Schools formula doesn't add up

Study presented to legislative committees

Posted: Monday, February 24, 2003

A presentation on the newest education cost study produced more questions than answers for the Legislature and public alike.

Jay Chambers, senior research fellow at the Washington, D.C.,-based American Institute for Research, presented the study before a joint meeting of the House and Senate Health, Education and Social Services committees and the House Special Committee on Education on Wednesday afternoon.

Members of the public filled the meeting room in Juneau and listened via teleconference across the state.

Though the presentation took nearly two hours, legislators and listeners followed with several questions and said they received few clear answers.

"The economist was not prepared to talk on a detailed basis to answer questions," said former Sen. John Torgerson of Kasilof, who participated in the hearing from the Kenai Legislative Information Office.

The study, contracted by the Legislature last year and released to the public in January, was designed to reevaluate the geographic cost of education index (GCEI), also known as the area cost differential, which the state uses to determine how different school districts across the state are funded. The purpose of the index is to recognize that districts in different geographic regions incur different costs for the same materials and services.

For example, under the current index, which is based on a 1982 study by the McDowell Group, the Kenai Peninsula Borough School District is listed at a 1.004 area cost differential, meaning the cost of running schools on the peninsula is only slightly higher (.4 percent) than the cost in Anchorage, which is the standard with an area cost differential of 1.000.

The new study designs a similar, but revamped index based on a more complex set of data, Chambers said.

"Our intent is not to criticize the previous study," he said. "But one difference does exist. The McDowell Group focused on existing patterns of spending. Our group looked at different prices.

"The method is comparable to that used by the Bureau of Labor Statistics to identify different costs of living."

The study examined four different cost factors for school districts across the state: personnel, energy, goods and travel.

Using these factors, researchers determined that several school districts in the state are over-funded, while a few others are being shortchanged.

Chambers recommended to the Legislature on Wednesday that the GCEI in the study be implemented over a two- to three-year period to correct the differences.

Legislators, however, were not quick to agree.

Many had more questions about the methodology of the study and about results they found questionable.

For example, Sen. Robin Taylor, R-Wrangell, said he couldn't understand why the study indicated that materials and shipping to Sitka and Juneau were higher than in Wrangell.

"That isn't a world reality," he said.

The study recommends an index value of 1.000 for Wrangell, which is what the district currently receives.

Sen. Gretchen Guess, D-Anchorage, wanted to know why researchers based their study on only districts' general fund budgets rather than all revenue and expenses. Anchorage's index value also would hold steady at 1.000 under the new study.

Sen. Lyda Green, R-Wasilla, challenged the personnel portion of the study, asking if the data accounted for districts' efforts to increase teacher pay despite financial constraints. She also wanted to know how a commuter population could skew data for particular regions.

Green's constituency includes the Mat-Su Borough School District, which is one of the many districts that stands to lose if the new GCEI is adopted. Mat-Su would go from a 1.010 index value down to 0.990.

Chambers repeatedly attempted to explain the methodology in layman's terms, but said he was unable to address questions on specific districts without looking into the research in more depth.

"The fact that we gathered questions (in advance) assumes that you would have answers," countered Green, noting that Chambers had been presented with a list of most of the legislators' specific questions days before the hearing.

"I don't feel I'm understanding your answers," agreed Rep. Mary Kapsner, D-Bethel. "What forum would be better for you to provide details?"

Chambers said he would be willing to address specific questions in writing, but that additional meetings with legislators would be outside the scope of the AIR contract with the government body.

The meeting ended after some three hours with little resolution.

Torgerson, leaving the Kenai LIO with just a little frustration, said a solution likely would be a long time in coming.

"It's hard to get through a bill with winners and losers in it," he said. "Take Mat-Su. They lose 1 percent in funding. They're going to be asking questions and want to know why.

"These things typically come through at the end of the session, after a lot of meetings. They're not going to be able to just throw a bill on the floor. It's not going to get through. There are too many winners and losers."

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