Legislature(2019 - 2020)ADAMS ROOM 519

05/20/2019 05:00 PM FINANCE

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Audio Topic
05:00:06 PM Start
05:00:40 PM HB1001
05:00:43 PM Public Testimony
05:41:03 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB1001 APPROP: 2020 EDUCATION FUNDING/REPEAL TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                   FIRST SPECIAL SESSION                                                                                        
                       May 20, 2019                                                                                             
                         5:00 p.m.                                                                                              
                                                                                                                                
5:00:06 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Wilson  called the House Finance  Committee meeting                                                                    
to order at 5:00 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Tammie Wilson, Co-Chair                                                                                          
Representative Jennifer Johnston, Vice-Chair                                                                                    
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Andy Josephson                                                                                                   
Representative Gary Knopp                                                                                                       
Representative Bart LeBon                                                                                                       
Representative Ben Carpenter                                                                                                    
Representative Kelly Merrick                                                                                                    
Representative Colleen Sullivan-Leonard                                                                                         
Representative Cathy Tilton                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
NONE                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Vikki  Jo  Kennedy,  Gramma Brigade,  Juneau;  Norm  Wooten,                                                                    
Executive  Director, Association  of  Alaska School  Boards,                                                                    
Juneau; Chris  Cairns, Information Technology  Staff, Juneau                                                                    
School District; Paul Kelly, Self,  Juneau; Dr. Lisa Parady,                                                                    
Alaska Council of School Administration, Juneau.                                                                                
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Howard  Tricky, Coalition  For Education  Equity, Anchorage;                                                                    
Matt  Singer,  Coalition  For Education  Equity,  Anchorage;                                                                    
Marilyn  Menish-Meucci,  Self,   Petersburg;  Chris  Reitan,                                                                    
Craig   School  District,   Craig;  Dave   Jones,  Assistant                                                                    
Superintendent,  Kenai  Peninsula Borough  School  District,                                                                    
Kenai;  Shawn Arnold,  Valdez  City  Schools, Valdez;  Katie                                                                    
Botz, Self,  Juneau; Patrick Mayer,  Superintendent, Yakutat                                                                    
School  District,   President,  Alaska  Council   of  School                                                                    
Administrators,  Yakutat;  Laura  Bonner,  Self,  Anchorage;                                                                    
Mary Fulp,  Superintendent, Mat-Su School  District; Melissa                                                                    
Linton, Self, Soldotna; Gary McDonald, Self, Anchorage.                                                                         
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 1001   APPROP: 2020 EDUCATION FUNDING/REPEAL                                                                                 
                                                                                                                                
          HB 1001 was HEARD and HELD in committee for                                                                           
          further consideration.                                                                                                
                                                                                                                                
HOUSE BILL NO. 1001                                                                                                           
                                                                                                                                
     "An Act making appropriations for public education and                                                                     
     transportation of students; repealing appropriations;                                                                      
     and providing for an effective date."                                                                                      
                                                                                                                                
5:00:40 PM                                                                                                                    
                                                                                                                                
^PUBLIC TESTIMONY                                                                                                             
                                                                                                                                
Co-Chair Wilson OPENED Public Testimony                                                                                         
                                                                                                                                
5:00:43 PM                                                                                                                    
                                                                                                                                
HOWARD  TRICKY, COALITION  FOR  EDUCATION EQUITY,  ANCHORAGE                                                                    
(via teleconference),  had represented school  districts for                                                                    
several  years.  In  his  testimony  he  would  address  the                                                                    
attorney  general's   opinion  dated,  May  8,   2019,  that                                                                    
contended the  appropriation to  forward fund  education was                                                                    
unconstitutional. He had three points  to convey to members.                                                                    
He  characterized what  the legislature  had  done with  the                                                                    
appropriation  as  a  forward funding  appropriation  or  an                                                                    
appropriation with a delayed effective  date. He argued that                                                                    
the  forward funding  of education  was  different from  the                                                                    
dedicated fund cases that had  been struck down cited by the                                                                    
attorney  general  in  his  opinion.   In  the  prior  cases                                                                    
considered by the Supreme Court,  the court had considered a                                                                    
situation where the legislature  created a dedicated revenue                                                                    
stream or source,  such as a special tax  or assessment, and                                                                    
assigning  those funds  to a  specific  purpose. The  Alaska                                                                    
Supreme  Court considered  the mix  of special  revenues and                                                                    
dedicated  expenditures to  determine,  in those  particular                                                                    
cases based  on specific  revenues identified  and dedicated                                                                    
to a specific purpose with  a commitment of future revenues,                                                                    
that they  were inappropriate dedicated funds.  He continued                                                                    
that  the  action of  the  legislature  with regard  to  the                                                                    
forward funding of  education was not the  same as violating                                                                    
the dedicated  funds clause in  the Alaska  Constitution. In                                                                    
contrast to  the cases cited,  forward funding  of education                                                                    
was  subject to  the normal  appropriation process.  Forward                                                                    
funding  was   a  routine  appropriation  approved   by  the                                                                    
legislature and  the former  governor, Governor  Walker. The                                                                    
only difference  between the appropriation for  forward fund                                                                    
education and other appropriations  passed in the prior year                                                                    
was that it  applied to FY 20 rather than  FY 19. A one-year                                                                    
delayed appropriation  seemed very different to  him, from a                                                                    
constitutional perspective, than a  dedicated fund where the                                                                    
legislature earmarked certain  revenue from specific sources                                                                    
and dedicated those funds to  be used for a specific purpose                                                                    
indefinitely.                                                                                                                   
                                                                                                                                
