Legislature(2019 - 2020)CAPITOL 106
04/15/2019 08:00 AM House EDUCATION
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| Presentation: Why is Education So Costly in Alaska? by the Institute of Social & Economic Research | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE EDUCATION STANDING COMMITTEE
April 15, 2019
8:02 a.m.
MEMBERS PRESENT
Representative Harriet Drummond, Co-Chair
Representative Andi Story, Co-Chair
Representative Grier Hopkins
Representative Chris Tuck
Representative Tiffany Zulkosky
Representative Josh Revak
Representative DeLena Johnson
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
PRESENTATION: WHY IS EDUCATION SO COSTLY IN ALASKA? BY THE
INSTITUTE OF SOCIAL & ECONOMIC RESEARCH
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
DAYNA JEAN DEFEO PhD, Director
Center for Alaska Education Policy Research
Institute of Social and Economic Research
University of Alaska Anchorage
Anchorage, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation
entitled, "What drives the cost of education in Alaska?" dated
4/15/19 and answered questions.
MATTHEW BERMAN PhD, Professor of Economics
College of Business and Public Policy
Institute of Social and Economic Research
University of Alaska Anchorage
Anchorage, Alaska
POSITION STATEMENT: Answered questions during a PowerPoint
presentation entitled, "What drives the cost of education in
Alaska?" dated 4/15/19.
ALEXANDRA (LEXI) HILL
Education Policy Researcher
Institute of Social and Economic Research
University of Alaska Anchorage
Anchorage, Alaska
POSITION STATEMENT: Answered questions during a PowerPoint
presentation entitled, "What drives the cost of education in
Alaska?" dated 4/15/19.
ACTION NARRATIVE
8:02:19 AM
CO-CHAIR ANDI STORY called the House Education Standing
Committee meeting to order at [8:02 a.m.]. Representatives
Drummond, Johnson, Hopkins, Revak, Zulkosky, Tuck, and Story
were present at the call to order.
^Presentation: Why is Education so Costly in Alaska? By the
Institute of Social & Economic Research
Presentation: Why is Education so Costly in Alaska? By the
Institute of Social & Economic Research
8:03:13 AM
CO-CHAIR STORY announced the only order of business would be a
presentation by the Institute of Social and Economic Research,
(ISER), College of Business and Public Policy, University of
Alaska Anchorage (UAA).
The committee took an at-ease from 8:03 a.m. to 8:06 a.m.
8:06:01 AM
DAYNA JEAN DEFEO PhD, Director, Center for Alaska Education
Policy Research, ISER, UAA, informed the committee her
colleagues at the Institute for Social and Economic Research
(ISER) collaborated with her to answer the questions posed on
the cost of education in Alaska. Because the aforementioned
questions are complicated by the costs of school employees'
benefits and the cost of energy, she said she may defer to
experts whenever appropriate (slide 2). Dr. DeFeo presented
slide 3, which was an outline of the presentation, noting the
presentation includes limited data on student achievement.
Slide 4 listed the context of the presentation: 130,000 K-12
public school students, 22 percent indigenous - with a majority
of indigenous students in rural areas - and a high homeschool
population of 10 percent; over 500 public schools, mostly state-
funded, with students distributed across the state, many of whom
attend school in rural and remote areas of Alaska.
8:09:03 AM
CO-CHAIR DRUMMOND questioned whether the data distinguishes the
homeschool population served through charter schools and local
school districts from the population of individual
homeschoolers.
DR. DEFEO offered to provide further information in this regard.
She returned attention to slide 4, noting the state funds
schools with ten or more students and about twelve schools have
closed in the past ten years; furthermore, the state has no
Bureau of Indian Education (BIE), U.S. Department of the
Interior, or Tribally operated public schools, which affects the
state's revenues related to education. Dr. DeFeo said there is
a lot of diversity in Alaska, which challenges aggregate
comparisons of averages due to small sample sizes; small samples
present methodological difficulties when interpreting data. For
example, Alaska's exceptionality is demonstrated in its
education system by its use of specific standards, rather than
the National Assessment of Educational Progress (NAEP), to
measure achievement. She cautioned Alaska's specific testing
may not compare to data from other states that use national
standards, and she gave an example (slide 5). Dr. DeFeo turned
to the question of education funding: 65 percent from state
funding, 22 percent from local funding, and 12 percent from
federal funding, which has not changed since 1991. Although
federal revenue is limited by the lack of BIE schools to serve
indigenous students, the state receives federal grants, local
contributions - with the exception of Regional Education
Attendance Areas (REAAs) - , and other small revenue streams
from investment earnings and in-kind services (slides 6 and 7).
