Education funding up for debate

Changes could mean more teachers, more programs for district

Posted: Sunday, February 03, 2008

Companion bills now before the Alaska House and Senate would boost the current base student allocation and raise the district cost factor for Kenai Peninsula Borough schools each year for the next five years.

House Bill 273 and its companion, Senate Bill 240, are currently in the finance committees of their respective legislative bodies. The measures incorporate recommendations of the Joint Legislative Education Funding Task Force.

Each version proposes to increase the base student allocation to $5,480 in fiscal year 2009, $100 more than the current allocation, and to keep increasing it at a rate of $100-per-year through fiscal year 2011, when the base student allocation would reach $5,680.

The bills also would increase the "area cost differentials" of school districts across the state. Those factors weight the relative remoteness of rural districts, which face higher costs, against a base of one (1.00) assigned to the municipal school district of Anchorage.

The Kenai Peninsula Borough's current area cost differential is set at 1.004, a factor school and borough officials have complained for years is far to low to account for the real costs of operating borough schools, which include a mix of urban and very rural facilities.

The two bills now under consideration would raise the borough school district's area cost differential factor from 1.004 to 1.088 in fiscal year 2009, to 1.109 the following fiscal year, and keep increasing it each fiscal year until it reached 1.171 in fiscal year 2014, which would be the 2013-2014 school year.

The bill also includes incremental increases to the factor used to determine funding for students with special needs who receive intensive services, as well as a buffer mechanism to help protect schools against precipitous declines in funding due to rapid drops in enrollment.

Dave Jones, district assistant superintendent, said one of the keys to what happened over the past couple of years was that the district's cost-factor funding was appropriated outside the state's Foundation Formula, which, among other things, dictates the cap on local funding.

This year, it appears, the cost factor will go back inside the formula, the upshot being that it will increase the amount the borough may legally contribute from local tax revenues.

Melody Douglas, finance director for the KPB school district, said if the current bill remained unchanged, next year's increase in the cost factor would provide about $5.6 million. However, that would not represent an increase in real dollars over the current year.

Superintendent Donna Peterson explained that last year, when lawmakers appropriated cost-factor funding outside the foundation formula, the effectively matched the amount expected from the 1.088 area cost differential proposed for FY 2009. Hence, the $5.6 million generated by the cost factor increase (now back within the Foundation Formula) cannot be considered an increase over the current year.

Other increases produced by the bill would, however, represent new money. According to Douglas, upping the base allocation by $100 next year will bring in another $1.5 million, and the increase in the "intensive multiplier" for special needs students could produce approximately $2 million more.

Craig Chapman, director of finance for the borough, said the additional revenue and the reinsertion of the cost differential back into the Foundation Formula might result in an increased appropriation from the borough of perhaps as much as $3.5 million, presuming the assembly agrees to full-funding of the local share. The assembly has never appropriated less than 100 percent of the local contribution.

The proposed increases will be tempered, however, by declining enrollment figures and rising costs.

Nevertheless, Peterson said she was thrilled that the district could be looking at roughly $2 million more in the FY 2009 schools budget, assuming the Legislature enacts Gov. Sarah Palin's proposed spending plan. For the first time in a long time, she said, district officials aren't agonizing over cuts.

"Wow, it's about time we could talk about increasing opportunities for students," she said Friday. "I'm thrilled. We get to spend some money. It's not just going to be the status quo."

Currently, the budget for next year envisions the same pupil-to-teacher ratio (PTR) as the current budget, except that in grades four through six the district would lower the PTR from 26 to 24 students per teacher, Peterson said.

District officials are also working on defining a basic education for 21st century students. Innovations could include programmatic staffing, Peterson said. Right now it's only a proposal, but soon they hope to offer more classes at each school, including more foreign languages and vocational and career training, along with the teachers and counselors to make that happen.

"Those are things that haven't happened in a long time," Peterson said.

While she is cautiously optimistic about future funding, in reality, the proposed increase to the area cost differential is only half that recommended by the University of Alaska's Institute of Social and Economic Research. Full differential funding is still five years away, she said.

Nevertheless, she called the school funding bills "the best shot right now" for improving educational services across the state.

Cautiously optimistic was exactly how Rep. Kurt Olson, a sponsor of HB 273, put it too, regarding the legislative chances for the funding package. He called the House bill a "unique piece of legislation" that could "blow up" if lawmakers start messing with its delicate infrastructure of compromises.

"We're walking on eggshells," he said Friday. "There's some pulling and tugging going on; some are asking for more. We're trying to get it out as fast as we can, and we are working with the Senate on it. I think they want it, too."

Hal Spence can be reached at

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