Legislature(2021 - 2022)ANCH LIO DENALI Rm
10/28/2021 01:30 PM House WAYS & MEANS
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| Start | |
| HB4003 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
| += | HB4003 | TELECONFERENCED | |
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ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON WAYS AND MEANS
Anchorage, Alaska
October 28, 2021
1:31 p.m.
MEMBERS PRESENT
Representative Ivy Spohnholz, Chair
Representative Andy Josephson
Representative Calvin Schrage
Representative Andi Story (via Microsoft Teams)
Representative Mike Prax (via Microsoft teams)
MEMBERS ABSENT
Representative Adam Wool
Representative David Eastman
OTHER LEGISLATORS PRESENT
Representative Bart LeBon (via teleconference)
Representative Dan Ortiz (via teleconference)
COMMITTEE CALENDAR
HOUSE BILL NO. 4003
"An Act relating to use of income of the Alaska permanent fund;
relating to the amount of the permanent fund dividend; relating
to the duties of the commissioner of revenue; and providing for
an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB4003
SHORT TITLE: PERMANENT FUND DIVIDEND; 25/75 POMV SPLIT
SPONSOR(s): WAYS & MEANS
10/04/21 (H) READ THE FIRST TIME - REFERRALS
10/04/21 (H) W&M, FIN
10/13/21 (H) W&M AT 10:00 AM ANCH LIO DENALI Rm
10/13/21 (H) Heard & Held
10/13/21 (H) MINUTE(W&M)
10/28/21 (H) W&M AT 1:30 PM ANCH LIO DENALI Rm
WITNESS REGISTER
MEGAN HOLLAND, Staff
Representative Ivy Spohnholz
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Co-presented a PowerPoint presentation
during the hearing on HB 4003 on behalf of the House Special
Committee on Ways and Means, prime sponsor, on which
Representative Spohnholz serves as chair.
KELLY O'SULLIVAN, Fiscal Analyst
Legislative Finance Division
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
4003.
NILS ANDREASSEN, Executive Director
Alaska Municipal League
Juneau, Alaska
POSITION STATEMENT: Provided invited testimony during the
hearing on CSHB 4003(W&M).
TOM KLAAMEYER, President
NEA Alaska
Juneau, Alaska
POSITION STATEMENT: Provided invited testimony during the
hearing on CSHB 4003(W&M).
NORM WOOTEN, Director of Advocacy
Association of Alaska School Boards
Juneau, Alaska
POSITION STATEMENT: Provided invited testimony during the
hearing on CSHB 4003(W&M).
LON GARRISON
Association of Alaska School Boards
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on
CSHB 4003(W&M)
CAROLINE STORM
Great Alaska Schools
Anchorage, Alaska
POSITION STATEMENT: Provided invited testimony during the
hearing on CSHB 4003(W&M).
DR. LISA PARADY, Executive Director
Alaska Council of School Administrators
Juneau, Alaska
POSITION STATEMENT: Provided invited testimony during the
hearing on CSHB 4003(W&M).
ACTION NARRATIVE
1:31:06 PM
CHAIR IVY SPOHNHOLZ called the House Special Committee on Ways
and Means meeting to order at 1:31 p.m. Representative
Josephson, Schrage, Story (via Microsoft teams), Prax (via
Microsoft Teams), and Spohnholz were present at the call to
order. Also present were Representatives LeBon (via
teleconference) and Ortiz (via teleconference).
HB4003-PERMANENT FUND DIVIDEND; 25/75 POMV SPLIT
1:32:01 PM
CHAIR SPOHNHOLZ announced that the only order of business would
be HOUSE BILL NO. 4003, "An Act relating to use of income of the
Alaska permanent fund; relating to the amount of the permanent
fund dividend; relating to the duties of the commissioner of
revenue; and providing for an effective date."
1:32:57 PM
CHAIR SPOHNHOLZ provided introductory remarks on HB 4003. She
directed attention to a PowerPoint presentation, titled "CSHB
4003: Updated Permanent Fund POMV Funding for Dividends,
Education, and other Essential State Services" [hard copy
included in the committee packet]. Beginning on slide 2, she
reviewed the impacts of various dividend formula rewrite bills.
1:33:32 PM
REPRESENTATIVE PRAX expressed his opposition to the forthcoming
committee substitute (CS) for HB 4003, noting that he would be
leaving the committee early today for a prior engagement.
CHAIR SPOHNHOLZ resumed the presentation on slide 3, which used
assumptions from the Fiscal Policy Working Group to highlight
elements from the various fiscal plans. She explained that
presentations from the Legislative Finance Division (LFD) had
made it clear that a 75/25 split, which was the basis for HB
4003, would come closest to balancing the budget while still
providing for a meaningful [dividend]. She stated that the
purpose of the plan was to create stable fiscal footing for the
state and to stabilize and grow both the PFD and education
funding.
