02/11/2022 09:00 AM House EDUCATION
| Audio | Topic |
|---|---|
| Start | |
| HB229 | |
| HB272|| HB273 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 229 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 272 | TELECONFERENCED | |
| += | HB 273 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE EDUCATION STANDING COMMITTEE
February 11, 2022
8:35 a.m.
MEMBERS PRESENT
Representative Harriet Drummond, Co-Chair
Representative Andi Story, Co-Chair
Representative Tiffany Zulkosky
Representative Grier Hopkins
Representative Mike Prax
Representative Mike Cronk
Representative Ronald Gillham
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Josiah Patkotak
COMMITTEE CALENDAR
HOUSE BILL NO. 229
"An Act relating to the Alaska higher education investment fund;
and relating to the Alaska Student Loan Corporation."
- MOVED CSHB 229(EDC) OUT OF COMMITTEE
HOUSE BILL NO. 272
"An Act relating to education; increasing the base student
allocation; and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 273
"An Act relating to education; increasing the base student
allocation; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 229
SHORT TITLE: ALASKA HIGHER EDUCATION INVESTMENT FUND
SPONSOR(s): REPRESENTATIVE(s) JOSEPHSON
01/18/22 (H) PREFILE RELEASED 1/7/22
01/18/22 (H) READ THE FIRST TIME - REFERRALS
01/18/22 (H) EDC, FIN
02/02/22 (H) EDC AT 8:00 AM DAVIS 106
02/02/22 (H) <Bill Hearing Canceled>
02/07/22 (H) EDC AT 9:00 AM DAVIS 106
02/07/22 (H) Heard & Held
02/07/22 (H) MINUTE(EDC)
02/11/22 (H) EDC AT 9:00 AM DAVIS 106
BILL: HB 272
SHORT TITLE: INCREASE BASE STUDENT ALLOCATION
SPONSOR(s): REPRESENTATIVE(s) STORY
01/18/22 (H) PREFILE RELEASED 1/14/22
01/18/22 (H) READ THE FIRST TIME - REFERRALS
01/18/22 (H) EDC, FIN
02/09/22 (H) EDC AT 9:00 AM DAVIS 106
02/09/22 (H) Heard & Held
02/09/22 (H) MINUTE(EDC)
02/11/22 (H) EDC AT 9:00 AM DAVIS 106
BILL: HB 273
SHORT TITLE: INCREASE BASE STUDENT ALLOC. INFLATION
SPONSOR(s): REPRESENTATIVE(s) STORY
01/18/22 (H) PREFILE RELEASED 1/14/22
01/18/22 (H) READ THE FIRST TIME - REFERRALS
01/18/22 (H) EDC, FIN
02/09/22 (H) EDC AT 9:00 AM DAVIS 106
02/09/22 (H) Scheduled but Not Heard
02/11/22 (H) EDC AT 9:00 AM DAVIS 106
WITNESS REGISTER
ARIEL SVETLIK, Staff
Representative Andi Story
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Co-presented a PowerPoint regarding HB 273
on behalf of Representative Story, prime sponsor.
JIM ANDERSON, Chief Finance Office
Anchorage School District
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 272 and HB 273.
DEBBIE CARY, Vice President
Kenai Peninsula Borough School Board
Kenai, Alaska
POSITION STATEMENT: Testified in support of HB 272 and HB 273.
FADIL LIMANI, Chief Financial Officer
Finance Office
North Slope Borough School District
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 272 and HB 273.
RACHEL LORD, representing self
Homer, Alaska
POSITION STATEMENT: Testified in support of HB 272 and HB 273.
KATIE BOTZ, representing self
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 272 and HB 273.
DAVID BOYLE, representing self
No address provided
POSITION STATEMENT: Testified during the hearing on HB 272.
ROBYN BURKE, Clerk
North Slope Borough School District Board of Education
North Slope Borough School District
Utqiagvik, Alaska
POSITION STATEMENT: Testified in support of HB 272 and HB 273.
DIANE HIRSHBERG, Director and Professor of Education Policy
Institute of Social and Economic Research
Anchorage, Alaska
POSITION STATEMENT: In her role as researcher, provided
information and responded to questions during the public
testimony period of the hearing on HB 272 and HB 273.
ACTION NARRATIVE
9:06:36 AM
CO-CHAIR HARRIET DRUMMOND called the House Education Standing
Committee meeting to order at 8:35 a.m. Representatives Story,
Prax, Gilham, Hopkins, Cronk, Zulkosky, and Drummond were
present at the call to order.
HB 229-ALASKA HIGHER EDUCATION INVESTMENT FUND
9:07:21 AM
CO-CHAIR DRUMMOND announced that the first order of business
would be HOUSE BILL NO. 229, "An Act relating to the Alaska
higher education investment fund; and relating to the Alaska
Student Loan Corporation."
[Because of their length, some amendments discussed or adopted
during the meeting are found at the end of the minutes for HB
91. Shorter amendments are included in the main text.]
9:07:59 AM
CO-CHAIR STORY moved to adopt Amendment 1 to HB 229, labeled 32-
LS1063\B.2, Marx, 2/8/22. [Amendment 1 is provided at the end
of the minutes on HB 229.]
9:08:02 AM
CO-CHAIR DRUMMOND objected for the purpose of discussion, then
spoke to Amendment 1. She said the amendment was recommended by
the bill sponsor. She gave a definition of "trust fund." She
said the higher education investment fund provides grants and
scholarships to thousands of Alaska students, and she opined
that the fund needs to be put back into active earning status,
which Amendment 1 would do by adding "trust" into the name of
the fund.
9:10:10 AM
CO-CHAIR DRUMMOND removed her objection. There being no further
objection, Amendment 1 was adopted.
