Legislature(2023 - 2024)SENATE FINANCE 532
04/13/2023 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB52 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 52 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
April 13, 2023
9:01 a.m.
9:01:40 AM
CALL TO ORDER
Co-Chair Olson called the Senate Finance Committee meeting
to order at 9:01 a.m.
MEMBERS PRESENT
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Jesse Kiehl
Senator Kelly Merrick
Senator David Wilson
MEMBERS ABSENT
Senator Lyman Hoffman, Co-Chair
ALSO PRESENT
Senator Cathy Giessel; Senator Loki Tobin, Sponsor; Mike
Mason, Staff, Senator Loki Tobin; Heidi Teshner, Acting
Commissioner, Department of Education and Early
Development; Elwin Blackwell, School Finance Manager,
Department of Education and Early Development; Brian Holst,
Executive Director, Juneau Economic Development Council;
Senator Mike Shower; Dr. Roy Getchell, Superintendent,
Haines Borough School District.
PRESENT VIA TELECONFERENCE
Jamie Burgess, Superintendent, Nome Public Schools.
SUMMARY
SB 52 INCREASE BASE STUDENT ALLOCATION
SB 52 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 52
"An Act relating to education; increasing the base
student allocation; and providing for an effective
date."
9:02:37 AM
SENATOR LOKI TOBIN, SPONSOR, discussed SB 52, which was
sponsored by the Senate Education Committee. She spoke of
testimony from various stakeholders that detailed the
challenges faced by school administrators, students, and
educators. She discussed a PowerPoint presentation "Senate
Bill 52 - An Act to Increase the Base Student Allocation,"
(copy on file).
Senator Tobin looked at slide 2, which showed the public
education clause in the Alaska Constitution, Article VII,
Section 1:
The legislature shall by general law establish and
maintain a system of public schools open to all
children of the state, and may provide for other
public educational institutions. Schools and
institutions so established shall be free from
sectarian control. No money shall be paid from public
funds for the direct benefit of any religious or other
private educational institution.
9:04:51 AM
Senator Tobin spoke to slide 3, "Kristine Moore, et al.,
vs. State of Alaska":
• Article 7, Section 1 requires the state to:
• The State must establish educational standards.
(https://education.alaska.gov/standards)
• The State must assess for those standards.
(https://education.alaska.gov/assessments)
• The State must adequately fund schools so they
can provide instruction in the standards.
(https://education.alaska.gov/SchoolFinance)
• In delegating the responsibility to education
children to local school districts, the state
must provide adequate accountability and
oversight to ensure districts are fulfilling the
State's constitutional obligation.
(https://education.alaska.gov/akaccountability)
9:05:50 AM
Senator Tobin referenced slide 4, "The Moore Lawsuit
Settlement":
The Moore legal settlement states that the Education
Clause of the Alaska Constitution includes a right for
every child to have a meaningful opportunity to become
proficient in reading, writing, and math, and to be
able to meaningfully explore curriculum content areas
that were not assessed by State standards-based
assessments.
9:06:22 AM
Senator Tobin turned to slide 5, "Base Student Allocation
Increase":
Right now, the authorized Base Student Allocation
(BSA) for Alaska is $5,960.
• That includes the $30 increase authorized in
the Alaska Reads Act.
• The $30 increase goes into effect at the start
of FY 2024.
Senate Bill 52 calls for an additional $1,000 increase
to the BSA in FY 24, which begins on July 1. (Cost =
$257.2 million)
• SB 52 includes an additional $348 BSA increase
in FY 25, which begins on July 1, 2024.
• SB 52 includes an inflation adjusted BSA
increase in FY 26, which begins on July 1, 2025.
Legislative Finance estimates that each $100 change in
the BSA is estimated to increase state funding by
$25.7 million.
9:06:50 AM
Senator Tobin considered slide 6, which showed a graph of
Alaska K-12 funding. She asserted that the graph
highlighted the unpredictability of one-time funds for
Alaskas schools. She contended that one-time funding
resulted in a feast or famine culture in public education
funding, which had become apparent as school boards across
the state attempted to finalize their FY24/FY25 budgets.
She stressed that record inflation had eroded the
purchasing power of school districts.
9:07:29 AM
Senator Tobin displayed slide 7, "Increased School
Accountability and Transparency":
SB 52 amends the Alaska Reads Act to
• Develop a more user-friendly data dashboard,
leveraging remaining COVID relief funds to expand
capacity at DEED to support districts in data
collection and presentation.
• Collaborate with the Department of Workforce
Development and Labor to provide longitudinal
data of student outcomes.
• Empower school boards, administrators, parents,
and policymakers to make better policy decisions
at the local level.
9:09:23 AM
Senator Tobin highlighted slide 8, which showed headlines
from various Alaskan news outlets. She summarized that that
there was great need for predictable, sustainable funding
for public education in the state.
9:10:01 AM
Senator Tobin looked at slide 9, The Alaska Foundation
Formula:
Alaskas first foundation formula was enacted in
1962(ch.164, SLA 1962) based on recommendations from a
school finance study released by the State Board of
Education in 1961.
23-085 History of K-12 School funding,
Legislative Research Services
The study team believes Alaskas current funding
system has the right elements in place to address the
variations described aboveAdditionally, the data
show a system where increases in instructional
expenditures are tied to increases in student
performance on the Alaska Standards Based Assessments.
