Legislature(2017 - 2018)BUTROVICH 205
04/04/2017 03:30 PM EDUCATION
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SB 103-ED GRANTS/SCHOLARSHIP;INNOVATIVE ED FUND 3:57:29 PM CHAIR HUGHES announced the consideration of SB 103. 3:57:44 PM MS. HUTCHISON explained SB 103. She provided the sectional analysis: Section 1: AS 14.03 Adds a new section, AS 14.03.128, that establishes the Alaska Education Innovation Grant Fund. School Districts may request a grant under this section for the support of innovative education ideas. The Commissioner of the Department of Education and Early Development (DEED) shall determine annually the amount requested for grants and submit them in their budget for legislative approval. Section 2: AS 14.42.030(e) Removes the Alaska Education Grant from state statute. The Alaska Education Grant is in AS 14.43.400 - AS 14.43.420. Section 3: AS 14.43.810(a) Makes the high school graduating class of 2017, the last high school class to receive the Alaska Performance Scholarship (APS). Section 4: AS 14.43.820(a) Allows the commission to award an APS to a student no later than July 1, 2017. Section 5: AS 14.43.915(a) Makes the APS and the Alaska Education Grant (AEG) available to students for four years and does not allow a student's eligibility to go past the 2020-2021 academic year. Section 6: AS 14.43.915(a) Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". This section deals with money going from the fund to the Alaska Education Grant fund. This section is repealed Feb. 1, 2021. Section 7: AS 14.43.915(b) Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". This section deals with money going from the fund to the Alaska Performance Scholarship award account. This section is repealed Feb. 1, 2021. Section 8: AS 14.43.915(c) Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". This section deals with the allocation of monies from the fund. This section is repealed Feb. 1, 2021. Section 9: AS 14.45.130(a) This section deals with eligibility of students from a private or religious school receiving the APS. It is repealed Feb. 1, 2021. 3:59:00 PM Section 10: AS 37.14.750(a) Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". This section establishes the purpose of the fund, which is "making grants to school districts to support the Alaska Education Innovation Grant Program." Section 11: AS 37.14.750(a) Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". This section establishes the purpose of the fund, which is "making grants to school districts to support the Alaska Education Innovation Grant Program." This section also removes the language that allows payments from the fund to go to scholarships to postsecondary institutions. This section is repealed in Feb. 1, 2021. Section 12: AS 37.14.750(d) Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". Section 13: AS 43.20.014(a) Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". Section 14: AS 43.55.019(a) Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". Section 15: AS 43.56.018(a) Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". Section 16: AS 43.65.018(a) Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". Section 17: AS 43.75.018(a) Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". Section 18: AS 43.77.045(a) Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". Section 19: AS 14.03.113 AS 14.03.113, "District's determination of scholarship eligibility" is repealed July 1, 2017 Section 20 Repeals the following sections on Feb. 1, 2021. Article 8: Alaska Education Grant Program - AS 14.43.400 - Purpose; creation - AS 14.43.405 - Administration - AS 14.43.406 - Applicability of other laws - AS 14.43.415 - Eligibility; priority - AS 14.43.420 - Limitation on grants Article 12: Alaska Performance Scholarship Program - AS 14.43.810 - Alaska performance scholarship program established; regulations - AS 14.43.820 - Alaska performance scholarship program; eligibility - AS 14.43.825 - Maximum annual awards - AS 14.43.830 - Qualified postsecondary institutions - AS 14.43.840 - Report to the Legislature - AS 14.43.849 - Definitions Article 13 General Provisions - AS 14.43.915 - Alaska education grant account and Alaska performance scholarship award account Article 9: Alaska Higher Education Investment Fund - AS 37.14.750(c) - As soon as is practicable after July 1 of each year, the commissioner of revenue shall determine the market value of the fund established in this section on June 30 for the immediately preceding fiscal year. The commissioner shall identify seven percent of that amount as available for appropriation as follows: (1) one-third for the grant account established under AS 14.43.915AS 14.43.915(b), from which the Alaska Commission on Postsecondary Education may award scholarships. (a), from which the Alaska Commission on Postsecondary Education may award grants; and (2) two-thirds for the scholarship