Legislature(2003 - 2004)

02/17/2004 11:03 AM House EDU

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 471-INCREASE AMT OF BASE STUDENT ALLOCATION                                                                                
Number 0070                                                                                                                     
CHAIR GATTO announced  that the first order of  business would be                                                               
HOUSE BILL  NO. 471, "An  Act relating  to the funding  of public                                                               
education; and  providing for  an effective date."   He  asked if                                                               
Representative  Ogg,  Chair  of  the  Subcommittee  on  Education                                                               
Funding,  would provide  the  committee  with the  subcommittee's                                                               
Number 0099                                                                                                                     
REPRESENTATIVE  OGG told  the members  that  it was  an honor  to                                                               
serve on  the subcommittee with Representatives  Seaton and Gara.                                                               
They  did an  excellent  job  in working  with  this complex  and                                                               
difficult subject,  he said.   Representative Ogg  commented that                                                               
the  subcommittee   listened  to  public  testimony   during  two                                                               
meetings.   The testimony  of school  districts around  the state                                                               
was  expressing how  the districts'  needs had  not been  met was                                                               
very persuasive, he said.                                                                                                       
Number 0212                                                                                                                     
REPRESENTATIVE  OGG explained  that  after  taking testimony  the                                                               
subcommittee  spent  time  discussing how  to  address  education                                                               
funding.     He   reminded   the  members   that   in  the   last                                                               
[subcommittee] meeting  a bill that dealt  with Public Employees'                                                               
Retirement System  (PERS) and  Teachers' Retirement  System (TRS)                                                               
increases  was referred  to  the [full  committee  of the]  House                                                               
Special Committee on Education.   Representative Ogg said that it                                                               
was the consensus  of the subcommittee to deal with  PERS and TRS                                                               
[funding] as  a separate  issue.   At one  point it  was believed                                                               
that  PERS and  TRS should  be  included in  the formula  funding                                                               
[bill];  however,  in   looking  at  the  numbers   it  became  a                                                               
differentiation [issue]  between the  actual costs under  the TRS                                                               
and PERS programs and formula  funding.  The subcommittee decided                                                               
to deal only with formula funding, he clarified.                                                                                
REPRESENTATIVE OGG asked  the members to look at HB  471 which is                                                               
the vehicle the subcommittee  believes best addresses [education]                                                               
funding for FY  05.  The number in the  bill reflects an increase                                                               
of $95.   He added that the subcommittee does  not recommend that                                                               
number  based  on  testimony  taken  and  a  lot  of  discussion.                                                               
Representative  Ogg   told  the  members  that   the  amount  the                                                               
subcommittee recommends is  an increase of $210, to  the total of                                                               
$4,379.   The  subcommittee recommends  an amendment  be made  to                                                               
reflect those figures, he said.                                                                                                 
Number 0317                                                                                                                     
REPRESENTATIVE  OGG  recommended  another amendment  which  would                                                               
change the wording on page 1,  line 6, where the words "beginning                                                               
on July  1, 2005," would be  inserted after the words  "on July 1                                                               
of each year," he said.                                                                                                         
REPRESENTATIVE OGG  explained that the subcommittee  came up with                                                               
the  $210 figure  based on  testimony given  [during subcommittee                                                               
hearings].   The  subcommittee used  the figure  provided by  the                                                               
Superintendent of the Anchorage  School District who offered that                                                               
a $388 increase  would make the Anchorage  School District whole.                                                               
The testimony  from around the state  came in very close  to that                                                               
figure,  he added.   Some  a  little less,  and very  few were  a                                                               
little  more, but  nothing over  $400.   The  amount each  school                                                               
district will get  is based on their actual costs,  he said.  The                                                               
way the subcommittee arrived at  the $210 increase was by funding                                                               
the  PER [and  TRS] requirement  through  a separate  bill.   The                                                               
amount given to  the subcommittee by the  Department of Education                                                               
and   Early  Development   for   [TRS  and   PERS]  funding   was                                                               
$35,000,000,  which  would  equal  $178 from  that  $388  [figure                                                               
provided  by the  Anchorage School  District], giving  the amount                                                               
for education  funding of $210.   Representative Ogg  thanked the                                                               
other members of the subcommittee saying  that it was not an easy                                                               
Number 0460                                                                                                                     
CHAIR GATTO  told the  members that there  will be  amendments to                                                               
the  bill  which  will  require   a  new  fiscal  note  from  the                                                               
