Legislature(2021 - 2022)SENATE FINANCE 532
02/11/2021 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| K-12 Fy22 Operating and Formula Walk Through | |
| University Fy22 Operating – Subcommittee of the Whole | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
February 11, 2021
9:01 a.m.
9:01:39 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:01 a.m.
MEMBERS PRESENT
Senator Click Bishop, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lyman Hoffman (via teleconference)
Senator Donny Olson
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
Senator Natasha von Imhof
ALSO PRESENT
Pat Pitney, Interim President, University of Alaska.
PRESENT VIA TELECONFERENCE
Michael Johnson, Commissioner, Department of Education and
Early Development; Heidi Teshner, Director, Finance and
Support Services, Department of Education and Early
Development; Lacey Sanders, Administrative Services
Director, Department of Education and Early Development,
Office of Management and Budget, Office of the Governor.
SUMMARY
K-12 FY22 OPERATING AND FORMULA WALK THROUGH
UNIVERSITY FY22 OPERATING SUBCOMMITTEE OF THE WHOLE
Co-Chair Stedman discussed the agenda.
^K-12 FY22 OPERATING AND FORMULA WALK THROUGH
9:03:04 AM
Co-Chair Stedman remarked that regardless of its fiscal
position, the education of Alaska's children was one of the
state's fundamental constitutional obligations.
9:03:37 AM
MICHAEL JOHNSON, COMMISSIONER, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT (via teleconference), discussed the
presentation "Foundation Formula Overview & K-12 FY2022
Operating Budget" (copy on file). He relayed that he would
give brief remarks until slide 4, at which time he would
turn the presentation over to the Director of Finance and
Support Services for the Department of Education and Early
Development (DEED).
Commissioner Johnson showed slide 2, "Our Mission, Vision,
and Purpose":
OUR MISSION
An excellent education for every student every day.
OUR VISION
All students will succeed in their education and work,
shape worthwhile and satisfying lives for themselves,
exemplify the best values of society, and be effective
in improving the character and quality of the world
about them. Alaska Statute 14.03.015
OUR PURPOSE
DEED exists to provide information, resources, and
leadership to support an excellent education for every
student every day.
Commissioner Johnson turned to slide 3, "Our Strategic
Priorities: Alaska's Education Challenge":
Five Shared Priorities:
1. Support all students to read at grade level by the
end of third grade
2. Increase career, technical, and culturally relevant
education to meet student and workforce needs
3. Close the achievement gap by ensuring equitable
educational rigor and resources
4. Prepare, attract, and retain effective education
professionals
5. Improve the safety and well-being of students
through school partnerships with families,
communities, and tribes
Commissioner Johnson thought it was important to ponder
priorities as the state reviewed the budget, identified the
impacts of COVID-19 on student enrollment, and considered
the impact of millions of dollars of relief funds.
9:05:48 AM
HEIDI TESHNER, DIRECTOR, FINANCE AND SUPPORT SERVICES,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT (via
teleconference), reviewed slide 4, "Public School Funding
Formula":
FY2021 Statewide Enrollment Counts
Foundation Payment Process and Advances
Federal Impact Aid Disparity Test
Additional State-Funded Formula Programs
Ms. Teshner displayed slide 5, "Public School Funding":
Public school funding is established under AS 14.17
Funding consists of State Aid, Required Local
Contribution, and Federal Impact Aid
The amount of State Aid a school district is eligible
to receive during the Fiscal Year is calculated
annually through the school funding formula (AS
14.17.410)
To begin the funding calculation, an average daily
membership (ADM) for each school must be determined.
education.alaska.gov/school finance
https://education.alaska.gov/SchoolFinance/docs/ADA%20
Funding%20Program%20Overview%202021_eff9-2020.pdf
Ms. Teshner cited that the education foundation formula was
adopted under SB 36 in 1998 and was implemented in 1999.
She noted that Regional Educational Attendance Areas (REAA)
did not have a local contribution, and there were 19 REAA
school districts in the state. She explained that the first
hyperlink listed on the slide would give access to DEED's
school finance website, where there were resources
including allocation history and annual foundation reports.
She mentioned two supplemental handouts, the eight-page
"Public School Funding Program Overview" and a one-page
document entitled "Alaska Public School Funding -
Foundation Formula History" (copy on file).
Ms. Teshner spoke to slide 6, "Annual Count Period":
Each Fall, every district is required to conduct a 20-
day student count to determine their Average Daily
Membership (ADM).
Districts must submit their student count data (ADM)
to the department two weeks after the count period
ends (AS 14.17.600).
The department uses ADM data to determine a district's
State Aid eligibility and funding
2020-2021 school year count period: September 28
October 23, 2020
2020-2021 school year count period submittal
date: November 6, 2020
9:09:43 AM
Ms. Teshner showed slide 7, "FY2021 Statewide School
Enrollment Counts":
FY2021 Projected: Projected student counts provided by
districts in November 2019 in order to prepare the
FY2021 Governor's Budget. Required by AS 14.17.500
FY2021 OASIS Update: Student counts or "actuals"
provided by districts during the 2020-2021 school year
20-day count period and the results of the
department's reconciliation and review process.
Required by AS 14.17.600(a)
FY2022 Projected: Projected student counts provided by
districts in November 2020 in order to prepare the
FY2022 Governor's Budget. Required by AS 14.17.500
Ms. Teshner noted that the table at the top of the slide
showed the statewide FY 21 updated student count data
compared to the FY 21 projected data and the FY 20 actual
data. Additionally, there was projected data for FY 21 and
FY 22. The department reviewed the data annually to ensure
that there were no duplicates and to review the special
education intensive students.
Co-Chair Stedman asked what the chart on slide 7 indicated.
Ms. Teshner pointed out that the FY 21 regular average
daily membership (ADM) had decreased 15,352.91 or by 13.4
percent compared to the projected data. In addition, the
ADM had increased 13,445.8 or 94.9 percent over the FY 21
projected data. There was a total ADM decrease of 1,907.11
or 1.5 percent compared. The department had anticipated the
shift from regular attendance to correspondence. There had
been a larger decrease in regular ADM versus the increase
in correspondence, and she relayed that there were students
that had left the school system or moved out of state and
were not being counted. She thought there may be other
anomalies occurring that caused students not to be counted,
and DEED not have specific data as to where the students
had gone.
Senator Wilson asked if it might be necessary to revisit
the way that the ADM count was calculated to help remedy
some of the things had occurred. He discussed counts during
the pandemic and the inability to true-up numbers. He
wondered how the department would be able to do the student
count.
