HFIN-260424-1330

Okay, I'll call this meeting of the House Finance Committee to order. Let the record reflect that the time is currently 2:13 PM on April 24th, 2026. And present today we have Representative Allard, Representative Stapp, Representative Moore, Representative Bynum, Kucher-Shraggi, Kucher-Josephson, Representative Jimmy, Representative Galvin, Representative Tom Sheff Rep. Hannan, myself, Co-Chair Foster. And just a reminder, folks can mute their cell phones. And we have two items on the agenda today, and that is House Bill 261, that is the education funding bill.

And we're going to get a recap of the bill. We will review the fiscal notes, and then we'll set an amendment deadline, and then we'll move over to House Bill 193, that is the unemployment benefits Paid Parental Leave bill. We will get a recap and then we will review the fiscal notes and ask questions. And so circling back, House Bill 261, education funding. I would like to invite up Representative Story as well as her staff, Ms. Tammy Smith.

If you could please put yourselves on the record and give us a brief recap of the bill. And then from there Let's see, we will go to questions or the fiscal notes and then questions. So with that, Representative Story, welcome back. Thank you, Co-Chair Foster, Co-Chairs Josephson and Sharagi, and for all the members of the House Finance Committee. For the record, I am Representative Andy Story representing District 3, which includes North Juneau, Gustavus, Haines, Klukwan, and Skagway.

I'm also joined by my staff member Tammy Smith. Again, thank you for hearing this bill, an act relating to education funding process. This bill seeks to fix our flawed education funding process that families, students, and staff and communities go through every year. The current timing of the education budget, the October 20-day pupil count process, contract renewals, and the legislative process makes for an uncertain, stressful community and staff education budget situation. Currently, it is the norm that communities do not know their final funding levels until after critical staffing and program decisions have been made and local municipalities have finalized their budgets.

This bill smooths out student enrollment changes by allowing districts to budget using the greater of either the average of the prior 3-year student counts count, also known as the average daily membership, or ADM, or taking the previous fiscal year student count average daily membership for funding for the school year. So communities will know their budget amounts starting July 1st of the current fiscal year. This provides more budget stability and smooths out student enrollment changes for improved program educational planning. This change was recommended more than a decade ago in a study titled Review of Alaska's School Funding Program that the legislature commissioned in 2015 and again recently heard as part of our Education Funding Task Force that met this past November and reviewed this topic. We have heard that over 26 states use an averaging student count process.

I'm pleased to say that one of the authors of the study, Amanda Brown from Augenblick, Palish and Associates, is online and available for questions this morning. Briefly, I wanted to remind you that this bill, by having a student count number July 1st, is not dependent on the current year October student count. This means that districts do not need to be as concerned about unexpected changes in student enrollment at the time of the October student count, and that is when teacher and staff contracts have already been signed for the year. This timeline better meets meets municipal statutes, budgeting deadlines. Their deadlines are due in March or April.

Importantly for us and for the school community, it allows districts to then offer teacher and staff contracts earlier in the spring, enabling our districts to retain their experienced, beloved teachers and hire teachers when new recruitment is in full swing across our country, rather than waiting until late late spring or right before school starts when talented candidates are limited, and especially in this national student shortage. This gives school communities time to focus on effective instruction and improving student achievement rather than deciding what to cut and doing and redoing their budgets. Again, the purpose of this bill is to ensure a more stable education funding and educational program accounting process. In closing, I wanted to share that in the 2015 report, it refers to this 3-year averaging as a declining enrollment adjustment. It is common across the country that school districts are experiencing a decline in enrollments due to less children being born and children and families choosing other educational options.

Using a declining enrollment average allows districts to better plan for lower enrollments and plan for their educational offerings. In the Task Force on Education Funding just this week, we talked of the increase in homeschooling and correspondence student enrollments in our state. It's approx— approximately 20% now, with the majority of our students still in our neighborhood schools at around 80%. Providing a stable, sensible budget process creates more stability and less stress for our communities. These changes remove some of the guesswork and provide for more stability.

And this stability— instability that they're living with really is very stressful, as we know and have heard from. And I wanted to give a quote that really impacted me when I was reading. And it was this fatigue, this push-pull between state and local funding shortages and last-minute fixes This is exhausting. The constant drumbeat of emergency and crisis has worn thin in our school communities and our communities at large. We can do something about this.

