Legislature(2023 - 2024)BELTZ 105 (TSBldg)

01/27/2023 03:30 PM Senate EDUCATION

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Audio Topic
03:31:09 PM Start
03:32:53 PM Presentation Northwest Arctic Borough School District
03:48:54 PM Presentation Kenai Peninsula Borough School District
04:18:00 PM Presentation Alaska Per Pupil K-12 Spending Analysis
04:52:24 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Teleconferenced --
+ Presentation: Public Education - A Rural TELECONFERENCED
Perspective by
Kenai Peninsula Borough School District
Superintendent Clayton Holland
Northwest Arctic Borough School District
Superintendent Terri Walker
Presentation: How much does Alaska spend on
K-12 Education? by
Dayna Jean DeFeo, Director of the Center for
Alaska Education Policy Research (CAEPR),
Institute of Social and Economic Research
Matthew Berman, Professor of Economics,
Institute of Social and Economic Research
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE EDUCATION STANDING COMMITTEE                                                                             
                        January 27, 2023                                                                                        
                           3:31 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Löki Tobin, Chair                                                                                                       
Senator Gary Stevens, Vice Chair                                                                                                
Senator Jesse Bjorkman                                                                                                          
Senator Jesse Kiehl                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Elvi Gray-Jackson                                                                                                       
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Rebecca Himschoot                                                                                                
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION KENAI PENINSULA BOROUGH SCHOOL DISTRICT                                                                            
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PRESENTATION ALASKA PER PUPIL K-12 SPENDING ANALYSIS                                                                            
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PRESENTATION NORTHWEST ARCTIC BOROUGH SCHOOL DISTRICT                                                                           
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
TERRI WALKER, Superintendent                                                                                                    
Northwest Arctic Borough School District (NWABSD)                                                                               
Kotzebue, Alaska                                                                                                                
POSITION STATEMENT: Testified by invitation on increasing                                                                     
Alaska's Base Student Allocation.                                                                                               
                                                                                                                                
CLAYTON HOLLAND, Superintendent                                                                                                 
Kenai Peninsula Borough School District (KPBSD)                                                                                 
Soldotna, Alaska                                                                                                                
POSITION  STATEMENT:   Provided  a  presentation  on   the  Kenai                                                             
Peninsula Borough School District.                                                                                              
                                                                                                                                
DAYNA DEFEO, Director                                                                                                           
Center for Alaska Education Policy Research (CAEPR)                                                                             
University of Alaska Anchorage                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Co-presented Alaska Per Pupil  K-12 Spending                                                             
Analysis.                                                                                                                       
                                                                                                                                
MATTHEW BERMAN, Professor                                                                                                       
Institute of Social and Economic Research (ISER)                                                                                
University of Alaska Anchorage                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Co-presented Alaska Per Pupil  K-12 Spending                                                             
Analysis.                                                                                                                       
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:31:09 PM                                                                                                                    
CHAIR LÖKI  TOBIN called the Senate  Education Standing Committee                                                             
meeting to order  at 3:31 p.m. Present at the  call to order were                                                               
Senators Bjorkman, Kiehl, Stevens, and Chair Tobin.                                                                             
                                                                                                                              
                                                                                                                              
^PRESENTATION NORTHWEST ARCTIC BOROUGH SCHOOL DISTRICT                                                                          
                          PRESENTATION                                                                                      
            NORTHWEST ARCTIC BOROUGH SCHOOL DISTRICT                                                                        
                                                                                                                                
3:32:53 PM                                                                                                                    
CHAIR TOBIN announced the consideration  of a presentation on the                                                               
Northwest Arctic Borough School  District. She requested that Ms.                                                               
Walker address local control in schools during her testimony.                                                                   
                                                                                                                                
3:33:35 PM                                                                                                                    
TERRI  WALKER, Superintendent,  Northwest  Arctic Borough  School                                                               
District (NWABSD),  Kotzebue, Alaska,  stated she  graduated from                                                               
NWABSD. She  firmly believes in  and supports providing  the best                                                               
education to students. NWABSD needs  a 17.4 percent ($10 million)                                                               
increase to  the current base  student allocation (BSA)  to cover                                                               
its fundamental  needs. NWABSD  was making  cuts to  its programs                                                               
before  the pandemic.  It  stopped  offering programs,  including                                                               
PreK  and Career  and Technology  Education.  Cuts to  counseling                                                               
positions  make it  difficult for  students to  receive services.                                                               
Partners  have  provided  support. The  Northwest  Arctic  Native                                                               
Association  (NANA)  funded  the  PreK program  for  FY  23.  The                                                               
district  was awarded  a $4.9  million grant  over five  years to                                                               
support counseling  programs. Every  year NWABSD applies  for the                                                               
Alaska  Housing Finance  Corporation  (AHFC) grant  and has  been                                                               
able  to build  housing units  in  some of  its communities.  She                                                               
opined that  partnerships and grants are  not sustainable sources                                                               
of funds.                                                                                                                       
                                                                                                                                
