Legislature(2017 - 2018)ADAMS ROOM 519
04/18/2018 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB216 | |
| SB102 | |
| SB104 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 383 | TELECONFERENCED | |
| + | SB 102 | TELECONFERENCED | |
| + | SB 216 | TELECONFERENCED | |
| + | SB 104 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 18, 2018
9:38 a.m.
9:38:44 AM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 9:38 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Paul Seaton, Co-Chair
Representative Les Gara, Vice-Chair
Representative Jason Grenn
Representative David Guttenberg
Representative Scott Kawasaki
Representative Dan Ortiz
Representative Lance Pruitt
Representative Steve Thompson
Representative Cathy Tilton
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Senator Natasha von Imhof, Sponsor; Jonathan King, Staff,
Senator von Imhof; Dr. Lisa Parady, Executive Director,
Alaska Council of School Administrators; Heidi Teshner,
Director of School Finance, Department of Education and
Early Development; Senator Anna McKinnon, Sponsor; Brittany
Hartmann, Staff, Senator Anna McKinnon; Michael Johnson,
Commissioner, Department of Education and Early
Development; Representative Harriet Drummond.
PRESENT VIA TELECONFERENCE
Dr. Deena Bishop, Anchorage School District, Anchorage;
Andrew Leavitt, Lower Yukon School District, Mountain
Village; Representative Harriett Drummond, Chair, House
Education Committee; Jim Anderson, Chief Financial Officer,
Anchorage School District, Anchorage; Damon Hargraves,
Kodiak Island Borough School District, Kodiak; Luke
Meinert, Yukon-Koyukuk School District, Fairbanks; David
Neese, Self, Anchorage; Bill Burr, Delta/Greely School
District and Alaska Society of Technology in Education,
Delta Junction.
SUMMARY
SB 102 INTERNET FOR SCHOOLS; FUNDING
SB 102 was HEARD and HELD in committee for
further consideration.
CSSB 104 (2d FIN)
EDUCATION CURRICULUM REQUIREMENTS
CSSB 104 (2d FIN) was HEARD and HELD in committee
for further consideration.
CSSB 216 (FIN)
SCHOOL FUNDING FOR CONSOLIDATED SCHOOLS
CSSB 216 (FIN) was HEARD and HELD in committee
for further consideration.
Co-Chair Foster reviewed the agenda for the day.
CS FOR SENATE BILL NO. 216(FIN)
"An Act relating to the calculation of state aid for
schools that consolidate; relating to the determination of
the number of schools in a district; and providing for an
effective date."
9:39:42 AM
SENATOR NATASHA VON IMHOF, SPONSOR, thanked members for
hearing the bill and the House for working on HB 406, the
companion bill. She indicated that the request was brought
forward to the legislature by several of the large urban
school districts in Alaska who were facing the challenge of
student migration out of their districts, leaving under-
utilized school buildings with excess capacity. Current
state law inadvertently discouraged school consolidation.
Analysis showed that districts that might want to
consolidate schools found that any savings experienced
through reduced labor and operating costs were
detrimentally offset through the reduced income received by
the district when students were absorbed into a larger
school.
Senator von Imhof explained that currently the school size
cost factor contained in AS 14.17.450 was an adjustment
factor applied to the base student allocation (BSA) which
gave smaller schools more money per student and larger
schools less money per student under the theory that small
schools were less efficient with higher operating costs per
student. For districts that might like to consolidate
schools, the fact that they were effectively punished via
the state funding formula for school consolidation meant
that many were unwilling to even have a conversation about
consolidation. Senate Bill 216 addressed the issue. The
bill provided a 4-year consolidation transition that
allowed a school district to gradually move from their
current state aid amount to a lower state aid amount after
the consolidation of schools. It was voluntary and simply
another tool for districts to use if they chose to. The
purpose of the bill was to encourage and incentivize
districts to look for excess capacity within their
districts through potentially consolidating schools by
holding harmless the state revenue received for 2 years
followed by a step down in revenue in years 3 and 4 so the
district had time to repurpose the asset and reabsorb the
associated operating costs. She had relayed the essence of
the bill and indicated her staff would continue with an
explanation and a review of the PowerPoint.
9:42:44 AM
JONATHAN KING, STAFF, SENATOR VON IMHOF, introduced the
PowerPoint presentation: "SB 216: School Consolidation
Transition." He was also available to walk through the
sectional analysis after the presentation if needed.
Mr. King began with the school size adjustment chart on
slide 2: "Alaska's School Size Factor Adjustment AS
14.17.450(a)." He indicated that the figure showed Alaska's
school size factor adjustment in AS 14.17.450(a). It was
part of the school funding formula used to provide smaller
schools with slightly more money than the state provided to
larger schools. He explained that for each individual
school the state counted the number of students, the
unadjusted average daily membership (ADM). For the
individual school the state located where they sat on the
curve. The curve provided the multiplier used inside the
school funding adjusted. He noted that the shape of the
curve went up on the left-hand side and went down on the
right-hand side. In terms of funding, in a smaller school
kids counted for more than kids in larger schools.
9:44:06 AM
Mr. King moved to the graph on slide 3: "Effect of the
School Size Factor on Consolidation: Example 1." The
problem the bill tried to address could be seen on the
slide. The curve followed exactly the same curve on the
prior slide. However, it showed the distribution of schools
inside the Anchorage School District. The district was
large enough to provide a large range of schools and the
same shaped curve as before. He highlighted the 2 green
dots on the page. He presumed that the 2 schools
represented by the green dots wanted to consolidate and
that the space in one of the existing facilities was large
enough to bring the kids from the other school over.
Currently, there were 2 schools; one with 755 students and
one with 798 students. Their school size factor adjustment,
according to statute, was equal to 1.06 and 1.05 - the
multipliers that their ADM received in the state funding
formula prior to consolidation. In combining the two
schools, they became the red dot further to the right of
the curve marked by the numbers 0.95 (the new multiplier)
and 1553 (the new number of students). Before
consolidation, the 2 schools would have received $11.8
million in state aid. After consolidation with the drop
down to the curve to the right, they received $10.6 million
in state aid. There was a difference of $1.2 million. At
the same time, they ended up with a drop in local funding
because the maximum amount of funding a school could
receive was a function of the total basic need calculation
for the state. The schools lost an additional $250,000 in
local funding. The hurdle for the school district was
whether it would save more than $1.5 million. The funding
the school would receive from state and local sources by
combining the 2 schools was $1.5 million. The question was
whether the school would save $1.5 million. If not, there
would be a net loss to the school district. He suggested
that when school districts did the calculations, they found
that their drop in funding was greater than their estimated
savings, at least in the short run.
9:47:03 AM
Mr. King continued to slide 4: "What the Bill Does: Section
1." He relayed that Section 1 removed the disincentive by
providing a 4-year transition period for consolidating
schools. In years 1 and 2, the school would preserve 100
percent of the pre-consolidation per student funding. In
the prior example where the two schools were combined, for
the first 2 years after consolidation their school size
adjustment factor would be held stable at 1.06 and 1.05 on
the prior slide. In year 3, the consolidated schools would
start transitioning to the post-consolidation funding
amount. They would receive the post consolidation amount
plus 66 percent of the difference between pre and post
consolidation. In year 4 they would receive 33 percent of
the difference plus the base amount. After year 4 the
school would receive standard funding as provided for in AS
14.17.410.
Mr. King reviewed slide 5: "What the Bill Does Not Do:
Section 1." The bill did not change the school size funding
formula in AS 14.17.450. The curve would not be affected
and would not change anything for those schools that did
not consolidate. For example, if Fairbanks had a
consolidation and Mat-Su did not, there would be no funding
effect to Mat-Su. It would only affect Fairbanks. Even
within Fairbanks, it would only affect the portion of
funding that was associated with the schools involved in
the consolidation. The calculations associated with schools
that were untouched by consolidation and did not have
boundary issues would not be included. The legislation did
not encourage districts to build new schools for the
purposes of consolidating existing schools. He noted there
was a prohibition within SB 216 to use a new facility. An
existing facility had to be used. It did not allow schools
to reopen or reconsolidate in order to take inappropriate
advantage of the consolidation transition. In other words,
there were limits on going back and forth. One thing heard
in public testimony was that there was no better way for
the school districts to get more money than by staying at
the status quo. Under the status quo, school districts had
the incentive to have the smallest schools possible because
they received the most funding associated with the curve.
The goal was to move away from the status quo, change the
thinking about the status quo, and make consolidation
potentially more attractive. The tool was available to
school districts who wanted to use it.
Senator von Imhof added that in Section 1 the bill was not
costing the state any additional funds. In fact, she
pointed out that there should be savings in year 3 and year
4 when the state began to drop down the revenue
calculation. In year 5, the state would be paying a new
revenue calculation which would be much less that it was
currently. She emphasized that consolidation was voluntary.
The goal was for schools to have 4 years to figure out a
way to repurpose the school. The bill did not address how
to repurpose the school. It was entirely up to the district
and the board to determine each specific property and how
they wanted to handle it. She had found, that for a typical
elementary school in the Anchorage School District the
savings would eventually be about $600,000. She suggested
that if a high school were to theoretically close or be
consolidated, the savings would be about $1 million per
school in the Anchorage School District. The goal was to
use existing infrastructure more efficiently rather than
constructing new buildings.
