Legislature(2021 - 2022)ADAMS 519
04/14/2021 01:30 PM FINANCE
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|Presentation: Tribal American Rescue Plan Act Funding|
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE BILL NO. 169 "An Act making appropriations for public education and transportation of students; and providing for an effective date." 3:05:53 PM Co-Chair Foster listed individuals available online. REPRESENTATIVE DAN ORTIZ, SPONSOR, introduced the legislation with a prepared statement: I appreciate the opportunity for the chance to present House Bill 169, which is an appropriation bill for the education formula and pupil transportation for fiscal year 2022. House Bill 169 is a separate appropriation bill from the regular operating budget in order to pass funding for education earlier in the session and prevent school districts from issuing mandatory teacher layoff notices. Each year, school districts rely heavily on an appropriation from the state to fund education, although we, the legislature, sometimes do not pass the operating budget until late May or June. School districts must complete their budgets much earlier, usually in March. Districts are often forced to draft multiple budgets and anticipate low amounts. In the face of uncertainty, school districts will sometimes issue pink slips to tenured teachers by May 15th and to non-tenured teachers by the last day of the school year because they did not know what the legislature was going to do specifically in relationship to funding for education; therefore, without knowing, by contracts, stipulations, and things like that, they sometimes are forced to hand out pink slips because they were left without the information they needed. Therefore, there was an opportunity cost with that. Education and students' success is a high priority for the state. Keeping educators in the classrooms is one of the most effective ways to address that priority. House Bill 169 reflects the legislature's commitment to education, the school districts, and teachers. Vice-Chair Ortiz further explained the bill was an attempt by the legislature to give early notice to districts as to where things would stand for them in relationship to funding. The goal was to hopefully avoid districts having to issue pink slips. He explained there was an opportunity cost with issuing pink slips because teachers sometimes decided to leave a community and take a job elsewhere. He highlighted the difficulty retaining teachers in Alaska. He hoped the problem could be avoided by working together to pass an early funding bill. He was available for questions. Co-Chair Foster did not see the necessity of reviewing the sectional analysis. He pointed out that the legislature had provided early funding for education several years back. He explained early funding was different than forward funding. He elaborated that early funding meant paying the current year as the legislature normally would in the operating budget, but rather than putting it in the operating budget, it was included in a separate bill to provide funding sooner. He elaborated that with the anticipated ARPA funding, the operating budget timeline had slowed down. He detailed that if the budget was not completed until after May 15, it was a problem for school districts. He argued that while May 15 was the deadline, some school districts had multiple schools that were asked internally to provide a list of potential pink slips by May 1. He highlighted that if the legislature did not issue a budget by May 10 or so, it would put some school districts in a bind. He pointed out that HB 169 was a basic bill that followed the formula. He clarified the bill did not contain any additional items such as projected ARPA funds or one-time increments. 3:10:49 PM Representative Josephson asked what average daily membership (ADM) would be applied to the calculation. Vice-Chair Ortiz answered that the ADM had been impacted in the current year by COVID. He had heard requests to use the FY 19 ADM numbers rather than the most recent October numbers. He did not know whether the legislature had the leeway to make the adjustment in the bill. He relayed he had submitted the question to the department. LACEY SANDERS, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR (via teleconference), answered that there were no changes made by the current version of the bill and the Department of Education and Early Development (DEED) would utilize the existing statute to provide payments to school districts. Currently the projection in the bill was based on the ADM provided by the school districts in September 2020; however, there would be a new student count with preliminary numbers after October 2021. She detailed that a reconciliation would be provided by the department and finalized numbers would be available in March of 2022. She explained the March 2022 number would be paid to school districts. 3:13:02 PM Representative Josephson provided a scenario where student populations beginning in mid-August looked more like a typical year as opposed to the current school year. He asked if the appropriation would look more like the 2019/2020 school year under the scenario. Ms. Sanders answered in the affirmative. She detailed districts would be paid based on the school count period in the fall [of 2021]. Representative Rasmussen asked if it was possible to look at language for funding the following year as well in the same piece of legislation to bring some certainty to districts. She reasoned if the funding was within the same two-year cycle, the legislature would not be binding a future legislature to an appropriation. She believed it was important for the legislature do everything it could to not put teachers and schools in the position of receiving pink slips, especially during a time with many financial stresses on families. Ms. Sanders responded that the bill provided funding for FY 22 and did not address FY 23. She believed it was what Co- Chair Foster had spoken to earlier when he had explained the bill did not forward fund education. Co-Chair Foster added that the bill did not forward fund, but it could. He stated the other part of the equation was whether the legislature wanted to do so. He relayed the committee could add the provision with an amendment. 