Legislature(2021 - 2022)ADAMS 519

04/19/2021 01:30 PM House FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved HB 169 Out of Committee
-- Public Testimony --
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      April 19, 2021                                                                                            
                         1:35 p.m.                                                                                              
1:35:38 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 1:35 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Kelly Merrick, Co-Chair                                                                                          
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Ben Carpenter                                                                                                    
Representative Bryce Edgmon                                                                                                     
Representative DeLena Johnson                                                                                                   
Representative Andy Josephson                                                                                                   
Representative Bart LeBon                                                                                                       
Representative Sara Rasmussen                                                                                                   
Representative Steve Thompson                                                                                                   
Representative Adam Wool                                                                                                        
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Tim  Lamkin,  Staff,  Senator  Gary  Stevens;  Kris  Curtis,                                                                    
Legislative Auditor, Alaska Division of Legislative Audit.                                                                      
PRESENT VIA TELECONFERENCE                                                                                                    
Corey  Aist,   Teacher,  Anchorage   Education  Association,                                                                    
Anchorage;  Jane Gray,  Self,  Anchorage;  Don Gray,  Former                                                                    
Member of  Alaska Board of Education,  Fairbanks; Tim Doran,                                                                    
President,  Fairbanks   School  Board,   Fairbanks;  Patrick                                                                    
Pillai,  Executive   Director,  Special   Education  Service                                                                    
Agency;  Heidi   Teshner,  Director,  Finance   and  Support                                                                    
Services, Department of Education and Early Development.                                                                        
HB 169    APPROP: EDUCATION; PUPIL TRANSPORTATION                                                                               
          HB 169 was REPORTED out of committee with ten "do                                                                     
          pass" recommendations and one "no recommendation"                                                                     
SB 19     EXTEND SPECIAL EDUCATION SERVICE AGENCY                                                                               
          SB 19 was HEARD and HELD in committee for further                                                                     
Co-Chair Foster reviewed the meeting agenda.                                                                                    
HOUSE BILL NO. 169                                                                                                            
     "An Act making appropriations for public education and                                                                     
     transportation of students; and providing for an                                                                           
     effective date."                                                                                                           
1:36:55 PM                                                                                                                    
Co-Chair Foster OPENED public testimony.                                                                                        
COREY  AIST,   TEACHER,  ANCHORAGE   EDUCATION  ASSOCIATION,                                                                    
ANCHORAGE (via teleconference), testified  in support of the                                                                    
legislation.  He  shared   information  about  his  teaching                                                                    
career in Alaska. He reported  that the school year had been                                                                    
unlike any  other and  educators had  continued to  adapt as                                                                    
they supported students and families  in online and face-to-                                                                    
face learning  environments. He  stressed the  importance of                                                                    
the stability  provided by the  legislation. He  shared that                                                                    
he  had watched  over the  years as  early career  educators                                                                    
were sometimes  laid off in  May. During those times  he had                                                                    
personally reassured  younger colleagues that the  state was                                                                    
likely to restore funding and that  they would have a job in                                                                    
the  fall.  He reported  that  unfortunately  many of  those                                                                    
teachers  had found  jobs  out of  state.  He stressed  that                                                                    
recruitment was always a big  issue. He remarked it was hard                                                                    
to lose committed, enthusiastic  educators when there was an                                                                    
easy remedy. He noted the current remedy was HB 169.                                                                            
Mr. Aist spoke about the  importance of stability. He stated                                                                    
that  legislators' efforts  could either  support or  hinder                                                                    
students' success.  He thanked Representative  Rasmussen for                                                                    
her  suggestion of  forward  funding.  He relayed  educators                                                                    
were exhausted and it had been  a tough year. He stated that                                                                    
the early forward funding would  be a signal of support that                                                                    
the legislature played  an important role in  the effort. He                                                                    
thanked the committee and encouraged  the advancement of the                                                                    
1:41:18 PM                                                                                                                    
JANE  GRAY,  SELF,  ANCHORAGE (via  teleconference),  shared                                                                    
that  she  had  been  a  teacher  in  the  Anchorage  School                                                                    
District  for  31  years.  She  echoed  testimony  from  the                                                                    
previous speaker. She  highlighted the disruptiveness caused                                                                    
by  uncertainty of  job security.  She  shared students  and                                                                    
teachers got  shuffled when principals were  uncertain about                                                                    
what  their staffing  would  be  in the  fall.  For at  risk                                                                    
students the  situation was an additional  trauma that could                                                                    
be avoided. She supported  separating education funding from                                                                    
the operating  budget and  passing the  bill early  in order                                                                    
for teachers, students,  and parents to know  what to expect                                                                    
in  terms  of  funding.  She thanked  Vice-Chair  Ortiz  for                                                                    
bringing the bill forward.                                                                                                      
1:43:31 PM                                                                                                                    
DON  GRAY,  FORMER  MEMBER OF  ALASKA  BOARD  OF  EDUCATION,                                                                    
FAIRBANKS (via teleconference), testified  in support of the                                                                    
legislation. He  shared that he  was a former member  of the                                                                    
Alaska  State  Board  of Education.  He  thanked  Vice-Chair                                                                    
Ortiz  for   bringing  the  proposal  forward.   He  thanked                                                                    
