Legislature(2023 - 2024)BELTZ 105 (TSBldg)

02/21/2024 03:30 PM Senate EDUCATION

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04:00:11 PM Start
04:01:03 PM Presentation: Local Government and Public Education
05:02:24 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 4 pm --
Presentation: Alaska Municipal League Testimony
by Municipal Officials Attending the AML 2024
Winter Legislative Conference
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
                      ALASKA STATE LEGISLATURE                                                                                
                 SENATE EDUCATION STANDING COMMITTEE                                                                          
                          February 21, 2024                                                                                     
                              4:00 p.m.                                                                                         
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Löki Tobin, Chair                                                                                                       
Senator Jesse Bjorkman                                                                                                          
Senator Jesse Kiehl                                                                                                             
Senator Elvi Gray-Jackson                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Gary Stevens, Vice Chair                                                                                                
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION: LOCAL GOVERNMENT AND PUBLIC EDUCATION                                                                             
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
NILS ANDEASSEN, Executive Director                                                                                              
Alaska Municipal League                                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Offered the presentation Local Government                                                                 
and Public Education.                                                                                                           
                                                                                                                                
ALVIN OSTERBACK, Mayor                                                                                                          
Aleutians East Borough                                                                                                          
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Presented information on the state of public                                                              
education in the Aleutians East Borough.                                                                                        
                                                                                                                                
BETH WELDON, Mayor                                                                                                              
City and Borough of Juneau                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented information on the state of public                                                              
education in the City and Borough of Juneau.                                                                                    
                                                                                                                                
 MARY SWAIN, Assembly Member                                                                                                    
 Bristol Bay Borough                                                                                                            
 Naknek, Alaska                                                                                                                 
 POSITION STATEMENT: Presented information on the state of public                                                             
 education in the Bristol Bay Borough.                                                                                          
                                                                                                                                
 CHRIS NOEL, Mayor                                                                                                              
 Denali Borough                                                                                                                 
 Healy, Alaska                                                                                                                  
 POSITION STATEMENT: Presented information on the state of public                                                             
 education in the Denali Borough.                                                                                               
                                                                                                                                
 BRYCE WARD, Mayor                                                                                                              
 Fairbanks North Star Borough                                                                                                   
 Fairbanks, Alaska                                                                                                              
 POSITION STATEMENT: Presented information on the state of public                                                             
 education in the Fairbanks North Star Borough.                                                                                 
                                                                                                                                
 BRENT JOHNSON, Assembly Member                                                                                                 
 Kenai Peninsula Borough                                                                                                        
 Soldotna, Alaska                                                                                                               
 POSITION STATEMENT: Presented information on the state of public                                                             
 education in the Kenai Peninsula Borough.                                                                                      
                                                                                                                                
 RODNEY DIAL, Mayor                                                                                                             
 Ketchikan Gateway Borough                                                                                                      
 Ketchikan, Alaska                                                                                                              
 POSITION STATEMENT: Presented information on the state of public                                                             
 education in the Ketchikan Gateway Borough.                                                                                    
                                                                                                                                
 SCOTT ARNDT, Mayor                                                                                                             
 Kodiak Island Borough                                                                                                          
 Kodiak, Alaska                                                                                                                 
 POSITION STATEMENT: Presented information on the state of public                                                             
 education in the Kodiak Island Borough.                                                                                        
                                                                                                                                
 FELIX RIVERA, Assembly Member                                                                                                  
 Municipality of Anchorage                                                                                                      
 Anchorage, Alaska                                                                                                              
 POSITION STATEMENT: Presented information on the state of public                                                             
 education in the Municipality of Anchorage.                                                                                    
                                                                                                                                
 ANNA BRAWLEY, Assembly Member                                                                                                  
 Municipality of Anchorage                                                                                                      
 Anchorage, Alaska                                                                                                              
 POSITION STATEMENT: Presented information on the state of public                                                             
 education in the Municipality of Anchorage.                                                                                    
                                                                                                                                
NATHAN HADLEY, JR., Assembly President                                                                                          
Northwest Arctic Borough                                                                                                        
Kotzebue, Alaska                                                                                                                
POSITION STATEMENT: Presented information on the state of public                                                              
education in the Northwest Arctic Borough.                                                                                      
                                                                                                                                
CRAIG MCCONNELL, Assembly Member                                                                                                
Northwest Arctic Borough                                                                                                        
Kotzebue, Alaska                                                                                                                
POSITION STATEMENT: Presented information on the state of public                                                              
education in the Northwest Arctic Borough.                                                                                      
                                                                                                                                
JOSH VERHAGEN, Mayor,                                                                                                           
City of Nenana                                                                                                                  
Nenana, Alaska                                                                                                                  
POSITION STATEMENT: Presented information on the state of public                                                              
education in the City of Nenana.                                                                                                
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
4:00:11 PM                                                                                                                    
CHAIR LÖKI TOBIN called  the Senate Education Standing Committee                                                              
meeting to order at 4:00 p.m. Present at  the call to order were                                                                
Senators Kiehl, Gray-Jackson, and  Chair Tobin. Senator Bjorkman                                                                
arrived thereafter.                                                                                                             
                                                                                                                                
