SB 97-TEACHER RECRUITMENT; LUMP SUM PAYMENT  4:10:00 PM CHAIR TOBIN reconvened the meeting and announced the consideration of SENATE BILL NO. 97 "An Act authorizing lump sum payments for certain teachers as retention and recruitment incentives; and providing for an effective date." 4:10:26 PM HEIDI TESHNER, Acting Commissioner, Department of Education and Early Development (DEED), Juneau, Alaska, thanked the committee for the opportunity to present SB 97, sponsored by the governor. She stated the following: We know that recruitment and retention of teachers has long been an issue here in Alaska and across the nation. Teachers have a tremendous impact on student achievement, and teachers' stability and effectiveness are essential components of a student's achievement. Priority number four of Alaska's Education Challenge is to prepare, attract, and retain effective education professionals. This bill supports our teachers and this priority of Alaska's education challenge. A few reminders for this committee and the listening public: I want to provide a few facts regarding teacher retention and recruitment in Alaska. We have approximately 7,300 teachers working in our Alaska Public Schools. We have fewer applicants for vacant positions, as demonstrated through our first-day vacancies. We have an increased number of first-day-of-school vacancies. There were 394 in 2023 compared to 115 in 2019. In Alaska, most of our teachers are recruited from the lower 48. We have seen an increasing number of teachers filling positions from out of state. There were 461 in 2018 to 1,043 in 2023. We have issued an increasing number of emergency licenses. About 22% of Alaska's teachers are turning over annually. Turnover is higher in our rural, remote, and lower- income schools. As you may recall, the governor ordered a task force to examine teacher recruitment and retention in 2020. In a report by a 30-member Alaskan working group, the Teacher Retention and Recruitment Action Plan, dated April 2021, was completed, and it identified root causes using a teacher retention and recruitment survey and qualitative supplemental study of written comments from teachers that held active certifications in Alaska at that time. There were six essential areas that were identified: 1. Strengthening working conditions 2. Developing leadership 3. Restructuring retirement options 4. Enhancing retirement efforts and opportunities 5. Creating paraprofessional pathways 6. Streamlining certification and recertification From the survey, salary ranks number one. In an effort to attract teachers to Alaska and address the highest- ranked findings in that report, Senate Bill 97 proposes the following: It provides three years of incentive payments for eligible teachers at approximately $58 million each year. It will be paid in fiscal years 2025, 2026, and 2027 for work completed in fiscal years 2024, 2025, and 2026. It provides three tiers of incentive payments based on the type of district: Tier I - urban districts at $5,000 per year for three years. This is approximately $24.8 million a year for our five largest districts with approximately 5,000 teachers. Tier II - rural districts at $10,000 per year for three years. This is approximately $9.52 million a year for 24 districts with approximately 1,100 teachers. Tier III - most remote and rural districts at $15,000 per year for three years. This is approximately $17.2 million a year for 25 districts with approximately 1,300 teachers. This bill is targeting the largest incentives to remote and rural districts who have struggled the most to recruit and retain their teachers. The incentive payments are for full-time teachers. Doing the same isn't working. So, this incentive pay will be just one solution and will be considered a pilot or a study. We want to see if the incentives help with the retention recruitment issues we are having in Alaska. We would survey teachers to see if they stay in their district or if they go to another district or even if they go out of state. We want to track who came from the lower 48 and find out why they went to a particular district. By the end of the three years of this pilot, we would have the data to better answer the question on whether or not incentive payments help with the recruitment and retention issues that we were experiencing. I also want to add that in November 2015, there was a report issued by the University of Alaska Anchorage's Center for Alaska Education Policy Research titled "Salary and Benefits Schedule and Teacher Tenure Study." This was another study commissioned by the state. While it was not recommended, teacher differentials for districts was encouraged. SB 97's tiered incentive approach for the governor is evidenced in that research. In summary, there are years of data and discussion about investing in our teachers. Through the introduction of SB 97, the governor is showing that he's listening to the stakeholders and directly incentivizing the people to do the work in our classrooms. This bill supports our teachers and shows that they matter. 4:16:12 PM LACEY SANDERS, Deputy Commissioner, Department of Education and Early Development (DEED), Juneau, Alaska, provided the sectional analysis and fiscal note overview, OMB 2796, for SB 97. She stated the following: [Original punctuation provided.] SB 97 Teacher Recruitment; Lump Sum Payment   Sectional Analysis  "An Act authorizing lump sum payments for certain teachers as retention and recruitment incentives; and providing for an effective date." Section 1: Amends uncodified law by adding a new section that establishes a program that would pay certificated full-time teachers with a lump sum payment on, or around, July 1, 2024, July 1, 2025, and July 1, 2026. The incentive payments would be contingent upon appropriations made for this purpose in the relevant fiscal years (FY2025, FY2026, and FY2027). The bill limits the payments to full-time teachers assigned to a classroom teaching assignments and specifically excludes temporary, substitutes, or assistant teachers. In addition, to be eligible for the payment, teachers would be required to submit an application and the school districts would be responsible for certifying the applications. The Department of Education and Early Development (DEED) would develop the application and it would be due no later than the last day of school for each eligible school year. Once the application and certification requirements are met, DEED would grant school districts funding to pay the incentive payments to eligible teachers. The bill also considers all incentive payments compensation for the purposes of the Teachers' Retirement System (TRS). The bill provides DEED authority to adopt regulations necessary to carry out the purposes of the bill. Section 2: This bill is effective on July 1, 2023. 