Legislature(2023 - 2024)ADAMS 519
04/28/2023 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB65 | |
| HB50 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 50 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 65 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 28, 2023
1:33 p.m.
1:33:32 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 1:33 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Neal Foster, Co-Chair
Representative DeLena Johnson, Co-Chair
Representative Julie Coulombe
Representative Mike Cronk
Representative Alyse Galvin
Representative Sara Hannan
Representative Andy Josephson
Representative Dan Ortiz
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Andy DeGraw, Chief Operations Officer, Fairbanks North Star
Borough School District; Eric DeMoulin, Administrative
Services Director, Department of Revenue; Brett Huber,
Chairman, Alaska Oil and Gas Conservation Commission; Ryan
Fitzpatrick, Director, Division of Oil and Gas, Department
of Natural Resources; Jason Olds, Director, Air Quality,
Department of Environmental Conservation.
PRESENT VIA TELECONFERENCE
Scott MacManus, Superintendent, Alaska Gateway School
District; Kasie Luke, Superintendent, Lake and Peninsula
School District; Dr. Randy Trani, Superintendent, Mat-Su
Borough School District; Andy Ratliff, Chief Financial
Officer, Anchorage School District; George Pierce, Self &
Neighbors, Kasilof; Trish Baker, Chugach Electric
Association, Anchorage; Christine Rusler, President and
CEO, ASRC Energy Services, Anchorage; Lydia Shumaker, Self,
Wasilla; Kassie Andrews, Self, Anchorage; Ken Griffin,
Self, Wasilla; Frank Paskvan, Affiliate Professor,
University of Alaska Fairbanks; Herman Morgan, Self, Aniak;
Fadil Limani, Deputy Commissioner, Department of Revenue.
SUMMARY
HB 50 CARBON STORAGE
HB 50 was HEARD and HELD in committee for further
consideration.
HB 65 INCREASE BASE STUDENT ALLOCATION
HB 65 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the meeting agenda.
HOUSE BILL NO. 65
"An Act relating to education; increasing the base
student allocation; and providing for an effective
date."
1:34:31 PM
SCOTT MACMANUS, SUPERINTENDENT, ALASKA GATEWAY SCHOOL
DISTRICT (via teleconference), thanked the committee for
the opportunity to speak in support of timely, reliable,
and predictable school funding. He reviewed a PowerPoint
presentation titled "COVID Relief Funds in Alaska Gateway
School District" (copy on file). He stated that the use of
COVID funding in the Alaska Gateway School District (AGSD)
was directly tied to the district's approach to the
pandemic. The district included five villages and the town
of Tok. He detailed that the approach in each of the
communities was very different and the use of COVID funds
was intended to reflect that.
Mr. MacManus thought it was helpful to understand that the
use of the word "unobligated" in the department's report
did not mean unplanned for; it meant the funds had not yet
been drawn down. He stated that the department had access
to what each district had planned regarding the use of
funds. He noted there had been a lag period in the time it
had taken to get the information to the legislature. He
turned to slide 2 showing an overview of district cost
increases. The figures reflected audited numbers from 2017
to 2022. He noted the numbers did not include the increase
in salary cost or health insurance that had gone up 34.8
percent (an increase of $500,000).
Mr. MacManus turned to slide 3 showing a breakdown of
district funding allocations from the FY 22 audit. The
district spent 70 percent of its general funds on
instruction and 4 percent of its funds on administration.
The Department of Education and Early Development (DEED)
reported five categories. The first was the operating
reserve fund, which was $1.1 million for AGSD. He detailed
that the amount was right at the 10 percent that was not
subject to limitation and was used for AGSD's emergency
fund. The amount would keep the district running for about
two months at the most and was kept on hand to enable the
district to address a roof collapse, a ceiling falling in,
or a boiler going down. The second category was pupil
transportation: the district initially had approximately
$75,000 for the service and would have approximately
$20,000 remaining at the end of the school year. The third
category was capital project funding of $1.1 million. The
district currently had $394,000 in capital project funds
and used the money to do its summer maintenance. The
funding was used to prioritize the district's $30 million
in deferred maintenance. He stated the available capital
funding was not as much as it may seem and was not
available to the district. He stated that his staff did a
great job keeping the district's facilities running with
very limited resources.
Mr. MacManus moved to the fourth category: other
governmental funds. The category showed about $1.1 million;
however, he clarified that the district's accountants
required the inclusion of fuel inventory accounts, student
activities, student funding drives for travel, as available
funds. He underscored that the money was not available to
the district. The fifth category was COVID relief funding
shown as $1.1 million. He stated the amount shown was
deceiving because the district did not have the entire
amount available. The district had spent all of its
Elementary and Secondary School Emergency Relief I (ESSER)
funds, which were supposed to be spent by September 30,
2022. He relayed that ESSER II funding currently included
$14,000 in the district's discretionary account and $8,000
in school testing (which had been used to do COVID
testing), all of which would be gone by the end of the
fiscal year. The district had $238,000 remaining in ESSER
III funds and it would have about $651,000 for the next
year to continue programs that had been started. He
detailed that the district had a mental health counselor,
some CTE [career and technical education] and STEM
[science, technology, engineering, and math] teachers
intended to reengage students, dropout prevention funds for
alternative education, and the district had hired
additional teachers for its high need schools Tetlin and
Mentasta.
1:41:09 PM
Mr. MacManus relayed the district had used its year one and
two funding. The district would use Coronavirus Aid,
Relief, and Economic Security (CARES) Act III funding for
operations in the next year, which would prevent if from
going off a fiscal cliff. He stated the funding was already
planned for and allocated. The district had spent funding
on mental health counseling, reading and instructional
support, roving subs, testing, personal protective
equipment and supplies, non-toxic sanitation, daycare,
staff pay during COVID, and keeping its schools open as
much as possible. The district was trying to keep its
programs running with staff currently under contract who
were expecting jobs in the next year.
1:42:28 PM
Representative Ortiz asked for a quick summary of next
year's budget if there was no funding increase.
Mr. MacManus replied that the district would have to dig
into its budget reserve because it had already contracted
out with staff. He relayed it would be about a $1 million
hit. The district would continue on with its current
programming and would start shaving off staff through
natural attrition. He stated the district would do its best
to not have to fire anyone, but it would be devastating.
There were currently two budgets, one with a $30 statutory
increase and one with a $500 increase, which was very
minimal. He stated that in order for the district to remain
solvent, it would need the amount proposed in HB 65.
Representative Stapp looked at the bottom of slide 2
showing health insurance cost at 34.8 percent for FY 23. He
asked if it brought the total cost to over $2 million.
Mr. MacManus agreed that the total was $2.2 million.
Representative Stapp asked if the district had around 50
employees.
Mr. MacManus replied that the district currently had 64
employees.
Representative Galvin referenced Mr. MacManus's testimony
in support of timely, reliable, and predictable funding.
She asked what that looked like for AGSD.
Mr. MacManus wanted to avoid another one-time funding
outside of the Base Student Allocation (BSA). He stated it
was kicking the can down the road and did not help provide
a reliable source of funding for teachers who wanted to
come work in the district. He would like to be able to
assure staff their jobs were secure in order to provide the
best education possible for the district's kids. He
underscored the difficulty of attracting quality staff when
their job may be on the line.
1:46:18 PM
Representative Galvin appreciated Mr. MacManus going into
detail on how responsible the district had been with its
existing resources. She looked at the district's
administration budget at 4 percent, which showed
significant discipline. She asked if the district's staff
knew about the difference between inside and outside the
BSA. She asked if it was common language that would impact
the district's retention and recruitment of teachers.
Mr. MacManus replied that a professional staff member
recruited from in-state would know the difference. He
relayed that when he hired someone, he was upfront about
the financial situation. He wanted to make sure people
moving from outside of Alaska were clear on the
circumstances. He did not know whether people would know
the difference between inside and outside the BSA, but they
certainly knew the difference between grant funding and
consistent, steady, reliable funding. He considered funding
outside the BSA to be grant funding because it was not part
of the formula.
Representative Cronk assumed the district still had an NEA
insurance plan. He referenced a bill that would pool
insurance across the state to save money. He asked if the
district supported the idea.
Mr. MacManus replied that the district had dropped its NEA
health insurance two years earlier because it had become
too expensive. The district put its insurance out to bid
and had gone with the lowest provider, which at the time
had saved about $300,000 annually. The rates had increased
10 percent in 2022 and 7 percent the year before. The
district had been shocked to see the 34.8 percent increase
through Premera Blue Cross. The district was looking at
going out to bid again, but it would be difficult with the
short turnaround.
1:49:24 PM
Representative Cronk stated that the governor had
introduced a bill that would offer teacher bonuses in
different quadrants across the state. He understood it was
not a fix, but he believed it was something people should
be supporting, particularly in the state's rural areas. He
asked Mr. MacManus for his thoughts.
Mr. MacManus returned to the previous question about
insurance pooling. The district would be interested in
looking at the option, but it was his understanding they
would negotiate individually with each district and that
each district would have a different bill. He thought a
salary increase seemed like a good thing, but he felt it
would be better to have the funds in the general fund in
order to provide consistent wages and salary increases that
teachers could rely on. He stated that a $15,000 bonus
sounded really good, but it would be better if the funding
could be consistent for the next many years.
Representative Galvin asked if the [governor's proposed]
bonuses would impact other staff in the building such as
teacher assistants or maintenance staff who were not
receiving an increase.
Mr. MacManus responded that his district had a grant that
was designed to provide teacher performance compensation.