^PRESENTATION: LOCAL GOVERNMENT and PUBLIC EDUCATION                                                                            
         PRESENTATION: LOCAL GOVERNMENT and PUBLIC EDUCATION                                                                
                                                                                                                              
4:01:03 PM                                                                                                                    
CHAIR TOBIN announced the  consideration of a presentation Local                                                                
Government and Public Education by the Alaska Municipal League.                                                                 
                                                                                                                                
4:02:19 PM                                                                                                                    
NILS  ANDEASSEN, Executive  Director,  Alaska Municipal  League,                                                                
Anchorage, Alaska, offered the presentation Local Government and                                                                
Public Education. He moved to slide 2:                                                                                          
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
          Public Education  Local Contributions                                                                               
                                                                                                                                
  • $530 million in local tax contributions                                                                                     
    • Five local governments that contribute more than the State                                                                
    • Local contributions of Under 5 percent - 3 MSD, 19 REAAs                                                                  
      (14 less than 1 percent)                                                                                                  
         • 11 MSDs between 5 percent and 20 percent                                                                             
         • 10 MSDs between 20 percent and 35 percent                                                                            
         • 6 MSDs between 35 percent and 45 percent                                                                             
         • 4 MSDs from 50 percent to 63 percent                                                                                 
    • REAAs $80M in federal, compared to MSD of $50M                                                                            
                                                                                                                                
MR. ANDERASSEN noted there are four local governments that contribute                                                           
more than the state does to local school districts and more than 20                                                             
contribute more than 20 percent.                                                                                                
                                                                                                                                
4:03:32 PM                                                                                                                    
MR. ANDREASSEN  moved to slide  3 and  said another facet  of the                                                               
intersection  between local  government and  public  education is                                                               
related to school construction and major maintenance. It is a huge                                                              
issue  outside  of the  BSA.  A  report  from  the Department  of                                                               
Education  and  Early  Development (DEED)  identified  that  $289                                                               
million is needed  for school construction and major maintenance.                                                               
There  is $603  million  in  priority projects  in  front of  the                                                               
legislature,  which is  historically funded  at  15  percent. The                                                               
current  budget is  funded less.  Local governments  made  up the                                                               
difference.                                                                                                                     
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
      School Construction and Major Maintenance                                                                               
                                                                                                                                
    • 76 percent of schools owned and managed by local                                                                          
      governments                                                                                                               
    • FY23  14 districts didn't submit 6-year plans  3                                                                          
      REAAs, 10 MSD                                                                                                             
    • FY 23 $603 million = $11,374.95 ADM                                                                                       
    • Average $165 million in following 5 years                                                                                 
    • 13-year average of $52M construction, and $13M for                                                                        
      maintenance o                                                                                                             
       • Of 37 construction projects, 12 districts, five                                                                        
         municipal                                                                                                              
       • 109 maintenance projects, 32 districts, 19                                                                             
         municipal                                                                                                              
    • State meeting 15 percent as a percentage of need                                                                          
      annually                                                                                                                  
    • 27 percent of all projects were REAA                                                                                      
    • Due to repeated funding shortfalls, industry standards                                                                    
      suggest an additional 1 percent of replacement value                                                                      
     should be programmed for deferred maintenance. At $9.7                                                                     
     billion, the  annual amount for  Alaska would  be $289                                                                     
     million.                                                                                                                   
                                                                                                                                
4:04:30 PM                                                                                                                    
MR. ANDREASSEN  moved to slide 4  and said the  Alaska Municipal                                                                
League  (AML)  adopted  several resolutions  related  to  public                                                                
education  and  mentioned  inflation proofing  the  BSA,  school                                                                
construction, and major maintenance:                                                                                            
                                                                                                                                
[Original punctuation provided.]                                                                                              
                                                                                                                              
     Public Education                                                                                                         
                                                                                                                                
     Resolution 2023-12                                                                                                       
     Increase and Inflation-Proof BSA                                                                                         
     Requesting that the State increase and inflation-proof                                                                     
     the BSA.                                                                                                                   
     Resolution 2020-07                                                                                                       
     Fund School Bond Debt Reimbursement                                                                                      
     Supporting full payment of  currently obligated school                                                                     
     bond debt reimbursement; a reinstatement of the school                                                                     
     bond  debt reimbursement  program; and  a careful  and                                                                     
     deliberate   reform  of   State   support  of   school                                                                     
     construction and maintenance.                                                                                              
     He spoke  to  inflation proofing BSA  and  fund school                                                                     
     bond debt reimbursement.                                                                                                   
                                                                                                                                
MR.  ANDREASSEN  said  because local  contribution  is  tied  to                                                                
property assessment,  which tracks  similar to  inflation, since                                                                
2017 the  value of  the local contribution  has increased by  13                                                                
percent while the value of  the state contribution has decreased                                                                
by 1 percent.                                                                                                                   
                                                                                                                                
