Legislature(2021 - 2022)ADAMS 519
04/14/2021 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Tribal American Rescue Plan Act Funding | |
| HB169 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 169 | TELECONFERENCED | |
| += | HB 69 | TELECONFERENCED | |
| += | HB 71 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
HOUSE FINANCE COMMITTEE
April 14, 2021
1:32 p.m.
1:32:04 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 1:32 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
None
ALSO PRESENT
Representative Dan Ortiz, Sponsor
PRESENT VIA TELECONFERENCE
Nicole Borromeo, Executive Vice President and General
Counsel, Alaska Federation of Natives; Lacey Sanders,
Administrative Services Director, Department of Education
and Early Development, Office of Management and Budget,
Office of the Governor.
SUMMARY
HB 169 APPROP: EDUCATION; PUPIL TRANSPORTATION
HB 169 was HEARD and HELD in committee for
further consideration.
PRESENTATION: TRIBAL AMERICAN RESCUE PLAN ACT FUNDING
Co-Chair Foster reviewed the meeting agenda.
^PRESENTATION: TRIBAL AMERICAN RESCUE PLAN ACT FUNDING
1:33:18 PM
Co-Chair Foster asked members to hold questions to the end
of the presentation.
NICOLE BORROMEO, EXECUTIVE VICE PRESIDENT AND GENERAL
COUNSEL, ALASKA FEDERATION OF NATIVES (via teleconference),
provided a PowerPoint presentation titled "Summary of the
Provisions Benefitting Alaska Natives in the American
Rescue Plan Act of 2021," dated April 14, 2021 (copy on
file). She shared information about the Alaska Federation
of Natives (AFN). [Note: due to poor audio quality the
testimony was repeated at 1:43. See below for detail.]
Co-Chair Foster noted that the audio was not completely
clear.
Ms. Borromeo tried calling in with her cellphone. She noted
she was hearing static on her end of the line.
Co-Chair Foster noted that the audio was not great. He
asked her to call into the teleconference number.
1:41:12 PM
AT EASE
1:43:43 PM
RECONVENED
Ms. Borromeo repeated her previous testimony due to audio
difficulties. She detailed that AFN was the oldest and
largest Native organization in Alaska, representing most of
the regional and village corporations established under the
Alaska Native Claims Settlement Act (ANCSA), all of the
tribal nonprofit regional organizations or tribal consortia
providing social services and healthcare to different
regions, and 159 different federally recognized tribes. She
planned to present on the Alaska Native or Native American
provisions in the American Rescue Plan Act (ARPA) of 2021.
She was happy to go over the bill after her presentation.
Ms. Borromeo turned to slide 2 and gave an overview of
ARPA. She reported that $1.9 trillion in funding was being
pushed out throughout the country to help with COVID-19
recovery efforts. She explained the funding was available
for a wide variety of programs touching nearly every
federal agency. She stated for the first time in the
country's history there was an immense tribal set-aside for
Native people. She elaborated that $32.5 billion was set
aside for tribes, tribal organizations, and Native people.
She remarked it was important to note that each tribal
program had its own eligibility criteria. Generally, there
were three different entities that would qualify for the
fund. The first was a federally recognized tribe, meaning
the tribe had to be on the List Act of 1994. The list
included the 229 federal recognized tribal governments in
Alaska. The second entities eligible were regional tribal
nonprofits. The third group of entities were Alaska Native
corporations, which qualified for the tribal set-aside
under some provisions.
Ms. Borromeo noted that whenever Indian tribes appeared in
federal law, it was necessary to look at the definitional
section to determine who was included in the definition of
Indian tribe. She explained that sometimes Congress
legislated in a manner aiming to impact economic policy, in
which case, Alaska Native corporations were included. Other
times, legislation only touched on tribal governance and
tribal sovereign authority was impacted, in which case, the
Alaska Native corporations and tribal nonprofits were not
necessarily included because it only applied to federally
recognized tribes that exercise self-governance powers.
1:47:57 PM
Ms. Borromeo moved to a disclaimer on slide 3. She reported
that the presentation was a high-level summary. She
clarified there are numerous tax provisions and amendments
to Medicaid and Medicare that were not covered in the
presentation. She elaborated that she had tried to include
all provisions with specific references to Indian-based
programs or benefits. She relayed that additional research
was necessary and legal counsel review was encouraged.
Ms. Borromeo turned to slide 4 titled "Title I -
Agriculture, Nutrition and Forestry." Title I included
$20.2 billion for socially disadvantaged farmers, ranchers,
and forest landowners and operators. She detailed that the
amount included two tribal set-asides: $10.1 million for
tribal colleges and universities; and $10.1 million for
Alaska Native and Native Hawaiian serving institutions of
higher education. She elaborated that the funds could be
for grants or loans to support education, extension,
scholarships, and internships. She noted that often the
loans would revert to a grant and funds would remain
available until expended. She explained that funds were
often allocated on a first come, first served basis;
therefore, it was imperative for Alaska's tribes and tribal
organizations to submit applications as soon as possible
for any funding with the first come, first served notation.
1:50:15 PM
Ms. Borromeo moved to slide 5 and highlighted $4 billion
available for food programs. She explained that the
increment was included in the presentation even though
there was no specific tribal set-aside because it was a
large pot of money and funding was available to purchase
food for distribution including seafood, seafood processing
facilities and processing vessels eligible for grants and
loans. She expounded there were many Alaska Natives who
operated commercial fishing boats or set net sites. She
added that tribal non-profit organizations would likely
qualify for program participation and funding.
Ms. Borromeo advanced to slide 6 and reviewed $500 million
available for rural health programs. She detailed that
tribal non-profit organizations serving rural communities
(not Anchorage, Fairbanks, or Juneau) and recognized tribes
in rural communities were eligible for grants. Funds could
be used for telehealth, facility construction, vaccine
distribution, medical supplies, lost revenue, staffing, and
nutrition programs. She noted it was a new pilot program
and the [U.S.] Department of Agriculture had been directed
to ensure the program was up and running within five
months. She expounded that the department was currently
holding a series of tribal consultations on the program to
receive tribal input. Once the input was received, the
department would issue more eligibility requirements. The
slide included a reference to CFR 3570.61(a) for more
information.
1:52:17 PM
Ms. Borromeo addressed Title II on slide 7, which she
described as a "mammoth" of a title within ARPA. She
explained the title included several different tribal set-
asides for Native people. One of the larger increments was
$1.072 billion for childcare development block grants and
childcare stabilization grants. She noted that most of the
funding would only be available to existing programs;
therefore, qualifying Alaska tribes and tribal
organizations would need to have already been operating a
program. She highlighted that Alaska Native corporations
were also eligible for the program. She noted that income
requirements did not apply for the program. She highlighted
that the program would loop in the largest tribal
participation within the state including tribes on the
federally recognized List Act, tribal nonprofits, and
Alaska Native corporations. She identified several purposes
the funds could be used for including personnel costs,
rent, and mortgage. She relayed the funds would be
available until the end of FY 24.
1:53:43 PM
Ms. Borromeo highlighted $25.401 million for Head Start on
slide 8. The funds were for federally recognized tribes and
tribal non-profits running existing programs. She detailed
that Head Start was intricately formulated under existing
allocation formulas. She elaborated that the department
would rely on existing formulas and funds would remain
available until expended and were on a first come, first
served basis.