1:36:17 PM
CHAIR SPOHNHOLZ turned to slide 4, which outlined the impact on
the dividend. She pointed out that under HB 4003, the dividend
would grow to $1,575 by FY 28. She addressed the increase in
outmigration due to the state's fiscal instability. She
proceeded to slide 5, which highlighted Article 7, Section 1, of
the Alaska State Constitution and read as follows [original
punctuation provided]:
The legislature shall by general law establish and
maintain a system of public schools open to all
children of the state?
CHAIR SPOHNHOLZ said the legislature's inability to resolve the
state's fiscal situation had placed downward pressure on K-12
funding for years. While other states made investments in K-12
education, Alaska's education funding remained largely static.
Proceeding to slide 6, she noted that the base student
allocation (BSA) had not been increased since 2015.
Additionally, when adjusted for inflation, Alaska's investment
in K-12 education decreased in each of the last four years. She
emphasized the impacts of unstable education funding on slide 7,
adding that sustainable funding helped drive reform, outcomes,
and performance.
1:40:01 PM
CHAIR SPOHNHOLZ advanced to slide 8, which read as follows
[original punctuation provided]:
CSHB 4003: Updates the Dividend Formula
Rewrites the dividend formula as follows:
The 5% Percent of Market Draw from the Permanent Fund
will be split as follows:
• 25% to dividends
• 75% UGF available for essential government
services
o 50%* to the public education fund for
foundation formula and pupil transportation
o If the percentage allocated to education
does not fully fund the foundation
formula, the remaining need will be met
with UGF
o If the percentage allocated to education
exceeds the amount required by the
foundation formula, the excess will be
distributed directly to school districts
according to the foundation formula.
• 50% to general fund
1:41:12 PM
MEGAN HOLLAND, Staff, Representative Ivy Spohnholz, Alaska State
Legislature, co-presented a PowerPoint presentation, titled
"CSHB 4003: Updated Permanent Fund POMV Funding for Dividends,
Education and other Essential State Services," on behalf of the
House Special Committee on Ways and Means, prime sponsor of HB
4003. She continued to slide 9, which illustrated the revised
POMV split proposed in the CS. She turned to slide 10, which
provided projections from LFD through FY 30. She indicated that
HB 4003 would create a stable fund source for Alaskan schools
that would grow into the future.
1:44:24 PM
MS. HOLLAND provided a sectional analysis of CSHB 4003(W&M)
[included in the committee packet], which read as follows
[original punctuation provided]:
Section 1: Amends AS 14.17.300 adding new language
allowing the foundation formula for public education
to be funded through a percentage of the POMV draw.
Clarifies that in the case that the percentage of the
POMV is not sufficient, foundation funding may be
provided by the general fund.
Section 2: Amends AS 37.13.140, clarifying that the
amount available for appropriation may not exceed the
balance of the earnings reserve account.
Repeals the old formula for calculating PFDs.
Section 3: Amends AS 37.13.145(b) to allow
appropriations from the earnings reserve account in
accordance with AS 37.13.140(b), (the POMV statute),
as follows: 25% to the dividend fund under AS
43.23.045 and 75% to the general fund.
Of the 75% distributed to the general fund, no less
than 50% may go to the public education fund for state
aid to school districts to satisfy the foundation
formula.
Section 4: Amends AS 37.13.145(c) to clarify that an
appropriation is required to move funds from the
earnings reserve account to the principal of the
permanent fund for purposes of inflation proofing.
Section 5: Amends AS 37.13.145(d) to stipulate funds
associated with the Amerada Hess settlement are not
included in the calculation of the percent of market
value under AS 37.13.140(b).
Section 6: Adds a new subsection that states, of the
75% distributed to the general fund, no less than 50%
may go to the public education fund for state aid to
school districts to satisfy the foundation formula.
Additionally, this section provides that if this
percentage of the POMV draw does not satisfy the
foundation formula, the remaining funds may come from
the general fund. And, if it exceeds the formula, the
excess may be distributed according to the foundation
formula.
Section 7: Amends AS 37.13.300(c) to specify that
income from the mental health trust fund is not
included in the calculation of the percent of market
value under AS 37.13.140(b).
Section 8: Amends AS 37.14.031(c) to require the
Alaska Permanent Fund Corporation calculate the net
income of the mental health trust fund annually on the
last day of the fiscal year, excluding any unrealized
gains or losses.
Section 9: Amends AS 43.23.025(a) to clarify that
funds must be appropriated to the dividend fund,
rather than transferred as current statute provides.
Section 10: Repeals AS 37.13.145(e) and (f). These
sections restricted to appropriations from the
earnings reserve account to the general fund to not
more than was available for appropriation. Similar
language is now found in Section 2 of this bill.
Section 11: Provides an effective date of July 1,
2022.