4:05:25 PM                                                                                                                    
MR. ANDREASSEN moved to slide 5 and said fund balance is a                                                                      
principal of good governance that local governments and                                                                         
school districts have in common:                                                                                                
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                              
     Fund Balance is an Important Tool                                                                                        
          Cash flow                                                                                                             
          Offset   revenue   shortfalls    and   unexpected                                                                     
          expenditures                                                                                                          
     Stabilize taxes and maintain services without budget                                                                       
     cutbacks                                                                                                                   
           Improve long-term planning initiatives                                                                               
           Enhance credit ratings                                                                                               
                                                                                                                                
 4:06:42 PM                                                                                                                   
 MR. ANDREASSEN moved to slide 6 and discussed the following                                                                    
 about unassigned fund balances:                                                                                                
                                                                                                                                
 [Original punctuation provided.]                                                                                               
                                                                                                                                
      Fund Balance Guidelines                                                                                                 
      GFOA recommends a minimum of two months of either                                                                         
      operating expenditures or operating revenue (~16%).                                                                       
      School districts are limited by state statute to 10%                                                                      
      of the year's expenditures                                                                                                
                                                                                                                                
      Current Reporting                                                                                                         
      • Average unassigned fund balance as percentage of                                                                        
        total expenditures is 3%.                                                                                               
      • Only 25 districts have positive unassigned fund                                                                         
        balances.                                                                                                               
      • Four have negative unassigned fund balances.                                                                            
      • The rest have zero unassigned.                                                                                          
                                                                                                                                
          • Non-Spendable                                                                                                       
          •  Restricted                                                                                                         
          • Committed                                                                                                           
          • Assigned                                                                                                            
          • Unassigned                                                                                                          
                                                                                                                                
 MR. ANDREASSEN said negative unassigned fund balances means                                                                    
 districts are trying to make up for the difference in some way.                                                                
                                                                                                                                
 4:07:25 PM                                                                                                                   
 MR. ANDREASSEN moved to slide 7 and said the unassigned fund                                                                   
 balance of 3 percent might not be true. A graph depicting the FY                                                               
 24 statewide total fund balance shows the unassigned operating                                                                 
 fund balance as $183,358,857 and school district expenditures as                                                               
 $2,197,760,620. He said because of how fund balance reporting                                                                  
 occurs the 3 percent might not be true - it comes outside a                                                                    
 fiscal year in the middle of one. It is a cash basis and a lot                                                                 
 of what is reflected in the $183 million is basically deferred                                                                 
 revenue. The districts receive revenue in December from a                                                                      
 municipality or other source and will use it to manage cash flow                                                               
 in coming months.                                                                                                              
                                                                                                                                
 4:08:16 PM                                                                                                                   
SENATOR GRAY-JACKSON inquired about the GFOA's recommendation                                                                   
because she heard it had changed.                                                                                               
                                                                                                                                
4:09:02 PM                                                                                                                    
MR. ANDREASSEN replied he would investigate and report his                                                                      
finding on best practice to the committee.                                                                                      
                                                                                                                                
SENATOR  GRAY_JACKSON  stated her  belief  that  two  months  of                                                                
recommended operating  expenditures or operating  revenue should                                                                
continue.  Independent auditors  used to  have a  recommendation                                                                
also.                                                                                                                           
                                                                                                                                
4:09:25 PM                                                                                                                    
MR. ANDREASSEN moved to slide 8 and spoke about Alaska's                                                                        
school districts six points of consensus:                                                                                       
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
     Working Toward Consensus:                                                                                                
                                                                                                                              
  1. A BSA increase of $300 is insufficient. We encourage a                                                                     
       significant investment by the state to bring education                                                                   
       funding closer to par with expenses experienced by our                                                                   
     districts.                                                                                                                 
  2. An increase to the BSA this year should be accompanied                                                                     
     by an inflation adjustment for future years.                                                                               
  3. The extent to which the State chooses to additionally                                                                      
     fund teachers as part of a recruitment and retention                                                                       
     initiative should be administered and budgeted for by                                                                      
     the State, and separately and in addition to a BSA                                                                         
     increase.                                                                                                                  
  4. Additional funding for pupil transportation and special                                                                    
     needs is critical to account for increasing costs in                                                                       
     those areas that are outpacing other cost areas of                                                                         
     inflation.                                                                                                                 
  5. Decisions related to new or alternative public schools                                                                     
     should be made at the local level, to ensure that the                                                                      
     taxes raised in those communities to contribute to                                                                         
     public education are appropriately represented.                                                                            
     • Local government leaders expect to be part of a                                                                          
          deliberative process that builds on the strengths                                                                     
        of the current system without destabilization.                                                                          
                                                                                                                                
  6. School construction and major maintenance continues to                                                                     
     fall behind without sufficient State investment, with                                                                      
       the State funding an average of only 15% of need. This                                                                   
      year's capital budget should address priorities                                                                           
      identified by school districts and local governments.                                                                     
                                                                                                                                
 4:11:47 PM                                                                                                                   
 CHAIR  TOBIN   referred  to  slide  6   regarding  fund  balance                                                               
 guidelines and current reporting. She stated the committee had a                                                               
 presentation  from DEED earlier  in the  week which  appeared to                                                               
 present inaccurate information. She said  she is glad the report                                                               
 was given to DEED so they can update the presentation.                                                                         
                                                                                                                                
