Legislature(2023 - 2024)DAVIS 106
03/11/2024 08:00 AM House EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| HB71 | |
| Presentation(s): Charter Schools: Strengthening Public Education | |
| HB280 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 71 | TELECONFERENCED | |
| *+ | HB 280 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 280-SCHOOL FUNDING; LOCAL CONTRIBUTION
8:34:53 AM
CO-CHAIR ALLARD announced that the final order of business would
be HOUSE BILL NO. 280, "An Act relating to education; relating
to local contributions of a city or borough school district;
relating to school funding; and providing for an effective
date."
8:35:14 AM
REPRESENTATIVE MIKE PRAX, Alaska State Legislature, as prime
sponsor, introduced HB 280 and paraphrased the sponsor statement
[included in the committee packet], which read as follows
[original punctuation provided]:
The Alaska Department of Education and Early
Development projects that the system will educate over
127,000 students next school year at a cost of $1.53
billion. The state's funding formula for education
accommodates the great diversities among Alaska's 53
school districts to reasonably ensure that each will
receive "basic need." Basic need fairly measures the
funds necessary to provide for basic education in each
of Alaska's school districts, however the way basic
need is funded is flawed.
In the late 1980s, the state fully funded basic need.
Today, only 75 percent of basic need comes from the
state. Payment of basic need by the state to city
governments that operate school districts (home-rule
and first-class cities in the unorganized borough) and
organized boroughs is reduced by the equivalent of a
2.65 mill tax levy on the full and true value of the
taxable real and personal property within the
district. This reduction in the payment of basic need
is referred to as a "required local contribution"
(RLC). Only 34 of Alaska's 53 school districts (16
city districts and 18 borough districts) are required
to make a local contribution. A local contribution is
not required from the 19 REAAS. Alaskans are not
treated equally and do not have corresponding
obligations when it comes to education funding.
Public education is a fundamental responsibility of
the state government. Article VII, Section 1 of the
Alaska Constitution (the "Public Schools Clause")
states, "the legislature shall by general law
establish and maintain a system of public schools open
to all children of the state and may provide for other
public educational institutions." This provision is
two-pronged in that it bestows a right and orders a
responsibility. Not only does the provision guarantee
all Alaskan children a right to public education, but
it also requires the legislature to "establish and
maintain" the public schools.
Furthermore, the Mandatory Borough Act of 1963
included a clear and formal statement of intent that
"no area incorporated as an organized borough shall be
deprived of state services, revenues, or assistance or
be otherwise penalized because of incorporation." The
FY 2025 RLC to be paid by the 34 city and borough
school districts totals $314 million, a clear
violation of this Act's intent. Since 2010, due to the
RLC calculation's link to local property values, RLC
has increased, statewide, at a rate of over 2.5 times
that of state aid.
HB 280 seeks full funding of basic need by the state
for all school districts. Full funding of basic need
would honor constitutional intent by ensuring the
state takes the lead in adequately funding education
without disproportionately burdening individual
communities. It would eliminate one of the most
onerous financial burdens placed on taxpayers of
existing organized municipalities, allowing local
governments to provide additional funding for
education, property tax relief, and/or other
priorities, and would remove the biggest financial
disincentive to incorporation of new boroughs.
I urge your support for HB 280.
8:39:22 AM
MAGGIE ELLIOT, Staff, Representative Mike Prax, Alaska State
Legislature, gave the sectional analysis to HB 280 on behalf of
Representative Prax, prime sponsor. The sectional analysis
[included in the committee packet] read as follows [original
punctuation provided]:
Section 1
Conforming amendment removing reference to the
required local contribution under the Funding for
Charter school section, AS 14.03.260.
Section 2
Amends 4.12.020(c) by replacing the reference to
Regional Education Attendance Areas with "districts of
the state public school system described in AS
14.12.010", which includes city school districts,
borough school districts and REAAs. This section also
amends language from requiring a local contribution
from borough and city school districts to making
additional local contributions optional.
Section 3
Amends 14.17.410(b) by removing language requiring a
local contribution from the calculation of state aid
and amends the rest of the subsection section with
conforming language.
Sections 4 to 9
Amends AS 14.17.410(c), 14.17.420(a), 14.17.460(a),
14.17.510(a), 14.17.990(3), and 14.20.177(a) with
conforming language.
Section 10
Amends 29.45.050(m) to allow municipalities to
completely exempt property taxes for an economic
development property. Currently, only the amount above
the school district's local required contribution may
be exempted.
Sections 11 and 12
Amends 43.23.220(d), and 43.23.230(c) with conforming
language.
Section 13
AS 14.17.410(d), 14.17.410(e), and 14.17.410(f), each
relating to required local contributions, are
repealed.
Section 14
Adds an effective date of July 1, 2024.
8:41:29 AM
REPRESENTATIVE PRAX pointed out a drafting error on page 2, line
21; the word "minus" should not be deleted in the bill.
8:42:22 AM
CO-CHAIR ALLARD welcomed invited testifiers.
8:42:51 AM
SAVANNAH FLETCHER, Presiding Officer, Fairbanks North Star
Borough, gave invited testimony in support of HB 280. She
opined that the bill is a key piece to finding sustainable
solutions moving forward. There is a burden on local taxpayers
and local budgets when there is a decrease in the amount of
state funding to the region's schools, she said. She gave
examples of budget numbers and how they pertain to basic needs.
She added that costs are also going up for community members and
how it has an effect; therefore, more stable funding solutions
are critical. She further stated she was testifying to
underscore a few policy points that make HB 280 "a very smart
bill" to move forward.