Review of Alaska's School Funding Program,
Prepared for the Alaska State Legislature by
Augenblick, Palaich and Associates, July 2015
Senator Tobin shared that in 2008 the legislature had built
upon the foundation formula and in 2015, researchers
commissioned by the legislature had determined that the
states foundation formula was equitable and fair. She
stressed that the BSA increase would benefit all public-
school students.
9:10:51 AM
Senator Tobin addressed slide 10, which showed three pie
charts that illustrated an education funding overview and
school district expenditure breakdown by category. She
stressed that statewide 74 percent of school funding went
directly to classrooms.
9:11:22 AM
Senator Tobin advanced to slide 11, "DEED Quick Facts":
Instructional staff comprise 74 percent of public-
school labor force.
• 2022-2023 Pupil to Teacher Ratio 17.55.
o7,298 classroom teachers, average salary
$76,991.95
• 2014-2015 Pupil to Teacher Ratio 16.42.
o 8,027 classroom teachers, average salary
$66,755.67 ($85,854.65 in FY23 dollars)
• 2010-2011 Pupil to Teacher Ratio 15.60.
o 8,468 classroom teachers, average salary
$61,439.63 ($85,300.45 in FY23 dollars)
9:11:50 AM
Senator Tobin looked at slide 12, "Education Funding Lags
Behind inflation.":
Inflation is at a 40-year high. (8 percent inflation
in 2022)
Schools have lost purchasing power, and therefore
programs and services have been cut.
From 2012 to 2022, the BSA has only increased by $250
per student (4.2 percent) while inflation has
increased by at least 24 percent (Anchorage CPI),
resulting in crippling staff shortages, school
closures, and program eliminations.
The Alaska Association of School Boards advocates for
not less than an $860 increase to the BSA for FY 2024.
The Anchorage School District has calculated that an
inflation proofed BSA for fiscal year 2024 would need
to increase by $1,268.
Legislative Finance notes that the BSA would need to
be $7,155 to match the buying power of the FY 2017
BSA.
9:12:36 AM
Senator Tobin showed slide 13, "One-Time Funding vs the
BSA:
When funding from outside the foundation
formula is added in, FY 2015 becomes the new
peak year for funding. ($43.0 million in one-time
funding)
For FY 2024 24 to match the FY 2015 funding
level in real terms, the BSA would need to
increase by $1,348 in FY 2024.
Legislative Budget and Audit Committee, January 30,
2023, Memorandum
9:12:55 AM
Senator Bishop thanked Senator Tobin for her work on the
legislation.
9:13:51 AM
Co-Chair Olson wondered how it would be known that
additional funding was going towards teacher salaries and
the effort toward teacher retention.
Senator Tobin thought the question might be best addressed
by invited testifiers, who could discuss how the funds
would be allocated at the local level.
Co-Chair Olson understood that the school administration
and school board set teacher salary.
Senator Tobin replied in the affirmative.
9:15:00 AM
MIKE MASON, STAFF, SENATOR LOKI TOBIN, discussed a
Sectional Analysis (copy on file):
Senate Bill 52: Increase Base Student Allocation
Version S Sectional Analysis
"An Act relating to education; increasing the base
student allocation; and providing for an effective
date."
Section 1 Amends AS 14.03.120 to add a new
subsection (k) requiring the Alaska Department of
Education and Early Development (DEED) to establish
and maintain an easy-to-understand internet website
that allows a member of the public to view and
download information, and to make recommendations
relating to improving public education in the State of
Alaska.
The website must include information required under AS
14.03.078, which is the statute that requires DEED to
provide annual progress reports to the Alaska State
Legislature about school districts.
The website must also include information from the
annual audit of school districts required under AS
14.14.050 and a description of how each school
district is addressing the needs of students who
receive special education services.
The website must also include a description of
resources provided to school districts regarding staff
training, progress in aligning curriculum with state
education performance standards, and a description of
the efforts of DEED to assist schools or school
districts that receive a low performance designation
under AS 14.03.123.
Subsection (L) allows school district to link to the
new website on their websites.
Subsection (m) directs the Department of Labor and
Workforce Development to collaborate with DEED to
gather data on the progress of each high school
graduating class in a district. The agencies would
gather information on career, postsecondary education,
and residency data on each student in the graduating
class. The departments must gather the data every five
years until 20 years after the high school graduating
date of the high school class.
Section 2 Amends Section 15 of the Alaska Reads Act
to add subsection (20) requiring DEED to collaborate
with the Department of Labor and Workforce Development
to gather data on the progress of each high school
graduating class under the new AS 14.03.120(m)
authorized in Section 1 of the Act.
Section 3 Amends AS 14.07.020(a) to add subsection
(18) to include the collaboration with the Department
of Labor and Workforce Development to the duties of
the Alaska Department of Education and Early
Development.
Section 4 Amends the Alaska Reads Act, House Bill
114 from the 32nd Alaska State Legislature, to
increase the Base Student Allocation (BSA) by an
additional $1,000 in fiscal year 2024. The Alaska
Reads Act amended AS 14.17.470, the BSA statute, to
increase the BSA from $5,930 to $5,960. Section 4 of
Senate Bill 52 further amends AS 14.17.470 to increase
the BSA to $6,960.