 4:12:55 PM                                                                                                                   
 ALVIN  OSTERBACK,  Mayor,  Aleutians  East  Borough,  Anchorage,                                                               
 Alaska, presented borough school funding contributions and major                                                               
 maintenance   information.   He   stated   the   minimum   local                                                               
 contribution  is $644,987  and  the maximum  is  $1,830,150. The                                                               
 borough typically funds  $1,100,000 in local contributions. This                                                               
 year  the  school  district  is  requesting  approximately  $1.5                                                               
 million because  one school in  the borough no  longer meets the                                                               
 10-student requirement so to remain open supplemental funding is                                                               
 needed.  Also, like  other areas  of the  state local  costs are                                                               
 rising  faster than anticipated. He  said in  2023 the Aleutians                                                               
 East  Borough  (AEB) received  $2,900,000  in  major maintenance                                                               
 funding and a  DEED grant for Sandpoint school. Due to inflation                                                               
 the  cost of  the project  increased to $6,800,000.  The borough                                                               
 submitted  a  supplemental  funding  request  to  DEED  for  the                                                               
 additional  $3.9 million  and a  Capital Project  Submission and                                                               
 Information   System   (CAPSIS)   request.  School   bond   debt                                                               
 reimbursement is  very important to AEB.  Currently, the state's                                                               
 FY25   budget  has   100  percent  of   the  school   bond  debt                                                               
 reimbursement in it.  The borough's FY25 reimbursement amount is                                                               
 $702,907. He  stated his  belief that educating children  is the                                                               
 most  important contribution  the state  can make  for  its next                                                               
 generation of leaders. Ensuring that the  BSA is set at a number                                                               
 that will  provide adequate funding through the school districts                                                               
 should  be  a very  high  priority for  Alaska.  He opined  that                                                               
 anything  less than  a BSA  of $680  would not  provide adequate                                                               
 school funding.                                                                                                                
                                                                                                                                
 4:15:09 PM                                                                                                                   
 BETH WELDON, Mayor,  City and Borough of Juneau, Juneau, Alaska,                                                               
 stated that  she is also  the president of  the Alaska Municipal                                                               
 League. She  said she provided  members with a copy  of a letter                                                               
 signed  by  school districts  listing points  of  consensus. She                                                               
 mentioned that  Juneau is  the first district  to end up  with a                                                               
 deficit, but  she expects other districts will  soon follow. The                                                               
 Juneau School  District (JSD) has a deficit  of $7.5 million for                                                               
 FY 24.  She noted that the  school district acknowledges its own                                                               
accounting errors, which resulted in the unexpected deficit, and                                                                
does not blame the legislature. However, an  increase in the BSA                                                                
would have helped. She stated that the cost of providing quality                                                                
education has outpaced state involvement. The BSA is a temporary                                                                
fix until  the governor and legislature  can develop a  plan for                                                                
education reform. She opined that Alaska is not only harming its                                                                
students but  also sending  a message  that it  is not open  for                                                                
business and  is not  family friendly. Families  do not want  to                                                                
live in a  state with a failing school system.  She requested an                                                                
increase in the BSA to fix  funding and education reform so that                                                                
schools can  thrive. She  also noted that  an increase  in pupil                                                                
transportation funding is needed.                                                                                               
                                                                                                                                
4:17:36 PM                                                                                                                    
MARY  SWAIN,  Assembly  Member,  Bristol  Bay  Borough,  Naknek,                                                                
Alaska, said the school district has three needs. The first is a                                                                
bare  minimum $680  increase  to the  BSA.  The  second need  is                                                                
housing,  driven  by  the  expanding commercial  salmon  fishing                                                                
industry. The  third need concerns  the Alaska Reads  Act, which                                                                
was implemented last year. While the borough has seen remarkable                                                                
growth through its implementation, more funding is required. For                                                                
student  growth to  continue,  full  funding is  necessary.  She                                                                
stated  that  her   borough  was  fortunate  to  have   a  major                                                                
maintenance  project funded,  with  the  borough matching  state                                                                
funds by paying $5 million  for the project. She emphasized that                                                                
municipalities support  education funding  and urged members  to                                                                
make major  maintenance a top  priority. She mentioned  that her                                                                
community prefers  partnerships and does  not agree  with forced                                                                
consolidation. She cited the growth of  the career and technical                                                                
education (CTE) program  and the addition of  a social-emotional                                                                
coach  for  students  as   evidence  that  partnering  with  the                                                                
community works and should be expanded.                                                                                         
                                                                                                                                
4:19:00 PM                                                                                                                    
SENATOR BJORKMAN joined the meeting.                                                                                            
                                                                                                                                
4:22:23 PM                                                                                                                    
CHRIS  NOEL, Mayor,  Denali Borough,  Healy,  Alaska, said  that                                                                
education is the  most important service and  the largest budget                                                                
item for the Denali Borough. More than  50 percent of the annual                                                                
budget is  spent on education. The  borough is one of  five that                                                                
consistently maximizes its local contribution. He stated that he                                                                
is  testifying  to   advocate  for  state  support   and  shared                                                                
responsibility  in  providing public  education.  He  encouraged                                                                
members to significantly increase the BSA  and include a statute                                                                
that would automatically adjust for  inflation. Fixed costs have                                                                
risen while  the BSA  has  remained flat. Anything  less than  a                                                                
 $1,100 increase to  the BSA, after the borough's unassigned fund                                                               
 balance  is exhausted, would not  allow the  district to balance                                                               
 its budget, even with full support from the borough assembly. He                                                               
 also  urged the appropriation of  sufficient funds to  the major                                                               
 maintenance grant program, as  there are needs across the state.                                                               
 The small communities of Cantwell and Anderson have large school                                                               
 facilities  but  are  nearing  the  10-student requirement.  The                                                               
 buildings need maintenance to remain safe learning environments.                                                               
                                                                                                                                