REPRESENTATIVE HOPKINS asked for typical education funding
percentages in other states.
8:14:22 AM
MATTHEW BERMAN PhD, Professor of Economics, College of Business
and Public Policy, ISER, UAA, said "Alaska is ... in the upper
tier but ... it's not at the top." For example, 100 percent of
the schools in Hawai'i are state funded, although the
percentages vary greatly by state.
DR. DEFEO continued, explaining general fund (GF) spending is
based upon the base student allocation (BSA) set by the
legislature and applied to the school foundation formula to
determine actual spending. She provided a short history of BSA
and the school foundation formula and pointed out community cost
differentials have not been updated since 2005 (slide 8).
REPRESENTATIVE ZULKOSKY questioned whether cost differentials
were applied to the foundation formula prior to 2002.
8:17:23 AM
LEXANDRA ("LEXI") HILL, Education Policy Researcher, ISER, UAA,
was unsure of specific cost differentials that may have been "in
play prior to 2002"; however, she said at that time, the
structure of the formula changed to incorporate a cost
differential that was based on research reported by the American
Institutes for Research (AIR). She expressed her belief cost
differentials were applied before 2002.
CO-CHAIR DRUMMOND asked for information on the ISER cost
differential updates to which Dr. DeFeo referred.
DR. DEFEO clarified ISER developed community cost differentials
in 2015 which were never implemented; ISER is not presently
working on updates.
REPRESENTATIVE TUCK recalled in 2007 a joint education
legislative taskforce recommended an increase to BSA of $200,
which was reduced to $100; further, there were adjustments to
the special education multipliers. He characterized these
changes to BSA as a "benchmark moment."
DR. DEFEO advised there were two requests to update the
community cost differentials, one of which was from the
Association of Alaska School Boards (AASB).
CO-CHAIR DRUMMOND added the Municipality of Anchorage Assembly
also seeks [updates]; she asked what ISER would require in order
to undertake updates of the cost differentials.
DR. DEFEO cautioned updating the cost differentials may increase
benefits to some communities and districts, but decrease
benefits to others; an ISER study of cost differentials would
need to be mandated by the legislature and not instigated by a
particular district or city to ensure the report is nonpartisan.
8:22:24 AM
MS. HILL advised a study by ISER to update cost differentials
was estimated to cost $130,000-$150,000 [and would take six
months to complete].
CO-CHAIR DRUMMOND related the Anchorage Assembly reserved about
$140,000 to contribute to the cost of a study - without the
expectation of any benefit to the municipality - and that the
study is needed. She urged "to begin this process, no matter
who pays for it - ISER needs to do it ...."
DR. DEFEO restated the request to ISER must have broad support
from a variety of [school] districts, the legislature, and/or a
large, statewide organization.
REPRESENTATIVE HOPKINS returned attention to slide 8 and noted
BSA has increased about 8 percent in the last ten years, not
adjusted for inflation; he asked whether the increases have kept
up with inflation.
DR. BERMAN said [an 8 percent increase] is less than inflation;
on average, prices in Alaska have risen less rapidly than in
other states, but have risen more than 8 percent over the past
ten years. He pointed out the data presented on slide 8 is from
the 2015-2016 school year because more recent federal data is
unavailable. He opined, in the past three or four years, other
states have been spending more than Alaska. Dr. Berman
described a slow decline; however, the percentage is unknown at
this time.
8:26:23 AM
DR. DEFEO returned to the presentation and explained the school
foundation formula starts with BSA and makes three categories of
adjustments for differences amongst schools: school size, the
district cost factor, and further adjustments for certain
programs such as vocational and career and technical education
and homeschools. The aforementioned adjustments are similar to
that of other states. At the time of distribution, total
education funds include federal payments in lieu of taxes,
required local contributions, and hold harmless provisions, and
exclude extra local contributions. She stated average [Alaska]
2016 per pupil school spending was $17,510 and compared the
average cost [of public education] to the cost of private school
tuition in Anchorage: Pacific Northern Academy - $13,815 per
year; Anchorage Montessori elementary school - $10,700 per year.