9:10:29 AM
CO-CHAIR STORY moved to adopt Amendment 2 to HB 229, labeled 32-
LS1063\B.3, Marx, 2/8/22, which read as follows:
Page 5, lines 15 - 26:
Delete all material and insert:
"* Sec. 6. AS 37.14.750 is amended by adding new
subsections to read:
(e) The commissioner of revenue is a fiduciary
of the Alaska higher education investment fund. In
managing the fund, the commissioner shall
(1) have the powers and duties set out in
AS 37.10.071; and
(2) invest money in the fund so as to yield
competitive market rates as provided in AS 37.10.071.
(f) In addition to the appropriations under (c)
of this section, money in the fund may be appropriated
to reimburse
(1) the Department of Revenue for the costs
of managing the fund; and
(2) other costs of administering the fund."
9:10:32 AM
CO-CHAIR DRUMMOND objected for the purpose of discussion.
CO-CHAIR STORY spoke to Amendment 2, the intent of which is that
the Department of Revenue (DOR) continue to manage the fund.
She said the statute relating to the calculation of the annual
draw would remain unchanged. Further, the commissioner of DOR
would continue to be responsible for the calculation. She named
other funds that have similar language. She said the following
support Amendment 2: the bill sponsor, the University of
Alaska, and the Alaska Commission on Postsecondary Education.
She reminded committee members that the fund is managed more
aggressively than other state savings accounts and yielded a
27.21 percent return in fiscal year 2021 (FY 21); the average
annual return from FY 13 to FY 21 was 8.82 percent.
9:13:18 AM
REPRESENTATIVE PRAX suggested there could be an advantage to
having the Alaska Permanent Fund Corporation manage all the
funds. He said he was not certain Amendment 2 was necessary,
and further said he did not know whether it was good to add
restrictive language.
CO-CHAIR DRUMMOND pointed out that this fund outperformed the
permanent fund, and she offered her understanding that the
purpose of Amendment 2 was to ensure the fund continue to be
managed by DOR.
9:15:22 AM
CO-CHAIR STORY confirmed that is correct.
REPRESENTATIVE PRAX cautioned that it is a mistake to base
evaluation of a fund on one year's performance.
9:16:33 AM
CO-CHAIR DRUMMOND stated her understanding that Representative
Prax clearly was objecting to Amendment 2.
REPRESENTATIVE PRAX said, "Yep."
9:16:45 AM
CO-CHAIR STORY proffered that the returns over the last eight
years have been higher than that of most investment accounts.
9:17:42 AM
REPRESENTATIVE HOPKINS suggested a bill could be introduced to
initiate a discussion regarding the benefits of having one
entity manage all funds; however, he said at this time he
supports Amendment 2 to maintain the current structure.
9:19:11 AM
CO-CHAIR DRUMMOND removed her objection to the motion to adopt
Amendment 2. She asked if there was any further objection.
[None were stated, and the previous confirmation of objection by
Representative Prax was treated as withdrawn.] Co-Chair
Drummond announced that there being no further objection,
Amendment 2 was adopted.
9:19:27 AM
CO-CHAIR STORY moved to report HB 229, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes. [No objection was audible.]
9:19:42 AM
CO-CHAIR DRUMMOND asked if there was any objection. She then
asked Representative Prax if he would like to maintain his
objection.
9:19:47 AM
REPRESENTATIVE PRAX said, "The objection is to moving it out of
committee. Sorry, I'm not, thank you."
CO-CHAIR DRUMMOND asked if there were "any additional
objections." [None were stated.] She then asked Representative
Prax if he maintained his objection.
REPRESENTATIVE PRAX said, "Of moving it out of committee, no."
CO-CHAIR DRUMMOND asked, "You're objecting to moving it out of
committee?"
REPRESENTATIVE PRAX replied, "Correct. No, I'm not. I'm
removing that objection."
9:20:11 AM
CO-CHAIR DRUMMOND announced there being no further objection,
CSHB 229(EDC) was reported out of the House Education Standing
Committee.
9:20:23 AM
The committee took an at-ease from 9:20 a.m. to 9:21 a.m.
9:21:45 AM
CO-CHAIR DRUMMOND restated that CSHB 229(EDC) had been reported
out of committee.
AMENDMENTS
The following amendment to HB 229 was moved for adoption during
the hearing. [Shorter amendments are provided in the main text
only.]
Amendment 1 [32-LS1063\B.2, Marx, 2/8/22] (adopted):
Page 1, line 1, following "investment":
Insert "trust"
Page 4, line 21, following "investment":
Insert "trust"
Page 4, line 29, following "investment":
Insert "trust"
Page 5, following line 1:
Insert a new bill section to read:
"* Sec. 5. AS 14.43.915(c) is amended to read:
(c) Of the total amount available annually to
the commission for payment of grants under
AS 14.43.400 - 14.43.420 and for payment of
scholarships under AS 14.43.810 - 14.43.849, one-third
of the combined amount in the accounts established
under (a) and (b) of this section shall be available
solely for payment of grants awarded under
AS 14.43.400 - 14.43.420. The commission shall
annually allocate to all qualified applicants for
scholarships awarded under AS 14.43.810 - 14.43.849
two-thirds of the combined amount in the accounts. If
an insufficient number of qualified applicants are
awarded grants under AS 14.43.400 - 14.43.420 or
scholarships under AS 14.43.810 - 14.43.849, or both,
before the end of that fiscal year, the commissioner
shall redeposit the remaining funds into the Alaska
higher education investment trust fund established
under AS 37.14.750."
Renumber the following bill sections accordingly.
