Legislature(2017 - 2018)HOUSE FINANCE 519
01/25/2018 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB287 | |
| HB213 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 287 | TELECONFERENCED | |
| *+ | HB 213 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
January 25, 2018
9:02 a.m.
9:02:56 AM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 9:02 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Paul Seaton, Co-Chair
Representative Les Gara, Vice-Chair
Representative Jason Grenn
Representative David Guttenberg
Representative Scott Kawasaki
Representative Dan Ortiz
Representative Lance Pruitt
Representative Steve Thompson
Representative Cathy Tilton
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Representative Paul Seaton, Sponsor; Arnold Liebelt, Staff,
Representative Paul Seaton; Alexei Painter, Analyst,
Legislative Finance Division; Amy Lujan, Alaska Association
of School Business Officials; Mark Miller, Superintendent,
Juneau School District, Juneau; Lisa Parady, Executive
Director, Alaska Council of School Administrators; Kathie
Wasserman, Executive Director, Alaska Municipal League;
Representative Justin Parish, Sponsor.
PRESENT VIA TELECONFERENCE
David Piazza, Superintendent, Southwest Region School
District, Dillingham; Sean Dusek, Superintendent, Kenai
Peninsula School District, Kenai; Deena Bishop,
Superintendent, Anchorage School District, Anchorage; David
Nees, Alaska Policy Forum, Anchorage; John Kelly, District
9 Member, State Board of Education, Homer; Kelly Cooper,
Self, Homer.
SUMMARY
HB 213 PUBLIC SCHOOL TRUST FUND
HB 213 was HEARD and HELD in committee for
further consideration.
HB 287 APPROP: EDUCATION/STUDENT TRANSPORTATION
HB 287 was HEARD and HELD in committee for
further consideration.
Co-Chair Foster reviewed the meeting agenda.
HOUSE BILL NO. 287
"An Act making appropriations for public education and
transportation of students; making appropriations
under art. IX, sec. 17(c), Constitution of the State
of Alaska, from the constitutional budget reserve
fund; and providing for an effective date."
9:04:12 AM
REPRESENTATIVE PAUL SEATON, SPONSOR, explained the bill's
intent was to complete an education budget prior to
completion of the remainder of the operating budget. He
explained the idea for the bill had come from a convention
of school superintendents in Seward. He shared that he had
been invited to serve on a panel at the convention as the
co-chair of the House Finance Committee responsible for the
operating budget. Additional attendees had included Senator
Peter Micciche and Representative Mike Chenault.
Superintendents had communicated the inefficiency of
developing two or more budgets. He pointed to problems and
delay experienced by the districts the previous year [due
to the delayed passage of a budget by the legislature]. He
detailed that the schools had to give termination notices
to all nontenured teachers by May 15. Subsequently, almost
every district lost good teachers because they took jobs
elsewhere due to employment uncertainty.
Co-Chair Seaton elaborated that superintendents had
requested a solution to the problem. He had communicated
that like the previous year, the House Majority would not
cut basic education. He elaborated that Senator Micciche
had also communicated that the Senate would not cut
education in the current year. Representative Chenault had
remarked that the state could choose to pass every state
agency budget separately as some other states did. He
elaborated that Representative Chenault understood that
would be a very difficult process. Consequently, there had
been discussion about providing early funding for the
agency that needed it because the state required in statute
that people get terminations from their contracts.
Co-Chair Seaton furthered that once it was evident the
House Majority and Minority and Senate were aligned he had
considered how to accomplish the early funding; the result
was HB 287. The bill would early fund basic education; it
used the governor's proposed funding level, which he had
taken from the previous year's budget. The bill would fund
all basic education that would require any teacher layoffs
including the Base Student Allocation (BSA), pupil
transportation, and boarding schools (Mt. Edgecumbe
included).
9:08:40 AM
ARNOLD LIEBELT, STAFF, REPRESENTATIVE PAUL SEATON, provided
a PowerPoint presentation titled "HB 287 Education and
Pupil Transportation: An Early and Stand-Alone
Appropriation Bill" dated January 25, 2018 (copy on file).
