The base student allocation is currently at $4,010 as set forth in AS 14.17.470. HB 265 would automatically increase this allocation by two percent on July 1 of each year. The effective date of this Act is July 1, 2004.

There comes a time for a specific amount of assurance and accountability. We have discussed the situation that exists where school districts are unable to offer their teachers contracts for the following year because of the uncertainty of funding coming from the legislature. In the past, we've talked about the possibility of forward funding particular elements of the education budget for our school districts around the state. We've have conducted dialogue's to separate out the education budget from the normal budget process and approve their funding earlier in the session. We have discussed the possibility of inflation proofing the foundation formula; increasing the amount in the foundation formula; and rolling the Learning Opportunity Grants (LOGS) into the formula.

One solution that will ensure a greater degree of confidence and accountability is the one this bill addresses: to increase the formula funding by 2% each year beginning on July 1, 2004.

This bill does three things -

• It allows the districts to plan with a certain amount of self-assurance. They can prepare their budget for the following year on a set 2% increase for the base student allocation.
• It builds in accountability. School districts fixed cost increases are more than 2% per year when you include teacher contracts, classified contracts, fuel costs (increased 80 % in the last 18 months), and insurance costs (some liability insurance has increased 100% in the last two years). By annually increasing the funding at a rate less than inflation you encourage the district to be fiscally prudent and programmatically responsible.
• It allows local governments to increase their participation in funding schools as a result of the raising of the cap caused by the annual 2% increase to the formula funding.

Last Updated: 04-22-03

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