Amicus Curiae Brief — Zuni Public School Dist. v. Dept. of Educ.

219 E

No. 05-1508

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In The :

Supreme Court of the Anited States

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ZUNI PUBLIC SCHOOL DISTRICT NO. 89, et al.,

Petitioners,

Vv.

- DEPARTMENT OF EDUCATION, et al.,

Respondents.

*

On Writ Of Certiorari To The

United States Court Of Appeals

For The Tenth Circuit

¢

BRIEF OF AMICUS CURIAE STATE OF

ALASKA IN SUPPORT OF THE RESPONDENTS

¢

CRAIG J. TILLERY

Acting Attorney General

KATHLEEN STRASBAUGH

Assistant Attorney Genera!

Counsel of Record

State of Alaska

P.O. Box 110300

Juneau, Alaska 99811-0300

(907) 465-3600 (voice)

(907) 465-2520 (facsimile)

Counsel for Amicus Curtae

State of Alaska °

COCKLE LAV USTEP URINTING, Cb stab 275 sons

ORC ALL COLLECT. tog) o42 2851

TABLE OF CONTENTS

+ BOs Page

-— ag

INTEREST OF THE AMICUS CURIAE..............cccc0000 1

SUMMARY OF THE ARGUMENT ....................0cceceeeees 1

FERS LETTE Se ea ROT Ne MS IO Ae 3

I. THE CURRENT EQUALIZATION FORMULA

IS CONSISTENT WITH CONGRESS’S IN-

TENT AND THE PURPOSE OF THE IMPACT

FE ia ca incicttiitiensitieainnitiisdassebindedmeneiaas 3

Il. THE APPLICATION OF THE SECRETARY’S

FORMULA TO THE STATES IS CONSIS-

TENT WITH THE PURPOSE OF THE STAT-

OTROS EA A SOLIS IR eR ees A EDN Ne 6

TERR FLAP ReaD ARS MIND mo PME 10

TABLE OF AUTHORITIES

Page

CASES:

Bob Jones University v, U.S., 461 U.S. 574 (1983)............. 6

Chevron U.S.A. v. Natural Resources Defense Coun-

a re ee ie OE iininitiericclecsinerinchansiclinnsctniitelianiaiuicsei 5

Matanuska-Susitna Borough School Dist. v. State,

931 P.2d 391 (Alaska 1997)...............cccccccccsssrsossssssccrseses 7

ADMINISTRATIVE DECISION:

ITMO Zuni Public School District, et al., Docket

No. 99-81-I (Decision of the Secretary of Educa-

tion, October 11, 2001), 2001 WL 34798131

IE diinctsstinsiisinchdicesnincesdceddaniicaciiliipieniineniciaibinteies 1

STATUTES:

a ea i TUN scchechashncdeseeitchiseitininsnccsiienceineltaiamiaiiteeiitdeliiniotaialin 1

Se Na Ar UE dicc sides inceieialiadniseinbeliibianiedabibiaeaas 1, 2,8, 10

Sa a ate Se ID sccevidcsnscchieiticeidemaeniniebiceblahaneigniiainidiinimdlichiel 2

eR Se PIII dacicicnndininsicndissiciiancindacsiadpinsbedianaininin 2, 3,9

I Be iterscncianniinnecinateiibaniinticssitiiciiintis 3

ete © © CEE UI ED cnisiccccinticnsnntecicectnnsstententinetsinetstind 6

es Se Se eailieietintecnninaccigiacesicincuniinsecissibiinesitinaiithiiaabiciinsaiibie 4

ee trttpctattitittiitieeancintbintebeetntcbinninpeinniii 7

AS 14.17.021 (1987) (Repealed) ..........2...cccceeeeeseeeeeeeeeeeeeeeees 6

AS 14.17.025 (1987) (Repealed) ............:cccccccccceessereeeeeeeseees 6

AS 14.17.051 (1970) (Repealed)......................ssseeeeceeeceeseeees 6

TABLE OF AUTHORITIES — Continued

Page

"FRR ENE PANIED siserntrinssccnsotintoneniqnenisjesniihiaienninaniiimiseenteibnias 6

AS 14.17.410(b)(1)............ccccceseseseseseeees arsesihnlihiaicadaibiltediinsaiininiidie 6

Se a ETE iicienicivientnniedniiiadaiiaipbinia daciiiidtapaihintintustdaiti sites 6

ee SI icitchteistniensicadianlindinieiedtniaiteieeaaeiend teats idheaesiaialele 9

Se I eatseice haticeaiaheiitbierepineitd ita ia acacia 6

Be a iasiniatiakninitehenicnstitistnisiedichaiietiahdi laa iccibattaina ss adalat 6

Se LAUT ihieuditsinsiciiaclidstietesnisbiheataiieidpaidbinndiidibineuiiiladiinaeabailesiaas 6

Se NE tiiitcidiie tienicaieinciniiabiaiiitsdtdeigtilidiateaicninsidsieahadaina leis 7

REGULATIONS AND REGULATORY MATERIALS:

Es MEI iniciise icstecdepciniceiacnlbeiietiteiibiipinieahinahiansbilitianeniied 1,3

ee ee Bri I II, Ui Aierncccsentninsissiesitniapneeniipendnentadil 1,3

Se GI SI, MITE hiscshidscnchnstichisiahbseienineicesicanciebantanehcliieiainaasdidadeddii 7

41 Fed. Reg. 26320 (Jume 25, 1976) ...........ccccseessssseerreeeeees 5

LEGISLATIVE HISTORY MATERIALS:

es ee OE iciciininisnsiiteiitinsdaipnnncceanttineiiaisianitnitteitaiin 4

H.R. Rep. 103-761 (1994) (Conf. Rep.), as reprinted

SU Tpit iticndasheedindisnpapidaiciiinetiunsiamascinininiditabteshiatunniieiuataphbenimnis 10

Rae Mee iiccietvicopsciintsindeniinislesiesscphasinalapsidaaieimetinion 10

COURT RULES:

RED Has: Tt TOT cds tcetidiicoiantiinsncenvndicivantieinaineseeniniosmamastiinliens 1

iv

TABLE OF AUTHORITIES - Continued

Page

MISCELLANEOUS:

Alaska Department of Education and Early Devel-

opment, K-12 Public School Operating Funds and

Selected Special Revenue Funds, http://www.eed.

state.ak.us/stats/Resources/annual_revenues_05.xls

(last visited December 8, 2006)...............csscessssseeeeeeeeeeees 7

Alaska Department of Natural Resources, “Fact Sheet:

Land Ownership in Alaska” (March 2000), http://

www.dnr.state.ak.us/mlw/factsht/land_own.pdf (last

visited December 8, 2006)...............:scseccceecssereereeecereceeeees 4

1

INTEREST OF THE AMICUS CURIAE

The State of Alaska submits this amicus curiae brief

in support of the respondents United States Department of

Education and State of New Mexico.’ Alaska has a signifi-

cant interest in outcome of this case for two reasons:

1. It is one of three states, including re-

spondent New Mexico, that has passed the test of

disparity under the federal Impact Aid program

at issue in the case, 34 C.F.R. § 222.162, and 34

C.F.R. Pt. 222, Subpt. K, and

2. Its system of equalization would be seri-

ously undermined if the more than $50 million

federal impact aid to Alaska were redistributed

as proposed by the petitioners.

¢

SUMMARY OF THE ARGUMENT

The State of Alaska urges the court to affirm the

October 11, 2001 decision of respondent United States

Department of Education’ and the regulations on which it

is based, 34 C.F.R. § 222.162, and 34 C.F.R. Pt. 222, Subpt.