3:15:47 PM Representative LeBon supported the legislation. He stated that he almost wished the legislature had passed the bill a bit earlier. He recalled his time on the Fairbanks School Board and reported that the school board had been deep into its budget process one to two months back. He highlighted that it still did not hurt that the legislature was giving districts some heads up that it was willing to fund to the formula. He stated that the bill would help regardless. Vice-Chair Ortiz referenced an earlier question by Representative Josephson. He asked if it would be legal to use the ADM count from FY 19 with the understanding that those numbers may more accurately reflect the student count in October of 2021. Ms. Sanders answered that using a different student count period would require a statutory change. She noted that the bill reflected the projections currently. She clarified that the actual payment made by DEED to school districts would be paid based on actuals in FY 22. Representative Thompson noted that the bill looked at projections for the current budget using 2020 counts from the past fall. He believed funding would be short if the student count in the fall increased to the 2019 level, but the budget used the 2020 count. He asked if it would mean a supplemental budget item. Co-Chair Foster answered that it was possible to do a supplemental. He remarked that the question had been asked to Legislative Legal Services or another entity. He explained that if the 2019 student count were used, each school would get a disproportionate amount. He referenced a recent year when the legislature had allocated a one-time increment of $35 million. He noted it had been necessary to get around the disparity test. He asked if the one-time increment had been allocated based on the ADM. 3:20:07 PM Ms. Sanders clarified that the estimates provided in the bill were projections by the school districts on what they think the next school year would look like. She elucidated that the projections were not based on the districts' decreased populations during the pandemic. She explained the language in the bill provided the appropriation at the amount necessary to fund, which provided DEED the ability to pay school districts based on the actual student count period and did not require DEED to come back for a supplemental. The department reported back on the changes between the initial projection and the actual amount required. She reiterated it did not require DEED to come back for a supplemental. She agreed that the $35 million had been an appropriation outside the foundation formula, which was allocated based on the adjusted ADM. She confirmed that changes to the formula required working with federal partners to avoid failing the disparity test, which would cost the state more money. Co-Chair Foster thought there would be a $26 million dip in the funding for education because students had gone to correspondence and fewer students had been in schools. He asked how to ensure schools did not see a reduction. He highlighted that eventually students would be back in brick and mortar schools. Ms. Sanders replied that school districts would be paid based on their actual student count. In the current year, districts may see a dent based on the decline in actual student enrollment. She clarified that the fund appropriated in HB 169 would be based on the next [school] year. She explained that school districts may have considered students returning from correspondence programs as schools were reopening in the next fiscal year and projections would not reflect the dip that occurred in the current year. 3:23:28 PM Representative Edgmon spoke to projections versus actual student counts. He stated that in the fall of 2020, many schools had kids being instructed by remote learning or not in school. He stated his understanding that schools were projecting "x" number of students in the fall in order to meet the funding that would come into play in March of 2022. He asked if projections could be used to suffice for the student count. Ms. Sanders replied in the affirmative. She elaborated that statutory guidance directed school districts to provide projections in the fall in order for DEED to have a budget to present to the legislature. She confirmed that districts provided projections. Representative Edgmon used the Bristol Bay Borough in his district as an example. He remarked that most of the kids were at home. He considered a scenario where the district projected 300 students for the fall of 2020. In terms of the legislation, he asked if the projections would suffice as opposed to counting the actual students. Ms. Sanders responded that DEED used projections when it developed the future year budget. She clarified that when DEED reimbursed districts during the year, it used districts' first nine months based on the FY 21 count and trued up in the final three months. She explained that projections were used for purposes of budgeting and when the actual student count occurred in October, the department used the actual counts. Representative Edgmon surmised the legislature could appropriate $1.1 billion in HB 169, but in the end, what actually went to school districts could be smaller because of the actual numbers in the true up. Ms. Sanders answered that the funding could be less or more depending on student counts. Co-Chair Foster referenced $26 million the legislature had heard schools would be shorted. He asked if the $26 million would be applied to the FY 21 budget with the "estimated to be" language. Alternatively, he asked if it was the projection for the FY 22 budget that schools would be short by $26 million. 