Legislature(2003 - 2004)

03/01/2004 01:35 PM Senate HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
         SB  91-INCREASE AMT OF BASE STUDENT ALLOCATION                                                                     
MR. RICHARD  BENAVIDES, staff to Senator  Bettye Davis, presented                                                               
SSSB 91  on behalf of  the sponsor.   He said originally  SSSB 91                                                               
was introduced  last February.   SSSB 91 brings the  base student                                                               
allocation   to  $4,600   and   includes  an   inflation-proofing                                                               
provision and  an annual  increase for  class size  reduction and                                                               
compliance  with  the NCLB  act.    He  said  he wanted  to  echo                                                               
statements of  the previous two  speakers that the time  has come                                                               
to look into changing the base student allocation.                                                                              
CHAIR  DYSON asked  if the  department wanted  to testify  on the                                                               
three bills.                                                                                                                    
MR.  EDDY JEANS,  Manager of  the School  Finance and  Facilities                                                               
Section, Department  of Education  and Early  Development (DEED),                                                               
testified that  fiscal notes have  been prepared for each  of the                                                               
three bills.   Analysis  includes additional  local contributions                                                               
or  local caps  that will  be increased  by each  district.   The                                                               
department believes  the increase in state  support goes hand-in-                                                               
hand  with  increased  local  support, and  wanted  to  show  the                                                               
impacts  of  those  dollar amounts  on  districts'  abilities  to                                                               
contribute  additional  local  revenue.    He  mentioned  looking                                                               
forward to working further on this issue in Senate Finance.                                                                     
CHAIR DYSON then took public testimony.                                                                                         
MS. ANDI STORY, a parent of three children in the Juneau School                                                                 
district and also a Juneau School Board member, testified as                                                                    
     I  became interested  in running  for the  school board                                                                    
     because  the class  sizes were  getting high  in Juneau                                                                    
     and I  felt that  public education was  going down.   I                                                                    
     ran  and  now I'm  seeing  the  realities of  what  the                                                                    
     school board members are facing across the state.                                                                          
     The  increase  to  the   PERS/TRS  contribution  is  $1                                                                    
     million to  the Juneau School District  alone, and much                                                                    
     more  to the  bigger  school  districts.   Eighty-eight                                                                    
     percent  of  the  Juneau   School  District  budget  is                                                                    
     salaries and  benefits and we  cannot absorb a  cost of                                                                    
     this size without negatively impacting class sizes.                                                                        
     The current  ratio in our  high school in Juneau  is 31                                                                    
     students  per  classroom  teacher,  31  in  the  middle                                                                    
     school,  and  about 25  in  elementary.   This  is  not                                                                    
     quality  in  my opinion.    Quality  is eroding  across                                                                    
     Alaska  without  a  long-term plan  for  providing  for                                                                    
     adequate  education.   Without  increases  in cost  for                                                                    
     living  expenses,  students  hurt.   In  Juneau  alone,                                                                    
     increases  in   property  taxes,   property  insurance,                                                                    
     liability insurance,  and workers' comp  [indisc.] will                                                                    
     be  $202,000, next  year.   Just  flat  funding is  not                                                                    
     enough  to  retain  quality.    In  order  to  pay  the                                                                    
     $202,000 it comes out of  programs or class sizes.  The                                                                    
     requirements of NCLB and the  exit exams, again, we see                                                                    
     pockets of  students who aren't performing,  so we need                                                                    
     to  provide extra  math teachers,  tutors;  we have  to                                                                    
     pull those  teachers out of teaching  other classes, so                                                                    
     then the class sizes go up  again.  And so students are                                                                    
     hurting because of all these factors.                                                                                      
     I had signed up to  testify under all three [bills] and                                                                    
     I will say to  you that SB 1 is too little  - SB 14 and                                                                    
     SB  91 -  SB  91  actually provides  for  this cost  of                                                                    
     living, and to  make us be more  than mediocre schools.                                                                    