K. The Secretary’s decision and the regulations are consis-

tent with 20 U.S.C. § 7709.

The federal government provides impact aid to local

school districts affected by the presence of federal activity.

20 U.S.C. § 7701. It sets a number of conditions on the

distribution of the aid, among them a prohibition against a

Sup. Ct. R. 37.

* Pet. App. at 34a, ]TMO Zuni Public School District, et al., Docket

No. 99-81-I (Decision of the Secretary of Education, October 11, 2001),

2001 WL 34798131 (EDDS).

2

state’s consideration of federal impact aid in its distribu-

tion of state aid. 20 U.S.C. § 7709(a). 20 U.S.C. § 7709(b)

provides an exception to the prohibition. The exception

applies to states with laws that provide an equalized

system of school finance, that is, a system that equalizes

the difference between rich and poor districts.

Alaska has an equalized system of school finance that

assures that school districts with linited resources,

including those without local tax authority, receive equita-

ble state funding. Because Alaska has been certified as an

equalized state by the United States Department of

Education, it is permitted to consider federal impact aid in

its distribution of state aid, and does so. If the Court

strikes down the Secretary of Education’s equalization

formula as the petitioners suggest, Alaska may lose the

ability to count federal impact aid against its contribution

under § 7709. The paradoxical effect of such a decision

would be that Alaska’s equalized funding scheme would be

undermined by federal impact funding.

The Secretary’s application of the regulation should be

upheld. The regulation is consistent with its authorizing

statuie because it best serves both Congressional intent

and the equitable distribution of funds in equalized states.

s

3

ARGUMENT

I. THE CURRENT EQUALIZATION FORMULA

IS CONSISTENT WITH CONGRESS’S INTENT

AND THE PURPOSE OF THE IMPACT AID

STATUTE

The petitioners’ central challenge to the Secretary’s

decision at issue in this case’ is that regulations on which

it was based: 34 C.F.R. § 222.162, and 34 C.F.R. Pt. 222,

Subpt. K, are in conflict with changes that Congress made

in 1994 to eligibility provisions of the federal impact

programs. To qualify under these provisions, a state must

demonstrate that its distribution of state aid is equalized,

thus enabling it to consider that impact aid when it

distributes state aid.

The petitioners argue that § 7709(b) precludes the

Secretary’s current regulation. Petrs.’ Br. 44. The statute

allows a state to eliminate outliers, defined as “local

educational agencies with per-pupil expenditures or

revenues above the 95th percentile or below the 5th

percentile of such expenditures or revenues in the State.”

20 U.S.C. § 7709(b)(2)( Bi).

As noted and fully discussed by the parties, the

purpose of the impact aid program is to compensate a

state for the effects of federal activity, such as military

installations, or lands held in trust (and thus not taxable)

for Native Americans or Alaska Natives.

Alaska is a state dominated by lands that fall within

these categories. About 60% of Alaska’s land — 222 million

acres — is federally owned. Another approximately 44

million acres is land set aside under the Alaska Native

* Pet. App. at 34a.

+

Claims Settlement Act and other federal statutes for

Alaska Natives; much of such land is not subject to taxa-

tion.*

Alaska receives substantial impact aid for its military,

trust, and other federally restricted lands, and stands to

lose over $50 million of its deductible impact aid, now

attributed to equalized districts. Attach. A at 11 (grand

total of column W).’ Ironically, the distribution of these

funds directly to local school districts would undermine

the equalization of the state’s school funding scheme, the

very result the equalization statute was designed to avoid.

H.R. Rep. 93-805 at 4128-29 (1974).°

State education agencies ordinarily are prohibited

from using Alaska’s method of applying federal impact

funds, reducing state aid to local school districts on ac-

count of impact aid eligibility. However, if a state has

equalized its payments to its local districts, as measured

by the Secretary’s disparity test, it may count its pay-

ments toward its contribution to local districts. The

objective of the disparity test is to assure that state funds

are equitably distributed, that is, that there are not

extreme differences among a state’s local jurisdictions.

In 1976, when the Secretary adopted the first set of

disparity test regulations, the United States Department

* See e.g. Alaska Native Claims Settlement Act § 21, 43 U.S.C.

§ 1620. Alaska Department of Natural Resources, “Fact Sheet: Land

Ownership in Alaska” (March 2000), http://www.dnr.state.ak.us/mlw/-

factsht/land_own.pdf, visited December 8, 2006.

* Attachment A is Alaska’s fiscal year 2005 federal impact aid

equalization certification, along with supporting documents. Cf. JA at

85-92, a portion of New Mexico’s equalization submission.

* Report concerning Education Amendments of 1974, P-L. 93-380.

5

of Education determined that it was necessary and appro-

priate to eliminate outliers and to do so on a per-pupil

basis to avoid inequitable results:

In regard to the question of pupils versus dis-

tricts for the percentages used in calculating the

disparity standard, it is the Commissioner’s view

that basing an exclusion on numbers of districts

- would act to apply the disparity standard in an

unfair and inconsistent manner among States.

The purpose of the exclusion is to eliminate those

anomalous characteristics of a distribution of ex-

penditures. In States with a small number of

large districts, an exclusion based on percentage

of school districts might exclude from the meas-

ure of disparity a substantial percentage of the

pupil population in those States. Conversely, in

States with large numbers of small districts,

such an approach might exclude only an insig-

nificant fraction of the pupil population and

would not exclude anomalous characteristics.

41 Fed. Reg. 26320, 26324 (June 25, 1976). These consid-

erations are reasonably related to the objective of the

legislation: they assure that state, and federal impact

funds are equitably distributed, without disincentive to

state and local effort.’ Nothing in the legislative record

suggests that Congress disapproved of this method when it

amended the statute in 1994. And indeed, as New Mexico

points out in its opposition to the petition for certiorari,

Congress reauthorized the statute after the Secretary

readopted the regulations retaining the per-pupil method

of determining the outliers, thus ratifying the Secretary’s

" Cf. Chevron U.S.A. v. Natural Resources Defense Council, 467

U.S. 837, 844 (1984).

6

action. Resp’t N.M. Br. in Opp. to Cert. at 26. See, e.g., Bob

Jones University v. U.S., 461 U.S. 574, 591 (1983) (Con-

gress’s awareness of regulation denying tax exempt status

to racially discriminatory schools and failure to change the

regulation after several opportunities to do so ratified IRS

interpretation of the law and public policy).

Il. THE APPLICATION OF THE SECRETARY’S

FORMULA TO THE STATES IS CONSISTENT

WITH THE PURPOSE OF THE STATUTE

Like New Mexico, Alaska has an equitable school

financing scheme. Under AS 1 .17.410, the state requires

municipal school districts to contribute a minimum

amount, but caps additional local contributions. AS

14.17.410(b)(2). Alaska’s scheme provides additional

payments for small schools, AS 14.17.450, adjusts for cost

differentials, AS 14.17.460; cf. 20 U.S.C. § 7709(b\ 2 Bi),

and provides a block grant for special needs, AS 14.17.420.

The foregoing statutes were enacted for the most part

in 1998. However, Alaska has had some form of adjust-.

ment for geographic differentials for school districts for

many years. AS 14.17.051 (1970) (repealed, § 39, ch. 83,

SLA 1998). There has been equalization based on local

effort since at least 1988. AS 14.17.021 (1987) (repealed

§ 39, ch. 83, SLA 1998); AS 14.17.025 (1987) (repealed § 39

ch. 83, SLA 1998).