Dr. DeFeo advised private school populations differ from public
schools in that private school populations may not include
students with intensive special education needs. Daycare costs
in Anchorage average $1,000 a month (slide 10). Slide 11 was a
graph comparing all states' [and Washington, D.C.] 2016 spending
per pupil, according to the U.S. Census Bureau 2016 Annual
Survey of School System Finances, which ranked Alaska sixth.
8:29:30 AM
REPRESENTATIVE JOHNSON questioned whether the U.S. Census Bureau
survey indicates "the 54 percent versus the 76 percent of the
[costs] that goes into the classroom ...."
DR. DEFEO directed attention to the seven categories of expenses
shown on the graph. She cautioned school budgets may not fit
into seven categories.
REPRESENTATIVE JOHNSON observed there is a disagreement over the
percentage of funds directed to classrooms and asked, "[Has
ISER] looked into what really is considered classroom expense
...?"
CO-CHAIR STORY referred to a recent presentation by the Alaska
Association of School Business Officials (ALASBO), which broke
down Alaska's education budget into different categories.
CO-CHAIR DRUMMOND added ALASBO uses the Department of Education
and Early Development (EED) chart of accounts; she pointed out
the graph indicates about two-thirds of spending - instruction
employee salaries, instruction employee benefits, instruction
staff support, and pupil support - go into the classroom, which
does not support an estimate of 54 percent.
DR. DEFEO offered to provide a more detailed breakdown of the
expenses that are shown on the graph; in fact, for the
presentation, ISER looked at instruction employee salaries and
instruction employee benefits because those expenses "tend to be
a topic of conversation in this state."
8:33:31 AM
REPRESENTATIVE ZULKOSKY surmised there is also discussion
related to ISER's choice of the sources of information used to
compare the cost of education. She suggested ISER provide the
committee with the rationale behind its choice of data sources
that have provided data that is not in alignment with data
previously presented to the committee. Representative Zulkosky
acknowledged the differences may be explained because certain
data is reported by a research institution versus school
business officials.
DR. DEFEO remarked:
We pulled these for this presentation alone. So,
these are not the numbers that we've used in some of
our other calculations. I would also add that this
chart sort of nicely breaks down spending into seven
categories, but ... the total length of the bar - if
we were to focus on that - the $17,510 per pupil,
should end up being the same across these different
accounting systems. ... What's nice with the census
data is that [it] ... allows us to do these
comparisons between states with a little bit more ...
context than just straight up numbers.
DR. DEFEO further explained ISER seeks to look at $17,510 - the
total cost of spending - and report how Alaska's spending
compares to the U.S. average. She summarized slides 12 and 13:
1. There is a high cost of living in rural Alaska which skews
the statewide average; 2. In urban Alaska, living costs are
higher than the U.S. average. Slide 14 illustrated the
community cost differentials developed by ISER in 2005.
8:36:40 AM
REPRESENTATIVE TUCK returned attention to slide 13 and
questioned whether ISER compared costs in Anchorage and the
Matanuska-Susitna (Mat-Su) region with more costly remote areas
of Alaska. Also, the [jurisdictions] listed on slide 11 that
have average spending higher than Alaska's - Vermont, New
Jersey, Connecticut, the District of Columbia, and New York -
are heavily populated compared to Alaska and he surmised, due to
economies of scale, the cost per pupil should go down for those
[jurisdictions]. Representative Tuck said he would like to
compare costs in New York with those in Anchorage.
DR. DEFEO deferred to Dr. Berman.
DR. BERMAN was unsure of the exact [cost per pupil in
Anchorage]. He stressed the averages include certain, but not
all, expenditures; for example, the $17,510 average represents
current spending, including spending the school districts incur
that is not directly related to instruction, but does not
include debt service and capital outlays, thus average costs can
vary from district to district. Further, to be precise, the
committee should request ALASBO to explain the details of its
report; he noted the U.S. Census Bureau survey is sent to all
school districts each year, collects data from all of the
states, and divides revenues and expenditures into the same
categories. He offered to provide the actual numbers for
Anchorage after reviewing the data.
REPRESENTATIVE TUCK affirmed his request for the cost averages
in Anchorage and Mat-Su.