The legislation was an appropriation bill, which was
different from other bills. The bill carved out education
going to school districts through the Department of
Education and Early Development (DEED) from the regular
operating budget. The bill was written like any other
appropriations bill. Section 1 was the numbers section,
which appropriated the funds for boarding home grants,
youth in detention, special schools, the Mount Edgecumbe
boarding school, Mount Edgecumbe facilities and
maintenance, and part of the foundation program. Section 2
of the bill identified funding for DEED. Section 3
identified the funding sources and amounts. Section 4 was
the language section, which pertained to the use of the
Constitutional Budget Reserve (CBR) at a fixed amount of
$1.2 billion and an estimated amount of $67 billion from
the Statutory Budget Reserve (SBR). He explained that the
portion of the operating budget included in the bill would
move through the budget process more quickly than the
operating budget.
9:11:03 AM
Mr. Liebelt moved to slide 2 and continued to explain the
bill. The bill would avoid the unnecessary teacher layoff
notices due to the passage of state operating budgets after
school districts plan their budgets. The amount requested
in HB 287 reflected the same amount in the governor's
budget request. He reiterated that the bill would
appropriate a fixed amount of $1.2 billion and an estimated
amount from the SBR.
Mr. Liebelt turned to slide 3 showing the allocations for
education funding [from FY 15 to present]; HB 287 was shown
in the last column on the right. The amount requested
matched the amount requested by the governor and was
substantially similar to the FY 18 management plan. He
clarified the bill did not request a different funding
level but identified a funding source and aimed at moving
the education budget through the process more quickly.
Mr. Liebelt addressed slide 4 titled "Why use the CBR and
SBR?" He reviewed that education was required by the
constitution and was a high priority program supported by
legislators. The bill proposed the use of the CBR because
it earned a lower interest rate when compared to other
funds used for generating revenue. He detailed that the
Permanent Fund Earnings Reserve Account (ERA) earned
substantially more revenue. Consequently, if the ERA was
considered for generating revenue for future high priority
programs, it made sense to use $1 billion from the CBR
(leaving a remaining balance exceeding $1 billion) and
preserving the ERA to generate additional revenue for state
programs.
Mr. Liebelt communicated that the CBR and the ERA were the
only accounts with sufficient funding for education and
pupil transportation. He expounded that undesignated
general fund (UGF) revenue was estimated at about $2
billion in the current year, which was not sufficient as a
fund source. He believed it was fair to say there was
recognition the CBR would need to be used in some manner to
pass the budget. The governor had proposed $400 million,
which the Legislative Finance Division put closer to $425
million. If the legislature was looking at using the CBR to
get a budget passed and if there was broad support for
funding education, HB 287 was a solution to doing so. The
bill used a funding source that would be required to get
the budget through and made timely decisions for the
state's school districts.
Co-Chair Foster recognized Representative Justin Parish in
the audience.
9:14:28 AM
Mr. Liebelt noted that the next several slides had been
prepared by LFD [slides 5 through 7]. Slide 5 showed a bar
chart depicting end of year savings balances for the CBR
and SBR from FY 15 to FY 19. The last column on the right
showed that if the bill passed in its current form, over
$100 million would remain in the SBR and over $1 billion
would remain in the CBR.
Mr. Liebelt advanced to a bar chart on slide 6 showing
earnings comparisons between the CBR (shown in blue) and
the Permanent Fund (shown with stripes). He detailed that
FY 17 earnings were shown on the left and the 10-year
earnings projection was shown on the right. The 10-year
projection estimated the CBR would earn about 2.38 percent
per year, while the Permanent Fund would earn approximately
6.5 percent per year. In the long-term there was greater
revenue generating capacity [by the Permanent Fund]. In FY
17 the Permanent Fund had earned 12.89 percent, while the
CBR had earned 1.83 percent. The bill proposed the use of
the CBR in order to preserve the earning capacity of other
high earning funds.
9:16:08 AM
Mr. Liebelt turned to slide 7 and discussed the effect of
earnings rate on $1.2 billion. A bar chart showed a 10-year
projection comparing the CBR and Permanent Fund starting at
the requested $1.2 billion in year 1. The Permanent Fund
would earn $650 million (at a 6.5 percent return) compared
to the CBR's projected return of $238 million (at a 2.3
percent return). He noted the figures were a forecast only
and the actual performance in some of the years would be
much higher or lower, primarily for the Permanent Fund. He
added that the CBR figures would be more stable as it was
designed to be much more liquid to serve as a shock
absorber for the state operating budget.