4:17:57 PM CHAIR TOBIN asked whether the effective date would allow enough time to develop regulations and hold public commentary. 4:18:12 PM MS. SANDER explained that the effective date of the bill aligns with the upcoming school year, allowing teachers to become eligible during that year. She opined that the timeline provides adequate time because while the teacher is earning eligibility, the department would develop regulations and the application. 4:18:41 PM MS. SANDER said the fiscal note, OMB 2796, for SB 97, is divided into two components. The first part involves the cost of establishing a non-permanent position, specifically an Education Associate III, who is responsible for program implementation, regulation and application development, application review, and payment distribution to school districts. The second part comprises incentive grant payments, estimated at around $51.5 million for approximately 7,000 full-time teachers in Alaska. Additionally, there is a $6.5 million value associated with the employer contribution to the Teacher Retirement System (TRS). This funding provides support to school districts in making the additional TRS contribution. 4:20:08 PM SENATOR KIEHL raised a mechanical question regarding processing incentive payments to teachers. He noted that the application deadline falls at the end of May or early June, with payments scheduled for July 1 or a reasonable time thereafter. He expressed concern about the workload, suggesting that many teachers might submit applications close to the deadline. Senator Kiehl questioned whether one person could handle processing these applications during the brief period between late May and July 1, and if so, what would the person's responsibilities be for the rest of the year. 4:20:55 PM MS. SANDER clarified that while there will be a heavy workload concentrated during a specific time frame, the department is aiming to establish an electronic application process to streamline the procedure and avoid the complications of paper applications. She noted that the non-permanent position created for this task may not be required for the entire year, as the workload could vary, being heavier during one part of the year and lighter during another. This aligns with the intended flexibility of the non-permanent position. SENATOR KIEHL observed that the budget allocated $110,000 for personnel services in all three years of the program. He remarked that this indicates the position is not intended to be permanent. Senator Kiehl expressed a desire to calculate how many months the $110,000 budget would cover at a Range 17, B, or C. MS. SANDER replied that the $110,000 budget for personnel services was an initial estimate for setting up one position. She stated that the department could return to the legislature with more specific details once the program is established and operational. SENATOR KIEHL inquired about the location of the employer contribution to the Teacher Retirement System within SB 97. 4:22:52 PM MS. SANDER replied that employer contribution is located on page 4, line 14, "Payment made under this section will be considered compensation for the purposes of AS 14.25." SENATOR KIEHL said that makes sense in terms of requiring a contribution and counting it towards eligibility, especially for Tier II teachers. However, he suggested clarifying language may be needed regarding who is responsible for paying the employer contribution. 4:23:37 PM CHAIR TOBIN noted that the legislation outlined different incentive amounts based on school size. She asked whether a teacher transferring from the Anchorage School District to the Bering Strait District would be eligible for the larger, $15,000 bonus. ACTING COMMISSIONER TESHNER replied yes if the teacher worked the entire school year. CHAIR TOBIN expressed concern about what appeared to be a potential imbalance in school funding. She questioned whether the varying size of the incentive could lead to some schools losing resources in favor of others and if there was a legal opinion or specific rationale behind the selection of $5,000, $10,000, and $15,000 as the incentives for different districts. ACTING COMMISSIONER TESHNER stated her understanding that the size of incentive aligns with the recommendations of studies and might be slightly higher than what other regions are implementing. 4:25:09 PM CHAIR TOBIN commented that if SB 97 passes, it might be lucrative for teachers to move from the Anchorage School District to her home community. 4:25:13 PM SENATOR KIEHL asked what happens after the three-year incentive program ends. He pointed out that there is no proposal to triple the teacher education programs at the university and no proposal from the administration to address other recommendations. He questioned how this program fits into the broader plan to address the ongoing teacher shortage in the state. 4:26:10 PM ACTING COMMISSIONER TESHNER replied that the three-year incentive program is just one part of a broader effort to address teacher recruitment and retention issues. A final report with all the recommendations would be available in August, and DEED would consider additional measures based on the recommendations. The program is a pilot, and DEED would evaluate its effectiveness in improving retention over the three years. It's an attempt that the governor is introducing to tackle Alaska's teacher retention and recruitment challenges. 4:26:52 PM SENATOR STEVENS commented that the annual turnover rate for teachers is 23 percent. He asked what the turnover rate is for principals. 