8:40:37 AM
DR. BERMAN, in response to Co-Chair Drummond, confirmed that the
U.S. Census Bureau survey collects and makes available to the
public data from every school district in the nation.
CO-CHAIR DRUMMOND surmised the Alaska average includes every
school district in Alaska.
DR. BERMAN indicated yes; however, Mt. Edgecumbe High School is
not in a school district but is supported by state education
funding.
8:42:02 AM
REPRESENTATIVE JOHNSON cautioned the committee has conflicting
data from the census bureau and from EED; in fact, EED reported
Alaska spends the highest amount in the nation, per pupil, in
the classroom. She related the census bureau chart of accounts
differs slightly from state data in that the healthcare cost for
teachers is not included in the [census bureau survey] but is
included in EED reporting. Representative Johnson opined this
disparity is relevant to the committee's understanding of
education costs.
DR. DEFEO pointed out the graph of spending on slide 11
[provided by the census bureau] includes instruction employee
benefits, which would reflect healthcare benefits. She
clarified the presentation is focused on total spending rather
than the proportion spent on instruction versus other costs.
She returned attention to slide 14 which illustrated community
cost differentials and pointed out in a significant area of the
state's geography, ISER estimated costs at more than [150
percent] above those of Anchorage; in other areas, estimated
costs were between [121-150 percent] above costs in Anchorage.
Returning attention to [the graph of expenses provided by the
census bureau] she said ISER weighted the cost multiplier across
the state to that of Anchorage, failing to adjust for small
school sizes, which put Alaska's average total spending at
$14,592, and ranks the state twelfth, not sixth, relative to
other [jurisdictions] (slide 15). Further, after adjusting to
the Anchorage cost of living index at 23.8 percent, Alaska's
education spending is within $219, per pupil, of the U.S.
average (slide 16).
8:46:52 AM
DR. DEFEO addressed the components that comprise the $17,510
average cost per pupil (slide 17). She related higher costs in
Alaska are not due to higher per-pupil teacher salaries, or
extra contributions to retirement systems, but are due to small
schools, healthcare costs, energy costs, and geographic costs
(slide 18). Slide 19 was a graph [of information provided by
the U.S. Census Bureau 2016 Annual Survey of School System
Finances] which illustrated per-pupil teacher salaries and
indicated Alaska ranks fourteenth in the nation; after adjusting
to [the Anchorage cost of living index] Alaska ranks twenty-
third. When adjusted to the U.S. average, the proportion of
Alaska's education budget that goes to teacher salaries is 23
percent below the average. Turning attention to factors that do
contribute to higher costs in Alaska, Dr. DeFeo noted there are
443 "regular" schools in Alaska, excluding schools such as those
within correctional facilities, and in 2017, 58 - 13 percent of
schools in the state - enrolled fewer than 25 students, and 34
schools enrolled between 26 and 50 students; in fact, 21 percent
of the schools in Alaska are very small. Further, the 58
smallest schools are spread across 22 school districts, most are
accessible only by air, many serve low-income students and are
more costly to operate. The schools are located in communities
with a higher cost of living, do not benefit from economies of
scale for capital costs, have small classes, and high staff
turnover (slide not provided). An additional factor
contributing to high costs in Alaska is the cost of healthcare,
which is the highest in the nation.
8:51:00 AM
REPRESENTATIVE ZULKOSKY returned attention to the factor of
small schools and asked Dr. Defeo to provide historical data on
why Alaska is legally obligated to fund the operation of small
schools. She said it is important to understand the context
surrounding why Alaska's obligation exists.
DR. DEFEO offered to provide an article which reviews "the Moore
settlement."
REPRESENTATIVE REVAK asked what type of healthcare plan is
provided to EED employees.
DR. DEFEO said state public employees are on the state
healthcare system.
CO-CHAIR STORY expressed her understanding [healthcare plans]
vary by district.
DR. DEFEO, in further response to Representative Revak, said she
did not know if the "Alaska care plan" was available to EED
employees and offered to provide further information related to
EED healthcare plans.
REPRESENTATIVE REVAK surmised a good healthcare plan may cut
costs.
CO-CHAIR DRUMMOND said, "Dr. DeFeo, I don't believe your numbers
include the department of education figures, is that correct?
Your numbers here are only including school districts. ... [The
numbers in the presentation including] healthcare costs, all of
that stuff, is all about school districts - this is not about
the department of education."
