Legislature(2025 - 2026)DAVIS 106
01/24/2025 08:00 AM House EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): K-12 Education Funding History | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE EDUCATION STANDING COMMITTEE
January 24, 2025
8:00 a.m.
MEMBERS PRESENT
Representative Rebecca Himschoot, Co-Chair
Representative Andi Story, Co-Chair
Representative Maxine Dibert
Representative Ted Eischeid
Representative Jubilee Underwood
Representative Rebecca Schwanke
Representative Bill Elam
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
PRESENTATION(S): EDUCATION FUNDING
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
ALEXEI PAINTER, Director
Legislative Finance Division
Juneau, Alaska
POSITION STATEMENT: Co-offered the Education Funding
presentation.
CONNOR BELL, Fiscal Analyst
Legislative Finance Division
Juneau, Alaska
POSITION STATEMENT: Co-offered the Education Funding
presentation.
ACTION NARRATIVE
8:00:33 AM
CO-CHAIR STORY called the House Education Standing Committee
meeting to order at 8:00 a.m. Representatives Himschoot,
Eischeid, Underwood, Schwanke, Dibert, Elam, and Story were
present at the call to order.
8:02:20 AM
CO-CHAIR STORY began the meeting by introducing the education
committee aides. She introduced herself and explained her
background in public education.
[In response to an invitation from Co-Chair Story, committee
member introductions were made.]
^PRESENTATION(S): K-12 Education Funding History
PRESENTATION(S): K-12 Education Funding History
8:11:28
CO-CHAIR STORY announced that the only order of business would
be the Education Funding presentation.
8:11:34 AM
ALEXEI PAINTER, Director, Legislative Finance Division, as co-
presenter, began a PowerPoint, titled "K-12 Education Funding."
He began on slide 2, which gave a broad overview of the contents
of the presentation. He continued to slide 3, which displayed a
pie chart that outlined the makeup of public school funding in
Alaska. He moved to slide 4, which displayed a pie chart that
highlighted the various sources of public education funding in
Alaska.
8:15:43 AM
REPRESETNASTIVE EISCHEID shared his understanding that the
federal government has a statutory obligation to pay 40 percent
of a school district's annual budget.
MR. PAINTER said that Representative Eischeid's understanding
was correct and said that the federal government does not fund
more than half of any given school district's budget.
8:16:31 AM
CO-CHAIR HIMSCHOOT asked Mr. Painter what the Foundation formula
is used for. She asked how the foundation formula funds may be
used and asked if the Base Student Allocation (BSA) could be
used for things like a school's curriculum.
MR. PAINTER answered that the foundation formula is used to
determine a school district's annual funding need. He said that
the foundation formula does not account for a need for new
curriculum and explained that the BSA allows for school
districts to more predictably pay for things like curriculum.
8:19:05 AM
MR. PAINTER resumed the presentation on slide 5, which
emphasized the difference between direct and indirect sources of
funding that a school district in Alaska might receive. He
continued to slide 6, which displayed a bar graph that compared
each various states' amount of education funding between
different sources. He continued to slide 7, which compared
various states' total education funding.
8:22:26 AM
CO-CHAIR STORY informed the committee of a study by the
Institute of Social and Economic Research and said that Alaska
is just under the average for national funding of public
schools.
MR. PAINTER said that the proportion of funding that comes from
the federal government presently is lower than it was two or
five years ago.
8:24:02 AM
CONNOR BELL, Fiscal Analyst, Legislative Finance Division, gave
a presentation titled "K-12 Education Funding History." He
resumed the presentation on slide 9, which explained the
"basics" of the Foundation [Funding] Formula for public schools
in Alaska.
8:25:36 AM
CO-CHAIR STORY asked if the governor of Alaska might be able to
veto any public education fiscal policy passed by the
legislature.
MR. BELL said that the governor would be able to veto any
legislative action related to public education funding.
8:26:20 AM
MR. BELL skipped back to slide 8a, which further highlighted the
"basics" of the Foundation [Funding] Formula in Alaska. He
described technical details of the formula and highlighted that
the BSA is a culmination of many different funding sources.
