HOUSE BILL NO. 287 "An Act making appropriations for public education and transportation of students; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." 1:57:59 PM Co-Chair Foster indicated that the committee heard the bill twice previously and the prior meeting was held on January 30, 2018. He intended to move the bill out of committee. Co-Chair Foster OPENED public testimony. ^PUBLIC TESTIMONY 1:58:32 PM MARK MILLER, SUPERINTENDENT, JUNEAU SCHOOL DISTRICT, JUNEAU, spoke in support of HB 287. He explained the process of budgeting for the school district. He indicated that the school district built its budget for the following school year from January through March each year. If he did not know the number for the budget, he had to guess, and the guess must be conservative, or it could result in a "catastrophic" situation. He believed that the situation could be averted if a sustainable budget was adopted. He related that the previous budgets were not completed in time to work with the school district's budgeting cycle. He was not sure the bill solved the overarching problem but felt the bill was the right thing to do. 2:02:00 PM DAVID BOYLE, ALASKA POLICY FORUM, ANCHORAGE, (via tele- conference), spoke in opposition to HB 287. He argued that the education budget should be included within the rest of the operating budget. He argued that other departments like the Department of Public Safety, Department of Transportation and Public Facilities (DOT), and the University of Alaska might "demand" that its budgets were forward funded. He characterized the bill as "incentivizing bad behavior." He understood that the budget had been passed very late but felt that the district's budgets could be managed. He stated that the education system was "not a jobs program." He opined that the education system had been funded with very "little accountability for increased student achievement." 2:04:00 PM AT EASE 2:04:50 PM RECONVENED Mr. Boyle continued that the Anchorage School District transported 15,000 students but received funding for 47,000 thousand students. He suggested prioritizing transportation costs. He noted that when the school district in Anchorage distributed pink slips they were only given to teachers and not to support staff. He argued for privatization of some support services. 2:07:06 PM STARR MARSETT, VICE-PRESIDENT, ANCHORAGE SCHOOL BOARD, ANCHORAGE (via teleconference), spoke in favor of HB 287. She indicated that the school district had issued approximately 220 pink slips. She explained the time consuming process of issuing pink slips. She spoke to the difficulties of managing health insurance once pink slips were issued and the many costs associated with issuing pink slips. Teachers were at risk of losing their health insurance if they were not reinstated by June 30th each year. She also noted the loss of new hires and the difficulty of recruitment because of the state's budget process and how it impacted education spending. The school district hired approximately 260 teachers each year due to turnover and retirements. She indicated that reliable funding would help avoid unintended costs and the stated issues while also boosting student and teacher morale. 2:10:48 PM JENNIFER MCNICHOL, PRESIDENT, SITKA SCHOOL BOARD, SITKA (via teleconference), spoke in support of HB 287. She thought that the legislation helped to solve the budgeting issue for school districts. The budget was done "far too late for district budgeting requirements." The bill would assist in teacher retention, which was crucial. The school district was in the process of initiating the Alaska Education Challenge, Every Student Succeeds Act (ESSA) and other projects and did not need budget uncertainty. She suggested a default to flat funding education if the budget deadline was missed. However, she hoped flat funding meant hold harmless because flat funding would equal a decrease in funding due to the rising costs of health care and utilities. She remarked that the district's health insurance increased 13 to 25 percent each year. She spoke to Mr. Boyles testimony and countered that teachers made up most of the districts staff and layoffs primarily affected teachers. Many of the district's support staff worked under long term contracts that were not able to be changed when a budget passed. She did not think passing a timely budget was "throwing money at a problem" as Mr. Boyle suggested. The board's number one goal was to close achievement gaps. She thanked the committee. 2:13:51 PM MAYOR BERT COTTLE, CITY OF WASILLA, WASILLA (via teleconference), spoke in support of HB 287. He noted that he did not have a direct impact on the district's budget but observed through experience that late funding affected morale and retention. He believed that early funding helped school districts and communities know what their budgets would be. He asked the legislature to take care of the education budget early in the session. Co-Chair Seaton asked when the school district was required to submit its budget to the municipality or if the budget was submitted directly to the borough. Mr. Cottle responded that the district's budget went directly to the borough. 2:15:40 PM JOHN RINGSTAD, FAIRBANKS NORTH STAR BOROUGH SCHOOL DISTRICT, FAIRBANKS (via teleconference), spoke in favor of the legislation. He related that the prior late funding was problematic for all school districts. He thought that early funding focused the process on educating children. He talked about the process that was required when funding was in question each year. He thought more focus on the classroom was the goal instead of developing contingency budgets, which increased administrative costs instead of leaving more money for the classroom. He stated that anything to move the budgeting process efficiently forward would be helpful. He thanked the committee. 2:17:59 PM Co-Chair Foster CLOSED Public Testimony. Representative Pruitt reported that every year he had been in the legislature he heard concerns about properly funding education even when it was forward funded. He argued that the bill was unnecessary, and it implied that the legislature would not get its job done in 90 days. He thought that most members of the legislature and the governor were aligned with the numbers in the education budget. He contended that the bill was overcapitalizing and withdrawing $800 million out of the Constitutional Budget Reserve (CBR) was needless. However, he would support moving the bill from committee even though he objected to the budgetary process in the bill. He felt that a vote against the bill would be portrayed as though he was against children and teachers. He relayed his wholehearted support of teachers. He reiterated that the real discussion was about a budgetary process. He contended that children and teachers were being "weaponized" in and argument over a budgetary process. The bill did not fully fund education for the following year; only key pieces were being funded as they related to education in the bill. He opined that the issue was about a process and how the legislature pieced things together. 2:22:02 PM Vice-Chair Gara spoke to the point of why early funding mattered. He indicated that when pink slips were issued teachers and parents took it seriously. The result was the loss of great teachers. He hoped that bipartisan support existed for early funding education to avoid sending out pink slips. He noted that the prior few year's late budgeting threatened troopers, teachers, and other vital state professionals' jobs, which contributed to retention issues. Co-Chair Seaton clarified that the purpose of the bill was to make the education system more efficient. He reiterated the testimony he heard of the effects of late budgeting on the school districts. He thought the bill needed a cooperative effort. He deemed it was much more efficient to take money from the CBR because it earned significantly less than the Earnings Reserve Account (ERA). He offered that there would be no point to draw from the ERA instead of a fund that earned less. He thought the bill was promoting efficiency on several levels, would help with the retention of teachers, and morale issues. He hoped the legislators would agree to fund education early. He encouraged members to vote the bill out of committee. 2:26:45 PM Vice-Chair Gara MOVED to report HB 287 out of Committee with individual recommendations. 2:27:18 PM AT EASE 2:27:48 PM RECONVENED Vice-Chair Gara WITHDREW his motion. Vice-Chair Gara MOVED to report HB 287 out of Committee with individual recommendations. There being NO OBJECTION, it was so ordered. HB 287 was REPORTED out of committee with a "do pass" recommendation. Co-Chair Foster reviewed the schedule for the following day.