Legislature(2013 - 2014)SENATE FINANCE 532

04/14/2014 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 278 EDUCATION TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
Bills Previously Heard/Scheduled:
+= HB 75 CONTRIBUTION FROM PFD: AUDITS; UNIVERSITY TELECONFERENCED
Heard & Held
+= SB 220 PERS/TRS STATE CONTRIBUTIONS TELECONFERENCED
Scheduled But Not Heard
                 SENATE FINANCE COMMITTEE                                                                                       
                      April 14, 2014                                                                                            
                         1:33 p.m.                                                                                              
                                                                                                                                
1:33:20 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Vice-Chair  Fairclough called  the Senate  Finance Committee                                                                    
meeting to order at 1:33 p.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Kevin Meyer, Co-Chair                                                                                                   
Senator Anna Fairclough, Vice-Chair                                                                                             
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Heather  Beggs,  Staff,   Representative  Paul  Seaton;  Dan                                                                    
Debartolo,  Director,  Permanent   Fund  Dividend  Division,                                                                    
Department  of  Revenue;  Chris Christensen  III,  Associate                                                                    
Vice President  for State  Relations, University  of Alaska;                                                                    
Michael  Hanley, Commissioner,  Department of  Education and                                                                    
Early  Development;  Linda Thibodeau,  Director,  Libraries,                                                                    
Archives,  and  Museums;  Erin Shine,  Staff,  Senator  Anna                                                                    
Fairclough;    Robbie   Graham,    Assistant   Commissioner,                                                                    
Department of Commerce,  Community and Economic Development;                                                                    
David   Teal,   Director,  Legislative   Finance   Division;                                                                    
Elizabeth   Nudelman,   Director,    School   Finances   and                                                                    
Facilities, Department of Education and Early Development;                                                                      
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Wanetta   Ayers,   Department   of   Labor   and   Workforce                                                                    
Development, Anchorage;                                                                                                         
                                                                                                                                
SUMMARY                                                                                                                       
SB 220    PERS/TRS STATE CONTRIBUTIONS                                                                                          
                                                                                                                                
          SB 220 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
CSHB 75(FIN)                                                                                                                    
         CONTRIBUTION FROM PFD: AUDITS; UNIVERSITY                                                                              
                                                                                                                                
          CSHB 75(FIN) was HEARD and HELD in committee for                                                                      
          further consideration.                                                                                                
                                                                                                                                
CSHB 278(FIN) am                                                                                                                
          EDUCATION                                                                                                             
                                                                                                                                
          CSHB 278(FIN) am was HEARD and HELD in committee                                                                      
          for further consideration.                                                                                            
                                                                                                                                
CS FOR HOUSE BILL NO. 75(FIN)                                                                                                   
                                                                                                                                
     "An  Act   amending  certain  audit   requirements  for                                                                    
     entities  receiving contributions  from permanent  fund                                                                    
     dividends;  requiring the  three main  campuses of  the                                                                    
     University of  Alaska to  apply to  be included  on the                                                                    
     contribution  list  for  contributions  from  permanent                                                                    
     fund dividends; and requiring the  university to pay an                                                                    
     application fee  for each  campus separately  listed on                                                                    
     the contribution list  for contributions from permanent                                                                    
     fund dividends."                                                                                                           
                                                                                                                                
1:34:19 PM                                                                                                                    
                                                                                                                                
HEATHER BEGGS, STAFF, REPRESENTATIVE PAUL SEATON, offered a                                                                     
sponsor statement for HB 75:                                                                                                    
                                                                                                                                
     HB   75    allows   greater   participation    in   the                                                                    
     Pick.Click.Give program by  small non-profits that meet                                                                    
     all of  the eligibility  requirements for  the program,                                                                    
     but  do not  participate  due to  the cost  prohibitive                                                                    
     audit requirement.                                                                                                         
                                                                                                                                
     The creation of the  popular Pick.Click.Give program by                                                                    
     the  25th  Alaska  State Legislature  gave  Alaskans  a                                                                    
     simple  and convenient  option to  donate to  charities                                                                    
     and non-profits  of their choice.  These organizations,                                                                    
     which  provide important  services to  our communities,                                                                    
     rely on donations to function.                                                                                             
     One  criterion  that  must   be  met  by  organizations                                                                    
     wishing  to  participate  often stops  smaller  Alaskan                                                                    
     charities and  non-profits from  applying. This  is the                                                                    
     required  financial  audit  for  organizations  with  a                                                                    
     total budget  of $250,000 or  greater. The cost  of the                                                                    
     required  financial audit  for smaller  groups is  much                                                                    
     greater  than the  donations received  by these  groups                                                                    
     through  the   Pick.Click.Give  program,   which  makes                                                                    
     participation  in  the  program impractical.  Not  only                                                                    
     does  this  mean that  these  smaller  groups will  not                                                                    
     receive  donations  through  the program,  some  groups                                                                    
     have found that exclusion  from the program gives their                                                                    
     supporters  the mistaken  impression that  they are  no                                                                    
     longer certified non-profits.                                                                                              
                                                                                                                                
     This  bill   eases  the   financial  burden   on  these                                                                    
     organizations  and  allows  Alaskans  a  more  complete                                                                    
     choice  of organizations  by eliminating  the financial                                                                    
     audit requirement for organizations  that do not file a                                                                    
     federal   audit.  This   does   not  remove   financial                                                                    
     accountability.     All    Pick.Click.Give     donation                                                                    
     recipients must be  501(c)(3) tax-exempt organizations,                                                                    
     which are required  to file the form  990 annually with                                                                    
     the IRS. The IRS form 990  was overhauled in 2008, is a                                                                    
     public  record and  accessible  online  to donors.  The                                                                    
     annual  filing  now  requires disclosure  of  not  only                                                                    
     detailed   financial    information,   but   governance                                                                    
     practices,  policies,   program  services,   and  other                                                                    
     compliance    measures.   This    rigorous   test    of                                                                    
     accountability  is  already  required  and  provides  a                                                                    
     complete  picture  of  finance   and  management  of  a                                                                    
     nonprofit.  Additionally,  an   audit  is  required  of                                                                    
     organizations that  expend $500,000 or more  in federal                                                                    
     awards. These organizations will  be required to submit                                                                    
     a  copy  of this  audit  to  the state.  Entities  that                                                                    
     expend less  than $500,000 in federal  funds still must                                                                    
     still make  their records available  for review  by the                                                                    
     federal government.                                                                                                        
                                                                                                                                
     This bill  further requires  each campus  of University                                                                    
     of  Alaska   to  pay  the   $250  application   fee  to                                                                    
     participate in the program, just  as all other eligible                                                                    
     organizations do.                                                                                                          
                                                                                                                                
     The  Pick.Click.Give  program  encourages  Alaskans  to                                                                    
     give  back  to their  community  by  bringing the  many                                                                    
     worthy state programs right  to their doorstep. Smaller                                                                    
     non-profits nourish  Alaskan communities on  a personal                                                                    
     level, open  pathways for budding artistic  talents and                                                                    
     provide educational  opportunities that fit  just right                                                                    
     with community  needs. These organizations  deserve the                                                                    
     chance  to  connect   through  Pick.Click.Give  to  the                                                                    
     Alaskans they serve.                                                                                                       
                                                                                                                                