Ms. Borromeo moved to slide 9 and reviewed $19 million
under Title II available for survivors of family violence.
She listed three primary areas the funds could be used for
including survivors of sexual assault and domestic
violence; other emerging needs related to COVID public
health, emergencies, and public health concerns; and to
promote strategic partnership development and collaboration
with other agencies outside of a tribe or tribal
organization. Congress had specified that $18 million would
go to Tribal Family Violence and Prevention Act grantees;
and $1 million would be allocated for StrongHearts Native
Helpline. She explained that when Congress had an affinity
for certain programs and policies it deemed were working
across Indian country, it would be more specific in how it
directed the department to use the funds. She specified
that funds would remain available until expended.
1:55:53 PM
Ms. Borromeo addressed $2.5 million for child abuse
prevention and treatment on slide 10. She detailed that
there was no state match for the increment; therefore, the
funding would be a direct allocation to tribes and tribal
organizations. She clarified the funds would remain
available until expended. Additionally, there was $1.75
billion for COVID-19 gene sequencing and surveillance. She
expounded funds could be used to conduct, expand, and
improve activities to sequence genomes, identify mutations,
and survey the circulation and transmission of viruses and
other organisms. She relayed tribal health departments were
eligible for the funding and could enter into cooperative
agreements with other states and localities. She explained
the increment may be available for DHSS or different
municipal health departments could use it to leverage the
funds.
Ms. Borromeo advanced to slide 11 and highlighted a $30
million tribal set-aside for local substance use disorder
services including overdose prevention in Section 2706(b)
of the act. She had tried to include the different sections
of ARPA to make the fund locations easily identifiable for
legislators looking to research the provisions. The
specific funding was only available for federally
recognized tribes and tribal non-profit organizations. She
noted that ARPA was a little stricter on how the specific
funds could be used. There were $50 million for behavioral
health grants available to federally recognized tribes and
tribal non-profit organizations. She noted there were many
different behavioral health grants throughout ARPA. The
specific funds could be used for prevention, intervention,
crisis management, substance abuse treatment, and
telehealth. She explained the provision would allow Alaska
Natives to apply for and capture some of the funds. She
added that distribution of the funds would be strictly
controlled by Congress. The use of the funds was outlined
in Section 2707(b)(2).
1:58:42 PM
Ms. Borromeo advanced to slide 12 and reviewed $4.5 billion
for low income home energy assistance programs. She
detailed that even though all federally recognized tribes
and tribal nonprofit organizations are eligible for grants,
Alaska only had seven federally recognized tribes and six
Alaska Native nonprofit organizations currently
administering the funding. She directed committee members
to the Low Income Home Energy Assistance Act (42 U.S.C.
8623) for more information.
Ms. Borromeo moved to slide 13 and addressed $15 million to
help pay for water bills. Federally recognized tribes were
eligible for the grants. She remarked that one challenge
that would make it harder for Alaska to qualify was that
many of its villages did not have water and sewer. She
explained it was nearly impossible to have a water bill
without running water in the first place. The funds would
remain available through FY 2022. Additionally, there was a
tribal set-aside for older Americans and family support.
She detailed that the funds were for grandparents raising
their grandchildren. She reported that federally recognized
tribes, tribal nonprofit organizations, and Alaska Native
corporations were eligible for grants that were available
on a first come, first served basis. Funds would remain
available until expended.
2:00:34 PM
Ms. Borromeo moved to slide 14 and reviewed $100 million
for rural housing assistance to provide for temporary
adjustment to income losses. She clarified the funding was
not a tribal set-aside, but it had been included in the
presentation as it was a large line item for applications
to come through. She informed the committee that the
Housing Act of 1949 would be very specific in terms of how
the program was administered. She stated the importance of
ensuring that legislative staff or other tribal
organizations and Native entities interested in the set-
aside were researching the ARPA provisions.
Ms. Borromeo turned to slide 15 and noted that the funds
were not necessarily tribal set-asides. The slide
highlighted increments of $7.66 billion for public health
workforce, $1.5 billion in block grands for community
mental health services, and, $1.5 billion in block grants
for prevention and treatment of substance abuse. The
increments were included in the presentation because AFN
believed tribal organizations and federally recognized
tribes were eligible under the criteria as written. She
noted that a nonprofit, private, or public organization was
eligible for the $7.66 billion if it demonstrated expertise
in implementing public health programs and had an
established relationship with state or local health
departments, particularly in medically underserved areas.
She relayed AFN believed it was a fantastic opportunity for
the Alaska Native Tribal Health Consortium (ANTHC) and all
of the regional health corporations to submit applications.
2:02:18 PM
Ms. Borromeo reviewed slide 16 and remarked that the funds
were not necessarily tribal set-asides but constituted
other opportunities for Alaska Native entities to apply to
receive different grants. The first increment on the slide
was clear that Indian tribes and tribal organizations were
eligible, but ARPA did not define either. She explained
that the [U.S.] Department of Health and Human Services
would likely rely on existing definitions of both of the
terms. Tribes and tribal organizations were eligible to
apply for the $80 million in mental health and substance
use disorder training for healthcare professionals and
public safety officers.
2:03:21 PM
Ms. Borromeo addressed the Title III - Banking, Housing,
Urban Affairs - section of the bill. There was $498 million
under the newly established Homeowner Assistance Fund
program to help recognized tribes, Tribally Designated
Housing Entities (TDHEs), and the Department of Hawaiian
Home Lands. She relayed funds could be spent to prevent
mortgage delinquencies, defaults, foreclosures, and to
provide utilities assistance and the displacement of
homeowners experiencing financial hardship due to COVID-19.
The formula allocation mirrored the Rental Assistance
Program in the Coronavirus Aid, Relief, and Economic
Security Act (CARES). She explained that Congress liked how
Treasury formulated the CARES program. Congress specified
that at least 60 percent of the allocation had to assist
homeowners who met certain low income guidelines.
Additionally, tribes that did not participate in the Indian
Housing Block Grants were required to "opt in" by April 11
(no later than 30 days after enactment of ARPA) in order to
participate. She relayed housing provisions in ARPA and
otherwise were very detail specific and most tribes and
tribally designated housing entities eligible to receive
the funds were tracking them in real time. Funds would
remain available until the end of FY 2025.
2:05:12 PM
Ms. Borromeo advanced to slide 18 and highlighted a tribal
set-aside of $500 million for the State Small Business
Credit Initiative. She reported it was the first time
Treasury had allowed tribes to participate in the program.
She elaborated that Treasury was expected to begin making
allocations within 60 days of the enactment of ARPA.
Allocations would be based on employment and economic data.
She relayed that interested tribal governments had to file
a notice of intent with the department no later than 30
days after enactment of ARPA to be eligible for funding.
She expounded that if a tribe or tribal organization had
not filed a notice of intent by April 11, it would be too
late to apply for the specific money.
2:06:07 PM
Ms. Borromeo referenced an additional $35 million in
Federal Transit Administration grants on slide 19. The
funding could be used to support tribal transit agencies
impacted by COVID-19. Congress specified that of the total
amount, $30 million would be allocated through the Rural
Areas formula grants; and $5 million would be allocated
through discretionary grants. Funds would remain available
until the end of FY 2024. She clarified the funding was for
federally recognized tribes running their own tribal
transportation programs.