Page 5, line 3, following "investment":
Insert "trust"
Page 5, following line 26:
Insert new bill sections to read:
"* Sec. 8. AS 37.14.750(d) is amended to read:
(d) In this section, unless the context requires
otherwise, "fund" means the Alaska higher education
investment trust fund established in (a) of this
section.
* Sec. 9. AS 43.20.014(a) is amended to read:
(a) A taxpayer is allowed a credit against the
tax due under this chapter for contributions of cash
or equipment accepted for
(1) direct instruction, research, and
educational support purposes, including library and
museum acquisitions, and contributions to endowment,
by an Alaska university foundation, by a nonprofit,
public or private, Alaska two-year or four-year
college accredited by a national or regional
accreditation association, or by a public or private
nonprofit elementary or secondary school in the state;
(2) secondary school level vocational
education courses, programs, and facilities by a
school district in the state;
(3) vocational education courses, programs,
equipment, and facilities by a state-operated
vocational technical education and training school, a
nonprofit regional training center recognized by the
Department of Labor and Workforce Development, and an
apprenticeship program in the state that is registered
with the United States Department of Labor under 29
U.S.C. 50 - 50b (National Apprenticeship Act);
(4) a facility by a nonprofit, public or
private, Alaska two-year or four-year college
accredited by a national or regional accreditation
association or by a public or private nonprofit
elementary or secondary school in the state;
(5) Alaska Native cultural or heritage
programs and educational support, including mentoring
and tutoring, provided by a nonprofit agency for
public school staff and for students who are in grades
kindergarten through 12 in the state;
(6) education, research, rehabilitation,
and facilities by an institution that is located in
the state and that qualifies as a coastal ecosystem
learning center under the Coastal America Partnership
established by the federal government;
(7) the Alaska higher education investment
trust fund under AS 37.14.750;
(8) funding a scholarship awarded by a
nonprofit organization to a dual-credit student to
defray the cost of a dual-credit course, including the
cost of
(A) tuition and textbooks;
(B) registration, course, and programmatic
student fees;
(C) on-campus room and board at the
postsecondary institution in the state that provides
the dual-credit course;
(D) transportation costs to and from a
residential school approved by the Department of
Education and Early Development under AS 14.16.200 or
the postsecondary school in the state that provides
the dual-credit course; and
(E) other related educational and
programmatic costs;
(9) constructing, operating, or maintaining
a residential housing facility by a residential school
in the state approved by the Department of Education
and Early Development under AS 14.16.200;
(10) childhood early learning and
development programs and educational support to
childhood early learning and development programs
provided by a nonprofit corporation organized under
AS 10.20, a tribal entity, or a school district in the
state, by the Department of Education and Early
Development, or through a state grant;
(11) science, technology, engineering, and
math programs provided by a nonprofit agency or a
school district for school staff and for students in
grades kindergarten through 12 in the state; and
(12) the operation of a nonprofit
organization dedicated to providing educational
opportunities that promote the legacy of public
service contributions to the state and perpetuate
ongoing educational programs that foster public
service leadership for future generations of residents
of the state.
* Sec. 10. AS 43.55.019(a) is amended to read:
(a) A producer of oil or gas is allowed a credit
against the tax levied by AS 43.55.011(e) for
contributions of cash or equipment accepted for
(1) direct instruction, research, and
educational support purposes, including library and
museum acquisitions, and contributions to endowment,
by an Alaska university foundation or by a nonprofit,
public or private, Alaska two-year or four-year
college accredited by a national or regional
accreditation association;
(2) secondary school level vocational
education courses, programs, and facilities by a
school district in the state;
(3) vocational education courses, programs,
equipment, and facilities by a state-operated
vocational technical education and training school, a
nonprofit regional training center recognized by the
Department of Labor and Workforce Development, and an
apprenticeship program in the state that is registered
with the United States Department of Labor under 29
U.S.C. 50 - 50b (National Apprenticeship Act);
(4) a facility by a nonprofit, public or
private, Alaska two-year or four-year college
accredited by a national or regional accreditation
association;
(5) Alaska Native cultural or heritage
programs and educational support, including mentoring
and tutoring, provided by a nonprofit agency for
public school staff and for students who are in grades
kindergarten through 12 in the state;
(6) education, research, rehabilitation,
and facilities by an institution that is located in
the state and that qualifies as a coastal ecosystem
learning center under the Coastal America Partnership
established by the federal government; and
(7) the Alaska higher education investment
trust fund under AS 37.14.750.
* Sec. 11. AS 43.56.018(a) is amended to read:
(a) The owner of property taxable under this
chapter is allowed a credit against the tax due under
this chapter for contributions of cash or equipment
accepted for
(1) direct instruction, research, and
educational support purposes, including library and
museum acquisitions, and contributions to endowment,
by an Alaska university foundation or by a nonprofit,
public or private, Alaska two-year or four-year
college accredited by a national or regional
accreditation association;
(2) secondary school level vocational
education courses, programs, and facilities by a
school district in the state;
(3) vocational education courses, programs,
and facilities by a state-operated vocational
technical education and training school;
(4) a facility by a nonprofit, public or
private, Alaska two-year or four-year college
accredited by a national or regional accreditation
association;
(5) Alaska Native cultural or heritage
programs and educational support, including mentoring
and tutoring, provided by a nonprofit agency for
public school staff and for students who are in grades
kindergarten through 12 in the state;
(6) education, research, rehabilitation,
and facilities by an institution that is located in
the state and that qualifies as a coastal ecosystem
learning center under the Coastal America Partnership
established by the federal government; and
(7) the Alaska higher education investment
trust fund under AS 37.14.750.