Section 5 Amends AS 14.17.470 to increase the BSA to
$7,308. The $348 increase to the BSA takes effect in
Fiscal Year 2025.
Section 6 Amends AS 14.17.470 to add a new
subsection (b) requiring DEED to increase the base
student allocation on July 1, 2025, by a percentage
equal to the average percentage of increase over the
preceding four calendar years in all items of the
Consumer Price Index for all urban consumers for urban
Alaska prepared by the U.S. Department of Labor. The
inflation adjustment takes affect at the start of
fiscal year 2026.
Section 7 Amends AS 44.31.020 to add subsection (8),
which adds the requirement to gather data on the
progress of high school graduating classes to the
duties of the Alaska Department of Labor and Workforce
Development. Subsection (8) requires the Department to
publish a biennial report on the data gathered on the
progress of each high school graduating class.
Section 8 Stipulates that Section 3 of the Act takes
effect on July 1, 2023.
Section 9 Stipulates that Section 2 of the Act takes
effect on July 1, 2023.
Section 10 Stipulates that the new subsections
authorized by Section 1 of the Act take effect on July
1, 2024.
Section 11 Stipulates that AS 14.03.120(m) enacted
by section 1 of this Act, and sections 6 and 7 of this
Act take effect on July 1, 2025.
9:19:35 AM
Senator Tobin interjected that the bill proposed to amend
the Alaska Reads Act when increasing the BSA in SB 52,
based on advice from legislative legal.
9:20:20 AM
Co-Chair Stedman inquired about inflation indexing and
wondered why the bill included inflation proofing, which
could put the legislature in the precarious position of not
being able to control the budget.
Senator Tobin stated that the provision was a policy call.
Mr. Mason noted that there was only one year of inflation
adjustment for FY 26.
Co-Chair Stedman commented that $257 million was
significant, which would increase to $430 million after
inflation proofing. He asked whether the Senate Education
Committee had discussed where the money would come from. He
added that the state was already struggling to balance its
operating budget.
Senator Tobin relayed that there had not been discussions
as to how the bill would be funded. She believed that the
matter should be sorted by the finance committees.
Co-Chair Olson considered the original bill, which was
seven lines long, and noted the significant increase in
page numbers and financial impact after being moved out of
the Senate Education Committee.
Mr. Mason explained that the first version of the bill had
been a simple $1000 increase through FY24. The additions to
the bill had been considered after much public testimony
and committee discussion by the Senate Education Committee.
9:24:12 AM
Senator Tobin commented that in committee there had been
many discussions after much public testimony about how to
provide stable and predictable funding streams for Alaskas
public schools.
9:24:59 AM
Co-Chair Stedman understood the inflation indexing. He
thought there was very little argument about changing the
BSA. He was curious what the Senate Education Committee had
discovered about the ability of the school districts to
absorb funding increases without squandering liquidity. He
wanted to hear input from different school districts.
Senator Tobin relayed that the committee had heard from
many superintendents and school boards who were eager to
absorb the additional funding. She shared that teachers
were not applying to jobs in Alaska and school districts in
the state were unable to offer competitive salaries.
9:27:47 AM
Co-Chair Olson suggested that the department follow up on
the issue.
9:28:06 AM
Senator Bishop appreciated Section 1, 3 and 7. He stressed
that the Department of Labor working in conjunction with
the Department of Education was an inspired idea and would
address any issue of student accountability.
Senator Tobin thanked Senator Bishop for his guidance and
assistance.
Co-Chair Olson commented that recruiting had been an
obstacle in the Bering Straits School District.
9:30:15 AM
AT EASE
9:34:02 AM
RECONVENED
HEIDI TESHNER, ACTING COMMISSIONER, DEPARTMENT OF EDUCATION
AND EARLY DEVELOPMENT, discussed a new fiscal note from
Department of Education and Early Development, OMB
Component 141. She read from the fiscal analysis:
The funding mechanism is a general fund transfer to
the Public Education Fund (PEF). The fiscal note
effect for FY2024 through FY2029 is reported in the
fiscal note for the PEF, as the funding is deposited
to the PEF, not into the Foundation Program funding
component. The above analysis is presented here for
explanation purposes only.
Acting Commissioner Teshner explained that the note, Fund
Capitalization, OMB Component 2804, reflected the funding
to the Public Education Fund:
SB52 will increase the base student allocation (BSA), under
AS 14.17.470, by $1,000 in the public-school funding
formula. The BSA will change from $5,960 to $6,960 in
FY2024 resulting in a $257 million increase in funding to
school districts. The BSA will increase an additional $348
in FY2025 from $6,960 to $7,308. The Department of
Education and Early Development (DEED) is instructed to
apply a Consumer Price Index (CPI) adjustment to the BSA in
FY2026 by taking the average of the preceding four calendar
years of the CPI for all urban consumers (CPI-U) in Alaska.
For the purposes of developing a fiscal note, the FY2026
CPI-U average is estimated to be 4.50%.
Acting Commissioner Teshner explained that there had been a
third page attached to the note that broke down the
increases by district, which was missing from the current
document before the members.
Co-Chair Olson asked when it would be given to members.
