HB 20 - EDUCATION FUNDING CHAIR NEUMAN announced that the first order of business would be HOUSE BILL NO. 20, "An Act relating to a separate appropriation bill for operating expenses for primary and secondary public education and establishing a date by which the bill must be transmitted to the governor each year; and providing for an effective date." 11:06:21 AM REPRESENTATIVE PAUL SEATON, sponsor to HB 20, stated that the purpose of HB 20 is to address a problem in districts across the state. He explained that the education budget is delayed until late in the year forcing school districts to fire teachers and then attempt to rehire them later. He said, "This is very disruptive and demoralizing to teachers." He explained that HB 20 requires the governor to submit the education budget separately by the fourth day of the session, and the legislature to approve that budget by March 15 of each year. He clarified that the sponsor substitute for HB 20 changed the date from April 1 to March 15, because the notification period for teachers is set at March 16. He explained that Section 2 of the bill moves the notification date for tenured teachers to March 25, providing a ten-day window for the legislature to act and the governor to approve. He pointed out that the bill provides for separate funding of the foundation formula. REPRESENTATIVE SEATON summarized that the intent of the bill is to get early funding of education. He noted that while the bill does not address a dollar amount, it ensures early funding and the districts will know how much money they have and the status of their teachers. He pointed out that the committee members were given copies of the sponsor statement and zero fiscal note as well as letters of support from the Kenai Peninsula Borough School District, (KPBSD), the Lower Kuskokwim District, and an individual teacher. The members also received a letter of support from the National Education Association of Alaska, (NEA- Alaska), although, he noted, NEA-Alaska has an issue with the March 16 date. He concluded that the bill needs to be addressed so that, "school districts throughout the state have a better working relationship within the teaching community and that we don't unnecessarily burden them with disruptive practices." 11:09:56 AM REPRESENTATIVE GATTO asked if Representative Seaton had received letters of opposition from any school districts. REPRESENTATIVE SEATON responded that he did not receive any such letters. REPRESENTATIVE GATTO asked if any professional teachers' associations had commented on the bill. REPRESENTATIVE SEATON responded that NEA-Alaska wrote a letter supporting the concept of the bill, however, "they did have a problem with moving the ... mandatory date for notifying tenured teachers, from the 16th to the 25th [of March]. They supported Sections 1 and 3, which is the essence of the bill." He added that Cindy Spanyers, legislative liason for the Alaska Public Employees Association/American Federation of Teachers, (APEA/AFT), will testify on the bill. CHAIR NEUMAN asked what the major obstacle has been in passing this type of bill. REPRESENTATIVE SEATON answered: One of the problems was [that] the date was April 1 ... it's been April 15 in the past, and that really didn't cure the problem of the statutory requirement for districts to notify their teachers that they wouldn't be rehired. ... The bill moves forward that date to ... March 15 ... and then moves back the date of the teacher notification ten days, to give a ten- day window. So what this does is gets us forward of that so that districts wouldn't have to get into this crunch of notifying their employees of termination. 11:12:38 AM REPRESENTATIVE WILSON asked why tenured and non-tenured teachers have different notification dates. REPRESENTATIVE SEATON replied that tenured teachers have specific rights and privileges that are established, whereas non-tenured teachers are hired on a year-to-year basis. REPRESENTATIVE WILSON opined that all teachers, tenured and non- tenured, would like to know whether they have a job the following year or if they need to apply elsewhere. REPRESENTATIVE SEATON commented he shares this opinion and that he thinks the districts use this date for notifying mainly non- tenured teachers because tenured teachers are very seldom laid- off. He said, "Not knowing what their budget is, [the districts] use this statutory date for tenured teachers as the date by which they want to notify their non-tenured teachers." REPRESENTATIVE WILSON stated that because of decreased funding, there are school systems that have had to continually cut back. She remarked that she knows of at least four school systems that have had to cut back to where they have only tenured teachers left. 11:16:31 AM REPRESENTATIVE GARA said that there always seems to be tension between early funding and adequate funding. He continued: It seems somehow the forces during the legislative session somehow get to the point where we can get a better school budget later in the session ... but we have the tension because we don't want the school districts to send out the pink slips, so we also want to get it to them early and the challenge has always been to try and find a way to get them both... REPRESENTATIVE GARA promoted changing the statutory date when school districts have to submit funding to their municipal governments. REPRESENTATIVE SEATON explained that it would be a disservice to make teachers wait for notifications until May 1, and that they would miss opportunities for other jobs. He stated that the intention is to move the process forward so that if people have to be laid off, they have the best window of opportunity to get the best job possible. REPRESENTATIVE GARA said that completing the budget by March 15 would be a complicated issue and asked if it could get done by March 15, each year. He then inquired as to creating coverage by statute for PERS/TRS and inflation costs. 