Legislature(2015 - 2016)BUTROVICH 205

03/12/2015 03:30 PM EDUCATION

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HCR 2 JAN 24 - 30, 2016: AK SCHOOL CHOICE WEEK TELECONFERENCED
Moved CSHCR 2(EDC) Out of Committee
+= SJR 2 CONST. AM: G.O. BONDS FOR STUDENT LOANS TELECONFERENCED
Moved SJR 2 Out of Committee
+= SCR 1 CIVICS EDUCATION TASK FORCE TELECONFERENCED
Moved CSSCR 1(EDC) Out of Committee
*+ SB 64 SCHOOL BOND DEBT REIMBURSEMENT TELECONFERENCED
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE EDUCATION STANDING COMMITTEE                                                                             
                         March 12, 2015                                                                                         
                           3:31 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Mike Dunleavy, Chair                                                                                                    
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Cathy Giessel                                                                                                           
Senator Gary Stevens                                                                                                            
Senator Berta Gardner                                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR HOUSE CONCURRENT RESOLUTION NO. 2(EDC)                                                                                   
Designating January 24 - 30, 2016, as Alaska School Choice Week.                                                                
                                                                                                                                
     - MOVED CSHCR 2(EDC) OUT OF COMMITTEE                                                                                      
                                                                                                                                
SENATE CONCURRENT RESOLUTION NO. 1                                                                                              
Relating to a legislative task force on civics education.                                                                       
                                                                                                                                
     - MOVED CSSCR 1(EDC) OUT OF COMMITTEE                                                                                      
                                                                                                                                
SENATE JOINT RESOLUTION NO. 2                                                                                                   
Proposing an amendment to the Constitution of the State of                                                                      
Alaska relating to contracting state debt for postsecondary                                                                     
student loans.                                                                                                                  
                                                                                                                                
     - MOVED SJR 2 OUT OF COMMITTEE                                                                                             
                                                                                                                                
SENATE BILL NO. 64                                                                                                              
"An Act relating to school bond debt reimbursement; and                                                                         
providing for an effective date."                                                                                               
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HCR 2                                                                                                                   
SHORT TITLE: JAN 24 - 30, 2016:  AK SCHOOL CHOICE WEEK                                                                          
SPONSOR(s): REPRESENTATIVE(s) GATTIS                                                                                            
                                                                                                                                
01/26/15       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/26/15       (H)       EDC                                                                                                    
02/04/15       (H)       EDC AT 8:00 AM CAPITOL 106                                                                             
02/04/15       (H)       Heard & Held                                                                                           
02/04/15       (H)       MINUTE(EDC)                                                                                            
02/06/15       (H)       EDC AT 8:00 AM CAPITOL 106                                                                             
02/06/15       (H)       Moved  CSHCR 2(EDC) Out of Committee                                                                   
02/06/15       (H)       MINUTE(EDC)                                                                                            
02/09/15       (H)       EDC RPT CS(EDC) NT 4DP                                                                                 
02/09/15       (H)       DP: KREISS-TOMKINS, DRUMMOND, SEATON,                                                                  
                         KELLER                                                                                                 
02/23/15       (H)       TRANSMITTED TO (S)                                                                                     
02/23/15       (H)       VERSION: CSHCR 2(EDC)                                                                                  
02/25/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/25/15       (S)       EDC                                                                                                    
03/12/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SJR 2                                                                                                                   
SHORT TITLE: CONST. AM: G.O. BONDS FOR STUDENT LOANS                                                                            
SPONSOR(s): SENATOR(s) MACKINNON                                                                                                
                                                                                                                                
01/21/15       (S)       PREFILE RELEASED 1/9/15                                                                                
01/21/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/15       (S)       STA, EDC, FIN                                                                                          
02/10/15       (S)       STA AT 9:00 AM BUTROVICH 205                                                                           
02/10/15       (S)       Moved SJR 2 Out of Committee                                                                           
02/10/15       (S)       MINUTE(STA)                                                                                            
02/11/15       (S)       STA RPT 3DP 2NR                                                                                        
02/11/15       (S)       DP: COGHILL, MCGUIRE, WIELECHOWSKI                                                                     
02/11/15       (S)       NR: STOLTZE, HUGGINS                                                                                   
02/24/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
02/24/15       (S)       Heard & Held                                                                                           
02/24/15       (S)       MINUTE(EDC)                                                                                            
03/12/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SCR 1                                                                                                                   
SHORT TITLE: CIVICS EDUCATION TASK FORCE                                                                                        
SPONSOR(s): SENATOR(s) STEVENS                                                                                                  
                                                                                                                                
