Legislature(2021 - 2022)DAVIS 106
02/09/2022 09:00 AM House EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| SB10 | |
| HB272 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 10 | TELECONFERENCED | |
| *+ | HB 273 | TELECONFERENCED | |
| *+ | HB 272 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 272-INCREASE BASE STUDENT ALLOCATION
[Contains discussion of HB 273.]
3:38:22 PM
CO-CHAIR DRUMMOND announced that the next order of business
would be HOUSE BILL NO. 272, "An Act relating to education;
increasing the base student allocation; and providing for an
effective date."
3:38:48 PM
CO-CHAIR STORY, as prime sponsor, presented HB 272 via
PowerPoint presentation, titled "BASE," a term she coined as an
acronym for "Base Allocation for Student Excellence." The focus
of HB 272 is to increase the base student allocation (BSA). As
shown on slide 2, she noted that the Article 7, Section 1, of
the Constitution of the State of Alaska states: "The
legislature shall by general law establish and maintain a system
of public schools open to all children of the State." She
emphasized the words "maintain" and "all". Referring to slide
3, she said education is an economic investment, an
infrastructure that requires maintenance to prevent its erosion.
She emphasized that the state needs to invest in Alaska's
children today in order to ensure the workforce of the future,
noting that statistics show that Alaska's workforce is aging.
CO-CHAIR STORY showed slide 4 and said HB 272 "is not a major
overhaul" or "a huge hike." It would provide a two-year
planning window of predictability in terms of cost, which would
allow districts a two-year planning window to predictability,
with the ability to award contracts and avoid layoff notices.
Referring to slide 5, she stated that while the legislature has
increased the amount of education funding over time, that
funding actually has decreased nearly 10 percent over the last
decade when adjusted for inflation. As reflected on slide 6,
she said the proposed increases would make up half of the lost
education funding experienced since the BSA funding was last
increased in fiscal year 2017 (FY 17). She explained that to
arrive at the proposed amount for FY 23, the $30 million outside
of the formula and vetoed in FY 20 would be put back into the
BSA, and FY 21 and FY 22 would be inflation-proofed; then that
would be inflation-proofed for FY 24. She noted that the
inflation-proofing would be based on the consumer price index
for urban Alaska from the U.S. Bureau of Labor Statistics.
3:43:14 PM
CO-CHAIR DRUMMOND asked for confirmation that even though
inflation has grown 8 percent since the BSA was last increased,
HB 272 proposes a modest increase of only 5 percent.
CO-CHAIR STORY confirmed that is correct. She moved on to slide
7 and reported findings of the Institute of Social and Economic
Research (ISER), sourced from the U.S. Census, that when the
cost of living and remote geography are factored in, Alaska's
average annual per pupil costs are about $12,000 per student,
which is slightly below the national average.
3:44:55 PM
REPRESENTATIVE PRAX asked for clarification.
3:45:41 PM
ARIEL SVETLIK, Staff, Representative Andi Story, Alaska State
Legislature, on behalf of Representative Story, prime sponsor of
HB 272, explained that the calculation is "inflation-adjusted"
for Alaska's consumer price index (CPI) compared to the value of
the dollar in the Lower 48. She noted there were
representatives from ISER available to answer questions.
3:47:43 PM
CO-CHAIR STORY continued with the PowerPoint. She noted that a
representative of ISER would be offering details regarding some
of the slides. She turned to slide 9 and talked about cost
drivers. She mentioned the Hootch v. Alaska case regarding the
inadequacy of sending children to boarding schools and the
resulting numerous small schools in rural Alaska. She advised
that small schools do not benefit from power cost equalization
(PCE), and all costs in Alaska are higher than in the Lower 48.
She added that Alaska's health care costs are the highest in the
nation. She next pointed to a pie chart on slide 10 and stated
that an investment in Alaska's children is really an investment
in the state's future workforce and meets the obligation of the
Constitution of the State of Alaska. She concluded the
presentation by urging her fellow committee members to support
HB 272.
3:50:55 PM
MS. SVETLIK read the sectional analysis for HB 272 [available in
the committee packet], which read as follows [original
punctuation provided]:
Section 1: Amends AS 14.17.470, increasing the Student
Base Allocation from $5930 by $223 to $6,153.
Section 2: Amends AS 14.17.470, increasing the Student
Base Allocation from $6,153 by $55 to $6,208.
Section 3: Sets an effective date for Section 1 of
July 1, 2022.