Representative  Rasmussen   for  recommending   the  forward                                                                    
funding  aspect   of  the  legislation  that   would  create                                                                    
additional  stability. He  thanked Representative  LeBon for                                                                    
his support  for early  funding and for  his service  on the                                                                    
Fairbanks  School Board  in the  past. He  thought education                                                                    
funding should  be kept separate  from the  more complicated                                                                    
operating budget.  He stressed  that the current  times were                                                                    
challenging  and without  precedent.  He  remarked that  the                                                                    
operating  budget may  be slowed  down due  to uncertainties                                                                    
about  the  American  Rescue Plan  Act  (ARPA)  funding.  He                                                                    
believed waiting  for clarification would be  detrimental to                                                                    
education.  He emphasized  that  the state's  responsibility                                                                    
for  education  was one  of  the  few  things in  the  state                                                                    
constitution.  He reiterated  his support  for the  bill and                                                                    
keeping  education  funding   separate  from  the  operating                                                                    
1:47:42 PM                                                                                                                    
TIM  DORAN,  PRESIDENT,  FAIRBANKS SCHOOL  BOARD,  FAIRBANKS                                                                    
(via  teleconference),  thanked  committee members  for  the                                                                    
bill  and their  support of  the bill.  He was  in favor  of                                                                    
separating  the  education  budget  from  the  rest  of  the                                                                    
operating budget  in order to provide  funding certainty. He                                                                    
shared that Fairbanks had completed  its draft budget and it                                                                    
was currently  under consideration  by the  borough assembly                                                                    
for  the local  contribution.  He reported  that the  school                                                                    
board  had  taken  a  conservative,  cautious  approach.  He                                                                    
understood  that  the  governor had  indicated  support  for                                                                    
fully  funding  a flat  Base  Student  Allocation (BSA).  He                                                                    
stated that until  the state budget was  approved, there was                                                                    
a  certain  amount  of uncertainty.  He  shared  that  early                                                                    
notification  on the  funding  amount made  a difference  in                                                                    
terms of district planning.                                                                                                     
Mr. Doran  reported that  COVID-19 had been  a major  hit in                                                                    
the past  year. The district  was looking at  COVID recovery                                                                    
in the next  year and the more funding certainty  it had for                                                                    
planning  purposes,  the  better.   He  explained  that  the                                                                    
district had  to let tenured  staff know whether  they would                                                                    
have  jobs  the  following  fall   by  May  15;  non-tenured                                                                    
teachers had  to be notified by  May 20. He shared  that the                                                                    
district had  to start the  process in the coming  weeks. He                                                                    
elaborated on  the process. He  stated that  Fairbanks ended                                                                    
up subsidizing transportation when  it was not fully funded.                                                                    
The district  did not  have the option  going into  the next                                                                    
fiscal  year.  He  heartily  supported  forward  funding  of                                                                    
education. He explained that it  had been very beneficial to                                                                    
the  district a  couple  of years  back.  He encouraged  the                                                                    
passage of the bill.                                                                                                            
Co-Chair  Foster recognized  that  Representative LeBon  and                                                                    
Representative Thompson had joined the meeting.                                                                                 
Co-Chair Foster CLOSED public testimony.                                                                                        
Co-Chair Foster noted  that the committee may  return to the                                                                    
bill to  address an amendment [note:  the committee returned                                                                    
to HB 169 at 2:20 p.m.].                                                                                                        
Co-Chair Foster handed the gavel to Co-Chair Merrick.                                                                           
1:54:30 PM                                                                                                                    
AT EASE                                                                                                                         
1:55:12 PM                                                                                                                    
CS FOR SENATE BILL NO. 19(FIN)                                                                                                
     "An  Act  relating  to   allocations  for  the  special                                                                    
     education   service  agency;   extending  the   special                                                                    
     education   service  agency;   and  providing   for  an                                                                    
     effective date."                                                                                                           
1:55:28 PM                                                                                                                    
TIM  LAMKIN, STAFF,  SENATOR  GARY  STEVENS, introduced  the                                                                    
legislation. He  communicated Senator  Stevens' appreciation                                                                    
of  the  bill  hearing.  He  shared that  the  bill  was  an                                                                    
opportunity to recognize  an agency that did  a large amount                                                                    
with very  little. He explained  that the  Special Education                                                                    
Service Agency (SESA) was a  community of people providing a                                                                    
unique set of services  for severely disadvantaged youth. He                                                                    
stated there  was trust  and respect  for the  agency's work                                                                    
that involved helping many  schools, students, and families.                                                                    
He noted the subject area  was fairly sensitive and required                                                                    
significant compassion, patience, grace,  and love. The bill                                                                    
would  extend  the SESA  sunset  to  2029 and  adjusted  the                                                                    
agency's  funding formula  to keep  it whole  over the  next                                                                    
eight  years.   He  reported  that  the   latest  audit  was                                                                    
constructive  and illuminated  SESA's success  and efficacy.                                                                    
He detailed that the SESA  director was available online and                                                                    
the legislature's  auditor was available in  person to speak                                                                    
about the findings.                                                                                                             
Mr. Lamkin reviewed the sectional analysis (copy on file):                                                                      