Ms. Borromeo addressed Title IX of the bill related to
finance. There was a $74.85 million set-aside for pandemic
emergency assistance (Sec. 9201). She elaborated that
recognized tribes and tribal organizations that participate
in the Temporary Assistance for Needy Families (TANF) were
eligible for funding. She reported that Alaska had no
tribes participating at the federally recognized level;
only the state's regional tribal nonprofits were
participating and were eligible. She added that funds would
remain available until expended and would be administered
on a first come, first served basis. Additionally, there
was $400 million for childcare assistance (Sec. 9801).
Recognized tribes and tribal organizations that receive
annual mandatory funding were the only entities available
for the funding.
2:07:53 PM
Ms. Borromeo moved to slide 21 that encompassed the largest
share of the tribal set aside: $20.6 billion in Coronavirus
State and Local Fiscal Recovery Funds; $20 billion tribal
set-aside, of which $1 billion would be allocated equitably
among all 574 recognized tribes; and the other $19 billion
would be allocated by the Treasury secretary on a
discretionary basis. Recognized tribes were eligible for
funding. Funds could be used to respond to the negative
health and economic impacts of COVID-19, including
providing premium pay to essential workers; replacing lost
revenues necessary to support government services; and
investing in water, sewer, and broadband infrastructure.
Funds had to be allocated within 60 days of the enactment
of ARPA and remained available through December 31, 2024.
Ms. Borromeo turned to slide 21 and addressed the "lion's
share" of the tribal set-aside. She detailed that of the
$32.5 billion, $20.6 billion was included in Section 9901
of ARPA. Of the $20.6 billion, $20 million [billion] was
designated in two different ways according to Congress. She
elaborated that $1 billion would be allocated equitably
among all 574 federally recognized tribes, which was
excellent for Alaska because it had 229 of the federally
recognized tribes. The remaining $19 billion would be
allocated by the Treasury secretary on a discretionary
basis.
Ms. Borromeo expounded that Treasury had held a series of
tribal consultations and most of the comments coming from
the Lower 48 were pushing a formula based on population,
land base, and economic impacts. She explained it would not
be favorable to Alaska. She explained even though Alaska
was the most Native state on pro rata basis, it had one of
the lowest populations of Native people. Additionally,
lands were not held by tribal governments in Alaska; they
were owned and managed by Alaska Native corporations under
the federal Alaska Native Claims Settlement Act (ANCSA).
Lastly, Alaska's tribes did not operate tribal industry and
businesses on the same level as some of the gaming tribes,
oil and gas, or large tourism tribes in the Lower 48. On
the contrary, the economic drivers for tribes in Alaska
were primarily the Alaska Native corporations formed under
ANCSA. She relayed that AFN was not expecting Alaska to do
incredibly well for the discretionary funds; however, they
were tracking it closely.
Ms. Borromeo shared that only federally recognized tribes
were eligible for the specific funding and funds could be
used in a wide array of activities for health and economic
impacts of COVID including paying essential workers,
repaying lost revenue, and supporting other government
services including water, sewer, and broadband
infrastructure. She reported that funds had to be allocated
within 60 days of the enactment of ARPA. She noted that
Treasury was working hard and fast to meet the deadline.
Funds would remain available until December 31, 2024.
2:10:48 PM
Ms. Borromeo reviewed slide 22 and highlighted $500 million
for local assistance and tribal consistency funds for
federally recognized tribes. She detailed that tribes could
use the funding for any governmental activity, except
lobbying. She explained that funding would be distributed
over the next two fiscal years and remain available until
the end of FY 2023. Additionally, there was $100 million
for the Coronavirus Capital Projects Fund. The funds would
be distributed in equal payments of no less than $50,000 to
each recognized tribe and the State of Hawaii to carry out
critical capital projects in response to COVID-19. Only
federally recognized tribes were eligible to apply for
funding and funding had to be allocated within 60 days
after the enactment of ARPA. She added that funds would be
distributed on a first come, first served basis, and would
remain available until expended.
2:11:59 PM
Ms. Borromeo addressed the Indian Affairs section - Title
IX. The title included $6.094 billion for the Indian Health
Service. She detailed that funding could be used to address
the impacts of COVID-19 on the operation of essential
health and sanitation programs. She expounded that Congress
had been a bit more specific about the fund breakdown. She
elaborated that $1.34 [$2.34] billion had to be used for
vaccine campaigns, testing, tracing, mitigation efforts,
and expanding or sustaining a public health workforce.
Another $2 billion had to be used for lost third-party
medical billing reimbursements. Funds were on a first come,
first served basis, and remained available until expended.
2:13:04 PM
Ms. Borromeo advanced to slide 24 and reviewed a $900
million set-aside for the Bureau of Indian Affairs to
distribute to different federally recognized tribes to
address the impacts of COVID-19 on social welfare and
public safety programs. Congress had specified the money
needed to be allocated very specifically. She detailed that
$772.5 million would be allocated for government services
including public safety and child welfare programs; $100
million would be allocated for the bureau's Housing
Improvement Program; $20 million would be allocated to
potable water delivery; and $7.5 million would be allocated
for administrative costs and oversight.
Ms. Borromeo explained that the U.S. Department of Interior
could not consider any allocation received to negatively
impact tribes receiving funding under the Small and Needy
Tribes Program. The program gave the base allocation to
tribes that were "small" and "needy" under definitional
sections. She detailed there were 310 tribes nationwide
participating in the program, with 209 in Alaska. She
remarked that Alaska did very well under the program and
the funding coming through Section 1102 would not impact
the program funding. Funds would remain available until
expended. She relayed the department had held a number of
consultations on the issue and all of Indian country was
tracking the issue. She characterized it as the second most
popular set-aside in addition to the large Treasury set-
aside of $20 billion.
2:15:11 PM
Ms. Borromeo looked at slide 25 and discussed that the BIA
[Bureau of Indian Affairs] would distribute $750 million
for housing assistance and support services. She reported
that Congress had specified several different breakdowns in
terms of how the money would be grouped together for
distribution. She detailed that $450 million would be
allocated for the Indian Housing Block Grant program; $280
million would be allocated for the Indian Community
Development Block Grant program; $10 million would be
allocated for technical assistance; $5 million would be
allocated for the Native Hawaiian Housing Block Grant
program; and $5 million would be allocated for
administrative costs and oversight. She explained that
recipients could use the funds for eligible COVID-19-
related expenses incurred since January 21, 2020. Funds
remain available until the end of FY 2025.
2:16:09 PM
Ms. Borromeo highlighted that the Department of Interior
was responsible for administering a $20 million set-aside
for Native language preservation and maintenance. She
explained that the health department would take on the task
instead and it was required to award the grants within 180
days of the enactment of ARPA. She detailed that
eligibility was limited to entities receiving other
language grants from the administration for Native
Americans; therefore, the pool of applicants had been
predetermined by Congress. Funds would remain available
until expended. There was an additional $190 million for
American Indian, Alaska Native, and Native Hawaiian
Education. She elaborated that the funding covered a broad
array of different education organizations within the
aforementioned groups. She detailed that Congress had
specified the funds would be split evenly with $85 million
going to Alaska and $85 million going to Hawaii. She
reported that the department had to allocate the funds
within 180 days of enactment of ARPA.
2:17:30 PM
Ms. Borromeo concluded her presentation. She was available
for questions. She hoped the presentation gave the
committee a high-level summary of the different Native
American provisions related to Alaska Natives that the
state could leverage through ARPA.