department.  It  will be provided by next  Thursday's meeting, he                                                               
Number 0523                                                                                                                     
REPRESENTATIVE OGG moved to have  HB 471, 23-LS1645\D, before the                                                               
committee as the working document.   There being no objection, HB
471,  version  D,  was  before the  House  Special  Committee  on                                                               
REPRESENTATIVE OGG moved  to amend HB 471 as  follows [adopted as                                                               
Amendment 1]:                                                                                                                   
     On page 1, line 6                                                                                                          
     Delete "$4,263"                                                                                                            
     Insert "$4,379"                                                                                                            
There being no objection, Amendment 1 was adopted.                                                                              
CHAIR GATTO  reiterated Representative  Ogg's comments  that this                                                               
bill reflects  a $210 increase  [in education funding].   He told                                                               
the  members it  is important  to note  that this  bill does  not                                                               
address the  TRS and  PERS shortfall, so  another bill  will come                                                               
before the  committee to deal with  that issue.  He  said that it                                                               
is  his understanding  that [the  figure  for education  funding]                                                               
plus the bill  that will handle the PERS and  TRS increase is the                                                               
figure  which was  given to  [the  committee] as  that which  was                                                               
spent on education  in FY 04.   He told the members  that most of                                                               
the school  districts are saying  that if funding is  provided at                                                               
this level  it would be  satisfactory and the districts  will not                                                               
be faced with the drastic cuts that have been proposed.                                                                         
Number 0702                                                                                                                     
REPRESENTATIVE OGG moved Amendment 2 as follows:                                                                                
     On page 1, line 6                                                                                                          
     After the word "year,"                                                                                                     
     Insert the words "beginning July 1, 2005,"                                                                                 
CHAIR GATTO  pointed out  that the budget  being proposed  is the                                                               
2005  budget.   If this  amendment were  effective July  1, 2005,                                                               
then  there  would  be  an  increase  in  the  formula  plus  the                                                               
percentage increase.   He asked Mr. Jeans to  clarify [the impact                                                               
of Amendment 2].                                                                                                                
Number 0764                                                                                                                     
EDDIE  JEANS,  Finance  Manager, School  Finance  and  Facilities                                                               
Section,   Department  of   Education   and  Early   Development,                                                               
testified on  HB 471 and  answered questions from  the committee.                                                               
He  explained that  by changing  the date  to July  1, 2005  [the                                                               
legislation] would effect the 2006 school year.                                                                                 
REPRESENTATIVE OGG  commented that  the date  he is  inserting is                                                               
not the  effective date  [of the  law].   He clarified  that this                                                               
change  would mean  that the  2 percent  increase would  not take                                                               
effect until the 2006 budget.                                                                                                   
Number 0819                                                                                                                     
CHAIR GATTO  asked if there  were any objections to  Amendment 2.                                                               
There being no objection, Amendment 2 was adopted.                                                                              
REPRESENTATIVE GARA  advised the  members that a  third amendment                                                               
is  being copied  for the  committee's consideration.   He  added                                                               
that he  will provide the  minority's report on  the subcommittee                                                               
at the same time [that he presents his amendment].                                                                              
Number 0893                                                                                                                     
JOHN   ALCANTRA,  Government   Relations  Director,   NEA-Alaska,                                                               
testified on  HB 471.   He  told the  members that  he represents                                                               
almost 13,000  members on NEA-Alaska.   Mr. Alcantra  thanked the                                                               
committee for  their efforts,  particularly for  those amendments                                                               
that  brought  education funding  up  to  $4,379.   He  told  the                                                               
committee it is important to  note that revenue sources that were                                                               
published two  months ago for  the Constitutional  Budget Reserve                                                               
(CBR) draw  for the current fiscal  year was less than  half that                                                               
which  was forecasted.   It  came in  at $195.7  million, leaving                                                               
$204.3  million in  abeyance of  the $400  million that  had been                                                               
discussed for a  CBR draw, he said.  Mr.  Alcantra stated that he                                                               
understands  that the  $35.8 million  in TRS  and PERS  shortfall                                                               
will  be dealt  with  in a  different bill.    He reiterated  his                                                               
appreciation to the  committee for their efforts,  but added that                                                               
he  concurs   with  other   legislators'  statements   that  this                                                               
