By Agnes Moran
March 09, 2013
Every year as the Borough works through its budgeting process, the Assembly is urged by some to Fund our schools to the Cap . The Cap is simply the upper end of the federal disparity limit to guarantee that Alaska has a program of equalized public education. It is not a measure of the quality of local funding support for education. The Cap is designed to ensure that students in wealthy school districts are not funded disproportionately more than students in poorer school districts.
If you prefer the technical definition, the federal disparity test as outlined in 20 U.S.C. 7709(b)(2)(a) states a program of State aid equalizes expenditures among local education agencies if, in the second fiscal year preceding the fiscal year for which the determination is made, the amount of per pupil expenditures made by, or per pupil revenues available to, the local educational agency in the state with the highest such per pupil expenditures or revenues did not exceed the amount of such per pupil expenditures made by, or per pupil revenues available to, the local educational agency in the State with the lowest such expenditures or revenues by more that 25 percent.
Locally, if the student count remains stable, funding to the Cap would require a discretionary contribution for FY2014 of $5,340,209 in addition to the State-mandated contribution of $4,198,727 for a total contribution of $9,538,936. This level of funding would require that the Borough areawide mill rate be raised 60 percent from 5 mills to 8 mills.
A city resident would then be facing a total property tax mill rate of 14.7 mills, along with sales tax of 6 percent, on top of the increases they ve already experienced in water and sewer rates and the strong possibility of diesel surcharges if our weather remains mild the remainder of the winter. A Borough resident would not fare much better. Property tax rates outside of the city limits in the Borough would range from a low of 8 mills in Saxman to 13.5 mills in the Forest Park Service area. (Note that the Borough mill rates haven't been set yet for FY 2014, so the mill rates listed could be even higher.)
Raising the mill rate to the maximum 8.0 mills level would be a short-term fix. Continued annual education funding to the Cap would reduce the Borough s General Fund budget reserves by FY2017 to below the minimum recommended to maintain our standing with the State bonding agency. At that point, the law would either have to be changed to allow the Assembly to raise the maximum areawide mill rate above 8 mills or reduce education funding to below the Cap.
The real solution to the dilemma of education funding lies in getting the State to live up to its Constitutional responsibility for education and fully fund basic need for all school districts.
About: "Local resident that has been working and researching education funding issues for multiple years"
Received March 07, 2013 - Published March 09, 2013
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