Mr. Liebelt addressed slide 8 titled "Late Passage of
Operating Budget." The bill aimed to avoid funding
uncertainty caused in previous years by budgets being
passed late in the year. He explained funding uncertainty
could be very energy intensive and emotional for school
districts and superintendents trying to put their budgets
together in a timely manner and trying to hold off on the
issuance of layoff notices for tenured and nontenured
teachers. He read from slide 8:
In 2015, the state needed to come back in special
session to pass a second operating budget that
included education funding. This special session bill
passed the legislature on June 11 and was signed by
the Governor on June 29.
In 2016, the state operating budget was passed by the
legislature on May 31 and signed by the governor on
June 28.
Last session, the state operating budget did not pass
the Legislature until June 22 and was signed by the
Governor on July 1.
Mr. Liebelt stated that it was a very difficult time and
there was significant debate on how to reach a balanced
budget. The bill provided a solution to the problem for
school districts. He elaborated that districts were trying
to do their job, keep their teachers, and other. He
explained that if the legislature could address the
education appropriation portion of the budget it would
better serve school districts and the state in the long-
term. He read the remaining portion of slide 8:
Funding uncertainty forces school districts to draft
multiple budgets. Anticipating low appropriations
requires districts to give termination notices (pink
slips) to tenured teachers by May 15 and to non-
tenured teachers by the last day of school.
9:19:22 AM
Mr. Liebelt concluded the presentation on slide 9:
Education is one of the highest priority programs for
the state and educators are shaping future
generations.
HB 287 reflects the importance of education to our
state.
Mr. Liebelt summarized that the appropriations bill was
fairly straight forward and was funded by the CBR. The goal
was to get the bill through the budget process in advance
of the operating budget. He added that Alexei Painter from
LFD was available for questions.
Representative Wilson pointed to slide 3 and noted that
funding for Mount Edgecumbe increased approximately
$806,000 or $2,000 per student, whereas, the foundation
program funding for all other students was decreased.
Mr. Liebelt deferred to Mr. Painter.
ALEXEI PAINTER, ANALYST, LEGISLATIVE FINANCE DIVISION,
answered that two things contributed to the increase.
First, was the addition of the Mount Edgecumbe boarding
school facilities maintenance allocation, which represented
a structure change from previous years. Previously, the
maintenance had been included in the overall departmentwide
state facilities maintenance appropriation. Second, in
previous years the department had used unbudgeted
interagency receipts for part of the funding for the Mount
Edgecumbe boarding school allocation to cover federal and
foundation funds. The funds had not been in the budget. He
underscored there was no increase in general funds to Mount
Edgecumbe; the numbers reflected a budget true-up. He
deferred to DEED for further detail.
9:21:54 AM
Representative Wilson stated it was hard to know the
difference between federal and UGF funds included in the
chart.
Mr. Painter replied there were no UGF funds going to Mount
Edgecumbe in the governor's budget or HB 287. There had
been some funds included in FY 17 and before, but that
portion had been switched to the Public School Trust Fund;
however, that amount was unchanged between FY 18 and FY 19.
The difference was interagency receipts of $250,000 and
federal funds of $250,000. He believed he was missing one
other non-GF fund source for the remaining balance.
Representative Wilson expressed confusion about a decrease
in the formula for the rest of the schools (excluding Mount
Edgecumbe). She asked for the breakdown via email showing
what the schools thought they were going to receive and
what they did not receive to see whether there was an
increase or merely a difference in the funding. She asked
for the student count statewide for the previous year
compared to the current year.
Mr. Painter responded that the average daily membership for
non-correspondence students in FY 19 was 16,814. He did not
have the FY 18 numbers on hand, but the figure had been
slightly higher; therefore, DEED was anticipating a slight
decline between FY 18 and FY 19. He noted there was a
larger decline between FY 17 and FY 18.
9:24:25 AM
Vice-Chair Gara remarked that in 2015 the legislature had
passed a bill including BSA funds plus $43 million in one-
time separate funds that had been distributed as BSA money
(shown in green in the bar reflecting FY 15 on slide 3). He
detailed that two $50 BSA increases had been added in FY 16
and FY 17. He asked if the loss of the $43 million [in FY
16 and FY 17] and the addition of approximately $30 million
accounted for the slight decrease [shown on slide 3].