Mr. Tricky continued that  the forward funding appropriation                                                                    
for  education  did  not  tie   the  hands  of  the  current                                                                    
legislature.  One  of  the  concerns in  the  cases  by  the                                                                    
Supreme  Court was  that  there was  a  lack of  legislative                                                                    
flexibility  in the  future  regarding appropriating  funds.                                                                    
Regarding  the forward  funding  of  education, the  current                                                                    
legislature was free to amend  or repeal the forward funding                                                                    
appropriation  from  the   previous  year.  The  legislature                                                                    
decided not  to do  so. The  attorney general's  opinion was                                                                    
critical of  the forward funding  measure as having  cut the                                                                    
governor  out of  the annual  appropriation process  and had                                                                    
violated the  governor's right to  veto on an  annual basis.                                                                    
He  argued  that  the attorney  general's  opinion  was  not                                                                    
accurate,  as it  did  not cut  out  the governor,  Governor                                                                    
Walker (not  Governor Dunleavy). The appropriation  had been                                                                    
subject to  the normal  appropriation process  involving the                                                                    
legislature  and the  governor.  He did  not think  attorney                                                                    
general's  opinion  was  correct  as a  matter  of  law.  He                                                                    
asserted  that the  opinion was  erroneous, and  the forward                                                                    
funding   measure  would   be  upheld   by  the   courts  if                                                                    
challenged.                                                                                                                     
                                                                                                                                
Mr. Tricky wanted  to point out to the  committee that while                                                                    
the attorney general's opinion cited  in footnote 8 the 2016                                                                    
case,   State  versus   Ketchikan  Gateway   Borough  School                                                                    
District, it  did not  analyze the effects  of the  case. If                                                                    
the  matter  went  to  court,  while  he  thought  that  the                                                                    
dedicated fund  cases that  the court  had decided  could be                                                                    
distinguished and  that the forward funding  did not violate                                                                    
any of the  decided cases, the Ketchikan case  carved out an                                                                    
exception for  education which the attorney  general did not                                                                    
analyze  in  his  opinion  letter.   He  thought  it  was  a                                                                    
significant oversight because it was controlling authority.                                                                     
                                                                                                                                
5:07:31 PM                                                                                                                    
                                                                                                                                
MATT SINGER, COALITION FOR  EDUCATION EQUITY, ANCHORAGE (via                                                                    
teleconference),  argued  that  HB 1001  was  not  necessary                                                                    
because the legislature had  already made the appropriation.                                                                    
He  discussed the  Ketchikan Gateway  School District  court                                                                    
case in which  the anti-dedication clause was  found to have                                                                    
no  standing regarding  education funding.  He believed  the                                                                    
current governor was obligated to distribute funding.                                                                           
                                                                                                                                
5:09:19 PM                                                                                                                    
                                                                                                                                
MARILYN     MENISH-MEUCCI,     SELF,     PETERSBURG     (via                                                                    
teleconference), strongly opposed HB 1001.  She spoke of the                                                                    
benefits resulting from forward funding.                                                                                        
                                                                                                                                
5:10:06 PM                                                                                                                    
                                                                                                                                
CHRIS   REITAN,   CRAIG    SCHOOL   DISTRICT,   CRAIG   (via                                                                    
teleconference),   spoke  in   favor   of  forward   funding                                                                    
education  and   noted  that  it  allowed   sound  financial                                                                    
management. He  thanked legislators  for their  past efforts                                                                    
to ensure forward funding.                                                                                                      
                                                                                                                                