Acting Commissioner Teshner replied that the third page
would be sent to the committee within the day.
9:36:28 AM
Acting Commissioner Teshner addressed a new fiscal note
from DEED for Student School Achievement, OMB Component
2796:
To perform and coordinate the data collection,
tracking, and collaboration with DLWD and other
stakeholders needed for this legislation, it would
require one Program Coordinator 1, Range 18, Step B/C,
at $114.7. In addition, department chargebacks of
$10.1 would be needed, plus a one-time increment of
$5.0 for supplies and equipment.
Acting Commissioner Teshner relayed that the total request
in the FY 24 appropriation column was $129.8 thousand, with
$2.9 million already included in the governors proposed
budget.
9:37:25 AM
Co-Chair Stedman asked whether the department supported the
bill. He queried how the department planned to fund the
legislation.
Acting Commissioner Teshner relayed that the department
supported adequate funding for school districts. She
qualified that how the state funded the adequate financial
support for school districts was a discussion that would
need to happen between the legislature and the
administration.
Co-Chair Stedman asked whether she believed that adequate
funding was a 25 percent reduction in the BSA. He asked her
to define adequate funding.
Acting Commissioner Teshner thought the definition would
vary from district to district. She said the answer would
be based on the funds available by the state.
Co-Chair Stedman thought the Senate Finance Committee was
the ideal place to have the conversation about adequate
funding. He wanted to know what the department considered
adequate funding for education.
Acting Commissioner Teshner thought any increase to the
foundation formula would help districts. She was not able
to provide a range or a number. She emphasized that it
depended on what was available after weighing all the
expenditures.
9:39:39 AM
Co-Chair Olson suggested that school boards and school
administrators could be brough before the committee to
testify about adequate funding.
Acting Commissioner Teshner replied that it was important
to consider that some districts had one-time Covid-19
funding that still needed to be spent. She said that
districts had been directed not to use the money for
ongoing operations. She stated that increasing the BSA
would provide districts with consistent funding. She
thought any increase would be helpful.
Co-Chair Stedman noted the $257 million request for FY24,
and the FY25 request for $346 million, and considered
affordability of the requests with competing resources. He
reminded the chairman that the budget recently submitted to
the committee was short by $500 million, which was after
the other body had modified the dividend payout for 2024.
He worried that the state could be facing a billion-dollar
budget deficit and thought that prudent decisions should be
made. He pointed out that under the legislation the North
Slope was looking at a 44 percent increase in funding over
the next two years. He reiterated his desire to know from
the school districts whether they could effectively absorb
increased funding.
9:42:44 AM
Co-Chair Olson commented on a school in Kaktovik that had
burned down and had not yet been rebuilt.
Co-Chair Stedman understood that the question to the
department was complicated. He pointed out that not only
was there a need for guidance from the department on
funding, but it was highly likely that there would be some
recommended changes to the Teacher's Retirement System
(TRS) and the funding levels. He thought that the matter
was one of limited liquidity. He stressed that the BSA was
only one of many issues facing the state in terms of
education.
Co-Chair Olson commented that the committee was trying to
balance the proposed budget and be sure there was available
funding for future operating and capital budgets.
9:46:20 AM
Senator Bishop asked for a modicum of latitude. He
expressed concern about keeping school maintenance and
major maintenance funding at the forefront.
Acting Commissioner Teshner addressed Co-Chair Stedman's
remarks. She expressed that there were districts that had
ongoing operation al costs. She believed most districts
would be able absorb and use the proposed increase in
funds.
9:48:53 AM
Co-Chair Stedman wanted to make a point of clarification.
He recalled that the previous year the legislature put $57
million in the budget for education. He asked if the $100
increase could be on the base BSA.
Acting Commissioner Teshner had heard that the $30 increase
to the BSA that had been included in the Alaska Reads Act
had not been sufficient and a $100 increase should be a
minimum.
9:49:49 AM
Co-Chair Stedman wanted to know if the department was using
the $5960 as the base or was the funding from the previous
year included.
Acting Commissioner Teshner explained that the $5960 that
was currently in statute for FY24, was the base, and did
not include the one-time funding from the previous year.
9:50:31 AM
Senator Kiehl asked whether the department was suggesting a
reduction of $30 million statewide, going from the $57
million of one-time money, to $27 million in sustainable
funding.
Acting Commissioner Teshner emphasized that districts
needed inside the formula, sustainable funding. She was not
proposing a cut to districts.
Senator Kiehl was interested in how the minimum number was
reached. He wanted clarification on the notion that most
districts were in a position of having more than 10 percent
in reserves.
Co-Chair Olson thought the $100 increase was an arbitrary
number that was used as a starting point.
Acting Commissioner Teshner agreed. She said that there
were approximately 30 districts that were over the 10
percent limit. She offered to provide more information.
9:53:06 AM
ELWIN BLACKWELL, SCHOOL FINANCE MANAGER, DEPARTMENT OF
EDUCATION AND EARLY DEVELOPMENT, offered his perspective on
the bill. He could not speak to the dollar amount in the
bill. He said that districts are at the point where they
needed additional resources to continue operations. He
asserted that the static BSA would not provide the
resources needed to keep up with increased costs. He
lamented that teacher to student ratios would increase due
to much of the resources going to other fixed costs. He
referenced increased fuel costs. He thought that there were
bills in play that could help alleviate the strain on
districts. He did not have a figure for the increase; he
thought any amount would be more helpful than no increase.