Ms. Teshner cited that the formula had been in place for
over 20 years and there might be a need to review the count
calculation. She thought it seemed that the process worked,
but the current year was an anomaly due to the COVID-19
pandemic. There were not normally such large fluctuations.
She stressed the need for better projections.
Senator Wilson thought it seemed that for the current and
next year there would be more than a 5 percent loss of
students, which would engage a two-year "hold harmless"
provision. He thought the matter could be addressed during
the next slide.
9:14:29 AM
Co-Chair Bishop requested a slide with student counts
broken down by school district.
Co-Chair Stedman reiterated Co-Chair Bishop's request.
Co-Chair Bishop wanted a student count by district.
Ms. Teshner relayed that there was a relevant report on
DEED's website, which included the ADM count by district
and all formula factors. She agreed to provide the
committee the information.
Senator Olson asked about the in-person (regular) ADM
versus the correspondence ADM ask shown on slide 7 and
asked how the numbers affected funding.
Ms. Teshner explained that so far, she had analyzed that
the shift from regular ADM to correspondence ADM had done
multiple things within districts. Some changes had
triggered hold-harmless provisions, and there had been
increases and decreases. Overall, there was a $25 million
net increase to the foundation formula. The shift in
correspondence programs had nearly doubled the cost of just
the correspondence students in the formula.
Senator Olson considered the COVID funding that had come to
the state and asked if any of the shortfalls would be
covered by the funding.
Ms. Teshner affirmed that the department would assume that
districts would be utilizing the funds to offset reduced
funding from lower enrollment as well as utilizing fund
balance where possible. She referenced a forthcoming
handout that helped provide an overall comparison between
COVID-19, enrollment, and fund balance information.
9:17:36 AM
Senator Wilson asked if the formula accounted for students
doing virtual learning due to the pandemic, and if the
students were different than correspondence students.
Ms. Teshner stated that if a student was enrolled in a
brick-and-mortar school, she or he was counted as a regular
ADM. If a student were enrolled in a correspondence
program, the student would be counted as such.
Co-Chair Stedman asked if there were any issues with
federal oversight or educational formula or concerns that
the formula might be out of balance.
Ms. Teshner stated that an upcoming slide would address the
disparity test and what the impact would be to the state if
it was not equalized. Currently there was not concerns with
the formula being equalized, as long as the state followed
the statute.
Ms. Teshner discussed slide 8, "Hold Harmless Provision":
Districts that experience a five percent or more
enrollment loss trigger the hold harmless provision
(AS 14.17.410(b)(1)(E)).
Eligibility is determined after the district's
adjusted for school size ADM are calculated and
totaled up for all schools.
The provision is available to school districts over a
three-year step-down:
75% in the first year,
50% in the second year, and
25% in the final year, provided the adjusted for
school size ADM total stays below the established
"base year".
Ms. Teshner discussed the hold harmless provision. She
relayed that the provision had been put in place prior to
the COVID-19 pandemic, and it had been helpful for a number
of districts. If a district had triggered the provision for
FY 21, and a majority of students returned in FY 22, the
district would no longer be in hold harmless status. Once
in hold-harmless status, it did not mean a school district
would stay there for three years.
9:21:06 AM
Senator Wielechowski asked if the department was aware of
any research regarding students that received instruction
in the classroom versus students in correspondence
programs.
Commissioner Johnson thought there had been numerous
articles on the subject but could not cite research off the
top of his head. He offered to look at the research and
provide the information to the committee.
Senator Wielechowski asked if Commissioner Johnson thought
(from a policy perspective) that the state should encourage
students to attend in-person versus virtual school.
Commissioner Johnson explained that the virtual delivery of
school was not new to the pandemic. He explained that each
individual student needed different methods and strategies
for learning. He could not recommend one strategy for every
single student, which was something he thought should be
decided by the teacher and family. He shared that before
the pandemic many students participated in virtual learning
as part of education, and he suspected the same would be
true after the pandemic.
Senator Wilson asked if there was a list that addressed how
many schools had a 5 percent enrollment loss. He wondered
if there was a trend related to schools off the road system
and schools on the road system.
Ms. Teshner stated there was no specific data on the
website that addressed the hold harmless provision. She
offered to provide a list of districts in hold-harmless
status for FY 21.
Co-Chair Stedman thought it would be helpful to have
historical data as well.
Ms. Teshner agreed to provide the information.
Ms. Teshner showed slide 9, "Public School Funding
Formula," which showed a table that depicted an overview of
formula factors including ADM, and factors that multiplied
up to determine a district's adjusted ADM.
Ms. Teshner turned to slide 10, "Public School Funding
Formula," which showed a table that continued the
information from slide 9 but included the basic need
calculation and funding sources to get the total state
entitlement.
Co-Chair Stedman asked if the spreadsheet that DEED would
provide would have all the same columns so members could
see the interaction of the numerics.
Ms. Teshner answered in the affirmative.
9:25:17 AM
Ms. Teshner referenced slide 11, "Base Student Allocation
(BSA) Funding," which showed a bar graph that showed the
history of the BSA from FY 99 through FY 21, as well as the
outside funding formula that had been appropriated by the
legislature.
Co-Chair Stedman looked at FY 20 and the notations of
funding outside the formula. He asked if the funding was
additive on top of the numerics on the graph.
Ms. Teshner explained that the outside funding was in
addition to the funds that districts would generate through
the formula. The one-time funding was typically paid on the
adjusted ADM.
Co-Chair Stedman asked if the department would adjust the
slide to graphically depict the added funding.
Co-Chair Stedman asked if the department would add a line
for inflation in order to consider real dollars when
looking at purchasing power and parity issues.
Ms. Teshner agreed to provide the information.
Senator Wielechowski recalled that Commissioner Johnson had
testified several years previously that the legislature was
close to violating its constitutional obligation regarding
providing education, and since that time funding had been
relatively flat. He was curious if the commissioner's
opinion on the subject had changed.
Commissioner Johnson stated he was not aware of the remarks
referenced by Senator Wielechowski. He acknowledged that
the legislature set the funding for education through the
established funding process. He wanted to better understand
Senator Wielechowski's question.
Co-Chair Stedman wanted to pass on the question. He noted
that the state was getting a substantial amount of the
Coronavirus Response and Relief Supplemental Appropriations
Act (CRRSAA) funds. He asked if the department would
include the information on its chart. He did not think it
would be wise to ignore the significant amount of funding
coming into school districts.
Ms. Teshner agreed to modify the chart with the
information.