DR. DEFEO said absolutely.
REPRESENTATIVE JOHNSON remarked:
... my understanding is that the [EED] ... numbers
have another component, maybe it is something to do
with administration, that goes into their numbers for,
to get the 76 percent going into [the] classroom as
opposed to the census data saying that 54 percent goes
into the classroom. Twenty-two percent disparity
between Alaska's [EED] presentation and ... the census
is a big disparity. ... I got a sense of what the
chart of accounts were that they pulled the census
numbers from, the chart of accounts that they pulled
the [EED] numbers from. ... If we could get a
breakdown of where [EED] gets their numbers and where
the ... census gets their numbers, so we can actually
compare apples to apples in this discussion ... we can
speak intelligently to those kinds of questions.
CO-CHAIR STORY offered to schedule future meetings to clarify
the aforementioned discrepancy and to discuss the healthcare
costs and plans in various school districts.
8:56:02 AM
REPRESENTATIVE TUCK suggested [the committee review] the census
bureau survey questions for comparison.
DR. DEFEO directed attention to slide 21, noting benefits costs
in Alaska are fourth highest in the nation; however, after
adjustments, instruction benefits costs are 11 percent above the
national average. She advised the effect of increasing prices
in healthcare on a fixed budget puts downward pressure on wages,
therefore, Alaska has difficulty competing for teachers.
Another factor contributing to high education costs in Alaska is
the cost of energy: energy is expensive and variable so fuel
costs more in remote places; costs fluctuate, which restricts
the negotiation of fuel prices; Power Cost Equalization (PCE)
does not benefit school districts in areas where electricity is
subsidized for households; buildings are heated regardless of
the number of students (slide 22). In response to Co-Chair
Drummond, she said the cost of energy is included in the "other"
category on the previous graph, as is transportation.
8:59:07 AM
REPRESENTATIVE JOHNSON has heard because schools can be the
largest consumer of fuel in certain communities, if the school
overpays for fuel, that drives up the cost of fuel for the rest
of the community.
9:00:33 AM
REPRESENTATIVE TUCK opined an anchor tenant brings costs down
because increased volume enables bulk shipping.
[Due to recording difficulties, a portion of the audio was
lost.]
DR. DEFEO continued to opportunities revealed by ISER's existing
research. She noted many of the big costs of education are
beyond education policy, such as healthcare and operating costs;
in reality, "it just costs more to be here." When looking at
policy, teacher salaries present one opportunity [to cut costs];
however, she cautioned teacher salaries are critical to student
achievement outcome objectives, the ability to recruit and
retain teachers, and the ability to compete with other states
for teachers (slides 23 and 24). Further, there is ample
research linking teacher salaries to teacher quality (slide 25).
REPRESENTATIVE ZULKOSKY returned attention to slide 24 and
suggested another policy opportunity is funding for school
districts. In a manner similar to the challenge of [providing
appropriate] teacher salaries in order to ensure [school
districts employ] quality teachers, she said, "not having
reliable funding from the legislature creates a very volatile
environment for recruitment and retention of their employees and
so I ... note that is a policy opportunity that's not reflected
here."
9:04:19 AM
REPRESENTATIVE HOPKINS returned to slide 19 which indicated,
after cost of living adjustments, Alaska's teacher salaries are
23 percent below the national average. He recalled a previous
ISER study reported training a new teacher costs an additional
$21,000 on top of their salary; he questioned whether lowering
teacher salaries would negatively impact recruitment and
retention.
DR. DEFEO, in response to Representative Zulkosky, said the list
of policy opportunities [on slide 24] is not an exhaustive list.
[Due to recording difficulties, a portion of the audio was
lost.]
DR. DEFEO, in response to Representative Hopkins, said in
addition to the cost of training a new teacher, the loss of a
teacher is the loss of his/her skill; in fact, research shows
the growth and effectiveness of a teacher is exponential over
the first five years of his/her teaching experience.
REPRESENTATIVE HOPKINS questioned whether ISER can report on
when teachers typically retire from the school system.
DR. DEFEO remarked:
... we're at an interesting point. I think we're
about 15 years out, so we're at the point where people
... can't move if they're in the old retirement
system. And people who are about the same spot, but
on the new system, have that opportunity. So, we
would, it presents a nice opportunity to really look
at, far enough out, when these things really start to
affect peoples' decisions to stay or go, we're poised
to do that research ....