1:47:38 PM
REPRESENTATIVE JOSEPHSON, referring to slide 10, highlighted the
total anticipated foundation funding of $1.26 billion in FY 23.
He asked what that number would be if there had been a 2 percent
growth in the BSA since FY 15. Additionally, he pointed out
that in FY 30, LFD projected a $240 million increase in funding
beyond the BSA formula. He asked what the $240 million would be
used for and whether school districts had indicated that they
needed that much in additional funding.
CHAIR SPOHNHOLZ deferred to Ms. O'Sullivan.
1:50:30 PM
KELLY O'SULLIVAN, Fiscal Analyst, Legislative Finance Division,
offered to follow up with the requested information.
CHAIR SPOHNHOLZ, regarding the inquiry from Representative
Josephson about the additional $240 million in FY 30, explained
that the bill did not specifically propose an update to the BSA
formula. She explained that the funds could be used in various
ways, such as capital expenses, pre-kindergarten, or reading
programs.
1:52:57 PM
REPRESENTATIVE JOSEPHSON moved to adopt the proposed committee
substitute (CS) for HB 4003, labeled 32-LS1209\B, Nauman,
10/27/21, as the working document. There being no objection,
Version B was before the committee.
CHAIR SPOHNHOLZ welcomed invited testimony.
1:54:34 PM
NILS ANDREASSEN, Executive Director, Alaska Municipal League,
read the following prepared remarks [original punctuation
provided]:
Thank you for the invitation to provide testimony on
HB 4003. As you're aware, AML has presented a few
times to this committee and offered to be a resource
as necessary.
The Alaska Municipal League is a membership
organization comprised of Alaska's 165 cities and
boroughs. Our role is to strengthen local governments,
including to provide a variety of services and to
coalesce municipal perspectives on issues affecting
local governments.
As you've heard from me before, that diverse
membership means that we may not be able to take a
position on specific bills but offer considerations
for you instead, so that you may include these in your
deliberations. Today's approach will be similar I
will review a number of aspects of this bill that
relate back to local government and intersect with
resolutions or a position taken by AML's membership.
First, AML members adopted a resolution (2021-08) in
support of a balanced approach to addressing the
State's deficit and continuing fiscal challenges.
Second, AML members have adopted a resolution (2021-
03) in support of a sustainable draw from the
Permanent Fund. The resolution notes that this is a
component of a sustainable fiscal policy that includes
revenues and expenditures that are balanced, emergency
reserves that have been replenished, and a fund
balance established.
Third, AML members have adopted a resolution in
support of a broad-based tax (2019-06). HB 4003 does
not address new revenues, which we believe will be
necessary to adequately account for the State's
responsibilities. This is not within the remit of the
bill, from our understanding, as it is limited to how
the State may appropriate available funds and to which
purposes. Thus, we haven't evaluated distributional
impact in relation to other revenue sources.
Fourth, AML members have adopted a resolution (2020-
12) that encourages the Legislature to come to
consensus on the Permanent Fund Dividend. Essentially,
AML has not taken a position on how or what the PFD
should be, only that we hope the Legislature can come
to agreement on this issue. To the extent that this
bill similar to other PFD legislation can do that,
we are hopeful.
Finally, AML members adopted a resolution (2019-01) in
support of a Community Dividend. The addition in HB
4003 of what is essentially a fund source for
education, a Constitutional obligation of the State,
feels very similar to that.
Adequately funding this public education has been a
policy statement of AML's for a long time, and AML
members passed a resolution (2021-05) that encourages
collaboration that fosters new approaches to public
education, and sufficient and consistent funding. To
that end, allocating a portion of the POMV draw to
meet this responsibility of the State's is an
important and even critical assurance that this can be
done sustainably.
It promises the potential, at some point, to meet
other goals identified by AML members early
childhood education, for instance, inflation-proofing
the BSA, overcoming barriers to teacher recruitment
and retention, and ensuring funding for school
construction and major maintenance. The inclusion here
of funding to meet a primary function of the State is
meaningful.
AML continues to advocate for a State able to meet its
obligations, with multiple resolutions adopted by
members arguing for full and sufficient funding for
any number of programs that are directly relevant to
local governments. We appreciate the attention and
diligence of this Committee as you work to find
solutions that do that.
Thank you.
1:58:23 PM
REPRESENTATIVE JOSEPHSON asked whether AML would support a bill
that designated 50 percent of the draw not spent on dividends to
education.
MR. ANDREASSEN declined to take a position on that question
without a formal proposal in front of the committee. He
reiterated that fully funding education was a priority for AML,
adding that many components of this bill would meet important
criteria for AML members.
1:59:40 PM
TOM KLAAMEYER, President, NEA Alaska, read the following
prepared remarks [original punctuation provided]:
Good afternoon, Chair Spohnholz and members of the
House Ways and Means Committee.