Alaska considers impact aid under the federal statute

by counting 90% of eligible federal impact_ aid. AS

14.17.410(b)(1).

To determine disparity under 34 C.F.R. Pt. 222,

Alaska employs an adjusted average daily membership.*

The adjustments are based on the statutory factors set out

above. Attach. A at 5, 8-11 column S.” The revenue per

adjusted average daily membership (Attach. A at 6, at 11,

column W) in a district is calculated by dividing the

district’s audited total revenue (Attach. A at 4, at 10,

column R) by the adjusted average daily membership

(Attach. A, column S). The United States Department of

Education has approved the methodology employed in

Attachment A”, and has certified Alaska as equalized

since 1988, and through the 1994 statutory changes.

Alaska has a long history of significant state funding of

schools — it does not have a tradition of reliance solely or

even primarily on local taxation. Indeed Alaska’s system

has been referred to as one of the most equitable in the

nation. Matanuska-Susitna Borough School Dist. v. State,

931 P.2d 391, 397 n. 8 (Alaska 1997).

Like New Mexico, Alaska, has many small school

districts.'' Thus, as with New Mexico, the application of the

* Average daily membership (or ADM) is defined as aggregate ~

number of full-time equivalent students enrolled in a school district

during a student count period divided by the actual number of days

that school is in session for the count period. AS 14.17.990(1).

* See Attach. A, disparity test documentation for FY '05. See also

“K-12 Public School Operating Fund and Selected Special Revenue

Funds” (“FY '05 Revenues”), http://www.eed.state.ak.us/stats/Reswrces/

annual_revenues_05.xls (last visited December 8, 2006) which sets out

the revenue per average daily membership, better illustrating that

more funds are actually distributed to the smaller, more remote

districts, including those without taxing authority under AS 14.08.011-

14.08.021, rural education attendance areas.

Attach. A ai 15-18.

" See “FY '05 Revenues,” http://www.eed.state.ak. us/stats/Resources/

annual _revenues_05.xls, column marked “ADM.”

8

5th and 95th percentiles to school districts instead of to

pupils would result in the elimination of only five or six of

the state’s many school districts with small populations.

Under the petitioners’ interpretation of the statute,

the anomaly results with either the average daily mem-

bership and the adjusted average daily membership: only

about four percent of the state’s children would be consid-

ered outside the disparity test, including the state’s

boarding school at the bottom, and at the top, the North

Slope Borough School District - with a tax base that

includes the North Slope oil industry, and Pelican, a tiny

school district that has only 11 students.” Other unmsual

districts (for example, Kashunamiut, a district with a

single school site, and Valdez, a small district with a

unique tax base — the terminal of the Trans-Alaska Pipe-

line) would not be included as outliers under petitioners’

scheme. Under the Secretary’s regulation, these are

treated as outliers, consistent with the Secretary’s finding

that application of the disparity test on the basis of stu-

dent numbers more successfully eliminates anomalies and

assures uniform application of the test among the states.

The results of the regulations as applied are consis-

tent with a reasonable conception of equalized school

funding, both in Alaska and in New Mexico, An example

will illustrate how the petitioners’ contrary interpretation

would severely undermine equalization. Annette Island

School District is in the middle of the state’s district rank-

ings under the current scheme. Attach. A at 10. Under the

petitioners’ interpretation of § 7709, the amount listed as

“adjusted deductible impact aid” — a significant percentage —

* Id.

9

of the school district’s total revenue, Attach. A, column N”,

would be added to total revenues, Attach. A, column R.

Taking that total $4,258,615-and dividing it by the ad-

justed average daily membership of the district, 546.58,

would increase the revenue per adjusted average daily

membership of the district from $5,610 to $7,791.

Another small district, Chatham, similar to Annette

Island in that it has no local revenue (Attach. A at 9,

column J), would obtain a radically different result.” Its

deductible impact aid is $217,749. Attach. A at 9, column

N. That, added to its audited total revenues and divided by

adjusted daily membership, would yield a much smaller

increase. Haines School District, with local revenue but

only $3,160 in deductible impact aid, similar total reve-

nues and a similar adjusted daily membership, would see

little increase, to only $5,641, but as a municipal school

district it would be limited by AS 14.17.410(c) in raising

additional revenues.

Thus, three districts with similar revenue and ad-

justed average daily membership would diverge widely in

combined impact and state aid. Alaska’s statutory equali-

zation would be seriously and substantially undermined,

a result directly contrary to the purpose of 20 U.S.C.

$ 7709(b)

Further, application of the s.atute in the manner that

the petitioners advocate would eliminate all, or all but one,

-—-

” Described in Attach. A at 4.

“ Chatham and Annette Island School Districts are rural educa-

tion attendance areas not required to make a minimum local contribu-

tuuon under state law.

10

state from consideration under § 7709. As a result, equita-

ble funding would end. The legislative history suggests

that this was not Congress’s intent.”

. +

CONCLUSION

Amicus curiae State of Alaska respectfully requests

the court to uphold the Secretary’s decision and regula- ~

tion, and to adopt the reasoning of the vacated decision of

the Tenth Circuit Court of Appeals.

Dated December 14th, 2006.

Respectfully submitted,

CRAIG J. TILLERY

Acting Attorney General

KATHLEEN STRASBAUGH

Assistant Attorney General

Counsel of Record

State of Alaska

P.O. Box 110300

Juneau, Alaska 99811-0300

(907) 465-3600 (voice)

(907) 465-2520 (facsimile)

Counsel for Amicus Curiae

State of Alaska

* In fact, it suggests to the contrary, that New Mexico, Alaska, and

Kansas would continue to be eligible to take federal impact aid into

account in the payment of state aid. In a discussion of a state grants

provision of the 1994 amendments to federal education law, the

conference report refers to the equalization compliance of New Mexico,

Alaska, and Kansas as if it were a given. H.R. Rep. 103-761 at 639

(1994) (Conf. Rep.), reprinted in 1994 U.S.C.C.A.N. 2901, 2970,

discussing Improving America’s Schools Act of 1994, P.L. 103-382.

App. 1

Attachment A

FRANK H. MURKOWSKI,

STATE OF ALASKA | CovERNOR

Department of Education! Goldbelt Place

& Early Development | 801 West Tenth Street, Suite 200

Juneau, Alaska 99801-1894

Office ofthe —*| (997) 465-2800

Commissioner (907) 465-4156 Fax

MEMORANDUM NUMBER 2006-17

To: Superintendents

School District Business Managers

/s/ Roger Sampson

From: Roger Sampson, Commissioner

Date: February 22, 2006

Subject: Title VIII — Impact Aid Adjustments

Under AS 14.17.410

KKEEKKEKEKEKEKEKRRERE KKK KEKE KEK KKK KKK KK Kh

The purpose of this memorandum is to give you notice

that, pursuant to secticn 8009%(c)(1)(b) of Title VIII —

Impact Aid, the State of Alaska is requesting permission

from the federal government to take impact aid payments

into account in determining state aid payments to school

districts during the state fiscal year 2007. All school

districts receiving impact aid during fiscal year 2007 are

subject to such adjustments as provided in AS 14.17.