This bill is something being used in other states, and I look forward to your questions about this. Great. Thank you very much, Representative Story. Before I go to questions, I'll keep a the list here. I would like to maybe just review the fiscal notes.

And so with that, we do have online Ms. Heather Heineken, Director of Finance over the Department of Education. Ms. Heineken, if you could put yourself on the record. And as you walk through the fiscal notes, if you could just refer to the control code at the bottom of each of the fiscal notes just to make sure that we have the correct one. Ms. Heineken.

Sure, thank you, uh, Co-chair Fosser and Co-chair Josephson, Co-chair Schragger, and House Finance Committee. For the record, my name is Heather Heineken and I serve as the Director of Finance and Support Services for the Department of Education Early Development. I will go through— there are a total of 4 fiscal notes today, and I will start with a public education fund which is control number Uh, SEYBM.

This fiscal note for version G reflects a projected cost to the public education fund, which is OMB component number 2804, of $113,710,600 in fiscal year 2027 and $113,548,500 in fiscal year '28 through '32. So this committee substitute outlines multiple revisions to the Public School Foundation formula, which includes maintaining the option to calculate basic need to a district based on the greater of the previous year's ADM or the prior 3-year average ADM, as presented by Representative Story. It continues the removal of the hold harmless provision as in the original bill, but it offers transition language for districts that are currently eligible for hold harmless to remove that cliff. And it retains the language counting alternative programs under the 175 minimum ADM is eligible for a separate school size adjustment, and it provides an option for intensive student funding counts, including the greatest of prior year count, a current year October count, or a later current year February count. It did remove the language allowing a 3-year average for the intensive count.

And then moving on to the Foundation Program, which is control number LVWLE, and that's OMB component number 141. And this is just a $0 fiscal note for the Foundation Program. Uh, this component, uh, the program operates under— however, the funding mechanism is a general fund transfer into the PEP, which we just reviewed. So it reflects the funding needs for the bill. That's an easy one.

And the next one is, uh, we'll look at Mount Edgecomb High School, which is control code GR PTJ, and that's OMB component number 1060. And this fiscal note is, uh, because Mt. Edgecomb is a division of the Department of Education and Early Development, it's a technical fiscal note because Mt. Edgecomb state aid is budgeted as an interagency receipt. And this fiscal note adjusts their receipt authority to align with the estimated allocation, again from the Public Education Fund.

The bill creates a projected decrease in state aid funding for Mount Edgecomb of $143,900 in fiscal year '27 and $163,000 in fiscal year '28 through '32. Uh, the final fiscal note is, um, for School Finance and Facilities, Control Number ECZOW, and that's, uh, Component Number 2737, which will require a one-time increment of $12,000 for legal services to allow the department to establish new regulations for the bill, and it would require regulations for the—.

To—. For the— basically for— so that inappropriate use of school site funding mechanisms for the minimum ADM for— excuse me— for alternative programs. And then it will also establish the reporting timelines and requirements for the intensive service students and the monthly payment calculations.

So that's the 4 fiscal notes, and I, I'm happy to answer questions. Great, thank you very much, Ms. Heineken. And before I go to questions, uh, would like to note that we have 2 people online, uh, available for questions, and that is Ms. Katie Parrott, president of the Alaska Association of School Business Officials, calling in from Anchorage. And then also we have Amanda Brown, Vice President of APA Consulting in Denver, Colorado. And so with that, uh, we'll open it up to questions for either Ms. Heinicke on the fiscal notes or the sponsor.

And so I've got in the lineup Representative Bynum and Representative Stapp. Representative Bynum. Thank you, Co-Chair Foster. Through the Chair, Ms. Heinicke, thank you for being here. I had asked this question previously and, um, of the sponsor, but I'm not sure that we have the information.

But I know that you guys are doing the modeling here, and it indicates here that we have a $113 million, almost $114 million fiscal note that then spans over the next 5 years. And one of the concerns that we've had with our schools is that we've seen declining enrollment. So I was wondering if you could square up how the cost of this stays consistent for the next 5 years if we've done actual modeling to demonstrate the numbers. Ms. Heineken.

Uh, thank you. Through the chair to Representative Bynum, unfortunately we, we did not do any modeling outside of the, uh, the projected enrollments through FY27. So we base FY28 through 32 on the projections we received for FY27. Our projections are received from the districts, so we wouldn't— wouldn't be in our purview to do that modeling. Representative Bynum.