Co-Chair Foster thanked Ms. Borromeo for her presentation.
Representative Rasmussen looked at slide 7 and asked if the
childcare and development block grants could be used for
the Parents as Teachers program. She asked how many of the
229 tribes in Alaska currently had Head Start programs in
place and how many families were served by the program.
Ms. Borromeo answered that the 12 regional nonprofit
organizations servicing most of the 229 tribes were
operating Head Start programs on behalf of the tribes. All
of the 12 nonprofits offered a Head Start program in
different villages throughout rural Alaska based on
enrollment. She did not know the answer to the question
about stipends for parents.
Representative Rasmussen suggested that perhaps the
legislature could work with Ms. Borromeo offline on the
Parents as Teachers issue. She believed Parents as Teachers
was a federal program and the state had been starting to do
more with the program in rural Alaska. She was hoping to
continue the effort. She requested a follow up on the
number of enrollees in Head Start through the 12 regional
corporations.
2:20:30 PM
Representative LeBon looked as slide 12 related to low
income home energy assistance. He thought it appeared
Alaska stood to do very well with the specific distribution
of funds. He referenced the second bullet that only seven
Alaska recognized tribes and six Alaska Native nonprofit
organizations [were administering the funding]. He asked
how the program could benefit Alaska.
Ms. Borromeo replied that the program was deceptively
beneficial to Alaska because only 7 of its 229 tribes and
half of its tribal nonprofits were eligible to apply. The
funding went to a number of different energy assistance
programs and many tribes were working in partnership with
state and federal energy agencies to further maximize the
funding. She explained that because Alaska only had 7
tribes and 6 tribal nonprofits operating Low Income Home
Energy Assistance Program (LIHEAP) programs, the state did
not have the reach, which was part of the drawback for the
state in the particular set-aside.
Representative LeBon thought at first glance the funding
appeared to be a great opportunity. He stated there had
been challenges with Alaska Native corporations getting
access to CARES Act relief funds. He asked if that
situation was in the past. Alternatively, he wondered
whether an Alaska Native corporation would still have to
fight for a share of the funding.
Ms. Borromeo answered that the issue continued to be a live
controversy. She detailed that the U.S. Supreme Court would
hear oral arguments the following week on the 19th of
April. She explained that Congress sometimes included
different Native entities, including Alaska Native
corporations in a legislative definition of Indian tribes.
She elaborated that when Congress had been legislating
CARES it wanted to push out the most amount of money and
have the broadest impact. Congress had decided to pull from
the Indian Self-Determination and Education Assistance Act.
She relayed that it was a familiar definition to Alaska and
AFN liked the definition because it included all of
Alaska's federally recognized tribes and Native
corporations. Unfortunately, the inclusion of Alaska Native
corporations in the CARES Act had been a very divisive
wedge for Indian country.
Ms. Borromeo detailed that the Lower 48 tribes had a real
issue with the situation and believed Alaska would be
unevenly impacted and benefitted if all 229 tribes and 245
corporations applied for the fund. The issue had been
immediately tied up in litigation and it was currently on
appeal to the U.S. Supreme Court. She explained the
situation had nothing to do with tribal self-governance or
sovereign immunity and unfortunately it was a bit of a red
herring. She explained that if the court sided with the
Lower 48 tribes and a handful of Alaska tribes and deemed
Alaska's Native corporations as ineligible under the
definition of tribes created by Congress it threatened to
undo a lot of the good progress that had been made over the
past 50 years in terms of self-determination.
2:25:19 PM
Representative LeBon thought it sounded like the issue
would remain a complicated legal issue. He looked at slide
24 and was interested in housing for Village Public Safety
Officer (VPSO) positions in rural Alaska. He explained it
had been a struggle to find quality housing to support the
program to help with recruitment and retention. He asked if
any of the funds would be eligible for the purpose.
Ms. Borromeo answered she would argue that the answer was
yes. She detailed that $772 million was allocated for
government services, which included public safety; however,
it was the argument that could be made from the perspective
of not knowing all of the details. Unfortunately, the
public safety program in ARPA tied back to an existing
public safety program run by BIA and Alaska did not
qualify. She stated it would be challenging to use the
funds for VPSO housing. She suggested that perhaps
different provisions that were more housing specific would
be a better fit.
2:26:56 PM
Vice-Chair Ortiz asked about the biggest roadblocks for
tribal groups in Alaska to fully take advantage of the
funds.
Ms. Borromeo responded that one of the biggest roadblocks
for the state's 229 federally recognized tribes was low
capacity in sufficient resources to hire staff to track the
legislation to locate all of the different pots of money.
She noted the legislation was the largest bill in the
history of the U.S. She elaborated there were many
different tribal set-asides through CARES, ARPA, and other
sources. She explained that Alaska's tribes did not have
the bandwidth to keep track of all of the different
application deadlines and requirements in addition to
following up and communicating with the various federal
agencies. Additionally, a significant portion of the
information was being sent electronically without advance
notice. She explained that Alaska's tribes were not seeing
the information because they did not have broadband on par
with Lower 48 tribes.
Vice-Chair Ortiz surmised there was significant challenge
based on Ms. Borromeo's answer. He asked if the challenges
could be overcome and if there was anything the state could
do to assist.
Ms. Borromeo answered that as shown on some of the slides,
there were application deadlines that had already passed.
She explained that some of the tribes were just learning
about the different provisions currently even though
federal agencies, AFN, and other tribal nonprofits had been
trying to get the information out. She emphasized the vast
number of things happening at the federal level including
numerous consultations with different agencies and comments
that were due, it was almost an information overload. She
stated that unfortunately the Native community had missed
some of the big deadlines. She highlighted that a future
remedy would be tracking legislation more closely. She
stated that "many hands make light work." She discussed a
greater collaboration between the state and Native
community. She noted the next big [federal] legislation
would be the infrastructure bill. She stressed it was
necessary to ensure the work was divided in a way that
allowed for reading the bill in real time and identifying
applications the Native community could submit. She
clarified they had not missed the boat on ARPA, but some
pots of money set aside for tribes had been missed. She
elaborated that the bigger increments, such as the $20
billion from Treasury were still working their way through
the federal agency consultation and allocation processes.
2:30:49 PM
Vice-Chair Ortiz noted that one of the slides addressed
water. He discussed that there had been an ongoing issue
with ensuring there was safe water in Alaska villages and
that the program was funded. He asked if there would be any
way to use some of the federal funds to address the issue
even though funds would go directly to communities and
tribes. He asked if the issue of village safe water was
addressable via the federal funds.
Ms. Borromeo replied in the affirmative. She pointed to
slide 24 and highlighted that the allocation from Congress
was limited to $20 million. She shared that 40 percent of
the Navajo nation did not have plumbed water. She explained
that between Alaska, Navajo nation, and all other tribes in
the country with water issues and shortages, it was not a
large amount of money to go around. She shared that the
Alaska Native community (especially tribes and regional
nonprofits) had expertise in leveraging funds. She
elaborated that if they were able to successfully apply and
receive an allocation and if the state was able to provide
matching funds, the dollars would go farther.