 4:24:49 PM                                                                                                                   
 BRYCE   WARD,  Mayor,  Fairbanks  North   Star  Borough  (FNSB),                                                               
 Fairbanks, Alaska, said the  borough is looking at shutting down                                                               
 two  more  schools,  having  already  closed three.  A  tax  cap                                                               
 election is scheduled for May to increase the local contribution                                                               
 by $10 million, raising  it from $50 million to $60 million. The                                                               
 borough's  contribution is  capped  at $70  million.  The school                                                               
 district  has seen  a drop in  enrollment, and  the lack  of BSA                                                               
 adjustment  has significantly impacted  the district.  The state                                                               
 has  a  required  local  contribution  for  education,  and  the                                                               
 community must  fund at least that  amount. This required amount                                                               
 is  deducted from the  basic need,  which has had  a significant                                                               
 impact due  to flat and declining  enrollment. While the borough                                                               
 has  maintained  flat  funding   at  $50  million,  due  to  the                                                               
 adjustment  in the  required  local contribution,  the district,                                                               
 even  with  2,000  fewer  students  than 10  years  ago,  should                                                               
 contribute  $12  million more  than  it did  a  decade ago.  Not                                                               
 funding this additional $12  million is an erosion of funding to                                                               
 district.                                                                                                                      
                                                                                                                                
 MR. WARD noted that Fairbanks has been successful in funding its                                                               
 capital projects  and has established a  new capital improvement                                                               
 program  that   has  leveraged  federal  dollars.  Despite  this                                                               
 success,  Fairbanks  has received  no  state  dollars since  the                                                               
 program  began  five  years   ago.  He  discussed  some  of  the                                                               
 improvements  the  borough has  made,  but  deferred maintenance                                                               
 remains  a  major issue  in  Fairbanks and  other  districts. He                                                               
 expressed  frustration with  policies that  allow correspondence                                                               
 programs to purchase  buildings within FNSB tax exempt while the                                                               
 community  is discussing  increasing its  education contribution                                                               
 and shutting down schools. He stated that practice erodes public                                                               
 brick-and-mortar  schools, which  have historically  been funded                                                               
 through  local  communities. He  concluded  by  stating that  if                                                               
 Alaska wants a  good education system, it must be willing to pay                                                               
 for it, adding, "There is no such thing as a free lunch."                                                                      
                                                                                                                                
 4:28:55 PM                                                                                                                   
SENATOR BJORKMAN  asked what the  maximum amount the  borough is                                                                
allowed to contribute.                                                                                                          
                                                                                                                                
4:29:18 PM                                                                                                                    
MR. WARD  replied that last year's  funding was $54  million and                                                                
the maximum allowable is $72 million.                                                                                           
                                                                                                                                
4:29:28 PM                                                                                                                    
CHAIR  TOBIN  asked  what  the average  class  size  is  in  the                                                                
Fairbanks North Star Borough.                                                                                                   
                                                                                                                                
4:29:45 PM                                                                                                                    
MR.  WARD  replied  the  answer depends  on  whether  it  is  an                                                                
elementary, middle,  or high  school. With  the FY25 budget  the                                                                
size  of classes  will  increase by  five  students, except  for                                                                
elementary due to the hold harmless provision.                                                                                  
                                                                                                                                
CHAIR TOBIN  replied that is  helpful to understand.  She stated                                                                
her  belief  that   the  National  Education  Association  (NEA)                                                                
recommends a  ratio of  1:10 for first  through sixth  grade. An                                                                
increase of 5 students is very aggressive.                                                                                      
                                                                                                                                
4:30:38 PM                                                                                                                    
BRENT   JOHNSON,  Assembly  Member,   Kenai   Peninsula  Borough                                                                
Assembly, Soldotna,  Alaska said he  supports the six  points of                                                                
consensus that were presented by AML.  He shared his interest in                                                                
wrestling and  that  Service High  School in  Anchorage won  the                                                                
regional championship for 12 - 15 years in a row. He opined that                                                                
this was not luck but good coaching and development of a program                                                                
where success  bred success. He  stated Alaska  needs to do  the                                                                
same with its education system. He said providing an increase to                                                                
the BSA  and addressing  the six points  of consensus  moves the                                                                
state  towards creating  a  good  system. It  doesn't  guarantee                                                                
success, but it enables success. Society can do things to make a                                                                
teacher's job more  friendly. If teachers have a  job where they                                                                
are happy  and successful, then  children will have  success and                                                                
the system will feed on itself.                                                                                                 
                                                                                                                                