Thank you. Thank you, Co-Chair Foster, through the Chair, Ms. Heineken. So my understanding is then basically what you've done is you just looked at what what the numbers are right now and you came up with a fiscal note to cover that and that you have not done any modeling to demonstrate how this formula, new formula change, would have reflected over any period of time or future time. Is that accurate? Ms. Heinrichen.

Through the Chair to Representative Bynum, yes. That's standard practice for the foundation. Thank you. And the co-chair Foster, I'll have some further questions, but I'll wait for— they're not specifically related to Fiscal Note, but they're specifically about the process of funding. So I'll bring this up in a minute.

Okay. I've got Representative Stepp and then Representative Tomaszewski. Representative Stepp. Yeah, I think, co-chair Foster, to the chair and Ms. Heinrich. All right.

So Rep. Bynum kind of talked about this. This is incredibly problematic that you didn't model the this fiscal note. There are 3 factors in this bill. You should expect school districts to maximize, uh, ghost kids. So they're going to take whatever count maximizes their enrollment.

And if they have a 3-year average, a current year, and even a February-intensive second count like that, that could dramatically change, um, the cost of the bill. So my question is like, do you not have the resources to model this? Or, I mean, because the variations in what's being proposed can swing wildly. Through the chair, Ms. Heineken.

Thank you. Through the chair to Representative Stepp, for clarification, FY27 and FY28 are, are basically taking the maximum allowable to the district. For those years. We have not projected further out because at the department level, we don't predict what the districts have happening at their level. That information would— the districts would have to provide it to us.

So it's not something that we collect regularly. Follow-up question. Follow-up, Representative Stagg. Yeah, so let me give you a practical example, and maybe you could explain to me, because this has a huge impact on the fiscal outcome of the bill. Let's say I am the Anchorage School District and I have 300 kids who go enroll in the Matsu School District.

That drops my enrollment. I invoke my 3-year average. Matsu now invokes their current year average for 300+ students. Like, those are the types of scenarios, because that would lead a 3-year change in cost structure for this bill. That's fairly substantial when you look at the foundation formula multipliers.

So is there any way that you can even reasonably give a range on what those types of impacts would be on the fiscal note? Through the chair, Ms. Heineken.

Through the chair to Representative Staff, the information that we have from the district that we received in November is information received from each individual district of what they project their FY 2027 enrollment to be. So that is as far out as we can project, um, and we use that information to base these numbers on. Follow-up. So in the event that this bill would be law, through the chair to Ms. Heinicke, don't you— wouldn't you consider that the projections that they would give you would probably change dramatically over time given the fact that they have multiple angles under this bill to preserve kind of artificially inflated student counts? Through the chair, Ms. Heinicke.

Through the chair to Representative Zap, I would expect them to change over time, but I wouldn't— the department wouldn't be in a position to predict how they would change. We do use the projections to project forward, and then when the actual data comes in, we adjust for the actual. So, um, so, uh, yeah, thank you, Chair Foster. Through the chair, uh, so I guess my final question would be, I understand that why not just say FY27 and 28 and then project indeterminate and tell why you would project indeterminate rather than just give me the same number for 10 years? Because I, I find this fiscal note, um, honestly really misleading because I think the levers in this bill will change dramatically the behavior of counting students, i.e., money.

Because, you know, what you incentivize financially will happen. That's why we have certain situations or foundation formula too. So curious why you just didn't go indeterminate after FY29 and kind of leave that note. Through the chair, Ms. Heineken.

Uh, through the chair to Representative Stepp, this is the standard process that we use for foundation anytime we project out to 2032, because just as you stated, those variables change year after year, and we can only base it on the current data that we have.

Follow-up, Mr. Co-chair. I would, I would argue that's all the more reason to project an indeterminate note with an explanation after FY29. But thank you. Representative Torrey. Yes, uh, thank you.

Uh, Thank you, Co-chair Foster, and through the chair to Rep. Staff and to the whole committee, really. I think that it is really important to know that we have not changed in statute when— how the student count is done in October. It is very important to note that DEED still has to verify that these students are where they are every year. And with the 3-year averaging, it is based on the prior year 3-year count or the previous year student count. It is only with the intensive students that that current year can be used.

So it's the, the previous year student count or the prior 3 years count. The other thing that I wanted to mention is this is a declining enrollment adjustment, the averaging. And so, and again, we have Amanda Brown on the line and she can maybe talk about why 26 other other states use this method, and it has to do with the thing that we are providing a system of public education in this state. And when you lose a few students— when you lose students, you still have to provide a system. Parents want that system to have educational opportunities, to have reasonable class sizes.

