02/24/2022 11:30 AM House WAYS & MEANS

        HB 259-PERMANENT FUND DIVIDEND; 25/75 POMV SPLIT                                                                    
                                                                                                                                
11:37:48 AM                                                                                                                   
                                                                                                                                
CHAIR SPOHNHOLZ announced that the  first order of business would                                                               
be HOUSE BILL NO.  259, "An Act relating to use  of income of the                                                               
Alaska permanent  fund; relating to  the amount of  the permanent                                                               
fund  dividend; relating  to the  duties of  the commissioner  of                                                               
revenue; relating to funding for  state aid for school districts,                                                               
the state boarding school,  centralized correspondence study, and                                                               
transportation of pupils; and providing for an effective date."                                                                 
                                                                                                                                
CHAIR SPOHNHOLZ,  as prime  sponsor, sought  final comment  on HB
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11:38:09 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE JOSEPHSON  referred to slide 12  of the PowerPoint                                                               
presentation, titled  "HB 259 Update  Permanent Fund  Funding for                                                               
Dividends, Education  and other  Essential State  Services" [hard                                                               
copy included in  the committee packet].  He pointed  out that by                                                               
fiscal  year 2026,  additional funding  beyond  the base  student                                                               
allocation (BSA)  would amount to  $218 million, which  he deemed                                                               
"too much excess  revenue."  He suggested that the  bill would be                                                               
more attractive  if the revenue  would be  targeted formulaically                                                               
to a  defined benefit for teachers,  a pre-kindergarten ("pre-K")                                                               
fund, or an extended school year.                                                                                               
                                                                                                                                
REPRESENTATIVE   WOOL   echoed   the  sentiments   expressed   by                                                               
Representative  Josephson.   He expressed  his support  for fully                                                               
funding education  and increasing  BSA, adding that  more support                                                               
for  education is  needed  in  his district.    He expressed  his                                                               
support  for the  permanent fund  dividend (PFD)  formula in  the                                                               
bill,  noting  that he  maintained  some  reservations about  the                                                               
proposed legislation.                                                                                                           
                                                                                                                                
11:41:58 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  STORY   saw  the  bill  as   prioritizing  public                                                               
education in  the state by  signaling that the  legislature would                                                               
be   serious  about   economic  development   and  training   its                                                               
workforce.   She acknowledged the "umbrella  needs" referenced by                                                               
Representative  Josephson   and  Representative  Wool,   such  as                                                               
teacher  retirement,  and  welcomed  future  discussions  on  the                                                               
matter.    Further,  she  highlighted the  $26  million  in  lost                                                               
revenue due to downward inflationary  pressure on schools, noting                                                               
that she was sponsoring a bill to address that issue.                                                                           
                                                                                                                                
REPRESENTATIVE  EASTMAN  expressed   his  skepticism  toward  the                                                               
effectiveness  of  the  proposed  legislation.   He  opined  that                                                               
increased test scores  and performance metrics would  be the best                                                               
signal  to  send   to  parents,  as  opposed   to  more  funding.                                                               
Additionally, he  shared his belief  that increasing  the funding                                                               
while  maintaining  the status  quo,  which  he characterized  as                                                               
"terrible"   in  Alaska,   would  place   downward  pressure   on                                                               
performance.                                                                                                                    
                                                                                                                                
11:44:59 AM                                                                                                                   
                                                                                                                                
CHAIR  SPOHNHOLZ reminded  the committee  that the  statutory PFD                                                               
formula would  create a $1.5 billion  fiscal gap next year.   She                                                               
opined  that  Alaskans deserved  transparency  in  regard to  the                                                               
annual dividend amount,  adding that the bill  would also resolve                                                               
a political problem for the  legislature.  She expressed a desire                                                               
to create  fiscal stability for  the future of Alaska  and agreed                                                               
that  the  bill  could  intersect  with  other  policy  proposals                                                               
seeking  to  address some  of  the  education challenges  in  the                                                               
state.   She  reported that  today, Alaska  spends $500  less per                                                               
child for  public education when adjusted  for inflation compared                                                               
to FY 08.   She expounded on several policy  proposals before the                                                               
legislature intended  to restructure the  BSA.  She  posited that                                                               
Alaska's educational  outcomes weren't worsening;  instead, other                                                               
states made  strategic investments  in education  and implemented                                                               
evidence-based  strategies to  jump  past  Alaska in  performance                                                               
metrics.   She added  that it  was her  intention to  allow local                                                               
jurisdictions to  determine how  the additional dollars  would be                                                               
spent;  nonetheless, she  said she  would be  happy to  amend the                                                               
proposed  legislation  in  the   House  Finance  Committee.    In                                                               
closing, she reiterated her belief  that the state needed to make                                                               
investments  in   public  education  and  could   not  afford  an                                                               
unsustainable  dividend formula,  hence  her  introduction of  HB
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11:49:21 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE WOOL moved to report  HB 259 out of committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There being  no objection, HB 259  was reported out of  the House                                                               
Special Committee on Ways and Means.