[funding] does not address the  past losses through inflation and                                                               
it will not address the adequate funding issues in the future.                                                                  
Number 1180                                                                                                                     
RON   RUCKER,   President,  Classified   Employees   Association,                                                               
testified on HB 471.   He explained that the Classified Employees                                                               
Association's members  are the support  staff for  the Matanuska-                                                               
Susitna School District.  When  he looked at the original version                                                               
of  HB  471  he  believed  it to  be  totally  inadequate.    The                                                               
[amendments] are  a step in  the right direction; however,  it is                                                               
important  to note  that this  increase still  does not  make the                                                               
district whole, he said.  Mr.  Rucker commented that he's come up                                                               
with some  quick numbers  which reflects  that the  district will                                                               
have a  $2 million shortfall.   He said he believes  that will be                                                               
the case even  with separate funding for  the PERS/TRS shortfall.                                                               
At this  rate the public  school system  will not be  around very                                                               
long,  he commented.   He  said that  the district  is no  longer                                                               
cutting fat or meat; it is  cutting the bone that supports public                                                               
education.   Mr. Rucker  summarized his  comments by  saying that                                                               
education  needs to  be funded  adequately because  education [of                                                               
the youth] is the future of this state.                                                                                         
Number 1167                                                                                                                     
CHAIR GATTO  asked Mr. Rucker  to provide him  with a name  of an                                                               
individual  who can  confirm  that  the Matanuska-Susitna  School                                                               
District will have a $2 million shortfall.                                                                                      
MR. RUCKER responded  that he did a rough estimate;  based on the                                                               
$8  million  in  cuts  Mr.  Doyle  [Chief  School  Administrator,                                                               
Matanuska-Susitna Borough  School District] said there  would be.                                                               
He said  that if [there were  originally] $8 million in  cuts, of                                                               
that $8 million,  $3 million is for PERS and  TRS, that leaves $5                                                               
million [in cuts] on the table.   Roughly 14,000 students times a                                                               
$210  increase  [in  base  student  allocations]  would  mean  an                                                               
increase  of  approximately  $2.9  million.    That  leaves  [the                                                               
district]  approximately  $2  million  short of  the  $5  million                                                               
shortfall, he  said.   The increase does  not make  this district                                                               
whole, he  stated.   He pointed  out that  the district  does not                                                               
have  the  option of  contributing  additional  local money  that                                                               
Anchorage or other communities have  because the borough assembly                                                               
is currently  funding to the  maximum amount [allowable  by law].                                                               
He commented that  this has been the case for  a number of years.                                                               
There is  nowhere else to go  but to cut programs  and raise fees                                                               
to residents and students.                                                                                                      
CHAIR  GATTO asked  Mr.  Rucker if  he is  aware  of the  funding                                                               
formula and how that works with  the base student allocation.  He                                                               
asked Mr.  Jeans to  comment on  the impact  of the  base student                                                               
Number 1293                                                                                                                     
MR. JEANS responded that as Chair  Gatto pointed out, there are a                                                               
number  of  adjustments that  occur  in  the foundation  program.                                                               
There is  an adjustment for  school size, district  cost factors,                                                               
and   20  percent   [additional]   funding   for  special   needs                                                               
[students].   The  numbers will  be  higher than  a straight  per                                                               
student times a dollar amount.   He summarized that there will be                                                               
a different number on the  fiscal note going to Matanuska-Susitna                                                               
Borough School District than the number Mr. Rucker mentioned.                                                                   
Number 1340                                                                                                                     
KRIS MOORE,  Valley Voices for  Children (VVFC), testified  on HB
471.   She  offered  her thanks  for the  work  the committee  is                                                               
doing.  She said she believes  the amendments show that the state                                                               
is moving  in the  right direction.   She  told the  members that                                                               
VVFC  would be  happy to  help  in seeing  that this  legislation                                                               
passes.   She  said that  she understands  that [a  separate bill                                                               
addressing] the TRS and PERS funding  issue will be coming to the                                                               
committee;  however,  she  does  not see  this  as  an  education                                                               
funding issue, but a revenue issue.                                                                                             
Number 1453                                                                                                                     
CHAIR  GATTO announced  for the  record that  Representative Wolf                                                               
joined the meeting some time ago.                                                                                               
Number 1474                                                                                                                     