9:07:37 AM
DR. DEFEO, in further response to Representative Zulkosky's
previous question, said ISER was asked to report on what happens
when teachers get pink slips due to uncertain budgets: how
issuing pink slips affects teacher retention, morale, and long-
term planning. She continued to slide 25 and acknowledged
Alaska has a teacher turnover problem for several reasons:
fewer students are enrolling in education programs, thus there
are fewer teachers available; 80-85 percent of Alaska's teachers
are hired from the Lower 48; Alaska faces strong competition for
teachers from other states; Alaska must attract teachers to
high-needs schools and retain them; Alaska must attract good
teachers. She said Alaska also needs to address principal and
superintendent turnover.
DR. DEFEO advised, in 2015, ISER calculated Alaska teacher
salaries were about "15 percent below where they should be, and
so the right salary that any teacher needs is going to vary by
community and by the working conditions there." In fact, ISER's
model - which was never implemented - reflected a 116 percent
difference between the highest and lowest recommended teacher
salaries. Although the ability to attract and retain teachers
is linked to salary, other research found working conditions are
a bigger predictor of teacher turnover than salary. She
concluded reducing turnover is an opportunity to reduce cost and
also improve the performance and productivity of teachers;
maintaining tenure is also a cost savings (slide 26).
REPRESENTATIVE HOPKINS said he would like further information on
how tenure saves school districts money and asked for examples
of working conditions that would affect teacher retention.
DR. DEFEO related working conditions include the quality of the
leadership in the school, the relationship between the community
and the school, class size, workload, and housing conditions for
teachers. She offered to provide studies related to tenure and
working conditions.
REPRESENTATIVE TUCK said working conditions would also include
respect for teachers, which would fall into the category of
community and school relationship. He gave an example
illustrating the "national trend" of not treating teachers with
the respect they deserve - or paying the compensation they
deserve - but relying on their passion to teach.
CO-CHAIR DRUMMOND advised working conditions in a community
include access to the Internet, which is also a problem for
schools, healthcare facilities, and other entities; young
teachers [and others] far from home seek to stay in touch with
their families. She asked whether ISER has researched the
effect of [the lack of] broadband access in rural communities in
Alaska, its high cost, and how limited access has affected
schools and employee retention for all employers.
DR. DEFEO said she is aware that [the lack of Internet access]
is significant to those who seek to provide distance education
to remote and rural communities; an ISER study reported on
feelings of isolation, but she was unsure whether Internet
access was surveyed.
MS. HILL said Internet access was not specifically part of the
aforementioned survey; however, Internet use and mobile phone
Internet use has changed notably in the five years since the
survey. In addition, ways in which "digital natives" use the
Internet have changed, and she offered to review research
[albeit outdated] on broadband access in rural Alaska, and more
recent work in the Canadian Arctic. In further response to Co-
Chair Drummond, she explained digital natives refers to young
people who have grown up using the Internet and thus are
accustomed to adopting the latest improvements in Internet
technology.
[Due to recording difficulties, a portion of the audio was lost
from 9:19 a.m. to 9:21 a.m.]
9:21:18 AM
REPRESENTATIVE TUCK returned attention to slide 26 and asked
whether teacher salaries - that are shown to be about 15 percent
below where they should be - include total compensation or just
salary.
DR. BERMAN clarified "just salary" because during the study ISER
reviewed contracts for individual school districts, each of
which paid for healthcare in a different way, thus ISER could
not include the value of benefits; if the study were repeated,
ISER would seek to include healthcare benefits. He recalled
housing was included in the study.
DR. DEFEO returned to Representative Johnson's earlier question
related to reducing fuel costs. She said a [cost saving]
opportunity may be to establish state-negotiated fuel prices and
remove the cost of fuel from the education funding formula
(slide 27).
REPRESENTATIVE ZULKOSKY questioned whether the aforementioned
opportunity had been vetted by affected rural hub communities or
remote rural school districts.
DR. DEFEO said ISER previously discussed this concept.
[Due to recording difficulties a portion of the audio was lost.]
REPRESENTATIVE ZULKOSKY asked Ms. Hill whether the suggestion
about the state negotiating fuel prices and removing fuel from
the foundation formula had been vetted with rural school
districts.