account established under 3:59:33 PM Section 21: Applicability Section The Alaska Commission on Postsecondary Education may only award an APS to a new applicant if they are determined eligible by their school district and reported as eligible to DEED on or before July 1, 2017. Section 22: Transition The Departments of: Education and Early Development, Labor and Workforce Development and the Alaska Commission on Postsecondary Education may adopt regulations to implement necessary changes made by this act. The regulations may only take effect after the law is implemented. Section 23: Retroactivity If Sections 3-5 and 19 of this Act take effect after July 1, 2017, then sections 3-5 and 19 of this act are retroactive to July 1, 2017. Section 24: Effective Dates Sections 2, 9, and 11 take effect Feb. 1, 2021. Section 25: Effective Date Except for Sections 2, 9, and 11, this act takes effect immediately. 4:00:42 PM SENATOR BEGICH voiced concern about a policy bill coming from Senate Finance Committee at this late date. He said Sections 12- 17 are amendments to Education Tax Credit that is set to sunset next year. He said that he has crafted an amendment to extend it seven more years, if the sponsor is interested. He asked whether Senator Coghill will be offering it as a bill. 4:02:53 PM SENATOR BEGICH related that the Innovation Grant Fund provides support to offset cuts proposed by the Senate Finance Committee. He asked how much is in the Grant Fund for this fiscal year. 4:03:36 PM MS. HUTCHISON said the amount in the Alaska Higher Education Investment will be transferred into the Alaska Education Innovation Grant Fund. That amount currently is $349 million. SENATOR BEGICH asked if the entire amount will be available for the Grant Fund. MS. HUTCHISON explained that the whole Grant Fund will not be available; the Alaska Performance Scholarship and the Alaska Higher Education Investment must be funded for four more years, as well as non-designated appropriations. 4:04:36 PM SENATOR BEGICH asked how much will be available. MS. HUTCHISON offered get that information. 4:05:08 PM CHAIR HUGHES thought there might be $100 million left. MS. HUTCHISON said she has seen the figures of $100 million and $118 million. SENATOR BEGICH explained that there is a one-time decrement of $69 million that lowers the BSA and follows through over time. 4:05:52 PM CHAIR HUGHES stated that the formula is not being change. She said the idea is to help districts come up with new ways to provide classroom instruction and serve as lasting changes. The Innovation Grants would no longer be needed year after year. 4:06:43 PM SENATOR BEGICH restated his question for the benefit of Senator MacKinnon, sponsor, who just joined the meeting. 4:07:01 PM SENATOR ANNA MACKINNON, Alaska State Legislature, speaking on behalf of the Senate Finance Committee, explained why Senator Begich's analysis was not correct. She noted the starting point of $349,360,778 in the FY18 Governor's budget for the Education Innovation Grant Fund. There are different draws on the Fund in both the House and Senate, so she cannot provide a balance after those are taken. Also, two other bills before the committee will draw from the Fund, should SB 103 pass. If the APS stays the same, it will also draw from the Fund. In addition, they propose to use a one-time expense in the e-rate bill, and the curriculum bill will probably pay for a DEED advisor. She concluded that she does not know what the final number will look like because there are different ways the money could be reduced over time. She is expecting fiscal notes for SB 102, SB 103, and SB 104 soon. She spoke of the APS funding ramp down over four years. 4:09:39 PM SENATOR MACKINNON discussed the huge budget shortfall and the fact that she has met with districts regarding their needs. She said the bill is designed with no funds available, except from drawing from savings to keep afloat the current system. The bill retools a fund where there are dollars available to provide students with better outcomes at state and global levels. The bill is intended to keep afloat the current system and allow students to have better outcomes. It takes existing resources and uses them for a constitutionally required benefit for K-12 students. 