     Section  1: AS  14.30.650  is amended  to increase  the                                                                    
     funding component  for SESA,  from an existing  rate of                                                                    
     $18.65 to  $23.13 times the  number of students  in the                                                                    
     state in average daily membership.                                                                                         
     Section 2:  AS 44.66.010(a)(6) Extends the  sunset date                                                                    
     for SESA to June 30, 2029.                                                                                                 
     Section 3:  Provides for  a retroactive  effective date                                                                    
     in  the event  the bill  doesn't pass  before June  30,                                                                    
     Section  4: Makes  the funding  component described  in                                                                    
     Section 1 effective July 1, 2021.                                                                                          
     Section  5: Provides  for an  immediate effective  date                                                                    
     upon its passage.                                                                                                          
1:58:04 PM                                                                                                                    
Representative Carpenter  asked why there was  a change from                                                                    
the existing rate from $18.65 to $23.13.                                                                                        
Mr.  Lamkin  answered  that SESA's  caseload  had  increased                                                                    
substantially with  flat funding  and flat  staffing levels.                                                                    
He relayed  that an  upcoming PowerPoint  presentation would                                                                    
explain the issue more thoroughly.                                                                                              
Representative LeBon  asked if the  rate had been  locked at                                                                    
$18.65 for quite some time.                                                                                                     
Mr. Lamkin replied  that the rate had been set  at $18.65 at                                                                    
the time  of the last  audit in 2013.  Prior to that  it had                                                                    
been 15 years since the last increase.                                                                                          
1:59:25 PM                                                                                                                    
PATRICK  PILLAI,   EXECUTIVE  DIRECTOR,   SPECIAL  EDUCATION                                                                    
SERVICE AGENCY  (via teleconference), provided  a PowerPoint                                                                    
presentation titled "SESA:  Special Education Service Agency                                                                    
Introduction" (copy on  file). He shared that  he had joined                                                                    
SESA in  1994 as  a deaf  education specialist.  He reviewed                                                                    
the presentation  with prepared  remarks beginning  on slide                                                                    
     This  is the  homepage of  SESA's website.  It provides                                                                    
     online  access to  program  services  and resources,  a                                                                    
     lending  library, online  professional development,  e-                                                                    
     modules, and  an easy process  for school  districts to                                                                    
     submit online referrals for  SESA service. The agency's                                                                    
     mission  reflects  a  focus on  addressing  the  unique                                                                    
     special  education  needs  of  students,  parents,  and                                                                    
     teachers across Alaska's 54 school districts.                                                                              
Mr. Pillai moved to slide 3:                                                                                                    
     The  statute  establishing   SESA  addresses  technical                                                                    
     assistance and  service to students with  low incidence                                                                    
     disabilities.  Low incidence  disabilities are  defined                                                                    
     as  occurring in  less than  one percent  of the  total                                                                    
     population. The  rarity of  the disability  often means                                                                    
     specialized services are not  normally available in the                                                                    
     school district.  SESA affords  such sites access  to a                                                                    
     specialist   with  an   endorsement  in   a  particular                                                                    
     disability area in addition to other resources.                                                                            
2:01:05 PM                                                                                                                    
Mr. Pillai turned to slide 4:                                                                                                   
     SESA's logic  model captures the  design of  process to                                                                    
     deliver specialized  services to parents,  schools, and                                                                    
     school districts. The intent is  to address the gap via                                                                    
     solutions that  promote availability of  SESA's service                                                                    
     through  on-site and  distance  support. This  approach                                                                    
     creates  broad participant  training  to address  staff                                                                    
     turnover  and  promises  collaboration  and  networking                                                                    
     amongst  teachers and  paraprofessionals. This  in turn                                                                    
     reduces isolation and  ultimately provides retention of                                                                    
     teachers  especially  in  rural  remote  areas  of  the                                                                    
Mr. Pillai addressed technical assistance on slide 5:                                                                           
     The  continuum   of  services   includes  observations,                                                                    
     assessments,  educational  interventions,  modeling  of                                                                    
     educational strategies,  in-service training, assistive                                                                    
     technology,  and many  more pertinent  activities based                                                                    
     on requests from the  child's educational team members.                                                                    
     Specialists  also  work  with vendors  to  troubleshoot                                                                    
     assistive   technology   when    teachers   call   with                                                                    
     complaints of device non-functionality.                                                                                    
Mr. Pillai turned to slides 6 and 7:                                                                                            
     In   addition  to   specialist  evaluation,   the  SESA                                                                    
     management  system  is  designed  to  collect  data  on                                                                    
     various aspects  of agency  activity. Metrics  focus on                                                                    
     mission-centric   activities  such   as  site   travel,                                                                    
     creation  of educational  materials,  training and  in-                                                                    
     services, and writing of  student service reports. Data                                                                    
     is analyzed  to understand variables  impacting service                                                                    
     and the SESA budget.                                                                                                       
     SESA's  database allows  us to  run  reports of  agency                                                                    
     productivity.   The   slide  captures   activities   of                                                                    
