Legislature(2021 - 2022)DAVIS 106
03/04/2022 08:00 AM House EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| HB48 | |
| HB350 | |
| HB108 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 350 | TELECONFERENCED | |
| += | HB 108 | TELECONFERENCED | |
| += | HB 48 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE EDUCATION STANDING COMMITTEE
March 4, 2022
8:04 a.m.
MEMBERS PRESENT
Representative Harriet Drummond, Co-Chair
Representative Andi Story, Co-Chair
Representative Grier Hopkins
Representative Mike Cronk
Representative Ronald Gillham
MEMBERS ABSENT
Representative Tiffany Zulkosky
Representative Mike Prax
COMMITTEE CALENDAR
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 48
"An Act relating to the Alaska performance scholarship program."
- HEARD & HELD
HOUSE BILL NO. 350
"An Act relating to school bond debt reimbursement; and
providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 108
"An Act relating to concurrent vocational education, training,
and on-the-job trade experience programs for students enrolled
in public secondary schools; relating to child labor; and
providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 48
SHORT TITLE: AK PERFORMANCE SCHOLARSHIP; ELIGIBILITY
SPONSOR(s): REPRESENTATIVE(s) STORY
02/18/21 (H) PREFILE RELEASED 1/8/21
02/18/21 (H) READ THE FIRST TIME - REFERRALS
02/18/21 (H) EDC, FIN
04/12/21 (H) EDC AT 8:00 AM DAVIS 106
04/12/21 (H) Heard & Held
04/12/21 (H) MINUTE(EDC)
04/28/21 (H) EDC AT 8:00 AM DAVIS 106
04/28/21 (H) Heard & Held
04/28/21 (H) MINUTE(EDC)
02/22/22 (H) SPONSOR SUBSTITUTE INTRODUCED
02/22/22 (H) READ THE FIRST TIME - REFERRALS
02/22/22 (H) EDC, FIN
02/25/22 (H) EDC AT 9:00 AM DAVIS 106
02/25/22 (H) Heard & Held
02/25/22 (H) MINUTE(EDC)
03/04/22 (H) EDC AT 8:00 AM DAVIS 106
BILL: HB 350
SHORT TITLE: SCHOOL BOND DEBT REIMBURSEMENT
SPONSOR(s): REPRESENTATIVE(s) DRUMMOND
02/22/22 (H) READ THE FIRST TIME - REFERRALS
02/22/22 (H) EDC, FIN
03/04/22 (H) EDC AT 8:00 AM DAVIS 106
BILL: HB 108
SHORT TITLE: CONCURRENT SECONDARY & TRADE SCHOOL
SPONSOR(s): REPRESENTATIVE(s) MCCARTY
02/22/21 (H) READ THE FIRST TIME - REFERRALS
02/22/21 (H) EDC, L&C, FIN
04/09/21 (H) EDC AT 8:00 AM DAVIS 106
04/09/21 (H) Heard & Held
04/09/21 (H) MINUTE(EDC)
02/23/22 (H) EDC AT 3:30 PM DAVIS 106
02/23/22 (H) Heard & Held
02/23/22 (H) MINUTE(EDC)
03/04/22 (H) EDC AT 8:00 AM DAVIS 106
WITNESS REGISTER
SANA EFIRD, Executive Director
Alaska Commission on Postsecondary Education
Department of Education and Early Development
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on
SSHB 48.
SARAH EVANS, Staff
Representative Harriett Drummond
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Gave a sectional analysis of HB 350 on
behalf of Representative Drummond, prime sponsor.
HEIDI TESHNER, Acting Deputy Commissioner
Department of Education and Early Development
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
350.
LISA PARADY, PhD, Executive Director
Alaska Council of School Administrators
Juneau, Alaska
POSITION STATEMENT: Provided invited testimony during the
hearing on HB 350.
JIM ANDERSON, Chief Financial Officer
Anchorage School District
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 350.
NILS ANDREASSEN, Executive Director
Alaska Municipal League
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HB 350.
PETER HOEPFNER, Vice President
Cordova School District Board of Education
Cordova, Alaska
POSITION STATEMENT: Testified in support of HB 350.
PENNY VADLA, School Board Treasurer
Kenai Peninsula Borough School District
Soldotna, Alaska
POSITION STATEMENT: Testified in support of HB 350.
NORM WOOTEN, Director of Advocacy
Association of Alaska School Boards
Kodiak, Alaska
POSITION STATEMENT: Testified in support of HB 350.
REPRESENTATIVE KEN MCCARTY
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, provided comment
regarding Amendment 1 during the hearing on HB 108.
ACTION NARRATIVE
8:04:42 AM
CO-CHAIR ANDI STORY called the House Education Standing
Committee meeting to order at 8:04 a.m. Representatives
Hopkins, Cronk, Gillham, Drummond, and Story were present at the
call to order.
CO-CHAIR STORY reviewed the agenda and handed the gavel to Co-
Chair Drummond.
The committee took a brief at-ease at 8:06 a.m.
HB 48-AK PERFORMANCE SCHOLARSHIP; ELIGIBILITY
8:06:17 AM
CO-CHAIR DRUMMOND announced that the first order of business
would be SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 48, "An Act
relating to the Alaska performance scholarship program."