If you have any questions, please contact Eddy Jeans,

Director of School Finance, at 465-8679. Thank you.

ce: Eddy Jeans, Director, Division of School Finance

Mindy Lobaugh, School Finance Specialist

App. 2

STATE OF ALASKA FRANK H. MURKOWSEI,

Department of Education GOVERNOR

& Early Development Goldbelt Place

Division of School Finance 801 West 10th Street,

Suite 200

PO Box 110500

Juneau, Alaska 99811-0500

(907) 465-8679

(907) 463-5279 Fax

Eddy Jeans@ccd.state.ak.us

February 23, 2006

Catherine Schagh, Director

Division of Impact Aid

U.S. Department of Education

400 Maryland Ave SW

Washington, DC 20202-6244

Dear Ms. Schagh:

Enclosed is Alaska’s disparity submission of fiscal year

2005 data to be used for fiscal year 2007 certification

based upon the provisions of 34 C.F.R. 222.62. This infor-

mation contains spreadsheets along with copies of the

refund notification of payments that were electronically

transferred to the Alaska LEAs for Impact Aid funds

previously withheld during the 2005 school year.

Please accept this letter as formal notice that the State of

Alaska, Department of Education & Early Development,

intends to consider Impact Aid payments when allocating

state aid to schools for the period July 2006 to June 2007.

This notice is required under section 8009(c)(1)(A) of Title

VIII-Impact Aid, Section 8009(c)(1)(B) requires this notice

to be in the form, and to contain information, that the

Secretary requires. The state’s plan for an equalized

education-funding program is located in Alaska Statute

App. 3

14.17. Please note there are no regulations yet prescribing

what information the Secretary wants submitted, but

these submissions are made at the direction of USDOE

Impact Aid Program staff. If the Secretary desires any

other information, he/she should notify the state immedi-

ately so the state can fully comply. Additionally, enclosed is

a copy of the letter notifying LEAs of the state’s intent to

consider Impact Aid funds during the Fiscal year 2007

foundation distribution.

The information submitted is accurate and complete to the

best of our knowledge. Should you have any questions or

require additional information, please contact me at (907)

465-8679.

Sincerely, .

/s/ Eddy Jeans

Eddy Jeans

Director

School Finance

App. 4

EXPLANATION OF FY2005 DISPARITY

TEST COMPUTATIONS & WORKSHEETS

Column A

Column B

Column C

Column D

Column E

Column F

PAGES 1, 2 & 3 OF EXHIBIT

SCHOOL DISTRICT lists the LEA’s in opera-

tion during FY2005.

ACTUAL FY2005 STATE FOUNDATION PAY-

MENTS as distributed by the Alaska Depart-

ment of Education during the 2004-05 school

year. These amounts represent state support

payments received by the LEA’s under provisions

of the Alaska Public School Foundation Program.

AS 14.17, 34 CFR 222.63(d)(1)

ADJUSTMENTS BASED ON AUDITS amounts

represent FY2005 state aid due to LEA’s based

on audited local revenues and adjustments to

Impact Aid as directed by the USDOE Impact

Aid Office. Amounts are carried forward from

page 5 column AA (AMOUNT STATE OWES).

FY2005 OTHER STATE REVENUE as re-

ported in the School Operating Fund (general

fund) of all LEA audits for the fiscal year tested.

Amounts represent all other state revenue not

reported under the specific categories above.

34 CFR 222.63(d)(1)

SUB-TOTAL STATE REVENUE combines all

revenue in columns B, C and D.

FY2005 CITY/BOROUGH APPROPRIATIONS

as reported in municipal LEA audits for the

fiscal year tested. (In Alaska, only cities and

boroughs/municipal governments” have the

power of taxation and legal responsibility to

support public schools; there are no local

appropriations for REAA’s.)

34 CFR 222.63(d)(2)

Column G

Column H

Column I

Column J

Column K

Column L

App. 5

FY2005 EARNINGS ON INVESTMENTS as

reported in municipal LEA audits for the

fiscal year tested.

34 CFR 222.63(d)(2)

FY2005 OTHER LOCAL REVENUE as

reported in municipal LEA audits for the

fiscal year tested. Amounts include all local

revenue not reported in columns F, G and I.

34 CFR 222.63(d)(2)

FY2005 IN-KIND SERVICES as reported in

municipal LEA audits for the fiscal year tested.

Amounts represent the value of services provided

to the LEA by the municipal government.

SUB-TOTAL LOCAL REVENUE combines all

revenue in columns F, G, H and I.

FY2005 OTHER REAA REVENUE contains

revenues received and reported by REAA

LEA’s in FY2005 audits. Revenues are in-

cluded as required by 34 CFR 222.63(d).

FY2005 TUITION FROM STUDENTS are

payments received from students enrolled in

any instructional program for which a tuition

fee is collected by the district.

Column M FY2005 TUITION FROM DISTRICTS are

payments received from other school districts

enrolled in any instructional program for

which a tuition fee is collected by the district.

Column N ADJUSTED DEDUCTIBLE IMPACT AID are

amounts of Impact Aid funds deducted by the

Alaska Department of Education & Early

Development during the 2004-2005 school

year when determining state aid to LEA's for

the year, less adjustments from column C.

App. 6

Column O FY2005 OTHER FEDERAL FUNDS as re-

ported in LEA audits for the fiscal year tested.

These are reported federal revenues to the

general operating fund which are not re-

stricted as to use by other federal law or

regulations.

34 CFR 222.63(d)(4).

Column P FY2005 OTHER REVENUE is other sources

of Federal revenue which are not classified

elsewhere.

Column Q FY2005 FUND TRANSFERS IN lists amounts

transferred from other school district funds

into the school operation fund as reported in

LEA audits for FY2005. Such transfers repre-

sent revenues to the general operating fund.

Column R FY2005 AUDITED TOTAL REVENUES is the

total of:

column E — Sub-Total State Revenue

column J — Sub-Total Local Revenue

column K — FY2005 Other REAA Revenue

column L — FY2005 Tuition from Students

column M — FY2005 Tuition from Districts

column N — Adjusted Deductible Impact Aid

column O ~ FY2005 Other Federal Funds

column P — FY2005 Other Revenue

column Q — FY2005 Fund Transfers In

Column S ADJUSTED ADM is calculated by:

1. Taking the aggregate number of full-time

equivalent students enrolled during a

count period divided by the number of

days in the count period as defined in AS

14.17.990.

App. 7

Adjust thet number for school size as

defined in AS 14.17.450.

Multiply it by the district cost factor as

defined in AS 14.17.460.

Apply the Special Needs & Intensive

Services Funding factor of 1.2 as defined

in AS 14.17.420(1).

Add to this the aggregate number of

Intensive Students multiplied by 5.

And finally add the aggregate number of

correspondence students multiplied by

80% as defined in AS 14.17.420(2) and AS

14.17.430, respectively.

Column T REVENUE PER ADJUSTED ADM calculated

by dividing column R by column S.

COMPUTATION OF DISPARITY:

The computation of disparity is performed as required by

34 ( “R 222.63(a) using the methodology described in the

paragraph numbered 1. The computations are displayed in

the bottom right corner of page 3. Specifically, the dispar-

ity computation is performed as follows:

b.

The revenues per adjusted Average Daily Mem-

bership (ADM) are ranked in descending order.

The 95th and 5th percentiles are identified as fol-

lows:

1.

Total FY2. 5 Adjusted ADM are multiplied

by 5% to obtain the target number needed to

find the 95th and 5th percentiles of the ad-

justed ADM.

Total FY2005 Adjusted ADM are added from

the top down until the target number is

App. 8

reached identifying the LEA at the 95th per-

centile; it is identified by the word “HIGH.”