And when you allow for this this 1%, 2%, 3% loss that you are still keeping in there because basically— and again, some districts might be increasing, some districts might be going down, but declining enrollment adjustment, it is so that the system still functions. Much like I just looked at Rep. Bynum and I think about public utilities. And when you are running public utilities, you have your customers come and go. You might have more more people in a certain area and then some move away, but you keep your system stable. They still want to have this— to adjust to providing and working with your community.

How are we going to afford these things? What are we going to do? And that's just very, very important. What we do is just these abrupt up and downs and we do it backwards. And this is something that other states are trying to have confidence in your public school systems and make sure our neighborhood schools, our community schools are still being able to work with what their desired educational outcomes are.

Okay. Representative Stepp, did you have a follow-up? I would be happy to go to the expert online I guess that Representative Story mentioned regarding attendance, but I mean, that's kind of a different line of questioning, so I'll defer to anyone else who wants to ask on the fiscal note. Um, I think while we're on this subject, we're, we're, uh, well along the way on this, and so, and we're just opening it up at this point to both fiscal notes and questions for the sponsor. And just so folks know, we've got Roxanne Tomaszewski, Allard, and then Galvin and Bynum.

So with that, Ms. Amanda Brown, uh, if you can put yourself on the record and we can restate the question if needed.

Thank you. Amanda Brown, for the record. I'm available to take questions or give some comments based on what Representative Flores is sharing, if you'd like. And maybe Representative Stapp, if you could repeat the question. Yeah, thank you, uh, Coach Foster, through the chair to, um, Miss Brown.

Um, so I guess just the Obviously 23 states do this membership average equation. I assume they probably don't all do it exactly the same. But I'm curious if you could tell me the pros and cons between average attendance model, like say in Mississippi, and membership average model in some of these other states. Through the Chair. Ms. Brown.

Amanda Brown to represent through the Chair. Great question. A few things to unpack. So, the first you were asking about was attendance versus membership. There's only a handful of states that do fund on membership—or on attendance—and I believe Mississippi is actually transitioning to membership in their most recent bill, in part because funding on attendance versus membership means you're only funding on the students that happen to be present when a count was taken.

Often when you're using attendance, you're not using a single day. You might be looking at an average over a period of time or even the entire school year. But what it tends to do is penalize your communities that might have more student mobility issues with attendance and higher-need populations that struggle to make sure students are attending as much. So, they're still serving them. They'll have to serve them a whole year, but they might not receive funding if they happen to not be present on the day or period that attendance was taken.

So the vast majority of states fund on membership. And then the other piece I was hearing on was kind of the averaging versus single day. And that tends to be more around averages being more stable than a single year or single day count. And then if you take that a step beyond to then averaging over multiple years of data, it gets to what Representative Stolle was speaking about, about the stability and predictability of budgeting, both for for your LEAs and for your state about how many students you'll serve. And I think the way that the bill is designed at present by doing a better-of approach, which is used in a number of states, you're both trying to account for districts that might be growing as well as declining, which is what that 3-year average is really picking up, is being able to provide that softer landing for systems that can't be as quickly responsive to changes in their budget, to Representative Choi's point about you still have a certain number of teachers in classrooms that you're having even if your student count changes.

So I hope that answers your question, gives a little more context on the kind of a few different pieces, how you think about count. Follow-up, Mr. Cook? Yeah, thank you, Co-Chair Foster, through the chair. No, I appreciate that answer. I'm curious, what model works best for improving outcomes in truancy?

Because one of the biggest challenges in Alaska schools is we have very high truancy rates, i.e., kids don't attend school that often. And I kind of am under the impression that when you talk about, um, accounting models, there's a financial incentive for the district to want to make sure the kids are going to school because they get more money if more kids are in the school. I was curious if you have thoughts on that through the chair. And Ms. Brown, if you're coming through a little bit muffled, if you could maybe get a little closer to the the mic.

Appreciate that. And I'll switch off the speaker, so maybe that will help. That's perfect. Thank you. Great.

Uh, Ms. Brown, is that better? Yes, much better. Thanks. Uh, thank you, uh, Representative, through the Chair. Um, it's a good question.