CO-CHAIR DRUMMOND reviewed that when the committee last heard
SSHB 48 [on 4/12 and 4/28/21], it heard invited and public
testimony. [The sponsor substitute was introduced on the House
floor on 2/22/22.]
8:06:48 AM
CO-CHAIR STORY, as prime sponsor of SSHB 48, presented a letter
of support for the bill [included in the committee packet] from
Juneau School District member Carin Smolin. She stated Ms.
Smolin's letter summarizes the changes the proposed bill makes
to the Alaska Performance Scholarship (APS) as follows: creates
rigorous courses for career and technical education; removes
college entry exams; increases award amounts to help APS remain
competitive; extends APS to eight years; and gives junior year
students access to information to keep them on track to receive
scholarships. She stated the purpose of the legislation is to
enable students to choose education in Alaska and grow the
state's workforce. She announced that Sana Efird is available
for questions.
8:08:47 AM
SANA EFIRD, in response to a question from Representative Cronk,
stated that current statute allows six years for an APS
recipient to utilize the grant. She continued that SSHB 48
would change the time limit to eight years.
CO-CHAIR STORY commented that in Alaska many nontraditional
students go to work right after high school. The bill offers
students [who were granted an APS] the opportunities to gain
work experience and credentials and then return to their
education.
8:10:12 AM
CO-CHAIR DRUMMOND announced that SSHB 48 was held over.
CO-CHAIR DRUMMOND passed the gavel to Co-Chair Story.
8:10:32 AM
The committee took an at-ease from 8:10 a.m. to 8:12 a.m.
HB 350-SCHOOL BOND DEBT REIMBURSEMENT
8:12:29 AM
CO-CHAIR STORY announced that the next order of business would
be HOUSE BILL NO. 350, "An Act relating to school bond debt
reimbursement; and providing for an effective date."
8:12:48 AM
CO-CHAIR DRUMMOND, as prime sponsor, presented HB 350. She
stated that she represents a district with five physical school
buildings, adding that there are at least 17 school attendance
areas. As decisions made in the legislature impact every
school, she stated she is not just representing the needs of the
Anchorage School District (ASD) but the needs of Alaska's 500-
plus schools. Beginning in 2015 the state stopped reimbursing
new school bond debt as a result of Senate Bill 64 [passed
during the Twenty-Ninth Alaska State Legislature]. She stated
that bill passed due to revenue shortfalls in the state.
However, she added that the state has continued to pay the debt
from school bonds passed prior to 2015. She stated she voted
against the legislation in 2015, but the bill passed with a
retroactive date of January 1, 2015, instead of July 1, 2015.
Starting in spring 2015 Anchorage taxpayers paid more for school
bonds than if the moratorium had not been set by the
legislature. She added that in 2020, since the state was still
having serious revenue issues, House Bill 106 [passed during the
Thirty-First Alaska State Legislature] extended the moratorium
to 2025. She stated that school bonds are critical to school
districts by helping build new schools and keeping older
facilities running. Bonds pay for a variety of construction and
maintenance projects, such as new boilers, roof replacements,
security improvements, and more. She remarked that school
districts already spend a substantial amount of their budget on
regular maintenance to keep buildings in good repair and
students and staff in safe and healthy schools. But as school
facilities age, and thousands of students and staff come and go,
facilities wear out, and daily maintenance is insufficient. She
stated that districts must bring forward carefully considered
bond issues developed in consultation with their school
communities and local governments.
CO-CHAIR DRUMMOND said that the school bond debt moratorium is
set to end July 1, 2025. The proposed legislation would change
the date to July 1, 2022, allowing the state to help the pay
school bonds sooner. She explained that the 2015 legislation
also decreased the rate the state reimbursed communities to 40
percent or 50 percent, depending on whether the bonds covered
new construction or major maintenance. She stated that HB 350
seeks to increase the reimbursable school bond debt back to the
original 60 percent or 70 percent. She voiced her opinion that
Alaska taxpayers and school districts can no longer afford to
pay the full price for essential maintenance and construction of
public schools. She stated that ASD continues to approve school
bonds, but the district limits new bonds to be no more than
retired annual bond debt. She added that instead of every year,
ASD puts new school bonds on the ballot every two years. She
said that there are over 500 school facilities in the state and
all either suffer from maintenance issues or need to be
replaced. She referenced the 2021 study by the Institute of
Social and Economic Research (ISER) at the University of Alaska
Anchorage. The study found that school districts in Alaska are
unable to address all maintenance problems due to underfunding.
8:17:46 AM
CO-CHAIR DRUMMOND continued that ISER noted since the moratorium
began in 2015, out of 21 school districts, only Anchorage and
the North Slope Borough could "afford" new school bonds. She
emphasized, "We all know how much costs have gone up." In
example, she stated she served on the schoolboard between 1994
and 2003, and the cost to build a new elementary school was $10
million to $12 million; today the cost would be $35 million.
She surmised that due to the decline in the population of
Alaska, the state will not need to build as many new schools.