For the record, my name is Tom Klaameyer, and I serve
as the President of NEA-Alaska. I am here on behalf of
the over 11,000 educators who represent the vast
majority of classroom teachers and education support
professionals in Alaska.
Thank you for the opportunity to testify today on HB
4003
I would like to thank the Chair and members of the
legislature who have made public education and Alaska
students a priority. Of course, it is a Constitutional
mandate, but it doesn't always feel that way,
considering the public school funding roller coaster
ride we've been on over the last decade or so. It's
quite refreshing to read HB 4003, actually, as it
attempts to replace that volatility with stability for
the institution of public education in our state,
which is the cornerstone of democracy and addresses
the critical need for the future development and
economic development of our state by investing in our
students.
As you may know, this has been one of the most
difficult years for educators in memory. Not only have
educators been dealing with the chronic underfunding
of our schools and the lack of student resources it
causes, but for the last (almost) two years, the
impacts of a global pandemic in their workplace and on
their students. Teaching is difficult; it's gotten
harder. And teaching in Alaska can be uniquely more
challenging.
A 2020 report from the All Alaska Pediatric
Partnership documented that even before the pandemic,
36% of Alaska students ages 0-8 live in poverty.
Alaska has the highest rate of child maltreatment in
the nation. The report goes on to detail that only
one-third of Alaska children start kindergarten
"ready", and low-income children are even less likely
to be well equipped to start their education.
The simple fact is that many Alaska students are
coming from some challenging backgrounds and arrive at
school unprepared. Furthermore, our state currently
invests less than 1% of general funds in early
childhood education, and another bill, introduced to
help rectify that, has stalled in the legislature for
the last two years.
Add to this mix the fact that Alaska offers the worst
retirement system in the country for teachers. Alaska
teachers (hired since 2006) do not receive Social
Security and do not earn a pension. A 2019 analysis by
the Chief Investment Officer of the State of Alaska
demonstrated that after a 30-year teaching career,
only about 31% of teachers hired after 2006 would have
sufficient assets to support themselves in retirement.
With no Social Security, this is a very scary prospect
for many and the reason so many leave after five years
(they can take what they earned and to teach in
another state).
Finally, consider what it has been like for teachers
over the last 10 years as the state budget crisis and
legislative gridlock have created almost annual
uncertainty for jobs and impacts to the school
districts.
Imagine being a first-year teacher with student loans,
or an early career teacher who has just bought a home
and receiving a "pink slip" from your employer because
of the inability of the Legislature to pass a budget
on time. A 2020 study by the Regional Education
Laboratory showed that 22 percent of teachers and 25%
of principals leave their schools and their roles each
year. Imagine how dangerous the oil production and
exploration on the North Slope would be if employers
there experienced that kind of turnover.
And this turnover costs the state of Alaska real
money. A 2017 study by ISER detailed costs of $20,000
per teacher to the tune of $20 million per year. It is
estimated that Principals cost $75,000 per year in
recruitment and retention costs. And it's not just the
state and school districts that pay for educators
coming and going from our schools and communities,
unfortunately, it is our students.
Educators grow and develop with experience. They get
to know families and students. They become part of the
community and build long-term relationships that
support student learning and connected school
communities. This doesn't just make common sense, it's
supported by the data. ISER has shown that in the five
school districts in Alaska with the lowest turnover
rates (average of 8.7%) student reading proficiency is
an impressive 85.8%. Conversely, in the five Alaska
school districts with the highest turnover rates
(churning out an average of 37.9% of teachers each
year) their student reading proficiency dropped
dramatically to only 46.9%.
I am here today before you because I am excited about
the potential impact of HB 4003. It represents a real
acknowledgment that we need to do better and more for
our students and educators. It builds a sustainable
stream of investment for our students and schools so
we can chart a strategic and productive course moving
forward. It starts to resolve the state fiscal crisis
which has been so damaging to public education.
In very recent history, and almost annually, the
entire apparatus related to public education has been
mobilized to make the case against massive and
damaging cuts to education. In 2015 we saw a very
serious proposal from the Senate Finance Committee to
make a 5% cut to education funding. More recently, we
saw a proposal to cut education funding by 23% in the
Governor's budget, followed by vetoes of education
funding - including funding for early childhood
education.
Fortunately, helping students who need it the most is
exactly why many educators joined the profession, to
begin with, but unfortunately, however, fewer and
fewer educators are choosing to make Alaska their
home. In fact, there are 1,000 fewer certificated
teachers working in Alaska than a decade ago. Years of
flat funding, further eroded by inflation, have
strained our system.
Sometimes I think about the energy and human capital
that educators, parents, and administrators have had
to invest over the last decade to make the case to
just hold students and schools harmless from funding
cuts. What if the adults involved in public education
had been able to spend 100% of their time focused on
students? What if they didn't have to worry about an
insufficient retirement, pink slip, or a school
closure, or a funding cut.