MS. HILL stated the suggestion [that the state negotiate fuel
prices] was made a couple of years ago by ALASBO as a potential
area of cost savings. The suggestion to remove fuel from the
foundation formula has not been vetted with school districts nor
has it been formally proposed by ISER.
REPRESENTATIVE ZULKOSKY remarked:
As a representative for a rural district, like
District 38, which is largely a rural hub as well as
remote rural community, when it comes to the delivery
of fuel every spring that's done through private
industry, which is largely an unregulated industry in
Alaska, in my preference as a legislator that
represents a rural district would be, in terms of
considering opportunities, are there opportunities to
find some regulations that ... can be put forward to a
very volatile market instead of holding down our
school districts in proposals that have not been
vetted? I guess I would put that forward ... in terms
of having a broader conversation about [how]
controlling community costs in rural Alaska is not
necessarily being driven by state government but by a
very volatile market ....
DR. DEFEO acknowledged more research is needed as the previous
ISER studies were done for specific purposes and are offered
only as a starting point for discussion. She continued to slide
29 and cautioned short-term reduced spending without complete
understanding is likely to harm student achievement outcomes
because school districts must struggle to absorb spending cuts,
without increasing class sizes and laying off teachers.
9:28:00 AM
CO-CHAIR STORY remarked:
[In the] Juneau School District, ... 90 percent of our
costs are personnel costs, and so, when you look at
reducing costs, ... there's not as many things to go
to that [don't] affect personnel in some way.
DR. DEFEO agreed a blanket reduction in district budgets almost
invariably results in teacher layoffs or in larger class sizes.
[Due to recording difficulties, a portion of the audio was
lost.]
9:29:09 AM
REPRESENTATIVE ZULKOSKY appreciated data that is presented with
objectivity. She restated that the state's obligation - in
terms of equitable funding for education across Alaska - was
missing from the presentation; further, she assured the
committee rural hub communities and remote, rural school
districts understand the context and background of all of the
issues discussed, [the acknowledgement of which] was also not
reflected in the presentation.
9:31:23 AM
REPRESENTATIVE TUCK noted he would seek support for an ISER
study to update community cost differentials.
CO-CHAIR STORY asked whether ISER would release its presentation
to the public in any form.
DR. DEFEO said the slides, after some corrections, can be made
available on ISER's website.
9:34:15 AM
REPRESENTATIVE HOPKINS noted the presentation did not include
individual cost drivers within BSA such as federal impact aid;
for example, how federal impact aid [negatively] impacts
districts across Alaska because it does not fully cover students
living on [military] bases.
DR. DEFEO deferred to Dr. Berman.
DR. BERMAN advised there are two basic sources of federal impact
aid: 1. student dependents of active duty military; 2. payments
in lieu of taxes for federal land. He was unsure exactly how
federal impact aid affects school districts.
REPRESENTATIVE HOPKINS expressed his understanding federal
impact aid pays a certain percentage of the cost to educate
[students of military parents] and military families pay any
applicable local or state taxes.
DR. BERMAN acknowledged federal impact aid is based on a
national formula and the revenue would vary; for example,
Anchorage and Kodiak may have differing tax bases. He said he
did not have a deep understanding of the issue.
REPRESENTATIVE HOPKINS asked, "How does the local revenue and
local contribution impact this, these calculations, compared to
other states around the nation?"
DR. BERMAN explained every state does something different; in
Alaska, there is a local required contribution in the foundation
formula that can be supplemented, to a limited degree, by
individual political subdivisions. Other states accomplish this
in different ways; he pointed out the local contribution to
total education funding in Alaska is 22 percent, which is a much
smaller percentage than in some states.
REPRESENTATIVE HOPKINS surmised in other states school districts
have the authority to tax their residents and raise revenue for
schools.
DR. BERMAN advised, in Alaska, borough schools and schools in
unified municipalities such as Anchorage, are included in the
overall local tax system; however, in most states school
districts are independent of local governments and have their
own taxes - generally property taxes - that are separate from
city government or county taxes.
9:41:30 AM
ADJOURNMENT
There being no further business before the committee, the House
Education Standing Committee meeting was adjourned at [9:41]
a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| ISER Presentation Resources Links.pdf |
HEDC 4/15/2019 8:00:00 AM |
|
| Ed costs in Alaska 4.14.pdf |
HEDC 4/15/2019 8:00:00 AM |