     I believe  we are mediocre  schools and people  are not                                                                    
     going to stay here, we  are not going to attract people                                                                    
     unless  we invest  in  putting  dollars into  providing                                                                    
     quality education and programs.                                                                                            
2:22 p.m.                                                                                                                       
MS.  MELODY   DOUGLAS  testified  via  teleconference   that  she                                                               
supports  additional funding  to public  education but  wanted to                                                               
speak specifically in  support of SSSB 14.  She  said that $4,500                                                               
has been  the needed  figure in the  Kenai Peninsula  for several                                                               
years, and  as the chief  financial officer, when  she calculated                                                               
the  numbers for  the Kenai  School District,  $4,570 would  hold                                                               
them on  par with  FY 04.   This includes  an accounting  for the                                                               
PERS/TRS  rate; if  that were  not factored  in, $4,392  would be                                                               
needed  to hold  them  equal to  FY  04.   She  recalled that  10                                                               
percent of  the classroom staff  was cut  last year, so  they are                                                               
well in  excess of $4,500  and [indisc.] to  try to give  back to                                                               
some level of normalcy from an educational classroom standpoint.                                                                
MR. MIKE  FORD, parent of  a second  grader in the  Juneau School                                                               
System, said he  spends time in the classroom and  also in Juneau                                                               
School  District budget  negotiations.   He  said  the system  is                                                               
stressed  because there  aren't resources  to meet  the standards                                                               
the Legislature  has created,  and the  system won't  work unless                                                               
there  are resources  to  meet  those standards.    The state  is                                                               
obsessed with  the PFD, but  he submits  there is no  system that                                                               
pays  better  dividends  than  the  public  school  system.    By                                                               
investing in that  system, dividends pay off for years.   He said                                                               
if the  Legislature is truly  a reflection of  public priorities,                                                               
the  priorities are  to increase  funding  for public  education.                                                               
Juneau has  a $2 million budget  gap.  That means  fewer teachers                                                               
and larger class sizes.  That trend needs to be reversed.                                                                       
MS. KATEY  MANGELSDORF, parent of  three children,  testified via                                                               
teleconference  and said  she  would support  using  part of  the                                                               
earnings from the Permanent Fund.                                                                                               
TAPE 04-10, SIDE B                                                                                                            
MS. MANGELSDORF continued as follows:                                                                                           
     My main reason  for speaking today is  to encourage you                                                                    
     to  put aside  differences  of opinion,  don't look  at                                                                    
     what  has been  done or  what  has not  been done,  but                                                                    
     answer this  question with clarity  of thought.   "What                                                                    
     can we  do right here  today to ensure the  children of                                                                    
     the   state  of   Alaska  will   have  a   good,  sound                                                                    
     education?"  I know you  know every school in the state                                                                    
     is hurting  terribly.  You  also know how to  work with                                                                    
     the finances to  find a solution.   The funding formula                                                                    
     needs to  be increased in  a significant way.   What is                                                                    
     proposed  will not  meet the  needs of  the schools  in                                                                    
     Alaska.  Of one thing I  am sure:  There is a solution.                                                                    
     I  know  you can  find  it  if  you  focus on  the  one                                                                    
     question  I  stated.   Ideas  are  beginning  to  grow.                                                                    
     Build on these ideas.  Forget  the past and look at the                                                                    
     legacy you can  set in place for our  children.  Please                                                                    
     do what is  right and good.  I want  to trust your good                                                                    
     judgment.   And  I will  support what  is necessary  to                                                                    
     guarantee  my children  and the  children in  Alaska to                                                                    
     get the solid, well-rounded  education they deserve and                                                                    
MS. MARY HAKALA,  a parent of three children  and coordinator for                                                               
"Alaska  Kids Count,"  noted there  were quite  a few  members of                                                               
that organization in  the room.  She said a  month ago there were                                                               
a  handful of  parents,  whereas  now "Alaska  Kids  Count" is  a                                                               
