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House OKs Delay in School Funding Change
HB 312 Preserves Rural Districts' Advantages Pending Study

(JUNEAU) - The House today passed legislation to delay changes in how the state adjusts education funding to reflect the varying costs of operating schools around Alaska, giving the education department a year to complete a study of the precise basis for such differences.

"The Legislature has a responsibility to make sure that money used to meet our state's educational responsibilities is distributed fairly and equitably," said Rep. Bill Williams (R-Saxman), co-chair of the House Finance Committee, who sponsored HB 312. "Until we know for sure how to fairly allow for the higher cost of rural education, it is best for all concerned to hold off any changes for one more year."

In 1998, the Legislature passed Senate Bill 36, changing the community-based funding formula to one based on the number of students. Twenty-two mostly rural districts that stood to lose money under the revised formula were guaranteed extra money to hold them harmless from such changes at existing student populations, Williams said.

Under a mechanism known as the "eroding floor," however, such schools would not receive full funding for more students if their student populations grew, but instead would receive 40 percent of the amount they would have otherwise received under the formula, he said. The erosion would continue until the school district no longer qualified for supplemental funding.

"House Bill 312 suspends the erosion effect on the supplemental funding floor established by SB 36, until the Department of Education and Early Development can complete a study of school district cost factors that the Legislature funded last year," Williams said. The results of that study will be available in time for the Legislature to use them in setting funding for the school year starting in the fall of 2004.

"School districts shouldn't get less than their fair share of state education money, but they shouldn't get more than their share, either," he said. "By waiting a year to get current, reliable, area cost differential information, we'll have the tools we need to make sound and informed school funding decisions based upon the best possible information."

HB 312 passed the House unanimously, and moves next to the Senate for consideration.

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