9:54:52 AM
Co-Chair Stedman recalled that the previous year increase
outside the formula of $58 million should be the base for
suggested increase.
9:55:52 AM
BRIAN HOLST, EXECUTIVE DIRECTOR, JUNEAU ECONOMIC
DEVELOPMENT COUNCIL, relayed that he was a graduate of the
Juneau School District and had served on the Juneau School
Board for the previous nine years.
Mr. Holst addressed the issue of accountability. He felt
that there was a large amount of accountability already
built into the system. He noted the work of site councils
and parent involvement. He recounted that the previous
evening the Juneau School Board had spent two hours with
the Juneau Assembly discussing transparency and
accountability. He stressed that the accountability
measures set forth in the Alaska Reads Act would cost
district two to three times more than what was provided for
education in FY23.
Mr. Holst discussed outcomes of schools in Alaska. He
referenced a National Assessment of Educational Progress
(NAEP) report from the 1990s that showed that Alaska was
keeping up with national averages He said that the state
was currently below average in math and reading. He said
that in 1996, Alaska ranked 1st in the country for
percentage of people over 25 with a high school diploma,
th
currently the state ranks 10. He said that in 1996, the
state was 4.3 percentage points higher than the national
average for high school graduates: currently, the state was
4.8 percent below the national average. The sate was ranked
th
40 out of 50 states for high school graduates going to
college.
9:59:36 AM
Mr. Holst continued his testimony. He noted that 65 percent
of the jobs in the state required some postsecondary
credentials, yet less than 55 percent of Alaskans have
those credentials for those jobs. He contended that Alaska
had done well in education in the past, which meant that
current trends could be improved. He discussed economic
relativity and the importance that the state be constantly
improving to not fall behind. He mentioned rankings via the
th
U.S. News and World Report, which placed Alaska 49 out of
50 in terms of the quality of our K-12 system. The stat was
thth
49 in high school graduation and 50 in college degree
attainment. He said that services had been reduced every
year, while costs had increased in every area of education.
Mr. Holst thought everyone could agree that inflation was
eroding the schools. He suggested that the BSA should
increase by $1,500 to meet inflation levels. He said that
the state paid less than the national average on education.
He shared that in 2003, there was one Title 1 elementary
school with 23 percent of the students qualifying for free
lunch; currently there re 6 Title 1 elementary schools,
with up to 50 percent of the student qualifying for free
lunch. He stressed that two-thirds of students were not
ready for school at the start of kindergarten.
10:03:15 AM
Mr. Holst discussed the importance of teachers' role in
school success. He provided that Alaska was the only state
in which teachers hired after 2006 cannot earn a pension
and have a fixed retirement. He lamented that teachers are
barely earning a living wage and cannot make ends meet.
Mr. Holst cited that economic research on education and
economy. He referenced economic research on education
funding and the economy, and thought the data was
abundantly clear that Alaska should invest in education.
Mr. Holst cited numerous studies about the link between
investing in education and the future economic stability of
Alaskans. He offered to send annotations of studies
providing economic evidence.
10:07:55 AM
Mr. Holst continued to discuss economic research that
supported increased education funding. He used the example
of the state of Massachusetts, which had made significant
investments in education. It was estimated that for every
dollar of investment in education in Massachusetts, a
return of $1.80 was experienced economically. In many
cases, education funding closed the achievement gap between
low- and high-income families.
Mr. Holst discussed the PFD and the BSA. He reasoned that
if the inflation-proofing was good for the Permanent Fund,
it was also good for the BSA.
Mr. Holst discussed spending for the PFD versus spending
for the BSA. He thought there was no better vehicle for
injecting resources for the state's economy than an
increase to the BSA.
10:11:47 AM
Co-Chair Olson thought Co-Chair Stedman had perspective in
the inflation proofing of the Permanent Fund.
Co-Chair Stedman commented that the legislature was working
to keep the Permanent Fund inflation proofed. He commented
that he would be surprised if the JEDC recommended a
customer inflation proofing their expenditures.
10:12:58 AM
Co-Chair Olson pointed out that the PFD itself was not
inflation proofed, only the fund.
Co-Chair Merrick agreed that the corpus of the fund was
inflation proofed and the PFD itself.
Mr. Holst replied that the effect was the same. Inflation
proofing the fund effectively inflation proofed the
dividend in statute. He thought that there were items in
the state budget that were going to be inflation proofed,
the BSA should be one of those things. He concluded that
the state was currently ranked #1 in economic stability by
the U.S. News and World Report, which meant that the state
had considerable resources and what was needed was
leadership that chose to use the states available wealth
of resources to adequately fund K-12 education.
10:15:48 AM
Co-Chair Stedman thought Mr. Holst had a unique perspective
as director of the JEDC and as a member of the school
board. He mentioned the cash call on the size of the
dividend. He pondered that to meet the request of the BSA
increase, some other area of state funding would have to be
balanced. He asked for Mr. Holst's thoughts on how
resources should be allocated.
