Legislature(2021 - 2022)ADAMS 519
05/11/2022 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB203 | |
| HB350 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 203 | TELECONFERENCED | |
| += | HB 350 | TELECONFERENCED | |
HOUSE BILL NO. 350
"An Act relating to school bond debt reimbursement;
and providing for an effective date."
1:47:22 PM
Co-Chair Merrick relayed that the bill had been heard the
previous day and one amendment had been received since that
time. She asked the bill sponsor's staff to provide any
opening comments.
SARAH EVANS, STAFF, REPRESENTATIVE HARRIET DRUMMOND, was
available to answer any questions.
Representative Wool MOVED to ADOPT Amendment 1, 32-
LS1560\A.1 (Marx, 5/11/22) (copy on file):
Page 7, line 3:
Delete "70[50]"
Insert "50"
Page 7, line 10
Delete "60"
Insert "50"
Co-Chair Merrick OBJECTED for discussion.
Representative Wool explained the amendment would bring
school bond debt reimbursement to 50 percent across the
board. He noted that the number had been 50 percent since
2015. He explained that if a school district got a bond for
new construction or maintenance, the state would pay half.
He understood the number had been higher in the past. He
noted that the bill currently had a 70/60 percent component
for different kinds of construction. He understood
previously there had been a 60/40 split prior to the
moratorium.
1:49:01 PM
Representative Josephson recalled that former Senator Anna
Fairclough [McKinnon] had sponsored the moratorium, which
had been a sign of things to come as the recession began.
He asked for verification that the number had been reduced
to 50 percent at the start of the moratorium.
Ms. Evans replied affirmatively.
Vice-Chair Ortiz asked how the amendment matched or
diverged with the current budget bills. He wondered if the
amendment would put school bond debt reimbursement on a
different path than the trajectory under the current
budget.
Representative Wool believed the state was currently paying
50 percent. He explained that the funding had been vetoed,
but the legislature had backfilled the funds in the current
budget. He recalled that when Representative Drummond had
presented the bill, she had stated there was a recent
school bond debt issue on the ballot in Anchorage with a
zero percent state contribution. He elaborated that under
the ballot proposition, 100 percent would have been paid by
the school district. He relayed the proposition had it
narrowly lost. He thought 50 percent was a good number. He
had a bit of concern there would be a flood of new school
projects if the bill passed with a 70 percent [state]
reimbursement. Under the amendment, both kinds of
construction would be at the 50 percent reimbursement rate.
He wanted to support school districts but did not want the
state to see a flood of new school bond debt it would be
responsible for. He noted the amendment was an effort to
strike a middle ground.
Co-Chair Merrick WITHDREW her OBJECTION.
Representative Josephson OBJECTED. He stated his
understanding the amendment would reduce the state's share
for school bond debt assistance beneath the 2013 rate.
Ms. Evans responded affirmatively. She detailed that since
the implementation of the moratorium in 2015, the state had
paid nothing toward school bond debt reimbursement. The
only two communities that had passed school bond debt
reimbursement on the ballot were Utkiagvik and Anchorage.
She relayed that a measure had not passed in any other
communities where the state would contribute no funding.
1:52:58 PM
Representative Josephson asked for verification that the
amendment would reduce the reimbursement below its
historical rate before 2015.
Ms. Evans agreed. She elaborated that [prior to 2015] the
reimbursement rate had been 70 percent on maintenance and
60 percent on new construction. She highlighted that [in
2015] SB 64 implemented a moratorium and reduced the
reimbursement rates to 50/40 [for maintenance and new
construction].
Representative Rasmussen supported the amendment. She
stated the legislature had heard a lot about an overall
comprehensive fiscal plan. She believed the legislature
needed to evaluate all of the education funding including
capital deferred maintenance, bond debt reimbursement,
major maintenance, the retirement plan, and Base Student
Allocation (BSA) increases to determine how the items
competed for state dollars. She reasoned that all of the
projects piling up could amass a large financial obligation
to the state. She highlighted the need to determine revenue
streams and to resolve the statutory Permanent Fund
Dividend formula. She believed there were many questions
that needed to be answered together and education was one
component of the whole picture.
Representative Wool pointed out that existing bond debt was
currently being paid at 50/40 according to the change in
2015. He stated that the reimbursement rate under the bill
was currently 70/50. He relayed his support for education
funding. He believed equal participation by the state and
school districts was equitable for new construction. He was
concerned there may be an influx of new construction
projects if the state paid 70 percent. He would rather see
the 20 percent go toward a BSA increase or classroom
expenditures.
1:56:09 PM
Vice-Chair Ortiz did not disagree with the comments by the
two prior speakers and recognized that dollars spent were
dollars spent. He agreed that everything should be a part
of the equation when trying to establish a fiscal plan;
however, the state was constitutionally required to provide
for education and public safety. He reasoned that having
adequate school facilities was an important element of
maintaining an adequate education system.
1:57:45 PM
AT EASE
1:59:36 PM
RECONVENED
Representative Wool replied to the prior comments made by
Vice-Chair Ortiz. He relayed his support for building
maintenance and keeping structures sound. He highlighted
that $100 million had been included in the capital budget
for school construction.
Co-Chair Merrick clarified the funding in the capital
budget was for school major maintenance.
Representative Wool stated that he supported maintaining
school buildings. He referred to Ms. Evan's earlier
statement that two communities had approved school bond
debt with zero state contribution. He noted that Anchorage
had almost approved school bond debt again with zero state
contribution. He thought 50 percent was fair.
2:00:46 PM
Representative Josephson MAINTAINED his OBJECTION to
Amendment 1.
A roll call vote was taken on the motion.
IN FAVOR: Rasmussen, Wool, Carpenter, Johnson, Merrick
OPPOSED: Josephson, LeBon, Ortiz, Thompson, Foster
The MOTION to adopt Amendment 1 FAILED (5/5).
Co-Chair Foster MOVED to REPORT HB 350 out of committee
with individual recommendations and the accompanying fiscal
note.
There was an OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Ortiz, Wool, Johnson, Josephson, Foster, Merrick
OPPOSED: LeBon, Rasmussen, Thompson, Carpenter
The MOTION PASSED (6/4).
There being NO further OBJECTION, HB 350 was REPORTED out
of committee with five "do pass" recommendations, two "do
not pass" recommendations, two "no recommendation"
recommendations, and one "amend" recommendation and with
one previously published indeterminate fiscal note: FN1
(EED/Debt Service).