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Bill to make inflation a factor in school funds

House committee OKs proposed legislation

Posted: Wednesday, February 06, 2002

A bill requiring the Legislature to bump school funding to keep up with inflation passed out of its first committee today.

House Bill 211 would require the state to increase the base student allocation annually to reflect changes in the Anchorage Consumer Price Index, or CPI.

The bill would hike the annual allocation from $4,010 per student to $4,078 next year, or by 1.7 percent, according to a fiscal note by Eddy Jeans, school finance manager for the state Department of Education and Early Development.

In a report last year, the department found inflation had gone up 30 percent over the past 10 years while the funding formula increased by only 5 percent, said Jeans, noting the formula currently is not annually adjusted for inflation.

"Districts have really lost the ability of purchasing power by at least 25 percent," Jeans said.

The bill passed out of the House Special Committee on Education by 5 to 1, with Chairman Con Bunde opposed. Bunde said he was worried about the price tag on the measure, which would cost an extra $13.6 million in fiscal year 2003, the first year it would take effect.

The Legislature should not increase spending while grappling with huge revenue shortfalls, said Bunde, an Anchorage Republican.

"I'm not interested in locking the state into any formula that requires new spending at this point until we get a better handle on what we can actually afford," said Bunde, who serves on the House Finance Committee.

Sponsor Rep. Gretchen Guess called her bill "good fiscal policy."

"I believe if the cost of living goes up we should automatically adjust foundation funds for that," said Guess, an Anchorage Democrat.

The bill now heads to the Health, Education and Social Services Committee.

Kathy Dye can be reached at kdye@juneauempire.com.



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