01/21/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/15       (S)       EDC, FIN                                                                                               
02/26/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
02/26/15       (S)       Heard & Held                                                                                           
02/26/15       (S)       MINUTE(EDC)                                                                                            
03/12/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB 64                                                                                                                   
SHORT TITLE: SCHOOL BOND DEBT REIMBURSEMENT                                                                                     
SPONSOR(s): FINANCE                                                                                                             
                                                                                                                                
03/02/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/02/15       (S)       EDC, FIN                                                                                               
03/12/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE LYNN GATTIS                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Sponsor of HCR 2.                                                                                        
                                                                                                                                
TIM LAMKIN, Staff                                                                                                               
Senator Gary Stevens                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska,                                                                                                               
POSITION STATEMENT: Explained the changes in the CS for SCR 1.                                                                
                                                                                                                                
STUART THOMPSON, representing himself                                                                                           
Meadow Lakes, Alaska                                                                                                            
POSITION STATEMENT: Testified in support of SCR 1.                                                                            
                                                                                                                                
LISA SKILES PARADY, Executive Director                                                                                          
Alaska Council of School Administrators (ACSA) and                                                                              
Executive Director                                                                                                              
Alaska Superintendents Association                                                                                              
Juneau, Alaska                                                                                                                
POSITION STATEMENT: Testified on SCR 1.                                                                                       
                                                                                                                                
SENATOR ANNA MACKINNON                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Sponsor of SJR 2 and Cross Sponsor of HCR 2.                                                              
                                                                                                                                
ROBERT DOTSON, representing himself                                                                                             
Cordova, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SJR 2.                                                                            
                                                                                                                                
LAURIE PIERRE, Staff                                                                                                            
Senator Anna MacKinnon                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                
POSITION STATEMENT: Presented a sectional analysis of SB 64.                                                                  
                                                                                                                              
MIKE ABBOTT, Chief Operating Officer                                                                                            
Anchorage School District                                                                                                       
Anchorage, Alaska                                                                                                             
POSITION STATEMENT: Testified about concerns regarding SB 64.                                                                 
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:31:10 PM                                                                                                                    
CHAIR  MIKE   DUNLEAVY  called   the  Senate  Education   Standing                                                            
Committee meeting  to order  at 3:31 p.m.  Present at the  call to                                                              
order  were   Senators  Huggins,   Giessel,  Gardner,   and  Chair                                                              
Dunleavy.  Senator  Stevens  arrived   shortly  thereafter.  Chair                                                              
Dunleavy noted the committee would hear four bills.                                                                             
                                                                                                                                
         HCR 2-JAN 24 - 30, 2016: AK SCHOOL CHOICE WEEK                                                                     
                                                                                                                                
3:32:19 PM                                                                                                                    
CHAIR  DUNLEAVY  announced  the  consideration of  HCR  2.  [CSHCR                                                              
2(EDC) was before the committee.]                                                                                               
                                                                                                                                
REPRESENTATIVE LYNN  GATTIS, Alaska State Legislature,  sponsor of                                                              
HCR 2, related  that the resolution  is about school choice  and a                                                              
parent's  right to  choose when,  where,  and how  their child  is                                                              
educated.  Designating January  24  - 30,  2016  as Alaska  School                                                              
Choice  Week, simply  acknowledges  that our  education system  is                                                              
accountable    to   families.    Alaska    has   many    education                                                              
opportunities;   public  neighborhood   schools,  public   charter                                                              
schools,   public   home   schools,   optional   public   schools,                                                              
independent  home schools, as  well as  private schools.  She said                                                              
School  Choice  Week  is  a  national  celebration  recognized  by                                                              
millions of students,  parents, educators, schools,  and community                                                              
leaders  for  the  purpose  of raising  public  awareness  to  the                                                              
importance of effective  education options. This  truly comes down                                                              
to a parent's  right to choose  how to education their  child. She                                                              
concluded that HCR 2 is a simple resolution.                                                                                    
                                                                                                                                
