if it provides additional funding for services that may not have to be paid for. REPRESENTATIVE BRICE said Mr. Church from the Department of Administration can probably answer that question. The amount of $72.4 thousand is for computer programming. That amount is not general fund expenditure; the employees will pay for that computer change. REPRESENTATIVE WHITAKER asked for clarification on that point. Number 0404 REPRESENTATIVE BRICE said the $72.4 thousand is from the revenue that the employees would pay into the system, and the cost associated with getting that year of service is a voluntary election by the employees. They have to take a positive action to say they want to pay an increased contribution into their retirement system, so they don't have to work 40 years for a 30 year retirement. CO-CHAIRMAN COGHILL said this does not reflect what could be. It only reflects what it is going to cost to institute this program. Number 0549 REPRESENTATIVE BRICE said the bill was drafted in such a way that any cost associated with this piece of legislation would ensure the actuarial soundness of the PERS funds. The $72.4 thousand is going to come out of contributions by the employees. Number 0586 The committee took a brief at-ease from 4:12 p.m. to 4:13 p.m. REPRESENTATIVE GREEN asked if this bill provides for future part-time workers. Number 0602 REPRESENTATIVE BRICE said if they are eligible, but he believes this is dealing with full-time seasonal employees. This starts today and goes forward; the employees cannot buy back years. Number 0670 RICK HELMS, representing Alaska Public Employees Association (APEA), American Federation of Teachers (AFT), Southeast Political Board of Directors, came forward to testify. He asked the committee for their support on HB 17. There are over 3600 members in APEA and 600 of them are nine-month employees, and this bill would benefit them. They are also professionals like the teachers and administrators. It takes them 37.5 years to get 30 years of service, and passing this bill will fix this injustice. He urged this committee to pass HB 17 this year. Number 0767 SANDY PEVAN testified from the Matanuska-Susitna (Mat-Su) Legislative Information Office (LIO) via teleconference. She has worked in her district 21 years and has only 14 years in her retirement. It takes five years to be vested PERS, but a nine-month school employee has to work 7.5 years to be vested. She urged them to support HB 17. Number 0829 DUANE GUILEY testified on behalf of the Special Education Service Agency (SESA) from Anchorage via teleconference. He is in favor of HB 17 and offered to answer questions. CO-CHAIRMAN DYSON asked him if the amendment which covers SESA is satisfactory. MR. GUILEY said he hadn't seen the specific amendment but understood what it would do. It does provide the same opportunity for SESA employees as it does to current employees of the REA and school districts. When he was told this amendment was the same as the one in the Senate, he said it did accomplish the objective of adding SESA to the legislation. Number 0936 DON ETHERIDGE came forward to testify on behalf of Public Employees Local 71. They support this bill and would like to see it passed to help their members who are school employees. Number 0976 JOHN CYR, President, NEA-Alaska, came forward to testify in support of HB 17. REPRESENTATIVE GREEN wanted reassurance that the payments would be sufficient to keep the program viable for all those who are already in it. BILL CHURCH, Retirement Supervisor, Division of Retirement and Benefits, Department of Administration, affirmed that the surcharge allocated will cover all of the costs to the retirement system. Number 1035 REPRESENTATIVE BRICE offered Amendment 1, 1-LS0157\A.1, Cramer, 3/22/99, which read: Page 1, line 3, following "areas,": Insert "the special education service agency," Page 1, line 9, following "area,": Insert "of the special education service agency," Page 2, line 22: Delete "district or" Insert "district, a" Following "area,": Insert "the special education service agency," Page 2, line 26: Delete "or" Insert ", a" Page 2, line 27, following "area": Insert ", or the special education service agency," Page 3, line 1: Delete "or" Insert ", a" Page 3, line 2, following "area": Insert ", or the special education service agency," Page 3, line 6: Delete "or" Insert ", a" Following "area,": Insert ", or the special education service agency," Page 3, line 12, following "area,": Insert "the special education service agency," CO-CHAIRMAN DYSON asked whether there was any objection. There being none, Amendment 1 was adopted. Number 1099 CO-CHAIRMAN COGHILL made a motion to move HB 17, as amended, with the fiscal note and individual recommendations. There being no objection, CSHB 17(HES) moved out of the House Health, Education and Social Services Standing Committee. HJR 6 - CONST. AM: EDUCATION FUNDING Number 1111 CO-CHAIRMAN DYSON announced the next order of business as House Joint Resolution No. 6, Proposing amendments to the Constitution of the State of Alaska relating to state aid for education. Number 1235 REPRESENTATIVE VIC