MS  WALKER said  the  district pays  an  additional $1.2  million                                                               
above  what the  USDA  reimburses for  the  school food  program.                                                               
Funds from  the Elementary and Secondary  School Emergency Relief                                                               
Funds (ESSER)  will cover this  difference through FY  24. NWABSD                                                               
is a  Title I district. One  hundred percent of its  students are                                                               
on free meals. The increased cost  of living has left families to                                                               
depend on  school meals.  Fuel in Kotzebue  was about  $5 dollars                                                               
per gallon. It is  now nearly $8 per gallon. The  cost is $14 per                                                               
gallon  for  areas  needing fuel  transported  by  airplane.  Ms.                                                               
Walker said that  last year the district started  the school year                                                               
with ten  certified teacher vacancies,  and this year  it started                                                               
with  40.  She  provided  an   anecdotal  story  of  a  student's                                                               
perspective  on  teacher  turnover.  The  high  turnover  impacts                                                               
student  learning  and the  ability  to  build positive  teacher-                                                               
student  relationships. She  opined that  returning to  a defined                                                               
benefit   plan,  Social   Security  options,   improved  housing,                                                               
mentoring,  and   wage  increases  would  help   improve  teacher                                                               
retention.                                                                                                                      
                                                                                                                                
MS.  WALKER   stated  that  underfunding  of   major  maintenance                                                               
continues.  The district's  school facilities  are deteriorating,                                                               
creating  unsafe  environments   that  impede  student  learning.                                                               
Continued  deferment  of  major  maintenance  will  increase  the                                                               
number of school construction projects.  She provided examples of                                                               
major  maintenance  projects  that  will lead  to  entire  school                                                               
reconstruction projects if not addressed.  NWABSD's budget is too                                                               
lean  to cover  repairs.  The district  has  applied for  special                                                               
funding and is on the  waitlist. She concluded that Alaskans need                                                               
to  give  students the  best  education  possible. She  expressed                                                               
appreciation for the legislature making education a priority.                                                                   
                                                                                                                                
MS.  WALKER  asked  Senator  Tobin to  expound  on  her  question                                                               
regarding local control.                                                                                                        
                                                                                                                                
3:42:27 PM                                                                                                                    
CHAIR  TOBIN asked  why  it  is important  to  have local  school                                                               
boards  and communities  influence curriculum  development rather                                                               
than a one size fits all approach to education.                                                                                 
                                                                                                                                
3:43:23 PM                                                                                                                    
MS. WALKER  replied that the  NWABSD is working on  a place-based                                                               
science curriculum incorporating  Native languages, cultures, and                                                               
traditions. The first  section of the curriculum  is physical and                                                               
earth  science.  Students  need  to  relate  to  the  curriculum.                                                               
Curriculums developed by organizations  outside the community are                                                               
often unrelatable to rural  school students. Place-based learning                                                               
allows students  to follow state and  federal education standards                                                               
through experiences relevant to Alaska's students.                                                                              
                                                                                                                                
3:45:28 PM                                                                                                                    
SENATOR STEVENS asked whether any  of the district's young people                                                               
are  interested  in  becoming teachers.  A  solution  to  keeping                                                               
teachers  in an  area  is to  hire locals.  He  is interested  in                                                               
solutions like  Future Teachers of America  and Educators Rising.                                                               
He  asked  what the  district  is  doing  to help  promote  local                                                               
hiring.                                                                                                                         
                                                                                                                                
3:46:22 PM                                                                                                                    
MS. WALKER  replied that administrators have  been discussing the                                                               
support needed  for local citizens  to become teachers.  She asks                                                               
administrators  to support  local staff  in taking  coursework to                                                               
become  teachers.  Three  local students  are  currently  working                                                               
towards certification.                                                                                                          
                                                                                                                                
3:48:12 PM                                                                                                                    
SENATOR STEVENS  stated he supports grow-your-own  programs since                                                               
teachers from the community are more likely to remain.                                                                          
                                                                                                                                
3:48:31 PM                                                                                                                    
SENATOR KIEHL joined the meeting.                                                                                               
                                                                                                                                
^PRESENTATION KENAI PENINSULA BOROUGH SCHOOL DISTRICT                                                                           
                          PRESENTATION                                                                                      
            KENAI PENINSULA BOROUGH SCHOOL DISTRICT                                                                         
                                                                                                                                
3:48:54 PM                                                                                                                    
CHAIR TOBIN announced the consideration  of a presentation on the                                                               
Kenai Peninsula Borough School District.                                                                                        
                                                                                                                                
3:49:12 PM                                                                                                                    
CLAYTON HOLLAND,  Superintendent, Kenai Peninsula  Borough School                                                               
District  (KPBSD),  Soldotna,  Alaska,  stated  his  presentation                                                               
would bring  in the human element  of what happens to  a district                                                               
when it is underfunded.                                                                                                         
                                                                                                                                