8:29:59 AM
REPRESENTATIVE SCHWANKE asked when the last time the small
school factor was changed.
MR. PAINTER said that the small school factor has not been
changed since 1998 beside a few provisions that have been made
since then.
8:31:21 AM
REPRESENTATIVE ELAM asked if the small school factor takes into
account different levels of funding utilization.
MR. PAINTER said that the small school factor is impacted by the
number of students in a certain school district and doesn't
consider different levels or types of funding utilization.
8:32:01 AM
CO-CHAIR HIMSCHOOT asked if there are any statutory guideline
for a "cost factor review."
MR. PAINTER said that Alaska Statute guides the Legislature to
conduct a District Cost Factor review.
8:33:08 AM
CO-CHAIR STORY asked what the timeline is for a district cost
study.
MR. PAINTER said that the last district cost study was done in
2005 at a cost of 350,000 dollars as allocated by the
Legislative Budget and Audit Committee.
8:34:30 AM
CO-CHAIR STORY shared her understanding that an area with a
lower cost of living might receive less funding by the
MR. PAINTER said that Co-Chair Story's understanding was
"potentially true" because there hasn't been a funding study
done in 2 decades.
8:36:34 AM
REPRESENTATIVE ELAM asked if any of the funding studies consider
different sizes of school districts and the difference in impact
that funds might have on a rural versus urban school district.
MR. PAINTER said that the 2005 study did take into account the
different between rural and urban school districts and said that
it is difficult to quantify the differences in impact that any
dollar might have on a certain district.
8:38:04 AM
CO-CHAIR STORY shared her understanding that the Special
Education Student population has increased by 85 percent but has
not yet seen an adjustment in funding levels due to the
foundation formula's basis of an increase in student population.
MR. PAITNER said that there was a study done in 2015 that
studied the impact of a block grant versus more targeted funding
on special education students and said that he would follow-up
with more information later.
8:39:44 AM
MR. BELL resumed the presentation on slide 11, which displayed a
table that compared different funding adjustments that are
proposed to be made over the coming fiscal year in the Fairbanks
North Star Borough School District based on the current funding
scenario from the state.
8:42:31 AM
REPRESENTATIVE EISCHEID asked what the rationale and
justification were for the different factors displayed on the
table.
MR. PAINTER said that he would speak on the table in a coming
slide.
8:43:46 AM
REPRESETNATIVE UNDERWOOD asked if any other states have
performed similar studies related to the comparison of rural and
urban school districts.
MR. PAINTER said that the 2015 study touches on the comparison
of rural and urban school districts.
8:44:33 AM
CO-CHAIR STORY commented that the 2015 study looked at the
fairness of Alaska's funding formula and affirmed that the study
determined Alaska's funding formula to be fair.
8:45:25 AM
MR. BELL resumed the presentation on slide 12, which highlighted
other provisions in the Foundation Formula.
8:46:48 AM
CO-CHAIR STORY asked what the fixed costs of operating a school
district might always be.
MR. BELL answered that certain administrative costs will always
sustain themselves, no matter the level of funding that a
district might receive.
8:48:00 AM
REPRESENTATIVE SCHWANKE asked what percentage of school
districts in Alaska are in the Hold Harmless Situation.
MR. PAINTER said that he is unaware of any school districts in
Alaska that are in a Hold Harmless Situation.
8:48:56 AM
MR. PAINTER skipped back to slide 9a, which highlighted the
history of Alaska's public education funding formula and the
inception of the BSA. He detailed the changes that have been
made to the funding formula in each Fiscal Year (FY) since FY
98.
8:53:13 AM
CO-CHAIR STORY commented that the Alaska State Legislature
increased pupil transportation funding by 7 million dollars
because of the great demand of funding from the service.
8:53:56 AM
REPRESENTATIVE SCHWANKE described how she has been encouraging
her local districts to "be creative" in reducing long term costs
of improving efficiencies where districts school districts can.
8:55:12 AM
MR. PAINTER resumed the presentation on slide 10a, which
described various changes that have been made in state and local
contributions to school districts around Alaska. He said that
school districts in Alaska are allowed to contribute a maximum
of 23 percent of a district's
8:58:04 AM
CO-CHAIR STORY asked how school districts in Alaska could raise
their revenue output.