* Sec. 12. AS 43.65.018(a) is amended to read:
(a) A person engaged in the business of mining
in the state is allowed a credit against the tax due
under this chapter for contributions of cash or
equipment accepted for
(1) direct instruction, research, and
educational support purposes, including library and
museum acquisitions, and contributions to endowment,
by an Alaska university foundation, by a nonprofit,
public or private, Alaska two-year or four-year
college accredited by a national or regional
accreditation association, or by a public or private
nonprofit elementary or secondary school in the state;
(2) secondary school level vocational
education courses, programs, and facilities by a
school district in the state;
(3) vocational education courses, programs,
and facilities by a state- operated vocational
technical education and training school;
(4) a facility by a nonprofit, public or
private, Alaska two-year or four-year college
accredited by a national or regional accreditation
association or by a public or private nonprofit
elementary or secondary school in the state;
(5) Alaska Native cultural or heritage
programs and educational support, including mentoring
and tutoring, provided by a nonprofit agency for
public school staff and for students who are in grades
kindergarten through 12 in the state;
(6) education, research, rehabilitation,
and facilities by an institution that is located in
the state and that qualifies as a coastal ecosystem
learning center under the Coastal America Partnership
established by the federal government;
(7) the Alaska higher education investment
trust fund under AS 37.14.750;
(8) funding a scholarship awarded by a
nonprofit organization to a dual-credit student to
defray the cost of a dual-credit course, including the
cost of
(A) tuition and textbooks;
(B) registration, course, and programmatic
student fees;
(C) on-campus room and board at the
postsecondary institution in the state that provides
the dual-credit course;
(D) transportation costs to and from a
residential school approved by the Department of
Education and Early Development under AS 14.16.200 or
the postsecondary school in the state that provides
the dual-credit course; and
(E) other related educational and
programmatic costs;
(9) constructing, operating, or maintaining
a residential housing facility by a residential school
approved by the Department of Education and Early
Development under AS 14.16.200;
(10) childhood early learning and
development programs and educational support to
childhood early learning and development programs
provided by a nonprofit corporation organized under
AS 10.20, a tribal entity, or a school district in the
state, by the Department of Education and Early
Development, or through a state grant;
(11) science, technology, engineering, and
math programs provided by a nonprofit agency or a
school district for school staff and for students in
grades kindergarten through 12 in the state; and
(12) the operation of a nonprofit
organization dedicated to providing educational
opportunities that promote the legacy of public
service contributions to the state and perpetuate
ongoing educational programs that foster public
service leadership for future generations of residents
of the state.
* Sec. 13. AS 43.75.018(a) is amended to read:
(a) A person engaged in a fisheries business is
allowed a credit against the tax due under this
chapter for contributions of cash or equipment
accepted for
(1) direct instruction, research, and
educational support purposes, including library and
museum acquisitions, and contributions to endowment,
by an Alaska university foundation, by a nonprofit,
public or private, Alaska two-year or four-year
college accredited by a national or regional
accreditation association, or by a public or private
nonprofit elementary or secondary school in the state;
(2) secondary school level vocational
education courses, programs, and facilities by a
school district in the state;
(3) vocational education courses, programs,
and facilities by a state-operated vocational
technical education and training school;
(4) a facility by a nonprofit, public or
private, Alaska two-year or four-year college
accredited by a national or regional accreditation
association or by a public or private nonprofit
elementary or secondary school in the state;
(5) Alaska Native cultural or heritage
programs and educational support, including mentoring
and tutoring, provided by a nonprofit agency for
public school staff and for students who are in grades
kindergarten through 12 in the state;
(6) education, research, rehabilitation,
and facilities by an institution that is located in
the state and that qualifies as a coastal ecosystem
learning center under the Coastal America Partnership
established by the federal government;
(7) the Alaska higher education investment
trust fund under AS 37.14.750;
(8) funding a scholarship awarded by a
nonprofit organization to a dual-credit student to
defray the cost of a dual-credit course, including the
cost of
(A) tuition and textbooks;
(B) registration, course, and programmatic
student fees;
(C) on-campus room and board at the
postsecondary institution in the state that provides
the dual-credit course;
(D) transportation costs to and from a
residential school approved by the Department of
Education and Early Development under AS 14.16.200 or
the postsecondary school in the state that provides
the dual-credit course; and
(E) other related educational and
programmatic costs;
(9) constructing, operating, or maintaining
a residential housing facility by a residential school
approved by the Department of Education and Early
Development under AS 14.16.200;
(10) childhood early learning and
development programs and educational support to
childhood early learning and development programs
provided by a nonprofit corporation organized under
AS 10.20, a tribal entity, or a school district in the
state, by the Department of Education and Early
Development, or through a state grant;
(11) science, technology, engineering, and
math programs provided by a nonprofit agency or a
school district for school staff and for students in
grades kindergarten through 12 in the state; and
(12) the operation of a nonprofit
organization dedicated to providing educational
opportunities that promote the legacy of public
service contributions to the state and perpetuate
ongoing educational programs that foster public
service leadership for future generations of residents
of the state.