Mr. King noted that the savings numbers were per school per
year rather than in total.
9:52:24 AM
Mr. King advanced to slide 6: "What the Bill Does: Section
2." He reported that Section 2 provided single school
communities to fully utilize the capacity of the existing
K-12 buildings that they had. There was a provision in
AS 14.17.905 that stated that in communities where there
was a single K-12 school, they would lose funding when
their ADM exceeded 425 students. Currently, under AS
14.17.905, the funding formula for a rural community with 1
K-12 school with 1 to 425 students stated that they would
be treated as if there were 2 schools. In other words, the
number of students, 425, would be divided in 2 to equal 2
schools of about 212 students each. The result would be
that the schools moved up the curve from slide 2 which
provided more funding. When going from 425 students to 426
the school would be treated as 1 school. He suggested that
the movement down the curve from 212 to 426 was a loss of
hundreds of thousands of dollars to that school district,
an unintended consequence of hard coding the 425 number.
Section 2 changed it so that when the schools reached above
425 ADM they would continue to be treated as 2 schools. He
wondered why the state would want to do that. He suggested
that under the current situation, when the student count
went from 425 to 426, all of a sudden, maintaining the K-12
school became less desirable. It also increased the
incentive to build a new school in order to have 2 brick
and mortar schools to maximize funding under the existing
state statute. It was much less expensive for the state to
remove the artificial barrier of 425 students keeping
districts in schools with capacity greater than 25, than it
was to build a new school for tens of millions of dollars.
Senator von Imhof explained that the provision came about
when exploring the legislation for larger school districts.
The particular issue was brought to her attention and was
the reason for Section 2. She noted that it was for
communities with a single K-12 school. It was specific to
the type of school as well as a specific size of the
community. The definition of "Community" was in the bill.
It was for communities that meet the criteria. Currently,
only one community qualified. She did not want the state to
pay for another new school costing tens of millions of
dollars when an existing building had excess capacity and
was working fine for the community.
Mr. King indicated there was another example, but it was up
to the will of the committee if members wanted to see a
more detailed example. Co-Chair Foster thought that the
committee was okay without the more detailed example.
Mr. King offered to walk through the sectional analysis.
Co-Chair Foster encouraged him to do so.
9:57:21 AM
Mr. King read the sectional analysis for SB 216:
Section 1: AS 14.17.410(b)
Adds new language to AS 14.17.410(b)(1) to provide a
"consolidation transition" that allows a school
district to gradually move from their current state
aid amount to a lower state aid amount after
consolidation of schools and describes how and when
the consolidation transition can be used.
(H) Specifies how state aide during the
transition period will be calculated. The "pre-
consolidation" and "post-consolidation" formula
remains the same; the bill will only change how
quickly the "post consolidation" amount is
instituted:
(H)(i)
Consolidation Years 1 & 2: The district will
receive the same funding as if the consolidated
school was still separate schools.
(H)(ii)
Consolidation Year 3: The district will receive
66% of the difference between funding from pre-
consolidation and post-consolidation.
(H)(iii)
Consolidation Year 4: The district will receive
33% of the difference between funding from pre-
consolidation and post-consolidation.
Sections (I) (L) specify conditions where the
"consolidation transition" may not be used.
(I) When the "transitional" state aid amount
would result in lower funding than under the
traditional funding formula.
(J) When a school district is already receiving
additional state aid due to the Hold Harmless
Clause in AS 14.17.410(b)(1)(E).
(K) If a new facility was constructed in order to
consolidate schools.
(L) If the school was reopened and reconsolidated
within the past seven years.
(M) Requires the district to provide the
necessary information and calculations for the
Department of Education and Early Development for
verification, including a student count by school
for the schools involved in the consolidation.
Section 2: AS 14.17.905
Adds a new subsection that allows a school that
services grades K-12 in a single building and has
an average daily membership (ADM) greater than
425 to be considered two separate schools for
calculating state aid.
Section 3: AS 14.17.410(b)
Makes this Act applicable to schools which consolidate
on or after the effective date of this bill.
Section 4: Effective Date
Provides for an immediate effective date.
Mr. King was available for questions.
Co-Chair Foster reviewed the list of available testifiers.
10:01:18 AM
Co-Chair Seaton referred to Section L regarding a school
being reopened and reconsolidated within the past seven
years. He asked if the language meant just under the
proposed program. Mr. King responded only if the school
received the funding transition under the proposed program.
Co-Chair Seaton presented a hypothetical scenario in which
a school was currently closed and was reopened. He though
the school could qualify for the change for reconsolidation
for the following year. Mr. King replied that he was
correct. If there was a school that was currently closed,
reopened, reconsolidated, and closed again, it could
qualify under the section. He had heard from the district
that it took about 2 years to reopen a school and 2 years
to close a school. It was a painful process for districts
and for families involved. Families got very attached to
schools, particularly with schools that had been opened for
a while. Although the bill was creating an additional tool,
it did not mean that consolidation was a done deal. It was
something for districts to consider, but there was a
political process to go through to do so. There would be
significant costs associated with reopening a school. He
thought it was important to consider the pragmatic hurdles.
10:04:13 AM
Co-Chair Seaton asked for a breakdown of cost savings. He
asked for information about the savings associated with the
closing of a school and repurposing it.
Mr. King referred to slide 8 which presented an example of
5 schools shrinking down to 4. The example was of the
Anchorage School District. He noted the district cost
factor in the yellow box of 1.00. In the very lower box, if
the Anchorage School District was to take 5 elementary
schools and consolidate them down to 4, their loss in
funding would be about $800,000. He thought Representative
Seaton was asking what the savings would be to the
districts. He had the information in his office. It showed
that a district would lose a principle, operating costs for
the building, and custodial support staff. The cost savings
would be about $500,000 to $600,000. The district would be
in the hole $200,000 even accounting for closing. He
highlighted the issue of transportation costs. There had
been questions in other committees about having fewer
schools and larger boundary areas resulting in more time on
the bus for students. There was a question about elementary
students spending 40 minutes per day each way on the bus.
The Anchorage School District had testified that it was
committed to making sure kindergarteners were on the bus
for an age appropriate amount of time, which meant adding
additional transportation costs. In this particular
example, based on what was provided to Senator von Imhof's
office, the additional transportation costs would be
$400,000. He conveyed that the school district would be out
at total of $500,000 to $600,000. The Anchorage School
District had been very willing to show its modeling as to
its decision-making process.
Co-Chair Seaton asked Mr. King to provide the information.
Co-Chair Foster asked, "That was who again?"
Mr. King responded that it was the Anchorage School
District. Dr. Bishop, who was online, and her staff would
be able to testify on the issue when they testified.
10:08:40 AM
DR. DEENA BISHOP, ANCHORAGE SCHOOL DISTRICT, ANCHORAGE (via
teleconference), was happy to answer any questions. She had
sent in her written testimony. She indicated that the key
was the operational side. She spoke of Anchorage recently
passing a bond initiative. She was aware that the bond debt
reimbursement program at the state was on hiatus until
2020. She suggested that while the bill was addressing the
operational costs of a school and the movement to close it,
Anchorage had a number of facilities that were built in the
1950s, 1960s, and 1970s. She reported that about 44 to 45
percent of the district's facilities were built prior to
the 1970s. The district was finding buildings that were
used for life and had to put money into them. The district
was happy to put money into them which the community
supported. However, the district wanted to be responsible.
If and when the state bond debt reimbursement came on, the
district would ask the state for support in making its
public schools more efficient.
Dr. Bishop continued with her testimony relaying some of
the questions the district received in prior testimony.
Many questions were about how to gain in the system and
whether school districts would participate. She felt the
district was taking the hard road to be responsive to the
community. People loved their schools. She was aware of how
the city had grown in different areas and where the new
buildout would be. There might be new investment needed in
other areas and some reduction in other parts. Presently,
there was a report about the district being able to find
efficiencies in a couple of schools. The bill would assist
the school district in the type of transition that would be
a 2-year process. The district wanted kids to be able to
matriculate out, while at the same time having high quality
education. The district would never receive more money that
it received presently. In the end, it would always be less.
She reported that it was difficult to convince a community
to do it to itself. She reported that the district had been
modeling the issue out to many schools within the district.
The models found the district with less money in the end.
In terms of the district's accountability and
responsibility to the state about capital, she thought the
district needed to start thinking bigger. Having
acknowledgement through legislation would help to make the
transitions good places to be for teachers, parents, and
students.
10:12:20 AM
Representative Guttenberg asked Dr. Bishop how she
responded to the criticism that the school district had
decided to move to smaller schools because of more money
coming in per student. He indicated she had taken a gamble
that failed. He had heard it was a bail out.
Ms. Bishop responded that she could continue to keep small
schools. She testified that Anchorage's schools were
neighborhood schools. The district had grown substantially.
The district was putting up schools because in the 1970s
and 1980s it was growing so much. Anchorage was larger and
more spread out, but there was not a gamble to build small
schools. They were schools with 400 kids. They were large
schools, as Anchorage was an urban district. The argument
was about making good decisions because enrollment was
declining. She could keep schools at 50 percent capacity
and the funding would continue to come from the state.