She said ISER noted that the National Council on School
Facilities (NCSF) recommends states spend 4 percent of the
state's total school replacement value annually on capital
projects. She stated that Alaska currently spends about 2.6
percent of school replacement value; thus, the state's school
facilities are falling behind. She said the legislature is
mandated to supply a minimum amount of funding to rural schools
in [Regional Education Attendance Areas (REAAs)] that do not
have taxing authority. She pointed out municipalities do not
have a funding guarantee and are falling behind. In conclusion,
she urged the committee to support HB 350. She deferred to her
staff to present the sectional analysis.
8:19:44 AM
SARAH EVANS, Staff, Representative Harriet Drummond, Alaska
State Legislature, on behalf of Representative Drummond, prime
sponsor, gave a sectional analysis of HB 350, [included in the
committee packet], which read as follows [original punctuation
provided]:
Section 1: Amends AS 14.11.014 (d)
Sunsets the moratorium on school bond debt
reimbursement provisions for school construction and
major maintenance from July 1, 2025, to July 1, 2022.
Section 2: Amends AS 14.11.100(a)
Page 7, line 3 inserts language relating to bonds
authorized on or after July 1, 2022.
(18) For projects approved under AS 14.11.100 (h),
(i), and (j)(2) (5) the reimbursement would be 70
percent on or after July 1, 2022.
(19) For projects approved under AS 14.11.100 (h),
(i), and (j)(2), (3), and (5) the reimbursement would
be 60 percent on or after July 1, 2022.
Section 3: Amends AS 14.11.100 (s)
Restricts the Commissioner from approving an
application for bond debt reimbursement on or after
January 1, 2015, but before July 1, 2022
Section 4: Amends AS 14.11.102 (c)
Restricts the Commissioner from approving an
application for bond debt reimbursement on or after
January 1, 2015, but before July 1, 2022.
Section 5: Section 6, ch. 3, SLA 2015, is amended to
read: 28 Sec. 6. AS 14.11.014(d), 14.11.100(s), and
14.11.102(c) are repealed July 1, 2022.
Section 6: The uncodified law of the State of Alaska
is amended by adding a new section to read:
Retroactivity. If this Act take effect after July 1,
2022, this Act is retroactive to July 1, 2022.
Section 7: This Act takes effect immediately under AS
01.10.070 (c).
MS. EVANS hypothesized if HB 350 passes and the governor does
not sign the bill before July 1, 2022, then any school bonds
that pass with reimbursements would be retroactive to July 1,
2022.
8:22:40 AM
CO-CHAIR DRUMMOND stated that she believes ASD is the only
community with a spring election, so the bond issue on
Anchorage's ballot would not be eligible under the proposed
legislation.
8:23:20 AM
REPRESENTATIVE HOPKINS inquired how many schools with bonds on
the major maintenance list would be included under the bill.
8:24:52 AM
HEIDI TESHNER, Acting Deputy Commissioner, Department of
Education and Early Development (DEED), stated that the
department does not know the exact number of qualifiable
projects on the current major maintenance list. She offered
that there are currently 18 municipalities and school districts
that receive funding under the school debt bond reimbursement
program. She stated that it is safe to assume if ASD sold
bonds, then it would have several projects on the list that
potentially qualify under the program. In response to a follow-
up question, she stated that the proposed bill would open the
bond reimbursement program on July 1, 2022, affecting bonds
loaded on or after this date.
8:26:15 AM
The committee took a brief at-ease at 8:26 a.m.
8:26:51 AM
MS. TESHNER directed attention to the fiscal note with the
Office of Management & Budget component 153. She stated that
the fiscal note is indeterminate because DEED does not know how
many municipalities or school districts will come forward and
start selling bonds immediately after July 1, 2022. She stated,
due to the timing of voter approval, DEED assumes the earliest
the program would grow is fiscal year 2024 (FY 24). She added
that under AS 14.11.102, the districts and municipalities must
provide to DEED their anticipated debt for the following fiscal
year by October 15 of every year. This anticipated debt would
be included in DEED's October 21 budget report. She stated that
assuming the districts and municipalities could organize and
submit the anticipated debt by the deadline, it would be
included in the FY 24 governor's budget.
8:28:29 AM
LISA PARADY, PhD, Executive Director, Alaska Council of School
Administrators (ACSA), noted that ACSA is the umbrella
organization for superintendents, elementary and secondary
principals, school business officials, and "all hard-working
school administrators" in Alaska. She stated her support for HB
350, noting that the bill addresses school safety, which is a
high priority in ACSA's position statement. She reiterated Co-
Chair Drummond's remark that one of the continuing challenges in
Alaska is the ongoing deferred maintenance for schools. She
said that the average school facility is 44 years old with
almost 50 buildings around 60 years old, while the current
financial backlog is hundreds of millions of dollars. In
agreement with Representative Hopkins's statement, she stated
this is not just an ASD issue but a huge issue for all school
districts.