JENNIE HAMMOND testified in support  of the amendments to HB 471.                                                               
She  told the  committee  that  last night  she  attended a  work                                                               
session on  the budget  by the  Kenai Peninsula  School District.                                                               
She  warned  that  this  increase   will  still  not  fully  fund                                                               
education in the  Kenai Peninsula School District.   The district                                                               
is looking at reducing special  education, she said.  Ms. Hammond                                                               
asked  if the  committee would  create a  task force  for special                                                               
education to  look at the issue.   She also asked  the members to                                                               
look at  the idea  of giving  tax cuts on  gas to  companies that                                                               
deal with the district.  That  might ensure that the companies do                                                               
not pass the additional costs to the district, she said.                                                                        
Number 1565                                                                                                                     
REPRESENTATIVE SEATON asked Ms. Hammond  if she recalls what base                                                               
student allocation figure was used at those meetings.                                                                           
MS.  HAMMOND responded  that the  figure used  in the  meeting to                                                               
adequately fund education was $4,570 for FY 04.                                                                                 
Number 1605                                                                                                                     
REPRESENTATIVE GARA  noted that both Kenai  and Matanuska-Susitna                                                               
testifiers have  said that roughly  $4,570 would be  necessary to                                                               
adequately fund to  FY 04 [level], and ensure  that no additional                                                               
teachers  would be  fired.   It is  important to  note that  [the                                                               
increased]  funding does  not make  up for  all the  teachers who                                                               
were  fired the  year  before.   Representative  Gara noted  that                                                               
Kenai said that  going into this year it was  necessary to layoff                                                               
10 percent  of their  teachers.  The  $4,570 would  [still] leave                                                               
Kenai at the point where it  has lost 10 percent of the teachers.                                                               
He said the point is well  taken that this increase does not make                                                               
districts whole.                                                                                                                
Number 1666                                                                                                                     
MELODY DOUGLAS,  Chief Financial Officer, Kenai  Peninsula School                                                               
District,  testified  in support  of  HB  471.   She  echoed  the                                                               
appreciation expressed  by others in  amending HB 471  to include                                                               
increases in  education funding.   Ms. Douglas said that  this is                                                               
movement in the right direction.   She said she realizes that the                                                               
PERS and TRS funding is not  included, but the way she calculates                                                               
this, the figure will come  in around $4,557, which would [still]                                                               
leave the district $13 off the  base unit for what would hold the                                                               
district to the FY 04 standards.   Ms. Douglas commented that she                                                               
really appreciates  the language  for the  2 percent  increase in                                                               
funding for  next year; however,  she said she is  very concerned                                                               
that  the  cost of  inflation  may  exceed  that [amount].    She                                                               
concluded her testimony by offering  to assist the members in any                                                               
way  possible  as  the  bill  proceeds  through  the  legislative                                                               
Number 1744                                                                                                                     
ANDI STORY,  Board Member, Juneau  School District,  testified in                                                               
support of HB 471.   She told the members that  she is the parent                                                               
of three children in the Juneau  School District.  Ms. Story told                                                               
the members that her family has  been in Alaska for 17 years, but                                                               
when her daughter was small, they  lived in San Diego and had the                                                               
opportunity to  move back  to Juneau to  work on  their business.                                                               
When her  first daughter  started kindergarten  in 1990,  she was                                                               
one  of  21 students  in  the  class;  when her  second  daughter                                                               
started,  she  was  in  a  class  of 29.    It  is  important  to                                                               
understand  that  as the  education  system  fails to  provide  a                                                               
quality  education, it  is more  difficult to  attract people  to                                                               
Alaska.  She said she does  appreciate the work of the committee.                                                               
Ms. Story  commented that  in the work  session she  is attending                                                               
tonight there  will be  discussions which will  focus on  what to                                                               
Number 1877                                                                                                                     
CHAIR GATTO announced that HB  471 would be held until Thursday's                                                               
HB 471-INCREASE AMT OF BASE STUDENT ALLOCATION                                                                                
[Contains discussion of HB 477]                                                                                                 
CHAIR  GATTO  announced  that  the   committee  would  return  to                                                               
discussions   about  HB   471.     He  told   the  members   that                                                               
Representative  Gara  would  provide  a minority  report  on  the                                                               
subcommittee on education funding.                                                                                              