3:50:23 PM                                                                                                                    
MR.  HOLLAND  moved to  slide  2  and  said the  Kenai  Peninsula                                                               
Borough  School  District  (KPBSD)  is about  the  size  of  West                                                               
Virginia.  It has  42 schools  across the  district. Four  of the                                                               
schools are reached only by plane.                                                                                              
                                                                                                                                
3:50:53 PM                                                                                                                    
MR.  HOLLAND turned  to slide  3 and  recognized the  differences                                                               
between  KPBSD  schools  but  stated   that  the  aspirations  of                                                               
students and parents are the  same. Everyone wants students to be                                                               
safe and successful in life.                                                                                                    
                                                                                                                                
3:52:07 PM                                                                                                                    
MR. HOLLAND  moved to slide  4 and said  the mission of  KPBSD is                                                               
supporting students  in life  success. Its  vision is  that every                                                               
KPBSD student will  be a lifelong learner who  will graduate with                                                               
the  knowledge, skills,  integrity,  perseverance, and  community                                                               
connectedness needed  to pursue their passions  and desired post-                                                               
secondary  opportunities.  He  stated  his  belief  that  schools                                                               
across  the state  share  this vision.  KPBSD's  core values  are                                                               
community, academic excellence,  perseverance, and integrity. The                                                               
priorities  associated  with  the   strategic  plan  are  student                                                               
success,  school   climate  and  safety,  family   and  community                                                               
engagement,   workforce  development,   and  organizational   and                                                               
resource management.                                                                                                            
                                                                                                                                
3:53:39 PM                                                                                                                    
MR.  HOLLAND advanced  to slide  6 and  said KPBSD's  legislative                                                               
priorities for the presentation focus on:                                                                                       
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Provide fair, predictable, and proactive funding.                                                                        
     ? Focus on recruitment and retention of high-quality                                                                       
       educators by investing in defined benefits.                                                                              
     ? Create innovative pathways to growing our own                                                                            
       teachers and staff.                                                                                                      
     ? Adjust the Base Student Allocation (BSA) and develop                                                                     
       mechanisms to compensate for inflation.                                                                                  
     ? Provide transportation funding based on actual                                                                           
       expenditures.                                                                                                            
     ? Explore affordable health care for employees.                                                                            
                                                                                                                                
3:54:01 PM                                                                                                                    
MR. HOLLAND moved  to slide 7 and stated that  Kenai is known for                                                               
its athletic and academic achievements.  Spencer Co is one of 100                                                               
students nationally with a perfect  score on the Computer Science                                                               
AP  exam.  Public  discourse asserts  that  schools  are  failing                                                               
students.   However,  KPBSD   has  students   attending  military                                                               
academies,  top universities,  and  trade  schools because  their                                                               
education  has  given  them the  opportunity.  School  activities                                                               
involve  students  in  community  service.  He  opined  that  the                                                               
negative narrative towards student learning needs to end.                                                                       
                                                                                                                                
3:56:19 PM                                                                                                                    
MR. HOLLAND turned to slide  10 and said KPBSD's Native education                                                               
has expanded. Parent engagement  has increased immensely. Schools                                                               
engage  with all  nine tribes  in the  Kenai Peninsula.  Students                                                               
have  participated in  Native Youth  Olympics,  drum making,  and                                                               
other Native events.                                                                                                            
                                                                                                                                
3:57:00 PM                                                                                                                    
MR. HOLLAND said  the district has fully embraced  the Reads Act.                                                               
Two cohorts  are going through  literacy training as part  of the                                                               
Reads Act.  He noted that the  Reads Act provided a  $30 increase                                                               
to the BSA, which is not enough  if Alaska is to achieve the same                                                               
results as Mississippi. Teachers will  be trained with funds from                                                               
the Reads Act  and then move elsewhere without  change to teacher                                                               
retention.                                                                                                                      
                                                                                                                                
3:57:54 PM                                                                                                                    
MR. HOLLAND said Career and  Technical Education (CTE) is another                                                               
part of the foundational and  academic excellence taking place at                                                               
KPBSD.  Kenai focuses  on creating  broader  pathway systems  for                                                               
students  to  enter  the  workforce.  Students  are  engaging  by                                                               
bringing   academic   subjects  into   real-world   applications.                                                               
Resources  such as  welding,  construction,  and agriculture  are                                                               
needed  to create  workforce  opportunities  for students.  KPBSD                                                               
works  to  bring community  and  partnerships  into its  schools.                                                               
Kenai  schools have  a violin  program, basketball  teams deliver                                                               
food to  families with  their coach, and  students learn  to hunt                                                               
with their  teacher. Teachers and coaches  provide these learning                                                               
opportunities  to  students  who  otherwise might  not  have  the                                                               
opportunity. Longevity and trust are  required to carry out these                                                               
types of activities. High turnover  and teacher retirement affect                                                               
these  opportunities.   The  state  is  filling   positions  with                                                               
teachers having J-1  US visas. Kenai is  hiring retired teachers.                                                               
A  lot  must  be  done  to make  living  and  working  in  Alaska                                                               
attractive. He  opined that  schools and the  economy go  hand in                                                               
hand. People must see Alaska as a desirable place to live.                                                                      
                                                                                                                                