Ms. Tesher looked at slide 12, "FY2021 Statewide Enrollment
Comparison," which showed a table. She noted that the top
portion of the table had been addressed by slide 7. The
bottom portion of the slide showed funding sources
including basic need, the required local contribution,
impact aid, and other sources. The FY 21 number versus the
FY 21 projected numbers signified a 2 percent ($25 million)
increase to the current year budget. Comparing the FY 22
projected number back to FY 21 projected numbers, there was
a projected 1.6 percent decrease for the next fiscal year.
9:30:40 AM
Ms. Teshner discussed slide 13, "Foundation Payments
Process":
Districts receive foundation payments based on the
previous year's student count for the first nine
months of the school year (AS 14.17.610(a)).
Final payments for the last three months of the school
year (April June) are used to 'true-up' to this
year's student count.
This ensures that when the fiscal year ends, districts
have been paid what is due based on their current
year, actual reconciled average daily membership (ADM)
counts.
Senator Wilson asked how the previous year's true-up
occurred.
Ms. Teshner stated that the annual process of ensuring
there were no duplicated students was the same each year.
She discussed the process and how a student may come to be
counted twice. There was a 30-day appeal period during
which school districts would review the final numbers.
Senator Wilson wondered if the previous year's abrupt
transition due the start of the COVID-19 pandemic had
caused any issues with the true-up.
Ms. Teshner explained that there was only one count period,
and the true-up ensured that the initial raw district data
from November of each year was finalized. If a student
attended during fall in one district and transferred to
another in the spring, the first district would retain the
funding.
9:34:13 AM
Commissioner Johnson showed slide 14, "Foundation Payments:
Advances":
Districts experiencing a large increase in student
enrollment can request an advance on their anticipated
finalized state aid funding (AS 14.17.610(c)).
To request an advance, a district must provide a
written request to the department that includes at
least the following information:
Copies of the last bank statements for all accounts.
Cash reconciliation prepared in the last 30 days.
A listing of investments with maturity dates.
Senator Olson asked how many school districts had taken
advantage of advanced payment in recent years.
Ms. Teshner estimated that there had been a dozen districts
that had requested advance payment in her 17 years at the
department.
Ms. Tesher referenced slide 15, "Federal Impact Aid
Disparity Test":
In order to qualify for this provision, the State must
demonstrate an equalized funding formula, in which
there is not more than a 25% disparity between
districts revenue per Adjusted Average Daily
Membership (AADM).
Failure to pass the annual disparity test results in a
cost of at least $255 million to the State of Alaska.
Ms. Teshner reminded that the federal government allowed
the state to deduct 90 percent of allowable impact aid from
the amount of foundation formula funds allocated to school
districts. The state was only allowed to deduct the aid if
there was an equalized formula. Based on federal
regulations, the state must request permission from the
federal government to take impact aid payments into account
in determining state aid payments to district. There was an
annual certification that had to occur not later than 120
days prior to the next fiscal year.
Co-Chair Stedman asked if the state had ever had problems
with the disparity test, and if the state's formula
structure was sufficient.
Ms. Teshner relayed that there had not been any issues with
exceeding the 25 percent disparity cap.
Ms. Teshner showed slide 16, "Additional State-Funded
Formula Programs":
Pupil Transportation
Funding determined based on statutory formula (AS
14.09.010)
Funded on regular (brick and mortar) ADMs only;
does not include correspondence students
FY2021 Appropriation = $76,997.7
FY2021 Estimated Actuals = $65,341.9
Residential Schools Program
Funding determined based on statutory formula (AS
14.16.200)
Per pupil monthly stipend rate x 9 months x
actual student count = residential stipend.
Plus one round-trip transportation
reimbursement per student, at the least
expensive means, between the student's
community of residence and the school
FY2021 Appropriation = $8,275.7
FY2021 Estimated Actuals = $2,363.6
Ms. Teshner noted that slide 16 showed two formula programs
that were also affected by enrollment counts. The slide
provided the formula for payment as well as the FY 21
appropriations and estimated grant totals. Each program had
seen a decrease based on how the formula was written and
less students participating.
9:37:28 AM
LACEY SANDERS, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF EDUCATION AND EARLY DEVELOPMENT, OFFICE OF MANAGEMENT
AND BUDGET, OFFICE OF THE GOVERNOR (via teleconference),
showed slide 17, "FY2022 Operating Budget":
AN EXCELLENT EDUCATION FOR EVERY STUDENT EVERY DAY 17
? Formula Funding
? Non-Formula Funding
? Budget Highlights
Ms. Sanders referenced additional slides and 7 attachments
based on questions from the committee the previous day
regarding the Education Stabilization Fund under the CRRSAA
Act (copy on file). She offered to walk through the
additional information.
Co-Chair Stedman asked Ms. Sanders to continue with the
ongoing presentation.
Ms. Sanders tuned to slide 18, "Formula Funding," which
showed two bar graphs showing the funding formula made up
of the K-12 foundation program, pupil transportation, the
residential schools program, youth in detention, special
schools, and the Alaska Performance Scholarship award in
the DEED budget. The formula funding made up the largest
portion of the department's budget and was distributed as
grants. The funding totaled 96 percent of DEED's
Unrestricted General Fund (UGF) budget, and 80 percent of
DEED's total budget. The K-12 portion was the largest piece
and totaled $1.2 billion, and pupil transportation was the
second largest with $71.4 million.
Ms. Sanders continued that there was an overall decrease of
$25.3 million when compared to the FY 21 management plan.
The reduction was made up of $19.8 million from the
foundation program and $5.6 million from the pupil
transportation program. The two reductions were based on
the lower projected district ADM as addressed by Ms.
Teshner.
Co-Chair Stedman commented that the scale of the graphs on
the slide was problematic. He thought the depiction was not
helpful.
Senator Wielechowski asked if there was any requirement for
school districts receiving state funding that employees
reside in Alaska while working.
Ms. Sanders was not aware of any such requirement but
agreed to follow up with more information.
Senator Wielechowski asked if the department would oppose a
provision in the budget that required employees of school
districts receiving state funds to reside and work in the
state.
Ms. Sanders deferred the question to the commissioner.
Commissioner Johnson thought districts negotiated with the
unions and did not know of any districts that prohibited
out of state work. He did not know of any employees of
Alaska school districts that resided out of state.
Senator Wielechowski asked if Commissioner Johnson, from
the state's perspective, would oppose a provision or
amendment that stipulated those receiving state funds could
not work outside Alaska.
Senator Wielechowski asked if the department would oppose
such a provision.
Commissioner Johnson thought the issue was best resolved
between the unions and each individual district.