     technical assistance,  number of schools  and districts                                                                    
     served, number  of trainings conducted on-site  and via                                                                    
     distance delivery, and an analysis of expenses.                                                                            
2:03:08 PM                                                                                                                    
Mr. Pillai advanced to slide 8 and spoke about the                                                                              
customized management system:                                                                                                   
     This  slide  is  a  visual example  of  the  customized                                                                    
     management system  SESA designed to  ensure data-driven                                                                    
     decision  making. Individual  reports  provide data  on                                                                    
     specialist   activity  allowing   for  measurement   of                                                                    
     productivity;  number  of  reports  completed  with  an                                                                    
     agency timeframe of 10 working  days; schools and sites                                                                    
     requesting   service;  active   student  caseloads   by                                                                    
     district, location, and school etcetera.                                                                                   
Mr. Pillai reviewed slide 9:                                                                                                    
     Legislative audits and the  program component of annual                                                                    
     public audits  run tests of  compliance with  regard to                                                                    
     process  and procedure.  This section  of the  database                                                                    
     was  created in  response  for specific  data and  with                                                                    
     feedback from  auditors. Following a  recommendation of                                                                    
     the SESA board  to go green, SESA  management worked to                                                                    
     eliminate  paper files.  All of  SESA's student  record                                                                    
     keeping is  now electronic.  The compliance  element of                                                                    
     the SESA database drives quarterly compliance reviews.                                                                     
Mr. Pillai turned to slide 10:                                                                                                  
     Slide  10  captures  in  red  the  number  of  students                                                                    
     attending Alaska's  schools in  any given  year between                                                                    
     2011  and  2020.  The  solid  blue  line  captures  the                                                                    
     steadily increasing  number of  students on  SESA's low                                                                    
     incidence  caseload. High  turnover  of  staff in  many                                                                    
     districts often drives the  need for repeated trainings                                                                    
     for new  staff, especially first-year teachers  who may                                                                    
     be  encountering any  given  disability  for the  first                                                                    
Mr. Pillai moved to slide 11:                                                                                                   
     Slide 11  is a history  of SESA fund balance  from 2013                                                                    
     and projected to 2023. The  cycle captures low funds at                                                                    
     the end  of a sunset  cycle, in this case  2013, higher                                                                    
     funds  at the  middle  of the  cycle,  and trending  to                                                                    
     lower fund balance at the end  of the cycle as a result                                                                    
     of the  increase in cost. SESA's  last funding increase                                                                    
     was in 2013. At the end  of [FY] 22, factoring for cost                                                                    
     increase,  we  anticipate   using  $578,000  from  fund                                                                    
     balance.  This is  a result  of the  impact of  the CPI                                                                    
     index  increase  of 6.3  percent  over  the last  eight                                                                    
Mr. Pillai looked at the fund balance on slide 12:                                                                              
     Slide 12 illustrates  SESA's projected withdrawals from                                                                    
     fund balance  in fiscal year 2022  moving into complete                                                                    
     deficit in  fiscal year 2025. SESA  utilizes a cashflow                                                                    
     of  roughly  $400,000  for  day-to-day  expenses.  SESA                                                                    
     revenues,  annual  support   grant,  and  LID  activity                                                                    
     occurring   between  the   initial   grant  award   and                                                                    
     disbursement of  funds at a later  date. Grants operate                                                                    
     with an initial upfront award  of roughly 25 percent of                                                                    
     the  grant total  and  thereafter  are reimbursed  upon                                                                    
     submission of receipts  for qualified grant expenditure                                                                    
     post the activity.                                                                                                         
Mr. Pillai moved to slide 13 and discussed a proposed 24                                                                        
percent funding increase:                                                                                                       
     Slide 13 is  the projection of the  24 percent proposed                                                                    
     increase to  SESA funding through  Senate Bill  19. The                                                                    
     bill  would  increase  the  current  $18.65  times  the                                                                    
     number of  students in the average  daily membership in                                                                    
     the   prior  fiscal   year   to   $23.13.  This   would                                                                    
     effectively fund SESA  without interruption of services                                                                    
     to  families  and  school districts  through  June  30,                                                                    
     2029, the end of the period of reauthorization.                                                                            
Mr. Pillai addressed the recently completed legislative                                                                         
audit on slide 14:                                                                                                              
     The recently  completed legislative audit  concurs that                                                                    
     SESA  meets the  needs of  students with  low incidence                                                                    
     disabilities,    provides   professional    development                                                                    
     opportunities   to   teachers  and   paraprofessionals,                                                                    
     provides  special education  resources  to parents  and                                                                    
     school    districts,    and    concludes    with    the                                                                    
     recommendation    for    an   eight-year    legislative                                                                    
Mr.  Pillai  relayed  that  he   was  happy  to  answer  any                                                                    
Co-Chair  Merrick thanked  Mr. Pillai  for SESA's  hard work                                                                    
with special needs students.                                                                                                    
2:07:51 PM                                                                                                                    
Co-Chair  Merrick  asked to  hear  a  review of  the  recent                                                                    
legislative audit.                                                                                                              