CHAIR DUNLEAVY  recognized  that Senator  Stevens was present.  He                                                              
said  the resolution  is  similar  to the  Senate  version of  the                                                              
bill.  The only  change is  on line 10;  there is  an addition  of                                                              
"optional public schools."                                                                                                      
                                                                                                                                
SENATOR GARDNER  said she read  the Senate version  very carefully                                                              
to see if  it was a voucher  bill that supported the  use of state                                                              
money for private  schools.  She concluded that it  was not a pro-                                                              
voucher bill.  She said  when she  researched the national  School                                                              
Choice movement  she recognized that when "public  charter school"                                                              
is used,  it means "voucher  schools" that receive  state dollars.                                                              
She  asked  if  the  wording  on line  10  is  an  endorsement  of                                                              
vouchers.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  GATTIS  said  it  really  means  "Alaska's  school                                                              
choices, not  vouchers." There are  no private charter  schools in                                                              
Alaska.                                                                                                                         
                                                                                                                                
CHAIR  DUNLEAVY  corrected  that  the  resolution  states  "public                                                              
charter schools."                                                                                                               
                                                                                                                                
3:35:53 PM                                                                                                                    
SENATOR HUGGINS said he could add vouchers to the resolution.                                                                   
                                                                                                                                
SENATOR HUGGINS moved  to report CSHCR 2(EDC) from  committee with                                                              
individual recommendations  and attached  zero fiscal  note. There                                                              
being no objection, it was so ordered.                                                                                          
                                                                                                                                
3:36:30 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
               SCR 1-CIVICS EDUCATION TASK FORCE                                                                            
                                                                                                                                
3:39:03 PM                                                                                                                    
CHAIR DUNLEAVY  announced the consideration  of SCR 1. He  said it                                                              
is the second  hearing of the  resolution and he intended  to move                                                              
it out of committee.                                                                                                            
                                                                                                                                
TIM   LAMKIN,   Staff,   Senator  Gary   Stevens,   Alaska   State                                                              
Legislature,  explained  the changes  in  the new  CS  for SCR  1,                                                              
version N.  He said the  bill is modeled  after one  from Illinois                                                              
and  the  language   was  changed  to  fit  Alaska's   task  force                                                              
composition. There  is a net  change to  twelve for the  number of                                                              
task force  members. On page  2, lines  23-26, the task  force now                                                              
has three representatives  and three senators, including  one each                                                              
from  the minority  caucus.  On page  3, line  1,  the NEA  member                                                              
would  be a teacher  with significant  experience  in the  area of                                                              
civics and social studies.                                                                                                      
                                                                                                                                
SENATOR  HUGGINS moved  to adopt  the CS  for SCR  1, labeled  29-                                                              
LS0237\N, as the working document before the committee.                                                                         
                                                                                                                                
CHAIR DUNLEAVY objected.                                                                                                        
                                                                                                                                
MR.  LAMKIN continued  to describe  the  changes in  the bill.  On                                                              
page 3,  lines 4-6,  the reference  to a member  of the  media was                                                              
deleted and  replaced with  a student.  Also, on  page 3,  lines 7                                                              
and 8,  a civics  non-profit member  was deleted  and replaced  by                                                              
someone  from the  judicial branch  of government.  Representation                                                              
by  the  superintendent  was  also   deleted  since  school  board                                                              
representation was maintained.                                                                                                  
                                                                                                                                
3:41:57 PM                                                                                                                    
SENATOR GARDNER pointed  out that there is an even  number of task                                                              
force members and she assumed they would work for consensus.                                                                    
                                                                                                                                
MR.  LAMKIN  said  historically   there  is  consensus  with  task                                                              
forces. In the event of a tie, a motion would fail.                                                                             
                                                                                                                                
CHAIR DUNLEAVY opened public testimony.                                                                                         
                                                                                                                                
3:42:41 PM                                                                                                                    
STUART  THOMPSON, representing  himself, testified  in support  of                                                              
SCR 1. He discussed  his belief in citizen participation.  He said                                                              
he has  five methods  for financing civics  education. He  said he                                                              
will fax his comments to the committee.                                                                                         
                                                                                                                                
