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The FY2001 Foundation Program, which funds K-12
public schools in Alaska, will require approximately $19 million
less in state aid than the amount authorized in FY2000. Several
key factors contribute to the drop in state aid while continuing
to fully fund the foundation formula.
Student Enrollment The projected FY2001 average daily membership (ADM) is 131,862.7. There has been a drop in student enrollment of slightly over 3,100 from the FY2000 projection that was incorporated in the funding level for FY2000. Although the statute (AS 14.17.500) requires that the annual budget request be based on school district ADM projections, the funding entitlement is ultimately based on actual student count which is provided by school districts in late October. After a decade of enrollment increases averaging 2% per year, there is a decline in enrollment from FY1999 to FY2000.  The
actual student enrollment in FY1999 was 132,904.8. In FY2000,
it declined by 1,037.2 ADM, or 0.8% to 131,867.6. According to
the Department of Labor and Workforce Development, there was
a decline in 1999 in the population of children between the ages
of 0 and 5 years. This decline indicates that future enrollments
will likely remain steady with no new growth expected for 5 to
6 yearsState Aid Compounding the decline in student enrollment are several key factors that impact the level of state aid to school districts. The formula program calculates school districts' basic need based on an adjusted student formula. The state aid required to support basic need is determined by subtracting out any required local effort and deductible impact aid to arrive at the level of state support. The greater the required local effort and impact aid received by the districts, the less state aid required. Required Local Effort City and borough school districts are required to provide local effort for schools of at least 4 mills. The public school funding program requires that the department utilize full and true property value determinations from the Department of Community and Economic Development. The FY2001 budget is based on the FY1999 property values. The State Assessor estimates that property values will increase 2 to 5% per year. Higher property values increases the amount of required local effort, which reduces state aid. Deductible Impact Aid Alaska school districts receive approximately $80 million annually in Impact Aid funds. The Foundation Program considers the amount of impact aid received by school districts when determining the amount of state aid. Impact Aid received by March 1st is considered in calculating a school district's entitlement for that year. The amount of federal impact aid received has increased over the past five years. The department believes that the level of federal impact aid funding will remain at this higher level for several years. The more federal impact aid received, the less state aid is required. Funding Floor The supplemental funding floor included in the new public school funding program in FY1999, is declining. All adjustments to the floor are reductions that result in a drop in state aid.
Reinvesting Part of the Savings in Education When the State Board of Education & Early Development learned of the reduction in the amount of state aid needed for FY2001, it recommended to the governor that the state reinvest a significant portion of the savings to improve education in Alaska. The two areas recommended by the board were the K-12 Quality Schools grants and Head Start. The governor's FY2001 budget proposes to reinvest $9.6 million of the general funds which still leaves a general fund savings of $10.4 million in next year's foundation program. Quality Schools Grants AS 14.17.480 provides for quality schools grant funding of $16 per adjusted ADM. These funds are used at the local district level for programs that support increased student performance such as tutoring, summer school, before and after school programs, and training. The governor proposes increasing that grant funding to $52 per adjusted ADM. This reinvests $7,552,258 in public school funding The chart below shows the current amount received by each school district under the Quality Schools grant and the amount of the increase with the governor's proposed reinvestment. Head Start The governor proposes to reinvest $2 million of the savings in Head Start. These state general funds will help Head Start programs leverage direct federal and local funding to provide services to approximately 400 additional children and their families. Head Start is nationally proven to have a positive impact on children's success in school and in avoiding juvenile crime, yet only 23% of the children in Alaska who are eligible are served currently.  |
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EBS Home Page / Office of Management and Budget / Webmaster / State of Alaska Karen_Allen@gov.state.ak.us (907) 465-4660 December 15, 1999 |
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