Number 1907                                                                                                                     
REPRESENTATIVE  GARA  asked  if  the  chair  wishes  to  take  up                                                               
Amendment 3 today.                                                                                                              
CHAIR  GATTO  responded  that  he  would  like  to  hold  off  on                                                               
Amendment 3 until Thursday.                                                                                                     
Number 1977                                                                                                                     
REPRESENTATIVE GARA said  that he appreciates all  the efforts of                                                               
the subcommittee members and those  who took the time to testify.                                                               
The bill before the members goes  a long way to repair the damage                                                               
to the schools over the last  many years, he said.  Comments that                                                               
were  heard  today  from  the  Matanuska-Susitna  Borough  School                                                               
District  and  testimony  heard  in  subcommittee  actually  went                                                               
further than what the bill  offers.  For example, Kenai Peninsula                                                               
School  District indicated  that  it would  need  a base  student                                                               
allocation of  $4,570, if  the PER  and TRS  was rolled  into the                                                               
[base  student allocation],  just  to be  held  harmless to  last                                                               
year's  level,   he  said.    Matanuska-Susitna   Borough  School                                                               
District needed the same amount of  money to be at the same level                                                               
as  last  year,  he  added.   Representative  Gara  reminded  the                                                               
members that the school districts  were very clear that last year                                                               
education  funding  was  cut  and  the  funding  fell  behind  on                                                               
inflation [proofing].  These actions  caused severe impacts which                                                               
required  the   districts  to   layoff  substantial   numbers  of                                                               
teachers.   Representative  Gara  pointed out  that  HB 471  only                                                               
mitigates  this year's  damage  and does  nothing  to repair  the                                                               
damage from last year's [budget cuts].                                                                                          
Number 2010                                                                                                                     
REPRESENTATIVE GARA  told the members that  he and Representative                                                               
Kapsner have filed HB 477 in an  attempt to go the second step in                                                               
repairing  some of  last  year's  damage.   As  the members  will                                                               
recall, he  said, last year the  legislature eliminated community                                                               
schools  funding, cut  what goes  into pupil  transportation, cut                                                               
the program that helped school  districts pay for the extra costs                                                               
of educating  foster children, and  cut the  kindergarten program                                                               
for four-year olds.   Representative Gara said he  believes it is                                                               
time to start  repairing the damage.  He explained  that his plan                                                               
would  include an  increase  in the  base  student allocation  to                                                               
$4,600 per student, which would  include rolling the PERS and TRS                                                               
amount [into  the bill].   The reason  that is important  is that                                                               
the amount then  becomes part of the base  student allocation and                                                               
it will not be necessary to go  over the PERS and TRS issue again                                                               
next year.   The numbers are not that far  off, he commented, the                                                               
number  in HB  477 recommends  is  $4,600, while  the number  the                                                               
subcommittee  is recommending  is  the equivalent  of $4,557  per                                                               
student.  Representative Gara pointed  out that the difference is                                                               
$8 million  and 160 teachers.   He summarized that for  not a lot                                                               
more money  [the legislature] could go  a long way to  solve this                                                               
problem.    Representative   Gara  applauded  the  subcommittee's                                                               
action  in addressing  inflation by  increasing the  base student                                                               
allocation into  the future  by 2 percent  annually.   He pointed                                                               
out  that inflation  may  exceed 2  percent so  a  better way  of                                                               
addressing this  issue would  be to  acknowledge the  damage that                                                               
has taken place  over the last decade, and to  repair that damage                                                               
into the future by increases  to the base student allocation with                                                               
inflation [proofing],  plus another  2 percent until  class sizes                                                               
come down  to a  level that is  acceptable.   Representative Gara                                                               
reiterated his  appreciation for the  work the committee  did and                                                               
acknowledged that [HB  471] is a good bill, but  noted that there                                                               
is much to be done to repair past damage [to public education].                                                                 
Number 2162                                                                                                                     
CHAIR  GATTO commented  that Representative  Gara's reference  to                                                               
the  funding being  "not  that far  off" is  music  to his  ears,                                                               
because there  have been  many times that  the members  have been                                                               
very far apart.                                                                                                                 
[HB 471 was held in committee.]                                                                                                 

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