4:11:26 PM SENATOR BEGICH agreed there is a constitutional obligation to provide an adequate education. He noted that the Grant Fund does not continue into perpetuity. SENATOR MACKINNON said that is dependent on the legislature. She countered that "we are required to provide a basic education, not an adequate education." She said she wants all children to succeed and pursue their dreams and it is her hope that the Grant Fund would continue to be a bridge to provide additional opportunities. She explained that the Senate's budget is using a portion of the Grant Fund to pay the debt down of the unfunded PERS and TRS liability. The conference committee, should the budgets pass, would have the option of leaving the money in the Grant Fund or using it for a one-time expense. There originally was much more in the Grant Fund and it has decreased. About $350 million is available now for the legislature and the Governor to consider its best use. 4:14:06 PM She added that e-rate and reoccurring costs would also come out of the Grant Fund. SENATOR BEGICH stated that the bill phases out the APS by 2021. He asked if it was also phasing out the needs-based Scholarship. SENATOR MACKINNON said yes. SENATOR BEGICH noted there would be future competition for the grants by 53 school districts resulting in inequities created due to the skill level of grant writers. He hoped there would be consideration for a fairer playing field. 4:15:28 PM SENATOR MACKINNON replied that DEED is involved in the process of working with districts to provide a level playing field. CHAIR HUGHES noted that DEED is present in the room and hears the discussion. She understood that the Innovation Grants will be able to continue without ongoing funds. 4:16:40 PM SENATOR MACKINNON said that is one way to look at it. The bill provides that DEED would come to the legislature in the form of a budget request after working with school districts across the state and after gaining support by the State Board of Education and the Governor. They could be ongoing, depending on what a district chooses to do. SENATOR MACKINNON stated that it is not fun to close down a program that is benefitting students, however, the state must prioritize the money it is currently utilizing. This proposal would benefit all students in Alaska, while the APS benefits only a few hundred or a thousand. She said her desire is not to pit one program against the other, but to have the same students benefit from the program, sooner rather than later, so that they are prepared to enter college or a vocational program. 4:18:28 PM SENATOR BEGICH voiced concern, not about the end of the APS, but about the $69 million removed from the BSA for competitive grants. He asked if they are directing districts as to where they can put their resources. SENATOR MACKINNON said no. She recalled the press conference yesterday where the bill was mentioned as innovation she hoped districts could use. She said the $68 million cut to the BSA is a different discussion and SB 103 is not tied to it. The cut is in response to a proposed $13 billion to be drawn from savings with a section of government she believes is taking over 30 percent of designated general funds and applying a small cut, compared to other cuts that are being made in other departments. She said her intent is to provide a bridge to the future. Everyone wants what is best for kids, but there is a need to change together. She looks to the Board of Education and DEED, working with school districts, to come up with something everyone can support. She spoke of how the e-rate bill could be used to support smaller districts. She pointed out that none of the bills mandate anyone to do anything. She hoped to work together on BSA concerns. She concluded that cuts to the budget are difficult for everyone and are part of a process. They will try to do everything possible to put students first. 4:23:05 PM CHAIR HUGHES said during all exploratory hearings on education, it has been highlighted that Alaska is not fully meeting students' education needs and there is a disparity in achievement. The Senate Education Committee is trying to step out of the box to be innovative and to change those results. She said the timing is right, with good leadership and the Alaska Innovative Challenge. She has had conversations with people in other states and has concluded that Alaska will be a leader in this mission. She said they will work together with both bodies, the administration, and districts to effect change and make a difference. She appreciated Senator MacKinnon's work. 4:25:24 PM SENATOR GIESSEL underscored Chair Hughes comments. She said that there have been discussions about innovation in education the past four years. She said the state cannot continue to do the same thing and expect different results. Funding is not getting to the classrooms and allowing teachers to teach to their highest capacity. She said she is supportive of SB 103. 4:26:33 PM CHAIR HUGHES agreed that teachers need the freedom to be flexible and creative. 4:26:51 PM SENATOR BEGICH related that he believes in the same things and supports innovation. He agreed that these bills are innovative, however, the process is concerning. There is an odd disconnect between these bills and what is going on overall with education funding. He requested looking at everything together. The three bills are laudable. He requested to be sure that due diligence is used. CHAIR HUGHES held SB 103 in committee.