Ms.  Beggs furthered  that the  bill would  add a  7 percent                                                                    
coordination fee,  which would  begin in  2015, and  be used                                                                    
for  statewide  marketing and  outreach.  The  fee would  be                                                                    
withheld from the annual payment  to an organization, and be                                                                    
based  on the  contributions received  through the  program.                                                                    
She  said   that  the  Rasmuson  Foundation   had  initially                                                                    
promised to  fund the statewide outreach  and marketing, but                                                                    
only for  the first  3 years  of the  program, which  made a                                                                    
plan  for  sustainability  necessary.  She  said  that  non-                                                                    
profits that had been surveyed  had expressed the desire for                                                                    
the marketing  and outreach to  continue and  the percentage                                                                    
fee  had decidedly  been the  best solution  to keeping  the                                                                    
program sustainable.  She shared that there  was a committee                                                                    
substitute  that had  been drafted  that  would correct  the                                                                    
non-conforming  sections of  statute  that  the drafter  had                                                                    
discovered. She  said that  the lasted  version of  the bill                                                                    
solved a  number of oversights in  the original legislation;                                                                    
The  University did  not object  to  paying the  application                                                                    
fee,   and   a   plan   was   being   made   for   long-term                                                                    
sustainability.                                                                                                                 
                                                                                                                                
1:39:47 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough  noted that there had  been a drafting                                                                    
error  in the  latest version  of  the bill  and that  there                                                                    
would  be a  corrected CS  before the  committee at  a later                                                                    
date.                                                                                                                           
                                                                                                                                
1:40:08 PM                                                                                                                    
                                                                                                                                
DAN DEBARTOLO,  DIRECTOR, PERMANENT FUND  DIVIDEND DIVISION,                                                                    
DEPARTMENT OF REVENUE, testified  that the legislation would                                                                    
not  make  any  fiscal  changes  to  the  operation  of  the                                                                    
division. He  said that the  division supported  the current                                                                    
version of the bill. He  relayed that once pledges were made                                                                    
to  the program  the 7  percent would  be taken  out of  the                                                                    
distribution   amount  in   October  through   December.  He                                                                    
explained  that  the  money  would be  held  in  a  separate                                                                    
account and reported  to the legislature as  was required to                                                                    
appropriate  into the  next year's  budget. He  related that                                                                    
the division operated the program  on the $250 fee and would                                                                    
not be using donated monies to operate the program.                                                                             
                                                                                                                                
1:43:01 PM                                                                                                                    
                                                                                                                                
CHRIS CHRISTENSEN  III, ASSOCIATE  VICE PRESIDENT  FOR STATE                                                                    
RELATIONS,   UNIVERSITY  OF   ALASKA,  testified   that  the                                                                    
University had  no issues with  paying the  application fee.                                                                    
He  noted  that  since  the inception  of  the  program  the                                                                    
donated amount had  risen from $7,000 to  $28,000. He shared                                                                    
that  for the  last 2  years  Exxon Mobile  had matched  all                                                                    
raised funds.                                                                                                                   
                                                                                                                                
Vice-Chair  Fairclough  related  that   one  of  the  issues                                                                    
pointed  out  by  the  non-profit  community  was  that  the                                                                    
University could  list all  of its  campuses in  the program                                                                    
and non-profits were restricted  to one individual, specific                                                                    
program.  She  noted  that  this  gave  the  University  the                                                                    
advantage of a higher rate of visual recognition by donors.                                                                     
She  thought   the  issue  should   be  considered   by  the                                                                    
committee.                                                                                                                      
                                                                                                                                
Mr. Christensen  stated that  he did not  expect all  of the                                                                    
University   campuses   to   be   listed.   He   said   that                                                                    
approximately a half  dozen of the campuses  would not raise                                                                    
as  much  money as  the  cost  of  the application  fee.  He                                                                    
related that  most people  that gave  to the  University did                                                                    
not  was to  give a  check directly  to the  University, but                                                                    
rather focus the  donation on a specific  campus or program.                                                                    
He  said  that  there  had been  proposals  that  University                                                                    
programs  be  allowed  to  be   listed,  not  just  campuses                                                                    
however;  that  could overburden  the  list  of choices  for                                                                    
donors. He  believed that there  were 100's of  charities on                                                                    
the list, a dozen of which were related to the University.                                                                      
                                                                                                                                
Vice-Chair Fairclough OPENED public testimony.                                                                                  
                                                                                                                                
There  being   none  Vice-Chair  Fairclough   CLOSED  public                                                                    
testimony.                                                                                                                      
                                                                                                                                
1:46:49 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough directed  the committee's attention to                                                                    
the fiscal notes attached to the bill.                                                                                          
                                                                                                                                
HB  75  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
CS FOR HOUSE BILL NO. 278(FIN) am                                                                                             
                                                                                                                                
     "An Act increasing the base  student allocation used in                                                                    
     the  formula for  state  funding  of public  education;                                                                    
     relating  to  the  exemption   from  jury  service  for                                                                    
     certain  teachers;  relating  to   the  powers  of  the                                                                    
     Department   of   Education  and   Early   Development;                                                                    
     relating to  high school  course credit  earned through                                                                    
     assessment;  relating  to school  performance  reports;                                                                    
     relating to  assessments; establishing a  public school                                                                    
     and  school   district  grading  system;   relating  to                                                                    
     charter  schools and  student transportation;  relating                                                                    
     to residential school  applications; relating to tenure                                                                    
     of  public school  teachers;  relating to  unemployment                                                                    
     contributions for  the Alaska technical  and vocational                                                                    
     education  program;  relating  to earning  high  school                                                                    
     credit for  completion of vocational  education courses                                                                    
     offered   by  institutions   receiving  technical   and                                                                    
     vocational  education  program   funding;  relating  to                                                                    
     schools  operated by  a federal  agency; relating  to a                                                                    
     grant for  school districts; relating to  education tax                                                                    
     credits;   establishing  an   optional  municipal   tax                                                                    
     exemption for  privately owned real property  rented or                                                                    
     leased  for  use as  a  charter  school; requiring  the                                                                    
     Department of Administration to  provide a proposal for                                                                    
     a salary  and benefits  schedule for  school districts;                                                                    
     making  conforming  amendments;  and providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
1:48:02 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:49:53 PM                                                                                                                    
RECONENED                                                                                                                       
                                                                                                                                
1:50:35 PM                                                                                                                    
                                                                                                                                
Senator Olson wondered what the minimum amount of available                                                                     
bandwidth should be for Alaska schools.                                                                                         
                                                                                                                                
MICHAEL  HANLEY, COMMISSIONER,  DEPARTMENT OF  EDUCATION AND                                                                    
EARLY   DEVELOPMENT,  responded   that   the  question   was                                                                    
difficult  to   answer  because  different   districts  used                                                                    
different amounts.   He said  that the department  would use                                                                    
as much bandwidth  as possible in all districts  in order to                                                                    
utilize all online applications.                                                                                                
                                                                                                                                
Senator Olson  believed that having more  bandwidth would be                                                                    
advantageous for distance learning through online classes.                                                                      
                                                                                                                                