KOHRING, sponsor, testified briefly before returning to a Finance Committee meeting. He said since HB 5 was thought to be unconstitutional, he is presenting an alternative plan, HJR 6, that would change the constitution to allow for direct funding for private education. His aide, Randy Lorenz, has done extensive research on this issue, and he asked him to present the information focusing primarily on the issue of direct funding. RANDY LORENZ, Researcher for Representative Vic Kohring, Alaska State Legislature, said that at a previous hearing on the school voucher bill, he heard that the Alaska State Constitution was unique to Alaska. In his research of the original Alaska Constitutional Convention, it shows there was nothing more than the Blaine amendment or the Enabling Act, which is the same as in over 39 other state constitutions. He gave some history to understand the Blaine amendment and referred to the 1530s during the Reformation of the Church when the individual denominations were developed. They did that as a result of the Church of England also being the government. In the 1600s many of these people came to the United States and established separate churches. In the 1800s these denominations had multiple schools and they wanted to form them under the "common school movement" which is now known as the public school system. In 1875, U.S. Representative Blaine introduced the Blaine amendment which sought to prohibit the Catholic Church from receiving any funds because they saw the Catholic Church as being a menace to what they believed. That initiative failed because it was unconstitutional. In 1888 he changed it to the Enabling Act which allowed four states to enter the United States as part of the union. Since that time 36 other states also adopted the same wording as the Enabling Act. MR. LORENZ referred the members to Item 2, History of Article VII, Constitutional Convention, Education Section Minutes, pages 1508 to 1535, December 1955 to 1956, which is in their packet. He pointed out many references in those minutes on various pages where it does refer to the Enabling Act. In effect, what they have is nothing more than what other states have done, and this wording has been ruled in over 20 court cases as being unconstitutional. CO-CHAIRMAN DYSON asked what did the Blaine amendment say. MR. LORENZ said the Blaine amendment prohibited any [sectarian] control of public schools. It has been construed to mean that they cannot provide direct public support to any private or [sectarian] schools. He is trying to draw that inference out. CO-CHAIRMAN DYSON reviewed that Mr. Lorenz is trying to show them that there was a direct connection between the Blaine amendment, the Enabling Act and the language that went into Alaska's constitution. MR. LORENZ referred to Item 5, Michigan's Constitution, Article VIII, Section 2 in their packets, on page 50, Nonpublic schools, prohibited aid which reads: No public monies or property shall be appropriated or paid or any public credit utilized, by the legislature or any other political subdivision or agency of the state directly or indirectly to aid or maintain any private, denominational or other nonpublic, pre-elementary, elementary, or secondary school. No payment, credit, tax benefit, exemption or deductions, tuition voucher, subsidy, grant or loan of public monies or property shall be provided, directly or indirectly... MR. LORENZ said it is a lot tighter than Alaska's constitution. On page 14, item B, it has the reference that the U.S. Supreme Court made in regards to this particular issue and the interpretation. It talks about the common understanding, and the words in there should not have any unique meaning; what they stand for is what they mean. MR. LORENZ referred to page 16, item C of the same document, which talks about the use of public funds and support. Under that it says: Under the amendment, public funds could not be used to support the attendance of nonpublic school students at any location or institution where instruction is offered in whole or in part to nonpublic school students. MR. LORENZ went on to read what the U.S. Supreme Court stated: This is a shocking result. It violates both the free exercise of religion and the equal protection provisions of the United State Constitution. MR. LORENZ referred to page 30, item G, which refers to the language in that particular area. It states: The language "or at any location or institution where instruction is offered in whole or in part to such nonpublic school students ...Proposal C is unconstitutional, void and unenforceable and is severable and capable of being removed from Article 8 Sec. 2 without altering the purpose and effect of the balance of the sentence and section. MR. LORENZ summed up that basically what they are saying is the prohibiting of using monies to support individual children is a violation of the U.S. Constitution. Alaska has the same reading in its constitution and should be able to draw the same conclusion. He feels it gives them a basis to start considering that and move this bill to the Judiciary Committee. MR. LORENZ said the second issue is the words "direct" versus "indirect," and he referred to Item 2, the minutes of the constitutional convention. On pages 1513 through 1533 the members of the constitutional convention had a very in-depth discussion about putting in the word "indirect," and on page 1513 an amendment was proposed to have the word "indirect" put in. CO-CHAIRMAN DYSON asked Mr. Lorenz if he is about to show them that the word "indirect" was inserted deliberately. MR. LORENZ said they put forth an amendment to insert it into the constitution during the constitutional convention. As a result of this ongoing text, they said they did not want the word "indirect" in there because they did not want to prohibit the ability to use funds to support individual children. CO-CHAIRMAN DYSON asked if it was because they considered putting the word "indirect" in and did not, that there was a logical and direct inference that they intended that "indirect" public support could happen. MR. LORENZ said yes. He referred again to Item 2, constitutional convention minutes, page 1514, which states: In this third sentence we have used the word "direct". It was spelled out that the maintenance and operation or other features of direct help would be prohibited. This was not intended and does not prohibit the contracting or giving of services to the individual child, for that child benefits as his part of society. MR. LORENZ said he thinks the bottom line is they planned to have the ability to be able to use funds for individual children, and that it is also public purpose in order to be able to do this. He feels the intent of the Alaska State Constitution has been misunderstood and has been perverted so they are not able to do this now. To bring this in alignment with both the U.S. Constitution as well as what the forefathers wanted or envisioned at this time, the only way to do this now is to remove the third sentence from the constitution. Number 2032 REPRESENTATIVE KEMPLEN asked if Mr. Lorenz was saying that the Alaska State Constitution is unconstitutional according to the federal constitution, and it has been since it was enacted. Number 2047 MR. LORENZ replied that when Alaska's constitution was written, what people were thinking at that time was different than what it is today. It has been viewed that to prohibit money to support children in nonpublic school settings is now a direct violation of both the First and Fourteenth Amendments. He contends that the way Alaska's constitution was framed, it does allow the ability, by the framers' own words, "to be able to use public money to support a nonpublic school child's education." It is in here that it does allow this. He continued saying that it is a result of the 1979 Alaska Supreme Court decision on Sheldon Jackson that took the word "students" to mean they were nothing more than conduits for direct benefits. If they look back to what the U.S. Supreme Court looks at as the way of common understanding of the word "direct," it was a misinterpretation; they went outside the scope of what that word means. Number 2094 REPRESENTATIVE KEMPLEN asked Mr. Lorenz if he was saying that the Alaska State Supreme Court misinterpreted the word "direct." Number 2102 MR. LORENZ answered that he does not know what was on their mind at the time so he won't make any inferences in that direction at all. He referred them to copies of the Sheldon Jackson case and their basic comment was that these college students were nothing more than a conduit for direct funds. According to what he has read from other court cases, that would not be "direct;" it would be "indirect". According to the minutes of the constitutional convention, they did not prohibit the direct benefit to a child even if it did indirectly support a parochial or private school. MR. LORENZ again referred them to page 1515, to Ralph Rivers' comments which stated: The word 'direct' is that standard treatment of that subject. Now when you get into the wording "or indirect", then you are getting into an argument as to whether you can even contract with a private institution for the rendering of certain public services because they might say they might make a profit. MR. LORENZ referred to Mr. Rivers statement that continued on page 1516 which stated: ... you talk about prohibiting the disbursement of money for an indirect benefit to a parochial or private institution. You are reaching clear out to ad infinitum in the realms of logic and association. MR. LORENZ said basically they did not want to go that route. They did not want to do "indirect" because it talks about the far-reaching implications that they couldn't even begin to imagine at that time; but they wanted the ability to use public funds for the public purpose of supporting children, even if it meant an indirect benefit to a private institution. They looked at that and said no, that was fine. Number 2196 REPRESENTATIVE KEMPLEN said it seems the argument is that they realized that they needed to have some flexibility because of the wide variety of opportunities that could exist for helping children with public monies. As a result, they didn't want to put in that language of "indirect," but