Section 4: Sets an effective date for Section 2 of
July 1, 2023.
MS. SVETLIK moved on to highlight the fiscal notes. She noted
one of them was a zero fiscal note from the Department of
Education and Early Development (DEED). She turned next to "a
Fund Capitalization fiscal note," which outlines how the BSA
would increase over time. She said the first year would see an
increase of approximately $57 million in BSA spending in FY 23;
beginning FY 24, the BSA would increase by $71 million annually.
3:53:17 PM
REPRESENTATIVE PRAX opined that innovations in technology need
to be considered when looking at inflation. He disagreed that
to "maintain" a constitutional requirement means keeping it the
same.
CO-CHAIR STORY explained her interpretation of "maintained" was
aimed at providing necessary services to schools. She said,
"When we keep the base student allocation flat, it eats into the
services that they can provide for the kids." She noted there
would be superintendents to testify.
REPRESENTATIVE PRAX challenged the assumption that it is beyond
the control of the school district to make adjustments to
address inflation.
CO-CHAIR STORY pointed to mandatory expenses, such as heating
buildings and paying for insurance. Certainly districts can
lower costs in some areas, she allowed.
3:59:02 PM
CO-CHAIR DRUMMOND offered her understanding that health care
costs are rising at a higher rate, which effects those working
in school districts.
3:59:46 PM late
CO-CHAIR DRUMMOND announced the committee would hear invited
testimony.
4:00:42 PM
The committee took two consecutive at-eases from 4:00 p.m. to
4:04 p.m. to address technical issues.
4:04:49 PM
DAYNA DEFEO, Director, Center for Alaska Education and Policy
Research (CAEPR), Institute of Social and Economic Research
(ISER), University of Alaska Anchorage (UAA), drew attention to
a six-page "Research Summary" document authored by herself, Matt
Berman, [Alexandra Hill,] and Diane Hirshberg [included in the
committee packet]. She said she had been asked to speak on
public spending on K-12 education, and she would focus on what
is paid compared to other states, as well as costs unique to
Alaska. Ms. Defeo said the last time ISER compared Alaska's
spending to other states was in 2019 when the statistics used
were from 2017. Those statistics showed spending that was 46
percent higher than the national average the sixth highest in
the nation. The latest numbers from 2019 show Alaska is still
in sixth place, but per pupil spending is now only 39 percent
higher than the national average. She indicated this had to do
with local economies growing faster in some other states.
MS. DEFEO said the question is whether Alaska pays more than the
U.S. average. She said the answer, pertaining to "raw dollars,"
is yes; however, she pointed out that everything in Alaska costs
more, exponentially so the smaller the community is. She
explained that some adjustments must be made to compare Alaska's
spending to that of other states. She said the ISER report
shows two adjustments were made to the buying power of the
dollars spent. First, ISER used the foundation formula's
geographic cost differential, which is weighted by district
average daily membership. That adjustment alone explained half
the difference between Alaska and other states; Alaska spent 22
percent above the national average. Next ISER adjusted
"Anchorage dollars" to the nation, which then reflected that
Alaska's costs were actually 2 percent below the national
average. That was in 2017. By 2019 Alaska was falling further
behind, she stated.
4:07:57 PM
MS. DEFEO highlighted that which drives the cost of public
education in Alaska [as shown on page 4 of the report]. She
echoed that the state has a legal obligation to provide
education to its children, and she noted there have been three
major cases between 1975 and 2004 that clearly define that
responsibility. The first driver is the small size of Alaska's
schools, which are costly to operate, because smaller
communities do not benefit from economies of scale in terms of
capital and labor costs. Another driver of cost is healthcare.
She reported that Alaska has the highest per capita cost of
healthcare in the U.S., which effects all sectors of the
economy. The third driver of costs is energy. The cost of fuel
varies based on area. She said the cost of electricity can be
three to five times higher in smaller communities.
MS. DEFEO stated that Alaska is not overspending on public
education. When the spending is readjusted to make a fair
comparison to other states, Alaska actually spends less than the
national average. She discussed the school funding formula,
which has been analyzed, and though it needs updating, the
formula works to distribute available funds equitably among
Alaska's school districts. She indicated a study needs to be
made as to what Alaska is spending its dollars on, to ensure the
best possible education outcomes for teachers, students,
schools, and communities.