Commissioner   Hanley  agreed.   He   said  that   increased                                                                    
bandwidth  was  a  quality  of  life issue  as  well  as  an                                                                    
educational issue.                                                                                                              
                                                                                                                                
1:53:02 PM                                                                                                                    
                                                                                                                                
Senator   Olson  inquired   queried,  if   the  funds   were                                                                    
unlimited,  how  much the  department  would  be willing  to                                                                    
spend to  increase bandwidth to school  districts across the                                                                    
state.                                                                                                                          
                                                                                                                                
Commissioner Hanley responded that  if funding was unlimited                                                                    
he  would look  into the  best bandwidth  available for  all                                                                    
schools in the state.                                                                                                           
                                                                                                                                
Senator Olson  assumed that reaching 10  megabits per second                                                                    
for each district would be welcomed by the department.                                                                          
                                                                                                                                
Commissioner Hanley  replied that any movement  in a forward                                                                    
direction would be beneficial for Alaska's students.                                                                            
                                                                                                                                
Senator Olson  inquired what Ms. Thibodeau  believed was the                                                                    
minimum amount of bandwidth that should be at each school.                                                                      
                                                                                                                                
LINDA   THIBODEAU,   DIRECTOR,  LIBRARIES,   ARCHIVES,   AND                                                                    
MUSEUMS, said that  it would depend on  the particular needs                                                                    
of  the school.  She felt  that 10  megabits was  too low  a                                                                    
number for seeking high-quality interconnectivity.                                                                              
                                                                                                                                
1:56:12 PM                                                                                                                    
                                                                                                                                
Senator  Olson  asked  what  level  of  bandwidth  would  be                                                                    
necessary  in  order  to  provide  each  school  with  high-                                                                    
quality,  interactive  courses  to middle  and  high  school                                                                    
students.                                                                                                                       
                                                                                                                                
Ms. Thibodeau  responded that  50 to  100 megabits  would be                                                                    
appropriate.                                                                                                                    
                                                                                                                                
1:57:17 PM                                                                                                                    
                                                                                                                                
ERIN SHINE, STAFF, SENATOR ANNA  FAIRCLOUGH, stated that she                                                                    
had  been working  with the  department  and the  governor's                                                                    
broadband taskforce  and had discovered some  leftover funds                                                                    
that  could be  re-appropriated to  perform a  study on  the                                                                    
interconnectivity of school districts in the state.                                                                             
                                                                                                                                
Vice-Chair Fairclough explained that  a survey had been done                                                                    
on the  issue and that  the administration had  been willing                                                                    
to  open the  contract in  order  to perform  an audit  that                                                                    
could detail  the hardware capacity  in districts  and bring                                                                    
communities online.                                                                                                             
                                                                                                                                
1:59:02 PM                                                                                                                    
                                                                                                                                
Senator Olson  commented that the legislature  should act in                                                                    
a  timely manner  on the  issue of  improving the  available                                                                    
bandwidth  to districts  because it  would be  several years                                                                    
before it would become available to communities.                                                                                
                                                                                                                                
Vice-Chair Fairclough thought  that addressing broadband and                                                                    
the  e-rate  was  important for  an  education  bill  moving                                                                    
forward. She  hoped that  Commissioner Hanley  would support                                                                    
the committee's  request to open  up the broadband  study to                                                                    
determine the need for access throughout Alaska's schools.                                                                      
                                                                                                                                
2:00:22 PM                                                                                                                    
                                                                                                                                
Senator Dunleavy  queried whether department had  a position                                                                    
on tenure.                                                                                                                      
                                                                                                                                
Commissioner  Hanley responded  that  DEED had  not taken  a                                                                    
specific position on the issue.                                                                                                 
                                                                                                                                
2:00:56 PM                                                                                                                    
                                                                                                                                
Senator  Dunleavy  understood  that the  rating  system  for                                                                    
schools  was necessary  under the  waiver  from the  federal                                                                    
government for No Child Left Behind (NCLB).                                                                                     
                                                                                                                                
Commissioner  Hanley  said  that a  separate  accountability                                                                    
system had to  be created when the state  dropped the system                                                                    
under NCLB.                                                                                                                     
                                                                                                                                
Senator  Dunleavy understood  a rating  system using  either                                                                    
letters or numbers  would be put into place  within the next                                                                    
two years.                                                                                                                      
                                                                                                                                
2:01:40 PM                                                                                                                    
                                                                                                                                
Commissioner Hanley shared that a  rating system had been in                                                                    
place for nearly a year.                                                                                                        
                                                                                                                                
Senator  Dunleavy understood  that the  system had  criteria                                                                    
for  rating.  He asked  what  the  department would  do  for                                                                    
schools  that received  low ratings  and whether  there were                                                                    
mandates  from the  federal government  to  move the  school                                                                    
from a low rating to a higher rating.                                                                                           
                                                                                                                                
Commissioner  Hanley said  that  the rating  system was  not                                                                    
simply  words  on   paper.  He  asserted  that   it  was  an                                                                    
accountability system  that informed  schools and  the state                                                                    
where additional  resources were  necessary and  where great                                                                    
performance had occurred. He stated  that the department had                                                                    
prioritized providing  mentors and  coaches to  schools that                                                                    
had one and two star ratings.                                                                                                   
                                                                                                                                
Senator  Dunleavy  wondered what  happen  to  a school  that                                                                    
failed to increase  its score. He queried  whether there was                                                                    
an  ultimate goal  of addressing  the needs  of low  scoring                                                                    
schools in order to improve their performance.                                                                                  
                                                                                                                                
Commissioner  Hanley  responded  that the  department  would                                                                    
maximize its  resources and work  with low rated  schools to                                                                    
its  best ability.  He said  that  additional funding  could                                                                    
help to meet  the needs of more schools on  the lower end of                                                                    
the rating  spectrum. He expressed appreciation  for mentors                                                                    
and  coaches  throughout the  state.  He  felt that  it  was                                                                    
important  to  recognize that  the  majority  of the  rating                                                                    
system was academic,  but many of the  issues facing schools                                                                    
had  nothing to  do with  academics. He  relayed that  there                                                                    
were  schools  that  were  struggling  with  social  issues,                                                                    
suicide,  and alcoholism;  some  schools in  the state  were                                                                    
reporting  that  over  80  percent  of  their  student  body                                                                    
suffered  from Fetal  Alcohol Spectrum  Disorder (FASD).  He                                                                    
stressed that  the district would support  all these schools                                                                    
to the greatest extent possible.                                                                                                
                                                                                                                                
2:05:43 PM                                                                                                                    
                                                                                                                                
Senator Olson inquired whether  the state offered incentives                                                                    
for teachers to work in the lower rated schools.                                                                                
                                                                                                                                
Commissioner Hanley replied no.                                                                                                 
                                                                                                                                
2:06:02 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer asked for an  explanation of the funding flow                                                                    
for charter  schools. He noted  that there was  concern over                                                                    
the 4  percent administration  cap in  one of  the education                                                                    
bills  being considered  by committees.  He asked  how large                                                                    
charge backs by school districts could be prevented.                                                                            
                                                                                                                                