9:42:58 AM
Ms. Sanders turned to slide 19, "Non-Formula Funding,"
which showed two graphs. She commented that the slide could
be modified. The slide showed the remaining non-formula
funding in the deferment for divisions and programs and
represented about 4 percent of DEEDs total UGF budget and
10 percent of DEEDs total budget for all funds. The total
amount for the FY 22 governor's budget for non-formula
funding was $318.5 million and reflected an overall
reduction of $1.1 million compared to the FY 21 management
plan. The total UGF in FY 22 was $45.9 million and
reflected a decrease of $254,000.
Co-Chair Stedman asked Ms. Sanders to pause. He thought the
chart did not have value as presented. He suggested going
to the next slide. He requested the information be put into
table format with the addition of numerics from FY 19
through FY 22.
Ms. Sanders agreed to modify the charts and provide the
material to the committee.
9:45:01 AM
Ms. Sanders displayed slide 20, "Budget Highlights":
K-12 Foundation Formula is fully funded based on the
statutory calculation (AS 14.17.410)
Base Student Allocation remains at $5,930 (AS
14.17.470)
Total State Aid equals a decrease of $19.8
million
Pupil Transportation is fully funded based on the
statutory calculation (AS 14.09.010)
Total Pupil Transportation equals a decrease of
$5.6 million
School Debt Reimbursement and Regional Educational
Attendance Area (REAA) and Small Municipal School
District School Fund are funded at 50% of the
statutory calculations
School Debt Reimbursement totals $41.7 million
(AS 14.11.102)
REAA Fund Capitalization totals $17.1 million
(AS 14.11.025)
Replace $933 thousand Inter-agency Receipts with UGF
for School Finance and Facilities' portion of the
budget that was previously tied to the School Debt
Reimbursement Program
Reduction of $230 thousand UGF in Student and School
Achievement due to identification of duplicate data
analysis - data will continue to be provided to
districts by information housed in the department
Reductions totaling $171.5 thousand UGF as department
transitions to more virtual conferences and meetings
Replace $431.5 thousand Alaska Student Loan
Corporation Receipts with Higher Education Investment
funds for administration of State Programs in the
Alaska Commission on Postsecondary Education
9:49:21 AM
Co-Chair Stedman stated that there were concerns on school
debt reimbursement policy. He asked for the department's
position regarding the 50 percent school bond debt
reimbursement. He asked how the funding tied into the REAA
Fund capitalization issue and the potential violation of
the Kasayulie case and decree. [In 1997, Kasayulie and
other parties brough suit against the State of Alaska
regarding education funding. The Kasayulie Consent Decree
and Settlement Agreement addressed the violations of law
and provided remedies for these violations.]
Ms. Sanders relayed that funding for the school debt
reimbursement program and the REAA Fund had historically
been tied together as outlined in statute. The governor's
FY 22 proposed budget continued the linkage based on a 50
percent level of funding. The Office of Management and
Budget (OMB) and the Department of Law were reviewing a
request and comments and questions from previous committee
meetings regarding the proportionate reductions and would
be providing a response to the committee.
Co-Chair Stedman reminded that one of the legislature's
primary constitutional obligations was educating the
state's children. He observed that the state had not build
any schools for several years and that the state had two to
three years on a moratorium going forward. He asked about
the department's position on the need for school
construction, particularly in Western Alaska and in the
Mat-Su area where there was a population growth of
children.
Co-Chair Stedman clarified that the question was directed
at the commissioner. He wanted the commissioner to address
his position on the state's requirement to educate the
state's children and lack of school construction. He
questioned how the state would facilitate fulfilling its
obligation considering the difficulty communities and REAAs
had in school bond debt reimbursement.
9:52:10 AM
Commissioner Johnson acknowledged that there would always
be a need for school construction and school maintenance.
He hoped that the legislature would commit as many funds as
possible to the effort while balancing the need with other
needs that existed in communities, including rural Alaska,
that supported the education of students directly and
indirectly.
Co-Chair Stedman stated that the legislature had not taken
a position to modify the 100 percent bond debt
reimbursement. He relayed that many communities were
concerned that the taxpayers would be responsible for 100
percent of the cost when school construction was needed. He
pondered unorganized areas with no tax base and asked how
the commissioner planned on constructing schools and
dealing with the state's constitutional obligation.
Commissioner Johnson noted that he could not appropriate
money, and that 50 percent of debt reimbursement was funded
through the proposal being considered. He understood that
the governor's bond proposal was to include some funding
for school maintenance and construction.
Co-Chair Stedman was concerned that there would be years
with no school construction, and the state would be in a
difficult position after not honoring its commitment to
organized communities with 100 percent debt reimbursement.
He thought the policy needed to be worked through.
Senator Wielechowski asked the commissioner about AS
14.11.100, which stated that "during the fiscal year the
state shall allocate to a municipality that is a school
district the following sums" and listed out the amounts
that were to be paid. He asked if the appropriations the
commissioner was allocating for school construction debt
were following the law.
Commissioner Johnson thought Senator Wielechowski's
question was a legal question and deferred to the
Department of Law regarding what had been proposed. He
affirmed that the department would allocate what the
legislature had directed and was signed by the governor. He
affirmed that he would take time to look at the statute and
review the material in the coming days.
Co-Chair Stedman asked the commissioner to get back to the
committee with his answer.
9:55:45 AM
Senator Hoffman considered that the amount of funds for
rural school construction had been vetoed, and the
administration was going forward with a 50 percent
allocation for rural schools and bond indebtedness. He had
been in contact with the individuals involved in the
Kasayulie case, who had written a letter regarding the
state's compliance with the case. The individuals had not
received a response. He asked why DEED had not responded in
writing on behalf of the administration. He thought the
state was on the verge of possibly causing the case to be
reopened and thought the state did not have a chance to
win.
Co-Chair Stedman was not familiar with the letter
referenced by Senator Hoffman, and asked Commissioner
Johnson to respond to Senator Hoffman verbally or in
writing.
Commissioner Johnson thought the letter Senator Hoffman
referenced was in regard to a potential lawsuit, and he had
forwarded the letter to the Department of Law. He would get
back to the committee with a response from the department.
Senator Hoffman asked the commissioner to request an answer
to the question since close to two years had passed. He was
fearful that a non-response was a worst-case scenario, and
he did not want the state to be in a legal battle regarding
the education of rural students. He did not think there was
a way for the state to win the case.
Co-Chair Stedman thought there was clearly concern with
areas of growing student population in the state. He
thought that the question pertained to several select areas
of the state, and that the problem had been festering for
years. He thought the problem needed to be addressed.