MR. PAINTER said that a municipal school district may choose to
raise local taxes or take on different responsibilities of the
school district as a means to both raise revenue and alleviate
cost burden from the school district.
CO-CHAIR STORY asked if the only way to account for inflation in
school funding was to increase the BSA.
MR. PAINTER said that the exhaustion of COVID-19 funding has
left districts with only the statutory BSA, which isn't enough.
CO-CHAIR STORY asked why there is no inflationary statute
associated with the BSA formula and asked when the last time the
BSA was increased.
MR. PAINTER replied that the inflationary statute is a policy
call of the Alaska State Legislature and said that the funding
for the BSA hasn't been increased since FY 17.
9:02:01 AM
REPRESENTATIVE DIBERT asked what would happen if the state got
rid of the maximum contribution limit for local municipalities
to their school districts.
MR. PAINTER said that certain school districts like those in
Anchorage and Juneau would be more affected than those in Rural
Education Areas (REA). He said that the maximum contribution
limit allows for a more equitable funding scenario for public
schools across the state.
9:04:13 AM
CO-CHAIR STORY asked if the funding from the federal government
would go to the Alaska State Legislature if it passed a funding
disparity test.
MR. PAINTER affirmed Co-Chair Story's understanding of the
current funding environment. He said that some districts would
receive more funding and some would not if the maximum
contribution limit did not exist.
9:05:54 AM
MR. PAINTER resumed the presentation on slide 11a, which
displayed a graph that highlighted the decline in statewide
average daily membership in Alaska's public schools. He moved
to slide 12a, which emphasized the impact of non-correspondence
in Alaska's schools and the associated conditions that led to
non-correspondence.
9:10:07 AM
REPRESENTATIVE ELAM asked Mr. Painter to explain the gap in
student populations displayed on slide 11.
MR. PAINTER explained that the numbers displayed on slide 11 are
supplemental to the total number displayed on slide 12.
REPRESENTATIVE ELAM asked what the total number of students in
Alaska are.
MR. PAINTER pointed to slide 12 to explain how the total number
of students in Alaska is calculated.
9:11:54 AM
REPRESENTATIVE SCHWANKE asked if there has been any discussion
of tapping healthcare funds to support public education.
MR. PAINTER answered that Alaska doesn't use healthcare funding
for public education.
9:13:57 AM
MR. PAINTER resumed the presentation on slide 13a, which
highlighted the history of the BSA's levels of funding. He
moved to slide 14a, which outlined the history of the BSA's
levels of funding, including funding coming from outside
sources.
9:16:29 AM
REPRESENTATIVE EISCHEID asked what the impact of a dollar from
the BSA is versus one coming from a one-time increase.
MR. PAINTER shared an anecdote that school districts often build
and submit their budget months in advance to the governor
signing the state Budget and explained that districts are not
able to count on one-time funding, which is problematic for
budgeting.
REPRESENTATIVE EISCHEID commented that school districts often
have to fire and re hire personnel and teachers in the event of
a one-time funding increase.
9:20:09 AM
MR. PAINTER skipped to slide 15a, which displayed a graph that
highlighted student's basic need projection over the coming
fiscal years. He moved to slide 16a, which displayed a graph
that outlined students basic need projections from FY 05 to FY
26. He continued to slides 17a and 18a, both of which displayed
a graph that highlighted foundation funding plus additional
formula funding and the impacts that it has on public education
in Alaska.
9:23:05 AM
CO-CHAIR STORY shared her concern that a one-time increase in
funding would lead a school district to be leery in using the
independent funds for a teacher's salaries.
MR. PAINTER confirmed Representative Story's understanding as
correct.
9:24:02 AM
CO-CHAIR HIMSCHOOT commented that one time funding is unlikely
to go "straight into the classroom."
MR. PAINTER said that Representative Himschoot's understanding
is correct and said that a school district is essentially
gambling when they use a one-time funding increase for a
teacher's salary.
CO-CHAIR HIMSCHOOT asked if there are any reserve funds that
school districts might be able to utilize.