However, she did not feel it was right. She was willing to
stand up and say the district believed in education and
wanted education for the twenty-first century. The district
did not want to ask tax payers to put revenue into taking
care of a building the district did not need. She suggested
that the district was looking at sharing resources and
pulling staff together to bring more opportunities to kids.
She was looking at the situation as a cup half full. She
would love to speak to anyone that thought it was a
failure. She argued that if things were left alone the
state would not be keeping account of its own resources.
She relayed that in Anchorage the state was paying 60
percent of the district's bill.
Co-Chair Foster recognized Representative Tilton and
Representative Thompson at the table and Representative
Harriet Drummond in the audience.
10:15:25 AM
Vice-Chair Gara thanked Dr. Bishop for being so vocal on
behalf of Alaska's students. He thought the bill made sense
for the reasons that were stated. However, he wondered how
the legislature could pass a bill which benefited some
school districts but not others. His district would benefit
but, for example, Lake and Peninsula School District would
not. It was not the fault of the bill, as it was trying to
create a problem in the foundation formula. He asked if Dr.
Bishop preferred to have the bill content be part of a
package that perhaps included an increase to the base
student allocation or an upgrade to the pupil
transportation formula. He wondered about the best way to
provide equity to schools across the state and a quality
education. He wondered if it would be better to have it as
part of a package with other things included as well.
Ms. Bishop responded that school districts around the state
would benefit from an education omnibus bill that included
smart thinking about investment in education whether it be
transportation or the BSA. The Anchorage School District
subsidized transportation in the amount of about $2.5
million per year to provide the bussing system in
Anchorage. In addition, looking at investing in education
overall with an increase in the BSA and a full package of
education would be favored. She advocated for a curriculum
bill as well. She did not think the bill did any harm to
districts such as the Lake and Peninsula School District.
She was aware that the Lower Yukon School District favored
the bill. She was happy to have a conversation about
supporting school districts in many different ways.
Vice-Chair Gara thought the points in the bill made sense.
However, even with the bill, unless there were other
changes, Anchorage faced about 100 additional staff losses.
He asked if he was correct.
Ms. Bishop responded that the school district had over 90
reductions in the current year. She elaborated that 50 of
the reductions were certified staff including principle,
teachers, and counselors. She opined that it took more
money to do business in Alaska. She believed the state
should invest in education, as it was the cornerstone of
democracy. She could not speak enough about investment in
education. The operations and the BSA were key paramount
programs.
Vice-Chair Gara agreed that the legislation was a piece of
the puzzle and understood the inequity the bill attempted
to correct. He appreciated Ms. Bishop's testimony.
10:20:29 AM
Representative Pruitt thought the bill was very important.
He asked Ms. Bishop if she expected a savings of about
$647,000 with the reduction of one school.
Ms. Bishop responded, "Absolutely." She indicated the
district had done some scaling out of numbers and
elementary was about a $600 savings in the long run looking
out 5 years. Middle schools ranged between $800 and $1000.
She indicated that the savings was a moving target because
of the ADM and the formula. She suggested that if the
school district was to look at bringing a building offline,
there would be an initial input of funds to be able to move
furniture or repurpose another area. The district would
have to upgrade a space to an acceptable condition for
classroom use. She also mentioned not wanting to give up
long-term maintenance for a school not in use, because it
was still responsible for maintaining the space. In
Anchorage, the school buildings were owned by the city. She
suggested that future bonds might help with re-use. The
school district was also considering moving some of the
charter schools that were renting facilities into other
school facilities not in use. She thought another piece of
legislation offered first use of a facility for another
purpose. The school district was exploring using some of
the facilities for other purposes such as preschools. The
district was looking at how to utilize facilities to
support education in the entire city. She concluded that as
part of a long-term plan, it would be best not to have to
immediately put revenue into a building for capital.
Instead, the district could work out the operational costs
over time. She thought the district would try to provide a
2-year buffer to matriculate kids out of primary,
secondary, and middle school. The district would want to
work with the city, parents, teachers, and students on the
issue. She believed the district could find savings in the
long-term. The school district's model was built off of a
long-term plan.
Co-Chair Foster indicated that floor session would begin
momentarily. The committee would resume later in the day.
He recessed the meeting to a call of the chair.
10:25:10 AM
RECESSED
1:36:37 PM
RECONVENED
Representative Grenn stated there had been spurts of
building elementary schools. He asked when the last batch
had been built. Ms. Bishop answered it had been over 10
years.
Co-Chair Foster OPENED public testimony.
DR. LISA PARADY, EXECUTIVE DIRECTOR, ALASKA COUNCIL OF
SCHOOL ADMINISTRATORS, spoke in support of the bill. She
relayed that although the bill impacted the Anchorage
School District and the Lower Yukon School District, there
were potentially other school districts that would use the
legislation as a tool and had indicated interest. The
reason her entity supported the bill was because it was
voluntary. She appreciated Dr. Bishop and Dr. Picou looking
at efficiencies in their districts and what they need to be
doing to support their local communities. She hoped the
committee would consider the bill as another flexibility
tool to provide for school districts if they deemed it
necessary for their communities.
Vice-Chair Gara thanked Dr. Parady for her work in
education. Since she represented many different officials
across the state and because she was testifying on behalf
of the bill, he assumed that the officials from areas that
would not benefit from the bill believed in lifting other
boats up. He asked if he was correct.
Ms. Parady replied that across the state the council
recognized that each district was doing whatever possible
to look at their efficiencies and what they needed to do in
support of their students. There was a general amount of
support for school districts across the state. The
districts were supportive of doing what was best for their
local communities. The recognition of local control, which
was held dearly, was true with the current legislation. If
the bill was mandatory she would feel differently. She
continued that the fact that the bill benefited the
Anchorage School District and potentially other districts
and did not cause harm to other districts, the districts
supported each other. She added that the bill had been well
thought out by the districts seeking the bill.
1:42:29 PM
Representative Guttenberg asked about what a school
district could do in a situation where inefficiency existed
for a long time and where reorganization into a
consolidation program should be applied. He did not believe
the state had any tools to address a situation where even
though a school fell below a certain level or a certain
attendance record, it was still more cost effective to
remain as-is, even with inefficiencies. Ms. Parady would
have to think about the response; she was not prepared to
make a recommendation presently.
Co-Chair Seaton was concerned about unintended consequences
or uses. He had mentioned subsection l under Section 1 of
the bill. The section indicated that if the school was
reopened and reconsolidated in the previous 7 years, it
would not be able to use the tool. He wondered if any flex
schools or magnet schools had closed, reopened, and
reconsolidated. He asked if Ms. Parady was aware of any
circumstances where his example would be the case. The last
thing he wanted to do was create legislation in which
people could take advantage of a system for something other
than what it was intended.
Ms. Parady thanked Co-Chair Seaton for considering
unintended consequences. She was not aware of any
unintended consequences with SB 216. She believed Mr. King,
in his work with the districts, had considered the
different consequences. She reiterated that the safeguard
was that the bill was voluntary. She added that regarding
subsection L, she was not aware of any specific situation
that currently applied. She offered to follow-up.
Co-Chair Seaton appreciated Ms. Parady following-up with an
answer to his question. He wanted the intent of the bill to
be clearly stated. He was not opposed to tweaking the
language of the bill to ensure it was as clean and
effective as possible.
1:47:27 PM
Representative Ortiz asked if there was any potential
impact particularly in rural areas where school choice
issues were a concern. He asked if the bill had been vetted
by members of the association and whether they had
expressed any concerns. Ms. Parady replied that she was not
sure there would be the capacity to use the bill in rural
areas. She was unaware of any situations that would impact
the rural areas. In meetings with superintendents recently,
she reviewed the bills that were moving in the legislative
session and did not hear any concerns expressed about the
bill. She reiterated that Dr. Bishop had done considerable
work and had a very good understanding of her district. She
had advocated that for the Anchorage School District, the
legislation was appropriate. There were other districts
that saw the legislation as a potential tool but would not
be mandated. Currently, the bill would support a couple of
the school districts represented by the council. There were
also other districts that thought the bill provided a new
tool. She did not see any negative impact to rural Alaska.
The bill was a flexible tool. The school districts needed
many tools.
Representative Kawasaki spoke about a decline in school
enrollment in Fairbanks in recent years. The city was now
expecting a ramp up in enrollment. He asked if there had
been consideration of the cyclical nature of enrollment.
Ms. Parady deferred to Dr. Karen Gaborik regarding
Representative Kawasaki's question about Fairbanks and
rolling enrollment. She also deferred to Mr. King on
specifics.
Mr. King replied that the school districts had to be
looking forward. In the case of the Anchorage School
District and the Mat-Su School District, they conducted
forward-looking projections of their expected enrollment.
Kids did not show up instantaneously. They had to be born
first. The state had birth records and records of Permanent
Fund Dividend (PFD) enrollments. The state could see what
was coming. He noted that twice per year the Anchorage
School District looked ahead 6 years. He relayed that the
professionals managing the systems were aware of the
issues. He reiterated that it took 2 years to open a school
and 2 years to close a school. He believed long-range
thinking was required and reminded members that districts
had to go through a public process. He thought it wise for
a school district to consult with its citizens. The process
lent itself to long-range thinking. The bill contained
provisions that did not allow a school to reopen and
reconsolidate a school earlier than 7 years. However, a
significant portion of the timeframe was just what was
needed to start the planning. He did not think the
districts would be switching schools on and off like a
light because of the tool provided in the bill.