* Sec. 14. AS 43.77.045(a) is amended to read:
(a) A person engaged in a floating fisheries
business is allowed a credit against the tax due under
this chapter for contributions of cash or equipment
accepted for
(1) direct instruction, research, and
educational support purposes, including library and
museum acquisitions, and contributions to endowment,
by an Alaska university foundation, by a nonprofit,
public or private, Alaska two-year or four-year
college accredited by a regional accreditation
association, or by a public or private nonprofit
elementary or secondary school in the state;
(2) secondary school level vocational
education courses, programs, and facilities by a
school district in the state;
(3) vocational education courses, programs,
and facilities by a state-operated vocational
technical education and training school;
(4) a facility by a nonprofit, public or
private, Alaska two-year or four-year college
accredited by a regional accreditation association or
by a public or private nonprofit elementary or
secondary school in the state;
(5) Alaska Native cultural or heritage
programs and educational support, including mentoring
and tutoring, provided by a nonprofit agency for
public school staff and for students who are in grades
kindergarten through 12 in the state;
(6) education, research, rehabilitation,
and facilities by an institution that is located in
the state and that qualifies as a coastal ecosystem
learning center under the Coastal America Partnership
established by the federal government;
(7) the Alaska higher education investment
trust fund under AS 37.14.750;
(8) funding a scholarship awarded by a
nonprofit organization to a dual-credit student to
defray the cost of a dual-credit course, including the
cost of
(A) tuition and textbooks;
(B) registration, course, and programmatic
student fees;
(C) on-campus room and board at the
postsecondary institution in the state that provides
the dual-credit course;
(D) transportation costs to and from a
residential school approved by the Department of
Education and Early Development under AS 14.16.200 or
the postsecondary school in the state that provides
the dual-credit course; and
(E) other related educational and
programmatic costs;
(9) constructing, operating, or maintaining
a residential housing facility by a residential school
approved by the Department of Education and Early
Development under AS 14.16.200;
(10) childhood early learning and
development programs and educational support to
childhood early learning and development programs
provided by a nonprofit corporation organized under
AS 10.20, a tribal entity, or a school district in the
state, by the Department of Education and Early
Development, or through a state grant;
(11) science, technology, engineering, and
math programs provided by a nonprofit agency or a
school district for school staff and for students in
grades kindergarten through 12 in the state; and
(12) the operation of a nonprofit organization
dedicated to providing educational opportunities that
promote the legacy of public service contributions to
the state and perpetuate ongoing educational programs
that foster public service leadership for future
generations of residents of the state."
[End of amendment - CSHB 229(EDC) was reported out of the House
Education Standing Committee.]
9:22:06 AM
ADJOURNMENT
CO-CHAIR DRUMMOND announced that the House Education Standing
Committee would recess until 3:30 p.m.
3:35:36 PM
CO-CHAIR DRUMMOND called the House Education Standing Committee
back to order at 3:35 p.m. Present at the call back to order
were Representatives Story, Gilham, Hopkins, and Drummond.
Representatives Prax and Cronk arrived as the meeting was in
progress. Also present was Representative Patkotak.
HB 272-INCREASE BASE STUDENT ALLOCATION
HB 273-INCREASE BASE STUDENT ALLOC. INFLATION
3:36:10 PM
CO-CHAIR DRUMMOND announced that the final order of business
would be HOUSE BILL NO. 272, "An Act relating to education;
increasing the base student allocation; and providing for an
effective date." and HOUSE BILL NO. 273, "An Act relating to
education; increasing the base student allocation; and providing
for an effective date."
3:36:42 PM
REPRESENTATIVE HOPKINS moved to adopt the proposed committee
substitute (CS) for HB 273, Version 32-LS1366\W, Marx, 2/7/22,
as a working document. There being no objection, Version W was
before the committee.
3:37:10 PM
The committee took a brief at-ease at 3:37 p.m.
3:37:43 PM
CO-CHAIR STORY, as prime sponsor, presented HB 273 via a
PowerPoint presentation [available in the committee packet].
She talked about two areas in which the bill would make a huge
difference: protecting services to children by keeping services
in the classroom by ensuring fixed costs are increased with
inflation, allowing school improvement plans to continue; and
providing for stability and certainty desperately needed in K-12
education. She emphasized the stress of having to plan a budget
before knowing what the funding will be. She said a known
budget can create efficiencies and avoid the need for "pink
slips."
3:42:10 PM
CO-CHAIR STORY turned to slide 3, which highlights that HB 273:
introduces inflation proofing to the BSA in the foundation
formula; ties the growth of education funding to the consumer
price index (CPI); and helps families and communities by
offering steady and reliable funding to children's services.
She said Ms. Svetlik would continue the PowerPoint.
3:43:46 PM
ARIEL SVETLIK, Staff, Representative Andi Story, Alaska State
Legislature, on behalf of Representative Story, prime sponsor of
HB 273, directed attention to slide 4, showing projected
inflation percentages and the fluctuation in changes of the
percentage of the CPI. It shows the CPI of urban Alaska by
calendar year (CY). She noted that CY 21 was at 4.88 percent,
and in comparison, CY 20 was a minus 1.10 percent. Prefacing
slide 5, she noted there was a 1.11 percent average inflation
growth from CY 18-20, which is what Ms. Svetlik used in her
calculation on slide 5, which uses that 1.11 percent to discover
what inflation growth would be. She showed the figure: "5930 x
1.0111 = 5996." She discussed the other information on slide 5,
which states that the BSA would increase by $66 per student, an
increase of 1.11 percent; by averaging three years, the formula
smooths out big swings in inflation; and by adding a lag year,
school communities will know their allocation ahead of time,
which helps them to craft their budgets and meet student needs.
She explained a lag year means that instead of FY 23 - which
happens in CY 22 - being gauged on CY 19-21, CY 21 would be
removed, and the calculation would be for 2018-2019.
3:47:33 PM
CO-CHAIR STORY emphasized the benefit of the three-year average
and the lag year in providing certainty for schools to budget.
She brought attention to slide 6 and, in conclusion, stated that
a strong education system creates active and informed citizens
and a bright future. She said Ariel would give a sectional
analysis.
3:51:55 PM
CO-CHAIR DRUMMOND noted individuals available for comment. She
spoke about the benefit to businesses in having good schools
nearby.
