HB 76-EDUCATION:SCHOOLS; GRANTS; FUNDING; DEBT  8:06:23 AM CO-CHAIR STORY announced that the first order of business would be HOUSE BILL NO. 76, "An Act relating to education; relating to public school attendance; relating to mobile communication devices in schools; relating to reading proficiency incentive grants; relating to authorization of charter schools; relating to transportation of students; relating to school bond debt reimbursement; relating to funding and reporting by Alaska technical and vocational education programs; authorizing lump sum payments for certain teachers as retention and recruitment incentives; and providing for an effective date." 8:08:11 AM KAREN MORRISON, Deputy Commissioner, Department of Education & Early Development, on behalf of House Rules by request of the governor, presented HB 76 to the committee. She picked up the presentation where it was previously left off on slide 12, which described how HB 76 would increase state funding to school transportation programs and extend the school bond debt reimbursement moratorium to 2030. 8:08:45 AM CO-CHAIR STORY asked Commissioner Bishop to explain the rationale of continuing the school bond debt reimbursement moratorium. COMMISSIONER BISHOP, Commissioner, Department of Education & Early Development, on behalf of House Rules by request of the governor, presented HB 76 to the committee. She explained that there used to be a 60/40 split or 70/30 split between a school district's contribution and the Department of Education and early Development (DEED)'s contribution to a bond debt prior to the current moratorium. She explained where a 70/30 or 60/40 split would be implemented and said that the decision to continue the moratorium on bond debt reimbursement was largely based off of testimony by Alexi Painter of the Legislative Finance Division and the Bond Reimbursement and Grant Review Committee (BRGR) meetings that pointed towards a moratorium on bond debt reimbursement as a fiscally responsible decision. 8:15:40 AM REPRESENTATIVE SCHWANKE commented that local municipalities and boroughs can still put funds into Capitol Improvement Project (CIP)s on their own, regardless of state funding levels. COMMISSIONER BISHOP affirmed that a local municipality or borough may contribute its own money to a CIP project outside of a bond. 8:16:31 AM REPRESENTATIVE EISCHEID shared his concern that the bond debt reimbursement moratorium might create stress for school districts' fiscal planning. COMMISSIONER BISHOP said that the intent of the moratorium extension was to buy the state time to create a more permanent solution. She explained that rural Alaskan cities are at significant debt compared to urban cities and stated that funding schools is an "expensive investment" in the face of a declining student populous as a whole. 8:20:45 AM CO-CHAIR HIMSCHOOT asked who serves on the BRGR committee and asked how its committee members are selected. 8:22:00 AM CO-CHAIR STORY clarified the acronyms for Maintenance and Operations (M&O) and BRGR. 8:23:21 AM HEATHER HEINEKEN, Director, Division of Finance & Support Services, Department of Education & Early Development, on behalf of House Rules by request of the governor, presented HB 76 to the committee. She explained that the BRGR committee was comprised of various legislators, staffers, and appointed professionals in the education field. 8:25:32 AM COMMISSIONER BISHOP resumed the presentation on slide 13, which detailed how HB 76 would increase state funding for districts that operate residential schools by 50 percent. 8:26:07 AM MS. MORRISON picked up the presentation on slide 14, which explained how the proposed legislation would change the funding formula for special needs and vocational classes, as well as change correspondence students to count as 1.0 full-time equivalent (FTE). 8:26:30 AM CO-CHAIR STORY asked how the 50 percent increase in residential school funds from the state was determined. COMMISSIONER BISHOP said that residential schools are in need of increased funding and explained that a 50 percent increase was not near as much as residential schools had initially requested. 8:27:23 AM REPRESENTATIVE SCHWANKE commented that HB 76 would create opportunities for students in Alaska to participate in career & technical education (CTE). 8:29:28 AM CO-CHAIR HIMSCHOOT asked if the transportation of kids to and from school outside of a winter break was in Alaska Statute. COMMISSIONER BISHOP explained that the proposed increase of transportation funding was not already in Alaska Statute. 8:32:41 AM COMMISSIONER BISHOP further detailed the changes to funding formula for correspondence students on slide 14. She moved to slide 15, which described the proposed increase in CTE funding from HB 76. 