I would have to give a little more thought to which one actually supports attendance. I think I think about it more in the opposite of what potentially penalizes communities that are trying to serve populations that may be more truant, less absent. So, I think a system that provides stability in funding, so funding via membership versus attendance, makes sure those communities can provide the resources they need to support attendance. Having those counselors, those translators, the folks that are making the home-to-school connection to support attendance, I think can be really important, and again, making sure you have stable funding, and membership funding tends to be more stable than attendance, which is why states are really moving away from attendance.

Through the chair, thank you. I appreciate you having me online. I'm just— I'm curious why— so I want the schools to get funded because the kids are going to school. I don't want schools to get money and then not have the kids attend the school because that seems kind of counterproductive. Productive to the outcome in education.

So I'm curious, I know you said you're more interested in the stability of the funding, but why wouldn't I want to ensure that the funding is directed to kids who are actually in the school, attending the school so they can get educated? So I guess I don't really understand the philosophical difference. I'd like to know which model— and you have several different— I didn't even talk about enrollment period or multiple counts— which model, in the best of your ability, kind of looks to incentivize the highest level of average attendance? Through the chair, Ms. Brown. Yeah, Representative, through the chair, I, I think the, the funding counts— so using a membership count that provides that stability funding, again, allows you to have the resources for districts to focus on making sure students can be present and attending.

So, I don't think it disincentivizes communities to then focus on attendance if you're providing funding and enrollment. I think instead it makes sure you have the resources, the staffing to support attendance and engagement, whereas you would potentially penalize them for trying to do those things by not doing it the other way. Okay, thanks. Okay, and again, I've got Representative Tomaszewski, Allard, Galvin, and Bynum. So we'll first go to Representative Tomaszewski.

Thank you, Co-Chair Foster, and through the chair. So, uh, just looking at the bill overall, we're looking at about $113 million increase to the budget. Have we determined or figured out about how we are going to pay for this. Representative Story. Through the chair, again, to the committee and to Rep. Tomaszewski, that would be our decision as legislators.

I know that we have put some money, one-time money in the funding for the budget. To me, we could use that money for this bill and then we would— and that would help us Yes.

Representative Tomczewski. Okay, follow-up. Yes, so it looks like this bill is really focused on a declining enrollment.

What is the school district doing to encourage an increase to enrollment? Thank you. Through the chair. I think we would probably get different responses from different districts, and we do have Katie Parrott on the line, but I think they're always working on trying to keep students in the district. What this enrollment averaging— averages does, it provides more stability to districts.

So parents are reading about offerings that they can have. They're not reading about this cycle that's going up and down, and they have more confidence that their school is going to be able to provide reasonable class sizes, and, and that builds incentive to come to school. Or we're keeping some of our electives, and we're— because we're having time to plan for this decline in enrollment, so districts are better able to decide, communities, what they want to have in their schools. So I think that stability really will help keep kids in school. And I do have to mention that this is one change that we could do personally as a legislature to give more stability to districts.

But we will— we still always have the decision to how much money, you know, will we be giving, like through a base student allocation increase, which is separate from this. But, you know, we have to address fixed costs that way to keep things going. So this won't solve all of our problems, but it will help smooth them. And again, other states have found this helpful in providing more stability, more confidence in their public school system. Thank you.

Just comment. Representative Tomaszewski. Thank you, co-chair. So I think it really comes down to local control. And I think, you know, a lot of Uh, school districts are making decisions that are driving parents away from, from public school, and I think this really needs to be addressed.

And I don't think the districts are taking a real and proactive effort into engaging parents and figuring out what is the problem. And, and in fact, I have seen testimony before school districts where parents are nearly ridiculed for their questions concerning what their school districts are doing. And so, you know, I think it, I think it comes down to really more than just adding more money to a system that parents are losing faith in, not only because of revenue or funding, but of, but because of things that are happening happening within the schools themselves. And so I think it really needs to be looked at in a lot of different directions. But I do thank you for coming forward and bringing this creative way to increase funding.

Thank you. May I comment? Rep. Sampstorre? Yeah, thank you very much for that. And again, this is something that has been done, was asked us to do in 2015, and just being on the task force and having to review these focus on our foundation system, it just kind of said, aha, let's— I think that we should try this, we should look at this, and it really makes sense.

And I want to say I'm sorry when parents feel dismissed by their requests, and I hope that boards are really working to be respectful of that. I think what's really hard is our community members, many of them are coming and saying, don't cut Cut my music, don't cut my specials, don't cut CTE. By state law, we have to provide what we need to graduate. We have to provide that basic core program. So when we're cutting that back, we lose our specials, and parents are leaving because they can do correspondence and homeschool, and they can provide music instruction, they can provide, um, unique programs.