4:02:59 PM                                                                                                                    
MR. HOLLAND  turned to slide 16,  a pie chart of  school district                                                               
expenditures. He said that  reports have disingenuously portrayed                                                               
administrative costs  as consuming  school budgets by  failing to                                                               
mention operating  costs. About 75  percent of a  school's budget                                                               
is for  instruction. The  remaining 25 percent  is split  with 15                                                               
percent  for  operations  and  maintenance  and  10  percent  for                                                               
various administrative costs.                                                                                                   
                                                                                                                                
4:03:53 PM                                                                                                                    
MR. HOLLAND  moved to slides  17 - 18  and noted that  the actual                                                               
amount Alaska  spends on  its schools is  less than  the national                                                               
average.                                                                                                                        
                                                                                                                                
4:04:22 PM                                                                                                                    
MR. HOLLAND advanced to slide 19  and stated that flat funding of                                                               
the  Base Student  Allocation (BSA)  and  increased health  care,                                                               
transportation,  inflation, and  energy costs  had placed  school                                                               
districts in their  current scenarios. The cost  of healthcare in                                                               
Alaska  is  five  times  the   national  average,  and  inflation                                                               
adjustments  for transportation  have  not  happened since  2015.                                                               
Despite route  consolidation efforts, KPBSD had  to transfer $500                                                               
thousand  from   its  [indiscernible]  marginal  fund   to  cover                                                               
transportation costs.                                                                                                           
                                                                                                                                
4:05:27 PM                                                                                                                    
MR. HOLLAND  said that with  full funding by the  Kenai Peninsula                                                               
Borough,  school  funding  for  KPBSD will  have  an  almost  $11                                                               
million  gap between  revenue and  expenditures. He  provided the                                                               
following  reasons for  the  drop in  state  funding even  though                                                               
there will be an increase to the BSA:                                                                                           
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     FY24 -  $30 dollar increase  to the BSA  provided about                                                                    
     $500K in revenue.                                                                                                          
                                                                                                                                
     In FY23, the hold  harmless provision in the foundation                                                                    
     formula  provided approximately  $900K in  funding. The                                                                    
     final year of the hold harmless provision was FY23.                                                                        
                                                                                                                                
     The Full  and True value  of taxable real  and personal                                                                    
     property   within   Kenai   Peninsula   Borough   (KPB)                                                                    
     increased  by approximately  $800M.  As  a result,  the                                                                    
     amount of  Regular State Aid is  reduced, and increases                                                                    
     the amount that KPB could provide.                                                                                         
                                                                                                                                
MR. HOLLAND  said there would be  a $13 million gap  and a needed                                                               
BSA increase  of $765 if  the Kenai  Borough does not  fully fund                                                               
the school  district. If  the borough  fully supports  the school                                                               
district, there  will be  a $10  million gap,  and the  BSA would                                                               
need to be increased by $630.  He pointed out that these are base                                                               
amounts. Schools  have been making  cuts for years.  Alaska needs                                                               
to  make drastic  changes  to retain  staff  and improve  student                                                               
learning.                                                                                                                       
                                                                                                                                
4:08:37 PM                                                                                                                    
CHAIR  TOBIN thanked  Mr. Holland  for his  presentation and  the                                                               
reminder that Alaskans should champion success in education.                                                                    
                                                                                                                                
4:09:26 PM                                                                                                                    
SENATOR  STEVENS  asked that  Mr.  Holland  convey the  state  of                                                               
teacher turnover in Kenai.                                                                                                      
                                                                                                                                
4:09:49 PM                                                                                                                    
MR. HOLLAND  stated that young  teachers are attracted  to Alaska                                                               
but leave when  they realize there is no  retirement system. Many                                                               
teachers leave by  their fifth year when the  state matches their                                                               
retirement. There is  a national shortage of  teachers. Kenai has                                                               
been  using federal  funding to  establish grow-your-own  teacher                                                               
programs. However,  successful program continuation  will require                                                               
dedicated funding.                                                                                                              
                                                                                                                                
4:11:25 PM                                                                                                                    
SENATOR BJORKMAN asked how many  teaching positions would have to                                                               
be eliminated to close a budget deficit of $10.8 million.                                                                       
                                                                                                                                
4:11:54 PM                                                                                                                    
MR. HOLLAND  replied that in FY  24, KPBSD would face  cutting 49                                                               
certified staff members.  KPBSD is down to  offering only basics,                                                               
including virtual education.  It is easier for  larger schools to                                                               
absorb the loss of one or two teachers than smaller schools.                                                                    
                                                                                                                                
4:12:45 PM                                                                                                                    
SENATOR  BJORKMAN asked  if  the loss  of  49 teaching  positions                                                               
would be equivalent to half of the $10.8 million dollar deficit.                                                                
                                                                                                                                