2:33:07 PM
Representative Carpenter did not know there had ever been a
problem such as the current one. He highlighted the state
deficit problem they were trying to solve that would take a
couple of years. He noted that the sovereign tribal nations
did not provide any revenue to the state budget, but the
state budget provided services to members of the tribes and
other Alaskans. He stated it was necessary to understand
the decisions made by the sovereign tribes in regard to any
federal funding they may receive in order to avoid
duplicate efforts in the state budget. He did not know what
the process was. He remarked there was not a process to
communicate with hundreds of sovereign nations within
Alaska on fiscal issues. He stated there was money
appropriated by the federal government directly to Alaskans
that would impact the state budget, yet the state did not
understand how the funds would impact the state budget. He
wondered if there was a recommendation from AFN about ways
to avoid duplicating funds.
Ms. Borromeo answered that although the funds were tribal
set-asides for tribal members, the State of Alaska still
had a constitutional obligation to fund certain programs
and services for all Alaskans, tribal and non-tribal
residents alike. She highlighted that rural Alaska was not
strictly made up of Alaska Natives. She stated that if the
concern was too much money for rural Alaska and that
perhaps the state did not need to allocate as much funding
because of the ARPA tribal provisions, she underscored that
it was not the message she hoped anyone on the committee
received. She stressed that the federal funds were highly
competitive between the nation's 574 tribes. The state's
229 tribes accounted for a substantial portion of the
total; however, its tribes were much smaller than those in
the Lower 48.
Ms. Borromeo explained that in funding discussions with
federal agencies there was almost always a formula that
came out of the discussion and Alaska almost always lost.
She furthered that Alaska did not have the large population
that big tribes had, it did not have the land base that
large reservation tribes had, and it did not have the
economic benefit of owning casinos, oil and gas operations,
or tourism businesses. She continued that there had been
such a high level of underfunding in rural Alaska and to
many areas where tribes were prevalent, even if Alaska
captured all of the $305 billion tribal set aside, which
would not happen, there would still be funding issues.
Ms. Borromeo suggested writing a letter or calling the
tribal administrator to see if there were shovel ready
projects in different regions or Alaska Native villages the
state could partner on with tribes. She recommended using
the funds under ARPA to leverage any state funds and tribal
set aside funds to complete projects for the benefit of
Alaskans whether or not they were enrolled in a federally
recognized tribe.
Representative Carpenter thought the answer highlighted the
coming challenge of communicating with several hundred
tribes to understand how they were being impacted.
2:38:36 PM
Co-Chair Foster acknowledged both points. He thought how to
avoid duplicating efforts and understanding the process was
a good point. He spoke to the point about grants being
competitive. He addressed the high level of need. He used
village safe water as an example. He stated that the ADEC
had come up with a list of over $1 billion in terms of need
for maintenance and new service for village safe water. He
referenced slide 24 and highlighted that only $20 million
in ARPA was allocated for potable water nationwide. He
remarked that even if Alaska received the entire amount,
funds would still fall far short [of the overall need]. He
noted it was only one piece of the puzzle and there were
many components involved in coordinating the whole thing.
Ms. Borromeo provided an additional suggestion about how
best to communicate with 229 tribes. She believed that
asking AFN to the meeting showed that the legislature knew
how to communicate effectively and efficiently with the
state's tribes. She detailed that AFN represented 169 of
the 229 tribes in Alaska and it was able to push out
information. She strongly suggested forming a relationship
with the different tribal nonprofits in all of the regions.
She explained that most regional tribes belonged to the
tribal consortia, which was able to communicate quickly and
efficiently with tribes as well. She added that
communicating only with AFN and tribal nonprofits was not a
substitution to trying one's best to send information in
real time to the tribes. She noted that AFN was more than
willing to help legislators with that. She believed tribal
nonprofits would also be willing to help.
2:41:11 PM
Representative Wool referenced the Alaska Native
corporations and the U.S. Supreme Court case. He assumed
that tribal nonprofits were not under the same lawsuit. He
asked if nonprofits were eligible in the same way tribes
were, which was different than the for-profit corporations.
Ms. Borromeo responded there were three primary entities
with a responsibility to Alaska Natives or with authority
over them, including federally recognized tribes, regional
nonprofits, and corporations. She explained that under
certain provisions of ARPA, tribal nonprofits were eligible
if Congress included them in the definition of Indian
tribes. She relayed that most of the ARPA funding set aside
for tribes was limited to federally recognized tribes. She
elaborated that the Lower 48 tribes were very active in
lobbying their different members of Congress in the new
administration and had been very crafty in making certain
Congress used definitions of federally recognized tribes as
much as possible because it would benefit the Lower 48
collectively. She clarified that AFN did not fault Lower 48
tribes for the effort. She emphasized the high level of
need across Indian country and tribes were advocating as
strongly and forcefully as possible for their people. She
explained that the effort hurt the chances of Alaska's
federally recognized Native tribes of receiving some of the
allocations; however, they understood why it was important
that a strict federally recognized tribe definition was
used as much as possible.
Ms. Borromeo continued that tribal organizations were
eligible for a good amount of the different funds if they
were included in the definition of tribal organizations,
which they almost always were. She stated it was another
good opportunity for AFN to be working better with tribal
organizations and tribes in submitting some of the
applications, especially when tribes and tribal nonprofits
were eligible on their own.
2:43:47 PM
Representative Wool stated that much of the presentation
included available funds to tribes across the country and
did not give a breakdown for Alaska. He surmised that many
of the funds were grants and the amount of money coming to
Alaska would depend on who applied.
Ms. Borromeo replied affirmatively.
Representative Wool relayed that the committee had heard
presentations from the Legislative Finance Division and
others on CARES Act and ARPA funds. He referenced a handout
the committee had received recently showing approximately
$400 million under the CARES Act and $500 million or $600
million under ARPA going to tribal entities. He asked if it
was separate from the funds included in the current
presentation. Alternatively, he asked if the listed amounts
were an approximation if the expected applicants applied.
Ms. Borromeo directed attention to slide 21 that showed the
$20 billion coming through Treasury. She explained that the
$400 million allocated to all tribes came from the $1
billion evenly shared by all 574 [federally recognized
tribes]. She clarified that the funds highlighted by
Representative Wool were not separate and were included in
her presentation.
Representative Wool referenced Ms. Borromeo's explanation
that the funding was divided between the 574 tribes based
on population, landmass, and so on. He understood the
formula was more involved than just dividing the money
equally by 574 or 229 in Alaska. He thought he had heard in
a recent meeting that every tribe in Alaska would receive
$1.7 million, which was almost $400 million. He asked if
the information was accurate.
Ms. Borromeo asked if Representative Wool was referencing
the $1 billion that would be divided equally across all
tribes in the country.
Representative Wool replied that he did not know. He
explained that the committee had been told in a recent
presentation that each of the 229 tribes in Alaska would
receive $1.7 million. He stated it may have been
inaccurate. He asked if the number was based on the $1
billion divided by 574.
Ms. Borromeo believed the person had been referring to the
$1 billion divided by 574. She was not entirely sure what
the number was. She confirmed that $1 billion would be
divided by 574 and allocated to all 229 tribes across the
state.
Representative Wool stated that the figure was $1.7
million. He asked if the $1 billion was divided equally
across the 574 tribes. He referenced Ms. Borromeo's
testimony that some funding was based on population,
landmass, and so on.