DR. PARADY stated that ACSA supports funding for school capital
projects and major maintenance for facilities in order to
provide students a safe and healthy learning environment. She
said that ACSA and the Alaska Municipal League (AML) designed a
survey together to better understand school districts'
maintenance backlog. She stated that after all school districts
have responded to the survey, the information will be provided
to committee members. Thus far the survey has reported 10
districts with major maintenance needs ranging from $1 million
to $10 million, and 7 districts reported major maintenance needs
ranging from $10 million to $100 million. One of the survey
questions addresses the actual process a district must go
through to request funds from DEED. This process is estimated
to cost $10,000 per request. She said that school districts
must weigh the risk of making a $10,000-plus investment to put
an application forward. So far 61 percent of school districts
responded that there is "no point," as most projects are not
funded.
DR. PARADY related that of the school districts that reported
funding needs, one district said it needed a heating system and
had to close the school for two days due to no heat. She stated
other districts requested dramatic upgrades to old and unsafe
school buildings. She explained that since the school bond debt
moratorium in 2015 many school districts have been deferring
their major maintenance needs. In 2021 ISER reported that from
FY 00 to FY 14 Alaska paid an average of $300 million on K-12
capital spending. She stated for FY 15 to FY 20 Alaska spent
$124 million. She reiterated NCSF's suggestion that spending
for Alaska schools should be $374 million for essential
maintenance. She stated she believes HB 350 could alleviate
deferred school maintenance by sunsetting the school bond debt
moratorium and changing reimbursement amounts for major
maintenance. She concluded that this would help ensure Alaska
students have a safe learning environment.
8:34:03 AM
DR. PARADY, in response to a question from Co-Chair Drummond,
said that the estimated $10,000 is not a fee charged to
districts by DEED, but the sum represents the cost school
districts incur during the application process and equates to
staff time.
8:34:40 AM
MS. TESHNER, in response to a question from Co-Chair Story,
stated that any inquiries about Alaska's capacity for statewide
debt should be directed to the State of Alaska Department of
Revenue.
8:35:42 AM
MS. TESHNER, in response to a question from Co-Chair Drummond,
stated that DEED maintains a major maintenance list on an annual
basis. She said that the list is posted on DEED's website, and
she offered to forward a copy to committee members. She stated
that DEED finalized the 2023 list on January 1, and there are 97
projects for a total state share of $196.6 million. She said
districts need to apply by September 1. The applications go
through a scoring and ranking process, and the major maintenance
list becomes available by November 5 every year.
8:37:06 AM
MS. TESHNER, in response to a question from Co-Chair Story,
stated that there are currently no major maintenance projects in
the FY 23 capital budget, only school construction.
8:37:27 AM
MS. TESHNER, in response to a question from Representative
Hopkins, stated that the school debt reimbursement program is
only available to the municipalities and school districts that
have bonding authority. All districts can be included on the
major maintenance list if they apply by September 1 of every
year, as outlined in AS 14.11.100. She described the major
maintenance list as a grant program and school debt
reimbursement as an entitlement program.
8:38:50 AM
JIM ANDERSON, Chief Financial Officer, Anchorage School
District, stated that when the governor vetoed state
reimbursement [of school bond debt] by 50 percent in FY 20,
$16.5 million [of debt] shifted to Anchorage property owners.
He continued that in FY 21 an additional $38 million shifted to
property owners, and in the current year property owners
incurred another $20.3 million. He explained that before each
year's reduction of bond debt reimbursements ASD had already
passed its following year budget. He continued that in each
case ASD had to pay an entire fiscal year of unexpected costs in
order to receive additional tax revenue the following year. As
a public entity with 91 facilities worth approximately $2
billion, he stated ASD has one of the largest fiscal plans in
the state.
MR. ANDERSON directed attention to a slide titled, "ASD Bond
Debt vs. Facility Backlog," [included in the committee packet]
and pointed out the graph shows that over the past 10-plus years
total bond debt decreased and deferred maintenance increased.
He directed the committee to FY 10, FY 11, and FY 12, when ASD
kept deferred maintenance costs at just over $100 million a
year. He said that ASD never caught up but described the
situation as "bearable." As a result of the moratorium in 2015,
he pointed out ASD bond debt spiked in FY 16. After that the
voters in the community supported decisions to make sure ASD
would never add another bond that was higher than what it could
afford. He surmised the total bond debt has decreased and
leveled off since the earthquake [November 2018]. He voiced
doubt on whether voters will pass a $112 million bond currently
on the ballot. He predicted that by FY 25 the ASD deferred
maintenance will be over $1 billion. He said that resuming the
state bond reimbursement program would be a relief to Anchorage
taxpayers as they have carried an additional debt of $75 million
over the past three years while also paying 100 percent on all
bonds since 2015. He stated he believes at some point
everything must level off. Referencing ISER's recommendation
[capital projects be 4 percent of total school replacement
value], he said that that would cost about $80 million a year
for Anchorage; he stated that it would be very difficult to ask
Anchorage voters in this economy for $80 million per year in
school bonds. In conclusion, he stated restoring bond debt
reimbursement in 2022 would give ASD time to communicate with
the community and start taking care of facilities, instead of
[using] Band-Aids.
8:45:01 AM
CO-CHAIR STORY opened public testimony on HB 350.
8:45:20 AM
NILS ANDREASSEN, Executive Director, Alaska Municipal League,
stated he feels he could talk at length on the state's
obligation regarding school construction and major maintenance.