statewide  network   of  400  parents,  community   members,  and                                                               
grandparents.   She told members  parents were seeing  the damage                                                               
and  the regression  that has  occurred  and will  occur if  "you                                                               
don't act."  She said  membership consists of volunteers, both in                                                               
and out  of the classroom.   Members  see the system  is strapped                                                               
with the  current level of  funding.  She  expressed appreciation                                                               
for anything that  can be done to prevent  dire consequences from                                                               
happening  if action  is  not  taken regarding  cuts  due to  the                                                               
PERS/TRS  issue  and escalating  costs  due  to inflation.    She                                                               
stated that  merely putting  a band-aide  on doesn't  address the                                                               
systemic  issue.    She  said  they  were  asking  not  only  for                                                               
impending cutbacks  to be taken  care of, but also  to rejuvenate                                                               
the  schools and  to  take  the discussion  to  "Yes, we  support                                                               
MR. CARL  ROSE testified that  there are problems  with PERS/TRS,                                                               
and  with  depleted  resources   available  for  maintenance  and                                                               
operation of schools.  He  stated it matters whether the PERS/TRS                                                               
issue  is addressed  from  inside  a formula  or  not.   He  said                                                               
regarding  monies  distributed  inside   a  formula,  because  of                                                               
calculations  and the  eroding floor,  dollars directed  toward a                                                               
specific issue  might not reach  there because it is  impacted by                                                               
the distribution of funds and the foundation formula.                                                                           
SENATOR GUESS  commented that from  her calculations,  $4,590 was                                                               
needed to hold districts harmless  on PERS/TRS, if it goes inside                                                               
the formula.                                                                                                                    
MR.  DAVE  JONES,  Director  of Finance  for  the  Kodiak  Island                                                               
Borough  School   District,  and  father  of   several  children,                                                               
testified as follows:                                                                                                           
     Kodiak  is in  the same  condition as  districts across                                                                    
     the  state.   To  just maintain  our current  programs,                                                                    
     we're  facing a  $2,047,000 revenue  deficit.   Roughly                                                                    
     half  a  million  of  that   is  related  to  declining                                                                    
     enrollments, so  I'm not going  to come to you  and ask                                                                    
     for that; we  need to deal with that  internally.  This                                                                    
     leaves   us  with   $1.5  million   deficit  of   that.                                                                    
     Approximately $700,000 is  related to retirement system                                                                    
     increases.   I'm going  to be  an optimist  and believe                                                                    
     that  you [indisc.]  solve that  problem as  a separate                                                                    
     issue.   This  leaves us  with a  little over  $800,000                                                                    
     deficit  that's  related   to  increases  in  salaries,                                                                    
     benefits, fuel,  costs, freight costs,  etc.   We're at                                                                    
     the cap  in Kodiak  and we can't  look locally  for any                                                                    
     additional help.   The solution  for us has to  come at                                                                    
     the state  level.  That's why  I want to thank  you for                                                                    
     considering the  bills that  are before  you today.   I                                                                    
     think it's imperative  that the bills that  come out of                                                                    
     your  committee  that  are  brought  forward  with  the                                                                    
     substantial increases  to the base  student allocation,                                                                    
     [indisc.] for the fixed cost increases we incur.                                                                           
     If you  set the retirement  issue aside, SB 1  gives us                                                                    
     about  half  the money  we  need  to  get to  the  cost                                                                    
     increases we're looking at.   A $200 increase, with the                                                                    
     corresponding ability  to increase local  support would                                                                    
     let us continue the programs that we have today.                                                                           
     I'm going  to take  five seconds to  tell you  that I'm                                                                    
     throwing my 'dad  hat on' and tell you that  I want you                                                                    
     to tax  me.  I want  to pay an  income tax.  I  want to                                                                    
     use the  permanent fund  earnings.  And  I want  you to                                                                    
     let me  help pay for  my children's education  by doing                                                                    