5:11:00 PM                                                                                                                    
                                                                                                                                
DAVE  JONES,   ASSISTANT  SUPERINTENDENT,   KENAI  PENINSULA                                                                    
BOROUGH    SCHOOL     DISTRICT    (KPBSD),     KENAI    (via                                                                    
teleconference),   spoke  in   favor   of  forward   funding                                                                    
education. He spoke  of a previous discussion  in an earlier                                                                    
meeting  about fund  balances at  the  end of  the year.  He                                                                    
thought it was  believed that the size of  the cuts proposed                                                                    
by the  governor were because  the districts  had unassigned                                                                    
fund  balances   that  could  make   up  for   the  proposed                                                                    
reductions. He  had sent members  a chart showing  the KPBSD                                                                    
FY 18  ending fund balance.  It was important for  people to                                                                    
understand that  the school district  ended the year  with a                                                                    
little  over $14  million. However,  only a  portion of  the                                                                    
balance could  be used - a  large portion of the  amount was                                                                    
already  dedicated. He  further  explained  that the  school                                                                    
district  had  a  minimum  fund  balance  policy  committing                                                                    
$4,289,271.  The  school  district had  an  unassigned  fund                                                                    
balance of  $1,600,218. At the end  of FY 18 it  had a large                                                                    
sum [Note:  the audio  cut out the  number] in  fund balance                                                                    
that his board  could use to address  the problems discussed                                                                    
in the district's fund balance policy.                                                                                          
                                                                                                                                
Mr.  Jones  asserted that  when  looking  at the  governor's                                                                    
proposed cuts to  KPBSD it was targeted  with $20,957,000 in                                                                    
cuts - far  exceeding the amount of fund  balance the school                                                                    
district had.  He also noted  that districts needed  to have                                                                    
some  minimum fund  balance  to  address revenue  volatility                                                                    
that  they faced.  Some of  the revenue  volatility included                                                                    
governor vetoes, mayor vetoes,  and student enrollment dips.                                                                    
It was  imperative for school  districts to maintain  a fund                                                                    
balance  to   address  their  fiscal   responsibilities.  He                                                                    
thanked  the committee  for its  intention  to forward  fund                                                                    
education.                                                                                                                      
                                                                                                                                
5:14:23 PM                                                                                                                    
                                                                                                                                
SHAWN   ARNOLD,    VALDEZ   CITY   SCHOOLS,    VALDEZ   (via                                                                    
teleconference),  did not  support  or oppose  HB 1001,  but                                                                    
supported  forward  funding  education.   He  spoke  of  the                                                                    
importance   or   predictability   in   order   to   operate                                                                    
efficiently and  effectively. Unstable  environments created                                                                    
chaos.  He  asked  members  to  ensure  forward  funding  to                                                                    
enhance predictability and financial soundness.                                                                                 
                                                                                                                                
5:16:34 PM                                                                                                                    
                                                                                                                                
KATIE BOTZ,  SELF, JUNEAU (via teleconference),  thought the                                                                    
legislature should  be done with its  work including forward                                                                    
funding  education.  She  wanted  to  sure  her  nieces  and                                                                    
nephews were receiving a proper education.                                                                                      
                                                                                                                                
5:18:25 PM                                                                                                                    
                                                                                                                                
VIKKI JO  KENNEDY, GRAMMA BRIGADE, JUNEAU,  had attended the                                                                    
previous  hearing.  She  asserted   that  the  governor  was                                                                    
playing a  game. She relayed  talking to a Senator  who told                                                                    
her she  was buying  into the  governor's lie.  She wondered                                                                    
what was true. She thought  she had heard previous testimony                                                                    
by employees  from the Office  of Management  and Government                                                                    
that the governor wanted to fully fund education.                                                                               
                                                                                                                                
5:20:55 PM                                                                                                                    
                                                                                                                                
NORM  WOOTEN,  EXECUTIVE  DIRECTOR,  ASSOCIATION  OF  ALASKA                                                                    
SCHOOL BOARDS, JUNEAU, thanked the  legislature for its work                                                                    
and the challenges members faced.  He reported that AASB had                                                                    
passed a  resolution urging the legislature  to forward fund                                                                    
education for the sake of planning and predictable.                                                                             
                                                                                                                                
5:23:09 PM                                                                                                                    
                                                                                                                                
CHRIS  CAIRNS, INFORMATION  TECHNOLOGY STAFF,  JUNEAU SCHOOL                                                                    
DISTRICT, thought it was important  for members to hear from                                                                    
school   district  employees.   He  noted   that  when   the                                                                    
governor's budget first  came out, it was  very difficult to                                                                    
hear  about.   He  talked  about  the   flexibility  he  had                                                                    
experienced resulting  from forward funding. He  thought the                                                                    
school  district had  been diminished  due to  inflation. He                                                                    
thought the  teachers educating Alaska's children  should be                                                                    
paid  fairly.  He  urged  the   committee  to  forward  fund                                                                    
education.                                                                                                                      
                                                                                                                                