1:53:50 PM
Representative Guttenberg provided an example, Rampart
School. Rampart, Alaska was forced to close their school
because of going below the student minimum. Young
leadership came in and brought people back. They reopened
the school and the community was vibrant again. He wondered
if there were traditional dollars available for shutting
down and then reopening again. He asked how it worked in a
case such as his example.
HEIDI TESHNER, DIRECTOR OF SCHOOL FINANCE, DEPARTMENT OF
EDUCATION AND EARLY DEVELOPMENT, reiterated Representative
Guttenberg's question that if Rampart was closed and then
reopened because they had enough students, would they come
to the department requesting permission to reopen and have
it counted on the attendance list in October. A minimum of
10 students would be required to open the school.
Representative Guttenberg asked if transitional support was
available after shutting down a school then reopening it.
He relayed a number of things were needed to reopen a
school. He asked if transitional funds were available
following a forced shutdown in order to reopen. Ms. Teshner
replied that typically the school district would go through
a process of determining whether to reopen a school. They
would go through the process of finding funding and hiring
teachers. The state did not have anything in the way of
statutes or the transitional funding. They would have to
find money through revenues.
Representative Guttenberg surmised that there was no
support. One day they were open and one day they were
closed. Ms. Teshner answered in the affirmative.
Co-Chair Seaton acknowledged Representative Gary Knopp in
the audience.
Vice-Chair Gara stated there was a four-year step down. If
a district consolidated a school, it might suffer a penalty
by receiving less funding under the foundation formula. He
understood the committee was trying to resolve the loss of
funds for some of the school districts, He did not believe
the 4-year step down magically indicated the school would
find the exact amount of efficiencies to make up for the
loss. He thought that at worst, it was a way for schools to
figure out how to adjust their finances over the 4-year
timeframe. It was unclear how much efficiency would be made
up in 4 years. At worst, it was a way for schools to figure
out how to adjust their finances: At best, they would find
efficiencies. He was not sure the district would be able to
find the exact amount of efficiencies in 4 years with a
step down. He asked if he understood correctly. Mr. King
replied in the affirmative. There was nothing to say that 4
years was the perfect number. He had not heard any negative
testimony about a 4-year period. It seemed like 4 years was
a reasonable number. It was another tool in the tool box.
The bill was voluntary and gave districts the opportunity
to go through the process as they saw fit. Vice-Chair Gara
thought it would be impossible to hold someone to modeling
more precisely.
1:59:09 PM
ANDREW LEAVITT, LOWER YUKON SCHOOL DISTRICT, MOUNTAIN
VILLAGE (via teleconference), read a letter from the school
superintendent:
Dear Senate Education Committee Members,
I have been a teacher, a principal, and a
superintendent in both rural and urban Alaska for the
past twenty years. On behalf of the Regional School
Board, the families of the Lower Yukon School
District, and the staff of the Lower Yukon School
District, this testimony is in support of Senate Bill
216: SCHOOL FUNDING FOR CONSOLIDATED SCHOOLS.
We are in support of Senate Bill 216 for the following
reasons:
1. Hooper Bay is a growing community with a
population of 1275. The Hooper Bay School is the
largest school in LYSD. The current enrollment is
at 449, well beyond the 425 specified in AS
14.17.905.
2. Every school in Alaska is funded proportionately
according to its ADM during a twenty-day count
period. According to the current language of AS
14.17.905, Hooper Bay School is the only school
in Alaska that actually gets penalized for an
increase in student enrollment.
3. In current form, the provision in AS14.17.905
that calculates funding for a school with an ADM
over 425 as one school instead of two schools
would equate to a reduction in revenue of $1 M. A
reduction in school funding of this size would
have a very detrimental impact on children in the
Lower Yukon School District.
4. The Senate Bill 216 provision correction of AS
14.17.905 in Sec 2 would hold the children of
LYSD harmless from the unintended consequences of
legislation that was written in 2001. In the
original language of AS 14.17.905, this
unintended consequence was anticipated, and
Hooper Bay was specifically mentioned in
deliberation.
For these reasons and many more the Lower Yukon School
District supports Senate Bill 216 and thanks you for
elevating the unintended consequences of AS 14.17.905
that would have the delirious impact on the quality of
education offered to the children of the Lower Yukon
School District.
Sincerely,
Dr. Rob Picou
Co-Chair Foster asked Mr. Leavitt to pass on regards to Dr.
Picou. He was aware the doctor had been online earlier in
the day.
2:01:49 PM
AT EASE
2:02:04 PM
RECONVENED
REPRESENTATIVE HARRIETT DRUMMOND, CHAIR, HOUSE EDUCATION
COMMITTEE (via teleconference), relayed that the House
Education Committee passed the House companion bill HB 406
sometime previously. She thought some of the questions
posed in the meeting had been interesting. She spoke about
her past experience as a school board member. She relayed
that in the nine-year period she served on the board the
Anchorage School District's population grew from 40,000
students to about 50,000 students. In that 9-year period,
the Anchorage School District built nearly $500 million
worth of school buildings including new school buildings,
expansions, renovations, and additions.
Representative Drummond reported that she participated as a
school Board Member in 2 district-wide boundary changes;
the middle schools and the high schools. It had been one of
the most tumultuous periods for the Anchorage School
District. The district built 2 new middle schools, Mirror
Lake Middle School and Goldenview Middle School, with a
bond issue that passed in 1994. The boundary change for
middle schools was not as difficult because some of the
middle schoolers had new schools to go to. However, the
high school boundaries had to change because many of them
were overcrowded and some had space. The district had not
built new high schools in the 9-year period. The process
was terrible because the district was moving kids around to
even out the population between schools. She expressed
sympathy for Dr. Bishop in having to make similar
transitions like the proposed consolidation of 5 elementary
schools to 4. Often parents purchased their homes to be
close to a particular school. It was difficult for the
district to have to tell those parents that it was going to
close that school and their children would have to get on a
bus to go to school a couple of neighborhoods away. She
opined that it was disconcerting and a problem in
communities. She understood Dr. Bishop's wish to take the
transition slowly.
Representative Drummond continued to elaborate that
teachers traveled with their students. The school's
administration positions went away once the transition
process of a consolidation was complete. She noted that the
Anchorage School District had the largest square footage of
real estate in the state of any single institution. There
were over 90 schools and several facilities and support.
She advised proceeding very carefully with seeking to make
large changes.
JIM ANDERSON, CHIEF FINANCIAL OFFICER, ANCHORAGE SCHOOL
DISTRICT, ANCHORAGE (via teleconference), clarified areas
of concern that had been expressed. There was a perception
that Anchorage had done some poor planning in the past and
was the reason the district was looking at consolidating
schools. However, it had more to do with changing
demographics and a declining student population. Anchorage
had lost more than 2,200 students. The schools were
originally built based on the population needs at the time.
The district had not opened up a new elementary school in
about 20 years or a new high school in about 10 years. He
also noted the topic of whether Anchorage would attempt to
close a school, open it back up in 2 years, close it, and
reopen it in 2 years. He conveyed that the amount of time,
effort, and energy to get ready to close a school was
incredibly time consuming. He could not imagine a scenario
where it would occur.
2:07:42 PM
Co-Chair Foster CLOSED public testimony.
CSSB 216(FIN) was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 102
"An Act relating to funding for Internet services for
school districts; and relating to the Alaska higher
education investment fund."
2:08:18 PM
SENATOR ANNA MCKINNON, SPONSOR, explained that SB 102 was a
mirror image of a bill that was passed in 2014 to create
better equity among school districts and being able to
provide and communicate over an internet system. In 2004,
the legislature created the Broadband Assistance Grant
(BAG) program and chose a speed of 10 megabits per second.
The bill before the committee moved the speed from 10
megabits to 25 megabits. She chose the number because she
had been told that school districts around Alaska had the
infrastructure, the hard units, available. The nationally
and federally recommended speed was 100 megabits. She was
shooting for that number but was a long ways off. She
relayed that SB 102 was written to provide educational
equity to rural schools. She wanted to provide rural access
with similar abilities to virtual education or
communication as urban schools currently had. She argued
that the best thing the bill did presently was that for
every dollar the state contributed, it leveraged $8 from
the federal government to try to create equal access
opportunities for Americans.
Senator MacKinnon surmised that the most contentious issue
relating to SB 102 was the funding source from the Alaska
Higher Education Fund. There was concern that, because the
legislature had reduced the interest rate, the risk level,
and the return plans for the Higher Education Fund, the
bill would somehow erode the value of the Higher Education
Fund specifically as it paid out to the Alaska Performance
Scholarship. There was another bill that sat in the House
Education Committee that she did not think would move. It
tried to streamline the fund so that it only paid out to
the top tier. The committee chairman, who had the bill, was
a huge advocate of education. The Senate had offered a
suite of bills, and SB 102 was a part of that. It was the
Senate's belief that the Alaska Performance Scholarship
needed retooling. She reported that the Higher Education
Fund was earning interest that would meet the current call
on cash that was anticipated. For the following 10 years
there should not be a problem in providing access. She
referenced the Kivalina School as an example. She had
blamed adults about fighting over the location or structure
of the building while students were sitting with buckets
and water dripping through their ceilings. As adults were
arguing about such things, students were put in very
different positions. She relayed that the state had
designated general funds that had been spent to improve
education that were sitting in the Higher Education Fund -
the reason the Senate Finance Committee recommended the use
of those dollars for the project in SB 102. It leveraged $1
to $8 for the state's students at a time they currently
needed it.