He stated that he appreciates HB 350 and will focus his
testimony on the result of the [2015] moratorium on school bond
debt reimbursement. After speaking with [AML] members, he
stated he believes that they would be "just fine" if the bill
passes, but there is a trust issue with local governments on
whether the state will meet its reimbursement obligation. He
stated each district would need to evaluate its own risk in case
the state did not follow through with reimbursement; this is
challenging as recent history demonstrates the state is not
positioned to carry through on its obligation. Due to the needs
of school districts, he said that he believes the state has
significant obligations with $2 billion in projects in the
coming years. He stated he observed that historically the state
only funded 8 percent of its maintenance list. He stated that
school bond reimbursement works as a mechanism for fulfilling
the state's obligation to fund public education.
MR. ANDREASSEN said he is encouraged that the proposed bill
increases reimbursements to at least 50 percent. He advised
committee members to think about the state's guarantee to local
governments and school districts; if the current debt structure
is not enough, evaluate the state's debt book and other types of
state debt that guarantees fulfillment. He suggested there are
opportunities to specify the debt type [in the proposed
legislation], whether it is state guaranteed debt or state
supported debt. He noted that the state keeps its obligation
for a variety of levels of debt. He stated AML represents 165
cities and boroughs across Alaska. Considering the important
community-level need of school construction and major
maintenance, if HB 350 "moves in the right direction," then
[AML] will be "happy to see it pass." He added that [if the
state fails to meet its obligation], then he does not know what
will happen. He said that strengthening the bill by clarifying
[the state's] responsibility would help.
8:50:23 AM
CO-CHAIR DRUMMOND expressed interest to learn about the other
types of state debt referred to by Mr. Andreassen. Concerning
funds from the Infrastructure Investment and Jobs Act (IIJA),
she stated that many communities consider schools to be a
critical piece of infrastructure. While schools are not roads
or bridges, she stated that in many communities in Alaska the
school is the major public facility. She expressed interest in
whether IIJA funds could be applied to school facilities in
addition to other types of public facilities.
MR. ANDREASSEN expressed confidence that IIJA will not fund
schools. He suggested creativity in the approach state and
local governments can take, for example, with broadband, water
and sewer, transportation, climate change, and pollution
prevention in relation to school construction and major
maintenance. But he emphasized that IIJA does not take the
place of the state's obligation to fund public education. He
said that with the influx of funding from IIJA, new
opportunities and offsets may help local governments address
construction and maintenance needs in their communities. But he
stated that after four to seven years of decreased bond debt
reimbursement and two years of the COVID-19 pandemic, local
governments made up costs by using their deferred maintenance
budgets. Thus, he stated that school districts and communities
are not [financially] well positioned.
8:53:04 AM
REPRESENTATIVE HOPKINS stated that HB 350 would only impact
schools in organized municipalities and not REAA schools. He
continued that the average age of schools in Alaska is 44 years,
so "we are not getting rid of shiny new buildings with shinier
new buildings." He stated concern over available options for
municipalities to fund major maintenance projects without
assistance from the state.
MR. ANDREASSEN advised that funding major maintenance and school
construction projects is the state's responsibility, but local
governments do try to address the safety of students in
classrooms. He stated most school districts in Alaska are
municipal districts, and most of these would have school bond
debt reimbursement as an option. He stated a formula exists for
funding REAA school districts, but he does not know the formula.
Otherwise, he said that local governments have the option to
pull funds from public safety, local education contribution, and
other infrastructure projects. This means local governments
either pull funds from existing saving accounts or increase
local taxes. He stated that he believes local governments will
have to contribute funds for HB 350 to be successful.
8:56:20 AM
CO-CHAIR DRUMMOND referred to the lengthy process a community
must go through to evaluate need for a school bond package. She
inquired whether ALM knows of communities that would be ready to
have a school bond package on their ballot this fall. She
stated that ASD is on a different voting cycle. She emphasized
that she is not "planning any tricks" to make the bill
retroactive like [Senate Bill 64] in 2015.
MR. ANDREASSEN responded that AML is unaware of any members who
are "chomping at the bit" to take advantage of the program. He
stated that that does not mean there are not projects that would
fit in a bond package. He stated he believes the need exists,
so some members would be responsive to an opportunity for bond
debt reimbursement in order to save local tax dollars.
CO-CHAIR DRUMMOND stated she appreciates Mr. Andreassen's
comments concerning trust issues between municipalities and the
state. She questioned Mr. Anderson on any change in the amount
that is devoted to regular maintenance in the ASD's budget.
8:58:37 AM
MR. ANDERSON replied that ASD spends around $25 million a year
on maintenance, with a gradual increase over the last several
years. The school district has also used bond debt on some
emergency projects that fell outside of the bond. He stated
that ASD stopped using bonds for security updates and intercom
systems because the school district could not put larger bonds
in front of voters without a secured reimbursement. He said he
has not yet determined the percentage between fund balance and
the cost of maintenance. Due to inflation and the COVID-19
pandemic, he stated that construction costs have spiked in the
last six to eight months. He continued that he believes five
years ago ASD would have never resorted to using fund balances.