3:27:11 PM Ms. Sanders stated her understanding that in FY 21 there was an increase over the projection in the prior budget. She would follow up with an answer in writing. Representative LeBon stated there was a lot unknown out there. He shared that his own district in Fairbanks was doing everything it could identify returning students because many students sought other options as much of the in-person instruction had paused. He recalled having meetings in June and July during his time on the school board to adjust budget amounts because of new information. He explained that in Fairbanks, funding had come from federal sources because of the schools on Fort Wainwright and Eielson Air Force Base. Additionally, there was the state funding formula, a borough component, and miscellaneous grants. He highlighted that budget actions were not limited to one time per year. Co-Chair Foster pointed out that although May 15th may be a deadline for tenured teachers, there was a deadline on the last day of school for non-tenured teachers, which was April 30 in one of the schools in his district. He stressed that the issue impacted schools. Representative Wool stated that the student count was down in Fairbanks by 2,000 from the previous year. He added that statewide the count was down 2,000. He noted that kids doing remote learning during in-person school closures did not change the student count. He remarked that correspondence learning was within the public school system depending on the program. He pointed out that although projected numbers were down from 2019, some school districts were up. He cited Galena as an example and explained that correspondence schools had a surge in enrolment. He referenced many calls to legislators requesting the use of 2019 numbers [in the education budget]. He reasoned that if the budget used 2019 numbers, the schools with robust correspondence programs (e.g., the Galena or Yukon-Kuskokwim School districts) would take a hit. He did not know what the correspondence schools' projected numbers were, but he speculated they would likely see decreases in student numbers. He reasoned that while it sounded simple, it may not be advisable to use 2019 student count numbers in the budget. He considered that statewide, the student count was only down by 2,000 and attributed the decrease partially to people leaving the state and private schools absorbing some of the students. He believed that remote schooling would not be offered in Fairbanks in the coming school year. He thought students would have the choice of doing correspondence or going to school in person. He speculated that school numbers would bounce back. He reported that his kids, who were attending school in person, had told him more students were returning to the classroom each week. He asked where student counts were currently in comparison to 2019 numbers. 3:32:35 PM Ms. Sanders replied that she did not have the district allocation on hand. She shared that the DEED website had a report showing projections provided by school districts. She would include the information in her response to the committee. Vice-Chair Ortiz asked if Ms. Sanders had the HB 169 sectional analysis on hand. Ms. Sanders replied that she would pull it up online. Vice-Chair Ortiz referenced language in the sectional analysis specifying the bill would appropriate the amount necessary, estimated to be $1.193 billion. He asked if the number reflected the savings or lessened funding that would go towards the Base Student Allocation (BSA) based on declined student enrollment due to COVID. Ms. Sanders answered that the number reflected the student count projected by school districts during the next school year. She relayed that school districts may have included some reduction based on projected declines, whether from COVID or students leaving the state. She could not speak to each school districts' basis for determining their projections. Vice-Chair Ortiz asked if it was no longer the position of the administration that approximately $30 million would be saved in the FY 22 budget based on declining enrollment. Ms. Sanders answered that she was not aware of the statement being made. She was not aware of the $30 million in savings due to [enrollment] decline. She reported that the actual cost of education had increased over the projection from the previous year. She elaborated that the number had increased by $26 million from the previous session. She wondered if Vice-Chair Ortiz was possibly comparing FY 20 to FY 22. Vice-Chair Ortiz answered that he was referring to a number referenced by Co-Chair Foster. He explained that the governor's initial budget reflected a decrease in BSA funding based on declining enrollment in FY 21. He did not recall the precise number referenced by Co-Chair Foster earlier in the meeting. Co-Chair Foster recalled the figure as $26 million. Co-Chair Foster asked Ms. Sanders to include the information in the written response to the committee. 3:36:46 PM Representative Carpenter asked for clarification on the projections and student counts. He referenced earlier discussion about September 2020 and October 2021 student counts for the ADM. He asked for verification that both were physical counts. He surmised the October 2021 count was not a projection. He thought the budget process used what he characterized as a third count reflecting projections created currently during the budget process. He asked for verification that the projected count resulted in the $1.2 billion appropriation. Ms. Sanders answered that there was one physical count period that occurred in October 2020, which determined what would actually be paid during the current year. The projection provided by the school district was at the same time for the following year; however, in October 2021, there would be another physical student count period that would apply to the next year's payment. HB 169 was HEARD and HELD in committee for further consideration. Co-Chair Foster reviewed the schedule for the following day.
|HB 169 Sectional Analysis.pdf||
HFIN 4/14/2021 1:30:00 PM
|HB 169 Sponsor Statement.pdf||
HFIN 4/14/2021 1:30:00 PM
|AFN - HFIN, re - ARPA (14APR21).pdf||
HFIN 4/14/2021 1:30:00 PM