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State lawmakers in Alaska have approved a $438.7-million school-aid budget for the upcoming fiscal year and a new formula for distributing the funds to school districts.

In addition to scaling back funding for precollegiate education by about $5 million from its fiscal 1987 level, the legislature adopted a new financing system that will require municipalities with taxing authority to raise more money for their local schools.

Currently, cities and towns with such authority have the option of contributing toward the financing of their schools, and some offer little or no monetary support, according to Mary Hakala, special assistant to the state commissioner of education.

The new law does not stipulate how localities are to raise the money, although local sales and property taxes are likely options, Ms. Hakala said. Rural school districts, which have no local tax base, will not have to comply with the new requirement, she said.

Carol Karroll, an aide to the legislature's joint finance committee, said a primary intent of the new formula is to equalize spending among districts.

In addition, she noted, school districts would have lost federal impact-aid if the state had failed to adopt a formula to equalize school spending. The new formula ensures the state's compliance with federal rules governing the program, according to state education officials.

A separate part of the bill that altered the school-finance system will also require districts to foot the entire bill for the state's teacher-retirement system. Currently, the state and districts share such costs equally. The change is expected to cost districts an additional $22 million next year.

Jean Krause, president of N.E.A./Alaska, an affiliate of the National Education Association, said that, while the new finance structure "provides some equity,'' the shift in funding for teacher retirement will pose a "danger'' to some districts. The extra burden, she predicted, will result in larger classes and the discontinuation of programs in some areas.

Lawmakers approved total state spending of $1.6 billion for fiscal 1988 in the session that ended this month, about the same as in the current fiscal year. Gov. Steve Cowper had proposed a $1.5-billion budget, with $428.1 million earmarked for precollegiate education. The Governor has not yet received the budget bill, but is expected to sign it, according to Laury Roberts Scandling, Mr. Cowper's deputy press secretary.

In other action, lawmakers voted to cut $200,000 in annual state costs by eliminating the statewide student-assessment program.--A.P.

Gov. George Deukmejian of California, confirming that the state will collect $2.7 billion more in tax revenues this year than previously expected, has unveiled a plan to provide $700 million in rebates to taxpayers--a proposal that has infuriated lawmakers and educators who are pressing for increases in state aid to schools.

The Governor disclosed the existence of the tax windfall in a pre-recorded radio and television address on May 19. "Thanks to our economic strength and some unexpected tax collections due to the new federal tax reform,'' he said, "the state will receive substantially more revenues than anyone expected last December,'' when his office completed work on his fiscal 1987-88 budget request.

In that request, which he said reflected "scarce fiscal resources,'' Mr. Deukmejian proposed raising state aid to schools from its current level of $15.3 billion to $16 billion in the upcoming fiscal year. The spending plan drew immediate criticism from Bill Honig, the state superintendent of public instruction, who argued that it would provide schools with $600 million less than needed to maintain current services.

In the ensuing months, the Governor and Mr. Honig have been embroiled in an angry public debate over the school-funding issue. The superintendent and key state lawmakers have proposed legislation that would restore the $600 million that they claim would be cut under the Governor's plan, and authorize $900 million in new programs.

In his address, Mr. Deukmejian indicated that he would earmark about $200 million of the new revenues for schools, raising his total request for fiscal 1987-88 to $16.2- billion. In addition to the $700 million in rebates, $76 million would be used to finance transportation and "urban impact aid'' programs that the Governor had previously cut from the current budget, some $500 million would be held in surplus, and much of the remainder would go toward covering rising costs in a variety of state programs.

Peter Mahas, assistant to the Governor for education, said Mr. Deukmejian was compelled to propose the rebates by the so-called Gann limitation, an initiative passed in 1979 that places strict restrictions on increases in state spending.

"Education was treated quite favorably under this proposal,'' Mr. Mahas said. "The only person who seems to disagree is the state superintendent. We're not quite sure how much money is enough for him.''

Mr. Honig quickly criticized the Governor's plan for the new revenues and predicted that it would be rejected by the legislature.

"I'm confident that Californians don't want to take money from children to give a short-term rebate of a few dollars to people in California,'' he said at a May 19 press conference. The superintendent also noted that the $700 million earmarked for the rebates, when added to the $200 million that would be set aside for schools, would fully fund the new educational programs that he promoted.

"Returning $700 million to taxpayers at this time, when there are critical needs to be funded, is poor public policy,'' added Dianne Jacob, president of the California School Boards Association.--T.M.

Vol. 06, Issue 36

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