Mr. Holst believed that prioritizing investing in schools
was the best investment for Alaskans and for the states
economy. He questioned the mindset of pitting the BSA
against the PFD. He thought the PFD had almost no value for
wealthier Alaskans but was important for lower-income
Alaskans. He was not a fan of telling people how to spend
money. He thought that the impact of the PFD had an uneven
effect across the board, whereas funding for education was
proven by research to improve the lives of all Alaskans,
regardless of economic status.
Mr. Holst considered the question of broad-based taxes.
10:19:15 AM
Co-Chair Stedman asked what Mr. Holst felt was the
absorption level of stepping up the BSA when considering
the Juneau School System.
Mr. Holst suggested that if there was no increase in the
current year, JSD would cut 40 teachers and would face an
approximately $4 million deficit. He believed that the
legislature would fund and additional $800, but the figure
used for the budget was an increase of $440. He continued
that JSD continued to cut items including library
assistance, support for STEM supports at the elementary
level, teacher training, and special education support. The
district needed an additional $600 added to the BSA to
repeat the offerings of the previous year and an additional
$1200 if improvements were going to be made. He cited that
middle school classrooms had more than 40 kids, which was
not good for the age group. He felt that if the BSA were
raised $1500 in FY24 the resources would be invested to
reduce class size. He mentioned current union negotiations
that would be helped by increased funds.
Mr. Holst recounted that the previous night the district
had discussed a deficit in transportation because funding
for transportation had been flat for years. He argued that
st
1 grades should not have to walk more than a half mile to
school.
10:22:43 AM
Mr. Holst contended that school districts around the state
would benefit from a substantial increase in the BSA and
not just be treading water.
10:23:07 AM
Senator Olson noted that Senator Shower had entered the
gallery.
10:23:27 AM
Senator Bishop asked what quality of life aspects a new
business considered when moving into the state.
Mr. Holst answered that they wanted to see good schools.
10:23:56 AM
JAMIE BURGESS, SUPERINTENDENT, NOME PUBLIC SCHOOLS (via
teleconference), spoke in support of the bill. She
recounted that over the previous three years she had
endeavored to have a "lean" budget with the assistance of
Nome Public Schools (NPS) business managers. She detailed
that work had been done to assure that teachers had
reasonable salary increases, and that schools stayed
maintained while providing a variety of academic offerings
to advance students to the postsecondary level. She
lamented that without an increase to the BSA the district
would need to reduce positions and resources in key areas.
She stressed that the district could no longer do more
with less year after year and would now be forced to do
less with less. She shared that Nome had prided itself on
its rich art community and the loss of choir and band at
the K-12 level, due to lack of funding, has been a
significant blow to the community. She said that the
district anticipated the loss of 20 percent of its teaching
force, which was unprecedented. She added that young
teachers are leaving, and the older teachers are near
retirement.
10:27:33 AM
Ms. Burgess described reduction in travel for sports teams.
She discussed community support through bake sales and
opined that the cost for sport travel will fall heavily on
families.
Ms. Burgess discussed the aging facilities in desperate
need of repair. She said that, typically, $300,000 to
$400,000 was transferred from general funds into Apple
Improvement Funds each year for major maintenance projects,
emergencies, and projects that did not qualify for state
funds. She noted that next year's budget would spend nearly
50 percent of the fund would need to be used for a roof
replacement on the high school. She described water damage
in Nome schools, and the issue of mold in school buildings.
Ms. Burgess discussed inflationary pressure, which was
affecting all areas of the budget. She noted pencils,
markers, paper towels, toiled paper, and contracts with
physical and occupational therapists, were all diminished
in capacity due to lack of resources. She stressed that the
district would drain its fund balance to balance next
years budget, which was unsustainable into the future.
10:30:33 AM
Ms. Burgess noted that NPS was in negotiations with
teachers and would not be able to offer increased salaries.
She discussed increased energy costs, and increased
property and liability insurance premiums.
10:31:44 AM
Ms. Burgess continued to discuss Nome school achievement.
She said that reading on the elementary level was at high
levels. She cited that the high school had one of the
highest percentages in rural Alaska for students qualifying
for the Alaska Performance Scholarship. She asserted that
one-time funding was appreciated but did not provide
predictability and stability from year to year. She urged
the committee to increase funding to the BSA.
10:32:43 AM
Co-Chair Olson thanked Ms. Burgess for her testimony. He
referenced storms in Western Alaska and the effect weather
had on buildings.
10:33:08 AM
Co-Chair Stedman wanted to hear about the absorption rate
over the following two years if the BSA were to be
increased. He reminded that an increase would come from the
PFD appropriation either the BSA could be increased, or
the 50/50 dividend could be issued but not both.
Ms. Burgess believed that the PFD brought benefits to
residents but thought that education funding offered longer
term benefits. She acknowledged that the dividend was not
needed as much by some individuals, while education funding
benefited everyone. She suggested that the state could
consider additional forms of revenue to provide resources
for its residents. She appealed to the idea of an income
tax.
Ms. Burgess thought there was a way to fund schools
adequately and equitably and provide a PFD to residents.
10:35:41 AM
Senator Bishop reminded that there was an education raffle
as part of the PFD application, which had an endowment that
was constitutionally protected and could not be swept by
the legislature.