3:47:23 PM                                                                                                                    
LISA SKILES PARADY,  Executive Director, Alaska Council  of School                                                              
Administrators    (ACSA),   and    Executive   Director,    Alaska                                                              
Superintendents  Association, testified  on SCR  1. She  requested                                                              
that a  superintendent be left on  the task force.  She maintained                                                              
that   school  board   members   have   a  different   role   than                                                              
superintendents.                                                                                                                
                                                                                                                                
CHAIR DUNLEAVY closed public testimony.                                                                                         
                                                                                                                                
SENATOR STEVENS  voiced appreciation  for Mr. Thompson's  support.                                                              
He  recognized  the   problem  of  funding  the   task  force.  He                                                              
appreciated  Dr. Parady's  comments.  He said  he  would not  mind                                                              
adding the superintendent  position back, but there  is a limit to                                                              
the number of members.                                                                                                          
                                                                                                                                
3:51:21 PM                                                                                                                    
SENATOR  HUGGINS asked  for  clarification of  the  status of  the                                                              
fiscal note.                                                                                                                    
                                                                                                                                
MR. LAMKIN  said there is a  fiscal note for the  original version                                                              
of the  bill and a replacement  is being considered.  He explained                                                              
that it  is the sponsor's  intent to have  the bulk of  task force                                                              
members who reside in or near Anchorage.                                                                                        
                                                                                                                                
CHAIR  DUNLEAVY said  there could  be a discussion  of the  fiscal                                                              
note in Senate Finance.                                                                                                         
                                                                                                                                
3:52:37 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
3:52:46 PM                                                                                                                    
CHAIR  DUNLEAVY said  they would  move the bill  out of  committee                                                              
with a fiscal note that could be discussed in Senate Finance.                                                                   
                                                                                                                                
SENATOR  HUGGINS moved  to report  CSSCR 1(EDC),  version N,  from                                                              
committee  with  individual recommendations  and  attached  fiscal                                                              
note.  There  being   no  objection,  the  motion   carried.  [The                                                              
assumption  is that Chair  Dunleavy removed  his objection  to the                                                              
adoption of version N.]                                                                                                         
                                                                                                                                
3:53:35 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
         SJR 2-CONST. AM: G.O. BONDS FOR STUDENT LOANS                                                                      
                                                                                                                                
3:55:17 PM                                                                                                                    
CHAIR DUNLEAVY  announced the  consideration of  SJR 2.  He shared                                                              
that  the resolution  is a  constitutional  amendment for  General                                                              
Obligation bonds for  student loans. The committee heard  SJR 2 on                                                              
February  24  and also  heard  public  testimony, which  is  still                                                              
open.  There is  a zero  fiscal note.  He said  the committee  has                                                              
received responses  to questions  posed at  the last meeting  from                                                              
Diane  Barrans  from  the  Alaska   Commission  on  Post-Secondary                                                              
Education.                                                                                                                      
                                                                                                                                
SENATOR ANNA MACKINNON,  Alaska State Legislature,  sponsor of SJR                                                              
2, read  from the sponsor  statement: SJR 2  is our way  of trying                                                              
to reduce student  loan debt for those who currently  have debt in                                                              
the  state of  Alaska and  those that  may have  debt in  Alaska's                                                              
future. Article IX,  sec. 8, of the Alaska  Constitution currently                                                              
says that  the state  only can use  the full  faith and  credit of                                                              
Alaska  for   capital  improvement   or  for  housing   loans  for                                                              
veterans.   This  would   amend  that   to  allow   post-secondary                                                              
education to  offer loans  to students,  thereby creating  a lower                                                              
loan rate for students, and our hope is to reduce student debt.                                                                 
                                                                                                                                
CHAIR DUNLEAVY opened public testimony.                                                                                         
                                                                                                                                
ROBERT DOTSON, representing  himself, testified in  support of SJR                                                              
2. He  shared that he is  helping support three  grandsons through                                                              
college.  He  said he  objects  to  the  high interest  rates  for                                                              
student loans.                                                                                                                  
                                                                                                                                
CHAIR DUNLEAVY noted  the fiscal note has zero impact.  He said if                                                              
both bodies pass SJR 2, it goes to the public for a vote.                                                                       
                                                                                                                                
SENATOR MACKINNON  agreed. She explained that after  two years the                                                              
public would vote again before any bond would be issued.                                                                        
                                                                                                                                