Commissioner  Hanley  related  that current  statute  stated                                                                    
that the budget for a charter  school shall not be less than                                                                    
the  amount  generated  by the  students  enrolled  in  that                                                                    
school. He said  that funding for charter  schools should be                                                                    
determined in  the same manner  as all of the  other schools                                                                    
in the district. He clarified  that the funds generated by a                                                                    
student  was more  than the  base  student allocation  (BSA)                                                                    
component,  but included  the 20  percent special  education                                                                    
component,      vocational/technical     education,      and                                                                    
transportation  costs.  He  stated that  the  one-time,  $25                                                                    
million funding that had been  appropriated for energy costs                                                                    
had  been  generated  to  the   districts  by  students.  He                                                                    
stressed that  the idea  was not  to create  "super schools"                                                                    
but to  create equity and make  sure that the intent  of the                                                                    
original statute was  met. He said that the  idea behind the                                                                    
4  percent  cap was  to  be  sure  that districts  were  not                                                                    
withholding  more  than they  should.  He  explained that  a                                                                    
school district  provided solidity  and support  for charter                                                                    
schools. He believed that the  legislation would help school                                                                    
districts  and charter  schools  to  continue having  strong                                                                    
communication.                                                                                                                  
                                                                                                                                
2:11:48 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  asked about the potential  cost of expanding                                                                    
the Alaska  Native Science  and Engineering  Program (ANSEP)                                                                    
to middle schools.                                                                                                              
                                                                                                                                
Commissioner Hanley  responded that the ANSEP  component was                                                                    
currently a  function of the  University of Alaska.  He said                                                                    
that just  under $1 million flowed  through the department's                                                                    
budget to  support the program.  He stated that  the program                                                                    
had  yielded  excellent  results.   He  explained  that  the                                                                    
program  was introduced  in the  8th grade  with a  computer                                                                    
build program;  students build their  own computer  and upon                                                                    
completion  of required  math courses  the  student gets  to                                                                    
keep the computer.  He said that the intent  of the language                                                                    
in the bill related to ANSEP  was to encourage the 8th grade                                                                    
component and set the stage for high school.                                                                                    
2:14:27 PM                                                                                                                    
                                                                                                                                
Senator Dunleavy noted that the  legislature was tasked with                                                                    
the job of  assisting and maintaining public  schools in the                                                                    
state's 54  school districts. He wondered  how local control                                                                    
and  state  funding  worked  together.  He  asked  what  the                                                                    
legislature  should expect  from schools  that were  left to                                                                    
determine how education was delivered to students.                                                                              
                                                                                                                                
Commissioner Hanley  responded that there were  targets that                                                                    
were in  place to assure  that students had  the opportunity                                                                    
to receive an  education in a healthy  and safe environment,                                                                    
with the progression  towards a time when  they are equipped                                                                    
with the tools  they will need to be  successful beyond high                                                                    
school.  He said  that assessments  in grades  3 through  10                                                                    
measured    student   success    in   academics    and   the                                                                    
accountability for  schools in  the areas of  attendance and                                                                    
graduation rates.                                                                                                               
                                                                                                                                
2:17:42 PM                                                                                                                    
                                                                                                                                
Senator Olson reiterated his  question about minimum amounts                                                                    
of bandwidth for schools.                                                                                                       
                                                                                                                                
ROBBIE   GRAHAM,  ASSISTANT   COMMISSIONER,  DEPARTMENT   OF                                                                    
COMMERCE,  COMMUNITY  AND  ECONOMIC  DEVELOPMENT,  responded                                                                    
that  the  minimum  speed  that most  schools  had  was  1.5                                                                    
megabits per second; some in  urban areas had faster speeds.                                                                    
The  federal  government had  recently  issued  a notice  of                                                                    
proposed  rulemaking that  would change  the e-rate  program                                                                    
and  require American  schools have  broadband speeds  of no                                                                    
less than  100 megabits  per second by  2015. She  said that                                                                    
the department was working towards  greater speed to support                                                                    
the increase in demand for digital learning.                                                                                    
                                                                                                                                
2:18:50 PM                                                                                                                    
                                                                                                                                
Senator Olson  queried how much  the federal match  would be                                                                    
for the funding of increased broadband.                                                                                         
                                                                                                                                
Ms. Grahm replied  that she was not sure. She  said that the                                                                    
entire  e-rate program  was part  of  the universal  service                                                                    
reform,  which was  subject to  change. She  understood that                                                                    
$2.3  billion  was  available   for  schools  and  libraries                                                                    
through  the universal  service  reform, but  it was  unsure                                                                    
what funding would look like in the future.                                                                                     
2:19:44 PM                                                                                                                    
                                                                                                                                
Senator  Olson  understood  that   to  assist  with  funding                                                                    
broadband  expansion the  federal  government matched  every                                                                    
state dollar with $4 additional dollars.                                                                                        
                                                                                                                                
Ms. Graham responded that the figure sounded accurate.                                                                          
                                                                                                                                
2:20:07 PM                                                                                                                    
                                                                                                                                
Senator  Olson inquired  what amount  of bandwidth  would be                                                                    
necessary to  provide high  quality interactive  courses for                                                                    
high  school and  middle school  students for  basic Science                                                                    
Technology Engineering and Mathematics (STEM) courses.                                                                          
                                                                                                                                
Ms.  Graham responded  that the  ideal amount  would be  100                                                                    
megabits  per second,  but that  speed carried  a price  tag                                                                    
that  the  department  could   not  currently  support.  The                                                                    
department was hoping that 15, 25  and up to 50 megabits per                                                                    
second would  be a reasonable  amount of speed for  the time                                                                    
being. She asserted that the  department was working towards                                                                    
100 megabits per second.                                                                                                        
                                                                                                                                
2:21:11 PM                                                                                                                    
                                                                                                                                
Senator Olson opined that there  was nothing to be gained by                                                                    
waiting  for survey  results  to  determine whether  schools                                                                    
that were  less than  10 megabits  needed to  increase their                                                                    
bandwidth.                                                                                                                      
                                                                                                                                
Ms.  Graham  replied that  the  survey  that Connect  Alaska                                                                    
would  perform   on  behalf   of  the   statewide  broadband                                                                    
taskforce  would begin  in  May  or June  of  2014 with  the                                                                    
intent to  survey most rural  schools in order  to determine                                                                    
what speeds were currently being  delivered and what kind of                                                                    
connectivity each school had to receive the bandwidth.                                                                          
                                                                                                                                
Senator Olson commented that the  schools that had less than                                                                    
10 megabits per  second would have to wait  for the analysis                                                                    
to be done on the survey, which will be detrimental.                                                                            
                                                                                                                                
2:23:07 PM                                                                                                                    
                                                                                                                                
Commissioner  Hanley offered  Senator  Olson's analysis  was                                                                    
correct. He wondered whether the  federal e-rate match would                                                                    
generate  the  same  numbers if  Alaska  put  in  additional                                                                    
funds.                                                                                                                          
                                                                                                                                
Ms. Graham responded that she was unsure.                                                                                       
                                                                                                                                
2:25:08 PM                                                                                                                    
                                                                                                                                
Senator Hoffman  thought that  the longer  it took  to bring                                                                    
the entire state up to  100 megabits per second, the farther                                                                    
students would fall behind.                                                                                                     
                                                                                                                                