2:33 p.m.                                                                                                                       
MR. GERRY  DONOHOE, parent of  two children in the  Juneau School                                                               
District, said  he and  his family could  have moved  anywhere in                                                               
the world, but  they chose to move back to  Juneau because of the                                                               
quality  of life  and  the  great community.    One  of the  only                                                               
compromises was  the declining state  of the  educational system.                                                               
He said they  were lucky in Pennsylvania because the  kids had 18                                                               
- 20  students in  their public school  classrooms.   That school                                                               
district spent $8,500 on each enrollee.   He stated, "If you want                                                               
to attract people to Alaska, if  you want to show progress in the                                                               
state, you've got to increase state education funding."                                                                         
MS. MARY FRANCIS, Executive Director  of Alaska Council of School                                                               
Administrators  (ACSA),   testified  that   all  of   the  school                                                               
districts  support the  additional  base  student allocation  and                                                               
would be grateful for any support,  the higher the better to keep                                                               
pace.   As a  former superintendent, she  said it  was incredible                                                               
how erosion can occur  in a year or two, and  it might take eight                                                               
to ten  years to reinstate  some programs; good  people providing                                                               
services will not  be there and it's very hard  to build programs                                                               
back.  She supports consideration of these bills.                                                                               
MS.  AMY LUJAN,  Business Manager  in the  Nome School  District,                                                               
testified that Nome needs a $200  increase in basic needs to keep                                                               
on par with FY 04.  She  explained that about two thirds, or $134                                                               
would  be  for  PERS/TRS,  and  about  one  third  would  be  for                                                               
insurance and  other increases encountered  in planning  for next                                                               
year.  This  still doesn't take into account cuts  in programs in                                                               
the  past few  years.   There are  fewer junior  and senior  high                                                               
school  offerings.    There  are larger  class  sizes,  which  is                                                               
especially problematic for elementary  school.  The nurse, social                                                               
worker,  elementary  assistant  principal,  and one  of  the  two                                                               
counselor positions have  been cut.  There are  fewer aides, some                                                               
large  deferred maintenance  needs, and  professional development                                                               
is  not  paid  for  out  of the  school  district  general  fund;                                                               
professional development is from grants.   This is difficult when                                                               
trying to  implement state and  federal requirements  for quality                                                               
schools.  The  $200 increase in basic needs won't  bring back the                                                               
cuts just mentioned, but would  help with PERS/TRS and basic cost                                                               
increases such as insurance and inflation.                                                                                      
MR. STUART  COHEN, parent  of two children  in the  Juneau School                                                               
District,  reflected  that  his  own third  grade  class  had  34                                                               
students,  but class  composition  didn't  include students  with                                                               
behavioral  or  learning  problems.   He  pointed  out  that  our                                                               
society has chosen to no  longer place those children in separate                                                               
classrooms,  condemning them  to a  lifetime of  limited economic                                                               
possibilities.   He also noted that  if one has taught  school or                                                               
worked with groups  of kids, the reality is that  one or two kids                                                               
who have  difficulty learning or  focusing can make the  class 20                                                               
percent or  30 percent harder and  limit what the other  kids can                                                               
learn.   He  said it  was important  to realize  that talk  about                                                               
class size  is of real concern,  and he urged members  to give as                                                               
much money as possible to the schools.                                                                                          
MS. SELINA  EVERSON, representing  the Alaska  Native Sisterhood,                                                               
said  she  has  four  grandchildren in  the  school  system,  and                                                               
expressed  concern  for  adequate   funding,  especially  in  the                                                               
village areas where "her people  reside."  She said, "Our history                                                               
should be  taught in the school  system and I can't  believe that                                                               
it  has been  this long.    Because when  you understand  another                                                               
race,  you  understand  and  can   tolerate  that  person.    You                                                               
