Legislature(2003 - 2004)
03/01/2004 01:35 PM Senate HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 follows: 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 need. 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 education." 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 that. 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 thing." 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 continuing. 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.