In the fall of the coming year, the teachers would get a
bonus of probably $5,000 for two years. He explained that
the district did not get funding for its classified staff,
but the district had found another funding source and
included them. He believed the classified staff and
paraprofessional staff were critically important to the
proper functioning of any good school and needed to be paid
accordingly. He thought the proposal would cause some
resentment from those staff if the district was unable to
find a way of matching the compensation.
1:52:59 PM
Representative Galvin found the highest cost driver in
education to be healthcare. She clarified that by
percentage it was not the highest cost, but in terms of
overall cost over the years, insurance appeared to be a
major driver [in the increased education cost].
Mr. MacManus answered that healthcare was the district's
largest single cost other than maintenance and wages. Other
insurance costs including workers' compensation and
liability had increased significantly. The actual dollar
figures were smaller, but the percentage of the increase
was larger. He reiterated his earlier testimony that the
health insurance increase of over 34 percent was a shock.
He added that a $400 BSA increase would just cover the
increased insurance cost.
Representative Hannan looked at a decrease in fuel cost by
4 percent over the past seven fiscal years shown in Mr.
MacManus's presentation. She asked how the decrease had
been achieved. She wondered if the district had shut
buildings or shifted from fuel to biomass.
Mr. MacManus answered that the price of fuel had gone down
for a few years around 2021. Additionally, the district
generally saved about 60,000 gallons of fuel at the Tok
school because of its biomass system that heated and
provided electricity. He highlighted that electricity was
$433,000 in FY 21 and jumped more than $150,000 in FY 22
because the district had been unable to keep up with
demand.
Representative Cronk asked when the Northway biomass kicked
in and how much fuel the district would save. He
highlighted the importance of biomass and managing state
forests correctly.
Mr. MacManus responded that the district had selected and
ordered equipment it would be installing. The chip barn was
on the way and the district hoped it would be functional by
the coming fall and would offset approximately 30,000
gallons of fuel per year. The project would also heat the
outbuildings around the school. The district was in the
process of negotiating a similar project in Mentasta in a
facility that was about half the size of Northway. He
agreed that the use of biomass and shift to available
resources had been important.
Representative Cronk asked how much had been saved at the
Tok school alone since biomass had been implemented.
Mr. MacManus answered, "At least 500,000 gallons."
1:58:36 PM
KASIE LUKE, SUPERINTENDENT, LAKE AND PENINSULA SCHOOL
DISTRICT (LPSD) (via teleconference), spoke in strong
support of the bill. She provided a PowerPoint presentation
titled "HB 65 LPSD House Finance," dated April 28, 2023
(copy on file). She read from prepared remarks:
Stable, predictable funding through an increase within
the Base Student Allocation (BSA) was necessary to
ensure districts can cover inflationary increases in
operating costs that are outside of our control. Lake
and Peninsula School District has tapped into our fund
balance to maintain programs and what we feel is
essential to educating and providing opportunities to
our students in rural Alaska over the past four years.
We will be experiencing a zero fund balance to
negative fund balance at the end of this fiscal year
as of June 30, 2023.
In the next few slides, I would like to highlight for
you two tangible examples of increasing costs in food
service and property and liability insurance that are
out of our control, yet are necessary to the wellbeing
of our students and the functioning of our schools. If
you move to slide 2, you'll see a table on the cost
overview of LPSD's food service program. Although I
know this table offers a cost overview, to bring to
life this table I would ask that you imagine
yourselves holding a number ten can of chili with
beans. In 2018, this can of chili with beans cost Lake
and Peninsula School District $74.72 to purchase and
ship to our community. In 2022, this same can of beans
cost us $107.06. LPSD is identified as a community
eligibility district, which means our low income
status provides free meals to all students. The USDA,
through the State of Alaska, only funds 40 percent of
the cost of food service. In order to operate a cold
breakfast and hot lunch program, 60 percent of that
cost is district funded. We anticipate transferring
$425,593 from our general funds to cover the cost of
the food service program this fiscal year. In FY 24,
we have added food service to the consideration for
our school board to suspend our program due to our
lack of fund balance.
If you move to slide 3 you'll see a bar chart
highlighting LPSD's insurance premiums projected to
merely triple by FY 24. These increases in costs are
driven by nationwide property and liability losses.
Again, a significant increase in cost that we cannot
control.
2:01:59 PM
Ms. Luke turned to slide 4 titled "COVID funding" and
continued to read from prepared remarks:
I just wanted to offer clarity to the House Finance
Committee of LPSD's FY 23 use of funds being budgeted
at $679,713, which will be expended by FY 24. The
final slide in my presentation is the FY 24 landscape
for Lake and Peninsula School District. We anticipate
a deficit of $609,429 when budgeting a zero dollar
increase to the BSA.
Co-Chair Edgmon appreciated the detailed analysis. He
stated that the case had been made to him that the district
among other school districts was in dire straits
financially and that a BSA increase or outside the BSA
increase was a necessity to continue into the future. He
referenced an earlier discussion in front of the committee
about the governor's proposal to provide a pay increase to
teachers. He wanted to get Ms. Luke's thoughts on the
issue. He remarked that the pay increase was for certified
teachers and left out other categories of support staff. He
pointed out that the bill was also very expensive at $57
million per year, which was on par with the $225 funded for
the BSA the past year at a total of $57 million outside the
BSA formula. He elaborated that the governor's bill
included three tiers and he believed LPSD was in tier III
where teachers would receive $15,000.
Co-Chair Edgmon asked how much the increase would be for a
young couple to receive $30,000 per year for three years at
a total of $90,000. He provided a scenario where the
legislature did not fund the salary increase in year four.
He wondered what would prevent the couple from taking their
defined contribution plan and returning to another state.
The scenario illustrated his concern with the proposal. He
emphasized that the proposal cost $57 million, which would
have to be funded annually by the legislature. He stated
the amount may increase in the coming year if there was
inflationary indexing attached. He asked if the proposal
was an incentive to teachers and a disincentive to staff
who did not qualify.
2:05:51 PM
Ms. Luke answered that based on conversations she had with
Co-Chair Edgmon and in other considerations of rural school
districts, LPSD viewed the one-time $15,000 as beneficial
for teachers in addition to an increase inside the BSA;
however, there would be a ripple effect on other employees.
She explained that while the governor's proposal supported
teachers, it only supported them for a certain time period
and isolated the support to teachers only who could choose
to take the money and leave Alaska. The proposal did not
support the district's classified hires, which were
typically local hires and the district put significant
emphasis on attracting and retaining. She did not see
teachers sticking with the district after the funds had
been utilized. She saw teachers moving somewhere where the
cost of living was much less expensive.
Co-Chair Edgmon surmised that if the program remained
permanent it would be an incentive. He understood there was
a disincentive to other educators [who would not qualify
for the proposed salary increase]. He referenced food
service staff, assistants, and administrative staff who
would not qualify. He highlighted that the BSA covered the
entire field and not merely one component of the
educational system. He asked for Ms. Luke's thoughts on the
issue.
Ms. Luke saw the increase in the BSA being most meaningful
and stable because of its predictability. She highlighted
fuel, property, electricity, and health insurance costs
that did not pertain only to certified educators. She
stated that an increase in BSA funding would be the most
beneficial for the district to anticipate its ability to
cover expenses.
2:09:16 PM
Representative Hannan referenced Ms. Luke's testimony that
$609,429 would need to be moved from LPSD's budget if there
was no increase to the BSA. She noted the slide indicated
beyond $30. She clarified that she did not believe the $30
the legislature added to the BSA the previous year was
enough to make a difference. She asked if the $609,429
included the $30 currently in the BSA from the Alaska Reads
Act in 2022.
Ms. Luke confirmed it included the $30.
Representative Hannan referenced the concept of bonus pay
to teachers. She thought $15,000 per year should be going
to their retirement accounts, not their wages. She asked
how much the average teacher was contributing to their
retirement plan on an annual basis.
Ms. Luke replied she would have to follow up.
Representative Hannan replied that she did not want Ms.
Luke to have to do the homework. She thought it was a great
bonus to talk about, but she felt it was separate from
funding school districts and was part of a compensation
plan for teachers equivalent to what the state should be
talking about for an annual retirement contribution for
public education employees. She stated that a teacher had
the opportunity to earn far more wages than the kitchen
staff, yet they both would have the same kind of cost of
living expenses and in retirement. She considered the
[governor's] bonus proposal was an incentive to stay;
however, she thought it would be an incentive to leave the
state once the bonuses ended. She did not think it helped
the districts in the long term.
Representative Ortiz asked how many unfilled positions LPSD
had for certified staff and paraprofessionals.
Ms. Luke answered that LPSD had started recruiting for its
certified positions early in the spring semester. The
district had started with 17 openings, which reflected a 40
percent turnover. The district was still looking to recruit
12 of the positions. She did not have the details on hand
related to classified hires. She relayed that the district
had pretty consistent classified staffing throughout the
year and from year to year, but it was a bit more
unpredictable.
Representative Ortiz asked for a quick summary of the kinds
of certified staff positions that were not being filled and
services that were not being delivered to students as a
result.
Ms. Luke replied that LPSD was currently fully staffed with
certified positions for the remainder of the current year,
but it was not fully staffed with its classified hires. She
relayed that if the district could not fill the positions
turning over for the next school year, it would cross a
multitude of classrooms. She explained that the district
had mostly generalist classrooms. She elaborated that it
meant elementary teachers were teaching all subjects at
many of the district's schools. The district was currently
looking for a principal that would serve multiple schools.
She stated that there was an impact to K-12 and
administration.
2:15:10 PM
Representative Josephson prefaced his question by
clarifying he was not suggesting there was anything
particularly wrong with the idea. He asked if the district
hired Filipino nationals due to a lack of other candidates.