MR.  HOLLAND answered  that  is correct.  KPBSD  faced losing  70                                                               
positions  until it  received  federal  Elementary and  Secondary                                                               
School  Emergency  Relief  (ESSER)  funds.  Federal  support  has                                                               
ended. Therefore, KPBSD will have  to cut another 45 jobs without                                                               
an increase to the BSA.                                                                                                         
                                                                                                                                
4:13:48 PM                                                                                                                    
SENATOR BJORKMAN asked Mr. Holland  how school districts use one-                                                               
time  funding the  legislature  provides  differently than  money                                                               
included inside the BSA.                                                                                                        
                                                                                                                                
4:14:24 PM                                                                                                                    
MR.  HOLLAND answered  that a  school  district usually  receives                                                               
one-time funding at  the end of the year. The  BSA is predictable                                                               
funding  that  allows for  preplanning.  A  school district  must                                                               
balance its budget  by April. Therefore, a  school district hopes                                                               
to receive enough funding to rehire  the teachers it laid off. It                                                               
is common  for teachers  to accept  positions in  other locations                                                               
when laid  off, especially  since there  is a  nationwide teacher                                                               
shortage.  The   uncertainty  caused  by   unpredictable  funding                                                               
creates  a negative  feeling  within  communities. ESSER  funding                                                               
allowed KPBSD to hold onto teachers  for two years, but the funds                                                               
are now gone.                                                                                                                   
                                                                                                                                
4:15:49 PM                                                                                                                    
CHAIR TOBIN  said the Anchorage  school district  is experiencing                                                               
significant  staffing  shortages.  She  asked  that  Mr.  Holland                                                               
explain  what  happens  to schools  when  administrative  support                                                               
positions are unfilled.                                                                                                         
                                                                                                                                
4:16:19 PM                                                                                                                    
MR. HOLLAND replied that KPBSD  experiences the same shortages as                                                               
other  school  districts.   Unfilled  positions  further  stretch                                                               
teachers and  staff, causing additional  stress in  the building.                                                               
Facilities are not cared for as they once were.                                                                                 
                                                                                                                                
4:17:39 PM                                                                                                                    
CHAIR TOBIN thanked Mr. Holland for his presentation.                                                                           
                                                                                                                                
^PRESENTATION ALASKA PER PUPIL K-12 SPENDING ANALYSIS                                                                           
                          PRESENTATION                                                                                      
            ALASKA PER PUPIL K-12 SPENDING ANALYSIS                                                                         
                                                                                                                              
4:18:00 PM                                                                                                                    
CHAIR  TOBIN announced  the consideration  of  a presentation  on                                                               
Alaska Per  Pupil K-12  Spending by the  Institute of  Social and                                                               
Economic Research (ISER).                                                                                                       
                                                                                                                                
4:18:27 PM                                                                                                                    
DAYNA  DEFEO,  Director,  Center   for  Alaska  Education  Policy                                                               
Research  (CAEPR),  University  of Alaska  Anchorage,  Anchorage,                                                               
Alaska, introduced herself.                                                                                                     
                                                                                                                                
4:18:41 PM                                                                                                                    
MATTHEW  BERMAN,  Professor,  Institute of  Social  and  Economic                                                               
Research  (ISER),  University  of  Alaska  Anchorage,  Anchorage,                                                               
Alaska, introduced himself.                                                                                                     
                                                                                                                                
MS.  DEFEO  stated that  the  Institute  of Social  and  Economic                                                               
Research (ISER)  aims to do  work that helps  Alaskans understand                                                               
social and  economic issues  and systems. The  work is  to inform                                                               
and  support public  and private  decision-making throughout  the                                                               
state.                                                                                                                          
                                                                                                                                
4:19:10 PM                                                                                                                    
MS. DEFEO moved to slide 2 and  said she was asked to discuss the                                                               
cost of  education in Alaska in  response to a story  that Alaska                                                               
has the  highest per-pupil spending  in the nation.  She asserted                                                               
that when  placed in  context, the statement  was not  valid. She                                                               
said   her  presentation   would  address   the  following   five                                                               
questions:                                                                                                                      
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
Where does Alaska's public education funding come from?                                                                         
How much does Alaska pay?                                                                                                       
How does Alaska's spending compare to the US average?                                                                           
What drives Alaska's costs?                                                                                                     
Where are areas of opportunity?                                                                                                 
                                                                                                                                
4:19:55 PM                                                                                                                    
MS.  DEFEO said  the  data on  slide 3  was  from 2016.  Alaska's                                                               
expenditure on  education was about  25.8 percent of  the state's                                                               
general  expenditure.  This  is  proportionally  similar  to  the                                                               
national  average of  24.9 percent.  Sixty-four  percent of  per-                                                               
pupil  spending  in  Alaska  comes   from  state  general  funds.                                                               
Alaska's proportion of state funding  is the fifth highest in the                                                               
nation. However, the proportion that  comes from local funding is                                                               
the fifth lowest. Alaska law  only allows the collection of local                                                               
taxes  in  organized boroughs.  Nineteen  of  Alaska's 54  school                                                               
districts are  regional education  attendance areas  (REAAs), not                                                               
organized boroughs. Alaska has the  sixth highest federal funding                                                               
in the nation at 14 percent.                                                                                                    
                                                                                                                                