10:36:31 AM
DR. ROY GETCHELL, SUPERINTENDENT, HAINES BOROUGH SCHOOL
DISTRICT, relayed that he was the incoming president of
Alaska Superintendents Association and the Alaska Council
of School Administrators. He discussed a PowerPoint
presentation entitled "SENATE BILL 52 - THROUGH THE LENS OF
THE HAINES BOROUGH SCHOOL DISTRICT," (copy on file).
Dr. Getchell looked at slide 2, which listed the
priorities:
1. Reliable & Predictive Public Education Funding
The BSA must be increased to keep up with
inflation to provide our students the quality
educational opportunities that they deserve.
2. Reliable, Convenient & Adequate Ferry Service
The Alaska Marine Highway is critical to Haines
and our students future.
3. Competitive Recruitment & Retention of Alaskan
Educated Teachers, Support staff, & Administrators
Haines students deserve high quality educators to
achieve their potential in becoming contributing
members of society and critical thinkers prepared
for individual success.
10:38:02 AM
Dr. Getchell spoke to slide 3, "My Alaska Story," which
showed a photograph of a 6th grade class of which he was a
teacher. He recounted that he had worked at a restaurant
and delivered pizzas to save the money to move to Alaska.
He said when he landed in Alaska here were over 3,000
applicants to compete with; so many people wanted to teach
in Alaska. He relayed his story working in education in
Alaska.
10:40:03 AM
Dr. Getchell referenced slide 4, "A Once Unthinkable
Crisis":
• The number of certified teaching applications are
down 90 percent when compared to 10 years ago
• The number of administrator applications are down 75
percent when compared to 10 years ago
• Over 75 percent of current certified applications
would require a J-1 visa if hired
• Less than 10 percent of current applicants for FY 24
positions possess a degree from the UA system
• Our certified turnover rate for FY 24 is 39 percent
• International recruitment opportunities, reductions
in pay, and the elimination of any sort of defined
benefit have crippled Alaska's number of potential
educators
Dr. Getchell noted that the data on the slide was from
Haines. He thought it was important to hire Alaskan
educators. He referenced the Northwest Arctic Borough,
which had experienced increased staffing difficulty
recruiting teachers and educators.
Dr. Getchell discussed a nation-wide decrease in graduates.
He referenced competition with international locations.
10:44:33 AM
Dr. Getchell turned to slide 5, "Total First Day Vacancies
in AK," which showed a line graph illustrating the
significant increase in total first day vacancies for
teachers from 2020 to 2023. He commented that the first
week of school was a critical time for community building
in the classroom and the state was currently down 400
teachers statewide.
10:46:32 AM
Dr. Getchell considered slide 6, "Cost of Teacher
Turnover":
• IS E R Study 2017
• Every time Alaska replaces a teacher, it costs
the school district over $20,000
• RAND Study 2019
• Average cost to replace a principal is $75,000
• Ronfeldt, Loeb, and Wyckoff 2013
• Students in grade-levels with higher turnover
score lower in both ELA and math and this effect
is particularly strong in schools with more low
performing and minority students. Moreover, the
results suggest that there is a disruptive effect
of turnover beyond changing the distribution in
teacher quality.
• Mid-Year Turnover
Dr. Getchell discussed the hiring of high-quality teachers
and principals. He stressed that schools that had high
rates of teacher turnover could not provide quality
education to students.
10:48:38 AM
Dr. Getchell displayed slide 7, which showed a graph of
Alaska K-12 funding that was previously displayed in the
presentation by Senator Tobin. He said that the floor for a
BSA increase in Haines was $240. He pointed out the loss of
purchasing power due to inflation.
10:49:20 AM
Dr. Getchell highlighted slide 8, "How BS A Flat Funding is
affecting our schools":
• Fixed Cost Increases in Haines
• Utilities 2X since FY 21
• Insurance costs Increasing 5 percent per year
• Transportation Flights to Juneau are now over
$400 round trip (25-minute flight)
• Fluctuating fuel surcharge on all incoming
freight that is now 20 percent in addition to
regular freight rates
• Classroom materials Increased 12 percent last
year
• Many commodities increased 25 percent since FY
21
• Liability Insurance Costs
• 8 percent inflation in 2022
10:51:33 AM
Dr. Getchell looked at slide 9, "Cost of Living Examples":
Haines Borough School District
• One Bedroom Apartment $1250
• Gallon of Milk $8.99
• Case of Bottled Water $ 21.00
• Dozen Eggs $6.69
• Gallon of Gasoline - $5.25
• Twelve pack of Coca -Cola - $11.99
• Case of Tissue - $40.00
Northwest Arctic School District
• One Bedroom Apartment $1800/month (plus utilities)
• Gallon of Milk $10 - $30 (depending on region)
• Case of Bottled Water $38-$50
• Dozen Eggs $9.59
10:52:53 AM
Dr. Getchell addressed slide 10, "Why Fund Inside the
BSA?":
• Reliability
• Predictability
• Putting one time money into fixed costs is
discouraged, risky, and uncertain
• Allows our School Boards to be better stewards of
their obligation to adopt budgets for their school
districts
One time money does not meet the needs of teachers,
classrooms, other educators and students in the future
Dr. Getchell said that one-time money was always
appreciated, and that predictable and sustainable funding
would be very helpful.