Senator MacKinnon reported that she could not ask for a
general fund spend. She relayed that if the bill was
changed to reflect a fund source of general funds, she was
doubtful there would be enough support for it. She
clarified that her comment was not meant as a threat, but
rather as a statement of fact. The state had some money set
aside for education, and the Senate chose the fund source
from the Higher Education Fund because the BAG was already
coming from that fund. The state did not have additional
general fund dollars to spend on increased internet speed.
She deferred to the committee.
2:13:32 PM
Co-Chair Foster listed individuals available for questions.
Representative Wilson asked, aside from the 191 schools,
who paid for the internet for the other schools.
BRITTANY HARTMANN, STAFF, SENATOR ANNA MCKINNON, asked
Representative Wilson to restate her question.
Representative Wilson indicated that the bill was
addressing 191 schools. The Senator had mentioned other
school districts making it equal. She asked about the other
schools that had a higher megabit speed. She wondered if
the schools with the higher speeds paid out of their BSA or
other grants. Ms. Hartmann answered that their funds came
from the federal E-rate program, the State Broadband
Assistance grant, and from the funding formula. She noted
that the federal E-rate program paid 70 percent to 90
percent of the internet bill.
Representative Wilson wondered if the difference was the
matching funds. She wondered if the matching funds paid by
the other schools outside of the 191 schools were paying it
out of their formula monies. The 191 schools would be given
additional funding outside of the BSA to make the increase
to 25 megabits.
Representative Grenn asked for verification there were 209
schools needing the upgrade. Ms. Hartmann replied that,
from research she had done with the Federal Communications
Commission, 197 schools would be upgraded.
Representative Grenn asked about an expected turnaround
time to get all of the schools upgraded. Ms. Hartmann would
have to direct his question to the telecom companies.
However, if the money was provided, the upgrades would be
purchased immediately or in the following year.
2:16:40 PM
Senator MacKinnon noted that each school would handle it
differently. The money was for the speed, not for
construction, hardwire, softwire, or building out a system.
That was what providers did on their own. The providers
could access other grants at the federal level to be able
to provide sources. The bill was about purchasing speed for
a school district. Currently, school districts were using
BSA money to provide whatever speed they deployed to their
students. She reported that buffering was occurring while
live streaming videos and other things. The bill provided a
way, if the legislature looked at virtual education or
classroom-to-classroom peers around the world, Alaska's
rural communities would have the needed speed to have a
conversation without latency and delay.
Representative Guttenberg asked if Department of Education
and Early Development could bring a spreadsheet showing
what the state was currently paying for what speeds, the E-
rate, the local contribution, and the amount of the
broadband Access Grant (BAG). Ms. Hartmann answered that
she had the information containing the current E-rate and
BAG per school district, and the total cost to each school
district. She would provide the information following the
meeting.
Senator MacKinnon noted there was information provided by
Co-Chair Hoffman in member packets titled "Alaska Schools
Under 25MBPS - Federal Communication Commission, Public
Reports, 2016" (copy on file) that showed the schools
listed with under 25 megabits under the federal program.
She could provide a copy if he did not have it in his
packet.
Representative Guttenberg noted that in statute speed would
increase to 25 megabits, which was not a standard by
itself. He conveyed that upload speed, download speed, and
latency were almost as critical as the download speeds. He
thought she had reported that the additional funds would
not be used to pay for upgrades. If they could pay for
upgrades currently, he wondered why they were not. The
state would not be paying for fiber or new equipment. He
wondered why they were not at a certain level.
2:19:57 PM
Senator MacKinnon answered that all communities had to make
choices about where they deployed their assets. Some of the
assets were being deployed in classrooms to support
teachers. They were making individual financial decisions
Some schools had 1000 megabits because the community had
taxing ability to raise revenues. She deferred to her
staff.
Representative Guttenberg asked why the ISP providers did
not offer the 1000 megabits presently. He stated that
everybody on fiber was capable of getting 1000 megabits
including Kenny Lake. He asked what was preventing the
providers from offering higher speeds since they were
available without needing any facility change outs or
additional capital projects.
Senator MacKinnon answered it was a business. Businesses
offered a suite and a package for a certain amount of
money. There was a contract established between the
district and the provider based on the cost to deploy the
resource at a particular location. There was fiber in some
areas, satellite in other areas, and microwave stations in
other areas. Each area had its own costs. There was a
relationship with someone selling something, internet at
various speeds. She felt personally that she overpaid for
her service, but it was an individual choice for her. One
of her family members had elected to discontinue cable
service due to the cost. It was up to the school districts
what they were willing to pay.
Senator MacKinnon furthered that there might not be 1000
megabits available at all of the schools. She believed
there was up to 25 megabits based on microwave, fiber, and
satellite systems that the state could raise the lowest
level to a group of districts and provide additional
funding to pay for the additional speed. She found that the
costs would go down because the fixed cost for a company to
try to recover the rate they were charging was spread over
more megabits. The costs would go down. She reported that
in 2014, multi-million dollars were fronted by the state.
Once the fixed costs were covered over time, the actual
speed rate dropped, and school districts' bills dropped.
She deferred to her aide.
2:23:33 PM
Ms. Hartmann replied that she had information from FY 15
through FY 18 regarding BAG statistics. In FY 15 the cost
was $3.6 million, in FY 16 the cost was $2.6, in FY 17 the
cost was $2.3 million, and in FY 18 the cost was $2.2
million. She reported that there was a decrease every year
of the BAG program.
Representative Ortiz applauded Senator MacKinnon for
bringing the bill forward. He spoke to the importance of
broadband. He was concerned about where the funding would
come from. He pointed to appropriation language in Section
3 of the bill. He asked about the current balance of the
Higher Education Fund. Senator MacKinnon replied $336
million.
Representative Ortiz asked if it had initially been
capitalized at $400 million. He queried if she had concerns
about the solvency of the fund and the continuation of the
Alaska Performance Scholarship Program.
Senator MacKinnon answered, not for 10 years. She stated
that Alaska needed to get its fiscal house in order. The
bill was a way to create equity over time. The interest
currently being earned on the Higher Education Fund out
into the future looked like it would cover the cost,
especially if the legislature deployed the resource to
receive matching funds and raised the megabits from 10 to
25. Past experience showed that when the legislature
invested money at the 10 megabits, the state paid a
significant amount up front. Over the years it started
sliding down and the school districts were getting the same
speeds. She believed the state would see a similar drop.
Senator MacKinnon noted that Senator Olson carried the bill
on the Senate Floor but was not able to address the issue
in House Finance because of the timing of the meeting. The
Senate saw the idea as emeritus. She copied his bill and
added the 15 megabit speed up to 25 megabits because she
saw the merit of the bill passed in 2014. She hoped that
the expenses would reduce over time and that the fund would
be whole. She emphasized that the finance committee had not
chosen to use the Higher Education Funds on other
proposals. However, the other BAG programs were funded from
the Higher Education Fund, which was the reason she chose
it as the source for her proposal.
2:27:39 PM
Representative Wilson referred to a handout that showed the
annual call for the internet, the E-rate, the BAG portion,
and the school portion. She noted that it was only for the
197 schools. She wondered if there was any information for
the other districts outside of those that serve the 197
schools. Ms. Hartmann answered she would follow up with the
information.
Representative Wilson wondered why the bill did not use the
Power Cost Equalization (PCE) Fund as opposed to the Higher
Education Fund. She suggested that the nature of the issue
had to do with a utility. The Power Cost Equalization fund
balance equaled $1 billion. She opined that the Higher
Education Fund had been robbed for several things. She was
concerned the state would have more problems within 10
years.
Senator MacKinnon answered that the PCE Fund had been
modified the preceding year to prioritize spending and
reduced interest earnings on it. It provided heating
assistance and applied to other items to reduce costs in
rural Alaska. In addition, the fund was being shared with
all communities including Fairbanks, Wrangel, Anchorage,
and other communities. All communities qualifying for
community revenue sharing were receiving funds from the PCE
Fund. A bill had been structured through Senate Finance
with her support in advancing it to provide energy use and
community assistance.
Representative Wilson stated that the Higher Education Fund
had not made enough interest to pay for the scholarship
program and the needs-based program. She was concerned
about taking more out of the fund. She relayed a personal
scenario about her internet service at home. She also spoke
about her son's internet service. She agreed with
Representative Guttenberg about the speed of service. Speed
was necessary. She thought the amount could go down, but a
commitment of more than $10 million was being discussed.
She was very concerned about fairness. She continued that
districts all over Alaska were paying for whatever speed
they had. She spoke about fairness. She was concerned the
bill only pertained to 197 schools. There were other
schools trying to do the right thing. She did not want to
jeopardize an important program. She thought the
scholarship programs were equally important for B and C
students. She did not want to negatively impact them.