5:25:55 PM                                                                                                                    
                                                                                                                                
PATRICK  MAYER, SUPERINTENDENT  OF YAKUTAT  SCHOOL DISTRICT,                                                                    
PRESIDENT, ALASKA COUNCIL  OF SCHOOL ADMINISTRATORS, YAKUTAT                                                                    
(via teleconference), thanked  members for their willingness                                                                    
to steer the course for  forward funding education. He spoke                                                                    
of  a study  that  had been  commissioned  showing that  the                                                                    
majority  of people  thought education  was underfunded.  He                                                                    
spoke  of   the  planning  issues  school   districts  would                                                                    
encounter with budget decisions being made late.                                                                                
                                                                                                                                
5:27:59 PM                                                                                                                    
                                                                                                                                
LAURA BONNER,  SELF, ANCHORAGE (via  teleconference), talked                                                                    
about her  daughter being a  special education  student. She                                                                    
mentioned the  difficulty of education  being funded  at the                                                                    
last minute. She  opposed any repeal of  forward funding for                                                                    
education. She  also argued against the  governor pursuing a                                                                    
lawsuit. She asked for members to forward fund education.                                                                       
                                                                                                                                
5:29:29 PM                                                                                                                    
                                                                                                                                
MARY  FULP,  SUPERINTENDENT,  MAT-SU  SCHOOL  DISTRICT  (via                                                                    
teleconference), talked about  her experience attracting and                                                                    
retaining  educators.  She  asked  the  legislature  to  put                                                                    
Alaska kids first. She thought  what was currently happening                                                                    
was  negatively  affecting  young people.  She  thought  the                                                                    
state needed to do more and to do better.                                                                                       
                                                                                                                                
5:31:22 PM                                                                                                                    
                                                                                                                                
MELISSA LINTON, SELF, SOLDOTNA  (via teleconference), was an                                                                    
educator for  the Kenai Peninsula  School District.  She and                                                                    
her   husband  loved   Alaska.  They   had  previously   had                                                                    
confidence  in  education  in  Alaska.   She  spoke  of  the                                                                    
negative effects  of not  passing a  budget and  not forward                                                                    
funding education.  She talked  about educators  leaving the                                                                    
state  and  taking  their  children  with  them.  She  asked                                                                    
members to invest in the  future of Alaska's kids. She asked                                                                    
the committee to do the right thing.                                                                                            
                                                                                                                                
5:34:19 PM                                                                                                                    
                                                                                                                                
PAUL KELLY, SELF, JUNEAU, asked members to oppose HB 1001.                                                                      
                                                                                                                                
5:35:08 PM                                                                                                                    
                                                                                                                                
DR. LISA  PARADY, ALASKA  COUNCIL OF  SCHOOL ADMINISTRATION,                                                                    
JUNEAU, thanked  members for their service  and attention to                                                                    
public  education.  She  also thanked  members  for  forward                                                                    
funding  education.   Alaska  was  in  the   worst  educator                                                                    
shortage in  Alaska and in  the nation. Uncertainty  was the                                                                    
enemy  to  stability and  that  pink  slips would  cause  an                                                                    
uproar.  She spoke  of Article  7, Section  1 of  the Alaska                                                                    
Constitution. She  noted the governor's position  and a veto                                                                    
override. Educators supported  education and forward funding                                                                    
education.  She noted  all of  the  previous testifiers  who                                                                    
talked  about   the  importance  of   predictability  within                                                                    
education.  She spoke  of the  importance of  retaining good                                                                    
educators.  She  wanted  to   see  educators  committed  and                                                                    
contracted to provide the following year's education.                                                                           
                                                                                                                                
5:39:22 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
5:39:38 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
GARY MCDONALD, SELF,  ANCHORAGE (via teleconference), opined                                                                    
that there was a significant  amount of whining and believed                                                                    
school districts were getting the money they needed.                                                                            
                                                                                                                                
Co-Chair Wilson CLOSED Public Testimony.                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
5:41:03 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 5:41 p.m.                                                                                          

Document Name Date/Time Subjects
HB 1001 Testimony KPBSD Fund Balance Information.pdf HFIN 5/20/2019 5:00:00 PM
HB1001
HB 1001 Denali B. SD Dan Polta Testimony - Supporting Forward Funding for Education.pdf HFIN 5/20/2019 5:00:00 PM
HB1001
HB1001 BBBSD Testimony.pdf HFIN 5/20/2019 5:00:00 PM
HB1001