CO-CHAIR DRUMMOND stated that when she last served on the school
board [1994 through 2003] ASD had $25 million a year for its
maintenance budget. She stated that this reflects the pressure
school budgets are under to provide enough funds for the
classroom and regular maintenance of aging facilities.
MR. ANDERSON stated that the base student allocation has
remained stationary for six years and many reductions had to be
made across the board in order to limit the impact on
classrooms. He stated that "everything is on the table every
year and has been for a while."
9:01:17 AM
PETER HOEPFNER, Vice President, Cordova School District Board of
Education, said in 2015 he testified against Senate Bill 64
because construction needs in Alaska school districts "do not
just disappear." He stated that construction prices have risen
over the last seven years, and deferred maintenance costs more.
He said that he believes the lack of investment [in school
maintenance and construction] harms education, and the bill will
help shift costs away from communities. He addressed that the
change in the 2015 legislation [for bond debt reimbursement]
resulted in a 20 percent reduction by the state. He emphasized
the importance of commitment for the length of the bond, "and no
going back." He stated communities voted on a known tax, and
the state did not honor this tax amount. When a promised
financial plan from a known entity fails, the result is an
unanticipated debt. He stated this debt to the Cordova School
District (CSD) accompanied a reduction in funding to the
education of Cordova's students. He stated, "There needs to be
teeth to this promise." People voted for bonds knowing and
planning on the amount of the intended debt. For example, he
stated that last year CSD had an unexpected $1.5 million
obligation. He said that CSD had an education funding
contribution cap of $2.1 million. Due to the unanticipated
amount outstanding, CSD only had funds of $1.7 million and bond
debt reimbursement of $1.5 million. He concluded that something
needs to be done.
9:04:14 AM
PENNY VADLA, School Board Treasurer, Kenai Peninsula Borough
School District (KPBSD), stated her support of HB 350. She
described the district as a large and diverse with a variety of
42 schools covering 26,000 square miles. She stated one of
KPBSD's main legislative priorities is the review of the school
bond debt moratorium and to ensure funding for the existing
state bond reimbursement program. She stated that KPBSD's
maintenance department continues to work but finds it impossible
to complete the large repairs and potential rebuilds with such a
wide variety of schools spread across the central peninsula,
outlying areas, and across the bay. She stated that KPBSD needs
the state support with bond debt reimbursement of 60 percent for
school repairs and 70 percent for school rebuilds. Cost-
shifting to the communities impacts schools by halting services,
programs, and other support needs.
MS. VADLA remarked that unlike large municipalities with
constituencies in one town, KPBSD is diverse and extensive,
making it difficult to obtain support for a small bond for one
community. She added that KPBSD supports all schools in Alaska.
She said that for years KPBSD maintained its own buildings, but
now without state support repairs are delayed. She emphasized
that the state needs to fulfill its obligation to prioritize a
quality education to the state's students in safe buildings with
the bond debt reimbursement program. She acknowledged that she
does not know how KPBSD will attain the current $420 million of
deferred school maintenance. She stated that KPBSD had a bond
listing 19 projects for maintenance along with a new building at
the Kachemak Selo School; the bond included 38 schools to ensure
the vote of the communities. She concluded by stating her
appreciation of HB 350 and the support of the committee. She
added that the state's job is to educate its students.
9:09:11 AM
MS. VADLA, in response to a question from Co-Chair Drummond,
stated that the Kenai Peninsula voters defeated the original
bond for the community of Kachemak Selo. After that the
schoolboard put together another bond that stalled due to the
COVID-19 pandemic. She stated that KPBSD took a different
direction with the bond, but it stalled as well. There is no
current bond going forward. She stated that she can provide
documentation on these bond packages. In response to a follow-
up question, she said she does not have all the information
concerning the bond amounts and does not want to put forth
misinformation.
9:12:09 AM
NORM WOOTEN. Director of Advocacy, Association of Alaska School
Boards, stated that prior to the [2015] moratorium local
municipalities had vested interest with a share of 30 percent or
40 percent, depending on the bond proposal put forward, whether
it was for new construction or major maintenance. When Senate
Bill 64 passed in 2015, he stated it was like a "gut punch" to
districts. Before this, during his time on the schoolboard in
Kodiak, a major bond package passed to rebuild the high school
in Kodiak. He stated that that package passed due to the
voters' knowledge of the many years of promised reimbursement by
the state. He stated the Kodiak community and school district
was "shocked" to have a longtime commitment pulled from the bond
package. He stated across Alaska many districts were in the
same situation. He said that some municipalities found the
money to pay down the bond debt either by reducing funding to
schools or by increasing property tax. He stated that he
believed the legislature created cost-shifting by transferring
its shortfall to the municipalities; he emphasized that the
money still had to be paid, so debt was shifted to boroughs and
municipalities. He said that by passing HB 350, [financial]
support would go to school districts and municipalities but most
importantly, to the students within the state.
CO-CHAIR DRUMMOND stated she visited Kodiak recently and
commented that Kodiak takes good care of its schools. She
stated that she also remembers the 2015 legislation like a "gut
punch." She commented that facing voters became difficult after
that, as [Senate Bill 64] translated to a local tax increase.