And the kids who are in our neighborhood schools, 80% of them They rely on us to make sure they have a well-rounded program, which is what families want from their public schools. They want to keep band, as Rep. Mena talked about on the floor this morning. They want to keep CTE. They want to keep STEM programs. They want to keep their higher math programs.

They want reasonable class sizes. So thank you. Okay. And next up, we've got Representative Allard. Thank you.

Through the co-chair, Representative Story, did you say that this bill was modeled after Colorado? Did I misunderstand that? Representative Story? Thank you to the chair. No, it is not.

I was just saying that this— other 26 other states do this. Okay. So yeah, I just— I have some questions and some comments, and it's kind of going to a little bit roll together. I'm a little bit concerned when we reference the other 26 6 states because they do it based off of overtime rather than single day. And single day ADM is done in 15 other states.

New Jersey, Utah are a couple of examples. And when they do it that way, they are not in a fiscal crisis. So for example, Colorado does it the way you are saying, but they are also in a budgetarily, like, deficit. Like, this is really hurting them. In the past 10 years, they lost 6,000 students.

And I know the Anchorage School District is on average losing close to 1,000 students a year. So to have this bill in place that says, well, we'll take it after July or the last ADM that we want, and then putting it through the school year, I don't think is a smart idea. If we're going to do it, we probably need to get on board with doing it through live timing. So when a student actually leaves Anchorage School District or Matsu student leaves, whatever school that they then attend, within a couple of days it is in their system and it's reported back to the other school district, and that ADM fund or those funds are then given to that school district. You had mentioned about the utilities, um, when I turn off my utility and I move somewhere else, uh, that's almost immediate, so they don't take months or years to report that.

Um, that is cut off in the next Next person is on board with it. Some of my questions, I guess, would be how is this going to be any helpful? It seems to me it would just take the school district and put them in further debt. So if we want to have, like you said, STEM, we also want athletics clubs, band, art, woodshop, and auto shop. This isn't going to help that.

This is actually going to hurt the school districts according to the way your bill is written. So I'm trying to figure out how you think it's beneficial for the ADM to be the end of the school year prior when they're going to keep going into debt. Because if those students aren't there on August— say the school starts August 15th— they're not going to have that money. They're going to keep spinning themselves in debt. So I'm just trying to figure out how, how you can come up with that.

Representative Story, uh, through the chair, uh, thank you, Rep. Ballard, for those comments. And Well, how this works is DEED verifies the student count. So like, we're in fiscal year '26, so this October 25th, that is the count that they have taken. And so, and actually, DEED does not— they just like maybe verified it last week. You know, sometimes there's discrepancies and one student, two students are declared in two different districts and they have to reconcile all those things.

And so they just have verified it though, but it's verified. We know through their work. So when you take that 25 fiscal count and you start the year, that amount of money is what is— what is that district can take, because they're gonna, for the most part, they're gonna have those students there. I— when one of the processes that I didn't put in the timeline that I put as a school board member, every spring we had to project what we thought our student count would be in October. And we hired an economist, Greg Erickson, um, David Ryum, and they would take our high, medium, and low enrollments.

And we as a school board had to pick which did we think we're going to have a high number of kids, medium, or low number of kids. And then we had to plan our school budget on that. And then how the current system works. If in October we don't get the high enrollment, we get middle enrollment, then all of a sudden we know, hey, we're going to have to— we hired those teachers to serve kids we thought we were going to have, and they never showed up. And so we're going to have to cut in that current year, find out different things to cut.

And so that is a really unstable way to budget. And the legislature doesn't even know what we're going to be funding schools. And it just puts the whole system in a tizzy, for lack of a better word. And so this is going to help districts have a number where they can plan their, their, their programs. It is, it is a much more stable program for them.

And, and I think will give good results. I think it's a good thing. I meant utilities as we don't shut down the utilities if we lose, you know, 30 people, 100 people. You still have to provide that utility system there, and you have to have the system working and be ready to go because you might get more students, more families, and you want to keep, keep that going. So you asked a few questions, and I don't know if I've hit all of the points, but I thank you for your perspective.

Okay, thank you. No, you've been hitting on some of them. I'm a little bit— since you brought it up, you said the school district in Juneau, you said that you worked with some economists in order to— do you believe that the ADM is what threw you guys into a deficit when the budget for the school district wasn't properly done? Representative Story. Through the chair, so my last year I served was in fiscal year 2018.