Commissioner  Hanley admitted  that  the  lack of  bandwidth                                                                    
created greater challenges for students.                                                                                        
                                                                                                                                
Senator Hoffman queried whether  the lack of bandwidth would                                                                    
allow students  to academically advance faster  than student                                                                    
in schools with faster broadband.                                                                                               
                                                                                                                                
Commissioner  Hanley responded  that that  would be  an even                                                                    
greater  challenge. He  recognized  that the  lack of  speed                                                                    
presented a challenge  but he did not believe  that it meant                                                                    
student would necessarily fall behind.                                                                                          
                                                                                                                                
2:27:08 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough wondered  whether the department could                                                                    
prioritize extra funding to communities  affected by lack of                                                                    
internet   speed  if   the  committee   included  additional                                                                    
appropriations in the omnibus education bill.                                                                                   
                                                                                                                                
Commissioner Hanley said absolutely.                                                                                            
                                                                                                                                
Vice-Chair  Fairclough stressed  importance that  the survey                                                                    
conducted  by the  taskforce be  conducted using  terms that                                                                    
could  be understood  by  people  unfamiliar with  technical                                                                    
jargon. She  asked whether the federal  government was going                                                                    
to  attempt to  implement  100 megabits  per  second in  all                                                                    
schools in the country by 2105.                                                                                                 
                                                                                                                                
Ms. Graham responded that the  notice of proposed rulemaking                                                                    
had  stated that  the federal  government  was targeting  99                                                                    
percent of America's schools to  have broadband speeds of no                                                                    
less than  100 megabits per  second by 2015. She  added that                                                                    
the  ultimate goal  was 1  gigabit per  second by  2020. She                                                                    
said that the recommendation had come from the FCC.                                                                             
                                                                                                                                
Vice-Chair  Fairclough   informed  committee   members  that                                                                    
amendments for HB 278 were due  by 5pm.  She wondered if Ms.                                                                    
Graham  could   provide  the   FCC  recommendation   to  the                                                                    
committee  so  that  intent language  could  be  crafted  to                                                                    
include in the bill.                                                                                                            
                                                                                                                                
Ms. Graham agreed to provide the information.                                                                                   
                                                                                                                                
Senator Dunleavy  stressed the importance that  schools have                                                                    
the hardware, software and training  in place to utilize any                                                                    
increased  broadband. He  believed  that an  audit would  be                                                                    
necessary in  order to ascertain the  capability capacity of                                                                    
each school, in every district.                                                                                                 
                                                                                                                                
Vice-Chair  Fairclough felt  that more  could be  learned by                                                                    
conducting a study on the matter rather than a survey.                                                                          
                                                                                                                                
2:31:37 PM                                                                                                                    
                                                                                                                                
Senator  Bishop   discussed  broadband  related   to  career                                                                    
technical  education. He  queried the  department's role  in                                                                    
implementing a career in technical education plan.                                                                              
                                                                                                                                
Commissioner Hanley  said that the department  supported the                                                                    
district-wide implementation of the plan.                                                                                       
                                                                                                                                
Senator Bishop believed that the  plan was a pathway forward                                                                    
for students.  He recalled a  statistic that  suggested that                                                                    
80 percent  of students  leaving high school  would continue                                                                    
into  trade schools;  20  percent would  go  to college.  He                                                                    
wondered if that statistic had changed.                                                                                         
                                                                                                                                
Commissioner Hanley  said that he  could not speak  to exact                                                                    
percentages,  but thought  that  the 80  percent figure  had                                                                    
dropped to 60 percent.                                                                                                          
                                                                                                                                
Senator   Bishop  believed   that  DEED,   DOL&WD  and   the                                                                    
University of  Alaska should continue  to work  together, in                                                                    
collaboration  with  the  state's 54  school  districts,  to                                                                    
educate and train Alaska's future workforce.                                                                                    
                                                                                                                                
Commissioner Hanley agreed.                                                                                                     
                                                                                                                                
Senator Bishop noted  that TEVEP was a small  portion of the                                                                    
money that would be needed for career technical education.                                                                      
                                                                                                                                
2:35:10 PM                                                                                                                    
Vice-Chair  Fairclough wondered  how  DOL was  collaborating                                                                    
with the  University or DEED to  track student's performance                                                                    
once  they exited  the school  system and  entered into  the                                                                    
workforce.                                                                                                                      
                                                                                                                                
2:35:55 PM                                                                                                                    
                                                                                                                                
WANETTA   AYERS,   DEPARTMENT   OF   LABOR   AND   WORKFORCE                                                                    
DEVELOPMENT,  ANCHORAGE (via  teleconference), replied  that                                                                    
some data  was available. She  said that a  complete picture                                                                    
was  not  yet available  due  to  technical and  legal  data                                                                    
sharing  issues. She  relayed that  labor and  job and  wage                                                                    
outcome   information   was   regularly  reported   by   the                                                                    
department for federal and state training grant programs.                                                                       
                                                                                                                                
Vice-Chair Fairclough  assumed that  DOL was not  opposed to                                                                    
sharing information with the K-12 or University systems.                                                                        
                                                                                                                                
Ms. Ayers  replied that the information  sharing was already                                                                    
taking place  between the entities.  She explained  that the                                                                    
research  and  analysis  division   of  DOL&WD  conducted  a                                                                    
variety  of  job and  wage  outcome  research operations  in                                                                    
cooperation with  the University.  She said that  there were                                                                    
technical  and legal  challenges  involved  in sharing  with                                                                    
DEED, which DOL&WD was working to overcome.                                                                                     
                                                                                                                                
2:37:30 PM                                                                                                                    
                                                                                                                                
Senator Dunleavy spoke to the  issue of tests for credit. He                                                                    
mentioned the  College Level Examination Program  (CLEP) and                                                                    
its growing  popularity nationwide. He said  that the Mat-Su                                                                    
Borough had adopted the test  for credit option. He stressed                                                                    
that  resources already  existed  for the  program and  were                                                                    
mass produced.  He strongly urged the  committee to consider                                                                    
that the program would easy to implement.                                                                                       
                                                                                                                                
2:39:13 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough  inquired whether DEED  maintained the                                                                    
desire to allow students to opt out of core subjects only.                                                                      
                                                                                                                                
Commissioner Hanley  replied that districts  could currently                                                                    
assess  students in  any way  that  they chose  and to  give                                                                    
credit to students  that showed proficiency or  mastery of a                                                                    
subject. He  asserted that the department  wanted to require                                                                    
that districts provide  a test out option  for core courses.                                                                    
He stated  that the  bill only  asked that  opt out  test be                                                                    
provided only for courses already offered by the school.                                                                        
                                                                                                                                
2:41:13 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer noted that the  amendments to the legislation                                                                    
should be submitted to his office before 5pm.                                                                                   
                                                                                                                                
2:42:22 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:53:45 PM                                                                                                                    
RECONVNED                                                                                                                       
                                                                                                                                
Vice-Chair Fairclough handed the gavel to Co-Chair Meyer.                                                                       
                                                                                                                                