Ms. Borromeo answered that the $1 billion would be
allocated evenly. She elaborated that of the $20 billion to
be allocated by Treasury, Congress had told U.S. Treasury
Secretary Janet Yellen to distribute $1 billion equally
between all 574 federally recognized tribes. Additionally,
there was $19 billion the secretary would allocate on a
discretionary basis. She relayed the comment period to
Treasury on how Indian country believed the funds should be
allocated had closed the previous Friday. She informed the
committee that Treasury had sent out a number of framing
questions indicating that population and economic losses
would be major factors. She explained the method was not
necessarily equitable because many of the tribes running
large casinos, operating oil and gas, or tourism business
could qualify for non-tribal set asides, which were greater
than the tribal set-asides in ARPA. She furthered that
those tribes would likely be able to double dip under the
$19 billion and other provisions. She highlighted
provisions for the service industry and restaurants as an
example. She reported that any tribe owning a restaurant in
a casino could apply.
2:49:47 PM
Representative Wool stated his understanding that one
amount would be divided equally between all 574 [federally
recognized] tribes with each tribe receiving approximately
$1.7 million. He remarked that it would certainly help
smaller tribes in Alaska. He believed the larger $19
billion would be allocated by population, which would not
help Alaskan tribes as much as other parts of the country.
Ms. Borromeo interjected that AFN did not know how the $19
billion would be allocated. She explained that AFN had seen
some framing questions from the Department of Treasury, and
some follow up questions led AFN to believe population
would be one of the main variables used to divide the
money. She elaborated that when a tribal funding formula
was developed by a federal agency, typically there were
several components included such as population, land base,
economic impacts, poverty, unemployment, and other. She
reiterated AFN's expectation that population would be a
major driver for the $19 billion.
Representative Wool asked if there were any sidebars or
rules on the $1.7 million each of the 574 tribes would
receive.
Ms. Borromeo replied that tribes had requested maximum
flexibility to be able to allocate the funds in line with
their own tribal sovereignty. She stated that AFN was
expecting there would be significant flexibility with the
funds. She explained that all of the funds would be subject
to a federal audit and Treasury would have guardrails on
some of the funds. For example, the funds could not be used
for lobbying and had to be used for COVID-related purposes
necessary for economic and health recovery.
2:52:19 PM
Representative Edgmon thanked Ms. Borromeo for a fantastic
presentation. He observed the presentation contained more
detail than the committee had received on the ARPA package.
He noted that he and various committee members had Alaska
Native villages in their districts. He stated that $2.7
billion was the last large federal funding that came to
Alaska tribes under the Obama Administration in 2009. He
stressed that the ARPA funding was $32.5 billion. He
referenced Ms. Borromeo's discussion on partnerships. He
was concerned that the state was not keeping its end of the
bargain up. He highlighted that the state had cut a number
of local government specialists around Alaska. He noted
that the governor's proposed budget would cut one more of
the positions. He explained that the specialists helped
tribal administrators and others at the village level who
would have demonstrate public health emergency needs,
essential workers, and the same requirements the House
Finance Committee had seen with the ARPA funds coming
Alaska's way. He explained that the $1.7 million for each
of the 229 tribes would not be a blank check.
Representative Edgmon recognized there would be a
tremendous amount of money coming into Alaska for tribes;
however, the concerning feature was the issue of capacity
and the number of tribal administrators and people who
could actually do the work it took to get the money. He
stressed that a vast amount of the $32.5 million [billion]
would be competitive money. He elaborated there would be
competition with tribes in the Lower 48 that were likely
more sophisticated, have more human capital, and larger
populations in terms of formula-based programs. He saw an
opportunity for the state to be a good partner and he hoped
it had the chance to do its part to help compete for much
of the money. He recognized that $1.7 billion coming to the
229 federally recognized tribes in Alaska was $389 million,
which was a substantial amount of money. Additionally,
there was $20 billion, and a plethora of other projects
shown in the presentation.
Representative Edgmon appreciated Representative
Carpenter's question about how the tribal money would be
tied into the budget process. He shared it had been his
concern from the beginning in terms of how the tribal and
other ARPA funds would be folded into the budget. He
pointed out that many of the tribes in Alaska were in
smaller communities with incorporated governments
functioning under the state constitution like the City of
Anchorage, cities of Palmer, Wasilla, Eagle River,
Dillingham, Nome, Ketchikan, etcetera. He highlighted that
numerous tribes also existed in urban Alaska including
Southcentral. He underscored there was $389 million in
addition to the other funding to be obtained through the
competitive process that would reverberate around the
statewide economy.
Representative Edgmon thought he had perhaps heard
somewhere along the way that villages did not pay their
way. He could say from experience that villages paid high
sales tax in addition to property taxes that differed
community to community (Native allotment and non-Native
allotment). He appreciated the thoroughness of the
presentation. He emphasized it was a tremendous opportunity
for the legislature on the tribal and non-tribal front. He
emphasized that part of the legislature's job was to ensure
there was enough human capacity to administer the grants,
to make certain the money was spent appropriately, and that
at some point a future legislature did not have a huge bill
to pay because people did not follow the rules properly in
tribal and non-tribal entities.
2:57:59 PM
Representative Rasmussen was curious to know if the state
was lacking some of the human capacity for competing for
the dollars, whether tribes were allowed to partner with
groups like the Rasmussen Foundation to provide assistance.
She wanted to know how they could set up the situation for
success.
Ms. Borromeo answered that tribes were able to partner with
a broad array of organizations and individuals as they saw
fit. For example, the Alaska Native Tribal Health System
had a grant writing office that lent its time and talents
to tribes as available. She agreed with Representative
Edgmon that a navigator program would be extremely helpful
in terms of what the state could contribute to the process.
She explained there were currently a vast number of tribal
set-asides in ARPA and there would likely be more under the
infrastructure package [under consideration by Congress];
therefore, a streamlined process where tribes knew where to
go for a "one stop shop" would really help draw down some
of the funds. She stressed that it mattered what an
application looked like and how talented a grant writer
was. She emphasized that the need in Alaska and the Lower
48 was great. She explained that the funds would not all be
allocated based on need alone. Some of the funds would be
distributed based on the application process.
Representative Rasmussen asked about the capacity the
various tribes had when it came to the application process.
She asked if the tribes had basic broadband internet access
to apply if a program was online.
Ms. Borromeo answered in the negative. She reported a
recent situation where a person in a village had to fly to
Anchorage to upload their application for submittal. She
explained it was difficult to submit the applications in
much of rural Alaska. She elaborated that the regional
nonprofits helped the tribes along with the process. In
terms of capacity, the tribes were very different across
the state. For example, the Tlingit and Haida tribe was
overseen by Richard Peterson in Juneau. She detailed the
tribe had numerous departments including court systems,
finance, child welfare, and an elders' program. There were
also tribes in the Interior with a handful of members and
one tribal administrator trying to keep track of the
different funding programs and opportunities. She
elaborated that the smaller tribe had one person doing a
job that was spread out among 40 individuals in a larger
tribe.
3:02:44 PM
Co-Chair Foster thanked Ms. Borromeo for the presentation
and asked if she had any closing comments.
Ms. Borromeo appreciated the committee's time. She stressed
that the federal funding was a once in a lifetime
opportunity. She emphasized that Alaska Native tribes,
tribal organizations, and Native corporations were extreme
economic drivers and wanted to be part of the solution in
terms of the fiscal gap. She explained that the entities
were able to leverage federal resources in ways the state
was unable to. She relayed the entities welcomed the
opportunity to partner with the state through ARPA and
different economic stimulus plans coming out through the
new administration. She believed there would be much more
success working together to solve negative health and
economic impacts from COVID.