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE   AUDIT,   reported   that   the   Division   of                                                                    
Legislative  Audit conducted  a review  of SESA  dated April                                                                    
2020 (copy  on file).  She began  the presentation  with the                                                                    
background information section  on page 5 of  the audit. She                                                                    
read from prepared remarks:                                                                                                     
     SESA  was  created  to help  Alaskan  school  districts                                                                    
     provide special education  services to individuals with                                                                    
     a low incidence disability.  A low incidence disability                                                                    
     occurs in less  than 1 percent of  the national school-                                                                    
     aged population  and the  disabilities are  more severe                                                                    
     in   nature    and   require    specialized   education                                                                    
     intervention.  SESA  was  established  as  a  nonprofit                                                                    
     organization  whose governing  board is  the Governor's                                                                    
     Council  on Disabilities  and Special  Education, which                                                                    
     is  organizationally housed  within  the Department  of                                                                    
     Health  and  Social   Services;  however,  its  primary                                                                    
     service,   its  low   incidence  outreach   program  is                                                                    
     budgeted   and  funded   through   the  Department   of                                                                    
     Education  and  Early   Development.  This  funding  is                                                                    
     independent  of  the  intensive needs  funding  that  a                                                                    
     district   may   otherwise  receive.   SESA's   funding                                                                    
     provides  additional financial  support to  help ensure                                                                    
     students   affected  by   low  incidence   disabilities                                                                    
     receive a  free and  appropriate public  education that                                                                    
     is required by state and federal laws.                                                                                     
     SESA's services  are available  to districts  whose low                                                                    
     incidence special  education needs  occur infrequently,                                                                    
     making it difficult  for the district to  serve the low                                                                    
     number  of students  in need  of a  particular service.                                                                    
     SESA   recruits,   trains,    and   retains   education                                                                    
     specialists   to  provide   technical  assistance   and                                                                    
     training  to  parents,  students,  and  district  staff                                                                    
     without regard  to the state.  The number  and location                                                                    
     of students  served by SESA  you will  see in a  map on                                                                    
     page 8. That shows that  as of February 2020 there were                                                                    
     335 students  served in 48  school districts.  You will                                                                    
     also see  that information broken  out on page 27  in a                                                                    
     separate  table,   which  breaks  out  the   number  of                                                                    
     students   served  by   a   low  incidence   disability                                                                    
     Report  conclusions  begin  on page  11.  Overall,  the                                                                    
     audit concludes that SESA  served the public's interest                                                                    
     by  assisting school  districts and  providing students                                                                    
     affected by low incidence  disabilities an education to                                                                    
     meet  the  children's  unique needs  and  by  providing                                                                    
     opportunities to enhance  school district teachers' and                                                                    
     paraprofessionals'   capabilities   and  by   providing                                                                    
     resources.   We   are    recommending   an   eight-year                                                                    
     extension,  which   is  the  maximum  allowed   for  in                                                                    
     statute. As part of the audit,  we did send a survey to                                                                    
     school district  special education directors in  all 51                                                                    
     school  districts. We  received a  59 percent  response                                                                    
     rate  and  in  general   the  school  district  special                                                                    
     education   directors  viewed   SESA  services,   staff                                                                    
     availability  and  their   expertise  favorably.  Those                                                                    
     questions and responses  can be found in  Appendix C to                                                                    
     the audit.                                                                                                                 
     As already  discussed, on page  13 we do  discuss their                                                                    
     statutory  funding   formula  and  how  it   is  $18.65                                                                    
     multiplied  by  the  states average  daily  membership,                                                                    
     again, set  in 2013.  Before that it  was set  14 years                                                                    
     earlier. That  has not  changed; however,  the caseload                                                                    
     has increased by 63 percent during the last 8 years.                                                                       
     We did  find that SESA's education  specialists serving                                                                    
     certain  categories  were experiencing  high  caseloads                                                                    
     and as of February 2020  the agency had three education                                                                    
     specialist vacancies.                                                                                                      
2:11:45 PM                                                                                                                    
Ms.  Curtis shared  that the  agency had  one recommendation                                                                    
beginning  on   page  18.   The  audit   recommended  SESA's                                                                    
executive  director implement  written procedures  to ensure                                                                    
the reclassification of a  student's referred disability was                                                                    
adequately  supported and  communicated  to school  district                                                                    
personnel. She detailed auditors  reviewed 40 case files and                                                                    
found  five  students'  disabilities as  identified  in  the                                                                    
referral   form  from   the   school   districts  had   been                                                                    
reclassified by  an education specialist  and had  not found                                                                    
any  documentation  in the  file  regarding  the reason  for                                                                    
reclassification. Additionally,  in four  of the  five cases                                                                    
there had been  no visible communication back  to the school                                                                    
district  about the  reclassification.  Auditors believed  a                                                                    
simple administrative fix should not  be too much trouble to                                                                    