4:12:02 PM
BILL HILL, Superintendent, Bristol Bay School District, provided
invited testimony in support of HB 272. He emphasized the
importance of providing students with what they need in order
for them to have a good education. He expressed that flat
incomes and flat costs challenge school districts to provide
such an education. While there has not been an increase to the
BSA in the last several years, costs have continued to escalate.
He echoed the issue of high health insurance, which he said has
increased by 24 percent since 2017. Additionally, it is
challenging to recruit and retain teachers. He shared that his
pay his first year teaching compared to current first-year
salaries for teachers shows that an 11 percent increase would be
needed "to catch up." He said one of the outcomes of reduced
incomes and a lack of a defined benefit retirement system is
that many schools in Alaska have a high turnover in workforce,
which he opined is detrimental to education. He said an
increase to and stability of the BSA is a good start in
correcting that and finding balance. Some decision making
pertaining to lack of funds will compromise the education of
students.
4:15:33 PM
JAMIE BURGESS, Superintendent, Nome School District, provided
invited testimony in support of HB 272. She gave examples of
how the flat funding system of the past six years has created
the current budget crisis. Property insurance premiums are
anticipated. She talked about the effects of climate change in
her region, which has brought strong winds and bitter cold,
resulting in high fuel bills, with anticipated rising costs in
heating oil fuel in the years to come. She stated that the
flattening of health costs during the pandemic were due to
teachers putting off procedures; however, even with the pandemic
continuing, healthcare costs are rising, and the expectation is
for at least a 10 percent rise in premiums in the next school
year.
MS. BURGESS said the cost of supplies and textbooks has risen,
so the district gets less for the same amount of money. Ms.
Burgess said the district used its COVID relief funding to
incentivize, recruit, and retain staff, but that funding will
soon be depleted. She talked about the fierce competition to
acquire educators, and she said Alaska does not have the
competitive edge it once had. She noted the district has moved
some of its key student behavioral support positions into its
COVID funding, but said that would be gone in two years, which
means positions will disappear unless another source of funding
can be found, or funding increased. She name vulnerable areas
of the school's programs that are reliant on outside funding
from the district's tribal partner, which questions why the
positions are not funded out of the general fund. She talked
about meeting the mandate while feeling that she is failing her
district. She commended those teachers committed to ensuring
students get a good education, and she said they deserve the
support of the legislature, and she stated her belief that HB
272 is a great start in that direction.
4:21:08 PM
TERRI WALKER, Superintendent, Northwest Arctic Borough School
District (NABSD), provided invited testimony in support of HB
272. She said the bill would inflation-proof the BSA, and she
offered a definition of "inflation," calling it insidious and at
a 40-year high. She said the current budget process does not
account for inflation, which results in budget cuts. She said
NABSD serves 13 schools in 11 communities. She reported that
from fiscal year 2019 (FY 19) to FY 21, the district has seen
the cost of freight to villages increase by about 10 percent;
freight minimums have also increased by about 20 percent. From
FY 21 to FY 22 to-date, there has been a 16 percent overall
increase to the district's heating fuel expenses. She talked
about bidding to buy fuel in bulk and the necessity to fly fuel
in during winter months because there are no accessible roads.
Some rivers are not deep enough to accommodate a barge. She
said the district qualifies for funding to feed students;
however, the U.S. Department of Agriculture (USDA) reimburses
only 40 percent of the cost. Because of the continuous
increased cost in food and shipping, the district supplements
over $1 million each year, and she said she is thankful for
CARES Act and ARPA funds that allow the district to cover these
funds through 2024.
MS. WALKER listed programs cut as a result of flat funding:
pre-K, career and technical education (CTE); 50 percent of the
district's counselors; and all elementary and middle school
student activities. She said the district has greatly reduced
funding for high school activities and has made cuts to
administrative, teaching, and support staff positions. She
emphasized the difficulty when faced with the choice of whether
to feed or education students. With a decreasing value [of the
dollar], students have fewer opportunities. She promoted
discussion of inflation-proofing the BSA.
4:28:33 PM
SCOTT MACMANUS, Superintendent, Alaska Gateway School District,
provided invited testimony in support of HB 272. He described
his district's demographics. He shared a PowerPoint, titled
"The Cost of Inflation," [included in the committee packet], and
he directed attention to slide 2, which shows that the Alaska
Gateway School District's (AGSD's) fixed costs have risen 19
percent since FY 17. Further, the CPI shows that the district
has lost $1.8 million in buying power since last year. He
observed that the cost of a Ticonderoga pencil increased by 61
percent. He brought attention to slide 3, which shows a 9
percent increase in maintenance costs, and he remarked on
deferred maintenance concerns. He reviewed the information on
slides 4 and 5, regarding heat and [electricity], and spoke
about energy efficiency. In regard to slide 6, he reported that
liability insurance was up 30 percent, and worker's
compensation, shown on slide 7, was up 58 percent. He stated
that health insurance, slide 8, rose 43 percent since FY 17. He
said AGSD "went out to bid" and found a way to save some money,
but [costs] are "still half a million dollars higher" than half
a year ago.