4:21:45 PM                                                                                                                    
SENATOR  KIEHL  said  Alaska's funding  formula  deducts  federal                                                               
impact aid  that would  flow to districts  and counts  it against                                                               
state formula funding as though  it were a local contribution. He                                                               
asked how ISER treated it.                                                                                                      
                                                                                                                                
4:22:08 PM                                                                                                                    
Mr.  BERMAN  replied  that  the  state and  net  share  had  been                                                               
deducted.  Alaska  has  a higher-than-average  share  of  federal                                                               
funding  because   it  has  many   federal  lands   and  military                                                               
installations. Ninety percent of  that funding counts against the                                                               
state  entitlement and  the  required local  effort.  So that  is                                                               
deducted. The  state's share, which  Ms. Defeo mentioned,  is the                                                               
net after the deductions.                                                                                                       
                                                                                                                                
4:22:51 PM                                                                                                                    
SENATOR  KIEHL asked  if ISER  placed it  under federal  or local                                                               
contribution.                                                                                                                   
                                                                                                                                
MR. BERMAN  answered that the  deduction is taken from  the state                                                               
share. It  means that the  state funding  is less because  of the                                                               
contribution of  federal funding,  which diminishes the  share of                                                               
the  state-funded  total.  Hence, the  state  funding  sixty-four                                                               
percent is the  net funding by the state after  federal and local                                                               
deductions are made from the foundation formula.                                                                                
                                                                                                                                
4:23:42 PM                                                                                                                    
MS. DEFEO advanced  to slides 4-5 and stated that  ISER used data                                                               
from  2017 to  do the  2019 analysis  and answered  the question,                                                               
"How  much does  Alaska pay?"  Analysis  of spending  in 2022  is                                                               
available using 2019  data. However, this data  does not indicate                                                               
normal fiscal  operations due  to COVID.  In 2017  Alaska's pupil                                                               
spending was 46 percent higher  than the national average, making                                                               
Alaska the  sixth highest in  the nation.  In 2019 Alaska  was 39                                                               
percent higher than the national  average. This change was due to                                                               
an  increase  in education  spending  by  other states.  The  raw                                                               
dollar amounts  for per pupil  K12 spending in 2019  were $13,187                                                               
nationally and $18,394 in Alaska.                                                                                               
                                                                                                                                
4:25:44 PM                                                                                                                    
MS.  DEFEO   stated  that  when  individuals   compare  per-pupil                                                               
spending,  they should  consider  the  following factors.  First,                                                               
Alaska has a high cost of  spending in rural areas that skews the                                                               
state  average.  Second, living  costs  are  higher than  the  US                                                               
average, even  in urban Alaska.  ISER made these  adjustments for                                                               
an  apple-to-apple  comparison.  After making  cost  adjustments,                                                               
ISER found Alaska's  average per pupil spending in  2017 and 2019                                                               
to  be 22  and 16  percent higher  when adjusting  to Anchorage's                                                               
living costs. When adjusted to  the nation's average living cost,                                                               
Alaska's  per-pupil spending  for 2017  and  2019 was  -2 and  -7                                                               
percent of the national average.                                                                                                
                                                                                                                                
4:28:13 PM                                                                                                                    
MS. DEFEO  moved to slide  8 and  described how Alaska  per pupil                                                               
spending  was  adjusted  to  reflect   the  cost  of  living  for                                                               
Anchorage  and nationally.  She stated  that the  map on  slide 9                                                               
shows the  cost differentials for various  communities in Alaska.                                                               
Most of the  school districts in Alaska have  a cost differential                                                               
greater than 1.5 times that of Anchorage.                                                                                       
                                                                                                                                
4:31:02 PM                                                                                                                    
SENATOR STEVENS asked if half  of Alaska's students reside in the                                                               
Anchorage area.                                                                                                                 
                                                                                                                                
4:31:21 PM                                                                                                                    
MR.  BERMAN replied  that the  foundation  formula's cost  factor                                                               
adjusts to  Anchorage. So, Anchorage  is the base used  to adjust                                                               
costs to  the national  average rather than  the average  for the                                                               
state.  Most  students   are  in  the  Anchorage   area,  so  the                                                               
adjustment  is  20   percent  and  not  40  -   50  percent.  The                                                               
differentials  of  Juneau,  Fairbanks,   Kenai,  and  Mat-Su  are                                                               
similar to Anchorage. Smaller communities  have much higher costs                                                               
but comprise less than half  of the student population, hence the                                                               
20 percent  reduction was compared  to the state average  and not                                                               
40 percent.                                                                                                                     
                                                                                                                                