Total FY2005 Adjusted ADM are added from

the bottom up until the target number is

reached identifying the LEA at the 5th per-

centile; it is identified by the word “LOW.”

c. The amount of revenue per adjusted ADM (col-

umn T) for the “LOW” LEA is subtracted from

the amount shown for the “HIGH” LEA. The re-

sult is divided by the amount shown for the low

LEA, yielding the percentage of disparity.

Column A

Column U

Column V

Column W

ACTUAL IMPACT AID

DEDUCTED LESS ADJUSTMENTS

PAGE 4 OF EXHIBIT

SCHOOL DISTRICT lists the LEA’s in

operation during fiscal year 2005.

FY2005 ACTUAL DEDUCTIBLE FEDERAL

PL81-874 lists the amounts of Impact Aid

funds the Alaska Department of Education

deducted when determining state aid to

LEA’s for the 2004-05 school year.

ADJUSTMENTS BASED ON AUDITS lists

the amounts representing FY2005 state aid

due LEA's based on audited local revenues and

adjustments to Impact Aid as directed by the

USDOE Impact Aid Office. These amounts are

carried forward from page 5 column AA

(AMOUNT STATE OWES.)

ADJUSTED DEDUCTIBLE IMPACT AID

(PL81-874) amounts represent column U less

column V.

App. 9

EXPLANATION OF FOUNDATION

AUDITED VS. ACTUAL DATA

PAGE 5 OF EXHIBIT

Column A SCHOOL DISTRICT lists the LEA’s in

operation during fiscal year 2005.

Column X STATE A.D BASED ON AUDITS ists

amounts that should have been paid to the

LEA’s based on audited data.

Column Y ACTUAL STATE AID PAID iists the

amounts that were actually paid to the LEA’s

during FY2005.

Column Z AUDITS LESS PAID represents the differ-

ence between column X and column Y.

Column AA AMOUNT STATE OWES lists the amounts

owed LEA's by the State of Alaska. Amounts

are listed in column C, page 1 of the dispar-

ity test (adjustments based on audits).

Alaska Department of Education and Early Development

12/12/2006 FILE: DisparityTest_2005 xis

FY2005 Disparity Test

Compilgg irom Fiscal Vou ong Aas Cc a E f 5

ACTUAL FY2005 -ADJUSTMENTS FY2005 Other | SUB-TOTAL FY2005 FY2005

SCHOOL STATE FOUNDATION BASED ON STATE STATE CITY/BOROUGH EARNINGS ON

DISTRICT PAID AUDITS REVENUE REVENUE APPROP. INVESTMENTS

NORTH SLOPE 9,289,803 S66 ) 9,290,369 22,991,968

PELICAN 404,883 Q 4,269 409, 152 52,121 1,413

SKAGWAY 824,525 ) 15,386 839,911 841,452 520

VALDEZ 3,977,576 5 79,850 4,057 433 4,949 342 19,989

ALEUTIANS EAST 3,444,655 6,835 0 3,451,490 908,556

CHUGACH 1,908,930 ) 0 1,908 930 u

KODIAK 15,355,959 15,017 879,582 16.250 558 7,491,892

HOONAH 1,475,529 YW) ) 1,475,529 505,400 5,155

SOUTHEAST ISLAND 3,041,735 0) 41,098 3,082,833 0

WRANGELL 2,285 953 50 0 2,286,003 862 007 3,922

UNALASKA 2,407 692 57 54,294 2,462,043 2,270,451 17,397

HY DABURG 767,001 ) 3,154 770,155 2,396

YAKUTAT 1,124,399 0 ) 1,124,399 388,000 6 462

KENAI PENINSULA 46,467 674 ) 69,324 46,536,998 26,788,170 197,956 _

JUNEAU 24,109,681 ) 20,445 24,130,126 18,835,000

LAKE & PENINSULA 6,146,267 ) 62,846 6,209,113 869,253 84,268

HAINES 1,726,634 0 0 1,726,634 1,363,044 2,445

ANNETTE |SLAND 1,317,721 0 0 4,317,721 i)

KLAWOCK 1,312,432 5,042 ) 1,317,474 297,009 17,037

CRAIG 3,667,606 7,515 2,498 3,677,619 860,278 10,854

ANCHORAGE 227 384,902 61,152 408 484 227 854,538 133,412,722 1,496,977

MAT-SU 81,777,454 0 ) 81,777,454 33,928,357

CHATHAM 2,030,356 0 Y) 2,030,356 0

SITKA 7,448 961 0 0 7,448,961 4,787,292

KETCHIKAN 11,530,586 3 ) 11,530,589 7,106,968 2,183

IDITAROD 4,253,299 0 34,301 4,287,600 CRs S

KAKE 1,219,900 1,610 4,320 1,225,830 170,000 7 538

CORDOVA _3,074,466 39 ) 3,074,505 1,333,000 482

FAIRBANKS 73,252,725 0 1,450,000 74,702,725 36,545,700

YUKON FLATS 4,454 522 0 74,029 4,528,551 0

BRISTOL BAY 1,154 967 0 ) 1,154,967 600,308 2,990

DENALI 4.469.672 0 0 4,469,672 1,250,000 10,718

SOUTHWEST REGION 6,756,535 0 0 6,756,535 )

PETERSBURG 3,894 437 0 ) 3,894,437 1,655,469 12,482

NORTHWEST ARCTIC 21,078,927 0 - 0) 21,078,927 3,215,493 129,047

ALEUTIAN REGION 1,064 031 ) 15,939 1,079.970 )

GALENA 15,986,233 0 227,038 16,213,271 25,000 18,690

BERING STRAIT 16,637,274 ) Y) 16,637,274 )

DILLINGHAM 4,159,419 15,991 0 4,175,410 1,000,000 26,937

NOME 6,055,521 ) 13,734 6,069,255 1,420,577 7,523

NENANA 4 002,980 0 0 4,002,980 73,183 1,968

LOWER KUSKOKWIM 38,155,539 " 0 671,330 38,826,869 0

KUSPUK 4,600,598 O ) 4,600,598 )

YUPUT id 4,261,258 ) 80,460 4,341,718 0

ALASKA GATEWAY 4.940.741 ) 77,802 5,018,543 )

TANANA 1,056 230 ) 0 1,056,230 22 692 283

PRIBILOF 1,189,523 0 7,901 1,197,424 0

LOWER YUKON 18,024 480 ) an 18, 024 480 0

KASHUNAMIUT 2,548,283 0 ) 2,548,283 0

YUKON-KOY UKUK 9,957,634 ) 0 9,957,634 0

SAINT MARY'S 1,859,327 784 ) 1,860,111 7,309

DELTA GREELY 7 989.414 0 0 7,989,114 0

COPPER RIVER 5.964 425 ) 0) 9,964,425 0)

2 MT_EDGECUMBE 1,630,642 0 ) 1,630,642

TOTALS $734.921618 $114 666 $4. 298.083 __ $739,334. 367 __ $316,820 704

82004541

Alaska Department of Education and Early Development

FY2005 Disparity Test

Compiled from Fiscal Yeay 005 Audits,

12/12/2006 FILE: DisparityTest_2005 xis

J * L -. ._ « N

FY2005 ~FY2005 SUB-TOTAL FY2005 FY2005 + +~=FY2005 ADJUSTED |

SCHOOL OTHER LOCAL IN-KIND LOCAL OTHER REAA TUITION TUITION DEDUCTIBLE

DISTRICT REVENUE _ SERVICES REVENUE REVENUE STUDENTS DISTRICTS IMPACT AID

NORTH SLOPE 48,225 563,910 23,604,103 a) 2,052,369

PELICAN 3.071 56,605 0 0

SKAGWAY 1,314 843,286 0 0

VALDEZ 49,850 5,019,181 0 1,256

ALEUTIANS EAST 25,209 225,450 1,159,215 0 277,122

CHUGACH 0 0 64.922 144,289

KODIAK 243,434 840,548 8,575,874 0 897,393

HOONAH 58,930 569 485 0 113,213

SOUTHEAST ISLAND 0 0 139,474 34,639

WRANGELL 13,291 29,000 908 220 0 4,027.