And every spring we would have to do this to plan for our educational program and to plan. So if we took— if we said— and lots of times we'd take the safe route, the middle enrollment, you know. But again, the economists are saying what it is. So if we took a high number, we said no, we think we're going to get more people, and then we hired more teachers, that yes, it threw us into, you know, not having the budget that we needed to meet our expenses. —And so it's a very important thing that it's— you're like on— every year you're like pins and needles, what should you pick?

And so this method is so much more stable because you're not doing guesswork. We're trying to take the guesswork out of the public system here and provide for more stability. Okay. Just a quick comment. If we're looking at how— I know you said you're not using the role model or the model of Colorado, but if you're looking at the other 26 states, you can absolutely see where their budget is in a crisis because this is what that bill is doing, is running at the same as those other 26 states.

The other 15 states that use single-day accountability or single-day ADM, those are the ones that are actually flourishing and giving a better headcount of what is happening with the students. So I would suggest if we are going— first, I'm going to have fun with a lot of amendments on this one, but I would suggest best if we're going to spend this much money, then we suggest we spend it in a program that can actually do live transfers. So again, if a student leaves Anchorage School District, goes to Matsu, the money follows the child. That's why we're not sitting there wondering what we're getting. It's happening live timing.

So thank you, Representative Story, for being here though. Thank you. Okay, Representative Story. Uh, yes, thank you for that. And I think it's important to remember that if that student moves to Mat-Su, they— the Mat-Su will be getting the money for that student the following year.

So that is important to know. And then we might want to— as far as taking a single-day count, I've talked to superintendents about that, and we just talked to residential school superintendents, and they said a single-day count would be disaster. Actually, they do take a single-day count count. But it just varies important when that single day count is always the same day count. But if it happens to be when it's there in the interim thing, they'll only have 40 students when they can have 70, and their whole schedule is ruined for the year with a single day count.

And I think we might want to go to our— either both to Katie Parrott and to Amanda Brown, because I think they can— I don't know if Colorado is in a deficit. I don't know, maybe they know those other schools are using single count membership. I, I, I have not heard that those who are using single count membership or averaging are struggling. Would you like us to go to Ms. Brown?

Ms. Brown, please. Okay, Ms. Brown, if you're there. Of course the superintendents would say that. They don't know how to budget.

Thank you, Representative. And through the Chair, I think we would have to do some further analysis of that. On face, I don't believe that is true when I think about states that are using this approach, that there's a correlation between if they're running deficits or not. Off the top of my head, I can think about Wyoming does this very similar approach, and they are not running a deficit. But again, I would need to to actually do that analysis to be able to think about that.

Connie. Okay, Representative Ballard. Thank you, I appreciate that, but they are running in a deficit. It's almost $77 million. I guess my question is, if we're going to bring a bill like this in front of us and we're the Finance Committee, why haven't we already done that analysis?

And why didn't you compare oranges to oranges or apples to oranges? Why would we just say, hey, we're better off doing an overall over time instead of a single day? Why, why would we present this bill unprepared to answer those questions? Representative Story, thank you. Through the chair—.

No, um, I apologize, I'm asking who's ever online up in the sky. Um, let's, let's see here. Ms. Brown, do you have a comment? Then we'll go to Representative Story.

Um, Representative, via the chair, we were just asked to come on calls and provide our expertise. We were not asked to do any analysis. What kind of— just volunteering our time here. Can I ask what department is Ms. Brown from again?

She's with APA Consulting in Denver, Colorado. And may I—. You're the firm that did the 2015 adequacy study for the state. Okay, so you're, you're with the state of Colorado and you don't know how in crisis they are with their ADM count. And Representative Story, I think you would like to— and just to clarify, she is not with the state of Colorado, she is with a consulting firm.

Representative Story? Yeah, thank you for that. I want to put Rep. Allard's concerns at rest. Ms. Brown was part of the Egan, Blick, Palish and Associates who did the 2015 review of this. And then Justin Silverstein was also an author too, and he was at our first hearing.

And both of them and Ms. Brown are like experts on student counts, what they use across the country. And so I just had her here for general questions about the student counts and how they work. So I'm sorry I didn't make that clear. My apologies. I appreciate that.

Thank you. Thank you, Jackie. Okay. Foster. Representative Bynum.