MR. PAINTER said that there are, but shared his unsureness if
there was cap on funding a school district's reserves.
9:27:05 AM
REPRESENTATIVE DIBERT asked if there has been any studies on the
impact of one-time funding versus formula funding.
MR. PAINTER said that he is unaware of any studies examining the
impacts of one-time funding s formula funding beyond anecdotal
evidence.
REPRESENTATIVE DIBERT commented that it is hard to quantify the
impacts of a teacher being fired.
9:28:27 AM
CO-CHAIR STORY echoed Representative Dibert's comment on the
impact of a teacher being fired and said that she is concerned
about the amount of school districts having to hire, fire, re-
hire, and re-train newer students.
9:29:10 AM
MR. PAINTER resumed the presentation on slides 19a and 20a, both
of which highlighted the total funding that school districts
have received between foundational and one time
9:30:11 AM
HIMSCHOOT asked Mr. Painter if he had any insight on the impact
of municipal funding on school districts around Alaska.
MR. PAINTER said that certain municipalities might have to raise
taxes or mill rates to make up for a difference on a funding
reserve cap.
9:31:46 AM
MR. PAINTER concluded the presentation on slide 20a, which
emphasized the different funding "levers" that the Legislature
might be able to utilize to impact the funding of public schools
in Alaska.
9:35:46 AM
CO-CHAIR STORY asked for clarification if a district would
produce more revenue if the Alaska State Legislature were to
increase the BSA.
MR. PAINTER clarified that a municipality would be able to pa
more into the required local contribution of their education
budget if the BSA were to be increased.
9:36:26 AM
CO-CHAIR HIMSCHOOT asked how the state adjusts for salary
increases in its budgeting process.
MR. PAINTER explained that there are several bargaining units,
all of which have been given just over $400 Million in the past
5 years to cover increased salaries and healthcare costs.
9:38:38 AM
CO-CHAIR STORY commented that the state and Legislature are to
honor the contracts negotiated by bargaining units within Alaska
and said that the cost of them must be absorbed by a school
district's budget.
MR. PAINTER replied that the majority of school districts in
Alaska are capped with regards to how much money they may be
able to receive from the federal government.
CO-CHAIR STORY commented that 85 percent of a school districts
budgets go to the personnel's salaries.
MR. PAINTER said that Co-Chair Story's understanding was
correct.
9:41:14 AM
REPRESENTATIVE DIBERT asked Mr. Painter for his opinion on the
best way to solve the funding crisis.
MR. PAINTER answered that it is a policy decision and said that
he is not in a position to give advice.
9:42:03 AM
REPRESENTATIVE SCHWANKE said that there is a large disparity
between the rural and urban school districts in Alaska, largely
due to the low pay of rural regions. She said that a method of
relief for funding that she is seeing in those school districts
is a fairer distribution of funds among students.
9:44:00 AM
REPRESENTATIVE EISCHEID asked Mr. Painter if he could point to
any other states that have had a similarly frozen foundation
formula.
MR. PAINTER answered that the overall trend nationally is that
the cost of public education outpacing inflation.
9:46:43 AM
CO-CHAIR STORY added that the highest expenditure of most
states' budgets is public education and explained certain
factors specific to Alaska that influence its higher cost of
education.
9:48:17 AM
CO-CHAIR STORY thanked the presenters and delivered committee
announcements.
9:49:50 AM
ADJOURNMENT
There being no further business before the committee, the House
Education Standing Committee meeting was adjourned at 9:49 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HECDK-12Funding History 1-24-25 UPDATED.pdf |
HEDC 1/24/2025 8:00:00 AM |
Education Funding History |
| Institute of Social and Economic Reform - ISER 4.15.2019.pdf |
HEDC 1/24/2025 8:00:00 AM |
Institute of Social and Economic Research (ISER) Study 4.15.2019 |
| LegFin Memo Response to HEDC Questions1.24.25.pdf |
HEDC 1/24/2025 8:00:00 AM |
|
| DEED FY2025 HB 268 Fund Balance Report 12.20.24.pdf |
HEDC 1/24/2025 8:00:00 AM |
HB 268 |