CHAIR DUNLEAVY closed public testimony.                                                                                         
                                                                                                                                
4:00:45 PM                                                                                                                    
SENATOR  HUGGINS  moved  to  report  SJR  2  from  committee  with                                                              
individual recommendations  and attached  zero fiscal  note. There                                                              
being no objection, the motion carried.                                                                                         
                                                                                                                                
4:01:07 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
              SB 64-SCHOOL BOND DEBT REIMBURSEMENT                                                                          
                                                                                                                                
4:03:16 PM                                                                                                                    
CHAIR DUNLEAVY  announced the consideration  of SB 64. He  said it                                                              
is the first hearing of the bill.                                                                                               
                                                                                                                                
SENATOR ANNA  MACKINNON, Alaska  State Legislature, sponsor  of SB                                                              
64, read  the sponsor statement.  Alaska is facing a  $3.5 billion                                                              
revenue  shortfall this  year and  projected into  next year.  One                                                              
thing we  can do to  take care of  Alaska is  to take care  of our                                                              
fiscal house as  quickly as possible. The current  bill before you                                                              
proposes to sunset  current state aid regarding  reimbursement for                                                              
major  maintenance  and school  construction.  This  is a  measure                                                              
that is  outside of our control  in anticipating our  future debt-                                                              
to-credit ratio  needs. I  understand that it  is a  valuable tool                                                              
for communities  that can provide bond indebtedness.  This doesn't                                                              
prevent   schools   from   going  forward   and   providing   that                                                              
indebtedness.                                                                                                                   
                                                                                                                                
She said  she originally  wanted an effective  date of  January 1,                                                              
2015. That  date was  rejected and is  a policy consideration  for                                                              
the  committee. It  takes  into  account that  people  go to  bond                                                              
market in  April and  October and sell  bonds. A municipality  may                                                              
be  getting  ready  to  market to  sell  bonds.  She  opined  that                                                              
January 1,  2015, is  the correct  date and  the people  of Alaska                                                              
will  understand that  the  state is  not in  the  position to  go                                                              
forward  with reimbursing  at a  higher level.  The bill does  not                                                              
eliminate the program, but sunsets it for five years.                                                                           
                                                                                                                                
4:06:04 PM                                                                                                                    
SENATOR GARDNER asked if January 1, 2015, is the correct date.                                                                  
                                                                                                                                
SENATOR MACKINNON  said yes; it  is retroactive. She  related that                                                              
Legislative Legal  expressed concern  about retroactivity  and the                                                              
possibility  that Anchorage  might  have a  bond proposition  that                                                              
voters expect to be reimbursed for.                                                                                             
                                                                                                                                
CHAIR DUNLEAVY requested a sectional analysis.                                                                                  
                                                                                                                                
LAURIE  PIERRE,  Staff,  Senator   Anna  MacKinnon,  Alaska  State                                                              
Legislature,  presented  a  sectional   analysis  of  SB  64.  She                                                              
clarified  that the  year  bonds  are issued  is  listed in  state                                                              
statute. The most  recent one was issued from October  1, 2006, to                                                              
May 1, 2015.  Legislative Legal suggested  a May 1 sunset  date so                                                              
as not to affect that bond.                                                                                                     
                                                                                                                                
4:08:17 PM                                                                                                                    
MS.  PIERRE  related   that  Section  1  sunsets   the  bond  debt                                                              
reimbursement  provisions   for  school  construction   and  major                                                              
maintenance for five years, May 1, 2015 to July 1, 2020.                                                                        
                                                                                                                                
Section  2  begins   on  page  6,  line  21,   and  restricts  the                                                              
reimbursement  of bonds  authorized after  May 1,  2015. Also,  on                                                              
page  7, lines  1  through 11,  it  deletes language  relating  to                                                              
bonds authorized after May 1, 2015.                                                                                             
                                                                                                                                
Section  3 page  12, line  17, through  page 13,  line 2,  inserts                                                              
language relating  to bonds authorized  on or after July  1, 2020,                                                              
and reduces  reimbursement from  70 percent for standard  projects                                                              
to 50  percent, and from 60  percent for non-standard  projects to                                                              
40 percent.                                                                                                                     
                                                                                                                                
4:10:04 PM                                                                                                                    
Section   4  restricts   the   commissioner   from  approving   an                                                              
application for bond  debt reimbursement between May  1, 2015, and                                                              
July 1, 2020.                                                                                                                   
                                                                                                                                