understand where  they're coming  from."   She said  the teachers                                                               
called  her dyslexic  grandchild "stupid"  and this  was hurtful.                                                               
In short,  the funding should not  be cut.  She  said her parents                                                               
used to  pay a  school tax,  and she  would be  willing to  pay a                                                               
school  tax for  her grandchildren  and her  great grandchildren.                                                               
And she would be willing to pay an income tax.                                                                                  
MR. TIM STEELE  testified from Anchorage and  mentioned 332 jobs,                                                               
program cuts,  increase in class  size, and so forth.   Regarding                                                               
solutions,  he  said  the  state  is at  a  breaking  point,  and                                                               
additional  funding   is  necessary.    The   superintendent  has                                                               
indicated  that  about  $238  will  hold  us  harmless,  assuming                                                               
PERS/TRS is outside.  Just  making it is not sufficient; adequacy                                                               
and  sustainability need  to be  addressed.   These Senate  bills                                                               
don't have  HB 471's two  percent cost of  living.  We  need some                                                               
way  to  not  be  back  in   this  same  fix,  year  after  year.                                                               
Legislative  research shows  that  $252 in  purchasing power  has                                                               
been lost since 1999.                                                                                                           
2:45 p.m.                                                                                                                       
SENATOR GUESS said  since Senator Davis wasn't there  to speak to                                                               
her  bill,   she  offered  that  SSSB   91  inflation-proofs  the                                                               
foundation formula for future years.                                                                                            
MS. CHRIS MOORE, mother of  four children and representing Valley                                                               
Voices for  Children, an organization from  the Mat-Su, testified                                                               
that  children's needs  are  not  being met.    Children are  not                                                               
receiving an adequate education  and deserve a quality education.                                                               
Although  she loves  living  in Alaska,  the  education issue  is                                                               
looming  like a  dark  cloud.   She  said  she  advocates for  an                                                               
inflation-proofing component in the foundation formula.                                                                         
MR. BOB DOYLE,  Chief School Administrator for  the Mat-Su Valley                                                               
School  District, representing  about 14,000  children and  their                                                               
parents,  suggested a  three-prong  approach.   This includes  an                                                               
increase to the  base student allocation of $210,  which would be                                                               
sufficient  as long  as TRS/PERS  cost increases  from this  year                                                               
were also  dealt with, and it  could be either inside  or outside                                                               
the formula.   Also, as the base student allocation  is moved up,                                                               
we're able to  get additional support from the  local assembly to                                                               
get full support  for the schools, as well.   With that approach,                                                               
we would  be held harmless  this year and  the focus could  be on                                                               
improving  student  learning  and  getting  on  with  efforts  in                                                               
curriculum alignment.                                                                                                           
CHAIR DYSON asked if anybody wanted to add to his/her testimony.                                                                
MR.  COHEN addressed  the  issue  of taxes,  saying  that he  was                                                               
already  taxed so  to  speak,  because he  writes  checks to  the                                                               
school,  as do  other  parents.   In his  20  years in  business,                                                               
traveling  to countries  such as  Mongolia or  Argentina, he  has                                                               
observed  different   philosophies  of  taxation,   ranging  from                                                               
communist China to Bolivia.   In some countries, people in charge                                                               
have a philosophy of not  re-distributing wealth through taxation                                                               
and because they have been  "too successful" in implementing that                                                               
philosophy,  educational  systems  are   such  that  the  wealthy                                                               
children go to excellent private  schools.  However, if you're of                                                               
the  middle  class, your  child  probably  goes to  a  church-run                                                               
Catholic school  and gets  an O.K.  education, whereas  if you're                                                               
living  in  poverty  as  60   to  95  percent  of  the  country's                                                               
population does,  your child  probably has to  share a  pencil at                                                               
school.  Those  countries have lost much of  their human capital,                                                               
as represented  by their  children, and  for other  reasons also,                                                               
they'll never  get out of  the situations  they're in.   He asked                                                               