9:15:59 AM
CO-CHAIR STORY, after ascertaining that no one else wished to
testify, closed public testimony on HB 350.
9:16:39 AM
CO-CHAIR STORY announced that HB 350 was held over.
HB 108-CONCURRENT SECONDARY & TRADE SCHOOL
9:16:58 AM
CO-CHAIR STORY announced that the final order of business would
be HOUSE BILL NO. 108, "An Act relating to concurrent vocational
education, training, and on-the-job trade experience programs
for students enrolled in public secondary schools; relating to
child labor; and providing for an effective date."
9:17:47 AM
REPRESENTATIVE GILLHAM moved to adopt Amendment 1 to HB 108,
labeled 32-LS0345\G.2, Marx, 2/8/22, which read as follows:
Page 5, line 30, following "(18)":
Insert "collaborate with school districts to"
Page 6, line 9:
Delete "The department"
Insert "A school district"
Page 6, line 14:
Delete "The department"
Insert "A school district"
Page 7, line 2, following "department":
Insert "or the school district"
Page 7, line 3, following "department":
Insert "or school district"
Page 7, line 7:
Delete "department"
Insert "school district"
Page 7, lines 8 - 9:
Delete "The department shall annually compile,
provide to school districts, and publish on the
department's"
Insert "A school district shall annually compile
and publish on the school district's"
Page 7, line 11:
Delete "department"
Insert "school district"
Page 7, lines 12 - 14:
Delete all material and insert:
"(b) For each listed program, the school
district shall identify any geographic attendance
restrictions and program availability."
Page 7, line 15:
Delete "The department"
Insert "A school district"
Page 7, line 20:
Delete "department"
Insert "school district"
Page 8, following line 24:
Insert a new section to read:
"Sec. 14.35.130. Definition. In AS 14.35.100 -
14.35.130, "school district" or "district" means a
borough school district, a city school district, or a
regional educational attendance area."
REPRESENTATIVE HOPKINS objected for the purposed of discussion.
9:18:00 AM
The committee took an at-ease from 9:18 a.m. to 9:21 a.m.
9:21:08 AM
REPRESENTATIVE GILLHAM asked to hear from the bill sponsor
regarding the changes proposed under Amendment 1.
9:21:34 AM
REPRESENTATIVE KEN MCCARTY, Alaska State Legislature, as prime
sponsor, announced that Amendment 1 changes the language in HB
108 to allow school districts an active role in decision making,
contracting, and connecting with instructors [for career and
technical education (CTE), training, and on-the-job programs].
He stated that the amendment moves the responsibility from DEED
to the school districts.
9:22:36 AM
REPRESENTATIVE MCCARTY, in response to Co-Chairs Story and
Drummond, confirmed that Amendment 1 would allow DEED to
collaborate with the school districts to provide opportunities
[for CTE programs]. He continued to elaborate on the changes in
the bill, stating that the districts have asked to be involved
because they know the resources in the region better than DEED.
He stated that if school districts made their own [CTE]
contracts, the process would be less expensive.
9:25:53 AM
CO-CHAIR DRUMMOND questioned whether shifting responsibility
from DEED to the school districts "in every instance" would
reduce the fiscal note. She stated that there is around a
$400,000 fiscal note in the first year and $600,000 to $900,000
in the "out years" from DEED.
REPRESENTATIVE MCCARTY offered his understanding that from the
discussion last year there may be a zero fiscal note. He stated
that DEED will wait for that committee's decision on the
amendment before making the fiscal note, as it may contain
regulation changes. He stated he believes the new fiscal note
would be far less than what is reflected in the current fiscal
note.
9:27:16 AM
REPRESENTATIVE MCCARTY, in response to a question from
Representative Hopkins, stated that he believes all school
districts would like to be part of the contracting decisions.
In response to a follow-up question, he stated that he
communicated with the districts via Internet, telephone, and
people coming into the office. He stated he felt school
districts were apprehensive about HB 108, and Amendment 1 will
gather more support for the bill [by giving school districts
more involvement establishing CTE programs].
REPRESENTATIVE HOPKINS referenced the section of the amendment
on page 7, lines 8 and 9, that switches the program publication
requirement from DEED to the school districts. He questioned
whether DEED should be an intermediary for program ideas, or
each school district should develop its own programs.
REPRESENTATIVE MCCARTY stated that some school districts became
concerned by a possible [DEED] requirement for districts to
provide [multiply standardized CTE] programs. The amendment
enables school districts to offer specific programs to their
region. In response to a follow-up question, he stated program
publication within districts enables local students and families
to be a part of regional programs. He added this will enable
schools to have "bragging rights" on the new careers of alumni.
9:31:00 AM
REPRESENTATIVE HOPKINS withdrew his objection. There being no
further objection, Amendment 1 to HB 108 was adopted.
9:31:21 AM
REPRESENTATIVE GILLHAM moved to adopt Amendment 2 to HB 108,
labeled 32-LS0345\G.3, Marx, 2/8/22, which read as follows:
Page 6, line 8:
Delete "from nonsectarian agencies"
Page 6, line 14:
Delete all material.