4:32:43 PM                                                                                                                    
MS.  DEFEO  noted that  the  adjustments  accounted for  schools'                                                               
average daily membership rates.                                                                                                 
                                                                                                                                
MR. BERMAN said  ISER made the adjustments using  the formula the                                                               
way it exists in statute.                                                                                                       
                                                                                                                                
4:33:15 PM                                                                                                                    
MS. DEFEO moved to slide 11  and said that private school tuition                                                               
in  Anchorage  is  similar to  the  state's  per-pupil  spending.                                                               
Private schools  receive donations that help  reduce tuition, and                                                               
they  do  not  have  the same  cost  responsibilities  as  public                                                               
schools, such as transportation  and intensive special education.                                                               
Therefore,  it  is  interesting that  private  school  costs  are                                                               
comparable to public  school costs. She added  that median infant                                                               
daycare  costs  in Anchorage  are  similar  to per  pupil  public                                                               
education.                                                                                                                      
                                                                                                                                
4:34:23 PM                                                                                                                    
MS.  DEFEO turned  to  slide  12 and  stated  that regardless  of                                                               
whether the cost of education  is adjusted, Alaska still spends a                                                               
lot  on  education.  ISER considered  costs  and  determined  the                                                               
following were not factors:                                                                                                     
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     High per-pupil teacher salaries                                                                                            
     ? On average, Alaska teacher salaries about 15% below                                                                      
     where they should be                                                                                                       
         ? "Right" salary varies by community & working                                                                         
     conditions there braceright                                                                                                
     Extra contributions to retirement systems                                                                                  
                                                                                                                                
                                                                                                                                
However, evidence supports that the following do drive costs:                                                                   
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Small schools                                                                                                              
     Healthcare                                                                                                                 
     Energy                                                                                                                     
     Geographic costs                                                                                                           
     ? Housing                                                                                                                  
                                                                                                                                
                                                                                                                                
4:36:06 PM                                                                                                                    
MS. DEFEO  said that Alaska has  more than 90 small  schools with                                                               
an enrollment  of 50  students or  less. Alaska  has a  legal and                                                               
ethical responsibility to educate  all its students, as evidenced                                                               
by the Hootch,  Kasayulie v. State, and Moore  v. State lawsuits.                                                               
Small schools are more costly to  operate for reasons such as not                                                               
benefiting  from  economies of  scale  and  smaller class  sizes.                                                               
Smaller  schools experience  a  higher turnover  of teachers  and                                                               
principals.                                                                                                                     
                                                                                                                                
4:36:55 PM                                                                                                                    
MS. DEFEO  advanced to slide 14  and said that as  part of ISER's                                                               
study they  looked at  healthcare costs from  2017 and  noted the                                                               
following:                                                                                                                      
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
Alaska has highest healthcare costs in US                                                                                       
    • Not unique to education                                                                                                   
    • Negatively affects private & public sector                                                                                
Health care costs are part of overall compensation                                                                              
   • Starting with fixed budget, growth rate in healthcare costs                                                                
     puts downward pressure on wage                                                                                             
     ?Makes competing for teachers more difficult                                                                               
   • In 2017, benefits costs                                                                                                    
     ? 4th highest in nation                                                                                                    
     ? 11% above average after all adjustments                                                                                  
                                                                                                                                
MS. DEFEO  said adjusted per  pupil spending was 2  percent below                                                               
the national average. However, when  looking at the adjusted cost                                                               
of benefits in  2017, the cost was 11 percent  above the national                                                               
average. Alaska's benefits are not  better than other states, but                                                               
Alaskans pay more. A big part  of the benefits package offered to                                                               
educators is healthcare.                                                                                                        
                                                                                                                                
4:38:06 PM                                                                                                                    
MS. DEFEO moved to slide 15  and said there are two components to                                                               
energy  cost  and  amount needed.  She  addressed  the  following                                                               
points:                                                                                                                         
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Costs                                                                                                                  
                                                                                                                                
     Fuel                                                                                                                     
     ? Costs more in remote places                                                                                              
     ? Costs fluctuate (a lot)                                                                                                  
       ? Districts have different capacities to negotiate                                                                       
        competitive prices                                                                                                      
                                                                                                                                
     Electricity                                                                                                              
      ? Schools don't benefit from Power Cost Equalization                                                                      
      (PCE) program                                                                                                             
                                                                                                                                
     Amount needed                                                                                                          
                                                                                                                                
     More to heat schools in colder places                                                                                      
                                                                                                                                
     Regardless of the number of students in a building, it                                                                     
     must be heated and lit                                                                                                     
                                                                                                                                