Section   5  restricts   the   commissioner   from  approving   an                                                              
application for bond  debt reimbursement between May  1, 2015, and                                                              
July 1, 2020.                                                                                                                   
                                                                                                                                
Section 6  repeals sections  1, 4, and  5 of this  Act on  July 1,                                                              
2020.                                                                                                                           
                                                                                                                                
Section 7 is  the retroactivity clause and applies  to Sections 1,                                                              
4, and 5.                                                                                                                       
                                                                                                                                
Section 8 states that Section 3 takes effect on July 1, 2020.                                                                   
                                                                                                                                
Section 9 is the immediate effective date.                                                                                      
                                                                                                                                
4:11:22 PM                                                                                                                    
SENATOR  STEVENS   requested  clarification   of  a   hypothetical                                                              
situation; if the  voters of Anchorage approved a  bond package on                                                              
April 7,  2015, it  would be funded  at a  70/30 ratio,  but other                                                              
districts  that  vote  at  a  later   date  would  not  have  that                                                              
opportunity.                                                                                                                    
                                                                                                                                
MS. PIERRE said that is correct.                                                                                                
                                                                                                                                
4:12:28 PM                                                                                                                    
MIKE ABBOTT,  Chief Operating  Officer, Anchorage School  District                                                              
(ASD),  testified about  concerns  regarding SB  64.  He said  ASD                                                              
relies on  general obligation  debt for  all capital projects,  at                                                              
about  90 percent,  with  smaller contributions  from  legislative                                                              
grants, federal sources,  and the operating budget.  ASD has taken                                                              
advantage  of multi-year  bonding  programs  for capital  projects                                                              
and voters  appreciate that approach.  ASD hopes to  continue that                                                              
funding method.                                                                                                                 
                                                                                                                                
He  explained  that ASD's  six-year  capital  improvement  program                                                              
anticipates  going forward  with  debt reduction.  New bonds  have                                                              
been sold  at lower rates  and old debts  have been  refinanced at                                                              
lower  rates. He  said  ASD is  not involved  in  the state  grant                                                              
process  and  would   not  score  well  compared   to  other  area                                                              
projects.  He concluded  that ASD  is uncertain  if it could  meet                                                              
its capital requirements going forward with this bill.                                                                          
                                                                                                                                
4:17:28 PM                                                                                                                    
SENATOR  HUGGINS  said  Wasilla  has had  many  new  students  and                                                              
construction demands. He asked what the trend is in Anchorage.                                                                  
                                                                                                                                
MR.  ABBOTT  replied  that  ASD anticipates  a  slight  growth  in                                                              
enrollment  over   the  next  six  years;  a   slight  decline  is                                                              
anticipated next year.                                                                                                          
                                                                                                                                
SENATOR HUGGINS asked for retrospective data.                                                                                   
                                                                                                                                
MR.  ABBOTT  said  over  the last  five  years  the  district  has                                                              
declined in enrollment by about three percent.                                                                                  
                                                                                                                                
4:19:18 PM                                                                                                                    
SENATOR STEVENS said  the bill has unusual wording.  He asked what                                                              
is on the  Anchorage ballot for  April 7, and how the  70/30 split                                                              
would work.                                                                                                                     
                                                                                                                                
MR.  ABBOTT  replied  that  there   is  a  single  bond  proposal,                                                              
Proposition 1,  for a little over  $59 million.  About  2/3 of the                                                              
bond is  to be  reimbursed at 60  percent and  1/3 at  70 percent,                                                              
for a blended  rate of about 64  percent. Of the $59  million, $56                                                              
million  is  for  four  elementary  renewal  projects.  Individual                                                              
costs range  between $12  million and $19  million. No  new school                                                              
construction is planned within the six-year CIP.                                                                                
                                                                                                                                
4:22:12 PM                                                                                                                    
CHAIR  DUNLEAVY noted  SB 64  is  an attempt  to get  a handle  on                                                              
revenue  and  would  provide  breathing  space for  the  state  to                                                              
replenish  its  coffers. He  stated  he  would  hold the  bill  in                                                              
committee today.  He thanked the  sponsor and noted the  bill goes                                                              
to Senate Finance next.                                                                                                         
                                                                                                                                
