The Alaska House Finance Committee heard testimony Wednesday on legislation that would fundamentally change how school districts budget by giving them enrollment numbers months earlier than the current system allows.

House Bill 261, introduced by Representative Andi Story, would let districts use either a three-year average of prior student counts or the previous year's count to set their budgets by July 1. That is well before the current October count that determines funding. The change would allow districts to offer teacher contracts in March or April instead of waiting until late spring or summer, when many qualified candidates have already accepted positions elsewhere.

"It is the norm that communities do not know their funding levels until after critical staffing program decisions have been made and local municipalities have finalized their budgets," Story said. "Last year, communities and districts did not know their current budgets until right before school started."

The bill draws on recommendations from a 2015 legislative study that found 26 other states use student count averaging. Story said the current system forces districts into an annual cycle of building budgets, revising them, and rebuilding them again as new information becomes available.

"This bill, by having a student count number July 1st and not dependent on the current year October student count, allows districts to then offer teacher and staff contracts earlier in the spring, enabling districts to retain experienced, beloved teachers, and hire new teachers when recruitment is in full swing, rather than waiting until late spring or right before school starts when talented candidates are limited," Story said.

Clayton Holland, superintendent of the Kenai Peninsula Borough School District, told the committee his district must submit a balanced budget to the borough by May 1 without knowing actual state revenue.

"In districts with the borough, we are required to submit a balanced budget in the spring," Holland said. "This creates a situation where we are making major financial decisions about staffing, programs, and in some cases even school closures without knowing what our actual revenue will be."

"It becomes a cycle of building a budget, revising it, and rebuilding it yet again as new information becomes available," Holland said. "This is not a stable or effective way to run a school system."

Holland said the Kenai district has not yet offered contracts to non-tenured teachers and has not begun hiring for positions that will likely open once funding levels are known.

The bill includes several other changes to the funding formula. It would allow districts to adjust intensive needs student counts in February to account for high-needs students who arrive after the October count. Story noted that intensive students receive 13 times the funding of regular students and have complex needs that typically require additional staff.