Mr. Painter answered in the affirmative. He pointed to the
green portion of the bar in FY 15 reflecting the $43
million figure allocated outside the formula funding. He
detailed it reflected the amount after a supplemental took
out the amounts for FY 16 and FY 17. The increases in FY 16
and FY 17 went up about $30 million in the foundation
program, which then declined slightly in subsequent years
based on student count. The BSA in FY 17, FY 18, and FY 19
was the same.
Representative Pruitt stated there had been discussions in
the past about using the CBR as a checking account - the
money could be utilized as long as it was replenished by
the end of the year. The bill would reduce the account from
$2.2 billion to about $1 billion. He remarked the committee
had been recently told by the Office of Management and
Budget or the Department of Revenue that a $1 billion
balance was their limit. He asked if there was the ability
to use the Permanent Fund as a checking account scenario if
the CBR was reduced below a recommended limit.
Mr. Painter replied that he was not the best person to
answer, but $1 billion was the recommended threshold for
the CBR to maintain cashflow. He explained that in future
years it would be possible to use the percent of market
value (POMV) as part of the funding if there was a draw. He
did not know the specifics. He added that no draws had been
authorized to date; therefore, how the process would work
was not currently known.
9:27:11 AM
Representative Pruitt stated that if the expectation was to
pull $1.2 billion from the CBR and the legislature had
heard the need for the current year was around $425
million, the account held about three times the draw. He
asked if the expectation was to change the amount from the
governor's budget and use some sort of POMV from the
Permanent Fund through the budget. He wondered if the
intent was to lower the draw from the Permanent Fund by
$800 million or draw the full POMV amount out in the
budget. He believed it would mean funding would be about
$800 million more than necessary for the current year.
Co-Chair Seaton responded that the idea was to recognize
the need to maintain $1 billion in the CBR. A pot of money
needed to be available if the education budget was to be
passed early. There was basically no money in the General
Fund at the end of the year. The CBR contained a known
amount of money to fund the education portion of the
budget. The expectation was there would be a similar POMV
draw from the budget reserve to fund the overall budget.
The legislature would decide where it chose to access funds
to balance the budget. The draw would allow the POMV done
at the lower rate that the Permanent Fund had identified as
sustainable at 6.5 percent instead of 6.95 percent. He
noted the Alaska Permanent Fund Corporation (APFC) had
recently adopted the 6.5 percent projected rate of return.
9:30:18 AM
Representative Pruitt thought he had heard Co-Chair Seaton
state the expectation that the legislature would not draw
more than what was necessary to complete the remaining
budget if the bill was passed. He surmised the $800 million
cushion in the ERA would not be drawn and would earn more
interest.
Co-Chair Seaton clarified there always had to be some
headroom in the budget whether it came from the CBR or
another fund source. The bill did not use headroom from the
CBR; it would fund the education budget (as required) with
a fixed amount [from the CBR] of $1.2 billion. The CBR draw
would not provide any headroom for the remainder of the
budget. He elaborated that the budget would require
headroom for supplementals otherwise it would require a
special session to handle any supplemental items for things
like wildfires. He explained that CBR draws in the past had
always included some headroom to pay the bills if needed.
He did not anticipate taking the budget and zeroing it out,
because if there was any money needed exceeding that amount
it would not be available. He did not intend to draw more
than necessary for the budget and headroom. The idea was
not to draw the 5.25 percent, but 4.5 percent [from the
Permanent Fund] because the education budget would be
funded with the CBR.
Representative Pruitt surmised it sounded like the need for
the bill had arisen from the legislature's failure to meet
a budget deadline at the end of session. He underscored
that the legislature was currently only 11 days into
session. He noted that the bill only applied to the current
year. He wondered if the bill implied there was an
expectation that the legislature would not accomplish its
work within the 90-day session or by May 15 or 31 (when
pink slips had to be disseminated). He questioned whether
the bill was planning for failure. He anticipated getting
finished within 90 days, which was plenty of time before
the pink slip date of May 15 for nontenured teachers. He
explained the pink slip date had been moved to May 15 a
couple of years earlier to take some of the pressure off
the local communities (the previous date had been in
March).
9:34:10 AM
Co-Chair Seaton answered that there was a bill in the
Senate looking at telling the next legislatures what to do.