Representative Edgmon thanked AFN for all of its work and
consultation with the federal delegation. He acknowledged
Senator Lisa Murkowski, Senator Dan Sullivan, and
Congressmen Don Young for their work on the federal
funding. He reiterated his appreciation for the
presentation.
3:04:46 PM
AT EASE
3:05:38 PM
RECONVENED
HOUSE BILL NO. 169
"An Act making appropriations for public education and
transportation of students; and providing for an
effective date."
3:05:53 PM
Co-Chair Foster listed individuals available online.
REPRESENTATIVE DAN ORTIZ, SPONSOR, introduced the
legislation with a prepared statement:
I appreciate the opportunity for the chance to present
House Bill 169, which is an appropriation bill for the
education formula and pupil transportation for fiscal
year 2022. House Bill 169 is a separate appropriation
bill from the regular operating budget in order to
pass funding for education earlier in the session and
prevent school districts from issuing mandatory
teacher layoff notices.
Each year, school districts rely heavily on an
appropriation from the state to fund education,
although we, the legislature, sometimes do not pass
the operating budget until late May or June. School
districts must complete their budgets much earlier,
usually in March. Districts are often forced to draft
multiple budgets and anticipate low amounts.
In the face of uncertainty, school districts will
sometimes issue pink slips to tenured teachers by May
15th and to non-tenured teachers by the last day of
the school year because they did not know what the
legislature was going to do specifically in
relationship to funding for education; therefore,
without knowing, by contracts, stipulations, and
things like that, they sometimes are forced to hand
out pink slips because they were left without the
information they needed. Therefore, there was an
opportunity cost with that. Education and students'
success is a high priority for the state.
Keeping educators in the classrooms is one of the most
effective ways to address that priority. House Bill
169 reflects the legislature's commitment to
education, the school districts, and teachers.
Vice-Chair Ortiz further explained the bill was an attempt
by the legislature to give early notice to districts as to
where things would stand for them in relationship to
funding. The goal was to hopefully avoid districts having
to issue pink slips. He explained there was an opportunity
cost with issuing pink slips because teachers sometimes
decided to leave a community and take a job elsewhere. He
highlighted the difficulty retaining teachers in Alaska. He
hoped the problem could be avoided by working together to
pass an early funding bill. He was available for questions.
Co-Chair Foster did not see the necessity of reviewing the
sectional analysis. He pointed out that the legislature had
provided early funding for education several years back. He
explained early funding was different than forward funding.
He elaborated that early funding meant paying the current
year as the legislature normally would in the operating
budget, but rather than putting it in the operating budget,
it was included in a separate bill to provide funding
sooner. He elaborated that with the anticipated ARPA
funding, the operating budget timeline had slowed down. He
detailed that if the budget was not completed until after
May 15, it was a problem for school districts. He argued
that while May 15 was the deadline, some school districts
had multiple schools that were asked internally to provide
a list of potential pink slips by May 1. He highlighted
that if the legislature did not issue a budget by May 10 or
so, it would put some school districts in a bind. He
pointed out that HB 169 was a basic bill that followed the
formula. He clarified the bill did not contain any
additional items such as projected ARPA funds or one-time
increments.
3:10:49 PM
Representative Josephson asked what average daily
membership (ADM) would be applied to the calculation.
Vice-Chair Ortiz answered that the ADM had been impacted in
the current year by COVID. He had heard requests to use the
FY 19 ADM numbers rather than the most recent October
numbers. He did not know whether the legislature had the
leeway to make the adjustment in the bill. He relayed he
had submitted the question to the department.
LACEY SANDERS, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF EDUCATION AND EARLY DEVELOPMENT, OFFICE OF MANAGEMENT
AND BUDGET, OFFICE OF THE GOVERNOR (via teleconference),
answered that there were no changes made by the current
version of the bill and the Department of Education and
Early Development (DEED) would utilize the existing statute
to provide payments to school districts. Currently the
projection in the bill was based on the ADM provided by the
school districts in September 2020; however, there would be
a new student count with preliminary numbers after October
2021. She detailed that a reconciliation would be provided
by the department and finalized numbers would be available
in March of 2022. She explained the March 2022 number would
be paid to school districts.
3:13:02 PM
Representative Josephson provided a scenario where student
populations beginning in mid-August looked more like a
typical year as opposed to the current school year. He
asked if the appropriation would look more like the
2019/2020 school year under the scenario.
Ms. Sanders answered in the affirmative. She detailed
districts would be paid based on the school count period in
the fall [of 2021].
Representative Rasmussen asked if it was possible to look
at language for funding the following year as well in the
same piece of legislation to bring some certainty to
districts. She reasoned if the funding was within the same
two-year cycle, the legislature would not be binding a
future legislature to an appropriation. She believed it was
important for the legislature do everything it could to not
put teachers and schools in the position of receiving pink
slips, especially during a time with many financial
stresses on families.
Ms. Sanders responded that the bill provided funding for FY
22 and did not address FY 23. She believed it was what Co-
Chair Foster had spoken to earlier when he had explained
the bill did not forward fund education.
Co-Chair Foster added that the bill did not forward fund,
but it could. He stated the other part of the equation was
whether the legislature wanted to do so. He relayed the
committee could add the provision with an amendment.
3:15:47 PM
Representative LeBon supported the legislation. He stated
that he almost wished the legislature had passed the bill a
bit earlier. He recalled his time on the Fairbanks School
Board and reported that the school board had been deep into
its budget process one to two months back. He highlighted
that it still did not hurt that the legislature was giving
districts some heads up that it was willing to fund to the
formula. He stated that the bill would help regardless.
Vice-Chair Ortiz referenced an earlier question by
Representative Josephson. He asked if it would be legal to
use the ADM count from FY 19 with the understanding that
those numbers may more accurately reflect the student count
in October of 2021.
Ms. Sanders answered that using a different student count
period would require a statutory change. She noted that the
bill reflected the projections currently. She clarified
that the actual payment made by DEED to school districts
would be paid based on actuals in FY 22.
Representative Thompson noted that the bill looked at
projections for the current budget using 2020 counts from
the past fall. He believed funding would be short if the
student count in the fall increased to the 2019 level, but
the budget used the 2020 count. He asked if it would mean a
supplemental budget item.
Co-Chair Foster answered that it was possible to do a
supplemental. He remarked that the question had been asked
to Legislative Legal Services or another entity. He
explained that if the 2019 student count were used, each
school would get a disproportionate amount. He referenced a
recent year when the legislature had allocated a one-time
increment of $35 million. He noted it had been necessary to
get around the disparity test. He asked if the one-time
increment had been allocated based on the ADM.
3:20:07 PM
Ms. Sanders clarified that the estimates provided in the
bill were projections by the school districts on what they
think the next school year would look like. She elucidated
that the projections were not based on the districts'
decreased populations during the pandemic. She explained
the language in the bill provided the appropriation at the
amount necessary to fund, which provided DEED the ability
to pay school districts based on the actual student count
period and did not require DEED to come back for a
supplemental. The department reported back on the changes
between the initial projection and the actual amount
required. She reiterated it did not require DEED to come
back for a supplemental. She agreed that the $35 million
had been an appropriation outside the foundation formula,
which was allocated based on the adjusted ADM. She
confirmed that changes to the formula required working with
federal partners to avoid failing the disparity test, which
would cost the state more money.