Co-Chair  Meyer noted  that school  funding was  one of  the                                                                    
most confusing areas of the bill.                                                                                               
                                                                                                                                
2:54:48 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer noted that the  governor had looked at adding                                                                    
$85 in the base student  allocation (BSA) and that the House                                                                    
had added  another $100.  He understood  that the  house had                                                                    
added an additional $30 million outside of the BSA.                                                                             
                                                                                                                                
DAVID TEAL, DIRECTOR,  LEGISLATIVE FINANCE DIVISION, replied                                                                    
in the affirmative.                                                                                                             
                                                                                                                                
Co-Chair Meyer inquired  how the $30 million  outside of the                                                                    
cap  would  be  distributed  to schools.  He  asked  whether                                                                    
additional  local  contribution  could be  made  to  funding                                                                    
outside of the BSA.                                                                                                             
                                                                                                                                
2:55:59 PM                                                                                                                    
                                                                                                                                
Mr.  Teal  responded  that  from  the  state's  perspective,                                                                    
assuming  that  the  funds  were  distributed  according  to                                                                    
adjusted average daily membership  (ADM), the same amount of                                                                    
money went  to the  same school districts  exactly as  if it                                                                    
had gone through the formula.  He said that school districts                                                                    
might argue that money in  the BSA was permanent and allowed                                                                    
for long-term  planning; money outside of  the formula would                                                                    
not give  as much of a  planning horizon because it  was not                                                                    
guaranteed.  He stated  that in  his experience  he had  not                                                                    
seen one-time  money go away in  the sense that it  had been                                                                    
removed,  but  rather   in  the  sense  that   it  had  been                                                                    
incorporated into the  BSA. He relayed that in  the past the                                                                    
senate had addressed  the issue by putting  outside money in                                                                    
for  multiple years.  He  agreed that  the  funding was  not                                                                    
permanent, but thought that planning  should not be affected                                                                    
if  spending  history  was reviewed.  He  offered  that  the                                                                    
funding  could affect  local contribution;  when monies  ran                                                                    
through  the formula  the basic  need was  higher, voluntary                                                                    
local contribution were capped at  23 percent of basic need,                                                                    
so more  could be  contributed at the  local level.  He gave                                                                    
the example that  if the funding was  increased $100 million                                                                    
outside  of  the  BSA and  Anchorage  received  roughly  $30                                                                    
million of those  funds, if it were outside of  the BSA then                                                                    
Anchorage would  lose the ability  to contribute  23 percent                                                                    
to the district. If the  money was inside the BSA, Anchorage                                                                    
could  contribute an  additional  $6 or  $7  million to  the                                                                    
district.                                                                                                                       
                                                                                                                                
2:59:01 PM                                                                                                                    
                                                                                                                                
Mr. Teal said that the  contribution would make a difference                                                                    
because Anchorage was  at the cap. He related  that it would                                                                    
make no difference  for districts that were not  at the cap.                                                                    
He stated that there were  some districts in the state whose                                                                    
communities funded  them to the  cap, so running  the monies                                                                    
outside  of the  formula would  arguably not  allow them  to                                                                    
contribute as much as they would like to contribute.                                                                            
                                                                                                                                
2:59:39 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer understood that every  $25 million equated to                                                                    
an approximate $100 increase in the BSA.  Mr. Teal agreed.                                                                      
                                                                                                                                
                                                                                                                                
3:00:11 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  said that  $100 million  had been  set aside                                                                    
for education  in the operating  budget, which equated  to a                                                                    
$400 BSA.                                                                                                                       
                                                                                                                                
Co-Chair Kelly  interjected that  the total money  set aside                                                                    
for 2014 was  $75 million because the other  $25 million was                                                                    
incorporated from 2013.                                                                                                         
                                                                                                                                
Co-Chair  Meyer inquired  whether putting  the $  75 million                                                                    
outside  of  the  cap would  prohibit  local  municipality's                                                                    
ability  to increase  contributions. Mr.  Teal responded  in                                                                    
the affirmative.                                                                                                                
Vice-Chair  Fairclough understood  that  if  the funds  were                                                                    
inside the BSA then taxpayers could see a tax increase.                                                                         
                                                                                                                                
Mr. Teal  responded that Vice-Chair Fairclough  was correct.                                                                    
He said  that if the city  needed to raise funds  to pay the                                                                    
extra money  then taxes would  increase; however,  the local                                                                    
contribution  was  voluntary  and  the  city  was  under  no                                                                    
obligation to increase payments.                                                                                                
                                                                                                                                
Co-Chair  Meyer   asked  if  there   was  a   scenario  that                                                                    
considered a  non-adjusted ADM. Mr. Teal  responded that the                                                                    
non-adjusted ADM  would be the  head count. He said  that if                                                                    
the money  were distributed according to  ADM then Anchorage                                                                    
would  receive more  than its  formula  share. He  explained                                                                    
that Anchorage was already at  the cap and federal disparity                                                                    
(dollars per  student differences)  testing would  not allow                                                                    
more than  25 percent. He  relayed if money  was distributed                                                                    
in  Anchorage according  to  the  unadjusted ADM,  Anchorage                                                                    
would exceed the disparity test.                                                                                                
                                                                                                                                
3:03:37 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough  opined that the state  was limited by                                                                    
the disparity test.                                                                                                             
                                                                                                                                
Mr.  Teal  replied  that   the  federal  government  allowed                                                                    
districts to  receive as  much as  25 percent  disparity. He                                                                    
explained that  Alaska did  not fund  by head  count, Alaska                                                                    
funds by adjusted student count.  The federal government had                                                                    
reviewed  the formula  and approved  the method  because the                                                                    
formula factors  used to adjust  for geographic  issues were                                                                    
legal on allowable adjustable factors.  He furthered that if                                                                    
factors not  approved by the federal  government were added,                                                                    
the disparity test would be  broken, even though the formula                                                                    
had been used.  He relayed that where  no local contribution                                                                    
was  required at  all the  municipality  paid zero;  however                                                                    
some  Alaska urban  areas had  a required  local effort.  He                                                                    
stated that the  lower districts could have no  more than 25                                                                    
percent  less funding  than the  higher  districts, and  so,                                                                    
money could  not be distributed  outside of the  formula and                                                                    
still  meet the  disparity  test. He  reiterated that  local                                                                    
contributions already made  up 23 percent of  the 25 percent                                                                    
disparity.                                                                                                                      
                                                                                                                                
3:06:46 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer asked  about the  idea  of adjusting  school                                                                    
sizes so that  urban schools could get more  funding and the                                                                    
rural schools would be held harmless.                                                                                           
                                                                                                                                
Mr. Teal  replied that  the other body  had removed  the top                                                                    
two  brackets  from the  size  factor,  but that  would  not                                                                    
affect   the  federal   test  because   size  was   a  valid                                                                    
adjustment. He said that if it  were to be decided that size                                                                    
factors had  changed then  they could  be modified.  He felt                                                                    
that the concern that would  be raised by the department was                                                                    
the study  that would support  the size factor  change would                                                                    
need to be  produced; should the formula  be taken seriously                                                                    
enough that changes were not  made via amendment, or another                                                                    
quick process,  because the money flow  was satisfactory. He                                                                    
said that the  formula should be based on  the economies, or                                                                    
diseconomies, of  scale that were  experienced in  the state                                                                    
and should not be changed in haste.                                                                                             
                                                                                                                                