4:39:32 PM                                                                                                                    
MS. DEFEO  moved to slide 17  and said the presentation  tried to                                                               
put school spending in Alaska  into a national context. Per pupil                                                               
spending  is  about how  much  a  district  spends and  where  it                                                               
spends. Much of what drives  up Alaska's per-pupil expenditure is                                                               
beyond education policy,  such as fuel, healthcare,  and the cost                                                               
of  goods.  Higher  costs  are  Alaska's  reality  and  influence                                                               
education  spending.   She  further  stated  that   the  two-year                                                               
differences between 2017  and 2019 show that  other states invest                                                               
more in  public education than  Alaska. Investing more  in public                                                               
education is  a big deal  because teachers  live and work  in the                                                               
conditions and  resources that public education  spending covers.                                                               
Alaska  needs  to  produce  more   teachers  to  fill  its  need.                                                               
Therefore,  Alaska  is  competing  for  teachers  in  a  national                                                               
market. To  attract good teachers,  Alaska must  have competitive                                                               
salaries, benefits, and working conditions.                                                                                     
                                                                                                                                
4:41:44 PM                                                                                                                    
SENATOR BJORKMAN asked if Alaska's  15 percent lower salary study                                                               
pertained to Anchorage or the state.                                                                                            
                                                                                                                                
4:42:31 PM                                                                                                                    
MS. DEFEO  replied that the  14-15 percent salary increase  was a                                                               
state  average.   ISER's  model  suggested  much   higher  salary                                                               
increases for  some areas of Alaska.  She offered to send  a copy                                                               
of the report to the committee.                                                                                                 
                                                                                                                                
4:42:48 PM                                                                                                                    
MR.  BERMAN said  several districts  in Alaska  are close  to the                                                               
national average,  such as Mat-Su,  Juneau, and  Sitka. Fairbanks                                                               
was slightly  below the national  average. Rural districts  and a                                                               
shortfall  in  Anchorage  did  not  pay  enough  that  the  urban                                                               
districts could compensate  for the disadvantages of  living in a                                                               
rural community, which is why  Alaska's average was 14-15 percent                                                               
lower than the  national average. Housing and  healthcare are the                                                               
two most  significant cost-driving differences between  living in                                                               
Anchorage and elsewhere  in the US. Teachers or  the district pay                                                               
these  costs. There  is  no free  lunch.  Lowering Alaska's  high                                                               
healthcare  costs  could  also  make up  for  the  difference  in                                                               
salary.                                                                                                                         
                                                                                                                                
4:45:34 PM                                                                                                                    
MS.  DEFEO added  that the  salary  recommendation study  modeled                                                               
what  teachers  should be  paid.  However,  the salary  schedules                                                               
reflect  what   the  districts  can  pay.   There  is  tremendous                                                               
variation  in   teacher  compensation  across  the   state.  Some                                                               
districts  having better  resources  is another  reason there  is                                                               
variation in wage recommendation and actual wages.                                                                              
                                                                                                                                
4:46:13 PM                                                                                                                    
MR.  BERMAN   commented  that  unincorporated   districts  depend                                                               
entirely on  state and limited  federal funding. They  cannot tax                                                               
residents. The  ability to tax  is what allows  other communities                                                               
to pay adequate salaries to teachers.                                                                                           
                                                                                                                                
4:47:06 PM                                                                                                                    
CHAIR  TOBIN asked  if healthcare  costs are  high for  all state                                                               
sectors or only for educators.                                                                                                  
                                                                                                                                
MR.  BERMAN replied  that healthcare  costs are  high across  all                                                               
sectors of the state.                                                                                                           
                                                                                                                                
CHAIR  TOBIN asked  if the  local contribution  reduces a  school                                                               
district's state contribution.                                                                                                  
                                                                                                                                
MR.  BERMAN  clarified that  there  is  a required  local  effort                                                               
deducted. However, if a municipality  wants to increase its local                                                               
contribution through taxes  above the required amount,  that is a                                                               
supplement. For example, the North  Slope Borough is an expensive                                                               
and challenging  place to live. It  has a high tax  base and pays                                                               
its teachers more  than other rural districts. By  law, there are                                                               
constraints regarding how much an area  with a very high tax base                                                               
can spend  on education. Valdez  and North Slope Borough  are the                                                               
only  two  districts that  have  reached  the legal  contribution                                                               
limit.                                                                                                                          
                                                                                                                                
4:50:10 PM                                                                                                                    
CHAIR TOBIN  thanked the  presenters for  the explanation  of per                                                               
pupil  spending in  Alaska and  how it  compares to  the national                                                               
average.                                                                                                                        
                                                                                                                                
4:52:24 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair  Tobin adjourned  the Senate  Education Standing  Committee                                                               
meeting at 4:52 pm.                                                                                                             

Document Name Date/Time Subjects
Clayton Holland Presentation 01.26.2023.pdf SEDC 1/27/2023 3:30:00 PM
ISER Presentation to Senate Education 01.27.2023.pdf SEDC 1/27/2023 3:30:00 PM
ISER K-12 Spending Research March 2022 Update 01.25.2023.pdf SEDC 1/27/2023 3:30:00 PM
ISER 2019 Research Summary K-12 Spending 01.27.2023.pdf SEDC 1/27/2023 3:30:00 PM