3:53:05 PM
MS. SVETLIK gave a sectional analysis [available in the
committee packet] which read as follows [original punctuation
provided]:
Section 1. Amends AS 14.17.470, adding a new
subsection that adds inflation proofing to the base
student allocation in the foundation formula. The base
student allocation would increase every year, based on
the average inflation of the three-year previous
Calendar Years, accounting for an additional lag year,
of the Consumer Price Index of Urban Alaska, as
measured by the United States Department of Labor,
Bureau of Labor Statistics.
Section 2. Provides an effective date for the
beginning of Fiscal Year 25 on July 1, 2024.
3:54:29 PM
CO-CHAIR DRUMMOND invited Jim Anderson to testify.
3:55:29 PM
JIM ANDERSON, Chief Finance Office, Anchorage School District,
testified in support of HB 272 and HB 273. He directed
attention to a handout he had provided [available in the
committee packet], titled "ASD School Funding Since 2017," which
showed a bar graph. He said the graph shows how the BSA has
been supported by state "one-time" funds in FY 19 and FY 20, and
with federal relief funds from FY 21 through FY 24. He
explained the red line at the top of the graph depicts the BSA's
inflationary increase, based on the consumer price index urban
(CPIU) from 2017 through 2022. The rates from January 2022 to
the end of 2024 are estimated based on a 2 percent steady
inflation rate and reflect adjusted staffing levels based on
projected student enrollment. He explained that the gray, light
blue, and gold bars represent BSA equivalent funds that helped
offset structural deficits. He discussed how ASD has, for the
last six years, applied its balance, Alaska's one-time payments,
and federal relief money to maximize educational opportunities.
He discussed other changes necessary to fill gaps. He talked
about the increase in inflationary costs even with declining
enrollment. He explained that the one-time funds have been
instrumental in avoiding layoffs but have not allowed the
district to implement multi-year strategies to improve student
outcomes. He offered further details.
MR. ANDERSON explained that one-time funds hid from the general
public the annual structural cost that has continued to grow
since 2017, but without a fiscal solution, it will be readily
apparent. He said ASD has taken measures to close the gap, for
example by closing two schools, combining programs, merging
schools into individual buildings, and reducing staff. He
offered further examples and spoke about costs per student. In
conclusion, Mr. Anderson emphasized that federal funds are
running out and it is time to implement an inflation-proof BSA,
because there is a need for multi-year strategies, not "one-year
Band-Aids." He opined that HB 272 and HB 273 "certainly would
accomplish that step."
4:01:37 PM
CO-CHAIR DRUMMOND noted there are federal relief funds that must
be funded by 2024, and she asked whether there would be "a
larger gold bar in ASD's BSA" [on the bar chart].
MR. ANDERSON answered only if ASD continues struggling with the
hiring of staff. He said he expects $5 million of $50 million
to be rolled over. He stated further that he does not expect a
significant amount of rollover. To a follow-up question
regarding difficulty in hiring, he said the district would shift
that money to different purposes. He described the shortages
this year throughout the district. There were fewer students
and, thus, $12 million less in revenue, and the vacancies offset
that loss in revenue.
4:06:28 PM
REPRESENTATIVE HOPKINS asked about support staff shortages.
MR. ANDERSON said ASD is short about 30 part-time custodians,
which means those working are working overtime. He related
similar issues with bus drivers and using a system of "rolling
routes" where certain routes had to be closed for three weeks at
a time. He offered further examples, including food service and
teachers' assistants.
4:09:19 PM
CO-CHAIR STORY asked for Mr. Anderson's thoughts on the three-
year rolling formula and lag year proposed under HB 273, and
also about his remark about putting a Band-Aid on education
funding.
MR. ANDERSON responded that he thinks the three-year average is
"probably the optimal way to figure out the BSA increases on
CPI" because the CPIU fluctuates year to year. He said he
thinks state management cannot react quickly enough to one-year
CPI jumps. He emphasized that he likes the proposed three-year
average.
4:11:33 PM
CO-CHAIR DRUMMOND announced that the committee would continue
with public testimony on HB 272 [opened during the hearing on
2/9/22], and she opened public testimony on HB 273.
4:12:01 PM
DEBBIE CARY, Vice President, Kenai Peninsula Borough School
Board, testified in support of HB 272 and HB 273. She spoke
about increased costs throughout the state for fuel, utilities,
supplies, and liability insurance. She said building
maintenance is not being addressed. She said COVID relief funds
have been used to support social-emotional learning (SEL), but
those funds will run out. Ms. Cary noted that without the COVID
relief funds, the district would be in a deficit of
approximately $7 million. She talked about subjects, such as
art, being dropped to accommodate other subjects, such as
science, as a result of lack of funds. She emphasized that the
district has been strategic in its management of funds in order
to "keep as many dollars in the classroom" as possible.
4:15:06 PM
MS. CAREY, in response to a question from Representative Prax,
stated how the district addresses insurance issues, such as
looking for ways to reduce healthcare costs. The district is
always looking for ways to reduce the costs of supplies. She
noted that Internet access is not available in some parts of the
Kenai Peninsula.
CO-CHAIR DRUMMOND said she has received e-mails from schools
that state they are limited in the number of insurance providers
in Alaska, so that limits the ability to shop around for a lower
price.
MS. CAREY confirmed that is correct and added that there is a
limitation on the willingness of companies to respond to bids
that take place too frequently.
4:18:03 PM
FADIL LIMANI, Chief Financial Officer, Finance Office, North
Slope Borough School District, read written testimony [included
in the committee packet] in support of HB 272 and HB 273. He
emphasized the challenge and negative effects to students and
schools resulting from the pandemic and the need to employ as
many financial resources as possible. He reported the district
has [a drop in its numbers by] approximately 200 students, a
significant decrease in its typical ADM, and that reduces the
BSA significantly. Further, he said the district anticipates a
drop in local funding for the 2023 budget, the current deficit
projected for FY 23 is approximately $7.9 million. He
emphasized the importance of stable funding. He said there is a
shortage of teachers who are able to come to the North Slope
Region to teach; the district is no longer able to attract and
retain teachers with pay and benefits; and teacher turnover has
a direct negative impact on student performance.