11:22:12 AM REPRESENTATIVE SEATON stated that covering PERS/TRS and inflation proofing is another issue. He advocated for dealing with each district and it's needs, individually. He opined that district issues need to be dealt with each year. He explained that the purpose of this bill is to segregate the education budget as a separate budget, excluding the costs of other operating considerations. REPRESENTATIVE WILSON said that the municipality fiscal year ends June 30th and that their budget is planned around the school budget. She commented that she is in support of HB 20 and thinks that it will make a big difference for schools in the long run. REPRESENTATIVE GATTO stated that schools are subject to laws of supply and demand and that now, the supply of teachers is relatively low, and the demand is relatively high. He advocated for creating an environment for teachers that offers certainty in their job placement. He expressed his appreciation for [HB 20]. 11:27:40 AM EDDY JEANS, Director, School Finance, Department of Education and Early Development, (EED), stated that the EED is supportive of the concept of early funding, but would make specific recommendations regarding the March 15 date. He pointed out that on page 1 line 9, it is stated that the governor submits an appropriations bill to the legislature limited to carry out "Alaska Statute 14.17". He explained that "14.17" is the foundation program and that language would limit the ability to include pupil transportation, schools for the handicapped, and other K-12 components. He clarified that he did not have a written amendment, but that the word "limited" restricts the EED from submitting a bill beyond the foundation program. CHAIR NEUMAN asked Mr. Jeans to submit his suggestions to the committee, in writing. 11:29:26 AM REPRESENTATIVE THOMAS inquired as to the language associated with "Alaska statute 14.21.77". MR. JEANS explained that the provision referring to statute "14.21.77" deals with reductions in workforce. He explained that it offers criteria for districts to meet for eligibility to fire tenured teachers. He continued, "so, the way the statute is laid out is if you think you are going to have less funding through the appropriation mechanism, or fewer students, you must notify tenured teachers by March 15 of the potential that they'll be laid off. In terms of non-tenured teachers, you have 'til the end of the school year to provide them with notice." 11:31:51 AM REPRESENTATIVE THOMAS commented that the language [in HB 20] is difficult to understand. DAN BECK, Superintendent, Delta/Greely School District, ("DGSD"), stated that he supports HB 20. He explained that the "DGSD" does not intend to fire any teachers this year due to rapid growth. He explained that the "DGSD" is planning on hiring highly qualified teachers to fill those positions, but the budget is unknown. He described the formation of the district's budget: We have to start with our projections in REAA's [Rural Education Attendance Area] somewhere around the first part of January putting the budget together; even though that budget is not passed in the final state by the board until June, we have to have it in the state close enough where we can go out to hire in March and since personnel makes up most of the budget, it is critical to have that information early. I think that Eddy Jeans had a really good point on moving the date in this bill back to March 1 ... we support the bill, in totality. We were in the position a couple years ago where we did lay off tenured teachers under the new reduction in force, and it's difficult, it's time consuming, and I wouldn't wish that on anybody else in the state. MARGARET GILMAN, Treasurer, Kenai Peninsula Borough School Board, expressed support for Representative Seaton's HB 20. She related that as a school board member, she appreciates known funding before hiring decisions are made. She said that in the current situation, with current funding, there is a tremendous level of uncertainty during the spring of each year and teachers are fearful of losing their jobs. She offered a suggestion of planning the budget one year in advance so that staffing would be known for the upcoming school year. MELODIE DOUGLAS, Chief Financial Officer, Kenai Peninsula Borough School District, (KPBSD), stated that the KPBSD Board of Education has adopted a legislative priority in support of this type of action. She said the Board of Education supports recommendations moving the date forward to March 1 and leaving the notification date for hiring at March 16. She related that it is disruptive in school districts to go through these processes and it affects children in the classroom when staff are worried about their job status. She said that moving the date could hinder the hiring process; job fairs start in March and run through April and May. She opined that it is essential to stabilize education and beneficial to fund early. She echoed Mr. Jeans's recommendation that this bill should be amended to reflect all K-12 programs, and that those programs are important in the planning process from a budget standpoint. She expressed thanks in being given the opportunity to comment and encouraged support of HB 20. 11:38:45 AM Anne Kilkenny stated that she is an active volunteer in the Kenai school system and agrees with the aforementioned reasons for early funding. She opined that [early funding] would reduce anxiety and uncertainty, help districts properly budget and make the system more efficient. She said that she appreciates the debate generated by this bill and the reasons for early funding have good merit. 