Even the idea of "forward funding", a modest, no-cost,
signal to school districts that there will be some
stability in education funding turned out to be
controversial. Though, I hope legislators who are
interested in a no-cost way to instill confidence and
support stability will continue to propose and
advocate for forward funding.
HB 4003 represents a real opportunity for Alaskans to
come together, to put a big part of the fiscal crisis
behind us and to make an enduring investment in
Alaska's kids and our state's future.
We are still carefully studying the details of HB
4003, but after an initial review I am eager to
continue this conversation as it represents an
acknowledgement of our Constitutional obligation to
public education, it is an innovative idea that shows
we can and must do better, and it puts Alaska's
students and young people at the center of the
conversation about moving forward.
Thank you, Chair Spohnholz for bringing this proposal
forward, and thank you all for your time, attention,
and consideration.
2:09:05 PM
REPRESENTATIVE JOSEPHSON asked what more the legislature could
do to ensure a stream of funding for K-12 education.
MR. KLAAMEYER said he was excited by the prospect of HB 4003, which
would provide stability and allow funding to continue to grow. He
emphasized the importance of installing best practices in schools and
catering to unique needs in individual communities. He expressed the
need for high quality educators and reducing the student-to-teacher
ratio, as well as improving the retirement system.
2:12:40 PM
REPRESENTATIVE SCHRAGE returned to slide 6 and asked Mr.
Klaameyer to contextualize the reductions in funding and speak
to the challenges that school districts are facing in today's
world.
MR. KLAAMEYER highlighted the impact on students; access to
medical care, school counselors, and social workers; retaining
high quality educators; maintaining enough paraprofessionals and
fully funding special education. He characterized Alaska's
retention issues as "creating a class of education tourists" who
after five years, leave Alaska after becoming fully vested.
2:16:07 PM
REPRESENTATIVE STORY sought clarification on the funding
components in HB 4003.
CHAIR SPOHNHOLZ stated that she had specifically excluded a
specific description of what would be funded. She added that
nothing in the bill would preclude a policy bill that would
rewrite the formula in some way to allow for growth over time
consistent with the legislation as drafted.
MS. HOLLAND asked Ms. O'Sullivan to list what foundation formula
direct aide to school district funding could be used for by
districts.
2:19:57 PM
MS. O'SULLIVAAN offered to follow up with the requested
information.
2:21:07 PM
NORM WOOTEN, Director of Advocacy, Association of Alaska School
Boards (AASB), read the following prepared remarks [original
punctuation provided]:
Good afternoon members of the House Ways & Means
Special Committee. My name is Norm Wooten and I serve
as the Director of Advocacy for the Association of
Alaska School Boards. Also, on-line today is AASB's
Executive Director, Lon Garrison. Thank you for the
opportunity to testify today.
We are supportive of the language of CS HB 4003(W&)
and its intent is in alignment with several
resolutions approved by the AASB Delegate Assembly.
We watched with interest the meetings of the
Legislative Fiscal Work Group and were gratified with
the recommendations of the Work Group. AASB's
Resolution 2.1 - SUSTAINED, RELIABLE AND ADEQUATE
STATE FISCAL PLAN AND EDUCATIONAL FUNDING FOR ALASKA'S
STUDENTS THROUGH A NON-VOLATILE FUNDING SOURCE
directly supports the Work Group's recommendations as
well as the proposed use of the POMV draw and the
division of the revenue from the Permanent Fund. CS HB
4003(W&M) meets the recommendations of the Work Group
by putting into place a step toward a fiscal plan as
well as revising the PFD statute. The future of
Alaska, as well as the future of public education,
depend on a workable fiscal plan.
Creating in statute a sustainable use of the POMV draw
puts to rest what has become the focus of many
discussions in the legislature. The debate over the
question, "How much is the PFD this year" is a
distraction to the business of the legislature that
business is policy decisions that affect every sector
of Alaska's population, including our public-school
students. I'm not here this afternoon to advocate for
an amount of the PFD. There are many thoughts on that
topic both within the Capitol as well as the general
population. I commend you for considering legislation
that creates a stable funding source for the PFD so
that legislators can concentrate on greater
responsibilities and move this debate off the table.
Each year school board members and education advocates
plead for education funding. And you routinely remind
yourselves and the public of your constitutional
responsibility that is contained in Alaska's
constitution. Article 7, Section 1 requires your
support and funding of a public school system. And you
have never failed to fund education, however, the Base
Student Allocation has not been increased from the
current $5,930 since FY 17. Six years with no increase
seems disingenuous to expect constant improvement in
instruction and increasing standardized test scores.
Utilities, supplies, transportation, fuel, salaries,
maintenance, freight, food, instructional materials,
communications, internet, and a myriad of other
supplies and services necessary for operating a school
system have all increased. It seems as if the cost for
everything has increased. About the only thing that
hasn't increased is the BSA. The proposed new language
in CS HB 4003(W&M) has provisions that address those
times when the formula draw does not meet the BSA and
also when the formula draw goes beyond the BSA need.