2:31:35 PM
Senator MacKinnon spoke about a conversation pertaining to
equity for rural states and about equity in education
opportunities. She reported that 100 megabits per second
(mbps) was the national recommendation. However, because
Alaska's smaller communities in more rural locations did
not have the same advantage of fiber that could provide
lower cost service, the bill was only providing an
opportunity of 25 percent of the national recommendation.
She agreed there was consternation around the funding
source. The funds were set aside for higher education.
Should the legislature solve the state's fiscal challenges,
there was an opportunity to place more money back into the
fund to continue to provide resources for the Alaska
Performance Scholarship, the needs-based Alaska Education
Grant, and the BAG program. She understood there might be a
negative draw on the fund and that it might eat the corpus
of the money placed in the account. However, she felt that
providing equity for those presently in the system would be
helpful.
Representative Pruitt spoke about the funding source. He
mentioned a Legislative Finance Division analysis of the
impact of SB 102 on the fund. By 2023, the estimated
investment earnings would be just over $15 million while
the total appropriations would be $35 million, $20 million
being drawn down. He reported the total value at the end of
2023 would be $245 million. He had concerns about the
impact on the ability to earn with less in the account and
the residual effects of being able to provide various
services. He thought Senator McKinnon had said that the
earnings could be covered by what was being asked to be
drawn down. He thought it looked like in the estimate that
what was provided in the bill could fit within the amount.
However, there were other items still being drawn from the
fund including the Alaska Performance Scholarship (APS). He
asked how he could say it was fiscally responsible if the
goal was to be able to provide scholarships in the long
term.
2:35:03 PM
Senator MacKinnon answered that if students were not ready
to go to college, they had to take remedial courses. In the
Anchorage area there had been a newspaper report that
showed that reading and math were below the national
average. The bill provided an opportunity to help increase
the chances that those that were ready to go to college
would be prepared and not have to take remedial classes.
She believed the fund had been used as a funding source for
two years for items that were not education related. The
items had dwindled the fund and the fund had been used for
those items in response to Alaska not solving its fiscal
challenges. She reported that the state had better numbers
at the beginning of the year. But the fund had changed its
earnings estimation. She explained that when she had
originally started with the bill, the interest earnings
were meeting everything in the fund. The numbers had
dropped, and she had received them the previous day. She
was looking for equity for all Alaskans, mostly those in
small communities. She relayed that all of Alaska's school
districts could qualify for the E-rate. It was the
committee's decision whether it was the correct funding
source. The Senate chose to use the Higher Education Fund
as the funding source inside of a comprehensive look at
education with a suite of bills. The other legislation that
would affect this fund was not before the committee. She
admitted it was a bit out of sequence with what the
Senate's ideas were around the issues.
2:37:18 PM
Representative Pruitt mentioned remedial classes needed by
University of Alaska students. In Anchorage a large portion
of students likely came from the Anchorage and Mat-Su areas
with access to broadband. He thought it spoke to a larger
issue than whether there was access to broadband. He noted
a policy call about whether to continue with the
scholarship fund. He asked if Senator MacKinnon thought
going forward with the bill without another component was
appropriate. He reported having objected to using the fund.
He questioned whether the committee should go forward with
only one piece of a larger package.
Senator MacKinnon commented that each bill stood on its own
merits. She deferred to the deliberation of the House. She
thought she had made a fair case for smaller communities
that were paying high costs for providing educational
services. They received the same BSA as other communities
that had taxing authority to add to their schools. She
noted that all schools in Alaska qualified for E-rate. The
cost for internet speed in larger communities was less or
might be less than in rural Alaska. She indicated that she
was trying to benefit all students. The goal from the
Senate Finance Committee was to try to do what was possible
to support education. She would explain to people in her
district that equal was equal and being able to provide
broadband access without latency and buffering meant that
the state could deploy a state of the art teacher into
classrooms that might or might not currently have the
option.
2:41:03 PM
Vice-Chair Gara appreciated the rural equity goal the
senator was trying to achieve. He wondered if 25 mbps would
be enough to allow for a large classroom setting. Ms.
Hartmann thought the question would be better addressed to
the telecom companies or DEED. She had been told that it
took 4 mbps to have a face-to-face interactive video. The
bill would help increase the ability to livestream.
Vice-Chair Gara reported having spent a fair amount of time
in rural Alaska and watched the little circle on his
computer go around and around. He asked if all of the
school districts listed with less than 25 mbps worth of
broadband had enough infrastructure from the telecom
companies to provide the 25 mbps. He wondered if internet
access would slow down. He asked if the broadband available
to others would slow down or be eaten up. He also wondered
if the telecom infrastructure would have to be upgraded.
Ms. Hartmann responded that she had recently uploaded
letters from the telecom companies that currently provided
services to the 197 schools that they were capable to go up
to 25 mbps with current infrastructure. She also had a
letter from the Alaska Telecom Association confirming the
same thing. Regarding Vice-Chair Gara's other question, she
would have to research or defer the question to the telecom
companies. Vice-Chair Gara did not know the answer and did
not expect her to either.
2:44:24 PM
Representative Guttenberg asserted that providing broadband
across Alaska was likely the most important thing the state
could do for its students. He reported paying more than
$110 for 4 megabytes. He indicated that the GCI map was
inaccurate. He mentioned that 3 years prior, the FCC
adopted the industry written Alaska plan. Over the course
of 10 years GCI would receive $1.350 billion. He spoke
about the telecom companies building infrastructure, which
was supposed to increase coverage in remote locations. He
noted living 5 miles from the university and reported not
having access to service. He was interested in seeing the
cost associated with the schools.
Representative Guttenberg wondered if the Senator had
queried the telecom companies about where they intended to
build out in communities. The Alaska plan was looked at
critically by some. He indicated there would be a 5-year
look back in about 2 years. He thought $1.350 billion in
subsidies with a minimal amount of build out was way beyond
what was being considered in the bill ($15 million per
year). He asked if the senator had asked the telecom
companies about where the build outs would enhance
communities without additional costs.
Senator MacKinnon thought the providers that were
participating in the Alaska plan should be consulted. The
telecom companies participating in the Alaska Plan received
a benefit from the federal government, which came with
strings attached. She noted that for people concerned about
the price of internet service going up, the FCC who ran the
federal E-rate program, showed all of its data online. The
prices reflected the cost continuing to go down.
Senator MacKinnon reported that the FCC had a rule called
the "Lowest Corresponding Price Rule (LCP). She explained
that the LCP was defined as the lowest price that a service
provider charged to non-residential customers who were
similarly situated to a particular applicant, school,
library, or consortium for similar services. The rule also
stated that service providers could not charge applicants a
price above the LCP for E-rate program services. She
indicated that the state could not force people to build in
all rural communities in the state. There were active
choices occurring with how many individuals were in a
location to receive service. The federal government was
trying to extend the stretch and trying to regulate that
the lowest cost structure was still provided to those
receiving the services. She offered to reach out to the
providers on behalf of the House Finance Committee. She
thought their plan had investment in infrastructure costs
every year. However, the state did not direct where
providers built out.
2:48:16 PM
Representative Guttenberg relayed that the state was
providing $1.3 billion in subsidies which did not cover E-
rate, rural clinics, or FirstNet. He thought there was an
intangible public purpose for the legislature to see that
an infrastructure build-out happened. He frequently had
discussions with industry people in which he posed the
question about when infrastructure would be built. He
reported that there was no square answer from industry
folks. He reiterated the need for additional infrastructure
with the amount of money going into Alaska in subsidies. He
indicated that the chairman of the FCC criticized the lack
of infrastructure build-out in Alaska. He thought it was
untenable that, at the end of a 10-year period, there would
be no substantial infrastructure in place. He felt policy
makers would be faced with continued escalating costs. He
agreed with the bill sponsor that Alaska's kids and
businesses were owed an infrastructure to allow them to
function at their highest level. He reiterated that he
lived in sight of the University and the mappings were
inaccurate. He continued to criticize the telecom
companies. He appreciated the senator's efforts.
Senator MacKinnon clarified she was not representing
telecom companies. The bill represented students and school
districts in Alaska. She believed that the legislature had
reached out to telecom companies to understand how they
were providing service and some of their challenges. In no
way was she trying to direct a single dollar towards any
individual private sector person. However, private sector
companies were providing the services. She emphasized that
she was not in communication with telecom providers with
the exception of asking questions.
Representative Guttenberg clarified that he had not been
inferring anything.
Representative Wilson wanted to understand how the
calculation had been made for the figure of $13.4 million.
She suggested that $2.5 million applied to the 197 schools.
She had hoped to have a discussion about other options
after seeing how the calculation was applied. Senator
MacKinnon answered that the department was prepared to
address the fiscal note.
2:52:43 PM
Co-Chair Foster OPENED public testimony.