10:53:49 AM
Dr. Getchell advanced to slide 11, " Implementation of
Unfunded Mandates":
• My Administrative Assistant keeps track
she has compiled a list of over 40
• The Alaska Reads Act is one of the 40
Implementation estimates range from
$75,000 to $12,000,000 depending on the district
• In Haines, I anticipate the cost to be at least
$150,000 (BS A increase for FY24 will currently be
$18,000)
• Examples: Kake: $231,000; Petersburg: $170,000,
Sitka: $615,000; Wrangell: $221,000; Annette Island:
$565,000; Anchorage $11,800,000; Northwest Arctic:
$1,849,000; LKS D: $2,023,150; Fairbanks: $3,500,000
Dr. Getchell asserted that implementing the mandates of the
Alaska Reads Act would cost schools significantly.
10:54:58 AM
Co-Chair Olson pointed out that the committee meeting
needed to end at 11am. He offered to have the next
presenter testify during the scheduled 1pm meeting.
10:55:32 AM
Dr. Getchell looked at slide 12, "HBSD's Strategic Plan Our
Roadmap and Accountability Model:
• Our Mission and Vision were developed by a diverse
group of HBS D stakeholders in 2019.
• Components of the strategic plan are updated
regularly for measurable results.
• Yearly goals are guided by most recent data in
achieving our goals.
• We will do a "refresh" later this fall.
10:56:04 AM
Dr. Getchell showed slide 13, "Targets for Excellence:
1.Educational Excellence
2.Community & Family Engagement Excellence
3.Organizational Excellence
4.School Climate & Culture of Excellence
10:56:13 AM
Dr. Getchell referenced slide 14, "Educational Excellence":
The Haines Borough School District will deliver a
rigorous academic curriculum based on meaningful
learning opportunities where students are empowered to
be critical thinkers and contributing members of
society. We do this through a rigorous academic
curriculum that includes fine arts instruction,
vocational education, and extracurricular activities.
Goal
80% of students in grades K-10 will meet or exceed
grade level academic indicators and/or show one year's
growth.
Strategy
Implement a robust multi-tiered support system (MTSS)
that utilizes data gathered on formative, summative,
and benchmark assessments.
Goal
100 percent of students will graduate on time and have
a completed plan for a post secondary pathway.
Strategy
Implement a college/career management system that
supports classroom and individual planning. Students
will complete onsite and/or virtual visits to
college/career institutions, complete required tests,
and participate in career-based internships.
10:56:47 AM
Dr. Getchell turned to slide 15, "Community & Family
Engagement Excellence:
The Haines Borough School District will partner with
families and abundant community resources to promote
shared values of intellectual, social, emotional, and
physical growth.
Goal
100 percent of teachers and parents will participate
in focused activities that promote values of
intellectual, social, emotional, and physical growth.
Strategy
The Haines Borough School District will host and track
parent participation in teacher conferences, family
nights, volunteer logs, and other parent/partnership
activities during the school year.
10:57:09 AM
Dr. Getchell considered slide 16, "Organizational
Excellence:
The Haines Borough School District will foster a
culture of innovation, respect and responsibility,
attract and retain highly effective employees, and
facilitate an environment of open and transparent
communication.
Goal
80 percent of stakeholders will give a score of
"Satisfactory" or above on an end of year
communication assessment.
Strategy
Review of communication protocols, implementation of
communication management systems (BLOOMZ), and an
upgrade of current tech platforms (website,
Powerschool, etc.).
Goal
The HBSD will retain 90 percent of employees on an
annual basis.
Strategy
Fostering positive staff relationships while
strengthening recruitment, mentoring, and onboarding
for new hires and the continued professional growth of
all experienced staff.
10:57:24 AM
Dr. Getchell turned to slide 17, School Climate & Culture
of Excellence:
The Haines Borough School District will ensure an
inclusive and healthy school culture that honors
diversity and is founded on safety, respect, and
responsibility.
Goal
Given yearly, student well-being survey results will
increase by 5 percent in every category as compared to
baseline data.
Strategy
Through a comprehensive guidance program that is
supported by all staff. This will include the support
of community partnerships, state resources, and
student driven school experiences.
10:57:30 AM
Dr. Getchell showed slide 18 "Key Highlights from HBSD:
Multiple school safety measures have been implemented
this year (anonymous reporting system, lockdown alert,
police/fire MOA, access control system, ALICE
training)
Necessary capital improvements are being funded by
the Haines Borough
Average age of school buildings in Alaska is 42 years
with 66 buildings over 60 years old
Our budget is balanced in FY 23 with a projected
shortfall of $290,000 in FY 24
ARP money still available for a 3rdyear of mental
health support in FY 24 (ARP money was not used to
supplement our general fund)
Middle and elementary school activity programs were
implemented in 2021 and 2022.
Our attendance rate increased from 89 percent in
2017/18 to 97 percent 2021/22.
10:58:53 AM
Senator Bishop complimented Dr. Getchell on his
presentation.
Co-Chair Olson requested that the bill sponsor to make
final comments.
Senator Tobin thanked the committee for hearing the bill.
She looked forward to the public testimony scheduled for
the 1pm meeting.
SB 52 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
11:00:32 AM
The meeting was adjourned at 11:00 a.m.