accomplish. She  relayed that the  board chair and  the DHSS                                                                    
and DEED  commissioners agreed  with the  report conclusions                                                                    
and the recommendation.                                                                                                         
2:12:43 PM                                                                                                                    
Representative  Wool looked  at the  map on  page 8  showing                                                                    
school  districts   and  number   of  students.   He  listed                                                                    
Anchorage, Fairbanks,  and Juneau  and asked if  the program                                                                    
did not serve large school districts by design.                                                                                 
Ms. Curtis  replied in the  affirmative. She  detailed there                                                                    
was a  threshold. When  a school district  reached ten  in a                                                                    
specific  category,   SESA  worked  with  the   district  to                                                                    
transition  away  from  SESA   services  to  make  sure  the                                                                    
district  hired its  own  specialists  given SESA's  limited                                                                    
resources. She added that there  were some students in those                                                                    
categories, but much fewer than in other locations.                                                                             
Representative Wool  asked if  statute designated  that SESA                                                                    
serve school  districts with  less than  ten students  [in a                                                                    
particular category] requiring intervention.                                                                                    
Ms. Curtis  answered that there  was no  statutory guidance.                                                                    
The prior sunset audit had  found that some type of criteria                                                                    
was  needed  to  specify  when school  districts  needed  to                                                                    
absorb  students.   She  explained  that   school  districts                                                                    
received  special  education  intensive needs  funding.  She                                                                    
elaborated that  SESA was in  place to serve  districts with                                                                    
needs in  such a low number  that the district did  not have                                                                    
the services in place to address them.                                                                                          
2:14:27 PM                                                                                                                    
Representative  Rasmussen referenced  page  8  and asked  if                                                                    
multiple disabilities was a combination  of one of the other                                                                    
six  listed  disabilities.  She  asked  if  there  were  any                                                                    
unlisted disabilities.                                                                                                          
2:15:18 PM                                                                                                                    
AT EASE                                                                                                                         
2:16:14 PM                                                                                                                    
Ms.   Curtis  pointed   to   the   definition  of   multiple                                                                    
disabilities  on  page  7; the  definition  listed  out  the                                                                    
different  combinations  that  qualified a  person  for  the                                                                    
HEIDI  TESHNER,  DIRECTOR,  FINANCE  AND  SUPPORT  SERVICES,                                                                    
DEPARTMENT   OF  EDUCATION   AND   EARLY  DEVELOPMENT   (via                                                                    
teleconference), was  available to present the  fiscal note,                                                                    
OMB Component  Number 2735. She  stated that the  bill would                                                                    
increase  SESA's funding  multiplier from  $18.65 to  $23.13                                                                    
multiplied by  the average daily  membership (ADM)  from the                                                                    
prior fiscal year. She elaborated  that the governor's FY 22                                                                    
budget request  included a $2.4 million  projected grant for                                                                    
SESA  based on  the statutory  calculation. She  detailed it                                                                    
had been determined  by multiplying the FY  21 projected ADM                                                                    
of  128,923.91  times the  $18.65.  Based  on the  increased                                                                    
multiplier and the final FY  21 ADM count finalized in March                                                                    
2021,  the   amended  FY  22   SESA  grant   was  $2,937,900                                                                    
(determined  by  multiplying  the final  ADM  of  127,015.30                                                                    
times $23.13).  The bill reflected an  increase of $533,500.                                                                    
She noted  the extension would  carry out through  June 2029                                                                    
and  DEED would  adjust  the budget  annually  based on  the                                                                    
statutory calculation.                                                                                                          
SB  19  was   HEARD  and  HELD  in   committee  for  further                                                                    
2:19:48 PM                                                                                                                    
AT EASE                                                                                                                         
2:19:56 PM                                                                                                                    
HOUSE BILL NO. 169                                                                                                            
     "An Act making appropriations for public education and                                                                     
     transportation of students; and providing for an                                                                           
     effective date."                                                                                                           
2:20:03 PM                                                                                                                    
Co-Chair Foster communicated there  were no amendments to be                                                                    
Co-Chair Merrick  MOVED to  REPORT HB  169 out  of committee                                                                    
with individual recommendations.                                                                                                
Representative   Carpenter  OBJECTED   for  discussion.   He                                                                    
acknowledged  the importance  of the  conversation on  early                                                                    
funding  of education.  He stated  that  without a  [budget]                                                                    
committee  substitute   (CS),  the  committee   was  further                                                                    
justifying the need to early  fund education due to the lack                                                                    
of a budget.  He thought the committee was  holding the rest                                                                    
of the state budget hostage  while it acted on one component                                                                    
of the  budget. He believed  it was highly  inappropriate to                                                                    
send the  bill out of  committee without any context  of how                                                                    
it  would be  received within  the  rest of  the budget.  He                                                                    
thought a conversation about early  funding should be a part                                                                    
of the  conversation within the  context of the budget  as a                                                                    
Representative Carpenter  stated it  was a bad  precedent to                                                                    
pick one  component of  the budget and  send it  forward for                                                                    