9:59:10 AM
Co-Chair Bishop wanted to add to Co-Chair Stedman's remarks
about the increasing problem. He emphasized that it was
crucial to address the deferred maintenance issue. He
wanted to adhere to the lawsuit and build schools as per
the lawsuit findings.
Senator Wilson recalled the governor waiving carry-forward
requirements the previous year. He referenced the end of
the disaster declaration and asked if the governor planned
to waive the carry-forward requirements in the current
year. He wondered if the legislature should address future
years and get rid of the 10 percent restriction on carry-
forward balances for school districts.
Co-Chair Stedman asked the commissioner to answer the
question and provide detail on the carry-forward provision
referenced by Senator Wilson.
Commissioner Johnson affirmed that the previous year the
governor had waived the 10 percent carry-over, which was a
statutory limit upon how much of a school district's budget
could be in reserve. Because of school closures and federal
funding, the governor waived the provision to give school
districts the flexibility to more efficiently and
effectively use funding. Since the previous year, school
districts had received another $143 million. The next
relief package expected from Congress included $130 billion
for education around the country which would signify
another $1 million for school districts. The department had
requested the governor (if he had the authority) to waive
the provision again for districts in order to maximize the
benefit of federal funds and integrate the funds into the
coming years. If there was not a disaster declaration, the
legislature would have to be the body to take action.
10:02:33 AM
Senator Wilson asked if the legislature should permanently
change the cap or put a moratorium on the provision for
five years or so.
Co-Chair Stedman asked if the commissioner had
recommendations for the committee.
Commissioner Johnson thought the topic was worth
consideration. He thought a change in the statute could be
approached from multiple angles and assumed school
districts would have opinions on the matter as well.
Senator Wielechowski discussed the governor's insistence
that the state follow the statutory requirement to pay a
full Permanent Fund Dividend (PFD). He asked if the
commissioner would agree that the state follow the
statutory formula to fully fund school construction debt.
Co-Chair Stedman thought Senator Wielechowski had asked a
loaded question and told the commissioner to answer or not
answer as he saw fit.
Commissioner Johnson stated he would not make a
recommendation to not follow the law.
Senator Wielechowski asked if the commissioner had
submitted a budget with anything that was less than what
the statute required in AS 14.11.100. He thought the answer
was yes.
Commissioner Johnson understood that the budget process was
a deliberative process and he stated Senator Wielechowski
was welcome to forward the question to the governor.
Senator Wielechowski stressed that the governor did not
come before the committee to discuss the budget proposal,
but the commissioner did. He referenced the governor's veto
of funding school construction debt the previous year. He
wanted the commissioner to come before the committee with
an answer to the question.
Co-Chair Stedman reiterated that Senator Wielechowski was
asking a loaded question. He suggested the commissioner
respond in writing to whatever level he was comfortable
with.
Senator Olson saw a pattern of not fully funding
statutorily mandated obligations. He found the matter
troubling. He mentioned the PFD and was concerned about
lack of funding for education. He thought there was a
pattern of inadequate funding.
10:06:22 AM
Senator Wilson asked about the delta between the current
year and past year's funding, considering the 94 percent
increase in correspondence students. He asked whether or
not correspondence students should be worth 10 percent less
than students attending in person.
Commissioner Johnson relayed that one way to stabilize
district funding long-term was to run correspondence
students through the formula. He thought the governor had
proposed a bill to do so. Currently students were treated
differently based on how the students received education,
which created instability for districts. He anticipated
that there would be differences in enrollment for the next
few years, due to choosing correspondence or part home-
based learning and part in-school learning. He asserted
that treating students the same in the formula would
stabilize school district budgets.
Commissioner Johnson showed slide 21, "Contact
Information":
Heidi Teshner, Director of Finance and Support
Services
heidi.teshner@alaska.gov
(907) 465-2875
Lacey Sanders, Administrative Services Director
lacey.sanders@alaska.gov
(907) 465-8721
Erin Hardin, Legislative Liaison
erin.hardin@alaska.gov
(907) 465-2803
Co-Chair Stedman asked about the relief supplemental
appropriations of the COVID-19 response issue. He asked for
commentary on the $143 million that would be coming into
school districts. He asked about spending parameters and
timelines.
Commissioner Johnson cited that to date school districts
had received $180 million in direct federal funds through
the first Coronavirus Aid, Relief and Economic Security
(CARES) Act and the Coronavirus Response and Relief
Supplemental Appropriations (CRRSA) Act. He thought
districts would almost certainly receive equivalent or
greater additional funds from the next CARES Act. The first
act had more restrictions than the second larger federal
relief fund. The last set of $143 million in funds were
more flexible and could be used for facilities, learning
loss, and other items. The school districts requested
reimbursement, so the department had records of requests
that were approved or denied. He noted that the department
was posting every piece of information possible about the
federal funds to make sure every district benefitted from
the funds to mitigate the effects of the pandemic.
Ms. Sanders thought the commissioner had covered the topic
well. She asked if the committee had specific questions
about the funding.
10:10:54 AM
Co-Chair Stedman wanted to know what the emergency relief
funding could be used for and how long the funds could be
carried forward. He asked what kind of feedback the
department was getting from the school districts. He
wondered if districts would be adding funds to reserves to
help with fiscal constraints or if all the funds would be
consumed.
Ms. Sanders addressed CARES Act Funding. She addressed the
presentation "COVID-19 K-12 Federal Relief - Funding
Overview" (copy on file), which broke down the allocations
by school district for both the CARES Act and CRRSSA funds.
Ms. Sanders showed slide 1, "COVID-19 K-12 Federal Relief -
Funding Overview":
? Coronavirus Aid, Relief and Economic Security
(CARES) Act
? Coronavirus Response and Relief Supplemental
Appropriations (CRRSA) Act
Ms. Sanders detailed that the CARES Act funding had two
allocations that were specific to DEED - the Elementary and
Secondary School Emergency Relief (ESSER) Fund, and the
Governor's Emergency Education Relief (GEER) Fund. Local
education agencies (school districts) received $34.6
million and had until September 30, 2022 to obligate the
funding. Allowable uses included addressing learning loss
and addressing needs in the schools to reduce the risk of
virus transmission. A small portion of the funding in the
amount of $3.8 million was allotted to DEED to award grants
and contracts, as well as $192,000 that could be used for
administrative costs. The funding was also available until
September 2022. She referenced a handout that outlined
funding by school district (copy on file).
Ms. Sanders noted that the department had provided the
committee with backup documents showing what had been spent
by school districts (copies on file). As of January 29,
2021 about $11 million had been spent. The department had
also provided additional detail as to how the districts had
spent the funds.