MR. MACMANUS moved on to the final slide, regarding teacher
salaries, to discuss recruitment and retention, which he said is
"currently a hot topic in education." He said the district has
a 90 percent retention goal, and although he reached 92 percent
this year, meeting that goal requires addressing rising costs of
meeting those teacher salaries. The average cost in FY 17 was
$65,000 a year, and that has risen to an average of $79,000 a
year this year. He underlined his dedication to expending money
on retention of good teachers.
4:35:39 PM
REPRESENTATIVE CRONK, as a former teacher, acknowledged the
continued rise of health coverage, and he asked whether "a total
state group" has "stepped in" to determine where money could be
saved in that area.
4:36:57 PM
MR. MACMANUS answered that a couple years ago, a study of that
issue was conducted by the State of Alaska, and he described a
proposal to remove a certain amount of money in exchange for
buying into the state health insurance pool; however, the study
done showed that would not save the school districts any money.
4:38:05 PM
The committee took an at-ease from 4:38 p.m. to 4:40 p.m.
4:40:16 PM
BRIDGET WEISS, PhD, Superintendent, Juneau School District,
shared that she is also president elect for the Alaska
Superintendents Association. She stated support for HB 272.
She described the effects of inflation on the Juneau School
District. With the 7.2 percent CPI increase last year, public
schools must make tough decisions regarding funding. She said
over the last five years, education has received flat funding,
while the fixed costs of running schools has seen significant
increases. She said counselors and health team members have
been lost. Class sizes have increased. The district has made
many adjustments in its schools that are hurting students. She
reported that in 2017, the price of water, sewer, and telephone
services for the district was $396,000; in FY 22, those same
items cost $464,000 an increase of 17 percent. Likewise, the
cost of electricity and heating oil in FY 17 was $1,258,439; in
FY 22, the cost was $1,527,200 an increase of 21 percent. She
shared further increased costs, including a 64 percent increase
in insurance coverage. She said projected costs for FY 23 are
$1.5 million a 155 percent increase since FY 17, and a 55
percent cost increase over the last year.
MS. WEISS said the current budget proposal does not account for
education. The district knows this results in a decline in
funding, given basic costs. She said the district will be
expected to find the funds to pay for the essential services and
coverage, while ensuring staff has a living wage, all while
receiving the same funding received in FY 17. She said the
district has been doing "more with less" for years and [the
legislature] is hurting Alaska's children the state's future
leaders by not fully funding education and accounting for
inflation. She talked about her commitment to education and
asked the legislature to help districts continue to deliver a
robust education.
4:44:14 PM
The committee took an at-ease from 4:44 p.m. to 4:45 p.m.
4:45:18 PM
CHRIS REITAN, Superintendent, Craig City School District, stated
support for HB 273 [which was not on the agenda], but noted
there were similarities in HB 272, which he indicated he also
supported. In response to a question from Co-Chair Drummond, he
said he had not explored the possibility of going in on orders
with another district; Craig City School District gets most of
its freight by barge.
4:49:33 PM
CO-CHAIR DRUMMOND opened public testimony on HB 272.
4:50:00 PM
CORY HUGHES, representing self, said his community is in the
Lower Kuskokwim School District. He stated support for HB 272,
and he emphasized its importance for rural schools, many of
which have no local bureau or municipal support and rely on
state funding. He echoed the effects of a stagnant BSA while
prices have soared across every aspect of school needs. He said
he has felt the loss, as the school he is involved in has lost
two full-time educators and multiple aides, which has resulted
in a drastic increase in class sizes, which is not the best
environment for teaching. Mr. Hughes said an increase in the
BSA would allow for after school activities, and he named
activities where school busses are not an option and funding is
necessary to transport students, such as sports travel, science,
technology, engineering, and mathematics (STEM) camp, art
competitions, and CTE activities that rely on other modes of
transportation via planes, boats, or snow machines. He talked
about rising costs in maintaining those vehicles. He noted that
after school activities can pull at-risk children into school,
and a transformation can occur once they are there. He implored
the committee to move HB 272 out of committee. In response to
Co-Chair Drummond, he confirmed he is a teacher.