UNALASKA 36,214 2,324,062 0 6,586

HYDABURG 26.532 65,000 93,928 0 64 472

YAKUTAT 70,425 28,000 432,887 0 78,935

KENAI PENINSULA 318,521 6,956,437 34, 260,684 0 0

JUNEAU 198,579 19,033,579 0 0

CAKE & PENINSULA 321,120 1,274,641 i) 262,798

HAINES 10,553 1,376,042 0 3, 160

ANNETTE ISLAND 0 0 127,305 1,192,174

KLAWOCK 23,407 337 453 0 171,489

CRAIG 789,437 111,423 7,171,992 0 700,491

ANCHORAGE 2,485,733 737,395,432 0 24,317 6,435,081

MAT-SU 740,285 34,068 642 0 0

CHATHAM 0 0 45,172 850 217,749

SITKA 41,606 4,828,898 0 8.959

KETCHIKAN 10 885 530,238 7,650,274 0 4,554

IDITAROD 0 0 148,769 618,641

KAKE 5.745 710,000 293,283 0 2,951 111,210

CORDOVA 6,610 33,000 1,373,092 0 11,792

FAIRBANKS 464 671 37,010,571 0 "6,490,660

YUKON FLATS 0 0 56,471 7,200,083

BRISTOL BAY 5 946 321,271 930,515 0 303,089

DENALI 3,075 1,263,793 0 7,232

SOUTHWES? REGION 0 0 482,803 2,451,849

PETERSBURG 36,084 1,704,035 0

NORTHWEST ARCTIC 426.683 3,771,223 0 333,058 2,264,786

ALEUTIAN REGION 0 0 19,586 189,211

GALENA 488,217 434,172 966,079 0 5 164 68

BERING STRAIT 0 0 1,701,968 6 693,025

DILLINGHAM 154,966 1,181,903 0 282,825

NOME 189,772 1,617,872 0 41,658

NENANA 337,567 412,718 0 0

LOWER KUSKOKY"M 0 9 528,075 10 359,531

KUSPUK 0 0 95,529 1,373,318

YUPIIT a) "0 49,375 7 608.053

ALASKA GATEWAY 0 fy) 42,475 300,287

TANANA 29,042 52,017 0 3,922 13,193

PRIBILOF 0 0 17,231 546,574

(LOWER YUKON fy) 0 534,420 6 606,365

KASHUNAMIUT 0 0 34,263 1,310,972

YUKON-KOYUKUK 0 0 82,279 1,215,841

SAINT MARY'S 42.174 20,689 70.172 0 7.898

DELTA GREELY 0 0 81,330 25.010

COPPER RIVER 0 0 84 996 267,516

Z Ml EDGECUMBE 0 0 801,052

TOTALS $6,447,373 $10269138 $335,631,756 $4 336,443 $365,490 $4,772 $57-466.495_

Alaska Department of Education and Early Development

FY2005 Disparity Test

Compiled from Fiscal Year 3005 Audits Pp

12/12/2006 FILE: DisparityTest_2005 x\s

FY 2005 FY 2005 FY2005 AUDITED ADJUSTED REVENU

SCHOOL OTHER FEDERAL OTHER TOTAL ADM PER ADJ.