discussion. He  highlighted that the previous  year, most of                                                                    
the budget had been finished  within 90 days. He stressed it                                                                    
was in  the committee's  power to  finish the  budget, which                                                                    
would avoid a discussion of  early funding for education. He                                                                    
did not know  what the delay was in terms  of receiving a CS                                                                    
that would  put education in  context with all of  the other                                                                    
important funding items for the  coming year. He opined that                                                                    
piecemealing the  budget was  inappropriate, unprofessional,                                                                    
poor  management,  and  set  a bad  precedent.  He  did  not                                                                    
believe HB 169 should be  sent from committee without seeing                                                                    
the rest of the budget.                                                                                                         
2:23:09 PM                                                                                                                    
Representative Josephson  believed HB  169 was a  good bill.                                                                    
He remarked that  he had been in Juneau  for special session                                                                    
in the past  in most months of the year.  He underscored the                                                                    
possibility  the  legislature could  be  in  Juneau in  June                                                                    
without a  budget. He had experienced  the situation several                                                                    
times.  He   stated  the  statutory   non-retention  letters                                                                    
required the  education funding carveout  [from the  rest of                                                                    
the budget]  in order to preserve  continuity for educators,                                                                    
administrators,  and staff.  He referenced  the [budget]  CS                                                                    
and believed  it was understood that  the legislature wanted                                                                    
a  say   on  how  $1.1   billion  [in  federal   funds]  was                                                                    
appropriated. He believed it was  part and parcel the reason                                                                    
for  some  delay.  He  noted  that  the  governor  had  just                                                                    
released  his own  version of  the  bill. He  asked why  the                                                                    
legislature should be ahead of  the governor. He stated that                                                                    
the money would  have to be spent in one  fashion or another                                                                    
and he believed it made perfect sense to do so via HB 169.                                                                      
2:24:59 PM                                                                                                                    
Representative Rasmussen  thought the bill  was appropriate.                                                                    
She recognized the timing was  slightly wonky due to the 30-                                                                    
day delay with organization [in  the House]. She stated that                                                                    
with  Alaska ranking  close to  the bottom  in many  student                                                                    
outcomes,  she did  not believe  the state  could afford  to                                                                    
risk   losing  any   more  good   teachers  due   to  fiscal                                                                    
uncertainty  and pink  slips  going  out unnecessarily.  She                                                                    
highlighted the constitutional  and statutory obligation and                                                                    
formula for  funding K-12 education.  She remarked  that the                                                                    
issue was  not up for  a lot  of debate until  the statutory                                                                    
BSA law was  changed. She had not seen  any bills introduced                                                                    
in the  current session that  would change the  formula. She                                                                    
opined  that until  the legislature  did something  else, HB
169 was  incredibly appropriate  and the  right thing  to do                                                                    
for  teachers and  students. She  spoke about  the need  for                                                                    
stability and  retention of  talented teachers.  She pointed                                                                    
out  that   teachers  could  go   other  places   with  more                                                                    
certainty.  She believed  it was  not  professional for  the                                                                    
state  to put  districts  in the  position  of sending  pink                                                                    
slips to staff every year. She supported the bill.                                                                              
Co-Chair Foster recognized  Representative Edgmon had joined                                                                    
the meeting.                                                                                                                    
Representative  Wool  supported  the bill.  He  shared  that                                                                    
before he  had run  for the legislature,  the issue  of pink                                                                    
slips and delays  had come up for his  district. He remarked                                                                    
that because  the district  did not  receive funding  at the                                                                    
right time  it had been  forced to  send out pink  slips. He                                                                    
noted   it  was   done  frequently.   He  believed   it  was                                                                    
unprofessional. He  stressed the importance of  holding onto                                                                    
valued  teachers.  He had  heard  many  stories of  teachers                                                                    
leaving. He  referenced public testimony earlier  in the day                                                                    
about teachers  receiving pink slips. He  remarked that some                                                                    
teachers  endured  the  situation several  times  but  after                                                                    
awhile  they decided  it was  enough. He  believed the  bill                                                                    
communicated  that  the   legislature  valued  teachers  and                                                                    
valued  them enough  to put  them  out front  of the  budget                                                                    
process.  He  agreed education  should  be  and was  in  the                                                                    
budget  and was  mandated by  the constitution.  He remarked                                                                    
that  for various  reasons the  budget was  not passed  in a                                                                    
timely  manner,  which  was  not  in  any  one  individual's                                                                    
control.  He supported  getting  the  education funding  out                                                                    
ahead. He  stated the  funding was  fairly formulaic  with a                                                                    
BSA and predicted  number of students. He noted  it could be                                                                    
adjusted later.  He believed the legislature  should get the                                                                    
majority  of  the  funding  out  immediately  to  avoid  the                                                                    
sending of  pink slips. He  stated that teachers  had enough                                                                    
trouble  and  stress  in  the   past  couple  of  years.  He                                                                    
underscored  that adding  more  stress  was preventable.  He                                                                    
supported moving forward with the legislation.                                                                                  
2:28:55 PM                                                                                                                    
Representative  Edgmon  apologized  that   he  had  been  in                                                                    
another meeting. He believed it  should be mandatory for the                                                                    