4:53:53 PM
EMMA MELKERSON, Teacher, McQueen School, testified in support of
HB 272. She said she teaches kindergarten and first-grade
students. She spoke about her pride in watching students
advance through K-12. She emphasized the increasing costs of
operating a school and the cuts that have occurred in the
Northwest Arctic Borough School District, including CTE, pre-K,
health professionals, and activities. Educators are being asked
to take on the role of teaching vital social emotional learning
(SEL) skills with little training to do so. She emphasized the
importance of basketball in the district and noted that the
weekly games have been cut back to "just a handful." She asked
the committee to imagine her kindergarteners coming to school
without the exposure they would have had in pre-K. Teachers are
being asked to do more with less, and children should have
better than they are receiving. She asked the committee to pass
HB 272.
4:56:44 PM
LON GARRISON, Executive Director, Association of Alaska School
Boards, testified in support of HB 272. [He also stated support
for HB 273, which was not on the agenda.] He pointed out the
similarities between the school districts' and legislature's
processes of figuring out a budget and the effect of budgetary
decisions on Alaska's students. He said the BSA is distributed
through the Alaska Education Foundation formula. He said HB 272
would provide moderate increases in the BSA in the next two
years to reverse the trend of flat funding education; it would
create the opportunity for school boards and superintendents to
consider decisions with lasting effects. He discussed the
complex nature of education funding and urged the committee to
support the proposed legislation.
5:00:07 PM
JESSIE EMBREE, Chair, Ketchikan Native Education Parent
Committee, Ketchikan Gateway Borough School District, said she
also works as an administrative assistant for the Ketchikan
Gateway Borough School District (KGBSD), and she stated her
support for HB 272. [She also stated support for HB 273, which
was not on the agenda.] She said the district is experiencing
staff shortages that affect the programs that support students.
She offered her understanding that the current flat funding has
not changed since 2017 and has not included adjustments for
inflation. She talked about a cultural program in the district
and collaboration between the district, the local tribal
government, and allocation of federal grant funding through a
Title VI grant. She said the current grant provides funding for
a district cultural coordinator position, as well as partial
funding for two preschool teacher salaries; it is a limited
grant fund that relies on the district for support and growth.
She talked about working with tribal governments in support of
Native students, parenting, and cultural connectivity, and she
expressed the need for support staff and funding to meet goals.
She emphasized the need through the pandemic for added SEL and
academic support services, provided through intervention
programs. She asked the committee to support the proposed
legislation.
5:05:13 PM
KEVIN SHOVE, Member, Haines Borough School Board, Haines Borough
School District, stated support for HB 272 on behalf of the
school board. [He also conveyed support for HB 273, which was
not on the agenda.] He said his experience as manager of a
supermarket gives him knowledge of the increased cost of
products and services as a result of inflation, and specifically
how the hike in fuel prices affects the price of goods. He
opined that properly funding education is crucial to attracting
educators to Alaska, and he emphasized the importance of
predictable funding for goal setting. Increasing the BSA and
making it inflation-proof would help school boards plan budgets,
he stated.
5:08:31 PM
PETE HOEPFNER, Member, Cordova School Board;, President, Alaska
Association of School Boards, opined that adequately funded
public education for Alaska's children needs to be a top
priority for the legislature. There have been 15 years of
steadily declining education funding, while costs have always
been increasing. He named health insurance as one of the
highest costs to a school district; that cost has risen to
almost 20 percent of the Cordova School District's budget. He
talked about the state's backing away from a promise to fund the
school bond debt reimbursement. He said public schools are
suffering across the state. The Cordova School District has
limited administration, no assistants, only one counselor, no
nurse, librarian, or reading specialist, no physical education
teacher, a "highly overwhelmed" special education instructor,
and increasing class sizes. He mentioned the goal of every
student reading by third grade and said overcrowded classrooms
are not supportive of that goal. He said the pre-K program had
been cut. He stated support for HB 272 [and HB 273, although it
was not on the agenda]. He said schools are at the mercy of
funding choices made by the legislature, and he expressed
appreciation for "this very first step" in addressing adequately
funded education for children in Alaska.
5:11:52 PM
CO-CHAIR DRUMMOND explained she would leave public testimony
open for a future meeting, and she announced that HB 272 was
held over.