11:42:37 AM BRUCE JOHNSON, Director, Quality Schools/Quality Students Service, (QS2), Association of Alaska School Boards, (AASB), stated that the AASB does not have a position or a resolution on this particular concept. He continued: we've had one in the past ... we certainly agree with Representative Seaton that it would do many things in terms of stabilizing our teaching force and assuring people that they have positions and in no way would we want to ... discredit this ... adequacy is really what we are after as an association. We will be working on this issue with our membership ... urging districts to weigh in on this issue in a way that makes sense for them personally in their own circumstances. REPRESENTATIVE GATTO asked Mr. Johnson if he thinks that we are trading one problem for another because education funding is tied to our budget, our budget is tied to the price of oil and the price of oil is unpredictable. He stated that he understood that being present for funding decisions later in the session when the price of oil is known is desirable. MR. JOHNSON opined that education has been well served during times of scarcity. He stated that it is a trade off and schools can benefit from early funding and from contributing to funding decisions when the projections are known. JOHN ALCANTRA, Director, Government Relations, National Education Association of Alaska, (NEA-Alaska), stated that [NEA- Alaska] represents about 12,500 public school employees around Alaska. He applauded Representatives Seaton, Chenault, and Wilson and thinks the forward funding concept is a great idea. He described a recent [NEA-Alaska] assembly where 400 elected delegates set policy for the year and passed a resolution for adequate and forward funding of education. He opined that the suggestions made by the administration and Eddy Jeans suggesting the March 1/March 5 date and leaving the tenure date at March 16 were good and hopes they will be considered. He thanked the committee for hearing this bill and opined that it is an important concept. He stated that [NEA-Alaska] has had resolutions of support in the past and mentioned the letter from PRESIDENT BJORK of NEA-Alaska, within the committee packet, which applauded Sections 1 and 3 of HB 20. He explained that [NEA-Alaska] supports changing the date from March 16 to March 25. He thanked Representative Seaton and the other co-sponsors for moving [HB 20] forward. 11:47:27 AM REPRESENTATIVE GARA asked Mr. Alcantra if the resolution is for early and adequate funding. He questioned if the [NEA-Alaska] resolution supports a stand-alone early funding bill, or if there is a caveat saying that the [NEA-Alaska] supports early funding if adequate funding can be provided. MR. ALCANTRA stated that the NEA-Alaska supports early funding if it is adequate. He said that the [NEA-Alaska] believes there is room in this budget for fiscal year (FY) 06 and future budgets to adequately fund K-12 public education as well as fund it early so districts know what they are going to get. He related that the NEA-Alaska thinks that the two can go hand in hand and expects that they will and that this is another year where legislators will put K-12 education as the number one issue. REPRESENTATIVE GARA asked if NEA-Alaska supports the bill only if there is a guarantee of adequate funding. 11:49:15 AM MR. ALCANTRA stated that NEA-Alaska supports the bill. He described the letter in the committee packet as verification of the support of early funding. He explained that the NEA-Alaska believes that early and adequate will be coupled and go hand in hand. KATHIE WASSERMAN, Policy Coordinator, Alaska Municipal League (AML), stated that AML has identified forward education funding as one of the priorities for this year, and stands behind HB 20 in full support. She said that there are some trickle down effects that inhibit municipalities from going forward when there is not forward funding on education. She explained that many small communities make their revenues from rentals to teachers and if they can't identify how many teachers will be in their community, it impacts their budgets. She said that if [the notification date] were changed to June 1, it would be very difficult for school boards and municipal councils to come together and make decisions by July 1. She concluded that the AML is in full support of HB 20. 11:51:10 AM CINDY SPANYERS, Legislative Liaison, Alaska Public Employees Association/American Federation of Teachers, (APEA/AFT), read written testimony as follows [original punctuation provided]: Among other bargaining groups in state service, city/borough governments, and with the University of Alaska, we represent employees within Anchorage, Valdez, Juneau, and Petersburg school districts. Their professions ranges from para-professionals to maintenance workers; school nurses to school librarians; teachers and special education providers, and administrative personnel. But I am also here on behalf of my seven-year old son and his second-grade classmates at Auke Bay Elementary. I would like to begin by thanking HB 20's sponsor, Representative Seaton, and members of this committee for making education a priority. Last year, several of you who served on this committee took responsibility for securing on of the biggest increases in educational funding. During the course of these discussions, you also realized the quandary local school districts and the local governments face when establishing their budgets and meeting their obligations in a timely fashion. I appreciate any efforts you can do to help school districts become fully funded early enough to make solid plans for the forthcoming school year. HB 20 is a big step in the right direction. Again, thank you for your efforts to help provide the best education to our children. [HB 20 was held over.] 11:53:38 AM