DAMON HARGRAVES, KODIAK ISLAND BOROUGH SCHOOL DISTRICT,
KODIAK (via teleconference), testified in support of the
bill. He relayed that in Kodiak bandwidth offered options
for its students. Many of the district's sights had one
high school teacher available locally. Bandwidth provided
access to high quality teachers and provided students in
the smaller schools with access to as many as a dozen or
more teachers. He continued that live video connections
between students and teachers for each distance class was
crucial. The Kodiak School District was currently limited
to 2 simultaneous video connections at most sites. An
increase to 25 mbps would help the district to deliver 4 or
more simultaneous connections to each of its sites. The
district, with increased bandwidth, would also be able to
offer more classes including welding. The course was taught
and facilitated by a teacher in Kodiak at the high school.
He continued he was able to offer a better experience. [The
testifier's call dropped off].
2:54:45 PM
LUKE MEINERT, YUKON-KOYUKUK SCHOOL DISTRICT, FAIRBANKS (via
teleconference), spoke in favor of the bill. He thanked
members for supporting the bandwidth assistance grant in
the past. The grant provided a positive impact on the
educational opportunities the district provided its
students. Because of this impact, he encouraged members to
support SB 102. The Yukon-Koyukuk School District had 10
rural schools in the interior of Alaska. 98 percent of the
students in the villages were Athabaskan and 8 of the 10
villages were only reachable via air service, with all
school internet being delivered by satellite or a microwave
connection. Very few homes in the area had internet
connections and there was no cell service. Each school's
internet costs for a 10-megabit circuit was $16,000 per
location or $160,000 for each of the district's 10 schools
prior to E-rate and the BAG contribution. The internet at
the school was a lifeline for their communities. Securing
more bandwidth for the district's students was not possible
without assistance, given the district's challenging budget
constraints. He relayed the estimated costs of expanding
the bandwidth without assistance. The district was more and
more reliant on internet service for education. He spoke to
the equitability of educating rural students through
distance learning with additional bandwidth being made
accessible. He indicated that to continue to improve
student outcomes additional bandwidth was necessary. He
asked that members consider supporting an increase to the
bandwidth from 10 megabits to 25 megabits. He thanked the
committee.
Representative Guttenberg asked who provided the district's
bandwidth. Mr. Meinert answered, "DRS Technologies is our
carrier."
2:57:47 PM
DAVID NEESE, SELF, ANCHORAGE (via teleconference), believed
increasing bandwidth was a good idea. However, internet
service was provided by 2 companies in Alaska, GCI and DRS.
He relayed that DRS had the ability to increase it but cost
much more. None of the letters included in the
documentation showed what the amount would be to go from 10
to 25 megabits. He reported that 4 megabits per device were
necessary to have video. If a school had 5 devices
streaming could occur on 4 of them. Other activities on the
internet such as accounting would likely drop off. He
referred to the last section of the bill that noted "any
amount" from the fund. He believed those words should be
removed or a cap should be included. He argued that the
legislature would be funding internet at the school for
elementary kids and taking it away from college kids. He
reported that at Dot Lake School, the cost per child was
$30,000 for internet at 10 megabits. He argued that "any
cost" would be difficult. He encouraged legislators to
consider that the state was helping to subsidize a
monopoly, GCI in most of the villages, instead of promoting
competition. He relayed that ACS had sent a letter to the
FCC complaining that GCI had a monopoly in rural Alaska.
The bill did nothing to break the monopoly up. He was
worried about the fund source to solve the problem. He did
not support the bill in its current from and recommended
looking at another funding source.
3:01:05 PM
AT EASE
3:01:44 PM
RECONVENED
Mr. Hargraves continued his earlier testimony. He shared
that the Kodiak Island Borough School District offered
Career Technical Education (CTE) courses including classes
in welding through distance, which were heavily reliant on
connectivity. The school was the best location for reliable
internet. He shared that many home school students came in
to use the internet. He noted a decline in enrollment in
rural schools. He attributed it partial to limited options.
Increased bandwidth would increase educational
opportunities for students. He also mentioned opportunities
for professional development was impacted by connectivity.
Kodiak had cut down on travel for professional development
and was now focused on videoconferencing capability for
training. He relayed that the bill would impact 8 schools
within his district. He anticipated that the Kodiak Island
School District would see a benefit of about $400,000. Upon
the passage of the bill, the school district would be ready
to implement immediately; it had the personnel, the
expertise, and the local hardware in place. He asked
members to support the bill.
Representative Guttenberg asked what the district was
paying for 10 megabits currently. Mr. Hargraves did not
have the numbers on hand.
3:04:59 PM
BILL BURR, DELTA/GREELY SCHOOL DISTRICT AND ALASKA SOCIETY
OF TECHNOLOGY IN EDUCATION, DELTA JUNCTION (via
teleconference), testified in support of the bill. He spoke
to the technical side of delivering broadband, going from
10 to 25 mmbps. The cost of increasing bandwidth in rural
areas was high. Flat funding did not afford the school
district to put money towards increased internet service
when other costs were higher. He pointed out the ratio of
5:8:1 federal dollars through the E-rate program. Every
dollar set aside to increase the bandwidth came with more
money from the federal government. He believed the bill was
an opportunity that should not be passed up. He talked
about the incredible opportunities that would come with
additional bandwidth. He needed bandwidth in order to reach
out and participate in the modern world. He stressed the
importance of the funding. He shared that the Delta/Greely
School District was not one of the BAG communities. The
district was in full support of rural communities that did
not have schools at 25 megabits.
Vice-Chair Gara indicated that his interest was that
students would be able to participate live in a classroom.
He thought Mr. Burr had stated that his district had this
level of internet. He asked if it worked well for the
district to provide live classroom participation. Mr. Burr
replied that the school district had 250 megabits of data.
It had the ability to do desktop video inside the school as
well as with other communities and other states and
countries. The district's level was higher than 25 megabits
and was very functional. Vice-Chair Gara would wait to
speak with a district that had 25 megabits. He thanked the
testifier.
3:09:40 PM
DR. LISA PARADY, EXECUTIVE DIRECTOR, ALASKA COUNCIL OF
SCHOOL ADMINISTRATORS, spoke in strong support of the bill
to increase the floor of megabit speed from 10 to 25. She
shared that she had previously worked for 6 years on the
North Slope bringing the original Broadband Assistance
Grant forward. At the time, there were villages with only 1
to 3 megabits which made it unrealistic to deliver certain
content. It was decided that 10 megabits would become the
new floor for rural Alaska. She thought it was appropriate
to continue to incrementally lift the floor. She agreed
with Senator MacKinnon that it was an equity issue. There
had been discussions about the shortage and recruitment of
teachers and educators. She thought that in rural Alaska
broadband played a role. She argued that Alaska had to
continue to deliver quality education to all of Alaska's
students. Teaching and learning through distance learning,
using video conferencing over broadband, was a viable
option to provide equity to students. She spoke to the
enhancement of many of the education applications that
needed broadband. She noted a number of applications
available to students that would be enhanced by lifting the
megabit floor. She emphasized that the state's investment
in its broadband infrastructure with a federal match was
8:1. The bill would expand access for students to take
University classes. She urged members to consider the bill.
She shared that members had expressed concern about the
funding mechanism.
3:14:31 PM
Representative Guttenberg stated there were other ways to
get less expensive internet. He invited her to come to his
office to review those options. He continued that the
charges for internet service in rural Alaska were
exorbitant. Dr. Parady replied that she would never engage
in a conversation about telecom companies or prices as it
was not her area of expertise. She relayed that having
tried to provide quality professional development across
89,000 square miles, she might be the only person in Alaska
who had a call from a provider saying that because
satellites were colliding she would not be able to provide
a district-wide professional development class. She had
lived the issue. She had talked to teachers that reported
they could not upload or download due to latency problems.
She would not consider speaking to the costs, but she could
definitely speak to the needs. It was a desperate time for
the districts to figure out how to best serve their
students going forward. She believed the technology piece
in the bill had to be part of the answer.
Representative Guttenberg noted that if someone compared
the charges with anything else anywhere in the world, they
would be dumbfounded.
Representative Ortiz noted that Ms. Parady had mentioned
her concern about the funding source at the end of her
testimony. He agreed that the state needed to upgrade
broadband, especially in his district, as there were
several rural areas that would be positively impacted. He
asked that if the question boiled down to having to leave
the funding source as is in order for the bill to move
forward, or not having the program, did she support the
funding source remaining. Dr. Parady answered that she saw
the megabit increase as a very high priority to education.
Representative Pruitt spoke about fiscal costs for items.
He asked if Ms. Parady's members would be okay with
removing other things that were drawing from the Higher
Education Fund in order to keep the fund stable. Ms. Parady
responded that she could not answer his question. She
thought that there were many worthwhile supports to
education. They had varying degrees of impact across
different school districts. She was unclear whether the
answer to his question would be uniform and was not
prepared to answer it. From a fiscal perspective, using
federal dollars appeared to be a wise investment. School
districts were being called upon to come up with creative
and innovative ways to serve students. Connectivity was
necessary to do so. She did not see the bill as a luxury,
but rather a necessity.
Representative Pruitt added that often times people
requested certain things that had fiscal costs. He
disagreed that it was up to the legislature to decide how
the state paid for things. He inherently disagreed and
argued that people had to recognize and determine
priorities. He agreed that better connectivity was
necessary in order to provide better education in Rural
communities. He thought it was good to discuss other areas
of savings. Dr. Parady thought it would cost about $2
billion to wire the school districts. From a fiscal
perspective, incrementally raising the megabit floor and
leveraging federal dollars seemed to be a wise investment.