4:27:11 PM ACTING COMMISSIONER TESHNER responded that she did not know but would provide the committee with an answer. CHAIR TOBIN noted that reporting measures or mechanisms were mentioned several times, but she could not locate any mention of them in SB 97 or the fiscal note. She inquired about the specific location and details of the reporting requirements. ACTING COMMISSIONER TESHNER stated that the bill did not contain a provision mandating the Department of Education and Early Development (DEED) report back to the legislature. However, DEED would collect and furnish the legislature with the information, CHAIR TOBIN stated that she found it slightly concerning that SB 97 did not contain a reporting requirement. She pointed out that there are other bills with reporting requirements, and it did not seem like a significant burden for the department to handle such reporting. She suggested amending SB 97 to include reporting measures and allocating a portion of the $110 personnel line item for this purpose. ACTING COMMISSIONER TESHNER replied that the suggestion would be a friendly amendment. 4:28:20 PM CHAIR TOBIN opened invited testimony on SB 97. 4:28:42 PM MAE PITKA, Teacher, Lower Yukon School District, Russian Mission, Alaska, stated that she is a teacher born and raised in Russian Mission. She stated that she had witnessed high teacher turnover rates both as a student and a teacher. This year marks her 29th year in teaching, and it is challenging to recall everyone who has come and gone. She emphasized the importance of quality teachers in her life and expressed gratitude for being able to live and teach in her hometown community. She also expressed hope that some of her students would choose teaching careers. MS. PITKA stated that she supports SB 97 to ensure students have access to quality teachers. She stated her belief that longevity incentives with lump sum payments were a positive step to support and attract teachers. She acknowledged that teacher retention would remain an ongoing issue and suggested that financial incentives were necessary to attract and retain high- quality educators. She thanked the committee members for their support of education in Alaska. 4:31:21 PM DAWN BOCKELMAN, Teacher, Anchorage School District, Anchorage, Alaska, stated she is a primary school teacher with six years of experience. She said she supports paying teachers an annual incentive for three years and stressed the importance of education in Alaska's future. She highlighted challenges caused by administrative support issues and the loss of university accreditation. MS. BOCKELMAN praised Governor Dunleavy's proposal to provide direct financial incentives to teachers instead of channeling funds through school districts. She stated that giving incentives to the teachers recognizes their value. She urged the committee to consider SB 97 to retain effective classroom teachers. 4:34:22 PM CHAIR TOBIN opened public testimony on SB 97; finding none, she closed public testimony. 4:34:44 PM SENATOR STEVENS stated he understands that Alaska's overall percentage of teacher turnover is 23 percent. He asked for a breakdown of teacher turnover for the three incentive categories. ACTING COMMISSIONER TESHNER said she would provide the committee with a spreadsheet since the amount varies across all districts. SENATOR STEVENS said he would like DEED to organize the spreadsheet by category, not district. ACTING COMMISSIONER TESHNER said she does not have a spreadsheet organized by category but can calculate the amount by category. She said she would provide the amounts to the committee. SENATOR KIEHL questioned the basis for calculating the bonuses in the proposed program. He said the department appears to have tied the incentive amounts to the average daily membership of districts. He expressed concern that this metric may not accurately reflect the cost of living in the teachers' communities. He pointed out that district cost factors, such as 1.08 in Ketchikan and 1.05 in Juneau, do not align with the bonuses, where Ketchikan teachers would receive twice that of Juneau teachers. Senator Stevens asked for clarification on the rationale for these calculations and bonuses. 4:36:20 PM ACTING COMMISSIONER TESHNER clarified that DEED did not base the allocation of funds on average daily membership. Instead, the decision was based on several factors, including district performance, teacher turnover rates, remote locations of districts, and whether an area was urban. The five largest urban districts received $5,000 each, and the allocation for rural and middle-tier districts was $10,000. The $15,000 allocation was based on factors such as location, road accessibility, and district performance. In summary, a combination of factors determined the allocation, not average daily membership. SENATOR KIEHL stated he did not see a matrix in the packet and that without a solid basis, there is a local and special acts problem. He asked for a copy of the analysis that led to the department's categorization of the districts. 4:37:38 PM ACTING COMMISSIONER TESHNER replied she would provide a copy to the committee. CHAIR TOBIN asked for the top three priorities from the teacher retention working group. ACTING COMMISSION TESHNER asked if Chair Tobin was referring to the six essential areas that were identified. CHAIR TOBIN replied she was referring to a comprehensive list the committee received. She recalled that two top priorities were leadership pipeline and defined benefits. The flexibility of work was also on the list. 4:38:17 PM ACTING COMMISSIONER TESHNER stated her belief that the three priorities Chair Tobin is requesting are: 1. Strengthening working conditions. 2. Developing leadership. 3. Restructure and retirement options 4. Enhancing recruitment efforts and opportunities 5. Creating paraprofessional pathways 6. Streamlining certification and recertification 4:38:40 PM CHAIR TOBIN asked under which priority would incentives belong. ACTING COMMISSIONER TESHNER said incentives belong under the Strengthening Working Conditions priority. Pay is part of the findings in that category. 4:39:00 PM CHAIR TOBIN held SB 97 in committee.