This seems to be a responsible solution. It also meets
the request of AASB's Resolution 2.2 - URGING EARLY,
ADEQUATE, EQUITABLE, AND PREDICTABLE FUNDING OF PUBLIC
EDUCATION
The proposed language in CS HB 4003(W&M) would remove
education from competition with all other
appropriations and fulfill the responsibility of
Article 7, Section 1 of Alaska's Constitution. The
legislature could then concentrate on the remainder of
other services that provide for Alaska's citizens and
make our state such a wonderful place to live and
raise families.
My own daughters and granddaughters received an
outstanding public-school education that laid the
foundation for them to lead successful adult lives. I
want my great granddaughters to also have that same
opportunity. CS HB 4003(W&M) will undoubtedly go
through many iterations as it progresses through the
committee process in both bodies. AASB commits to
weighing in at every opportunity and to help make it
the best possible support for every public school
student in Alaska.
AASB has several other resolutions that support CS HB
4003(W&M) and they are included in the written copy
provided to the committee.
Thank you for the opportunity to testify in support of
CSHB 4003(W&M). Both AASB Executive Director Lon
Garrison and I are available for any questions you
might have.
AASB Resolutions Supporting HB 4003
B.7 EDUCATIONAL PROGRAMS AND FUNDING AS TOP PRIORITY
Article VII, Sec. 1 of the Alaska State Constitution
states that the Legislature shall establish and
maintain a system of public schools open to all school
age children. Public education is fundamental to
democracy and economic advancement of the state and
tribes. AASB calls upon the Governor and the Alaska
Legislature to make early, sustainable, adequate and
equitable funding a top priority for the exemplary
education of our youth.
2.1 SUSTAINED, RELIABLE AND ADEQUATE STATE FISCAL PLAN
AND EDUCATIONAL FUNDING FOR ALASKA'S STUDENTS THROUGH
A NONVOLATILE FUNDING SOURCE
The sustainability, reliability and adequacy of
Alaska's funding for public education are of highest
concern to the Association of Alaska School Boards.
AASB urges the Legislature to develop a state fiscal
plan. This fiscal plan would provide a long-term
approach to funding the costs of public education and
other services upon which Alaska's students and their
families depend. The plan should be strategic,
sustainable and realistic, providing a framework for
balancing budgets while adequately funding public
education.
2.2 URGING EARLY, ADEQUATE, EQUITABLE, AND PREDICTABLE
FUNDING OF PUBLIC EDUCATION
AASB urges the State of Alaska to provide early,
adequate, equitable, and predictable funding of public
education. AASB believes that adequate funding should
include the following:
? State funding of the TRS-PERS retirement liability;
? An increase to the Base Student Allocation to
account for both inflation and adequate pre-K through
12th grade education;
? Recognition of the need to keep pupil-teacher ratios
to a level in line with research-based best practices;
? Career and technical education.
? An early adoption timeline that allows school boards
and district administration to effectively plan
instruction and staffing for the upcoming school year.
? Programs and Initiatives focusing on Alaska Native
languages and cultures.
AASB urges that in the years when the Alaska
Legislature has not approved an education budget by
April 1, the budget from the previous year shall be
the legal minimum funding for the next fiscal year.
AASB urges the Legislature to review and recommend
appropriate adjustments to AS.14.17.460, District Cost
Factors, to ensure equity in school funding.
AASB urges the Legislature to provide stable forward
funding that addresses inflation, including the use of
an education endowment, to ensure funding
predictability.
2.10 EDUCATION ENDOWMENT
AASB lends its full support to the establishment of an
adequately funded and well-managed educational
endowment to help secure stable and full funding for
education to be used for public elementary and
secondary education.
2.14 PUPIL TRANSPORTATION
AASB urges the State of Alaska to adequately fund
pupil transportation by increasing the transportation
allocation to accurately reflect true costs, to avoid
the use of operating fund dollars, and to provide
funding for districts with increased transportation
needs due to state legislated labor costs, special
circumstances and/or student growth. Getting students
safely to and from school is a vital part of public
education.
2.23 FUNDING FOR SCHOOLS BY ESTABLISHING THE BASE
STUDENT ALLOCATION IN ADVANCE
AASB supports funding for schools in advance. At a
minimum, the Base Student Allocation (BSA) should be
established at least one, and preferably three, years
ahead to provide sufficient time for school districts
to prepare and submit their budgets in a timely manner
without spending unnecessary time and resources
revising budgets based on legislative action after the
local budget process has begun. The Education Fund, AS
14.17.300, must also be maintained and increased for
this purpose.
2.50 INFLATION-PROOFED BASE STUDENT ALLOCATION (BSA)
INVESTMENTS
AASB urges the State of Alaska to make inflation-
proofed incremental investments to the BSA to make up
for flat funding since FY 2011.