they did want to clarify and make a distinction between "indirect" support and "direct" support. He doesn't see where the conversation at the constitutional convention shows that they are supportive of direct support for religious institutions or religious schools. MR. LORENZ said what they wanted to prohibit was a direct benefit to a private institution, like maintenance and operations and features of direct help. CO-CHAIRMAN DYSON said since they will not finish this today, he opened public testimony. TAPE 99-23, SIDE B Number 2321 SUSAN STITHAM, Vice Chair, State Board of Education, testified via teleconference from Fairbanks. She said the members should have a copy of the State Board of Education's position statement on vouchers. She thinks what they would like to emphasize, as they consider HJR 6, is the issue of accountability for public money in terms of public schools. They have initiated the partnership with the legislature, the Department of Education (DOE), the commissioner of DOE and the State Board of Education in a real effort in terms of quality schools. The exit tests, teacher standards in the licensure process and school accountability are going to improve what is essentially a very good school system in this state. All of that seems like an appropriate level of accountability for parents, for children and for the state in terms of the use of state money. MS. STITHAM voiced another concern that under current situations, private schools in this state have no accountability whatsoever. They are not even required to hire licensed teachers, their students are not required to take examinations and so it seems counterproductive in terms of their continuing efforts to try to make sure that every Alaskan student has the best possible education that they can provide in terms of contributions to the future of Alaska and each of them individually. Number 2260 LINDA ANDERSON testified from the Mat-Su LIO via teleconference. She is a nurse, a parent and a 26-year resident of Alaska who home schooled her children. She expressed her strong support of HJR 6. The U.S. Supreme Court has already upheld this under the freedom of religion and equal protection under the law. The U.S. Supreme Court ruled over Michigan's constitution as deliberate discrimination to prevent payment of public funds for direct educational benefit of all students. She sees the clear logic that the U.S. Constitution as written by the forefathers supports the intent of HJR 6, and the Alaska State Constitution should be amended to support equal protection and equal rights of all students. The GI Bill and the Alaska State Student Loan Program are both constitutional. They need HJR 6 to enable all students access to equal education. It is the parental responsibility and accountability to know what school and what services are best for their children. It is the parents' responsibility, not the state's. She said people who choose nonpublic schools are being heavily burdened by paying for their child's needs and still being forced against their will to double pay for other people's children. She urged the committee to please pass HJR 6 and help enable the families; it is constitutional, it is fair and it is legal. Number 2188 STANLEY TUCKER testified from the Mat-Su LIO via teleconference. He spoke in support of HJR 6; he believes it will allow parents a greater choice for their children's education. Now many children are discriminated against if they do not attend public school since they do not receive the benefits that public school children do from the state coffers. This will be fair since parents who do not use public schools are assessed property taxes to support public schools. He has read that competition to public schools in other states has also benefitted public schools. It is probably because public schools become more accountable to the public. He agreed that accountability is a problem, but when parents have a choice to do what is best for the children, they will. If public school is the best place; that is where they will put the child, but if it is not the best place; then they would have the opportunity to put their child in a place they feel is better. He feels that this proposed constitutional change would be fair to all Alaskans and beneficial to Alaskan children. Number 2129 ROY BURKHART testified from the Mat-Su LIO via teleconference. He had two children that went through the public school system in Anchorage and has no complaints with the system. Both his children were valedictorians of their high schools, but unfortunately some of the children who graduated with them never learned to read through the system. He knew of a mother who went to the school board, the principal, the teachers and got no help. If she could have found some help in a private school, he wouldn't have seen anything wrong with that. The state should have helped her. He thinks competition will improve the public education system. JUNE BURKHART testified from Mat-Su via teleconference. She agreed with the testimonies of Linda Anderson, Stanley Tucker and Roy Burkhart. She did have a concern about a situation in