10:14:47 AM
Co-Chair Stedman asked about slides sent to the committee
that had not yet been distributed. He asked to conclude the
overview of the federal funds.
Ms. Sanders showed slide 2, "Coronavirus Aid, Relief, and
Economic Security (CARES) Act Update":
CARES Act was signed into law on March 27, 2020
Education Stabilization Fund - $30.75 billion in emergency
relief funds
1. Approximately $3 billion for the Governor's
Emergency Education Relief Fund (GEER I Fund)
2. Approximately $13.5 billion for the Elementary and
Secondary School Emergency Relief Fund (ESSER I Fund)
3. Approximately $14.25 billion for the Higher
Education Emergency Relief Fund
Ms. Sanders relayed that there had been a request for
information regarding how the governor's emergency
education relief funds were allocated to entities. There
had been a competitive process. She referenced handout 6,
"Governor's Education Emergency Relief Fund," (copy on
file). She cited that the most recent CRRSSA funding would
be made available for school districts to apply for. None
of the funds had been allocated and was based on the Title
1A formula. All the information would be shared with
committee members and was on the DEED website.
Co-Chair Stedman stated that the committee would have the
department back to address the use of the federal funds and
how the funds were distributed to school districts. He
thought the funds were significant and could have a
positive impact on school districts.
Co-Chair Stedman thanked the department for the
presentation. He acknowledged that the legislature had
tough questions regarding school bond debt reimbursement,
and thought the legislature had a fundamental policy
difference with the administration.
10:18:50 AM
RECESSED
10:20:16 AM
RECONVENED
Co-Chair Stedman explained that the committee would
consider the University operating budget and meet as the
Senate Finance subcommittee of the whole.
^UNIVERSITY FY22 OPERATING SUBCOMMITTEE OF THE WHOLE
10:21:11 AM
PAT PITNEY, INTERIM PRESIDENT, UNIVERSITY OF ALASKA,
discussed the presentation "University of Alaska - Serving
Alaska - Senate Finance Committee - February 11, 2021"
(copy on file).
Ms. Pitney turned to slide 2, "University of Alaska -
Alaska's System of Higher Education":
Three universities:
-different missions
research, urban comprehensive, regional
-different experience
-all valued
serving their communities
offering a breadth of programs from
workforce credentialing to doctoral degrees
Ms. Pitney acknowledged that the three universities'
different missions was an unusual structure, but it allowed
the University of Alaska (UA) the breadth of programs
necessary to meet the needs of communities. She remarked
that there had been turmoil at UA in recent years and she
was pushing for stability. She noted that the end of the
presentation would provide information regarding how
graduates left UA and went to work in the state. She cited
that 70 percent to 90 percent of UA grads went to work
within a year of graduation and many worked in the state.
She noted that 90 percent of graduates of the Process
Technology program stayed in-state and were making $130,000
within five years.
Ms. Pitney showed slide 3, "To meet the needs of Alaska?":
?STABILITY
?CONFIDENCE
?TRUST
?Meet Alaska's workforce needs and increase degree
attainment
?Essential to Alaska's economic recovery, diversity
and growth
?World-class nationally competitive research
?Operate more cost effectively
Ms. Pitney stated that UA's focus was on programs and
nationally and worldwide competitive research. She cited
that UA was ranked first in the nation for climate
modelling and the Arctic. She referenced the UA's research
funding that was a huge economic driver for the state. She
wanted to focus on reducing UA's physical and
administrative footprint.
10:24:02 AM
Ms. Pitney reviewed slide 4, "Reduced budget reduced
footprint":
At the end of the Compact in FY22, UA will be down
$120 million UGF from FY14
?Smaller footprint with a foundation of high-quality
core programs and research
?Facility and lease reductions
?Faculty and staff reductions since 2014
?2,500 fewer employees
?Reduced administrative personnel costs by more
than 20 percent
Ms. Pitney relayed that UA had sold ten facilities and had
taken down 13 facilities. She emphasized that the majority
of remaining of programs were there to stay, and UA would
focus on rebuilding programs through enrollment and would
have continued focus on administrative cost.
Co-Chair Stedman commented that although there had been
$120 million in savings, the legislature would be
considering other components of the state and how GF were
consumed. He thought there were budget escalations that had
consumed the savings from UA and the Alaska Marine Highway
System (AMHS). He thought it would be apparent that the
state had not gained much in aggregate savings.
Ms. Pitney shared that in one of her first presentations to
the UA Board of Regents she had included information on the
overall state budget. She discussed UA's savings. She noted
that the $50 million in UA savings had been reallocated to
the Department of the Public Safety and Department of
Corrections.
10:27:13 AM
Senator Olson referenced Ms. Pitney's comment about a third
of the UA budget being reduced. He asked about the
perspective of members on the UA reductions as compared to
other departments.
Co-Chair Stedman stated that the committee was working on a
presentation related to reductions and consumption of
reductions. He noted that all the funds were co-mingled,
and the presentation would address increases, reductions,
and some statewide issues.
Ms. Pitney discussed slide 5, "Legislative Priorities":
Financial Stability
?To grow enrollment and diversify revenue through
additional tuition revenue, we need budget
certainty
?A single appropriation is necessary to provide
the Board the most flexibility with budget
decisions
Ms. Pitney discussed UA's focus on programs and pointed out
that programs supported economic recovery. She mentioned
the number of people that had been affected during the
COVID-19 pandemic, and the jobs that would return would
likely require additional training. She explained that UA
had a great breadth of programs, all of which had a direct
link to industry. She noted that the request for a single
appropriation was to provide flexibility in the face of
dramatic reductions.
10:30:09 AM
Ms. Pitney referenced slide 6, "Legislative Priorities":
?Capital Requests
?Deferred Maintenance
?General Obligation Bond
?Debt Relief
?COVID Impact Mitigation
Ms. Pitney stated that she would go into more detail
regarding the three capital request priorities listed on
the slide.
Ms. Pitney spoke to slide 7, "Debt Service Relief - $15.1
million Request":
?Annual Debt Service = $24 million (UGF component is
$19.3 million)
?$10.5 million (43%) UAF Combined Heat & Power
Plant
?Principal Outstanding = $288.5 million
?Debt service is 5% of UA's unrestricted revenues, and
has increased as revenue (UGF & Tuition) decline
?Fixed costs reduce management's capacity to make
strategic reductions as revenues decline
?Examples of debt-financed projects: UAF Power Plant,
UAF Engineering Building, Deferred Maintenance
?UA's debt capacity is limited
?Debt relief, in the form of principal payoff or debt
service reimbursement, is a prudent financial move
?Debt relief would strengthen UA's financial position,
and increase its capacity to respond to current and
future revenue pressures
Ms. Pitney explained that the debt service request for
$15.1 million represented a two-year debt relief on UA's
combined heat and power plant, and its deferred
maintenance. When the heat and power plant was funded in
2014 it was funded with cash, a state appropriation-covered
municipal bond, and a UAF revenue bond funded through
student fees and utility savings. There was $7 million
appropriated in 2014, and since then UA appropriations had
been cut by $120 million. There had been no way to avoid
the new heat and power plant due to the age of the old
power plant.