Co-Chair Meyer  probed the advantages, or  disadvantages, of                                                                    
putting money outside of the formula.                                                                                           
                                                                                                                                
Mr.  Teal  replied  that  the  advantage  of  keeping  money                                                                    
outside the formula was that  it would appear to be one-time                                                                    
money.  He  thought  that  a solid  reason  for  putting  it                                                                    
outside the formula  would be that the formula  was going to                                                                    
be studied again; size factors  had been in place since 1997                                                                    
and the geographic factors had  not been studied since 2007.                                                                    
He said that  a completed study of whether  the factors were                                                                    
adjusting for  differences the way they  should be adjusting                                                                    
should  be   conducted  before   the  BASA   were  increased                                                                    
permanently. He  asserted that there  could be  schools that                                                                    
would  lose out  were the  formula to  change; if  money was                                                                    
going to  be moved around  because factors had  changed, the                                                                    
BSA  would need  to be  increased  in order  to appease  the                                                                    
districts  that  did  not receive  more  money  through  the                                                                    
formula  adjustments.  He  stated  that if  money  was  held                                                                    
outside of the BSA it could  be argued that the "winners and                                                                    
losers" argument would go away  because the funding was one-                                                                    
time  funding, given  while the  study was  being completed,                                                                    
and not that  there were new numbers, a new  formula and new                                                                    
allocation dollars the money could be put in the BSA.                                                                           
                                                                                                                                
Co-Chair Meyer asked if one  of the studies addressed in the                                                                    
legislation was a BSA study.                                                                                                    
                                                                                                                                
Mr. Teal though that the only  study in the bill was a state                                                                    
salary study.                                                                                                                   
3:11:20 PM                                                                                                                    
                                                                                                                                
Co-Chair Kelly  inquired how the  federal impact  aid played                                                                    
into the discussion regarding the disparity test.                                                                               
                                                                                                                                
Mr. Teal directed the question to DEED.                                                                                         
                                                                                                                                
3:12:12 PM                                                                                                                    
                                                                                                                                
Senator   Dunleavy  understood   that  the   disparity  test                                                                    
revealed  how  much  the state  contributed  within  the  25                                                                    
percent limit.                                                                                                                  
                                                                                                                                
Mr. Teal replied  that the 25 percent applied  to any funds,                                                                    
state or local.                                                                                                                 
                                                                                                                                
Senator Dunleavy spoke  of districts in the  state that were                                                                    
not currently  experiencing a shortfall, he  wondered if the                                                                    
issue was one of funding and not expenditure.                                                                                   
                                                                                                                                
Mr.  Teal responded  that the  disparity test  was based  on                                                                    
revenue and not expenditures.                                                                                                   
                                                                                                                                
3:14:30 PM                                                                                                                    
                                                                                                                                
Co-Chair Kelly asked how federal  impact aid played into the                                                                    
disparity test.                                                                                                                 
                                                                                                                                
ELIZABETH   NUDELMAN,   DIRECTOR,    SCHOOL   FINANCES   AND                                                                    
FACILITIES, DEPARTMENT  OF EDUCATION AND  EARLY DEVELOPMENT,                                                                    
replied  that  the  Alaska  had  an  equalized  formula  for                                                                    
distributing public  education funding. The formula  was set                                                                    
out  to provide  the  same education  across  the state  for                                                                    
different  regions  with  different  expenditure  levels  to                                                                    
acquire  a  teacher  and the  other  things  that  supported                                                                    
education.  She stated  that  because  Alaska maintained  an                                                                    
equalized formula within 25 percent  from the most expensive                                                                    
area  to the  least expansive  area the  state, through  the                                                                    
federal aid program,  was allowed to use  federal impact aid                                                                    
dollars to fund the foundation  program. She said that there                                                                    
was approximately $140  million in impact aid  funds sent to                                                                    
school districts  across Alaska. She relayed  that the funds                                                                    
were payments in lieu of  taxes for federal lands where they                                                                    
could not be taxed locally.  Of the $140 million distributed                                                                    
to school  districts, Alaska used approximately  $70 million                                                                    
to fund  the foundation program. She  explained that without                                                                    
the impact aid, without  maintaining an equalized program in                                                                    
passing the disparity test, Alaska  would not be able to use                                                                    
the  payments  in  lieu  of taxes  to  fund  the  foundation                                                                    
program, if  the program continued  the state would  need to                                                                    
find $70 million to replace the impact aid.                                                                                     
                                                                                                                                
3:16:46 PM                                                                                                                    
                                                                                                                                
Senator Hoffman wondered where the $70 million went.                                                                            
                                                                                                                                
Ms.  Nudelman  replied that  there  was  a calculation  that                                                                    
provided for how much school  district's retained versus how                                                                    
much  the state  retained. The  calculation was  a ratio  of                                                                    
local effort:  districts that were  putting in  local effort                                                                    
retained  a  portion of  their  impact  aid. She  said  that                                                                    
regional educational attendance areas  (REAA) did not need a                                                                    
local effort  in order  to retain 10  percent of  the impact                                                                    
aid. The  $70 million that  was left in the  districts would                                                                    
be based on a calculation of 90 percent local effort.                                                                           
                                                                                                                                
Senator Hoffman inquired if the  federal lands that were the                                                                    
result of the revenue were primarily in rural Alaska.                                                                           
                                                                                                                                
Ms.  Nudelman  replied  no.  She  said  that  larger  school                                                                    
districts  had   military  bases  and  the   state  received                                                                    
significant impact aid funds from the bases.                                                                                    
                                                                                                                                
3:18:36 PM                                                                                                                    
                                                                                                                                
Senator  Dunleavy  relayed that  the  question  of what  was                                                                    
enough money was  one that was discussed from  year to year.                                                                    
He asked  why some  school districts had  a fund  balance in                                                                    
term  of expenditures  and  some did  not,  and whether  the                                                                    
problem  had to  do with  flat  funding. He  noted that  the                                                                    
larger schools districts seemed to  be in the most financial                                                                    
trouble.                                                                                                                        
                                                                                                                                
Ms.  Nudelman  said that  by  statute  districts could  only                                                                    
maintain 10 percent of their  expenditures in a fund balance                                                                    
for an operating fund at the  end of each year. She believed                                                                    
that this  made sense in  order to account  for emergencies.                                                                    
She relayed  that the  factors leading  to why  one district                                                                    
would hold  over money from  one year  to the next  would be                                                                    
unknown.  She  stated  that  she  could  not  speak  to  the                                                                    
particular needs  of each individual district  she mentioned                                                                    
a  Senate Education  Task Force  meeting  from summer  2012,                                                                    
where  several districts  gave presentations  that described                                                                    
cost drivers but controllable and uncontrollable.                                                                               
3:22:49 PM                                                                                                                    
                                                                                                                                
Senator Dunleavy commented that  large school districts were                                                                    
having a  difficult time handling  insurance costs.  He said                                                                    
that  the  largest  school  districts   in  the  state  were                                                                    
experiencing similar  problems with  regard to  deficits. He                                                                    
noted that  smaller school districts  were not. He  hoped to                                                                    
figure out why.                                                                                                                 
                                                                                                                                