8:35:39 AM CO-CHAIR HIMSCHOOT asked about the reasoning for increasing funding for correspondence students. COMMISSIONER BISHOP explained that correspondence students currently do not apply to any funding multiplier and are currently only funded at 0.9 FTE. She opined that school districts are running correspondence schools to fill the increased need of remote teaching. 8:40:09 AM CO-CHAIR HIMSCHOOT shared her understanding that the funding for part-time students is already in place. COMMISSIONER BISHOP responded that it would be a local school district's decision for charging correspondence students for in person classes. 8:42:10 AM CO-CHAIR HIMSCHOOT objected to the idea that 0.9 FTE reflects the DEED's belief that a correspondence student is less than a whole child. COMMISSIONER BISHOP explained that FTE and Average Daily membership (ADM) are technical terms used for funding calculations and algorithms. 8:44:18 AM REPRESENTATIVE SCHWANKE shared her experience in her local school district covering the cost of administration, tutoring, and testing for homeschool students. She explained that the cost of educating a student has increased significantly with the increased requirements of frequent testing. 8:48:38 AM REPRESENTATIVE EISCHEID asked if increasing the BSA would increase funding for correspondence students and if increasing the ADM would constitute a greater contribution from the state. COMMISSIONER BISHOP confirmed both that increasing the BSA would increase funding for correspondence students and a higher ADM would constitute a greater contribution from the state. 8:50:05 AM REPRESENTATIVE DIBERT commented on her opportunity to attend brick and mortar schools. 8:51:19 AM CO-CHAIR STORY commented on the unreliable nature of one-time increases to the BSA and emphasized the importance of increasing the BSA as it is. COMMISSIONER BISHOP explained that the lack of an increase to the BSA is due to year to year funding that has been in place for a long time. She emphasized that the governor has introduced language to encourage non-standard public schools and purported that the governor has always supported increasing funding for schools. 8:57:15 AM REPRESENTATIVE UNDERWOOD explained that any funding increase to correspondence students must go through the local school district first. COMMISSIONER BISHOP affirmed Representative Underwood's understanding of how a local school district manages correspondence student funding. 8:59:37 AM REPRESENTATIVE EISCHEID asked about the accountability of statewide assessment testing. CO-CHAIR STORY noted that there are ongoing discussions on improving testing rates as a tool for homeschool students. 9:01:25 AM COMMISSIONER BISHOP added that the DEED is working to address the challenges of homeschooling, specifically statewide proctored online tests that are currently less accessible to homeschooled students. 9:04:28 AM CO-CHAIR HIMSCHOOT thanked the DEED for addressing barriers to education & assessments that homeschool students face and noted that an increase to the BSA would benefit all students in Alaska, not only correspondence or k-3 students. COMMISSIONER BISHOP shared her understanding that increasing the BSA should not be the only method of improving education in Alaska. 9:07:40 AM COMMISSIONER BISHOP resumed the presentation on slide 16, which detailed a three-year lump-sum teacher retention payment program proposed by HB 76. 9:09:49 AM CO-CHAIR HIMSCHOOT noted that House Bill 230 as passed by the 33rd Alaska State Legislature sought to pay an incentive to both teachers who were nationally certified and those who were seeking to be certified. She pointed to Washington state as an example of a state that pays incentives to teachers seeking to work in hard-to-staff schools. 9:11:13 AM CO-CHAIR STORY remarked that hiring incentives are helpful in teacher recruitment & retention and emphasized that better paying salaries are more effective in that regard. 9:12:21 AM REPRESENTATIVE DIBERT commented on the importance of the need for the state of Alaska to plan for its future education system. 9:13:50 AM COMMISSIONER BISHOP resumed the presentation on slide 17, which outlined how the proposed legislation would create a report to the Alaska State Legislature before the first day of the first regular session of the 35th Legislature. 9:14:29 AM CO-CHAIR STORY asked Ms. Heineken to review the fiscal notes associated with HB 76. 9:14:41 AM MS. HEINEKEN reviewed fiscal note 1 associated with HB 76. 9:16:20 AM CO-CHAIR STORY asked for clarification on which funds fiscal note 1 concerned. MS. HEINEKEN explained that the funds listed on fiscal note 1 would fall into the Alaska Public Education trust. 9:19:09 AM MS. HEINEKEN detailed fiscal notes 2, 3, 4, and 5, of which concerned the funding of public school transportation, correspondence education, remote assessments, and teacher recruitment incentives. She continued to detail fiscal notes 6, 7, 8, and 9, of which concerned the student and school achievement fund, charter school authorization costs, and equipment & supply costs. [HB 76 was held over.}