Ms. Luke responded that LPSD had not experienced the
current rate of turnover during her tenure of 12 years in
various roles. The district had not gone down the road of
fostering the connection with Filipino hires or other hires
outside of Alaska or the United States. The district had
worked to maintain connection with its university partners
in Alaska and the Lower 48 to grow its own teachers. She
noted the idea was not off the table.
Representative Josephson asked for verification that other
districts in western Alaska did [hire Filipino nationals
due to a lack of other candidates].
Ms. Luke responded that she could not speak to the
districts in southwest Alaska. She noted that LPSD's
partnership school district Bristol Bay had not had to go
that route.
2:17:11 PM
Co-Chair Foster recognized Senator Loki Tobin in the room.
ANDY DEGRAW, CHIEF OPERATIONS OFFICER, FAIRBANKS NORTH STAR
BOROUGH SCHOOL DISTRICT, provided a PowerPoint presentation
titled "Fairbanks North Star Borough School District" (copy
on file). He acknowledged the challenging circumstances
facing the state. He thanked the members for their work. He
strongly supported the bill and a permanent, reliable, and
predictable increase to the BSA. He relayed that his
presentation was in response to the DEED fund balance
report issued a couple of weeks earlier. Additionally, he
would provide a brief snapshot of Fairbanks' financial
situation and challenges.
Mr. DeGraw began on slide 2 and addressed the question of
what funds were available to school districts for the FY 24
operating budget. He thought the implication had possibly
been put out there that districts were sitting on $1
billion and why did they need any kind of additional
funding. He stated that the nature of the remarks of the
districts would be to dispel the misconception. He reported
that Fairbanks' unreserved operating fund was at zero. He
could not overstate the precarious situation it put the
district in. He elaborated that state statute allowed the
district approximately $19 million in unreserved fund
balance, which would equate to 45 days of operating
expenses. He noted it was not relatively speaking a lot of
money for a district with a $240 million budget.
Mr. DeGraw explained that districts had to plan for staff
levels one year in advance of when students were counted.
Districts put staff on contract. He reported that if 200 or
300 fewer students came into the district than projected,
the district's fund balance had to carry the additional
staff brought in to teach the students who did not show up
and that the district did not end up receiving revenue for.
There was a practical need for an operating fund balance
for school districts. There was $2.3 million in the capital
projects and the funds were committed. He expounded that
the district had agreements with the borough to do roof
projects at two different schools. He relayed that one was
complete and the other was ongoing. The funds technically
could be accessed at some point down the road, but it would
involve a process with the borough to unrestrict the funds
and bring them back.
2:21:02 PM
Mr. DeGraw moved to slide 3 and stated that of the $4.7
million in DEED's report, $1 million were restricted to
pupil transportation. He reported that the school district
was running a structural deficit in its transportation fund
of approximately $3.5 million and the district was
budgeting a $3 million deficit in the coming year. He
underscored that transportation funding had not been
increased in eight years. The district could address the
issue in one of two ways. First, the district could budget
for the need in its general fund and subsidize
transportation out of its classroom funds. Second, it could
use its unrestricted fund balance to cover the deficit. The
district was planning to use the second option. He
elaborated that technically the funds could be used but it
meant the need to budget an additional $3 million expense
to the district's general fund. He stated that the $17
million deficit would immediately increase to $20 million.
He stated that if no action was taken the fund balance
would be exhausted in about 1.5 years.
Mr. DeGraw addressed other governmental funds of $13
million on slide 4. The district had $1.5 million in money
fundraised by students and organizations in the district.
The funds were technically available, but they had a
"newspaper headline test." He provided a hypothetical
headline example: "Bakesale Funds Used to Pay Employee
Benefits." He stated he would be run out of town if that
occurred; therefore, for all intents and purposes, the
funding was unavailable. He highlighted FY 23 impact aid of
$7.8 million as the largest number on the slide. He noted
that the "as of" date on the DEED report was the end of FY
22. The funds had been budgeted to FY 23 and the district
was in the process of expending them. The district's
nutrition services fund of $2.4 million and inventory and
home school allotments of $1.3 million were restricted.
2:24:06 PM
Mr. DeGraw spoke about COVID relief grants on slide 5.
There was a $16.1 million balance remaining for Fairbanks
in December 2022. He explained that districts spent the
money in advance and requested reimbursement from the state
in arrears. He relayed that when the DEED report had been
compiled, Fairbanks had not yet submitted its March 31
request. He explained that when the state grant system
updated it was already outdated because districts submitted
quarterly and Fairbanks was using about $1.5 million in
COVID funds per month. He pointed to $2.1 million in
unknown funds on slide 5 and relayed it included special
education, homeless, and literacy grant funds, which were
restricted to specific activities. The district estimated
it would have $4.9 million available for FY 23 at the end
of FY 24 to keep class sizes from increasing more than they
already had.
2:25:33 PM
Mr. DeGraw advanced to slide 6 and discussed that the
district's starting deficit in FY 24 would be $17.5
million. He underscored that districts were not merely
sitting there asking for more money. He stressed that
districts were doing everything possible and were at the
end of the line. He detailed that the Fairbanks North Star
Borough School District had reduced 180 positions since
2020 (slightly over 10 percent of its workforce), which had
impacted instruction. Additionally, the district had closed
three schools. He stated it had been the right thing to do
as enrollment had been down, but it had been a very
political and gut wrenching process. The district's high
school and middle school class sizes were currently 32
students in the FY 24 budget. The current classroom size
was 30 students and the district needed additional funds to
maintain that number in FY 24. He noted that a classroom
target size of 30 meant there were some classrooms with up
to 34 students. The issue was spreading to elementary
schools as well and the district was hoping to avoid
increasing Kindergarten class sizes above 25 students.
Mr. DeGraw reported that one year earlier the district's
special education count was 2,354 students, while the
number had increased to 2,610 in the current year. The
district was holding special education harmless, but the
workload was increasing dramatically. He emphasized the
pressure the situation put on teachers and support staff.
The district desperately needed a lifeline. He reiterated
his strong support for the bill and a permanent increase to
the BSA. He relayed that the district would absolutely
appreciate a one-time increase, but the one-time funding
meant the district's $17 million deficit would increase to
$20 million in the next year. The district would be out of
COVID funds, and it had cut its support departments to the
bone before raising class size, but ultimately that would
be necessary. He thanked the committee for the opportunity
to testify.
Co-Chair Foster thanked Mr. DeGraw for flying in to meet
with the committee. He recognized Representative Andi Story
in the audience.
2:29:29 PM
Representative Stapp asked about federal impact aid, why
the borough received the money, and if it could keep the
money all of the money directed to the school district.
Mr. DeGraw explained that the borough had a significant
number of military connected students and had received
several related awards in the last couple of years. He
detailed that the borough was not able to assess property
taxes on that property; therefore, impact aid was provided
in lieu of those taxes. The district integrated the funding
into its operating budget. He noted there was a relatively
small number of districts in the state that received the
funding.
Representative Ortiz referenced the $680 BSA increase. He
asked what it looked like the following year if there was a
one-time increase. He asked if the Fairbanks North Star
Borough School District would still be unable to fill its
funding gap.
Mr. DeGraw answered that [an increase of] $680 allowed
Fairbanks to hold the line and restore cuts the district
was making currently in its FY 24 budget. He stated it
would not necessarily allow the district to invest beyond
that. He highlighted that 180 positions had been cut since
2020 and the $680 would not allow the district to start to
chip away at positions aside from immediate cuts. The
district was in the process of determining its approach to
the Alaska Reads Act. He stated the district desperately
wanted to be a part of the dialogue on how it saw improved
outcomes. He relayed there were questions on how
effectively the district could implement the Reads Act
because the $680 did not leave the district with excess
funding to invest.
2:32:31 PM
Co-Chair Edgmon asked about school reporting to DEED. He
shared it had been presented to him that the state needed
to do a better job of interactions between school districts
and DEED in terms of fund reserve balances. He presumed
Fairbanks North Star Borough School District went through
an annual audit. He asked if there was a way to improve the
reporting mechanism. He suggested it could perhaps occur
twice per year.
Mr. DeGraw believed there was a better way. He valued the
district's relationship with DEED, but the communication
and timeliness of reporting could be improved. He stated it
was a timing issue and numbers could be accurate and
inaccurate at the same time. For example, he could put a
number out in his community and people could use the number
to argue both sides of a topic with no context. He believed
the short answer was that data reporting could be improved.
He believed one of the most important factors was good,
accurate, and reliable information.
Co-Chair Edgmon referenced the [governor's proposed] pay
bonuses legislation for teachers. He stated that Fairbanks
was in tier I [the legislation had three specified tiers],
which would mean a salary bonus of $5,000 for each
certified teacher. He asked Mr. DeGraw to couch it in a
scenario where the district did not get the $680 BSA
increase it was seeking and the number ended up being much
lower.
Mr. DeGraw stated his understanding of the question. He
stated there was a nationwide challenge of recruiting and
retaining teachers. He did not believe there was one silver
bullet to solve the problems facing districts. He remarked
that the challenges facing Fairbanks were very different
than those facing rural districts. He stated that Fairbanks
did not face the same level of challenges facing rural
districts. He liked the tracking component in the
[governor's salary bonus] proposal to see what impact it
had. He recognized that the cost was significant. He stated
the bonus potential going teachers going to rural districts
was significant. He believed the nature of the workforce
was changing. He did not believe people could be expected
to remain in one place for 25 to 30 years anymore. He
elaborated that demographics were changing and people were
more mobile. He suggested perhaps it became a conversation
about how to increase the average time a teacher remained
in a location. He thought it needed to be a "Swiss Army
Knife" approach of pay increases, benefits, and health
insurance. He thought there was some merit in the proposal
especially to rural districts. He noted that he had spent
time in a small school district that struggled with
challenges facing many rural districts in Alaska.