SENATOR  MACKINNON  said there  are  four  major cost  drivers  in                                                              
Alaska's  budget;  K-12,  Health  and  Human  Service  -  Medicaid                                                              
growth,  PERS/TRS,  and  school   debt  reimbursement,  which  has                                                              
totaled  $3 billion  since FY  1972.  The legislature  has had  no                                                              
control  except  to  step  up and  pay  just  under  $120  million                                                              
annually.  She  stated   support  for  what  ASD   is  doing,  but                                                              
maintained that  it is time to  reduce expenses. She  stressed the                                                              
need to  retroactively  date the  bill to prevent  large bonds  in                                                              
the  fall.  She concluded  that  SB  64  is totally  about  fiscal                                                              
restraint.                                                                                                                      
                                                                                                                                
CHAIR   DUNLEAVY   asked  Mr.   Abbott   about  the   60   percent                                                              
reimbursement and if ASD followed DEED guidelines.                                                                              
                                                                                                                                
MR.  ABBOTT  explained   that  three  of  the   elementary  school                                                              
projects  are eligible  for 60  percent  reimbursement under  DEED                                                              
regulations  because  ASD  is  adding a  small  amount  of  square                                                              
footage to  try and improve the  security of the  front entrances.                                                              
It  is  less expensive  to  add  a  few square  feet  rather  than                                                              
remodel an old structure.  It would be eligible for  70 percent if                                                              
that were not done, but would be more expensive.                                                                                
                                                                                                                                
4:28:02 PM                                                                                                                    
SENATOR  HUGGINS  assumed  there   would  be  a  retroactive  date                                                              
proposed. He asked what that would do to ASD's bond proposition.                                                                
                                                                                                                                
CHAIR DUNLEAVY asked  Mr. Abbott to consider a  proposed amendment                                                              
to that effect.                                                                                                                 
                                                                                                                                
MR. ABBOTT  explained that the  ballot language authorized  by the                                                              
Anchorage Assembly  describes school  debt reimbursement as  it is                                                              
currently  defined  in statute  -  it  is  not guaranteed  and  is                                                              
subject  to appropriation.  The  voters are  on the  hook for  the                                                              
entire  amount  of  the indebtedness  and  the  entire  amount  of                                                              
annual debt service.                                                                                                            
                                                                                                                                
CHAIR  DUNLEAVY commented  on  the trend  of  a declining  student                                                              
population in Alaska.  He summarized that the bill  is a result of                                                              
the financial situation in the state.                                                                                           
                                                                                                                                
SENATOR  MACKINNON  noted SB  64  is  a Senate  Finance  Committee                                                              
bill.                                                                                                                           
                                                                                                                                
CHAIR DUNLEAVY held SB 64 in committee.                                                                                         
                                                                                                                                
4:31:44 PM                                                                                                                    
There  being  nothing  further   to  come  before  the  committee,                                                              
Senator   Dunleavy  adjourned   the   Senate  Education   Standing                                                              
Committee at 4:31 p.m.                                                                                                          

Document Name Date/Time Subjects
HCR 2 - Resolution.pdf SEDC 3/12/2015 3:30:00 PM
HCR 2 - Sponsor Statement.pdf SEDC 3/12/2015 3:30:00 PM
HCR 2 - Fiscal Note.pdf SEDC 3/12/2015 3:30:00 PM
SCR 1 Committee Substitute.pdf SEDC 3/12/2015 3:30:00 PM
SCR 1 Amendments in CS.pdf SEDC 3/12/2015 3:30:00 PM
CS for SCR 1 Testimony.pdf SEDC 3/12/2015 3:30:00 PM
CS for SCR 1 Fiscal Note.pdf SEDC 3/12/2015 3:30:00 PM
SJR 2 Diane Barrans Response to Question.pdf SEDC 3/12/2015 3:30:00 PM
SB 64 - Legislation.pdf SEDC 3/12/2015 3:30:00 PM
SB 64
SB 64 - Sponsor Statement.pdf SEDC 3/12/2015 3:30:00 PM
SB 64
SB 64 - Sectional Analysis.pdf SEDC 3/12/2015 3:30:00 PM
SB 64
SB 64 - Fiscal Note.pdf SEDC 3/12/2015 3:30:00 PM
SB 64