He explained HB 287 aimed to accomplish early funding of
education. He speculated there would be amendments to a
bill currently in the Senate and perhaps from the House
Finance Committee. He stated it was necessary to figure out
what to do in the future, but he did not want to put off
addressing the current year. The only way to address the
issue in the current year was to pass an early funding
bill. The only other appropriation the legislature could
use for education funding was from the ERA, which was a
high earning account and he did not believe the legislature
wanted to do. He believed the legislature was trying to
avoid ad hoc draws from the ERA. He continued that HB 287
would take funds from the CBR as the sole pot of money
available to fund education. He noted there would be other
decisions the legislature had to make. He had met with
Representative Mike Chenault and Senator Peter Micciche and
there had been general agreement to move forward with an
early funding bill. The CBR was the only available pot of
money without deciding on an ad hoc draw from the ERA. He
reasoned if there was consensus among the House and Senate
and their caucuses, he believed it was possible to go
forward and accomplish the goal of early education funding.
Co-Chair Foster recognized Representative Harriet Drummond
in the audience.
Vice-Chair Gara reported he had initially wondered if the
bill could be funded with general funds; however, he
understood from LFD that until action was taken to fix the
deficit, any general fund money went out to pay bills from
FY 18. There was no general fund balance to early fund
education. The only two options to early fund education
were the CBR or ERA. He did not want to use the ERA.
Co-Chair Foster provided the House Finance Committee email
address for public testimony.
9:38:43 AM
AT EASE
9:39:35 AM
RECONVENED
DAVID PIAZZA, SUPERINTENDENT, SOUTHWEST REGION SCHOOL
DISTRICT, DILLINGHAM (via teleconference), spoke in support
of the bill. School districts needed to know the budget in
order to finalize their own budgets in the spring. He noted
that although the Southwest Region School District did not
send out pink slips to employees the past year, the
district hesitated on making early hiring decisions. He
spoke to vacancies in the district that had remained into
the summer. The pool of candidates had still contained
quality individuals, but the number of candidates was
limited. The district supported measures by the legislature
to secure funding early to help public school systems
including DEED and local schools to plan effectively and
efficiently. He reiterated support for the bill.
9:41:46 AM
SEAN DUSEK, SUPERINTENDENT, KENAI PENINSULA SCHOOL DISTRICT
(via teleconference), KENAI, testified in strong support of
the legislation. He underscored the importance of the
discussion on a fiscal plan, but it had resulted in the
late passage of the operating budget. By statute, school
districts were required to make staffing decisions no later
than mid-May. HeHe stressed there was a disconnect between
school related statute and recent legislative budget
development practice. It had forced districts to lay off
staff or delay hiring staff. The district had to make many
difficult decisions over the past few years due to fiscal
problems. The bill provided certainty for districts to work
with local communities through the budget process in a
timely manner. He supported the budget process in a timely
manner that would allow the hire of qualified teachers. He
noted that additional items needed to be addressed
including funding for the Public Employees' Retirement
System (PERS) and Teachers' Retirement System (TRS), school
bond debt reimbursement, and healthcare. He stressed that a
full funding package would allow districts to plan.
9:44:11 AM
DEENA BISHOP, SUPERINTENDENT, ANCHORAGE SCHOOL DISTRICT,
ANCHORAGE (via teleconference), spoke in support of the
legislation. Early funding would help avoid unnecessary
layoff notices. The statutory deadline for teacher layoff
notices was May 15 for tenured teachers and the last day of
school for nontenured teachers. During the past legislative
session, state budget negotiations had gone past the
aforementioned statutory deadline. The district had been
forced to issue layoff notices to 223 teachers. Some
legislators at the time had been calling for a 3 to 5
percent cut to K-12 education. The risk for the district
had been too high to avoid issuing the layoff notices. Most
of the notices had been recalled, but there was significant
loss of morale. She appreciated the committee's support for
public education. The bill would take the guess work out of
the school districts' budget process.
9:46:01 AM
DAVID NEES, ALASKA POLICY FORUM, ANCHORAGE (via
teleconference), stated that the bill solved part of the
problem, but it created a problem as well. He stated the
bill would fund everything in the education including
superintendents. The bill aimed to solve the problem of
sending pink slips to teachers. He believed the early
funding would probably solve the problem, but it did not
directly address it. He stated the bill did not state that
the legislature would fund teachers early in order for the
districts to decide when they wanted to do the rest of
their budget. He stressed the need to provide and designate
a specific funding level for teachers. He explained it
meant teachers could be retained and would not receive pink
slips. He suggested passing the specific funds annually
prior to the end of the 90-day session. He believed that
the block grant education system was the problem. He
explained pulling the teacher funding component out with a
separate block grant, perhaps including transportation, it
would result in a good system. He stated that the bill
would solve the problem, but it created a precedent that
could include other agencies in the future. He cited early
funding for state troopers as an example. He recommended
funding teachers early.
