House panel aims to halt rural school aid cuts

Eroding floor' would freeze until study of costs is completed

Posted: Wednesday, January 30, 2002

With the "urban-rural divide" as a backdrop, a House committee voted this morning for a one-year suspension of the so-called "eroding floor" that has limited state aid increases for 32 rural school districts.

Legislation by Rep. Bill Williams, a Saxman Republican, would spend $1 million to ensure full state funding for all school districts under the still-controversial Senate Bill 36 from 1998. That law limits increases to 60 percent of the previous year's appropriation for districts that were deemed to be overfunded under the previous formula.

The suspension, approved on a 5-2 vote, is intended to allow for the completion of a cost-differential study that's examining how fiscal challenges vary by district.

Today's committee debate included discussion of whether SB 36 was flawed and whether critics in some rural school districts are justified in saying that the current formula values their children less than students in urban areas. Some people even have suggested that the formula is racist, given the higher percentage of Natives in rural school populations.

Sen. Gary Wilken, a Fairbanks Republican, said he believes the numbers speak for themselves. About half of the districts that received increases of 5 percent or more under SB 36 were rural, he said. "Since that time, we've increased funding for K-12 education over 8 percent, which is beating inflation, I'm proud to say."

Wilken noted that the 60-percent limitation affects "transitional dollars" for districts that were getting funded at what was considered an excessive rate, holding them harmless at first but allowing a gradual drop in state aid.

As for the alleged disparities based on race or geography, "That conversation has no place at this table," said Wilken, who appeared as a witness before the House Special Committee on Education.

"Some people have demagogued this," agreed committee Chairman Con Bunde, an Anchorage Republican.

"I think you're always going to be dealing with a perception issue in this area of law," said Eddy Jeans, school finance manager for the Department of Education, which supports the one-year suspension.

Jeans said the cost study should be completed "before further damage is done." Three of the original 32 school districts have fully "eroded," and the annual transitional funding has dropped from $17.4 million to $12.2 million in the current fiscal year, Jeans said. That $5.2 million reduction hasn't been reinvested in K-12 education, he said.

Wilken contends that the pre-SB 36 education formula hurriedly was assembled in 1987 with inadequate data on the cost of education in various districts. By suspending the eroding floor, that implies that the old formula really was better after all, he said. "I'm here to defend the new formula. ... It was a quantum leap ahead of where we were."

But Republican Rep. Peggy Wilson said that was difficult to understand when her Wrangell school district makes a substantial property-tax effort and still struggles with teacher retention and rising insurance costs. Contrary to Wilken's claim that SB 36 represented a simplification, Wilson, whose husband is superintendent in Wrangell, said the existing formula is "much more complicated to figure out than it was before."

The one-year suspension was supported in testimony from officials representing the Kodiak and Galena districts, the Alaska chapter of the National Education Association, and the Association of Alaska School Boards.

House Speaker Brian Porter, disagreeing with Wilken, said it's possible to support the suspension even while defending the integrity of the formula established by SB 36.

"This is not a repudiation of SB 36," said Porter, an Anchorage Republican. Once the cost-differential study comes out, he said, "The chips are going to fall where they may."

Voting for the bill were Porter, Wilson, Kodiak Republican Gary Stevens and Democrats Gretchen Guess of Anchorage and Reggie Joule of Kotzebue. It was opposed by Bunde and Anchorage Republican Joe Green.

The bill now moves to the House Finance Committee, where sponsor Williams is co-chairman.

Bill McAllister can be reached at

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