members to  consider, "A  little bit  of taxation  can be  a good                                                               
CHAIR DYSON closed public testimony.                                                                                            
SENATOR  WAGONER mentioned  that $4,500  would hold  the district                                                               
harmless for 2004, and PERS would  be outside of that.  He wanted                                                               
to reiterate  for the record,  that for  the year prior  to that,                                                               
Kenai  Peninsula Borough  School  District cut  an additional  56                                                               
positions,  amounting   to  about  $2.5  million.   He  said  the                                                               
discrepancy was due  to his thinking of 2003, not  2004.  He said                                                               
they have been cutting for a  long time, and that "I stick pretty                                                               
tight to  the $4,500 without  the PERS being  in it.   That would                                                               
heal a little bit of the  problems they've got on student numbers                                                               
and classroom numbers."                                                                                                         
SENATOR  GREEN said  the  discussion has  been  on whether  these                                                               
funding  pieces were  handled separately,  and  questioned if  it                                                               
would  be better  for  funds  to go  directly  to retirement  and                                                               
benefits  - a  portion  of it  -  and not  accrue  to the  school                                                               
district.  Or,  would it be necessary to send  it directly to the                                                               
district and, in  turn, pay for a portion of  PERS/TRS?  She said                                                               
this information  was still important,  and the  conversation was                                                               
SENATOR  GREEN moved  to  report  SSSB 1  out  of committee  with                                                               
individual recommendations and attached fiscal note.                                                                            
CHAIR DYSON asked if there was  any objection.  There being none,                                                               
it was so ordered.                                                                                                              
SENATOR  GUESS moved  to report  SSSB  91 out  of committee  with                                                               
individual recommendation and attached fiscal note.                                                                             
CHAIR DYSON  asked if there was  any objection.  Seeing  none, it                                                               
was so ordered.                                                                                                                 
SENATOR  GUESS moved  to report  SSSB  14 out  of committee  with                                                               
individual recommendations and attached fiscal note.                                                                            
CHAIR DYSON  asked if there was  any objection.  Seeing  none, it                                                               
was so ordered.                                                                                                                 
SENATOR  GUESS said  since  others in  committee  were in  Senate                                                               
Finance while she  wasn't, she told members that  PERS/TRS is not                                                               
a one-time hit, and that  serious consideration needs to be given                                                               
to putting  it in the  foundation formula.   She said  this issue                                                               
would need to be dealt with  in multiple years, and we don't know                                                               
what will  happen with the  market, which caused this  problem to                                                               
begin  with.   She suggested  that as  a policy  matter, one-time                                                               
money  sometimes does  more harm  than  good over  the long  run,                                                               
although this isn't  a one-time problem.  Anchorage  looks at $22                                                               
million as  part of PERS/TRS.   Every  district is going  to deal                                                               
with this next year.  She  recommended putting it in, and keeping                                                               
all districts harmless.                                                                                                         
SENATOR GUESS  told members  that because  the minority  has been                                                               
recently  criticized  for  not  making  policy  intentions  clear                                                               
[enough], that Democrats  believe SSSB 91 is the  best policy for                                                               
education funding.  Democrats will  be offering amendments on the                                                               
Floor if they're not in the final  bill.  She said, "I don't want                                                               
to surprise anyone,  since we got criticized for  some reason for                                                               
not giving you  guys enough heads-up, so I'm just  on the record,                                                               
stating that."                                                                                                                  
SENATOR GREEN said she believed  there was still more information                                                               
to  follow on  the PERS/TRS  issue, particularly  because of  the                                                               
board meeting scheduled  for the third week in March.   She noted                                                               
that the numbers continue to float, so there needs to be                                                                        
sensitivity to that.                                                                                                            
There being no further business to come before the committee,                                                                   
Chair Dyson adjourned the meeting at 2:58 p.m.                                                                                  

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