DISTRICT FUNDS REVENUE TRANSFERSIN REVENUES ADM

NORTH SLOPE 0 330,021 35,276,862 ___ 4,331.00 8,145

PELICAN 2,000 6,928 474,695 66.30 7,160

SKAGWAY 2,000 8,643 1,693,840 252.70 6,703

VALDEZ 12,118 21,931 9,111,919 1,409.10 6 466

ALEUTIANS EAST 364 883,209 6 771,400 892.69 6 465

CHUGACH 0 222,175 2,340,316 368.42 6,352 7,320

KODIAK 0 472,565 26,196,390 _ 4,377.60 5,984 HIGH

HOONAH SR 65,544 "2,223,771 372.73 5 966

SOUTHEAST ISLAND ~ 258,056 133,272 3,648,274 615.82 5.924

WRANGELL 454,280 44,268 3,696, 798 626.02 5 905

UNALASKA 2,000 6 358 4,801,049 815.94 5 684

BURG 0 35, 162 963,717 163.98 5,877 =

YAKUTAT 0 27 283 1,663,504 286 89 5,798 9

‘KENAI PENINSULA 0 435,323 81,233,005 14,210.70 5,716 on

= 2 ee tw

JUNEAU 37,676 17,156 43,218,537 7.61472 5,676

LAKE & PENINSULA 0 470,603 B,217,155 1449 69 5 668

HAINES 0 41,365 3, 147,201 558 48 5,635

ANNETTE ISLAND 339,228 90,013 3,066,441 546 58 5,610

KLAWOCK 0 20,477 1,846,893 329.74 5,601

aU 3,455 94,340 ~ 5,047 697 90252 : nt

ANCHORAGE 386 895 666,671 372,762,934 66,966.48

WAT-SU 168,778 268,398 116,283,272 20,898 86 ; sa

CHATHAM 252.669 176,049 2,722,845 489 57 5 562

SITKA 16,824 39,887 12,343,529 2,220.18 5,560

KETCHIKAN 21,299 50,140 19,256,856 3,468.42 5,552

IDITAROD 0 213,361 5 268,371 955 96 5.511

KAKE 0 50,578 1,683,852 305 80 5,506

CORDOVA 0 31,580 4,490,969 824.02 5 450

FAIRBANKS 99,358 255,646 118,558,960 21.77903 5 444

YUKON FLATS 0 222,410 6,007,515 1,106.21 5 431

‘BRISTOL BAY 0 27, 501 2,416,072 448.25 5,390

DENALi "2,000 113,487 5 B56, 184 1,097 80 5,334

SOUTHWEST REGION 0 1,002,972 10,694,159 2,005.31 5,333

PETERSBURG 7,148 19,553 5,625,173 1,062 92 5,292

N WEST ARCTIC 0 1, 192,946 28,640,940 5,416.02 5 288

ALEUTIAN REGION 2,802 15,650 1,307,219 247.49 5.282

GALENA 0 213,304 17,397,686 3,296 97 5,277

BERING STRAIT 0 7,690,047 26,722,314 5,080.64 5.260

DILLINGHAM 6,061 61,798 5,707,997 1,087 85 5.247

NOME 6,820 25,588 7,761,193 7,503 84 5 161

NENANA 0 80,939 4,496 637 887.67 5,066

LOWER KUSKOKWIM 0 2,380,109 52,094,584 10,347.39 5,035

KUSPUK 129, 182 350,854 6 549 481 7,300.94 5,034

YUPIIT 0 386 824 6,385 970 7,278.16 4 996

ALASKA GATEWAY 0 219,540 5 580,845 7,118.55 4 989

TANANA 72,131 46 893 1, 184,386 237 B3 4,980

PRIBILOF 5,080 83 622 1 849.931 37807 4,893

LOWER YUKON 0 973,151 26.078,416 5,363.86 4862 LOW

KASHUNAMIUT 19 646 138,255 4,051,419 840 43 4821 7,315

YUKON-KOYUKUK 0 441 841 11.697 595 2,433.25 4,807

SAINT MARY'S 0 6,397 1,938,578 409 24 4,737

DELTA GREELY 17,745 80,701 6.193 900 1,745.24 4,695

COPPER RIVER 0 29,731 6,346 668 1,35/ 13 4677

TMT EDGECUMBE 0 0 2,431,694 529 55 4,592

TOTALS $2,265,615 $14.923,059 $1,154.027,997 208.680 54

5% HIGH 5 984

10,434.03 LOW 4,862

DIFF 1,122

DISPARITY 23 08%

ALASKA DEPARTMENT OF EDUCATION & EARLY DEVELOPMENT

FY2005 DISPARITY TEST

COMPILED FROM FISCAL YEAR 2004 AUDITS

A U Vv Ww

Actual Adjustments Adjusted

SCHOOL Deductible Based on Deductible

DISTRICT impact Aid Audits Impact Aid

ALASKA GATEWAY 300,287 - 300,287

ALEUTIAN REGION 189,211. - 189,211

ALEUTIANS EAST 270,287 6 835 277,122

ANCHORAGE 6,373,929 61,152 6,435,081

ANNETTE ISLAND 1,192,174 - 1,192,174

BERING STRAIT 6,693,025 - 6,693,025

BRISTOL BAY 303,089 - 303,089

CHATHAM 217,749 - 217,749

CHUGACH 144,289 - 144,289

COPPER RIVER 267,516 - 267,516

CORDOVA 11,753 _ 3 11,792

CRAIG 92,976 7,515 100,491

DELTA GREELY 25,010 - 25,010

DENAL! 7,232 - 7,232

DILLINGF AM 266 834 15,991 282,825

FAIRBANKS 6,490 660 - 6,490 660

GALENA 68 - 68

HAINES 3,160 - 3,160

HOONAH 113,213 113,213

HYDABURG 64,472 - 64,472

IDITAROD 618,641 - 618,644

JUNEAU : - -

KAKE 109,600 1,610 111,210

KASHUNAMIUT 1,310,972 : 1,310,972

KENAI PENINSULA - : rw

KETCHIKAN 4.551 3 4,554

KLAWOCK 166,447 5,042 171,489

KODIAK 882,376 15,017 897 393

KUSPUK 1 373,318 - 1,373,318

LAKE & PENINSULA 262,798 - 262,796

LOWER KUSKOKWIM 10,359,531 : 10,359,531

LOWER YUKON 6,606, 365 : 6,606,365

MAT-SU - - -

NOME 41,658 - 41,658

NORTH SLOPE 2,051,803 566 2,052,369

NORTHWEST ARCTIC 2,264,786 - 2,264,786

PELICAN - - -

PETERSBURG net Y :

PRIBILOF 546,574 : 546,574

SAIN’ MARY'S 1.114 784 1,898

SITKA 8.959 - 8.959

SKAS TY ~ ; .

SOUTHEAST ISLAND 34,639 - 34,639

SOUTHWEST REGION 2,451,849 - 2,451,849

TANANA 13,193 - 13,193

UNALASKA 6,529 57 6.586

VALDEZ 1,251 5 1,256

WRANGELL __ 3,977 50 4,027

YAKUTAT 78 935 - 78,935

YUKON FLATS 1,200,083 - 1,200,083

YUKON-KOY UKUK 1.215.841 - 1.215.841

YUPIT a 1,608 053 - 1.608.053

Z Mi EXNGECUMBE 801 052 - 801,052

57 051,829 114 666 57.166,.495

gl ‘ddy

ALASKA DEPARTMENT OF EDUCATION & EARLY DEVELOPMENT

FY2005 DISPARITY TES/i

COMPILED FROM FISCAL YEAR 2005 AUDITS

A x Y z AA

State Aid Actual Audits Amount

SCHOOL Based on Audits State Aid Less State

DISTRICT Paid paid Owes

ALASKA GATEWAY 4,940,741 4,9:10,741 - -

ALEUTIAN REGION 1,064,031 1,064,031 - -

ALEUTIANS EAST 3,451,490 3,444 655 6,835 6,835

ANCHORAGE 227,446,054 227,384,902 61,152 61,152

ANNETTE ISLAND 1,317,721 1,317,721 - -

BERING STRAIT 16,637 274 16,637,274 - -

BRISTOL BAY 1,152, 885 1,154,967 (2,082) -

CHATHAM 2,030,356 2,030,356 - -

CHUGACH 1,908,930 1,908,930 - -

COPPER RIVER 5 964 425 5,964,425 - -

CORDOVA 3,074,505 3,074,466 39 39

CRAIG 3,675,121 3,667,606 7,515 7,515

DELTA GREELY 7,989,114 7,989,114 - -

DENALI 4,469,597 4,469 672 (75) -

DILLINGHAM 4,175,410 4,159,419 15,991 15,991

FAIRBANKS 73,209,772 73,252,725 (42,953) -

GALENA 15 986,193 15,986,233 (40) -

HAINES 1,726,609 1,726,634 (25) -

HOONAH 1,474,736 1,475,529 (793) | -

HYDABURG 734,696 767,001 (32,305) -

IDITAROD 4,253,299 4,253,299 - -

JUNEAU 24,109,681 24,109,681 - -

KAKE 1,221,510 1,219,900 1,610 1,610

KASHUNAMIUT 2,548,283 2,548,283 - -

KENAI PENINSULA 46,467 674 46 467 674 - -

KETCHIKAN 11,530,589 11,530,586 3 3

KLAWOCK 1,317,474 1,312,432 5,042 5,042

KODIAK 15,370,976 15,355,959 15,017 15,017

KUSPUK 4 600,598 4,600,598 - -

LAKE & PENINSULA 6,140,608 6,146,267 _ (5.659) -

LOWER KUSKOKWIM 38,155,539 38,155,539 : -

LOWER YUKON 18.024 480 18,024 480 -

MAT-SU 81,777,454 81,777 454 - -

NENANA 4,002,980 4,002,980 - -

NOME 6,055,082 6,055,521 (439) -

NORTH SLOPE 9,290,369 9,289,803 566 566

NORTHWEST ARCTIC 21,004 975 21,078,927 (73,952) _ -

PELICAN 404.883 404 883 - -

PETEF.SBURG 3,894 437 3,894.437 -

PRIBILOF 1,189,523 1.189.523 = -

SAINT MARY'S 1,860,111 1,859, 327 784 784

SITKA 7,448 951 7,448,961 (10) -

SKAGWAY _ Mate 824 525 874,525 - -

SOUTHEAST ISLAND 3,041,735 3,041,735 -

SOUTHWEST REGION 6,756,535 6,756,535 - -

TANANA 1.041.199 1,056,230 (15.031) .