4:33:25 PM                                                                                                                    
RODNEY  DIAL,  Mayor,   Ketchikan  Gateway  Borough,  Ketchikan,                                                                
Alaska,  said he  had  an  idea to  help  stretch limited  state                                                                
education funds further. He noted  that for years, the Ketchikan                                                                
Gateway Borough's primary policy issue has been the disparity in                                                                
the required  local contribution,  a state  tax imposed only  on                                                                
organized boroughs  and municipalities.  The concern isn't  that                                                                
the borough pays the tax, but that  many other areas do not, and                                                                
it's not based on the ability to  pay. He pointed out that areas                                                                
 outside of  Fairbanks, Palmer, and as far  as Valdez pay nothing                                                               
 to  support  education. It's  not  just  about  what they  could                                                               
 contribute  in   support  of  education,  but   also  about  the                                                               
 efficiencies that would result from mandatory borough formation.                                                               
 He used Prince of Wales Island as an example, noting that it has                                                               
 three school districts serving only a few thousand people, which                                                               
 he said wastes limited education dollars.                                                                                      
                                                                                                                                
 MR.   DIAL  explained  that   half  the  state,   which  remains                                                               
 unorganized,  provides no  local  support for  education because                                                               
 some  communities,  who could  afford  it,  choose  not to  form                                                               
 boroughs  in order to  avoid paying education  taxes. This makes                                                               
 the education funding pie smaller for everyone else. Unorganized                                                               
 areas  experience inflation just  like organized areas,  but the                                                               
 difference  is  that  they  are  shielded by  the  state,  which                                                               
 essentially inflation-proofs their education needs each year. He                                                               
 urged  the legislature to  pursue borough formation and,  in the                                                               
 meantime, requested  that the state,  at a  minimum, provide the                                                               
 same  inflation protection to organized  boroughs as it  does to                                                               
 unorganized ones.                                                                                                              
                                                                                                                                
 4:35:47 PM                                                                                                                   
 SCOTT ARNDT, Mayor,  Kodiak Island Borough, Kodiak, Alaska, said                                                               
 that Kodiak  was forced to form a  borough that includes village                                                               
 schools, which  do not receive enough  funding, leaving the town                                                               
 to  carry  the costs  on  the  local tax  base.  He thanked  the                                                               
 committee members for their continued support of the School Bond                                                               
 Debt  Reimbursement Program,  which  is crucial  for  Kodiak. He                                                               
 emphasized  that  the  proposed  $680  increase to  the  BSA  is                                                               
 desperately  needed.  He  opined  that  the governor's  proposed                                                               
 three-year teacher bonus experiment is  not a solution to salary                                                               
 issues, as it does not guarantee long-term funding.                                                                            
                                                                                                                                
 MR. ARNDT said  continued maintenance is a persistent problem in                                                               
 Kodiak,  and to  cover revenue losses,  some of  the Coronavirus                                                               
 Aid, Relief, and  Economic Security (CARES) Act funds were used.                                                               
 It costs  roughly $2.63.0  million to replace  a school roof. He                                                               
 also  noted  that the  guidelines for  minor  maintenance, which                                                               
 school  districts are  responsible for,  and  major maintenance,                                                               
 handled  by  boroughs, need  updating.  The  threshold was  last                                                               
 increased  from $15,000 to  $25,000 in  1999, and  adjusting for                                                               
 inflation and  the time it will take  to implement, he suggested                                                               
 raising it to $50,000.                                                                                                         
                                                                                                                                
 MR.  ARNDT pointed  out that  part of  the funding  allocated to                                                               
 school  districts  is meant  for  maintenance,  but the  state's                                                               
 failure  to  adequately  address  funding  sources  for  schools                                                               
remains a significant issue. He urged the committee to secure as                                                                
much funding as possible and thanked them for their efforts.                                                                    
                                                                                                                                
4:38:58 PM                                                                                                                    
SENATOR  KIEHL said  Kodiak Island  Borough  school district  is                                                                
unusual because  it has  mid-size community schools  and several                                                                
rural  village  schools.  He  said   the  bonus  program  issues                                                                
incentives by district. He asked if  the borough works to retain                                                                
teachers in village schools  in the same way it  does for Kodiak                                                                
proper.                                                                                                                         
                                                                                                                                
MR.  ARNDT  replied yes,  except  that  village schools  receive                                                                
housing assistance for  teachers. Under the bonus  program, each                                                                
Kodiak teacher is  to receive $10,000. However, there  are other                                                                
school professionals that do not  qualify for the program. There                                                                
is inequity in the program, and it is a problem.                                                                                
                                                                                                                                