3:24:10 PM                                                                                                                    
                                                                                                                                
Senator  Hoffman noted  that rural  schools  faced the  same                                                                    
funding problems  although they  might not receive  the same                                                                    
publicity as larger districts statewide.  He agreed with Mr.                                                                    
Teal that formula changes needed to be made with caution.                                                                       
                                                                                                                                
3:25:49 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer asked how  correspondence schools were funded                                                                    
through the formula.                                                                                                            
                                                                                                                                
Commissioner  Hanley replied  that  they were  funded at  .8                                                                    
percent of the BSA.                                                                                                             
                                                                                                                                
3:27:45 PM                                                                                                                    
                                                                                                                                
Senator Dunleavy shared that Mat-Su  Central School had 1700                                                                    
students  in its  correspondence program.  He felt  that the                                                                    
correspondence   percentage    number   had    been   chosen                                                                    
arbitrarily.                                                                                                                    
                                                                                                                                
Co-Chair  Meyer   admitted  that  the  bill   included  many                                                                    
challenging issues pertaining to education.                                                                                     
                                                                                                                                
3:29:53 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:31:32 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
CSHB  278(FIN)  am  was  HEARD and  HELD  in  committee  for                                                                    
further consideration.                                                                                                          
                                                                                                                                
SB 220 was SCHEDULED but not HEARD.                                                                                             
                                                                                                                                
Co-Chair Meyer discussed housekeeping.                                                                                          
                                                                                                                                
ADJOURNMENT                                                                                                                   
3:31:54 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:31 p.m.                                                                                          

Document Name Date/Time Subjects
HB278 PLEASE do the right thing for our Schools increase the BSA - Toll.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 O'Malley elementary mom - Glenn.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 BSA increase - Davis.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Support Schools - Rein.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 education funding - Walton.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Student funding - Berg.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB 278 Testimony - Holleman.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Increase the BSA by $400 this year and $125 each the next 2 years - Mingo.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Public Testimony - Shurson.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Public Testimony - Superman.pdf SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Raise the BSA - Roll.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 BSA increase - Marshburn.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 I oppose HB 278 - Boring.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please support HB 278 supporting charter schools - Flein.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Senate Finance Testimony April10 - Eski.doc SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Base Student Allocation in budget bill - Richotte.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Comments - Atwater.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Letter to House Finance Committee Co-Chairs AQ Funding - Fairbanks.pdf SFIN 4/14/2014 1:30:00 PM
HB 278
HB278SupportLetter_NACTEC_1.pdf SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 IFA Letter.pdf SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Teacher Tenure (do not change) - Ernst.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB 278 ~Tenure Amendment - Bushey.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Public Testimony - Gray.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB75 Pledge Numbers Provided by PFD.doc SFIN 4/14/2014 1:30:00 PM
HB 75
HB75 PCG Pledges vs Contributions by Year and Org.xls SFIN 4/14/2014 1:30:00 PM
HB 75
HB278 BSA Increase - Weaver.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Education Funding - Mitchell.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Public Testimony BSA _ Boggs.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 House Bill on Education - Carlson.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 substitute for the House Bill on Education - Turner.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Education funding - Carnahan.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please ensure adequate school funding - Johnson.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please Increase BSA - Carnahan.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Increase the BSA - Downer.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please vote for school funding increase - Sievert.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Public Testimony - Schroeder.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB 278 - Leah.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Increases to BSA - Gardey.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please support public schools to the fullest! - Faralan-Mingo.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 School funding - French.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 The Base Student Allocation Needs to be Increased Substantially - Danner.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Education funding highest priority - Danner.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 BSA increase - Kupilik.msg SFIN 4/14/2014 1:30:00 PM
HB 278
Hb278 BSA Increased by $400 Please! - Jensen.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please fully fund education - Rozen.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please increase the BSA - Paesani.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Base Student Allocation - Ritter.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 BSA increase - Murry.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Alaska's Kids are Counting on You... - Birch.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 School funding - McCoy.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Education Bill Testimony - Roselle.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 BSA Public Testimony - Sullivan.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Base Student Allocation - Please increase! - Thoms.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Make education funding a priority -J.Dinneen.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 School funding - Evans-Dinneen.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 I support increased funding for Anchorage Schools - Reeves.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 School BSA Reallocation - White.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please increase the BSA by $400 AND $125 for the next 2 years - Boots.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please support our Alaska schools - Nash.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 To Senate Finance Committee Members -- Please support our public schools Increase BSA by $400$125$125 - Wiggin.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Fully fund schools - Richotte.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please help the Alaska kids - Cedano.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Student Base Allocation and Susitna Dam - Pierce.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Education matters! - Harmon.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 School Funding - Cramer.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 school funding - Kushin.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Support Alaska's Students - Bivins.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Funding public education - Wiggin.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Base student allocation - Retus.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Raise the BSA $600 effective FY15. Show us the money. - Bronson.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please Support our Educational Discourse Fund our Schools - Waisanen.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 INCREASE BSA - Decker.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Increase the BSA - Zafren.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Increase BSA please - Engh.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 school funding plea! - Reed.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please increase the BSA and avoid more layoffs! - Shellenbaum.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Public Schools - Norton.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 AASA Testimony.pdf SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 A thru F grading of schools -- Keep it! - Boyle2.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 A-F Grading provision in HB 278 - Griffin.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Fully fund our schools - please - Burch.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 A thru F grading of schools -- Keep it! - Boyle.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 FCC Scool and Libray Policy Brief.pdf SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 FCC changes to Universal Service Reform for the e-rate program - FCC-13-100A1.docx SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 BSA - Johnson.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Increase the BSA - Glenn.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Don't stop public school funding - Olnes.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 BSA URGENT - Tague.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 School allocations - Shewman.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 TVEP Public Testimony - Reynolds.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 AWIB - CTE Programs RTC List - Reynolds.pdf SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Fund public schools with $400 BSA - Pease.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 - Please support our schools! - Wittrock.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please Support School Funding - Woern.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 base student allocation - Crane.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Letter to Leadership Team re Supporting Alaska's Students by Increasing the BSA - Brooks.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB 278 Education; BSA Increases for FY 15-17 - Borromeo.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 school funding - Hopkins.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please prioritize Alaska's children and raise the BSA for the next 3 years - Pausebeck.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Alaska public schools are our future - Kimmel.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Alaska public schools are our future - Kimmel.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Increasing the BSA to $400 for next school year with an additional $125 for the following two school years - Crosson.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please Increase the BSA - Williams.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 BSA increase - Cox.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please take out the tenure ext in HB278 - Yocum.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Vote for full funding BSA - Burch.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Increase the BSA! - Coward.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB 278 Public Testimony - Jamieson.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Opposed to Extending Teacher Tenure - Boyle.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Restore the BSA $400-125-125 - Pease.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Education Funding - Walton.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please raise the BSA to $400 - Malloy.msg SFIN 4/14/2014 1:30:00 PM
HB 278
HB278 Please add more funding to the BSA - Elliott.msg SFIN 4/14/2014 1:30:00 PM
HB 278