Co-Chair Foster thought there would be a $26 million dip in
the funding for education because students had gone to
correspondence and fewer students had been in schools. He
asked how to ensure schools did not see a reduction. He
highlighted that eventually students would be back in brick
and mortar schools.
Ms. Sanders replied that school districts would be paid
based on their actual student count. In the current year,
districts may see a dent based on the decline in actual
student enrollment. She clarified that the fund
appropriated in HB 169 would be based on the next [school]
year. She explained that school districts may have
considered students returning from correspondence programs
as schools were reopening in the next fiscal year and
projections would not reflect the dip that occurred in the
current year.
3:23:28 PM
Representative Edgmon spoke to projections versus actual
student counts. He stated that in the fall of 2020, many
schools had kids being instructed by remote learning or not
in school. He stated his understanding that schools were
projecting "x" number of students in the fall in order to
meet the funding that would come into play in March of
2022. He asked if projections could be used to suffice for
the student count.
Ms. Sanders replied in the affirmative. She elaborated that
statutory guidance directed school districts to provide
projections in the fall in order for DEED to have a budget
to present to the legislature. She confirmed that districts
provided projections.
Representative Edgmon used the Bristol Bay Borough in his
district as an example. He remarked that most of the kids
were at home. He considered a scenario where the district
projected 300 students for the fall of 2020. In terms of
the legislation, he asked if the projections would suffice
as opposed to counting the actual students.
Ms. Sanders responded that DEED used projections when it
developed the future year budget. She clarified that when
DEED reimbursed districts during the year, it used
districts' first nine months based on the FY 21 count and
trued up in the final three months. She explained that
projections were used for purposes of budgeting and when
the actual student count occurred in October, the
department used the actual counts.
Representative Edgmon surmised the legislature could
appropriate $1.1 billion in HB 169, but in the end, what
actually went to school districts could be smaller because
of the actual numbers in the true up.
Ms. Sanders answered that the funding could be less or more
depending on student counts.
Co-Chair Foster referenced $26 million the legislature had
heard schools would be shorted. He asked if the $26 million
would be applied to the FY 21 budget with the "estimated to
be" language. Alternatively, he asked if it was the
projection for the FY 22 budget that schools would be short
by $26 million.
3:27:11 PM
Ms. Sanders stated her understanding that in FY 21 there
was an increase over the projection in the prior budget.
She would follow up with an answer in writing.
Representative LeBon stated there was a lot unknown out
there. He shared that his own district in Fairbanks was
doing everything it could identify returning students
because many students sought other options as much of the
in-person instruction had paused. He recalled having
meetings in June and July during his time on the school
board to adjust budget amounts because of new information.
He explained that in Fairbanks, funding had come from
federal sources because of the schools on Fort Wainwright
and Eielson Air Force Base. Additionally, there was the
state funding formula, a borough component, and
miscellaneous grants. He highlighted that budget actions
were not limited to one time per year.
Co-Chair Foster pointed out that although May 15th may be a
deadline for tenured teachers, there was a deadline on the
last day of school for non-tenured teachers, which was
April 30 in one of the schools in his district. He stressed
that the issue impacted schools.
Representative Wool stated that the student count was down
in Fairbanks by 2,000 from the previous year. He added that
statewide the count was down 2,000. He noted that kids
doing remote learning during in-person school closures did
not change the student count. He remarked that
correspondence learning was within the public school system
depending on the program. He pointed out that although
projected numbers were down from 2019, some school
districts were up. He cited Galena as an example and
explained that correspondence schools had a surge in
enrolment. He referenced many calls to legislators
requesting the use of 2019 numbers [in the education
budget]. He reasoned that if the budget used 2019 numbers,
the schools with robust correspondence programs (e.g., the
Galena or Yukon-Kuskokwim School districts) would take a
hit. He did not know what the correspondence schools'
projected numbers were, but he speculated they would likely
see decreases in student numbers. He reasoned that while it
sounded simple, it may not be advisable to use 2019 student
count numbers in the budget. He considered that statewide,
the student count was only down by 2,000 and attributed the
decrease partially to people leaving the state and private
schools absorbing some of the students. He believed that
remote schooling would not be offered in Fairbanks in the
coming school year. He thought students would have the
choice of doing correspondence or going to school in
person. He speculated that school numbers would bounce
back. He reported that his kids, who were attending school
in person, had told him more students were returning to the
classroom each week. He asked where student counts were
currently in comparison to 2019 numbers.
3:32:35 PM
Ms. Sanders replied that she did not have the district
allocation on hand. She shared that the DEED website had a
report showing projections provided by school districts.
She would include the information in her response to the
committee.
Vice-Chair Ortiz asked if Ms. Sanders had the HB 169
sectional analysis on hand.
Ms. Sanders replied that she would pull it up online.
Vice-Chair Ortiz referenced language in the sectional
analysis specifying the bill would appropriate the amount
necessary, estimated to be $1.193 billion. He asked if the
number reflected the savings or lessened funding that would
go towards the Base Student Allocation (BSA) based on
declined student enrollment due to COVID.
Ms. Sanders answered that the number reflected the student
count projected by school districts during the next school
year. She relayed that school districts may have included
some reduction based on projected declines, whether from
COVID or students leaving the state. She could not speak to
each school districts' basis for determining their
projections.
Vice-Chair Ortiz asked if it was no longer the position of
the administration that approximately $30 million would be
saved in the FY 22 budget based on declining enrollment.
Ms. Sanders answered that she was not aware of the
statement being made. She was not aware of the $30 million
in savings due to [enrollment] decline. She reported that
the actual cost of education had increased over the
projection from the previous year. She elaborated that the
number had increased by $26 million from the previous
session. She wondered if Vice-Chair Ortiz was possibly
comparing FY 20 to FY 22.
Vice-Chair Ortiz answered that he was referring to a number
referenced by Co-Chair Foster. He explained that the
governor's initial budget reflected a decrease in BSA
funding based on declining enrollment in FY 21. He did not
recall the precise number referenced by Co-Chair Foster
earlier in the meeting.
Co-Chair Foster recalled the figure as $26 million.
Co-Chair Foster asked Ms. Sanders to include the
information in the written response to the committee.
3:36:46 PM
Representative Carpenter asked for clarification on the
projections and student counts. He referenced earlier
discussion about September 2020 and October 2021 student
counts for the ADM. He asked for verification that both
were physical counts. He surmised the October 2021 count
was not a projection. He thought the budget process used
what he characterized as a third count reflecting
projections created currently during the budget process. He
asked for verification that the projected count resulted in
the $1.2 billion appropriation.
Ms. Sanders answered that there was one physical count
period that occurred in October 2020, which determined what
would actually be paid during the current year. The
projection provided by the school district was at the same
time for the following year; however, in October 2021,
there would be another physical student count period that
would apply to the next year's payment.
HB 169 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the schedule for the following
day.
ADJOURNMENT
3:38:52 PM
The meeting was adjourned at 3:38 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 169 Sectional Analysis.pdf |
HFIN 4/14/2021 1:30:00 PM |
HB 169 |
| HB 169 Sponsor Statement.pdf |
HFIN 4/14/2021 1:30:00 PM |
HB 169 |
| AFN - HFIN, re - ARPA (14APR21).pdf |
HFIN 4/14/2021 1:30:00 PM |