4:40:39 PM                                                                                                                    
FELIX  RIVERA,  Assembly   Member,  Municipality  of  Anchorage,                                                                
Anchorage,  Alaska, said  there  is  widespread acceptance  that                                                                
Alaska's education  system needs more  funding. In  January, the                                                                
Anchorage Assembly passed a  resolution supporting the Anchorage                                                                
School District's request  to increase the  BSA by no  less than                                                                
$1,413, bringing  it to  $7,373, and to  increase transportation                                                                
funding by  at least $209  per student, raising  it to  $690 per                                                                
pupil  for   FY  25.   The  assembly  became   involved  because                                                                
underfunding schools hurts the  entire community. Property taxes                                                                
have  risen  without school  bond  debt  reimbursement, and  the                                                                
decreased  support for  schools  is  driving young  families  to                                                                
leave,   which  negatively  impacts   Anchorage's  economy   and                                                                
residents' quality of life, exacerbating the workforce shortage.                                                                
Anchorage wants  to provide its  students with  opportunities to                                                                
thrive  in   the   school  system,  but   the   state's  chronic                                                                
underfunding of  public education is stifling  the opportunities                                                                
that  once  made  the  system remarkable  and  offered  families                                                                
choices. He questioned how local  communities can be expected to                                                                
fill   the   gap    for   Alaska's   constitutionally   mandated                                                                
responsibility to  fund education.  While local  communities are                                                                
willing partners,  inflation and increased  property assessments                                                                
are putting significant pressure on local taxpayers.                                                                            
                                                                                                                                
MR.  RIVERA  acknowledged  that committee  members  have  worked                                                                
diligently to  improve education  funding, but  he is  concerned                                                                
that the state is squandering educational opportunities for both                                                                
current  and  future  generations. He  implored  legislators  to                                                                
address the  funding issue to  provide stability and  relief for                                                                
schools  in   Alaskan  communities.  He  shared   various  facts                                                                
 regarding the  BSA, maintenance, and inflation,  and warned that                                                               
 ASD  may be forced to  eliminate 450 educators and  staff in May                                                               
 2024  unless legislative  action  is taken  by  mid-February. He                                                               
 urged swift action.                                                                                                            
                                                                                                                                
 4:44:16 PM                                                                                                                   
 ANNA  BRAWLEY,   Assembly  Member,  Municipality  of  Anchorage,                                                               
 Anchorage, Alaska, said she agreed with the comments made by her                                                               
 colleagues across the state. She noted that two key concerns for                                                               
 both   local  and   state  governments   are  the   economy  and                                                               
 infrastructure. She  shared how her family  moved frequently and                                                               
 chose where  to live based on the  quality of public schools and                                                               
 affordable housing  options. She opined that  most families look                                                               
 for  good  infrastructure when  deciding  where  to settle.  She                                                               
 emphasized  that  public  schools  are  a  critical  part  of  a                                                               
 community's  infrastructure in  Alaska,  noting  that the  state                                                               
 competes with others  for talent. Alaska needs to attract people                                                               
 to   work  on   large  infrastructure  projects,   and  economy,                                                               
 infrastructure,  and schools are  interconnected. She  urged the                                                               
 legislature to take action to ensure these systems work together                                                               
 effectively.                                                                                                                   
                                                                                                                                
 4:46:58 PM                                                                                                                   
 SENATOR  KIEHL asked how  much Anchorage has  invested in school                                                               
 major  maintenance during  the  state's nine-year  moratorium on                                                               
 participation, for which it has received no state reimbursement.                                                               
                                                                                                                                
 MS. BRAWLEY replied  that Anchorage is a community that utilizes                                                               
 bonding. Unfortunately, the school bond has failed over the past                                                               
 couple  of  years,  leading to  a  backlog  of maintenance.  The                                                               
 municipality   regularly  asks  voters   to  help   fund  school                                                               
 maintenance.  She stated  that she  would provide  the committee                                                               
 with specific details on the local contribution.                                                                               
                                                                                                                                
 4:48:05 PM                                                                                                                   
 SENATOR  KIEHL  said  he  would  appreciate  having  the  dollar                                                               
 amounts,  as the  state's moratorium  has put  communities  in a                                                               
 difficult position. He expressed his appreciation for the effort                                                               
 municipalities are making in the absence of state action.                                                                      
                                                                                                                                
 4:48:44 PM                                                                                                                   
 SENATOR GRAY-JACKSON said  maintaining a healthy fund balance is                                                               
 valuable  to obtaining  a  favorable bond  rating.  She inquired                                                               
 whether  a  2011  assembly  resolution  regarding  fund  balance                                                               
 maintenance was still in effect.                                                                                               
                                                                                                                                
 MR. RIVERA replied yes, the resolution was still in effect.                                                                    
                                                                                                                                
4:49:21 PM                                                                                                                    
SENATOR GRAY-JACKSON asked whether an  independent auditor still                                                                
recommends the amount to hold in reserve.                                                                                       
                                                                                                                                
MR.  RIVERA  replied  yes.  The   recommended  fund  balance  is                                                                
approximately 12 percent.                                                                                                       
                                                                                                                                
4:50:21 PM                                                                                                                    
NATHAN  HADLEY,   JR.,  Assembly  President,   Northwest  Arctic                                                                
Borough, Kotzebue, Alaska, said he grew up  in a village without                                                                
running water  or sewer.  As a  student living  in Buckland,  he                                                                
joined all  sports because  he wanted to  shower at  the school.                                                                
Building  maintenance is  important  for  villages. He  said  he                                                                
supports AML's presentation.                                                                                                    
                                                                                                                                