Mr. DeGraw continued to answer Co-Chair Edgmon's question.
He relayed the district would be in big trouble if the
[BSA] increase was $300. The district would need to
maintain cuts below what it had experienced up to the
current point into FY 24. He reported that if it was one-
time funding it would generate significant challenges for
Fairbanks.
2:37:46 PM
Co-Chair Edgmon clarified that he had presented the teacher
pay bonuses and the smaller BSA scenario together because
some people in the political world believed both could be
done. He explained that one would have to be a smaller
number in lieu of the other.
Mr. DeGraw replied that the district would by far prefer
the larger BSA increase rather than a combination of the
teacher bonus and a smaller increase.
Representative Galvin referenced Mr. DeGraw's comments on
class size. She appreciated the district's hard work to
maintain classes and extend education to every child. She
referenced a study dated June 10, 2022 reporting that New
York, Minnesota, North Carolina, Texas, and Wisconsin had
spent the extra funds necessary to maintain class sizes.
The study found that test scores in smaller classes by far
surpassed those with larger class sizes. She reviewed the
benefits of smaller class sizes. She referenced Mr.
DeGraw's testimony that the district was working to keep
Kindergarten classes at 25 students. She stated the
National Institute for Early Learning and the Center for
Public Education had both said the size needed to be less
than 20 students. She thought it was important to recognize
that BSA dollars translated to class size. She found it
concerning the district was looking at growing class sizes
by two students in high school. She asked for the history
of the decision. She asked how funding inside and outside
the BSA would impact class size.
2:41:26 PM
Mr. DeGraw stated that the vast majority of a funding
increase would go directly to the classroom. He reported
that class size was becoming an issue in Fairbanks. He
explained the main reason the district's fund balance was
zero was that the Board of Education locally indicated a
desire to maintain those lower and as long as possible.
Five years ago, the kindergarten class size had been 21 to
22 and it was now up to 25 with the threat of having to
increase to 27. The district had been able to find cuts in
other places to keep the number at 25 for the coming year.
Reductions made included teacher aids and teaching
assistants. The vast majority of the $680 increase would go
into the classroom. The investment would enable the
district to lower class sizes back to historical levels.
Five years back the class size had been around 22 in
elementary school and 25 or 26 at the middle school and
high school level. Those class sizes had creeped up by 2 to
4 over the last two to three years. He reported it had been
seven years since the last BSA increase and they were at
the end of the line.
Representative Galvin did not know where the district stood
with teacher and other vacancies. She referenced the
[governor's] teacher bonus proposal and calculated that if
the state spent $57 million for four years instead of three
and paid full college tuition at UAF for high school
students out of the community to become teachers, the state
would grow more than 2,500 teachers for the state after
four years. She stated there were many decisions to be made
and she wanted to ensure teachers were receiving adequate
salaries in Alaska. She wondered what the community would
think and how the district was doing with vacancies.
Mr. DeGraw replied that the bonus program would not
necessarily benefit Fairbanks as much because it was
looking at hiring more teachers. He stated the two primary
levers were the cost of salaries and benefits and the
numbers. Fairbanks needed more bodies in classrooms as
class sizes were lowered.
Representative Galvin asked if the district would be able
retain more educators if they were home grown.
Mr. DeGraw agreed emphatically.
2:44:52 PM
Representative Coulombe noted there was a Fairbanks Board
of Education resolution in members' bill packets. The
resolution explained that the district had done a great job
reducing costs and it discussed the closure of [three]
schools. She looked at the district's request for $270 per
student to the BSA per student over two years and inflation
proofing. She wondered why the district had gone up from
$270 to $680. She clarified that it was a resolution
possibly from the end of the previous year.
Mr. DeGraw responded that he could look into the issue. He
remarked that if the resolution was from the end of 2022
the information would be outdated.
Representative Coulombe asked what happened from the
previous year to the current year that resulted in the
district's need for the $680 [increase in the BSA]. She was
hearing from Mr. DeGraw that the increase was needed to
cover the district's deficit. She wondered if the original
amount would have impacted the deficit a little bit and the
higher amount would cover it. She was trying to understand
the difference in the requests.
Mr. DeGraw explained that Fairbanks had received about $33
million in COVID funding and the district had relied on the
funds to provide a soft landing. He elaborated that the
district had been budgeting $10 million to $12 million in
COVID funds for class size retention. Additionally, there
had been huge COVID costs for districts. He detailed that
people's jobs had changed and additional resources needed
to be dedicated to address the pandemic. The main
difference was that the district was hitting the cliff of
available COVID funds.
Representative Coulombe referenced Mr. DeGraw's testimony
on positions and closing schools. She asked if the measures
were driven by lower student counts and an effort to
consolidate.
Mr. DeGraw agreed it was fair to say that a portion was
attributed to school closure and lower enrollment. Some of
the staff was dispersed to other schools, but there was an
overall reduction in staff. The district had lost 2,000
students at the onset of the pandemic and it had recovered
75 to 80 percent.
2:48:30 PM
Representative Hannan stated that in the past the Fairbanks
School District's health insurance was fairly unique. She
elaborated that the district had not been part of a health
insurance trust, educators had been paid through a city
joint plan with zero copay. She asked for the district's
current healthcare cost per employee.
Mr. DeGraw replied that the district was self-insured, and
the cost was in the range of a couple thousand dollars per
month per employee.
Representative Hannan stated there was a bill that talked
about consolidating districts into the state plan. She
believed it would be an increase in the monthly cost for
Fairbanks.
Mr. DeGraw responded that the district had looked at the
idea a couple of times in the past 10 to 15 years and it
had not been a beneficial move for Fairbanks. He did not
suspect it would be any different at present.
Representative Josephson looked at the resolution mentioned
by Representative Coulombe. He recalled that a couple of
years ago Representative Andi Story had a bill to increase
the BSA by $74 million for two years. He had asked the
Legislative Finance Division what the inflation adjustment
was from 2017 and it had been somewhere in the neighborhood
of $150 million. He had subsequently offered the amendment
in committee. He referenced that Mr. DeGraw had cited the
depletion of COVID funding in response to Representative
Coulombe's earlier question. He highlighted that much of
the change was due to inflation adjustment in the past 18
months. He asked if it was the larger factor. He noted the
committee had heard about the cost increase in a very large
can of chili from another district earlier in the meeting.
Mr. DeGraw replied that the estimated cost increases in
Fairbanks were not as extreme as those in villages but were
roughly 13 to 14 percent since the last BSA increase. He
stated that going into 2024, the number would pass 15
percent. He agreed there was huge pressure there. He
referenced the resolution and relayed that the local board
of education put out a legislative priority sheet at the
beginning of the school year and included a request for a
BSA increase of $800.
2:51:50 PM
Representative Cronk clarified that the teacher shortage
was occurring nationwide and was not unique to Alaska. He
noted that Fairbanks did not have that issue. He asked for
details on why.
Mr. DeGraw agreed it was a nationwide and statewide
challenge. The district did not have the same challenges as
the rural districts as Fairbanks was on the road system and
was a larger municipality. He confirmed that regular
teaching positions were not as much of a challenge for
Fairbanks; however, the district did see a challenge in the
special education area. He reported that about three-
quarters of the district's vacancies were in the special
education department.
Representative Cronk stated that if salaries were higher it
was an incentive for people to want to live in those areas.
He stressed that if the governor's proposal were adopted, a
teacher couple would make an additional $30,000 in one of
the schools in his district. He would probably never leave
if he was in the situation. He believed Fairbanks paid
fairly well and it was one of the reasons its turnover was
low.
Mr. DeGraw believed the challenge of addressing recruitment
and retention was a multi-tooled approach. The first was a
good work environment, which included class sizes. The
district needed to hire more teachers in order to reduce
class sizes to improve the work environment for teachers.
Teachers were "pulling their hair out" with class sizes of
33 students. Pay was another approach. He stated that if
pay was number two or three on a survey list, he absolutely
agreed it would make a difference. Retirement was another
component. He underscored that tackling the issue was a
multipronged approach.
Co-Chair Foster recognized Representative Maxine Dibert in
the room.
Mr. DeGraw thanked the committee members for their service
and dedication to the state. He remarked there were no easy
answers to many challenging decisions. He reiterated his
strong support for a permanent increase to the BSA.
2:56:11 PM
DR. RANDY TRANI, SUPERINTENDENT, MAT-SU BOROUGH SCHOOL
DISTRICT (via teleconference), spoke in favor of the
legislation and timely, reliable, and predictable funding.
He shared that the Mat-Su Borough School District (MSBSD)
had its highest student enrollment in the current year. He
reported that the district had the most career and
technical education courses per student and most advanced
placement student courses ever. Additionally, the district
had recently posted its best graduation rate ever. The
district wanted to continue to build on its successes. He
referred to a handout titled "DEED School District Fund
Balances" (copy on file). He pointed to the top of slide 1
showing the districts unrestricted unreserved ending fund
balance of $14.911 million and a total by district number
of $85,419,000. He recognized that if a person casually
looked at the figures, they would wonder why the district
needed any more money. He would explain in the upcoming
slides how the funding was or was not available for future
spending.
Mr. Trani explained that the $19.9 million represented
6.126 percent of the district's expenses. He detailed that
$3.5 million of the total was reserved for the district's
charter schools. He noted that the district had some of the
highest achieving and oldest charter schools in the state.
He relayed that the local school board policy required the
district to maintain a 5 percent fund balance. He stated
that including the money the charter schools had been
saving to build permanent facilities for themselves, the
district had a 6.126 percent balance. He reported that the
district had about $11.5 million available for use. The
other funds had already been spent or were unspendable.
