Sponsor Statement for SB 146
Public School Foundation Funding

"Long-term solutions create short-term difficulties"
(Mr. Bill Demerest - Time Magazine)

Members of the State Legislature, thank you for your consideration of Senate Bill 146 - an act relating to the method by which the state determines public school funding. Your attention to this matter is an indication that you, like I, recognize the importance of this legislation. Important in that it deals with Alaska’s most important resource - our children and the quality of their education.

I came to Juneau knowing two things about the public school foundation formula. First I knew how important it was, and is, to the education of Alaska’s children. And secondly, I knew that, at least in my election district, there was general dissatisfaction with the current formula. Many felt it needed "adjustment", some felt it needed only care and feeding, and some felt it needed an out and out replacement. I was originally one of the "care and feeding" group, but after trying to understand the formula, it became apparent to me that it needed a complete review and replacement. It became evident to me that the current formula is, very simply, 1) too complicated and 2) too unfair.

SB 146 is the result of an effort to re-write the formula. It is the result of focusing a rewrite effort on four broad goals:

  1. Make it simple. Simplicity
  2. Make it fair. Equity
  3. There is no new money for a new formula. Dollars
  4. Make a plan that works Timing

Simplicity

  1. The variables, which determine the relationships between 1) state basic support, 2) required local support, 3) optional local support, and 4) assessment equalization, are minimized in number and expressed whenever possible in "per student" quantities.
  2. The underlying basis of the funding formula is the assessed value of the organized government within which the school district resides. The assessed value of a governmental entity is a determined by the free market forces at work within the boundaries, thus determined by the free exchange of goods and services. It is simply a valid reflection of the ability of an organized area to create wealth. And collectively, on a larger scale, it is a reflection of the health of our State.

Equity

  1. SB 146 recognizes the relationship between the number of students to be educated in a particular school district and the wealth, as measured by assessed value, of that district. The greater the assessed wealth per student of a school district the more it is asked to participate in the education process; and correspondingly the less the wealth, the greater the assistance the less wealthy district will receive.
  2. Each district is required to contribute an equal amount based on their assessed value in order to qualify for state basic support, but never more than what is required to educate their respective children.
  3. Regional Educational Attendance Areas (REAA’s) are asked to contribute to the education of Alaska’s youth.
  4. Assessment normalization redistributes formula money from the more wealthy districts to the less wealthy.
  5. A comprehensive Area Cost Differential Analysis (ACD) is proposed to relect the cost of operating a school. It will be accepted or rejected in total by the Legislature and upon acceptance, will be in effect in year 3 (2000).

Dollars

  1. SB 146 fully funds the increases in student enrollment for FY 1998 and projects a 1.5% increase for the five year plan being proposed.
  2. It does not propose new educational dollars be injected into the K-12 funding level (other than the student increases).

Timing

  1. SB 146 is a five year plan to institute a new public school funding formula. In year one (1998) the 1997 funding levels are maintained (with the enrollment increases considered) and in year five (2002) the new formula is fully in effect.
  2. Transition funding is provided for years 1,2,3, and 4 in order to allow time to adjust operations for those that are affected by the new public school funding formula.

A public school funding formula to serve a state as diverse as ours is complicated at best. To enable you to understand the enclosed packet I would refer you to the Table of Contents. Those sections or pages that will enable you to obtain a cursory overview SB 146 are noted with a (*) after the respective page number. For a more detailed explanation those that provide a more in-depth analysis are noted with a (**). Of course, when time permits, I commend the entire packet to your reading, understanding, consideration, and support in favor of passage.

It has been a pleasure to work with the Senate HESS committee as they have patiently taken a great deal of public testimony and provided valuable input, not only at the committee table but on an individual basis as well. I would also like to recognize the contributions of Mr. Bob Shefchik - Chief Financial Officer - Fairbanks North Star Borough School District and Mr. Eddy Jeans - Department of Finance (DOE) for their assistance in explaining, not only the current formula but how a new one would affect the education of our children. Also I would like to recognize the contribution of Mr. Dan Bockhorst (DCRA) for his lucid explanations of the various governmental organizations of our State.

As Chairman of Senate HESS I thank you once again for your consideration. The committee and my staff stand ready to assist you in any way possible as you ponder this important legislation.

Gary Wilken
Senator - West Fairbanks