HB 65-INCREASE BASE STUDENT ALLOCATION  9:35:58 AM CO-CHAIR RUFFRIDGE announced that the final order of business would be HOUSE BILL NO. 65, "An Act relating to education; increasing the base student allocation; and providing for an effective date." 9:36:21 AM REPRESENTATIVE DAN ORTIZ, Alaska State Legislature, as prime sponsor, explained that HB 65 would increase the BSA as summarized in the sponsor statement which read as follows, [original punctuation provided]: House Bill 65 increases Alaska's Base Student Allocation (BSA) by $1,250 to a total of $7,210 per eligible student. Alaskan students, parents, and teachers are dealing with underfunded schools. Between flat funding from the state and inflation, education funding has not kept up with increased costs. It has resulted in fewer education programs, staff shortages, and even school closures. University of Alaska's Institute of Social and Economic Research conducted a study that found that Alaska spent less per pupil on public education than the national average in 2019 when spending was adjusted for inflation and indexed to the cost of living. Since 2012, Alaska's urban consumer price index increased by 24.6% while Alaska's BSA only increased by 4.2%. Increasing the BSA by $1,250, or almost 21%, is a significant investment in Alaska's K-12 public education system. It would allow school districts to recruit and retain good teachers, reduce class sizes, and ultimately give Alaska's children the education and tools they need and deserve. REPRESENTATIVE ORTIZ further summarized HB 65 by providing a brief PowerPoint, titled "House Bill 65 Increase the Base Student Allocation." 9:40:50 AM REPRESENTATIVE ORTIZ stated if the State of Alaska continues to fund education at the current BSA level, schools will have huge budgetary shortfalls. He provided examples of shortfalls from Anchorage, Alaska, and Kenai, Alaska. He moved to a slide, titled "Despite the decreased services, [school districts are] still prioritizing funding instruction," which showed pie charts that break down expenditure budgets by category. He thanked the committee for thinking critically about Alaska's education system and offered to answer questions on HB 65. 9:42:53 AM REPRESENTATIVE PRAX commented it would be helpful to hear invited testimony before posing questions. 9:43:46 AM LON GARRISON, Executive Director, Association of Alaska School Boards (AASB), stated AASB strongly supports HB 65. He explained that the AASB board of directors had adopted three legislative priorities for the year: sufficient, sustainable, and predictable education funding; retention and recruitment of staff; and student wellness and safety. He established that his testimony would focus on sufficient education funding, which is a critical factor affecting student outcomes. 9:46:40 AM MR. GARRISON explained that in November, the AASB delegate assembly unanimously approved Resolution [2.2] that specified an increase in the BSA, but the amount did not "meet the mark." He noted that the $1,250 BSA increase proposed under HB 65 would provide the greatest chance to even the score with inflation. He clarified that Alaska schoolboards have no taxing authority, and therefore must solely rely upon the revenue of the state, the federal government, and a minimal contribution to the local education fund. 9:50:39 AM MR. GARRISON explained support for HB 65 is imperative and meets the request of ASB's Resolution 2.2. He reiterated that locally elected schoolboards rely on state, local, and federal government for revenue. School boards implement the local control model that has served Alaska well. 9:51:36 AM REPRESENTATIVE PRAX asked for clarity whether the verbiage in the Alaska State Constitution is "establish a fund" or "establish a system". MR. GARRISON replied it is "establish a system". 9:52:23 AM REPRESENTATIVE PRAX asked if it made sense to keep throwing money at a funding system, and if the current method of funding the state education system is fundamentally flawed. MR. GARRISON replied no, and through the system of local control and the support of the Department of Education the state has the ability to create innovation. The challenge is to use funding effectively. 9:55:48 AM REPRESENTATIVE PRAX asked Mr. Garrison if he is familiar with the situation in the Fairbanks North Star Borough School District where over the years other districts, mainly that in Galena, Alaska, came up with a completely different service delivery model. MR. GARRISON answered he was somewhat familiar with the Fairbanks model, and it is not unusual; he explained he had seen the model with other districts as well. He noted the Galena correspondence program has been around for a long time and has been successful. 9:58:20 AM CO-CHAIR ALLARD expressed concerns with the formula, and she stated she would like to see more dollars staying in the classroom. She asked where all the funds are going because "it's not following the child." MR. GARRISON explained when school districts are funded, there is a count period that happens in October - and this number is used for the following year. 10:02:04 AM CO-CHAIR ALLARD asked Mr. Garrison to get back to the committee and elaborate on accountability and what the system is going to do, specifically if a child moves to another district. 10:03:30 AM REPRESENTATIVE MCKAY commented on the BSA after all the adjustments and stated there needs to be a lot of examination of the formula. 10:06:02 AM CO-CHAIR RUFFRIDGE announced that HB 65 was held over.