3:00:02 PM
Mr. Trani turned to slide 2 showing zero dollars under the
FY 22 pupil transportation category. The chart in the lower
right showed that the district had been supporting
transportation funds with general fund dollars for at least
five years. The first bullet on the left showed the
district would spend $4.2 million in general funds to
support pupil transportation. From FY 18 through FY 22, the
district spent $6.7 million out of general funds for
transportation. He noted there would be savings in FY 23 as
a result of the month-long school bus driver strike in
addition to service failures due to a lack of drivers. He
did not believe it was a coincidence that all of the big
five school districts had struggled with transportation in
the current year given there had been no increase in eight
years.
Mr. Trani moved to slide 3 and highlighted the FY 22
capital projects fund balance of $13.5 million and the FY
22 total from other governmental funds of $32.3 million. He
explained that because there had been a moratorium on bond
debt reimbursement, the Mat-Su Central School had a lease
running out and would not have a home. The district was
partnering with the borough to build the school a new home
and $10.5 million of the $13.5 million had already been
transferred to the borough for construction in the coming
summer. The remaining fund balance after June 30, 2023
would be approximately $3 million for things like carpet.
Mr. Trani pointed to a chart on the bottom right of slide 3
and highlighted the nonspendable category of $8.2 million
shown in black. The category included things like
subscriptions to curriculum and technology. He noted that
the district purchased the items for years into the future
to get a better rate. He relayed that about $3 million of
the total was for inventory including food. The restricted
category shown in gray was $2.8 million and reflected
unspent student allotments for correspondence students. He
stated it was money that had been promised to families and
could not be used by the district. The committed category
shown in blue included $14.88 million in student activities
and renewal/replacement funds. He elaborated that schools
raised money for the various sports teams. The district had
gone to a one to one initiative due to COVID-19. He
detailed that each student had a computer to take home
starting in third grade. The fund worked to support the
refresh and renewal of computers annually.
Mr. Trani reviewed the assigned category with $6.3 million
shown in red. The category included self-insurance, food
service funds, and other projects. He explained that other
projects included things like elevator upgrades. He stated
that although $45 million to $46 million between capital
project funds and other governmental funds was a large
amount of money, the funds had either been spent or were
not available to the district.
3:05:17 PM
Mr. Trani discussed the district's COVID funding on slide
4. He highlighted that as of December [2022] the district
had $24 million in COVID funds. He clarified that the
figure did not include the money the district expected to
spend in the third and fourth quarters of the current year.
The district anticipated it would be down to $14.391
million in COVID relief funds. He relayed that all of the
funds were included in the district's current budget for
the coming year. The slide listed ways the COVID funds had
been used by the district and the largest expenditure had
been maintaining staffing to keep class sizes as low as
possible.
Mr. Trani advanced to slide 5 and highlighted the FY 23
general fund unreserved ending fund balance. He pointed out
that the number had increased from $15 million in 2022 to
$24 million in 2023. The district was trying to be very
transparent because he did not want people to think the
district was hiding money. The district was in a long and
protracted bargaining with two of its largest unions. He
reported that MSBSD was the ninth largest employer in the
state and had thousands of employees. The district
anticipated that any settlement that would hopefully come
over the summer would include work that had already been
done. He communicated that a 2 percent raise for the two
groups would cost the district approximately $3 million in
the current year and would carry forward to the next year.
He stated if the contract was settled at a raise of 2.2
percent, it would represent $9 million. He explained that
the result would be a very limited available fund balance
of about 6 percent. He informed the committee that by the
end of the next school year it would be out of COVID
funding. He provided a brief summary of the numbers in his
testimony.
3:08:18 PM
Co-Chair Foster thanked Mr. Trani for the detailed
breakdown of the numbers.
Co-Chair Edgmon asked about reporting and keeping DEED
informed on a better basis. He asked for Mr. Trani's
thoughts.
Mr. Trani believed the district's finance department was
capable of providing updates to DEED on a more robust
reporting schedule. He noted the numbers would not be
audited given the audit only occurred once annually. He
stated that the district was very good at predicting what
it would have.
Mr. Trani requested to share additional testimony. He
reported that MSBSD was one of the rare school districts in
the state that was growing. He explained there were cuts in
the budget that could not be seen. The district was
expecting an additional 250 to 300 elementary school
students. He explained that when the district budgeted, it
was not budgeting to add the normal number of employees it
would take to operate a new elementary school. The
district's budget was built on the $30 increase to the BSA
in statute and all of the one-time funds. He stated it was
different than other districts the committee had heard from
such as Juneau. He explained there were hidden cuts because
MSBSD was adding students faster than it was adding staff.
3:10:51 PM
Co-Chair Edgmon referenced [the governor's proposed
legislation for] teacher bonuses. He gathered the district
was doing well with teacher recruitment and retention and
likely did not need bonuses in order to continue that
trend.
Mr. Trani responded that the district dedicated two entire
staff to work on teacher recruitment and retention year-
round. He reported that the district had a challenge
recruiting special education teachers. He referenced his
earlier testimony that the district's bus contractor was
unable to hire bus drivers. He relayed he had just visited
a high school in the district that had been without a front
office staff member since before Christmas. The school had
tried to hire the position multiple times and had lost one
person after a day because they were offered a higher
paying job elsewhere. During his three years with the
district, they had never had a full contingent of janitors.
He stated that attracting teachers was important (and
salaries and benefits helped with that goal), but the
district needed support within the BSA because it was not
the only category the district had filling.
Co-Chair Johnson thanked Mr. Trani for presenting. She
appreciated the effort and consistency he had brought to
MSBSD.
Representative Hannan asked how many teachers in the
district were untenured.
Mr. Trani estimated that each year the district hired
between 100 and 150 new teachers per year, and it took
three years to become tenured. He estimated there could be
450 untenured teachers (out of approximately 1,200) at any
given time.
Representative Hannan provided a scenario where the
governor's bonus bill passed. She asked if teachers given a
$5,000 hiring bonus in Mat-Su would be likely to leave for
a district with a $15,000 per year bonus.
Mr. Trani stated that districts on the road system
generally attracted teachers from the bush; it did not
generally go the other way. He considered that a $15,000
bonus could potentially encourage a teacher to move to the
bush for a job. He was unsure. He stated there were just
not enough teachers in Alaska to go around to all 54
districts.
3:16:04 PM
Representative Galvin thanked Mr. Trani for his work. She
appreciated the information that Mr. Trani provided about
the graduation rate, advanced placement classes and other.
She stated it was phenomenal work particularly in light of
emerging from a pandemic. She hoped the legislature could
award the district with predictable funding.
Mr. Trani thanked the committee.
3:16:52 PM
ANDY RATLIFF, CHIEF FINANCIAL OFFICER, ANCHORAGE SCHOOL
DISTRICT (via teleconference), provided a PowerPoint
presentation titled "Anchorage School District Fund Balance
and Fiscal Outlook" (copy on file). The Anchorage School
District (ASD) average daily membership (ADM) was almost
44,000, about 34 percent of the state's total ADM and 38
percent of the brick and mortar students (non-
correspondence). The district had 95 schools, 33 of which
were Title 1. The district had $351 million out of the
total $1.03 billion (33.9 percent of the total funding). He
recognized that $351 million was a substantial amount of
money, but the district had a significant number of
students. He did not believe it was accurate to say that
Anchorage had a lot more money compared to other districts
when comparing to its ADM.
Mr. Ratliff looked at slide 3 and discussed FY 22 and the
remaining COVID relief funding. He explained that the
district was only reporting funds spent through December 31
and it did not account for the third and fourth quarter
spending. He noted that the district's fourth quarter
spending would be considerably higher because teachers
received two paychecks in May to help pay them into the
summer. Additionally, there were June summer school costs
of $4 million to $5 million. The district was projecting
slightly more than $20 million remaining for FY 24, which
had already been allocated to mitigate further class size
increases. The district was currently projecting a class
size increase of one across all grade levels. Some of the
uses of COVID funds included class size retention/reduction
(one of the large expenditure items for FY 23, about 477
FTE were included at about $56 million), virtual
instruction, Chromebooks for remote learning, reading
interventions, summer school, air quality improvement,
mental health supports, charter school support, PPE, and
instructional software.
3:20:47 PM
Mr. Ratliff moved to slide 4 and continued to discuss FY 22
fund balances and remaining COVID funding. Of the
unreserved general fund money of $71.7 million, $25.7
million was restricted preserve the municipality's bond
rating. There was $46 million in unreserved funds at the
end of FY 22, which equated to just under one month of
expenditures. The district anticipated the amount would
grow a bit in the current year because the district had
saved $16 million that it received out of its proportionate
share of the $57 million one-time funds for FY 13 and it
had numerous unfilled positions. The saved money would go
towards next year's budget. There was $3.1 million
remaining in transportation funds, $2.4 million of the
amount would go towards shoring up the FY 24 budget. The
capital projects fund of $16 million was generated through
voter approved bonds and could not be used for other
purposes.
Mr. Ratliff moved to slide 5 and discussed the district's
other governmental funds. There was $90.5 million in debt
service. The district had about $4.1 million in from
property tax proceeds, which was restricted to repay debt.
The remaining $86.4 million from prior years state school
bond debt reimbursement paid by the state at the end of FY
22, which had been transferred to ASD's capital projects to
help address the $900 million deferred maintenance backlog.
Additional restricted funds included food service, student
activities, federal impact aid, and self-insurance. The
district had $28.6 million in encumbrances for ongoing
projects, almost $18 million of which was reserved for
charter school carryovers and 10.7 million was for ongoing
maintenance projects (i.e., IT equipment and software,
curriculum adoptions, and audits). A portion of funds also
went to required prepaid items.
