HB 212-LOCAL CONTRIBUTIONS BY SCHOOL DISTRICTS  9:07:58 AM CO-CHAIR STORY announced that the final order of business would be HOUSE BILL NO. 212, "An Act relating to the local contribution made by a city or borough school district; and providing for an effective date." [Co-Chair Story handed the gavel to Co-Chair Himschoot]. 9:09:16 AM REPRESENTATIVE ANDI STORY, Alaska State Legislature, as prime sponsor, presented HB 212 to the committee. She read from the sponsor statement for HB 212 [included in the committee packet], which read as follows [original punctuation provided]: Upon the draft recommendation of the Department of Education and Early Development (DEED), the Alaska State Board of Education and Early Development will consider a regulation change to 4 AAC 09.990(b), which will amend the definition of local contribution in AS14.17.990. Currently under Sec.14.17.990 Definitions, (6) states, "local contribution means appropriations and the value of inkind services made by a district." If passed by the State Board of Education, the draft proposal will have far-reaching implications for school districts by limiting services and opportunities for our youth. The language presented to the Alaska State Board of Education and Early Development seeks to prohibit municipalities from making additional, voluntary contributions to their school district for non- instructional purposes and/or to designated non- operating funds. Districts have long received additional funding outside of the foundation formula limit through the local discretionary maximum also known as "the cap" for non-instructional expenses such as student transportation before and after-school programs, early childhood and pre-k education, career and technical education, nutritional services, student activities, and more. Additional revenues provided to local school districts to support programs, services, projects, and events deemed critical by the local communities is a long-held practice. At a time when state-wide revenues continue to be stretched, many of our municipalities around the state have stepped up to support their community-wide schools beyond their required contribution mandated under the foundation formula. One of the concerns facing this bill is the lack of ability to raise revenue in our school districts that are most rural. I support equitable funding for all children, and we must find ways to ensure equity. However, this draft regulation will not do that. It is much more complicated. Some Rural Education Attendance Area schools (REAA) receive revenue which puts them in the top 95th percentile. Prohibiting a revenue source is not the solution to achieving equity for Alaska's children and communities. A school district's operating budget funds the day-to- day instructional operations, legal obligations, and administrative duties of providing public education. However, a school district is much more than an instructional institution. It is the cornerstone of a community. This bill is about allowing local control in a municipality to fund programs and services that improve and preserve quality of life as needed. It is of utmost importance that we prioritize protecting any loss of services to children and their families particularly in this time of budget shortfalls. Without this bill, the funding crisis for some Alaska school districts stand to worsen as we head into the next few years, and so I urge your support of House Bill 212. 9:13:35 AM TAMMY SMITH, Staff, Representative Andi Story, Alaska State Legislature, on behalf of Representative Andi Story, prime sponsor, presented HB 212 to the committee. Section 1. Amends 14.17 by adding a new section Sec. 14.17.530: Determination of local contribution made by a city or borough school district. A local school district shall define the terms "student transportation," "nutrition services," "food services," "preschool, pre- kindergarten, or other early education program," "career and technical education", "before-school program," "after-school program," and "student activity" when determining the calculation of a local contribution. Section 2. Amends Sec. 2. AS 14.17.990(6) to read "local contribution" means appropriations and the value of in-kind services made by a district does not include appropriations or the value of in-kind services made by a district for student transportation, nutrition services, food services, a preschool, pre- kindergarten, or other early education program, career and technical education, a before-school program, an after-school program, or a student activity. Section 3. Amends AS 01.10.070(c) to provide for this Act to take effect immediately. 9:16:18 AM FRANK HAUSER, Superintendent, Juneau School District, gave invited testimony on HB 212. He began his testimony by explaining how the proposed legislation would change how local communities within a school district would be able to fund non- instructional items, such as extracurricular sports, activities, community schools, after school programs, student nutrition, student transportation, and early education programs. He highlighted the positive impacts of allowing local school communities within school districts to allocate funds at their own discretion and emphasized the possible negative impacts upon a school district were its local community not allowed to allocate it funds. He described how a proposed regulatory change by the DEED would threaten the very way that school districts are currently allowed to budget by eliminating local governments' authority to make decisions with local dollars and non-instructional priorities. He said that the proposed regulatory changes by the DEED would not succeed in providing the equitable outcome that they aim to achieve and explained how HB 212 would provide a "targeted approach" to maintain both federal funding exceptions and a free and fair public education. 9:27:12 AM KATIE PARROT, Senior Director, Office of Management & Budget, Anchorage School District, gave invited testimony on HB 212. She explained how school districts around Alaska are utilizing local funds for their schools to offset the impacts of a flat- funded Base Student Allocation (BSA) and an increasing cost of operation for school districts in Alaska. She emphasized how the proposed legislation would balance school district funding needs by retaining the ability for local communities to fund their local school districts at their own discretion. She explained how the proposed regulatory change by the DEED would result in a more unfair funding environment for Alaska's schools and describe the positive impacts of local funding on school districts around the state. 9:36:41 AM REPRESENTATIVE SCHWANKE asked why the supplemental transportation funding for the Anchorage School District (ASD) is set to increase in the next fiscal year. MS. PARROT answered that enrollment decline is often to blame in the increase of a transportation route's cost. She said that the passing of 2024 Ballot Measure 1 also has an impact on the cost of labor. 9:39:34 AM REPRESENTATIVE EISCHEID asked if 1600 kids would lose transportation services if HB 212 were not to become law. MS. PARROT explained that the 1600 figure she shared was comprised of a multitude of different sectors of education. 9:42:16 AM JOSH COUGHRAN, Superintendent, Skagway School District, gave invited testimony on HB 212. He explained how the Skagway School District (SSD) utilizes local funding to make up a funding disparity from the state and fund programs that might not otherwise be able to exist were local funds not available. He explained how the limiting of special revenue funds would negatively impact schools all over Alaska and detailed the various school services that special revenue funds uphold in Skagway. He urged the committee to help protect the special revenue funding avenue that currently exists for school districts in Alaska. 9:47:34 AM CO-CHAIR HIMSCHOOT opened public testimony on HB 212. 9:48:03 AM NILS ANDREASSEN, Executive Directo, Alaska Municipal League, testified in support of HB 212. He emphasized the importance of local governments being able to provide their own revenue to their own school districts and said that HB 212 would create a clear distinction between the state's obligation to provide a free and fair public education and a local government's need to tailor state funding. 9:50:32 AM MIKE COONS, representing self, testified in opposition to HB 212. He said that the proposed legislation would push for "equity, which is part in parcel of D-E-I.". He continued to ask how the ASD would "it do this once the $17 million is pulled by the U.S. Department of Education for their pushing of DEI, CRT, and LGBCDQ. Why can't the ASD use the $80 million slush fund that they have, BSA needs to be going to classroom and teachers, not any and all other things that are not classroom and teachers. So long as this legislature continues with no real accountability, I call on the governor to veto HB 57, and if this passes, veto this as well." 9:52:22 AM CO-CHAIR HIMSCHOOT, after ascertaining that there was no one who wished to testify, closed public testimony on HB 212. 9:52:32 AM CO-CHAIR STORY made clear that HB 212 would concern only funding that would be raised by local governments and had nothing to do with the BSA. [HB 212 was held over]. 9:53:50 AM ADJOURNMENT  There being no further business before the committee, the House Education Standing Committee meeting was adjourned at 9:53 a.m.