3:22:31 PM
Representative Guttenberg clarified that the estimate for
wiring the entire state was between $1.2 billion and higher
based on the 2008 Broadband Taskforce calculations. He
compared it to buying a house: A total cash layout would
not be required. The investment would be paid off over
time. The cost for not doing things for Alaska's children
was higher than making the investment.
Co-Chair Foster CLOSED public testimony. He set an
amendment deadline for 5:00 PM Friday, April 20, 2018. He
appreciated the sponsor's work on the bill.
SB 102 was HEARD and HELD in committee for further
consideration.
CS FOR SENATE BILL NO. 104(2d FIN)
"An Act relating to the duties of the Department of
Education and Early Development; relating to the
duties of the state Board of Education and Early
Development; relating to school curricula; and
relating to a system for managing student information
and records related to individualized education
programs for children with disabilities."
3:24:13 PM
MICHAEL JOHNSON, COMMISSIONER, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT, spoke in support of the bill. The bill
benefited school districts. Some school districts would
benefit financially from the legislation. The department
was appreciative because it benefited all schools in the
state by providing educators additional information about
what was working and being used at other schools around the
state. It provided the department the ability to collect
information and publish it on the department's website.
Commissioner Johnson continued that the department was
particularly appreciative of the bill for the information
it provided parents and policy makers. It reported what
curriculum was being used and invited parents to be a part
of the process in understanding what was being used for
their students and schools. Mostly, the department was
appreciative that the bill did something great for
students. He suggested that by providing all of the other
people in the system the resources and information,
decisions would be made to benefit students in the
classroom. The department was appreciative of the bill and
the conversation that took place around it. He was hopeful
that the department would be able to apply it for the
benefit of students in the state.
Co-Chair Foster invited the bill sponsor to the table.
3:26:49 PM
SENATOR ANNA MCKINNON, SPONSOR, introduced the bill that
was an attempt to improve educational outcomes for
students. It was not mandatory for districts to
participate. However, it allowed the Department of
Education and Early Development to see if they were ready
to move forward in a process.
Senator MacKinnon continued that the bill would make a
pilot program available for up to 5 schools. Hopefully
those schools would be able to participate in each
curriculum in the effort to improve math and language arts
- basic skills that all students needed to be successful in
elementary school, middle school, college, and life beyond.
She explained that the 3-year pilot program would be
constructed on the ability to be able to go forward and
look at the change. Through the first year of the program,
DEED would work with districts and teachers proficient in
these skills to look around the world, inside America, and
inside Alaska to see if the state had best practices in
place and whether students could achieve outcomes
consistent with the current standards. She admitted that
the standards could change and that the bill did not
address the standards in place. The bill stipulated that
whatever curricula moved forward should meet Alaska State
standards.
Senator MacKinnon continued to detail the bill. The
legislation would require school districts to put their
curriculum on DEED's website so that parents would have an
opportunity to understand and engage in a student's
education and opportunities to support that student in
individual schools. She emphasized that it was the only
mandate in the bill.
Senator MacKinnon relayed that the bill also updated and
would support schools that wanted to improve communication
for individual education performance plans. She offered
that she could go into extensive detail about the paperwork
required to communicate an individual education plan. As
she recalled there was a minimum of 27 pages and sometimes
up to 3, 5, or 15 people that needed to come together to
sign off on all of the paperwork for an individual student.
She would leave it up to her staff to explain further.
Senator MacKinnon offered that the bill created a new fund
called the "Curriculum and Best Practices Fund." It was
charged with $30 million. The money would not be extended
in a huge part in year 1. It was an up to amount of $10
million in year 1, year 2, and year 3 of the pilot program
as the program went forward. She indicated that depending
on the schools and their readiness or willingness to engage
in the incentivized curricula, the fund would offset or
help individual schools, the number would be expended for
the remaining 3 years in different segments.
Senator MacKinnon did not anticipate spending the entire
$30 million. As she understood, the Anchorage School
District recently reviewed some of its curricula. It was
her estimation that they would not redo their curricula.
She highlighted another change in the bill which had to do
with length of time. Legislators had tried to find ways to
deploy and streamline processes for educators. They were
working hard and doing a good job in many areas around the
state. However, some students were struggling. She argued
that curricula were the foundation of trying to provide a
stepping stone to create consistency and support from DEED.
Senator MacKinnon continued that Alaska's constitution
guaranteed local self-determination. The reason why there
was a pilot program was to try to bring people together,
specifically Alaska's Board of Education to agree on what
was best to achieve something for students that they could
align with and succeed with in their future. There was a
process outlined in the bill where the department worked
with school districts across the state in forming and
finding the curricula that might be available and then
incentivizing its use should districts choose to do so on a
voluntary basis. As she understood, specifically in math,
Alaska's largest districts were circling around similar
curricula. Sometimes the same process was not available to
smaller schools. She elaborated that depending on school
size, a school might have different levels of expertise in
individual subjects in smaller school districts. Although
the curricula review was extended from 6 years to 10 in the
bill, the state school board would be required to review
curricula for math and language arts every 5 years to
ensure that the core portion of learning was looked at all
of the time. She was available for questions.
3:32:50 PM
BRITTANY HUTCHINSON, STAFF, SENATOR ANNA MCKINNON, was
available to present the sectional analysis, if it was the
will of the committee.
Co-Chair Foster did not think the committee needed a review
of the sectional analysis. He reviewed a list of available
testifiers. He asked the senator if she wanted to continue
or if she wanted to wait.
Senator MacKinnon thought that the will of the legislature
was for the co-chairmen to meet and to try to solve and
find a path forward on the budget. She was happy to wait
for questions until after the public hearing. Ms. Hartman
could stay to answer questions. She was aware of the huge
fiscal note associated with the bill. She assured members
that the money was saved rather than spent. She explained
the reason the number was so high was because of the ADM at
$150 per student. Everyone had the ability to participate.
However, for the pilot program only a maximum of 5 schools
would be allowed to participate - 1 rural and 1 urban. She
recollected that Anchorage had already done a rewrite.
Co-Chair Foster indicated the committee would bring the
bill up the following day, rather than being in a rush.
3:35:38 PM
AT EASE
3:36:10 PM
RECONVENED
Co-Chair Foster would pass the gavel to Vice-Chair Gara.
Vice-Chair Gara OPENED public testimony.
3:37:10 PM
DR. DEENA BISHOP, ANCHORAGE SCHOOL DISTRICT, ANCHORAGE (via
teleconference), spoke in support of SB 104. She relayed
that curriculum was a foundational piece of quality
instruction. She understood education took resources and
education made a difference. The bill would provide a means
for all districts to access and guarantee them viable
curriculum. State approved curricula was a standard found
in many states allowing for the expertise and resources to
be shared by the largest and smallest communities. She
thought the bill was exactly what districts should be
asking from the state in support of its schools in
partnership with DEED. She Reported that Anchorage School
District supported the bill.
Representative Wilson asked when the Anchorage school
system last updated its English and math curricula. Dr.
Bishop responded that the district had its first adoption
of its K-12 literacy program. The district had gone through
a process in the prior year to adopt an evidence-based
reading curriculum. The district updated its math
curriculum 5 years ago. The district was not looking to
change curricula. The school district was using data to
demonstrate the area for which it needed to find growth.
Representative Wilson asked about the process of reviewing
the district's curriculum. Dr. Bishop responded that the
district had conducted the process in small units due to
budget constraints. The district had looked at elementary
K-2, which had new curriculum, instruction, and
assessments. In the following year the district would be
rolling out 3-5. She elaborated that professional
development and preparation were required in the rolling
out of new curriculum.
Vice-Chair Gara indicated there were no other testifiers
online.
3:40:49 PM
Representative Ortiz asked Dr. Bishop about science
curriculum being reviewed. He wondered if things changed
more rapidly than every 10 years. Dr. Bishop explained that
the school district used its data. For instance, the
district's math data was enough to be reviewed. The
district had reviewed its data and found that what was
happening in its classrooms currently was not meeting its
goals in some areas. The district was choosing to reinvest
in some areas. In other areas, in a 6-year continuous
cycle, the district felt confident. The district was
focusing its energy on where the need existed. She hoped
that leadership around the state and individual districts
would do the same. The legislation would allow for the
expertise to be statewide so that for smaller districts
that did not have the means could engage in the process.
Anchorage School District's science was addressed every
year. The district was working through science, technology,
engineering, and mathematics (STEM). She elaborated about
curriculum reviews and looking at the impact in student
learning and whether outcomes were where they were expected
to be. If they were not, the school district would look at
what was happening in the schools from day-to-day. The
school district wanted to ensure the success of its
students when they left the district.
Vice-Chair Gara thanked Dr. Bishop for her testimony.
3:44:33 PM
Vice-Chair Gara CLOSED public testimony.
Vice-Chair Gara reported that amendments were due by
Friday, April 20, 2018 at 5:00 p.m. [The meeting was
recessed to the call of the chair but never reconvened.]
ADJOURNMENT
3:45:36 PM
The meeting was adjourned at 3:45 p.m.