3:23:41 PM
Mr. Ratliff addressed the district's FY 24 outlook on slide
6. The district's FY 24 budget had been approved by the
school board and assembly. The budget relied on $45 million
in fund balance and savings would be spent down to the 8
percent school board minimum. Of the 8 percent minimum, 4
percent was reserved to preserve bond ratings. The budget
also relied on $20 million in COVID funding to limit
increases in class size; it also increased teacher ratio by
one at all grade levels. Class sizes would be increasing in
FY 24. He reported that the ASD's FY 25 deficit was
expected to be $85 million to $90 million based on current
funding and 3 percent inflation. He emphasized that the
absence of a BSA increase would cause immeasurable havoc
during the district's budgeting process. He explained that
the district presented its budget to the board in January.
If the district had one-time funds or did not know what the
BSA would be for the following year, it had to balance its
budget based on current statute.
Mr. Ratliff underscored that a deficit of $85 million to
$90 million was 900 to 1,000 positions. The district
started doing its staffing in March and April; if staff
were not in place, they would begin looking for other jobs
in different districts, states, or industries. He stressed
the importance of reliable, predictable funding in order to
create a financial plan and to avoid losing employees. He
added that even if funding came back in May or June prior
to the start of the next fiscal year, it would be much
harder to add positions and hire people if they had already
found other jobs.
Mr. Ratliff advocated for a permanent BSA increase with
inflation proofing.
3:26:36 PM
Representative Coulombe looked UGF of $71.7 million on
slide 4. She referenced Mr. Ratliff's testimony that $25
million of the total went to preserve the municipality's
bond rating and $46 million was unreserved. She asked for
more detail on the $46 million.
Mr. Ratliff responded that when DEED set the UGF balances
he believed Anchorage was the only district with the bond
rating the truly unreserved money was unassigned in the
district's fund balance. Some of the funding was outside of
the board policy of an 8 percent minimum [fund balance]. He
stated the funds could be spent if needed, but the amount
was enough for a little under one month of expenditures.
3:28:13 PM
Representative Galvin appreciated the presentation and
slide 2 explaining the large amount ASD was looking at. She
thought it appeared to be 0.06 less than the percentage of
students. She referenced the $85 million to $90 million
deficit in FY 25 based on current funding and 3 percent
inflation. She asked what BSA number would keep the
district whole (excluding inflation).
Mr. Ratliff replied that it depended on how the issue was
looked at. He stated that if the district wanted to burn
through some of its fund balance it could do so. However,
if the district was able to put the $45 million towards
some of its unfunded deferred maintenance backlog and add
back the PTR [pupil to teacher ratio] increase of $7.4
million, the BSA increase would need to be about $715 to
cover the $52.4 million. He added that $20 million in ESSER
money that would have to be spent in FY 24. He thought the
district would need an additional $530 in the BSA for FY 25
to cover all of the one-time money and PTR.
Representative Galvin stated it helped her appreciate the
"COVID cliff." She detailed that once the [federal COVID
relief] funds were gone it would be a substantial change.
She asked if Mr. Ratliff's answer included increasing class
size.
Mr. Ratliff answered that the BSA increase would enable the
district to restore the one PTR increase.
Co-Chair Edgmon thanked the co-chairs for providing
substantial time talking to school districts on two
different occasions. He listed the Alaska Gateway School
District, Lake and Peninsula School District, and the
Fairbanks, Mat-Su, Anchorage, and Juneau school districts.
He noted his list may be missing other districts that had
testified. He stated the need to provide more support to
schools was undisputed. He suspected the BSA would be
increased during the current session, but the amount was
unknown at present. He believed the BSA increase would be
insufficient. He thought there would be continued
backsliding in the state's public education system, in
addition to continued erosion of the quality of services
provided across the state. His third takeaway from the
testimony was the need for improved reporting. He believed
the document provided by DEED failed to capture the picture
of the current situation with the school districts. Yet
coincidentally, the information was sufficient enough for
DEED to play a role in putting together the teacher bonuses
legislation. He continued that the legislation broke the
teacher bonuses into three tiers where teachers in rural
areas would earn a bonus of $15,000, teachers in midsize
schools would earn $10,000, and teachers in larger, urban
schools would earn $5,000. He highlighted that larger urban
schools that arguably had an equal or greater need in some
respects for additional resources, would have the smaller
bonus. He relayed that if the teacher bonuses bill came to
the House Finance Committee he would seriously consider
amending it to make it permanent, make it more reflective
of the smaller schools that had a difficult time recruiting
and retaining, and trimming back some of the costs involved
in the $57 million annual price tag, which he did not
believe was sustainable. He thought providing bonuses for
three years was a short-term panacea band aid. He thought
an intersection had been reached and something needed to be
done for public education in the current session.
Co-Chair Foster stated public testimony and an amendment
deadline had yet to be determined. He spoke about different
options for education.
HB 65 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 50
"An Act relating to the geologic storage of carbon
dioxide; and providing for an effective date."
3:34:32 PM
Co-Chair Foster OPENED public testimony.
GEORGE PIERCE, SELF & NEIGHBORS, KASILOF (via
teleconference), spoke in opposition to the bill. He stated
the bill was bad for the ground water, land, and trees. He
opposed carbon capture storage. He emphasized that the
issue was about money. He stated it was a handout to the
oil industry and lobbyists pouring money into politicians'
pockets. He remarked that the state would not be levying a
high enough tax to reduce emissions to the desired extent.
He stated that the legislature did what the oil industry
told it to do. He stated the governor's carbon capture tax
did not address the largest carbon dioxide emitted from
fossil fuel methane. He stated it was bad for permafrost,
highly expensive, and energy intense. He highlighted that
the state's oil industry produced 3 billion tons of CO2 per
year. There was no place to put all of the CO2 and no
chemical process to extract it in any reasonable time. He
stated that carbon capture and sequestration was almost
entirely a PR fig leaf promoted by the fossil fuel
industry. He relayed the proposal was only feasible if the
gas exceeded the additional cost of removal. He stated that
Alaska gave the industry $1 billion in free gas to inject
into wells. He stated it was all about oil recovery. He
stressed that the proposal would add no new revenue to the
budget. He encouraged the legislature to look closely at
the issue and stated the bill should be thrown in the
trash.
3:39:24 PM
TRISH BAKER, CHUGACH ELECTRIC ASSOCIATION, ANCHORAGE (via
teleconference), shared that the company was the largest
electric utility in the state. She spoke about the company
and its service area. The company was committed to
responsibly developing clean and sustainable energy for the
state. The company's energy portfolio included a mix of
natural gas, hydro, and wind. It was working towards its
goal of reducing the carbon intensity of electricity
generation. The company was evaluating several types of
projects to achieve its decarbonization goals. Carbon
capture and sequestration was one of the options the
company was looking at. She stated the bill would make the
option more achievable. She elaborated that when fully
developed, carbon capture technology may provide an
additional tool for decarbonizing new or existing energy
generation. She relayed that the bill would help Alaska
complete installation of carbon sequestration
infrastructure vital for an electric utility carbon capture
program. The company supported the development of a carbon
management framework.
3:41:35 PM
CHRISTINE RUSLER, PRESIDENT AND CEO, ASRC ENERGY SERVICES,
ANCHORAGE (via teleconference), testified in support the
bill. She hoped the state stayed at the forefront of making
carbon capture safe and economical in order for Alaska to
prosper for future generations. She relayed that the
Department of Natural Resources had been actively engaging
with carbon capture utilization working groups and she had
been an active part of. The group brought together state
agencies, private corporations, and the university to
discuss a clear path forward. She hoped the Alaska Oil and
Gas Conservation Commission (AOGCC) would be given the
authority to pursue primacy to enable faster permitting and
to increase the likelihood of receiving government funding.
She believed the bill would attract more investment in
carbon capture in Alaska. She supported the bill and
thanked the committee.
3:43:31 PM
LYDIA SHUMAKER, SELF, WASILLA (via teleconference), opposed
the legislation. She addressed the tax credit that was the
only driver for companies to partake in CCUS [carbon
capture utilization and storage], a way of signaling
environmental savings. She stated that CCUS projects never
met their expected goals and it had not been discussed in
any of the bill hearings. She stressed that the bill's
fiscal notes specified that the amount and timing of
revenue from the bill proposal was not yet known. She
stated that unknown revenue was a terrible way to move
forward on any project. She stated that the bill was not
needed to apply for Class VI primacy. She strongly opposed
the bill.
Representative Galvin asked about Ms. Shumaker's reference
to taxpayer expenses of $281 million. She asked if Ms.
Shumaker was referring to a state or federal project.
Ms. Shumaker answered it was a federal project in Illinois
called Archer Daniels Midland. She detailed it was an
attempt at a CCUS project, the same as the type proposed
under the legislation. The project had failed and cost over
$400 million with $281 million covered by the federal
Department of Energy. She stated the federal government did
not make money, it only collected taxes. She stated
essentially the taxpayer had to pay for it.
Representative Hannan asked about Ms. Shumaker's
affiliation and requested her testimony in writing.
Ms. Shumaker responded that she was not affiliated with a
group and she would submit her comments in writing.
3:47:45 PM
KASSIE ANDREWS, SELF, ANCHORAGE (via teleconference),
opposed the legislation. She stated it had been stated
numerous times that the biggest incentive to the proposal
was the 45Q tax credit. She relayed that according to
Taxpayers for Common Sense the Treasury Department's
inspector general for tax administration found that only 10
entities claimed over $1 billion in 45Q tax credits from
2010 to 2019, which was roughly 99 percent of the total
credits claimed. She relayed that out of the 12 commercial
capture projects as of 2020, only one project sequestered
captured carbon. No reporting had been made public on the
amount of carbon that would be pumped into the ground. She
stated that the 45Q program was in noncompliance with
reporting standards. She reported that of the $1 billion
claimed, nearly 90 percent did not comply with
Environmental Protection Agency reporting requirements. She
stated that the tax credit was an unproven climate
solution, commercially unviable, and mired in a history of
tax fraud. She highlighted that $30.6 billion was the
latest estimate on the credit, which did not include the
Inflation Reduction Act expansion. She asked how Alaskans
would benefit from the proposal. She reasoned the proposal
would stand on its own two feet if it was such a great idea
rather than being supported by consumers.