legislature to  pass the education budget  early every year.                                                                    
He believed  eight out of  ten teachers in Alaska  came from                                                                    
out-of-state. He detailed  that the absence of  a budget put                                                                    
teachers in a  position where they did not know  if they had                                                                    
a job  and they had  to decide  whether to relocate  back to                                                                    
their  home state  or elsewhere.  He strongly  supported the                                                                    
2:29:50 PM                                                                                                                    
Co-Chair Foster  voiced his support for  the legislation. He                                                                    
stated that early funding of  education had been done in the                                                                    
past. He highlighted that the  bill followed the formula and                                                                    
did not make any increases.  He understood the argument that                                                                    
education funding  should be  put in  context of  the larger                                                                    
budget.  He believed  the argument  for including  education                                                                    
funding with  the rest  of the budget  would be  stronger if                                                                    
the  legislature  was  making increases.  He  reasoned  that                                                                    
because no  changes were  being made,  the benefit  of early                                                                    
funding outweighed  the cost. He  referred to  the statutory                                                                    
deadline  for layoff  notices. Additionally,  there was  the                                                                    
extraordinary circumstance  of the forthcoming  federal ARPA                                                                    
funding the legislature had to  determine how to incorporate                                                                    
in the  operating budget. He  stated that the  situation had                                                                    
slowed the process  down. He did not  believe schools should                                                                    
have to feel the brunt of the situation.                                                                                        
Representative Carpenter  remarked that  the hearing  on the                                                                    
previous bill [SB  19] indicated an increase  in funding for                                                                    
SESA  [Special Education  Service  Agency].  He reasoned  it                                                                    
meant the legislature was  increasing funding for education.                                                                    
He did  not know whether  other areas in education  would be                                                                    
increased because he did not  have a budget to reference. He                                                                    
understood  that   forward  funding  or  early   funding  of                                                                    
education improved  the ability of subordinate  or follow-on                                                                    
agencies  to do  their budgets;  however, the  committee did                                                                    
not have  a budget to  reference for context. He  asked when                                                                    
the committee would  see a [budget] CS.  He underscored that                                                                    
someone was making a decision  to put federal funding on top                                                                    
of state funding  in a budget. He assumed it  was the reason                                                                    
for the delay.  He remarked that an alternative  was to have                                                                    
two  separate bills.  He  thought one  bill  with state  and                                                                    
federal funding combined would be hard to understand.                                                                           
Co-Chair  Foster replied  that he  had  hoped to  have a  CS                                                                    
before  the committee  the previous  Monday. He  shared that                                                                    
the  Legislative  Finance  Division  had  relayed  it  could                                                                    
provide some  suggestions on what  the legislature  could do                                                                    
in  using some  of the  ARPA funds.  He elaborated  that the                                                                    
governor had  ended up  rolling out his  bill that  had come                                                                    
out  earlier  in   the  day.  He  stated   there  were  many                                                                    
complexities in the process and  he had told people it would                                                                    
not  be easy.  He  was trying  to  make the  best  out of  a                                                                    
difficult situation in terms of getting  a CS out as soon as                                                                    
possible, while trying  to determine how to  manage the ARPA                                                                    
2:33:21 PM                                                                                                                    
Representative  Rasmussen  believed   the  SESA  funds  fell                                                                    
outside the  BSA and pupil transportation  funds. She stated                                                                    
her  understanding that  HB 169  was the  statutory required                                                                    
formula for the BSA and pupil transportation only.                                                                              
Vice-Chair Ortiz  believed the SESA funding  was not related                                                                    
to the funding formula bill before the committee.                                                                               
Co-Chair   Foster  agreed.   He   spoke  to   Representative                                                                    
Carpenter's point. He  stated that the SESA  funding did not                                                                    
increase the BSA  formula. He explained that  the release of                                                                    
a CS had  been slowed down by the effort  to include some of                                                                    
the ARPA funding.                                                                                                               
2:35:18 PM                                                                                                                    
Representative Carpenter WITHDREW his OBJECTION.                                                                                
There being NO further OBJECTION, it was so ordered.                                                                            
HB 169 was REPORTED out of committee with ten "do pass"                                                                         
recommendations and one "no recommendation" recommendation.                                                                     
2:35:59 PM                                                                                                                    
AT EASE                                                                                                                         
2:36:07 PM                                                                                                                    
Co-Chair Foster reviewed the schedule for the following                                                                         
2:36:38 PM                                                                                                                    
The meeting was adjourned at 2:36 p.m.                                                                                          

Document Name Date/Time Subjects
SB019_SESA-Sunset_Support Letters_bundled_as of 24Feb2021.pdf HFIN 4/19/2021 1:30:00 PM
SB 19
SB019_SESA-Sunset_Research_LBA-Audit_Full-Report_03April2020.pdf HFIN 4/19/2021 1:30:00 PM
SB 19
SB019_SESA_Presentation_Revised_07April2021.pdf HFIN 4/19/2021 1:30:00 PM
SB 19
SB019_SESA-Sunset_Sectional_version i.pdf HFIN 4/19/2021 1:30:00 PM
SB 19
SB019_SESA-Sunset_SponsorStatement.pdf HFIN 4/19/2021 1:30:00 PM
SB 19
SB019_SESA-Sunset_Summary-of-Changes_from A to B.pdf HFIN 4/19/2021 1:30:00 PM
SB 19
SB019_SESA-Sunset_Summary-of-Changes_from B to i.pdf HFIN 4/19/2021 1:30:00 PM
SB 19
HB 169 Attachment 1 Foundation Formula Enrollment Comparison 041821.pdf HFIN 4/19/2021 1:30:00 PM
HB 169
HB 169 4.14.2021 (H)FC DEED Hearing Follow-Up.pdf HFIN 4/19/2021 1:30:00 PM
HB 169
HB 169 Attachment 2 Foundation Formula Timeline 041821.pdf HFIN 4/19/2021 1:30:00 PM
HB 169
HB 169 Response to Q Attachment DEED 041821.pdf HFIN 4/19/2021 1:30:00 PM
HB 169
HB 169 Public Testimony 042021.pdf HFIN 4/19/2021 1:30:00 PM
HB 169