9:49:03 AM
Co-Chair Foster recognized Representative Chris Tuck in the
audience.
JOHN KELLY, DISTRICT 9 MEMBER, STATE BOARD OF EDUCATION,
HOMER (via teleconference), spoke in support of the
legislation. The bill would assist the school district in
retaining talented staff and teachers. Additionally, the
bill would help protect the district's investment in
professional development resources. He understood the
current fiscal environment and was willing to make the most
of the funding proposal with the certainty of securing its
budget in time to reduce the number of pink slips it had to
pass out in the spring.
9:50:24 AM
KELLY COOPER, SELF, HOMER (via teleconference), spoke in
support of the bill. She relayed that the entire state was
painfully aware of the fiscal issues the state was facing.
She appreciated that legislators understood education could
not sustain additional cuts. The future of the state relied
on the success of current students. As a member of the
Kenai Peninsula Borough Assembly, school district funding
was the largest portion of their budget. She explained the
difficulty of working off of different budget scenarios
when developing the district's budget. She planned to
sponsor a resolution from the borough in support of the
legislation at an upcoming meeting. Forward funding the
education budget was critical to all school districts. She
spoke to the benefits of early funding. She asked committee
members to think about what would happen if they could not
determine their family budgets.
9:52:42 AM
AMY LUJAN, ALASKA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS,
spoke in strong support of the bill's intent for early
funding of education. The association was asking for timely
funding for education to ensure sound financial management.
She spoke to the nationwide teacher shortage. She
emphasized the difficulty of recruiting teachers when the
budget was not known until the last minute. Additionally,
implementing a class curriculum took advanced work. She
asked members to imagine flying teachers in for the last
minute with no time for training. She stated it was setting
up for failure. The situation was impacting the ability for
quality education. She referenced prior testimony by Mr.
Nees and stressed it was not possible to fund one portion
of a budget - it would not really solve a problem. Never
before had the legislature directed funding to districts in
that way. She did not believe the solution was workable.
She spoke in support of the legislation.
9:56:29 AM
Vice-Chair Gara asked if somewhere around 10,000 pink slips
went out if funding was not provided in a timely manner.
Ms. Lujan replied that she did not know. She elaborated the
number depended on the financial picture in individual
districts (e.g. tenured versus nontenured positions and
other). She noted there were certainly that many teachers
that the pink slips could impact. The uncertainty was also
detrimental to morale.
Representative Ortiz referenced Ms. Lujan's testimony about
a lack of time for teacher recruitment. He asked about the
number of unfilled positions in the current year.
Ms. Lujan answered that she did not track those specific
statistics, but she believed Dr. Lisa Parady or DEED would
have the information. She heard the unfilled positions were
in the hundreds at the beginning of the school year.
9:58:07 AM
MARK MILLER, SUPERINTENDENT, JUNEAU SCHOOL DISTRICT,
JUNEAU, testified in favor of the bill. He communicated
that flat funding in recent years had caused the district
to budget on a razor-thin margin. There was no wiggle room
in the district's budget. The district's end fund balance
was less than one half of 1 percent of its total budget. If
he had to keep the schools open for two more days, he would
not have money for payroll. The amount the district
received from the state determined the amount it received
from the city because it was funded to the cap. Until the
district knew what it would get from the legislature it did
not know what it would get from the city and it still had
to have a budget done in March. There were statutory
requirements to pink slip tenured teachers by May 15. He
stated that part of the issue depended on the amount of
money the district received in the budget and whether the
cut reached the threshold. He noted that in May he had been
told that the district would have to cut its non-tenured
teachers, which he communicated the district would not do.
He stressed that he would not pink-slip those teachers to
have them leave for other districts. Fortunately no cuts
had occurred. He believed the bill was a good first step in
moving in the right direction.