3:49:33 PM
KEN GRIFFIN, SELF, WASILLA (via teleconference), stressed
that the technology had not been proven to be profitable.
He underscored that all of the major projects throughout
the world had failed. He referenced a failed project in
Australia where an uptick in CO2 emissions had occurred
because of the inability to capture the gas. He underscored
his belief the proposal was a scam. He reported there were
25 other states fighting the idea. He was not saying don't
pass the bill, but he supported putting the brakes on the
issue to study it. He stated it was necessary to ask why 25
states were fighting the idea. He remarked that the
governor had signed something against ESG [environmental
and social governance] investments. He underscored it was a
big contradiction and problem. He stated the 45Q in the
state's own testimony in the Resources Committee was
referred to as "spaghetti law" and full of fraud. He
stressed that budgets were bloated, borrowing was to the
max, and the GDP was terrible. He stressed it would grow
government and the government would have to find a way to
keep funding it. He stated it was a bad idea. He referenced
the 45Q tax credit and stated there was a huge difference
between collectively taking money from taxpayers from the
IRS to give to a company that wanted to shift liability to
citizens compared to the state lowering the tax burden to
increase competition. He stressed that the companies would
be doing this on their own if it was a proven and viable
concept. He asked the legislature to put the brakes on the
issue.
3:53:12 PM
FRANK PASKVAN, AFFILIATE PROFESSOR, UNIVERSITY OF ALASKA
FAIRBANKS (via teleconference), supported the bill. He had
been working in carbon capture and storage on behalf of the
university for the past several years. He also led a
statewide carbon capture workgroup with over 150 people
representing industry, the university, the public,
nongovernmental organizations, and state agencies. The
university and the Department of Natural Resources had held
workshops in 2022 to gather input for the research and
development of the bill. The mission of the workgroup was
to accelerate commercial carbon capture projects in Alaska
to enable investments and provide options to lower the
carbon footprint of activities of vital importance to the
state economy including power generation at refineries. He
detailed that the Infrastructure Investment and Jobs Act
(IIJA) of 2021 provided $62 billion over five years for
emission reduction programs, including more than $10
billion for carbon capture and other methods to limit
emissions from industry. A separate law in 2022 included $2
billion for carbon dioxide removal and extending the 45Q
tax credits. He relayed that for the state to compete for
the funding, it was fundamentally important to establish a
legal framework enabling carbon storage. He encouraged the
committee's support.
Representative Galvin referenced Mr. Paskvan's work with
other stakeholders. She referenced Mr. Paskvan's testimony
that the bill was critical to enable investments. She asked
if he was referring to federal investments or projects
happening that may be looking at ESGs.
Mr. Paskvan replied it was necessary for both. He stated
that the bill enabled the Department of Natural Resources
to lease subsurface storage area for carbon dioxide. He
relayed that without the provision in law, there was no
possibility of any project. He explained that the bill
would establish all of the necessary items for the business
of carbon storage. He relayed there were at least 12 states
establishing similar laws. He stated that Alaska could play
a big part in the new and growing industry, which was seen
as an important element in reducing the carbon footprint.
Representative Galvin understood the industry had been
using similar technology that would make the concept
viable. She recognized the state had the space between the
rocks for the technology. She asked about the more global
aspects. She referenced a brief conversation she had with
GaffneyCline and stated her understanding that the concept
of other states sending carbon to Alaska for storage had
not been fully flushed out. She thought it seemed there was
a lot of pretty major technology that had yet to be put in
place, whereas the storage by industry may be viable
currently. She asked if the bill was covering more than it
needed to. She wondered if they could think about the
global portion at a later date while still satisfying what
was needed for industry to become competitive in its work
to satisfy ESGs and other.
3:59:35 PM
Mr. Paskvan replied that the aspects of leasing the carbon
storage space would be fundamental to an instate storage
project or imported storage project. He believed Japan had
put together a CO2 research storage vessel, but it was very
early days. He did not know of anyone transporting CO2, but
Alaska had the rocks and the opportunity to compete. He did
not know how the bill would treat or discriminate between
the two.
Representative Galvin thought it could be something for
later investigation. She thanked Mr. Paskvan for his
testimony.
4:00:48 PM
HERMAN MORGAN, SELF, ANIAK (via teleconference), did not
support the bill. He stated they needed to get out of ESG
investment and Blackrock because it was destroying the
economy. He wanted the Permanent Fund to be given back to
the people. He spoke to the need to invest in cheap energy
in rural Alaska such as propane to heat water and homes. He
supported investment in a gas pipeline to bring cheap
energy to residents. He stated the carbon capture nonsense
was not right. He thanked the committee.
Co-Chair Foster reviewed the email address for public
testimony.
Co-Chair Foster CLOSED public testimony.
Co-Chair Foster asked for a review of the fiscal notes
beginning with the Department of Revenue (DOR).
4:04:27 PM
ERIC DEMOULIN, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF REVENUE, reviewed FN 8, control code wpuhz. He stated it
was important to note that carbon sequestration was a
rapidly emerging market in the very early stages. The
department recognized there would be infrastructure needs
and an incentive for investment to get things moving
forward. The department's fiscal note was indeterminate due
to variables that could not currently be quantified. He
referenced the federal 45Q changes that occurred in 2022
and 2023. The department looked at it as being a potential
economic benefit to have some sort of influence for
companies to be able to invest.
Representative Galvin referenced earlier public testimony
by Mr. Paskvan that there were 12 other states currently
establishing similar laws. She asked if the fiscal notes
considered what the state's competition was looking at. She
noted Mr. DeMoulin's statement that the market was dynamic
and moving fast. She asked if it meant the state would miss
out on potential revenue if it did not pass legislation
quickly. She asked if the 12 states had similar market
conditions. She considered companies outside of Alaska
would all have to determine how to transfer CO2, whereas
that may not be such an issue in other states.
Mr. DeMoulin deferred the question to a colleague.
FADIL LIMANI, DEPUTY COMMISSIONER, DEPARTMENT OF REVENUE
(via teleconference), responded that the revenue was
indeterminate at present as the state was seeking to secure
the enabling authority to determine the market in Alaska.
He reported it was a rapid emerging market nationwide and
many states were starting to jump onboard. He stated it was
a global market. He relayed the industry was constantly
changing and was a trillion dollar business. The state was
currently working with some groups to be able to provide
conceptual framework on the financial aspects of the
market. He remarked that he was not privy to the
information related to other states, but he could follow
up.
4:11:14 PM
Representative Galvin referenced earlier testimony that the
federal government was dispersing $10 billion. She thought
she may have heard the number $62 billion listed as well.
She asked if there was a time limit on receiving the
funding. She asked if Alaska would miss out on being a
strong applicant for federal funding if it did not pass
legislation.
Mr. DeMoulin deferred the question to Mr. Limani.
Mr. Limani responded that he did not know what federal
programs were available in relation to the figures provided
by Representative Galvin.
Mr. DeMoulin asked Representative Galvin to provide any
additional information she may have to aid in a follow up
response.
Representative Galvin replied that she was referring to
notes she had taken during Mr. Paskvan's testimony in
support of the legislation. She noted Mr. Paskvan also
testified he led the workgroup related to carbon capture
and sequestration. He had cited the figures $62 billion and
$10 billion related to carbon capture.
Mr. DeMoulin replied that the Department of Natural
Resources may have more information during its portion of
the fiscal note review.
Representative Josephson looked at page 2 of the DOR fiscal
note that discussed potential impacts on revenue including
the severance tax. He remarked that the unknown should be a
red flag for any legislator; however, he was assuaged by
the fact that the bill was designed to be structure or
scaffolding. He understood they were trying to create an
enabling act. He surmised the state could put the brakes on
if it learned the impact on its production tax was bad. He
concluded the legislation did not involve making final
decisions.
Mr. DeMoulin believed it was a fair statement. He explained
that the legislation gave the state a framework to work
with but there was no obligation in terms of next steps.
Mr. Limani stated it was a fair assessment. He relayed the
department did not currently have a clear assessment of
what the market entailed without having the ability to
determine which particular areas the state was looking at
in order to be able to quantify the revenue impacts. There
was no initial investment by the state; therefore, once the
state received enabling authority it could determine
gathering of the data related to fiscal impacts.
4:15:33 PM
BRETT HUBER, CHAIRMAN, ALASKA OIL AND GAS CONSERVATION
COMMISSION (AOGCC), reviewed the Department of Natural
Resources (DNR) fiscal note control code MPzCQ. Following
the passage of the legislation, the AOGCC would concentrate
on seeking primacy for Class VI wells from the EPA and
doing the regulatory package underpinning the statutory
direction contained in the legislation. He relayed it was a
substantial regulatory lift for the agency. He relayed it
was a new program, but not new to the business the agency
conducted. The agency would be in charge of the vast
majority of the program, particularly as it pertained to
the underground. He noted that DNR would handle some of the
surface components such as licensing and leasing
unitization. The fiscal note added two positions in the
first two years including a senior carbon engineer at a
range 26 and a fully exempt carbon assistant at a range 18.