UNALASKA 2,407,749 2,407 $92 §7 57

VALDEZ 3,977,583 3,977 578 5 5

‘WRANGELL 2,286,003 2,285,953 50 50

YAKUTAT 1.124.276 1,124,399 (123) -

YUKON FLATS 4 454 522 4,454 522 -

YUKON-KOYUKUK 9.957 634 9,957 634

YUPIIT 4,261,258 4.261.258

2 Mt. EOGECUMBE 1,630,642 1,630,642 - -

734,862,797 734,921.618 (58,821) 114,666

pt ddy

App. 15

[SEAL] UNITED STATES DEPARTMENT OF EDUCATION

OFFICE OF ELEMENTARY AND

SECONDARY EDUCATION

May 15, 2006

Honorable Roger Sampson

Commissioner

Alaska Department of Education and Early Development

-801 West 10th Street, Suite 200

Juneau, Alaska 99801-1894

Dear Commissioner Sampson:

Enclosed are a certification and related report confirming

that Alaska meets the requirements of section 8009(b) of

the Elementary and Secondary Education Act of 1965 (20

U.S.C. § 7709(b)). This means that the State is eligible to

consider a portion of Impact Aid payments as local re-

sources in determining State aid entitlements for the

period July 1, 2005-June 30, 2006 (fiscal year 2006).

A copy of the certification and report is being sent to all

school districts in Alaska tc inform them of their right to a

hearing.

Sincerely,

/s/ Catherine Schagh

Catherine Schagh., Director

Impact Aid Program

Enclosures

400 MARYLAND AVE., S.W., WASHINGTON, DC 20202

www.ed.gov

Our mission is to ensure equal access to education and to

promote educational excellence throughout the nation.

App. 16

[SEAL] UNITED STATES DEPARTMENT OF EDUCATION

OFFICE OF ELEMENTARY AND

SECONDARY EDUCATION

May 15, 2006

NOTICE OF ACTION UNDER SECTION 8009(b) OF

THE ELEMENTARY AND SECONDARY EDUCATION

ACT OF 1965 (20 U.S.C. § 7709(b))

State — Alaska

Period of Certification — July 1, 2005-June 30, 2006

As further described in the enclosed report, we have

determined that Alaska is eligible to take into considera-

tion Impact Aid payments in determining State aid to local

educational agencies in accordance with section 8009(b) of

the Elementary and Secondary Education Act of 1965 (20

U.S.C. § 7709(b)) for the period noted above.

Any local educational egency adversely affected by this

action may request, in writing and within 60 days of the

receipt of this notice, a hearing under section 8009(c)(3)\(B)

and 34 C.F.R. § 222.165. A request for a hearing should be

sent to: Director, Impact Aid Program, U.S. Department of

Education, 400 Maryland Avenue, S.W., Washington, D.C.

20202-6244.

/s/ Catherine Schagh

Catherine Schagh, Director

Impact Aid Program

Enclosure

400 MARYLAND AVE., S.W., WASHINGTON, DC 20202

www.ed.gov

Our mission is to ensure equal access to education and to

promote educational excellence throughout the nation.

App. 17

REPORT FOR THE YEAR JULY 1, 2005-JUNE 30, 2006

(STATE FISCAL YEAR 2006) UNDER SECTION

8009(b) OF THE ELEMENTARY AND SECONDARY

EDUCATION ACT OF 1965 (20 U.S.C. § 7709(b))

State — Alaska

Section I. Background

A. Procedural History

The Commissioner of the Alaska Department of Education

and Early Development (State) timely notified the U.S.

Department of Education (Department) and all Alaska

school districts of the State’s intention, under Section

8009(b) of the Elementary and Secondary Education Act of

196, (“the Act”), to take Impact Aid payments into consid-

eration in the calculation of school aid for the period of

July 1, 2005 to June 30, 2006 (State fiscal year (FY) 2006).

The notice was by numbered memorandum 2005-11 dated

February 11, 2005. The Department received final FY

2004 data from the State in support of the request for

certification under section 8009(b) on March 1, 2005.

On July 5, 2005, the Department notified all school dis-

tricts in the State of their opportunity to request a prede-

termination hearing concerning the State’s request, No

district requested such a hearing.

B. State Foundation Formula

The current State school funding program, enacted in

1998 (see HCS CSSB 36 (FIN\1998)), establishes a for-

mula for disbursing general State foundation aid. Funding

for public schools consists of State aid, a required local

contribution, and eligible Federal Impact Aid, A district’s

State aid equals “basic need” minus a required local

App. 18

contribution and 90 percent of eligible Federal Impact Aid

for that fiscal year. Under the formula (Alaska Stet.

§§ 14.17.410) “basic need” is a number (“N”) multiplied by

the “base student allocation,” $3,940, see Alaska Stat.

§ 14.17.470). “N” is the sum of the products of three

formulas:

1) the average daily membership (ADM) of all

students (except correspondence students),

times the applicable district cost factor un-

der Alaska Stat. § 14.17.460, times the spe-

cial needs factor set out in Alaska Stat.

§ 14.17,420(a)(1);

2) the ADM of intensive needs students times

the intensive needs factor (see Alaska Stat.

§14.17.420(a)(2));

3) the ADM of correspondence students times

the correspondence factor (see Alaska Stat.

§ 14.17.430).

In addition, the formula provides for Quality School

Funding and the calculation of foundation aid on a “hold

harmless” basis.

Section II. Description of Disparity Calculation

A. Disparity Test

A State may take into consideration Impact Aid payments

in calculating State aid if the Secretary determines that

the amount of per-pupil expenditures or revenues of the

local educational agency with the highest per-pupil expen-

ditures or revenues in the State did not exceed the per-

pupil expenditures or revenues of the LEA with the lowest

per-pupil expenditures or revenues by more than 25

App. 19

percent. 20 U.S.C.§ 7709(b)(2)(A). Alaska has satisfied this

requirement for FY 2006 with the calculated disparity of

20-45 percent.

In making this determination, LEAs with expenditures or

revenues above the 95th percentile or below the 5th

percentile of such revenues or expenditures in the State

are excluded, as required by the statute. See 2( U.S.C.

7709(b)(2)(B)(i) and the Appendix to 34 C.F.R. Subpart K.

In addition, as required by statute (20 U.S.C.

§ 7709(b)(2)(ii)), the extent to which the State’s program

reflects the additional cost of providing free public educa-

tion in particular types of LEAs or to particular types of

students was considered by performing the disparity

calculation on an adjusted ADM basis.

B. Fiscal Year 2004 Data in Support of FY 2006 Request

The revenue per adjusted ADM at the 95th percentile is

$5,412 (Kodiak), and the revenue per adjusted ADM at the

5th percentile is $4,493 (Lower Yukon). The re:-ulting

disparity is 20.45 percent.

Section III. Findings

A. Approval

Based upon final FY 2004 data received by the Depart-

ment on March 1, 2005, the Alaska State aid formula is

certified under section 8009(c)(3) of the Impact Aid statute

for FY 2006. The revenue disparity is 20.45 percent, which

is within the 25 percent disparity allowed under section

8009(b)(2)(A).

App. 20

B. Exclusions and Allowable Proportion

The State is certified to take into consideration Impact Aid

payments when calculating State aid to districts for FY

2006. The State may not take into consideration the

increased payment that results from the use of a weight

of greater than 1.0 under subparagraph (B) of section

8003(a)(2) of the Act (children residing on Indian lands)

or supplemental payments under section 8003(d) of the

Act (children with disabilities) or funds received under

section 8003(b)(2) of the Act (heavily impacted LEAs) that

are in excess of amounts calculated under section 8003(b)(1)

of the Act (Basic Support payments). See 20 U.S.C.

§ 7709(b\(1). The maximum proportion of payments that

may be taken into consideration, calculated under section

8009(d)(1) for each LEA, is available upon request from

the State.

Report Issued By: /s/ Catherine Schagh May 15, 2006

Catherine Schagh, Date

Director

Impact Aid Program