8:46:37 AM
MS. FLETCHER continued summarizing policy points and gave
further examples referencing the Fairbanks North Star Borough.
She reiterated that it would be an "amazing opportunity" for
local communities to chip in and support local schools more if
the required local contribution was taken off the burden of only
some communities. She opined the result would bring the freedom
of local control.
8:49:26 AM
DAN BOCKHORST, Retired, Local Boundary Commission, gave invited
testimony in support of HB 280. He provided his background,
noting that he spent 40 years in local government in Alaska
including spending time in the local boundary commission which
deals with school district annexation, among other areas. He
read from an example of court proceedings regarding the required
local contribution being deemed unconstitutional. If HB 280
were enacted, he opined, it would be the most significant local
government legislation since the 1963 Mandatory Borough Act. He
further commented on the 1963 Act.
8:56:28 AM
MR. BOCKHORST offered his belief that HB 280 would rectify a
long-standing injustice by aligning state law with the original
intent of the 1963 Act, and he urged the committee to support HB
280.
8:58:13 AM
BRANDY HARTY, President, Fairbanks North Star Borough School
District, gave invited testimony in support of HB 280. She said
over the past several decades, the burden of financing the
education system in Alaska has shifted to the local
municipalities, and she provided examples of funding and taxes.
She noted that currently there are four schools up for
consideration for closing, and removing the required local
contribution would dramatically improve the community's ability
to support its schools and stop the need for further closures.
She stated Fairbanks can no longer afford to pay this "hidden
tax."
9:01:18 AM
REPRESENTATIVE STORY referred to $70 million and whether it
should go to the Regional Education Attendance Area (REAA)
school districts and the state would not get local impact aid
anymore.
REPRESENTATIVE PRAX replied that where the federal impact aid
goes is a separate question. He said what HB 280 deals with is
inequity between organized and unorganized boroughs, and the
point that needs to be addressed is the two groups are being
treated differently and the state constitution says everyone
should be treated equal under the law.
REPRESENTATIVE STORY encouraged Representative Prax to think
about including the $70 million.
REPRESENTATIVE PRAX agreed he would give it thought.
9:05:17 AM
REPRESENTATIVE HIMSCHOOT asked where the $314 million came from.
REPRESENTATIVE PRAX responded it came out of the state general
fund.
9:05:34 AM
REPRESENTATIVE MCCORMICK asked Representative Prax to expand on
the inequity between organized and unorganized boroughs.
REPRESENTATIVE PRAX explained that the inequity is that the
state is mandated to provide and maintain a system of public
schools; however, they maintain them [the two boroughs]
differently and have different requirements.
REPRESENTATIVE MCCORMICK referred to a visit Representative Prax
made to the Bush and asked him to expand on the inequities he
saw in terms of lifestyle and economic opportunities from the
district he represents and that of in rural Alaska.
REPRESENTATIVE PRAX stated that he appreciated the difference in
"the ability to pay." He said it is a big question that must be
addressed and there is a constitution to enforce.
9:07:58 AM
MR. BOCKHORST commented on Representative Story's previous
question about impact aid as a support.
REPRESENTATIVE STORY offered her belief that her question had
been answered but welcomed more insight from Mr. Bockhorst.
MR. BOCKHORST said that the question had been raised in the past
whether federal impact aid is the equivalent of a local
contribution by municipal governments and that is not reasonable
interpretation. He provided brief examples of education
attendance areas and impact aid.
9:11:25 AM
REPRESENTATIVE MCCORMICK reflected on a testifier who opined
that if the bill passed, it may encourage unincorporated
boroughs to become incorporated. He asked Representative Prax
if he shared that sentiment.
REPRESENTATIVE PRAX responded that it was hard to say, and it is
an obstacle or disincentive for some communities throughout the
state; it would be up to individual communities. He reiterated
that HB 280 addressed inequity.
REPRESENTATIVE MCCORMICK referred to funding being cut for
various services and offered his opinion that he does not feel
confident that the state will hold up its end of the bargain.
REPRESENTATIVE PRAX concurred that was a valid point and there
are big decisions to make; however, there are still inequities
and the constitution "drives it."
9:14:24 AM
CO-CHAIR ALLARD thanked the bill sponsor and added that her
district suffers due to the inequity that the organized boroughs
carry.
CO-CHAIR ALLARD announced that HB 280 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB0280A.pdf |
HEDC 3/11/2024 8:00:00 AM |
HB 280 |
| HB280 Sectional Analysis 3.8.24.pdf |
HEDC 3/11/2024 8:00:00 AM |
HB 280 |
| HB280 Sponsor Statement 3.8.24.pdf |
HEDC 3/11/2024 8:00:00 AM |
HB 280 |
| HB280 - Fiscal Note 1.pdf |
HEDC 3/11/2024 8:00:00 AM |
HB 280 |
| HB280 - Fiscal Note 2.pdf |
HEDC 3/11/2024 8:00:00 AM |
HB 280 |
| HB280 - Fiscal Note 3.pdf |
HEDC 3/11/2024 8:00:00 AM |
HB 280 |
| HB0071A.PDF |
HEDC 3/11/2024 8:00:00 AM |
HB 71 |
| HB 71 Sponsor Statement.pdf |
HEDC 3/11/2024 8:00:00 AM |
HB 71 |
| HB 71 Sectional Analysis.pdf |
HEDC 3/11/2024 8:00:00 AM |
HB 71 |
| Charter School Presentation 3 11.pptx |
HEDC 3/11/2024 8:00:00 AM |