The cost for the positions was $388,000 annually through
2029. There was a services component of $650,000 for the
first two years, $50,000 of which was for the statewide
corps services allocation and $300,000 was for the
Department of Law for AOGCC's regulatory lift and the
opportunity to contract with expertise that had gone
through the process in other states.
Mr. Huber stated it was possible the work would be done
entirely in-house or partially in-house, but the numbers in
the fiscal note covered the maximum the agency would need
to cover the process. Page 2 of the fiscal note specified
the funds of about $1 million per year in the first two
years were general funds. The department had been invited
to put in a letter of interest to the EPA grant program.
There was $50 million currently in the program and about
half the states applied for the program. He relayed that
the request for interest period was closed, but
applications had not yet been sent out. The agency assumed
the state's share may be $2 million with $1 million
received in the first year. The agency believed it would
recoup all or the majority of the $2 million in the first
two years from federal funding. The fiscal note showed a
needed increase in the agency's federal receipt authority,
but it would not necessarily need to be handled in the
current budget work. He relayed it could be handled via RPL
[revised program legislative] or in a supplemental budget
the following year.
Mr. Huber highlighted that the agency believed there was
revenue potential from the program. However, until there
was a regulatory or statutory framework in place, it was
what DNR had testified as the thrust of the bill "to hang
some regulatory bones out there to have the conversation
with the industry" to determine the level of interest and
potential levels of dollars changing hands may be. The
agency intended the program to be fully funded by the
regulated industry as was the case with the oil and gas
industry. There were a number of mechanisms by which the
bill allowed the agency to garner the funds into the Carbon
Storage Facility Administrative Fund. He reiterated that
the fiscal note was indeterminate. He highlighted staff and
services lines of $388,000 and $350,000 for a total of
$738,000 in FY 26 through FY 29 with corresponding
designated general fund (DGF) revenues for a net zero. He
stated the number could change on the top or the bottom.
The agency could potentially manage it in-house or via
contract due to substantial modeling. The bill gave the
flexibility for either or both options.
Representative Hannan noted Mr. Huber's reference to the
EPA grant program. She asked if the state had applied but
did not know if it would receive the grant funds. She asked
if passage of the legislation was required in order for the
agency to apply for EPA grant funds to backfill general
fund costs.
Mr. Huber clarified that prior to the beginning of the year
the governor's office received notice of a grant
opportunity to seek primacy of the Class VI program through
the EPA. The administration and Congress determined they
would prefer to have the program managed through the states
instead of the federal government and had put forward $50
million to assist. The state had submitted its letter of
interest and that part of the process had closed at the end
of March. He relayed that the EPA should be issuing grant
applications shortly, at which point, the agency would
complete and submit the application. The agency believed it
would operate similarly to its Underground Injection
Control Class II program that was currently with the
federal government. He elaborated that the state believed
it would get the funding, but the grant application and
approval were not yet in place.
4:22:46 PM
Representative Hannan asked if the agency believed the
legislation was necessary in order to apply for the Class
VI primacy. Alternatively, she asked if the state could
apply for the Class VI primacy and grant without the
passage of the legislation.
Mr. Huber answered that it was AOGCC's estimation that the
state was able to begin the process of seeking primacy, but
could not accept primacy without the legislation. He added
that the agency would not have submitted the letter of
interest if it could not do so without the legislation.
Representative Stapp asked if the agency could apply for
and receive the grant funding without passage of the bill.
Mr. Huber replied he believed so. He relayed that the
agency had not seen the grant rules, but there was every
indication it was a grant to seek primacy, not to receive
primacy. He believed they could start down the grant
process of receiving and expending the funds to start
looking at the regulatory process. He added that in order
to receive primacy and perhaps some of the regulations it
would require the state to have the authority to accept
primacy and to promulgate some of the regulations only
allowed under the legislation.
Representative Stapp referenced the request to hire a
senior carbon engineer. He presumed the expertise was
likely not in high supply due to the new nature of the
industry. He thought action should potentially be taken in
order to hire the position.
Mr. Huber answered there was more demand than supply
currently. The agency found it to be the same situation
when hiring senior petroleum engineers or senior petroleum
geologists. The jobs were not easy to fill, especially when
looking at who was competing for the small pool of
individuals. He highlighted that the industry side was able
to pay much more than the state. He confirmed that the
sooner the state was able to begin the process of seeking
an individual to fill the position the better.
4:26:31 PM
RYAN FITZPATRICK, DIRECTOR, DIVISION OF OIL AND GAS,
DEPARTMENT OF NATURAL RESOURCES, spoke to DNR's fiscal note
7 control code CFleq, OMB component 439. He reported that
the fiscal note reflected zero dollars in additional
expenditures. The department anticipated that standing up
the program could be accomplished using in-house resources,
primarily within the Division of Oil and Gas. He detailed
that DNR's role in the CCUS bill was primarily with regard
to leasing of state lands, which was very similar to the
leasing program the division operated for oil and gas
leases. The staff involved in oil and gas lease offerings,
lease management, and unitizations would be the same staff
undertaking the new operations. The revenue reflected in
the fiscal note was indeterminate. He explained that DNR
would look at revenues from the leasing activity and as the
projects progressed there would hopefully be injection fees
or gross revenue receipts from project operators. The
outyears reflected expenses for the legislation. He noted
it was possible that if there was a large increase in lease
applications that took substantial staff time the
department may need to request management funds in the
future. He explained that under the scenario, there would
hopefully be a better picture in terms of potential revenue
and revenue could help cover any additional staff costs.
Representative Galvin recalled seeing a cost per tonnage as
a placeholder. She assumed it came from looking at other
projects. She understood there was not a full business plan
currently. She considered the scope within Alaska and the
industry that was already present. She wondered if the
department would share anything it had currently with
regard to the cost per tonnage of injection. She thought it
would only apply after injection was used for production.
She asked for verification it would only count as carbon
storage.
Mr. Fitzpatrick responded that the original version of the
bill had looked at one other equivalent state lease with
commercial terms the department could review. Based on the
initial bill, the department had used an injection fee of
$2.50 per ton as a placeholder along with a $20 per acre
minimum rental fee for the license of the lease terms. As
the department continued to investigate and looked at other
leases that included the commercial terms rather than a
recorded notice of the lease, it found increasing
variability around the commercial terms for different CCUS
projects. He stated that CCUS was an evolving industry and
part of the reason for the variation in commercial terms
was due to the different economics present in different
projects. He elaborated that the different economics
depended on whether a project was capturing from an
industrial process with a pure CO2 stream versus a post
combustion process with a more diluted stream. The
economics of the different projects drove very different
economics in regard to the commercial terms for the
injection and storage piece of the project.
Mr. Fitzpatrick explained that as DNR looked at additional
leases, it had concluded that setting a minimum commercial
term, especially at the rate it initially used, ran the
risk that the state could price itself out of the market
for several potential types of projects. The bill had been
amended to provide for commercial terms being set by the
commissioner through a regulation and rule making process
that would be subject to public notice and input. He
relayed that the different leases DNR had seen included a
variety of commercial terms including injection fees that
ranged from $1.00 and over $3.00 per ton. Some lease terms
also referenced other types of commercial terms such as a
percentage of gross revenue or revenue sharing on a net
basis. He explained the variation was the reason the bill
had been amended to be more flexible with regard to
commercial terms. The state would like to target being as
high up in the commercial competitive scale as possible.
4:34:18 PM
Representative Galvin thought it sounded like a complicated
formula when deciding how to determine the best rates for
Alaska. She understood it was currently a moving target in
light of the rapidly changing market. She added that Alaska
was unique. She thought about companies already working in
Alaska and considered that if they wanted to use the
technology it may be an advantage for the state. She hoped
Alaska could obtain the higher end of the $1.00 to $3.00
range. She understood why the change had been made to the
bill to be flexible. She had spoken with GaffneyCline and
understood the market was dynamic. She stated her
understanding the department was looking at two markets:
the market in Alaska and the market globally. She would be
following the issue with a positive and hopeful attitude.
Co-Chair Foster turned to the next fiscal note from the
Department of Environmental Conservation, control code
Zlvkm.
JASON OLDS, DIRECTOR, AIR QUALITY, DEPARTMENT OF
ENVIRONMENTAL CONSERVATION, spoke to the department's zero
fiscal note. The department was not anticipating expenses
and generally supported the bill. He stated that the
emerging technology would provide an opportunity for the
injection of potential emissions or pollutants that would
otherwise be produced from industrial sources. He stated it
was a win-win for air quality. The department did not
believe any emissions generated would significantly impact
its revenue or work.
HB 50 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the schedule for the following
meeting.
ADJOURNMENT
4:38:27 PM
The meeting was adjourned at 4:38 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 50 NEW FN DCCED AOGCC 042423.pdf |
HFIN 4/28/2023 1:30:00 PM |
HB 50 |
| HB 65 FNSB FY24 House Finance 04.27.23.pdf |
HFIN 4/28/2023 1:30:00 PM |
HB 65 |
| HB 65 FNSB School Fund Balance 042723.pdf |
HFIN 4/28/2023 1:30:00 PM |
HB 65 |
| HB 65 Anchorage SD - HFIN 4.28.23.pdf |
HFIN 4/28/2023 1:30:00 PM |
HB 65 |
| HB 65 MSBSD Slides House Finance 042823.pdf |
HFIN 4/28/2023 1:30:00 PM |
HB 65 |
| HB65 LPSD House Finance 4.28.23 (1).pdf |
HFIN 4/28/2023 1:30:00 PM |
HB 65 |
| HB 50 NEW FN DCCED AOGCC 042823.pdf |
HFIN 4/28/2023 1:30:00 PM |
HB 50 |
| HB 65 Public Testimony Rec'd by 050923.pdf |
HFIN 4/28/2023 1:30:00 PM |
HB 65 |