10:00:41 AM
LISA PARADY, EXECUTIVE DIRECTOR, ALASKA COUNCIL OF SCHOOL
ADMINISTRATORS, spoke in favor of the bill. She thanked Co-
Chair Seaton and cosponsors for listening to the pleas from
the administrators. She provided information about the
Alaska Council of School Administrators. She brought a
handout for members reflecting the organization's joint
position statements. She pointed out the highest priority,
which was priority funding for education. She stressed that
reliable, timely, and predictable funding for schools was
the highest priority, which helped schools make sound
financial management decisions required by the legislature.
She underscored the importance of quality educators, which
could not be secured without funding. She stressed the
unparalleled national crisis with education staffing. She
expounded that an insufficient number of individuals were
going into education and the state had lost competitiveness
in attracting teachers from the Lower 48. She emphasized
the importance of allowing districts time to get contracts
out to retain qualified teachers was a high priority. The
organization saw the bill as a way to provide stability to
districts.
Ms. Parady replied to an earlier question by Representative
Ortiz. She reported that in December there had been almost
100 special education positions open across the state. She
remarked that the positions were being filled with
substitutes, which was not what was wanted for the state.
She could provide further detail later.
10:05:43 AM
KATHIE WASSERMAN, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL
LEAGUE, testified in favor of the bill. The issue impacted
municipalities as well. She stated that the inability to
plan was a backbreaking issue for the districts. She
stressed the importance of being able to plan and be
successful. She thought the issue had become a political
football at the end of session, which she believed was very
sad. She noted that it was not really possible to hold on
to teachers under the situation. She encouraged the passage
of the bill.
Co-Chair Foster CLOSED public testimony. He relayed that
amendments were due on Monday, January 29, 2018 by 5:00
p.m. The bill would be heard again on Tuesday, January 30.
HB 287 was HEARD and HELD in committee for further
consideration.
10:08:42 AM
AT EASE
10:09:49 AM
RECONVENED
HOUSE BILL NO. 213
"An Act relating to the investment, appropriation, and
administration of the public school trust fund."
10:09:56 AM
REPRESENTATIVE JUSTIN PARISH, SPONSOR, explained that the
bill would achieve greater efficiency in government. He
detailed it would allow the state to manage the Public
School Trust Fund in a way that would realize greater
earnings and would allow more to be sustainably spun off to
support public education statewide. He characterized the
details of the bill as a bit esoteric. He explained it
would modernize the way the fund was managed. All of the
analyses he had seen had supported the change. The bill
would switch from the current antiquated model to a more
modern industry standard of a Percent of Market Value
(POMV) draw. The bill proposed a conservative POMV draw of
4.75 percent and would include a 10-year lookback.
Co-Chair Foster relayed the committee would recess to a
call of the chair [note: the meeting never reconvened].
HB 287 was HEARD and HELD in committee for further
consideration.
10:12:23 AM
RECESSED
ADJOURNMENT
11:54:43 AM
The meeting was adjourned at 11:54 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 213 Sponsor Statement Public School Trust fund.pdf |
HFIN 1/25/2018 9:00:00 AM |
HB 213 |
| HB 287 Sponsor Statement.pdf |
HFIN 1/25/2018 9:00:00 AM |
HB 287 |
| Sectional Analysis HB 213.pdf |
HFIN 1/25/2018 9:00:00 AM |
HB 213 |
| HB 287 Presentation 1-25-2018.pdf |
HFIN 1/25/2018 9:00:00 AM |
|
| Sectional Analysis HB 213.pdf |
HFIN 1/25/2018 9:00:00 AM |
HB 213 |
| HB 213 Comparison 01-12-2018.pdf |
HFIN 1/25/2018 9:00:00 AM |
HB 213 |
| HB 213 10 years 01-23-2018.pdf |
HFIN 1/25/2018 9:00:00 AM |
HB 213 |
| HB 287 Letters in Support.pdf |
HFIN 1/25/2018 9:00:00 AM |
HB 287 |
| HB 213 DOR endowment calculations table.pdf |
HFIN 1/25/2018 9:00:00 AM |
HB 213 |
| HB 287 Letter in Support 1.25.16.pdf |
HFIN 1/25/2018 9:00:00 AM |
HB 287 |
| HB 287 JPS State Issues 2018.pdf |
HFIN 1/25/2018 9:00:00 AM |
HB 287 |
| HB 287 Support Document Follow up.pdf |
HFIN 1/25/2018 9:00:00 AM |
HB 287 |
| HB 287 Presentation 1-25-2018.pdf |
HFIN 1/25/2018 9:00:00 AM |
HB 287 |