MR. LIMANI spoke about the interrupted supply chain and the
effect of prices that are even higher in the region. He
expressed a need for awareness about the diminishing value of
flat funding. He talked about the increase in utilities and
aging infrastructure of schools. He expressed gratitude for the
funding from the CARES Act; however, those funds cannot be used
to supplement the constitutionally required funding of public
education. He said while the proposed legislation may not
address all the needs of the district, it would move in the
right direction of allowing the district to be able to offset
some of the fiscal shortfalls to come.
4:22:35 PM
MR. LIMANI responded to a series of questions from
Representative Prax. He clarified that student enrollment had
hovered around 2,000, and the last count in FY 23 was 1,844.
Some of the students transferred to other school districts,
while others "just dropped out." He explained that [access to]
broadband has been an issue in terms of affordability and
providing access for Zoom connections for classes, and the
district does not have the staffing necessary to offer "a hybrid
model" to provide "distance delivery." He said the district
expects some of those students to come back, but not a number
certain.
4:25:49 PM
MR. LIMANI, in response to a question from Co-Chair Drummond,
said the district serves eight villages. To a follow-up
question, he said the only two villages to and from which a
person could drive are Prudhoe and Nuiqsut, and then only in the
winter. In response to Co-Chair Drummond mentioning another
piece of legislation not on the agenda, Mr. Limani expressed his
thoughts on school bond debt reimbursement.
4:28:39 PM
MR. LIMANI, in response to a question from Representative
Hopkins, talked about progress following a school in Kaktovik
burning down.
4:32:00 PM
RACHEL LORD, representing self, testified in support of HB 272
and HB 273. She noted that she and her husband are business
owners, and she emphasized the importance of education in
producing a strong workforce. She said society pays for
underfunded education in a variety of ways, including:
healthcare, justice, policing, unemployment, and child
protective services. She stated, "Reasonable, rational funding
and predictable funding for schools is a foundational step to
maintain community-level support for kids and keep them on the
right path." She expressed strong support for state funding of
schools in Alaska that keeps up with inflation. She spoke of
the challenges schools have in covering utilities, health
insurance, and other fixed costs. She touched on the state's
responsibility and constitutional obligation to provide
education to Alaska children, and she emphasized the need for
funding in order for that to happen. She asked the committee to
support both HB 272 and HB 273.
4:36:30 PM
KATIE BOTZ, representing self, testified in support of HB 272
and HB 273. She stated that as a school bus driver and aunt to
several nieces and nephews, she is concerned about the multi-
year flat-funding of education, because she wants a better
future for them. She expressed concern about the mental and
emotional health of students upon graduation after experiencing
the pandemic. She asked the committee to fully fund education
and stop flat funding, and to put children's futures first.
4:38:28 PM
CO-CHAIR STORY thanked Ms. Botz for the service she provides as
bus driver.
4:39:00 PM
DAVID BOYLE, representing self, listed the current funding for
four of the five largest school districts in Alaska and noted
that the funding formula multiplies the BSA. For example, he
said the 4,200 student input to the foundation formula comes out
to 7,200; the $5,930 BSA ends up as $7,732 per student; and "the
proposed $233 increase goes to $306." He quoted Superintendent
Deena Bishop as having said recently, "We have enough funding."
He stated that fixed costs are not the driver of education
costs, rather that personnel costs are. For example, he said
that personnel costs for the Anchorage School District make up
88 percent of total costs. He concluded, "We need to improve
education, but this is not the way to do it."
4:41:13 PM
ROBYN BURKE, Clerk, North Slope Borough School District Board of
Education, North Slope Borough School District (NSBSD),
testified in support of HB 272 and HB 273. She echoed the
previously made point that 2017 was the last time there was an
increase [in funding to education] and offered her understanding
that "there's a ten-year projection." She acknowledged the
statement of the previous speaker about 88 percent of budget
going to personnel, and she noted that a majority of NSBSD's
expenses are directed to personnel; however, she said the
district has a problem with recruitment and retention of
teachers and loses teachers for reasons based on [lack of]
funding. She said the district has not finalized its budget for
next year, so it does not yet know what positions may need to be
cut. She said the district loses one quarter of its teachers
each year. She talked about meeting demands when there are
shortages in support staff. Ms. Burke mentioned the high cost
of broadband that families needed to use to remain connected
with education for their children during the pandemic. She
noted there are costs unique to the remoteness of the district,
for example, paying the cost of flying other school teams to
compete against theirs. She expressed hope that the district
would have fiscal security to ensure the future of its students.
4:46:36 PM
MS. BURKE, in response to a question from Representative Prax,
talked about ideas for solving the teacher retention problem.
She said that in talking with the union, one idea produced was
to offer retention bonuses. She talked about reimbursement of
ticket prices for flights to and from Utqiagvik. She said she
could not "put a number or a figure on how much more money"
[would solve the retention problem]; she indicated the issue is
not knowing what to expect when trying to budget for the school
year.
4:49:12 PM
MR. LIMANI added that the district is currently undergoing
negotiations with administrators, and negotiations with teachers
would commence soon. He stated that housing is a problem in
remote Alaska, thus the district provides housing, and there has
been "an increase to our leasing units" while "the rates on
those housing units have not changed." He said the district has
not conducted a study on benefits or cost of living in some
time, so many of the rates have remained stagnant. He listed
some other things provided by the district: Internet, cell
phone, vehicle, and travel out of state for professional
development.