Reletter the following subsection accordingly.
9:31:27 AM
REPRESENTATIVE HOPKINS objected for the purpose of discussion.
9:32:06 AM
REPRESENTATIVE MCCARTY stated, per the Alaska State
Constitution, DEED cannot give funds directly to a sectarian
school or organization. He explained that in some villages
there may be a sectarian school or organization offering [CTE]
programs. If the public school would like to offer that CTE
program, the district could contract with that sectarian school
or organization. He stated that this would not entail sectarian
belief in the classroom.
9:32:49 AM
REPRESENTATIVE HOPKINS inquired whether Representative McCarty
had obtained legal analysis from Legislative Legal Services
about credit being earned from a sectarian institution.
REPRESENTATIVE MCCARTY stated that the school credit comes from
the public school that has contracted with a sectarian school or
organization with onsite training. He stated that he learned
from Legislative Legal Services many examples of indirect funds
that follow students to the different schools, as a student with
a state scholarship for post-secondary education may attend a
sectarian university. He explained that the sectarian school
would not receive money directly. In response to a follow-up
question, he stated that school districts can contract with a
sectarian school or organization for CTE if the instructor at
that entity has a Type M Certificate.
REPRESENTATIVE HOPKINS expressed his confusion and speculated
whether DEED would supply a Type M Certificate to an individual
who is not a school district employee but a sectarian school
employee.
REPRESENTATIVE MCCARTY stated his understanding is to allow
school districts latitude to contract and offer CTE programs
with all entities in their region. He continued that this
requires instructors to have a Type M Certificate before being
contracted, per the language of the bill.
REPRESENTATIVE HOPKINS established that the language initially
in the bill specified nonsectarian agencies, but now the
amendment takes out the language. He then questioned if
Legislative Legal Services initially put in the language or
whether it was the request of the sponsor.
REPRESENTATIVE MCCARTY responded that during the original draft
of the bill Legislative Legal Services referenced the Alaska
State Constitution in its recommendation to include the
language. He stated that school districts requested more
latitude [establishing CTE programs], and they asked to have the
language removed.
9:37:42 AM
REPRESENTATIVE HOPKINS maintained his objection to Amendment 2
to HB 108, explaining that if Legislative Legal Services
included language due to constitutional concerns, he believes
the language should remain in the bill. He stated he is
apprehensive to "open doors" that would impact the constitution.
He stated he strongly supports the concept of the legislation to
avail avenues for apprenticeships and on-the-job training, but
due to constitutional concerns he maintains his objection.
9:38:31 AM
CO-CHAIR DRUMMOND expressed confusion regarding Amendment 2,
remarking that a nonsectarian organization is not associated
with a religion or a church, so a college, a trade school, or
another nonunion association may or may not offer classes. She
stated she would like to divide the question. She argued that
the first part of the amendment does not make sense with the
second part. She stated she does not understand the removal of
"nonsectarian agencies" on line 8 or the removal of line 14.
She stated her objection to Amendment 2.
9:39:56 AM
The committee took an at-ease from 9:40 a.m. to 9:41 a.m.
9:41:41 AM
REPRESENTATIVE GILLHAM withdrew his motion to adopt Amendment 2
to HB 108.
9:41:47 AM
The committee took an at-ease from 9:41 a.m. to 9:43 a.m.
9:43:07 AM
CO-CHAIR STORY announced that HB 108 was held over.
9:44:11 AM
ADJOURNMENT
There being no further business before the committee, the House
Education Standing Committee meeting was adjourned at 9:44 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 108 support 030222.pdf |
HEDC 3/4/2022 8:00:00 AM |
HB 108 |
| HB 48 support 030222.pdf |
HEDC 3/4/2022 8:00:00 AM |
|
| HB 350 Bill Packet.pdf |
HEDC 3/4/2022 8:00:00 AM |
HB 350 |
| HB 350 ASD Bond Debt vs Facility Backlog.pdf |
HEDC 3/4/2022 8:00:00 AM |
HB 350 |
| HB 350 FN Debt Service.pdf |
HEDC 3/4/2022 8:00:00 AM |
HB 350 |
| HB 108 Amendment 1 HEDU.pdf |
HEDC 3/4/2022 8:00:00 AM |
HB 108 |
| HB 108 Amendment 2 HEDU.pdf |
HEDC 3/4/2022 8:00:00 AM |
HB 108 |
| HB 350 Supporting Docs.pdf |
HEDC 3/4/2022 8:00:00 AM |
HB 350 |
| HB 350 Sectional.pdf |
HEDC 3/4/2022 8:00:00 AM |
HB 350 |
| HB 350 Sponsor Statement.pdf |
HEDC 3/4/2022 8:00:00 AM |
HB 350 |
| HB0350A.PDF |
HEDC 3/4/2022 8:00:00 AM |
HB 350 |
| HB 350 3.4.2022 (H)EDC Hearing DEED Follow-Up.pdf |
HEDC 3/4/2022 8:00:00 AM |
HB 350 |
| HB 48 support 030222.pdf |
HEDC 3/4/2022 8:00:00 AM |
HB 48 |