2:26:56 PM
REPRESENTATIVE STORY asked Mr. Wooten to share what had been cut
from the education budget due to flat funding.
MR. WOOTEN conveyed that many things had been cut, such as
counseling in rural districts and school nurses. He pointed out
that increased class sizes were also a direct result of flat
funding. He deferred to Mr. Garrison to elaborate.
2:31:22 PM
LON GARRISON, Association of Alaska School Boards (AASB), said
AASB tried to instill a notion of focusing on student outcomes
and strategic planning for school districts in school board
members, as opposed to solely focusing on cutting the budget.
He emphasized that educational plans needed to reflect community
values and needs, which varied from district to district in
Alaska. He acknowledged the importance of local control;
however, he pointed out that decisions couldn't be made without
adequate resources. He stated that the opportunity to offer an
excellent education for every student every day was diminished
in those districts with exceptionally high turnover rates among
educators. He continued to note that AASB offered robust
training to help public officials understand their role and
commitment to working with their communities.
2:33:28 PM
CHAIR SPOHNHOLZ asked whether increases to the foundation
formula should be used on recruitment and retention efforts,
including increases to salary and benefits, to help alleviate
the high rates of turnover among educators.
2:33:57 PM
MR. GARRISON answered yes, adding that salary and benefits were
one of the largest expenses for school districts.
CHAIR SPOHNHOLZ acknowledged the challenge faced by school
districts across the state, as they tried to stretch the same
amount of dollars with inflation at a record high.
2:35:29 PM
CAROLINE STORM, Great Alaska Schools, read the following
prepared remarks [original punctuation provided]:
Alaska has long needed a stable, consistent,
predictable, and adequate funding source for
education. Great Alaska Schools supports those bills
that move us closer to such a stable, consistent,
predictable, and adequate funding for education. This
Committee Substitute for HB 4003 is such a bill.
Throughout or advocacy efforts we've learned that
Alaskan families really want our children to be
prepared for the workforce or for further learning
when they leave Alaska's public schools as young
adults. A strong education system is really the only
means for the majority of students to succeed. There
is plenty of research showing that a high-quality
teacher leads to the greatest education outcomes.
However, there is a national shortage of quality
educators, and Alaska is losing those educators to
other states. Alaska must prioritize creating an
attractive work environment to retain the educators we
have and attract future impassioned educators.
When we ask our education leaders why there are so
many vacant positions, we hear time and again that
recruitment and retention are the greatest challenges.
Other states have shown that by prioritizing education
with consistent funding they can draw quality teachers
through solid retirement benefits, attractive
healthcare options, and by incentivizing or
compensating for higher learning in the profession.
The teacher turnover rate in Alaska is high and
getting higher. This is incredibly costly to all
districts, both financially and emotionally for
students. Per Jim Anderson, CFO of ASD, it costs ASD
approx. $108,000 to onboard a single teacher. That's
money that does not make it to the classroom. The lack
of consistency for students has a bigger and impact on
students than we can fully outline, but especially
during this pandemic, during a time of dramatic
uncertainty for children, the relationships students
have with their educator is all too often the only
solid relationship that they have with an adult
outside their home. When that adult is forced to
relocate, it can be very destabilizing for a student.
Furthermore, since the BSA has been flat and the cost
of operations have compounded over the last 6 years,
ASD has worked carefully to equally allocate teachers
in their schools, so when budgets are continually
squeezed, it has led to a teachers being moved to
other schools, the result of those moves are losses of
continuity and colleague relationships for educators,
and significant disruption for students.
This pandemic has certainly underscored just how
critical it is to have a safe and nurturing place for
our kids to go in order for parents to be able to
continue to work. I personally believe that there is a
greater appreciation for our educators now, so let's
take this opportunity to show them that they are
valued by enacting legislation to support them.
Great Alaska Schools sees this CS for HB 4003 as a
sincere effort by legislators to set up stable,
consistent, predictable, and adequate funding for
public education. We fully support this Bill and the %
of the POMV being specifically allocated for public
education.
2:40:15 PM
REPRESENTATIVE STORY questioned how families prioritize
education. She pondered whether it influenced their reasoning
for living in a certain area.
MS. STORM conveyed that many of her architectural colleagues had
left the state, in part due to the education system in Alaska.
CHAIR SPOHNHOLZ recalled that quality public schools were
critical to military members as well.
2:42:42 PM
DR. LISA PARADY, Executive Director, Alaska Council of School
Administrators, read the following prepared remarks [original
punctuation provided]:
Good Afternoon
For the record my name is Dr. Lisa Skiles Parady,
Executive Director Alaska Council of School
Administrators or ACSA
Established in 1973, the Alaska Council of School
Administrators (ACSA) was created to serve as an
umbrella for some of Alaska's premier educational
leadership organizations including the: Alaska
Superintendents Association, the Alaska Association of
Secondary School Principals, the Alaska Association of
Elementary School Principals, the Alaska School
Business Officials and all the hard-working school
administrators across Alaska
Thank you for inviting me to speak to the CS for House
bill Number 4003, thank you to the committee for
introducing it.
