The 26th Alaska State Legislature, 2009 - 2010||
Sponsor Statement: House Bill 350
Public School Funding: Local Contribution
“An Act relating to the local contribution to public school funding; and providing for an effective date.”
Posted: February 22, 2010
Status: (H) FIN : 2010-03-15
HB 350 brings uniformity back into Alaska's public school funding formula's calculation of required local effort. It will continue a benefit of counting only half the assessed valuation growth over the previous year. This recognizes for one year the increased infrastructure burden experienced by areas undergoing economic growth.
Legislation enacted in 2001 changed the funding formula to require that only half of the increased current year's property value over the base year's value be counted. However it added this to a fixed year (FY 99) to determine the property value for the purposes of calculating required local effort for education. Use of a fixed base year instead of the previous year to calculate full and true value and local effort contribution has lead to a growing disparity between districts.
HB 350 will address this problem by requiring the local contribution of a city or borough school district to be derived from a uniform rate of a 2.7 mill tax levy on the full and true value of the taxable property in the district as of January 1 of the second preceding fiscal year plus 50% of the increase in value to the following year.
Under the current formula, areas with growing populations are given an ever greater tax break than stable areas. Districts containing older communities are therefore required to pay higher taxes than expanding districts. HB 350 will apply an even method of taxation, one that is proportionally fair and economically sustainable. It has set a uniform mill rate at the lowest current rate so no district will have to pay more than its current local tax mill rate.