4:51:05 PM
MS. BURKE added that 48 percent of the district's teachers have
said they do not expect to remain in the district longer than
two to three years.
4:51:58 PM
MS. BURKE, in response to a question from Representative Hopkins
as to what cuts the district has had to make that have impacted
student engagement, said as a whole the budget for each of the
schools has been decreased for "added duty contracts." She said
cuts have been considered for Pre-K and sports, and cuts have
been made in areas including administration and technology. She
noted that cuts outside the classroom do have a negative effect
on the classroom.
REPRESENTATIVE HOPKINS acknowledged the team effort in schools
and thanked Ms. Burke for her work.
4:56:07 PM
MR. LIMANI added that in 2019 the local appropriation was
reduced by approximately 10 percent, about $3.3 million. All
cuts were made in central operations. He said the district has
not been able to rebound from that. Now, he said, the district
is being fiscally conservative and focusing on that which will
benefit the students. That said, projections for upcoming years
show that the district will have a difficult time absorbing the
budget gaps. He said the district hopes to use some of its fund
balance to offset that, but the proposed legislation would help
"alleviate some of those fiscal pressures."
4:58:16 PM
MR. LIMANI, in response to Representative Cronk, acknowledged
"for the most part" that the BSA is a set amount of money that
is received by the district each year; however, the underlying
influx is student enrollment, which fluctuates. He reiterated
the number of students had decreased by about 200. In response
to a follow-up question, he reviewed that some of the students
had dropped out while others had transferred to other districts,
and he estimated some may come back. He relayed that the
district's student advisory council had told the district it
should expect to see an increase in the head count for the
second semester.
5:00:27 PM
CO-CHAIR DRUMMOND offered her understanding that the children
who come back to a district the second semester would not have
been counted at the beginning of the school year toward the
district's funding. Further, the hold harmless is in place, so
the district is still getting funding for those students but may
not have the teachers for them.
MR. LIMANI responded that is correct.
5:01:22 PM
DIANE HIRSHBERG, Director and Professor of Education Policy,
Institute of Social and Economic Research (ISER), specified that
she was speaking in her role as researcher rather than
administrator. She stated that a few years ago ISER conducted
studies which she offered to return to discuss. That said, she
proffered that salary is only a piece of the story in terms of
retention. The other factors include access to health care, the
distance to travel home to see loved ones, and working
conditions. To the last factor, she noted that there are
teachers who are given "dry cabins" in which to live, with
temperatures falling to 40 degrees below zero Fahrenheit. She
described the challenges of this scenario.
MS. HIRSHBERG, regarding the description of the BSA as a known
quantity, said it is, but she quantified that the geographic
cost differential numbers have not been updated for many years;
therefore, it is not known whether the money is being
distributed as it should. She stated that these questions would
not be answerable without more empirical data and a manner in
which to keep that data updated.
5:04:42 PM
CO-CHAIR STORY asked if she was interpreting ISER's study
correctly in thinking that when adjusting for cost of living and
geographic cost differentials, "our money" is worth $12,000,
just under the national average; therefore, although "we are
giving the same amount of ... BSA, we have less buying power,"
and fixed costs increase, "and so that money is ... worth less."
MS. HIRSHBERG confirmed that was a correct interpretation. She
said there is a geographic cost differential that tries to
provide equity for the higher costs being faced in some regions,
but whether [the state] is keeping up with those different costs
is unknown, particularly because of rapid cost changes. She
said there are "some big hits" that have occurred. She stated,
"We were hearing very similar stories from districts that energy
costs from districts were so volatile that when the legislature
raised the BSA, ... all that money went right to energy costs,
and the schools were not able to increase teacher salaries or
invest in other ways to make teaching in our districts more
successful and more attractive."
5:08:24 PM
CO-CHAIR DRUMMOND thanked Ms. Hirshberg. After ascertaining
that there was no one else who wished to testify, she closed
public testimony on HB 272 and HB 273.
5:09:38 PM
CO-CHAIR DRUMMOND announced that HB 272 and HB 273 were held
over.
5:10:07 PM
ADJOURNMENT
There being no further business before the committee, the House
Education Standing Committee meeting was adjourned at 5:10 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 229 University of Alaska Workforce Reports_Summary.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 229 |
| HB 229 University of Alaska Workforce Reports_Combined.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 229 |
| HB 229 2021 Alaska WWAMI One Page.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 229 |
| HB 229 Am 2 HEDC 2.11.2022.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 229 |
| HB 229 Am 1 HEDC 2.11.2022.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 229 |
| HB 229 APS and AEG Figures 2 7 2022.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 229 |
| FY17_22 BSA Chart for ASD.pptx |
HEDC 2/11/2022 9:00:00 AM |
|
| HB 272 invited testimony ISER.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 272 |
| HB 272 MSBSD Written Testimony.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 272 |
| HB 272 NEA Support.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 272 |
| HB 272 Sitka Letter of support.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 272 |
| HB 272 Testimony.docx.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 272 |
| HB 272 invited testimony ISER.docx |
HEDC 2/11/2022 9:00:00 AM |
HB 272 |
| HB 272 2022 ACSA JPS.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 272 |
| HB 272 HB 273 Testimony.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 272 HB 273 |
| HB 272 2022 02 08 ACSA Letter of Support.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 272 |
| HB 272 Support 021122.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 272 |
| HB 273 Support 021122.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 273 |
| HB 273 Aleutians East.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 273 |
| HB 273 Sitka Letter of support.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 273 |
| HB 273 NEA Support.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 273 |
| HB 273 2022 ACSA JPS.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 273 |
| HB 273 AASB Letter of Support.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 273 |
| HB 273 Support 021122.pdf |
HEDC 2/11/2022 9:00:00 AM |
HB 273 |