ACSA's unifying purpose is to support educational
leaders through providing a collective voice that
champions possibilities for all students and
purposeful advocacy for public education.
Each year our members work together to develop what
are called the Joint Position Statements. The Joint
Position Statements envelop the highest priorities for
education policy positions. While student achievement
is our number one priority, Adequate funding remains
our most critical need.
Specifically, we are supportive that the CS for HB4003
recognizes that the state of Alaska must provide
timely, reliable and predictable revenue for schools,
funding the actual cost of education in all districts
and providing full and equitable funding for all
initiatives, laws that require additional resources.
We are also excited to see the seeds planted within
the bill for future investment in public education.
Early notification of funding and stable funding is
crucial to school district sound financial management
as well as recruitment and retention of quality
educators.
We are in the greatest period of education staff
shortage in the history of Alaska this crisis is at
every level of our K-12 system, teachers, substitutes,
mechanics, bus drivers, paras, principals,
superintendent and education professionals such as our
business managers are feeling it too.
We have been in a Groundhog Day cycle of uncertainty
unpredictable funding, leads to district uncertainty
(hiring, services and retention of quality educators),
which leads to district instability and ultimately
impacts instruction negatively
Implementation of a long-term, multi revenue fiscal
plan remains imperative to maximize districts' ability
to meet student needs.
We are very encouraged by this committee's
consideration of a new structure to provide stable,
predictable funding. We look forward to partnering
with all stakeholders and the committee as this bill
moves forward in the process. It is especially
noteworthy to see such substantive ideas come forward
from this fourth special session.
Thank you for the opportunity to testify in support. I
am happy to answer any questions.
2:49:59 PM
REPRESENTATIVE JOSEPHSON inquired about the number of type A
certificates that had been lost in the last decade.
DR. PARADY believed that Mr. Klaameyer had testified to that.
She offered to follow up with the requested information.
REPRESENTATIVE JOSEPHSON recalled that the number was 1,000;
however, he wanted to be sure.
2:50:57 PM
REPRESENTATIVE STORY questioned how Alaska compared to other
states in terms of education funding.
DR. PARADY explained that Alaska relied heavily on the Lower 48
to recruit educators. She pointed out that recruitment
difficulties were heightened by a severe staff shortage across
the country in addition to poor salary and benefits.
REPRESENTATIVE STORY asked whether any states were making
education a top priority.
DR. PARADY believed that some states were prioritizing
education. She offered to follow up with that information.
2:54:05 PM
CHAIR SPOHNHOLZ, in response to Representative Josephson's
question, confirmed that 1,000 [type A certificates] had been
lost. She provided closing remarks, noting that this was the
last committee hearing planned for the current special session.
She acknowledged the frustration felt my many over the fact that
a fiscal plan had not been passed; however, she pointed out that
passing a "grand bargain" would take a lot of time, thought,
collaboration, and compromise. She addressed the cost of
inaction and the impact of cuts to government, as well as the
impact of instability on the entire state of Alaska. She shared
her belief that the people of Alaska were its most important
resource, emphasizing the importance of a robust education
system. In closing, she commended the governor for recognizing
the need to pass a comprehensive fiscal plan, as well as the
Fiscal Policy Working Group for identifying several consensus
points in a seemingly divided legislature.
2:59:50 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Ways and Means meeting was adjourned at
2:59 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 4003 Fiscal Note, OMB.pdf |
HW&M 10/28/2021 1:30:00 PM |
|
| CSHB4003 (W&M) v.B.pdf |
HW&M 10/28/2021 1:30:00 PM |
HB4003 |
| CSHB 4003 Presentation, 10.28.21.pdf |
HW&M 10/28/2021 1:30:00 PM |
HB4003 |
| CSHB4003 Sectional v. B.pdf |
HW&M 10/28/2021 1:30:00 PM |
HB4003 |
| CSHB4003 Invited Testimony, 10.28.21.pdf |
HW&M 10/28/2021 1:30:00 PM |
HB4003 |
| Education Funding Behind Inflation Leg Research Report.pdf |
HW&M 10/28/2021 1:30:00 PM |
|
| 2021 Kids Count Alaska Profile.pdf |
HW&M 10/28/2021 1:30:00 PM |
|
| HB4003 Invited Testimony, ACSA.pdf |
HW&M 10/28/2021 1:30:00 PM |
HB4003 |
| HWM Responses to 10.29.21 Hearing (HB 4003).pdf |
HW&M 10/28/2021 1:30:00 PM |
HB4003 |