Ms. Pitney explained that the reason the request was for
only two years of debt relief was that UA was working on
monetizing the power plant. Other universities had done the
same. She thought it would be helpful if UA could get to a
concession deal or sale of heat and power. She thought two
years was needed.
Co-Chair Stedman asked if Ms. Pitney was referencing the
new coal-fired power plant.
Ms. Pitney answered in the affirmative. The plant had
recently come online but had been funded in FY 14.
Co-Chair Stedman asked if the plant was integrated with
users outside the UA system, or integrated in Fairbanks'
grid.
Ms. Pitney relayed that there was an intertie with Golden
Valley Electric, and UA was working actively on a power
purchase agreement. She shared that there was excess
capacity and hoped that there was an available opportunity.
10:34:11 AM
Ms. Pitney discussed slide 8, "Deferred Maintenance - $50
million Request":
?Facilities across the University of Alaska are
extensive and a unique subset of public facilities.
?397 facilities totaling over 8 million square
feet, valued at over $4 billion
?Average age of UA's buildings is 35-years old
?Deferred maintenance backlog over $1.3 billion
?UA's physical footprint serves academic, research,
and community service focused mission priorities.
?Facility type varies from residential housing,
general offices and classrooms to complex
laboratories
?Through active stewardship, UA leverages shrinking
maintenance operations budgets to lengthen the service
life of buildings beyond the typical age for major
renewal.
?Emergency repairs are becoming more common place as
major components and systems surpass their normal
life-span. Resources are going toward reactive
maintenance.
Ms. Pitney noted that $50 million was a traditional request
for UA and that the amount would keep the university even
and would not be gaining in additional deferred
maintenance. She added that LFD had reported in its
overview that 1 percent of facility values across the state
was $97 million. She thought the figure reiterated Co-Chair
Bishop's point that at $100 million per year on deferred
maintenance of facilities, the state stayed even and did
not gain backlog. She acknowledged that UA comprised a big
share of the state's deferred maintenance, with a large
share of facilities outside the K-12 education
infrastructure. She continued that UA had demolished 13
facilities, which had helped with the backlog.
Ms. Pitney thought utilization of facilities would be
different after learning from COVID-19 practices. She
thought UA would need to repurpose some facilities. She
cited that she had significant information and background
on UA's deferred maintenance request, and the entire list.
10:36:35 AM
Co-Chair Bishop asked Ms. Pitney to briefly tell the
committee what the University of Alaska Fairbanks had done
to help with the COVID-19 pandemic in the community.
Co-Chair Stedman asked if Ms. Pitney could hold the
question until the topic was addressed on slide 10.
Ms. Pitney displayed slide 9, "Deferred Maintenance":
?Board of Regents Request: $50 million
?Senate Bill 74 includes $29.9 million for:
?UAF Bartlett and Moore Hall Modernization and
Renewal -$18.65 million
?UAA Building Energy Performance Upgrades -$10.9
million
?UAA Integrated Sciences Building Energy Savings
Project -$428,000
Ms. Pitney noted that the projects listed on the slide
represented priority projects for UA.
Ms. Pitney turned to slide 10, "Serving Alaska during
COVID-19":
?Training and employing 400+ contact tracers
?UA experts in epidemiology, economic impacts and
modeling, small business, and mental health assist
state response
?Manufacturing PPE (e.g. hand sanitizer, 3D printed
face shields, ventilator parts, viral transport media)
?Small Business Development Center and Business
Enterprise Institute support small businesses PPP
loans and community small business relief
?Graduated and licensed 75 senior nursing students
early in order to meet the increased demand
?NSF has funded four RAPID awards to UA researchers
Ms. Pitney addressed Co-Chair Bishop's question about
COVID-19. She highlighted that the UA College of Health had
been instrumental in training contact tracers as a well as
operating a contract tracing team. She noted that the state
virology lab was on the University of Alaska Fairbanks
(UAF) campus and had given assistance with testing
protocols. She mentioned a doctor from the College of
Health that had been a great asset with Center for Disease
Control protocols. She noted that Institute of Social and
Economic Research (ISER) had done a tremendous amount of
economic modelling. She continued that UA had manufactured
a tremendous amount of personal protective equipment.
Additionally, all campuses were working on research
projects funded by the National Science Foundation that
traced how the disease moved in the state and where
protocols had made a significant difference.
10:40:07 AM
Ms. Pitney showed slide 11, "COVID-19 Support and Impacts
(March 2020 present)":
COVID Funding Requests: $15.7M
1. UA is working with OMB and Legislature on a
COVID supplemental appropriation.
2. UA submitted a request to Governor's office on
January 29, 2021
from the Governor's Emergency Education Fund
3. UA has applied for funding from Federal
Emergency Management Agency (FEMA). In process.
Ms. Pitney noted that the data table on the left showed a
full accounting of institutional support, with lost revenue
and costs associated with COVID-19 shown in the table on
the right. There were multiple areas in which UA had
received funding, including from the CARES Act. She
highlighted federal Higher Education Emergency Relief Fund
funds. Additional funds were received from the governor via
the GEER Fund.
Ms. Pitney continued that the City of Soldotna, the City of
Fairbanks, the City of Bethel, and the Alaska Community
Foundation had all provided CARES Act funds to the
institution. In addition to the funds that came to the
institution from the CARES Act, UA had received almost $8
million for direct student support to help offset the
impacts in housing and other areas, including tuition
support. She highlighted that the institutional support was
$31 million, and the impacts had been $47 million. She
described the situation as a "double whammy" on top of
state reductions. The system would continue to seek other
available funding sources.
Ms. Pitney discussed slide 12, "Legislative Priorities":
Technical Vocational Education Program Reauthorization
?Program is funded annually from a portion of
unemployment insurance contributions
?UA receives 45 percent of program dollars, $5.8M in
FY21 (46% of participants)
?Funds high-demand career and technical training
marine, mining, oil & gas, health care, construction,
and IT
?Seeking a five-year reauthorization of the current
program
Ms. Pitney used the example of the marine simulation
programs in Ketchikan and the new medical-technical program
to discuss high-demand career and technical training that
relied on start-up funding.