4:51:17 PM                                                                                                                    
CRAIG  MCCONNELL,  Assembly Member,  Northwest  Arctic  Borough,                                                                
Kotzebue, Alaska, Mr. M  said he is a former  teacher who worked                                                                
for the district  for 35 years, with 24 years  as the facilities                                                                
director. He testified that resources were  not wasted. In terms                                                                
of maintenance  operations, the Northwest Arctic  Borough School                                                                
District was  one of  the few  to operate  below the  30 percent                                                                
maintenance  threshold,  with one  year  operating  at  just  18                                                                
percent  of   the  budget.  However,   inflation  has   made  it                                                                
increasingly  difficult  to  operate.  The  governor's  proposed                                                                
increase would provide  $612,000 for the district,  which serves                                                                
1,800 students. Fuel costs have risen by  $2 per gallon, and the                                                                
borough burns  600,000 gallons of  fuel per  year, leading to  a                                                                
$1.2  million  increase  in fuel  costs  alone.  The  governor's                                                                
proposed increase would not even cover the increased fuel costs,                                                                
let  alone other  rising  costs for  electricity, water,  sewer,                                                                
garbage, insurance, maintenance, salary increases, and housing.                                                                 
                                                                                                                                
MR.  MCCONNELL  pointed  to  the   committee  room's  vents  and                                                                
explained that  they supply  and return  fresh air.  An engineer                                                                
would typically recommend 50  percent fresh air, but due  to the                                                                
cost of  heating the fresh  air, it has  been reduced to  just 5                                                                
percent to  save on fuel.  He opined  that the borough  would go                                                                
bankrupt if  it complied with  everything the state  and federal                                                                
governments required.  He emphasized  that he  never cuts  areas                                                                
concerning safety.                                                                                                              
                                                                                                                                
MR.  MCCONNELL described a  specific issue  where a  30-year-old                                                                
fire alarm system in one school is no longer compatible with the                                                                
community's power source. The borough does  not have $700,000 to                                                                
replace  the fire  system. The  school has  a  hired watchperson                                                                
 monitor  for fires. The  watchperson stays up  through the night                                                               
 when visiting teams sleep at the school. He said the district is                                                               
 in  a difficult situation and desperately needs  funding; a $340                                                               
 increase is insufficient; $1,400 is needed.                                                                                    
                                                                                                                                
 4:55:49 PM                                                                                                                   
 JOSH VERHAGEN, Mayor, City  of Nenana, Nenana, Alaska, said that                                                               
 Nenana  is a  home rule  city and  is not  part of  an organized                                                               
 borough.  It  operates  its  own  city  school  district,  which                                                               
 includes a  K-12 school. Additionally, the Nenana Student Living                                                               
 Center,  which has operated  for 22  years, houses approximately                                                               
 110 students  from rural Alaska, 96 percent  of whom are Native.                                                               
 The graduation  rate at the center is  94 percent. The CyberLynx                                                               
 correspondence program, also based  in Nenana, serves over 1,000                                                               
 students.                                                                                                                      
                                                                                                                                
 MR.  VERHAGEN  expressed pride  in  Nenana's  school system  and                                                               
 gratitude for  the funding  it receives. He  reiterated that the                                                               
 Alaska  Constitution states, "the  legislature shall  by general                                                               
 law  establish and maintain a  system of public  schools open to                                                               
 all  children of  the state,"  noting that  it does  not mention                                                               
 municipalities.  He urged  the legislature  to make  what  it is                                                               
 obligated to fund  a priority. Nenana has invested significantly                                                               
 in  its school system and  has worked diligently to  be as self-                                                               
 sufficient  as  possible.  The  average  cost  per  student  per                                                               
 semester  is  $7,800.  To  balance  the  budget  this  year,  he                                                               
 requested a  minimum BSA increase of  $600 and acknowledged that                                                               
 other schools may require more.                                                                                                
                                                                                                                                
 MR.  ANDREASSEN said the testimony provided  highlights the need                                                               
 for  collaboration and  a  solution to  fix  funding  across the                                                               
 state.  He emphasized  that  partnership and  collaboration will                                                               
 depend on  the state fulfilling its constitutional obligation to                                                               
 fund  public education, while also  ensuring local collaboration                                                               
 and  maintaining as  much local  control and  decision-making as                                                               
 possible.                                                                                                                      
                                                                                                                                
 4:59:54 PM                                                                                                                   
 SENATOR  BJORKMAN said he  wanted to thank  Educators Rising for                                                               
 attending the  hearing. The students  have identified themselves                                                               
 as wanting to  be educators. He noted that advocating for things                                                               
 that  they  believe   in  is  an  important  part  of  teaching.                                                               
 Testifiers and  legislators have indicated that they  have had a                                                               
 valuable education. He  mentioned having a great experience with                                                               
 one  of the  assembly members that  testified. He said  he would                                                               
 like to see investment in Alaska's schools.                                                                                    
 5:01:42 PM                                                                                                                   
CHAIR TOBIN said she finds it exciting that one of the students                                                                 
wants to be a counselor.                                                                                                        
                                                                                                                                
5:02:24 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Tobin adjourned the Senate Education Standing Committee                                                                   
meeting at 5:02 p.m.                                                                                                            

Document Name Date/Time Subjects
Alaska Municipal League Updated Presentation 02.21.2024.pdf SEDC 2/21/2024 3:30:00 PM
Education