Mat-Su which would be helped if this amendment goes through. A child diagnosed with dyslexia was referred to the district's correspondence program which means the parents will have to home school him. The parents are distraught; they are not educated to do anything for this child short of hiring a private tutor. These kinds of things have got to stop. SANDY PEVAN testified from the Mat-Su LIO via teleconference. She spoke against HJR 6. She does not believe that public education funds should be sent out to private or religious schools; they belong to the public. Number 1979 JOHN CYR, President, National Education Association (NEA) Alaska came forward to testify. He said the members have NEA Alaska's position statement. He said the issue which is really important is whether this is good educational policy; not whether it is constitutional. He suggested looking at some other areas where vouchers have been into place. He referred to an article of a study done by Martin Carnoy, a professor of education and economics at Stanford, not connected with the NEA. Chile tried a voucher system back in the 1980s. Chile had one of the best educational systems in South America until Pinochet came into power, and they decentralized and went to vouchers. He read one statement from this article: The lessons for us here in the United States are obvious, but they are not the ones that privatization advocates want known. Voucher plans increase inequality without making schools better. Even more significantly, privatization reduces the public effort to improve schooling since it relies on the free market to increase achievement. MR. CYR said that is the antithesis of what needs to be done in Alaska. It sets up bad public policy. He referred to an article that ran in the Fairbanks Daily News-Miner about the voucher system in Texas. When vouchers were instituted in Texas, the contribution to public education went down. Public money goes to areas that some believe it shouldn't go. He reported that Milwaukee spent $25 million; took that money from the public schools and gave it to children in private schools, with no significant improvement in either reading or math scores. What actually happened was taxes went up to pay for children in private schools. In fact, those children who were in private schools already got the money; it didn't go for children who left public school. Number 1850 MR. CYR continued that the same thing happened in Cleveland, but the only difference was people used vouchers for their children's taxi fare back and forth to school. He wasn't suggesting that it isn't appropriate for children to take taxis to school, he doesn't think this state can afford it. Approximately 15,000 children are in private, religious or home schools in this state. If the base allocation is a little over $4,000, that is $60 million that a voucher scheme would cost before one child leaves public school. He reiterated that it is not only bad public policy, it is insane economically at this point in time. Number 1800 PHILIP REEVES, Assistant Attorney General, Human Services Section, Civil Division (Juneau), Department of Law. came forward to testify. He pointed out that the attorney general's office did provide an opinion regarding HB 5, and SSHB 5 in particular, and that opinion focused upon Article VII, Section 1 and the Supreme Court's decision in Sheldon Jackson interpreting that. They didn't go beyond that constitutional provision because that seemed to be a showstopper. Essentially the Alaska Supreme Court has ruled that they cannot expend public funds for private educational costs in this state. Now they are looking at the next step since the sponsor is seeking to change the constitution, and the attorney general's office feels it is important to give the committee some information about some other constitutional and statutory issues that would impact the ability to set up a statutory program for private school vouchers. Number 1750 MR. REEVES said it is true that the repeal of Article VII, Section 1 would remove the most direct legal impediment to tuition vouchers, but it would certainly not clear the field. Both the Alaska and United States constitutions' establishment clause has placed significant restrictions on the expenditure of public funds for tuition for religious schools. The U.S. Supreme Court has not ruled that vouchers for general religious education programs are constitutional under the federal establishment clause. The Wisconsin Supreme Court did hold that under the Wisconsin and federal constitutions, the Wisconsin voucher program was constitutional, but the U.S. Supreme Court denied certiorari and basically has not rendered any opinion on such a wide-ranging voucher program. Finally, the Wisconsin voucher program had a significant requirement that was not included in the proposed SSHB 5, which was an opt-out provision which essentially would require a participating private school in Wisconsin to provide a nonreligious curriculum to any tuition student who requested it within the religious school. That obviously is a point of major impact to the consideration of where the state would want