Ms. Pitney showed slide 13, "UA TVEP Supports Alaska
Economic Regions FY2015 FY2019," which showed a pie chart
depicting distribution of the past four years of TVEP
funding. She cited funding of $9 million in the Anchorage
region, $4.7 in the Interior region, and $3.2 million in
the Southeast region.
10:43:48 AM
Ms. Pitney referenced slide 14, "Legislative Priorities":
Higher Education Investment Fund
reserve full funding of these important programs:
? Alaska Performance Scholarship program ~ $12M
? Alaska Education Grant ~ $6M
? WWAMI Medical School program ~ $3M
Ms. Pitney emphasized that stability of the Higher
Education Investment Fund was critical to the future. She
cited that disruption of the funding in 2019 had a more
negative impact on enrollment than did the COVID-19 crisis.
Ms. Pitney discussed slide 15, "University of Alaska Total
Budget," which showed a table showing budget specifics. She
cited that the UGF budget peak in was FY 14 at $377
million, and funds declined to $257 million in FY 22. The
total budget went from $920 million in FY 14 down to $780
million in FY 22. She relayed that she was more experienced
in dealing in revenue rather than budgets.
Ms. Pitney advanced to slide 16, "State appropriations
(UGF) are the base on which all programs operate programs
generate all other revenue Funding Sources":
UA keeps a high quality core foundation maintained on
the reduced state support.
UA is trusted and central to industry, communities,
and the state for economic recovery and
diversification.
The legislature and governor assure stable state
funding from which UA will grow enrollment, research,
service, partnerships and philanthropy.
Federal $132M, Other ~$9M, DGF $65M are restricted
grants, scholarships, or contracts.
~$200M of the $400.5M is restricted to a specific
purpose by the entity providing the revenue
Ms. Pitney highlighted categories on the table on slide 16.
She pointed out that the subtotal of earned revenue at $415
million. She noted that FY 22 revenues were expected to be
$400 million. She explained that about $65 million of the
$258 million of designated general funds (DGF) was
restricted by the entity that provided the funds for a
specific purpose. The federal funds were restricted to a
specific project or purpose, as were the "Other" funds. Of
the $400 million, only $200 million was available to
accommodate the budget reductions in the programs. She
discussed the imbalanced impact on the UA budget. The other
pieces of the budget were interagency receipts and excess
receipt authority.
Ms. Pitney relayed that UA had been able to stabilize by
focusing on partnerships and grants. The institution had
been able to hold research steady with slight growth, which
had been a huge stabilizer. Going forward, growing
enrollment and stabilizing revenue from tuition and fees
was important.
10:47:39 AM
Senator Wilson asked about UA's indirect rate, or federal
or administrative cost allocation rate charged through
funding agreements. He understood that in the past
different programs had different rates, some of which were
not established.
Ms. Pitney stated there were very strict rules for federal
agencies, and there was an audited indirect cost agreement.
There was an agency that went through UA's indirect cost
agreements and audited all financials, which set the rate
with federal entities. There were some federal agencies
that had a rate that overrode UA's negotiated indirect cost
recovery rate, which was around 50 percent. She explained
that the rate was based on a percentage of facilities used
in research, and on administrative costs, which were
capped. She discussed different rates. She noted that 85
percent of federal funding came through UAF's research,
whereas the University of Alaska Anchorage had its own
rate. All of the rates were audited by the Office of Naval
Research.
Senator Wilson asked about getting a list of the indirect
rates for UA. He discussed different rates and wondered
about written agreements. He thought certain schools within
the system were using different rates. He wanted to
understand the rate structure, specifically in-state.
Ms. Pitney agreed to provide the information.
10:51:17 AM
Ms. Pitney showed slide 17, "Unrestricted General Funds
Reductions," which showed a data table, and a bar graph
entitled 'FY14-FY22 UGF Reduction by $.' She looked at the
percentage change between FY 14 to FY 22 for UAA, UAF, the
University of Alaska Southeast, and the system office. The
bar graph showed the magnitude of the reductions. She
observed that it would have been helpful to show the data
in negative. She highlighted that the UAF campus had $46
million in reductions, UAA had $36 million, and the system
office had $16 million in reductions.
Ms. Pitney turned to slide 18, "Students and Employees,"
which showed a table. The regular benefit-eligible
employees were down by nearly 900 from Fall 2014. Part time
employees were down by almost 1,500. The student headcount
was down by 30 percent since Fall 2014, two-thirds of which
was lost in the previous two years. She mentioned the need
for stability to regain students. She thought it was
fortunate that program graduates and students in high-
demand areas had stayed more stable than the student body
as a whole.
Co-Chair Stedman asked about the decrease in credit hours.
Ms. Pitney agreed to provide the information to the
committee at a later date.
Senator Hoffman noted that the legislature had already cut
UA by $100 million and was scheduled to impose a reduction
of another $20 million. He asked how much impact the
reductions would have on the number of people that would be
laid off throughout the state at the 3 main campuses as
well as in rural Alaska.
Ms. Pitney stated that UA was trying to do as much as
possible through the administrative, facilities, and
revenue areas, and would take advantage of additional
attrition. She thought there would be a few layoffs but
based on the attrition she anticipated between 50 and 70
regular faculty and staff layoffs. Because major program
reductions had been done the previous year, the results
would be seen the next fall. She was not anticipating
wholesale layoffs.
Co-Chair Bishop asked for a list of reductions of PCNs by
campus.
10:56:39 AM
Senator Olson considered the attrition and loss of staff.
He asked what kind of losses were anticipated for research
funding.
Ms. Pitney noted that research staff were largely 100
percent funded by the grants or by contract, and the
staffing had stayed fairly solid. The administrative
positions that managed grants and contracts were becoming
fewer. The positions were important for partnerships with
agencies and the ability to submit proposals. She shared
that UA had tried to keep stability in research to keep
receiving funding that would otherwise go to other states.
She asserted that the funding affected every community in
the state. She mentioned the College of Fisheries and Ocean
Sciences that did work in Seward and other places.
Ms. Pitney used the example of the field station maintained
by UA that was used by scientists from all over the world.
She noted that UA research was very successful compared to
other institutions.
Ms. Pitney thanked the committee. She advised that UA was
managing into its smaller footprint, and that UA was
present to support the economic recovery of the state.
Co-Chair Stedman discussed the agenda for the following
day.
ADJOURNMENT
11:00:46 AM
The meeting was adjourned at 11:00 a.m.