to go in developing a program. Number 1694 MR. REEVES referred specifically to the establishment clause. They can look at both the U.S. Supreme Court decisions regarding the federal constitution and then the Alaska Supreme Court decisions. The U.S. Supreme Court has broadened the limitations under the federal establishment clause as recently as two years ago. Up until 1997, the U.S. Supreme Court had essentially ruled that public funds could not be expended for any educational program within a private school. In 1997, they overruled their earlier decision. In the case, a particular remedial public education program, presented and taught by public education teachers, was allowed within a Catholic school. That is as far as the U.S. Supreme Court has gone. Obviously, the Wisconsin voucher program and the proposal of HB 5 are much broader type programs. Essentially, the entire educational program of religious schools, which includes religious instruction classes meant to inculcate religious values throughout the subject matter, would be funded. It is the opinion of the attorney general's office that it is unlikely that the U.S. Supreme Court would make a jump of that magnitude from the current position, which recently allowed a single public class taught by public school teachers to be taught within a private school setting. Typically the U.S. Supreme Court acts in more of an incremental fashion, and the attorney general's office submits that would be a substantial leap. Number 1602 MR. REEVES said when public funds are expended in private schools, there is a question as to whether those are totally private schools any more. A number of federal programs which have strong strings attached to the expenditure of funding require an array of accommodations and regulatory structure for the educational institution that receives those funds. It may be that the restrictions on discrimination are much greater so that discrimination in enrollment on a religious basis may not be allowed. There is a very detailed regulatory regime requiring accommodations, and there certainly can be no discriminatory enrollment practices for students who have either mental or physical impairments that require significant accommodations. MR. REEVES said he is not here to tell them today that by providing public funding to those schools, all of those regulations will apply, but he thinks it is important for the legislature to realize that once steps are taken in that direction, those are legitimate legal questions that will have to be considered. He is certain that the private school administrations will be very concerned about those types of legal issues. Number 1510 CO-CHAIRMAN DYSON asked if there were changes to state statutes to accommodate the kinds of concerns he raised, would that alleviate some of the concerns. MR. REEVES said if he was referring to his comments regarding statutory requirements on discrimination in enrollment or accommodations, certainly state statutory programs could be adjusted to reflect the wish of the legislature, particularly in the area of special needs students. Most of those requirements are under the federal law. They are also under state law because the federal program is set up to make the Department of Education the responsible entity in ensuring that those are included in public education programs. CO-CHAIRMAN DYSON asked for Mr. Reeves' comments on the line of argument on the constitutional convention debate on "direct" and "indirect". Number 1422 MR. REEVES said it is not his place to second guess a decision of the Alaska Supreme Court. The Alaska Supreme Court directly considered the term "direct" at length in the Sheldon Jackson case. and cited the constitutional minutes, which he has reviewed. It was their determination that "indirect" was considered to be benefits that society at large gained, such as fire protection services or connection to utilities. Those type of public services and expenditures, which are of a benefit to private schools and to any other entity, were considered to be the indirect benefits. The court expressly ruled that payment of tuition from private schools was a direct benefit, interpreting the state constitution, and they also ruled that channeling funds through students which then went directly to schools to pay that tuition would not remove that direct benefit. That is their position and that would have to be what he would provide to them. Number 1350 REPRESENTATIVE BRICE asked if the argument was that the state does not provide indirect aid to private institutions. CO-CHAIRMAN DYSON said as he understood the argument, the framers wanted to be able to supply indirect benefits. REPRESENTATIVE BRICE wanted to make it clear that the state does provide indirect aid to private institutions. They provide bussing, part-time attendants and the use of public school facilities for private school students. CO-CHAIRMAN DYSON closed the public hearing. [HJR 6 was held over] ADJOURNMENT Number 1276 There being no further business before the committee, the House Health, Education and Social Services Standing Committee meeting was adjourned at 5:18 p.m.