Just for the record, can we clarify, are the two individuals on the phone, are they here just as invited testimony or are they actually functionally part of a process? They are part of— they are available for questions. Experts who are available for questions. Invited testimony. Not invited testimony, just invited or just experts who are available for questions.

Invited experts. Correct. Yes. Thank you. Yeah.

Okay. We're going to go over to Representative Galvin unless you had a comment. Representative Story. No, thank you. I just, I just wanted to remind people that Katie Parrott is online with Alaska School Business Officials.

If there's any specific questions that you wanted to follow up. Okay. Representative Galvin. Thank you. I, I, if, if it would please the co-chair, I would like to touch on some areas around truancy that got brought up, something around family engagement, also something around the system that was referred to by the sponsor of this bill.

Representative Goggin. Thank you. So beginning with the issue of truancy, what I appreciate about this bill is that it will allow for smoothing is the word that I heard you use, but to me what I think of is allow for transitions in membership so that schools do not have to eliminate entire programs or classrooms if there are changes of count in that current moment. So it smooths it out so that decisions can be made by board so that they can then You know, I'm trying to find the right analogy because I'm not sure about a utility, but I was thinking about a system, like a system of healthcare, for example. We would want to be sure to have our general practitioners or our— maybe our everyday classroom, and then we'd also want the specialties.

We'll need a cardiologist in the state, a podiatrist, all these other specialties that are so important in the system of healthcare. And if we eliminate these, one, even one, we end up not having that opportunity for someone looking for that care. And then when I think about a system of education, whether it's history, art, music, nurses, counselors, coaches, all of that, when we have to or wish to present that opportunity for our schools, it seems to me that this will help create a better system in general for our whole state. So I appreciate that. I'm also very appreciative of the concerns around truancy and loss of loss of families, whether they are going to another state or whether they are choosing to homeschool.

And I know that the losses have not been that great, 1 to 3%, but still they are enough that when we are making these tweaks, we end up losing entire classrooms and we have to merge them together, and then we get a very high PTR, parent pupil-teacher ratio or what have you. And I guess what I really wanted to mention is that if we are concerned about truancy, it seems to me to be able to ensure that we have the full complement of different types of classes, or rather relevance in teaching, that is critical. Relationships in teaching, which comes with Small classroom sizes, that is critical. And lastly, rigor. And that means that this— the work that students are doing is meaningful and they want to show up.

So I want to touch on that and then hear your comments. But to me, if we are talking about a system of education and making sure that we embrace that Yes, it's going to cost money. I want to fully acknowledge Representative Allard's comments because it would certainly cost money if you can't move a student who has high special needs, special ed needs, over to Wasilla from Anchorage, for example, and you can't fire the teacher in Anchorage immediately because we have this sort of leveling, I think, or, or I think that the language that you are using is different than leveling, but to me it is to allow for the 3-year— it is— yeah, I think that to me it makes sense that we are having to pay more to be able to not immediately eliminate whomever or whatever staff that student is needing. And so that is— it is a complicated situation. And I want— first off, I would like it if you would like to comment on that one, and then I have more around family engagement if I could.

Representative Story. Thank you, Co-Chair Foster. Thank you for your comments, Rep. Galvin.

I think that it's to provide for this smoothing, this planning that districts will have to take. They are still going to be making some really tough choices to plan what they want if we do not do the other thing that we always have to decide about, what level of funding are we going to give to our schools through the base student allocation. But what this is doing is correcting all these off timelines that we have. It is trying to provide— to have a smoother education budget process and by taking And so it's all those deadlines and statutes and how they don't mix and their backwards funding. That's a big part of correcting the process, the timelines that we have.

That's a big part of this bill that will make a definite improvement right away on just having people not so much on this stress, anxiety. They are still going to have to go through— if we do not address the base student allocation keep, you know, costs flat for a long time, they're still going to have to deal with that and be downsizing their programs. But the point about this is it's a smoothing and they can plan for it and it's not so much a bump up and down. And they know their number July 1st, so they are planning their programs. And then when— if things come different in October, they still can go on with their program and plan smoothly for the next year.

Representative Galvin. Thank you, um, Co-Chair Foster. Uh, I— so what I appreciate again is that when we have a board and a superintendent, and more importantly a principal and teachers who do not have the chaos of wondering, will there be a pink slip because They are not sure what the— it's going to be the next year. And this is, I think, what we are talking about. The timing of our system currently.

I know in Anchorage we have 500 pink slips that have gone out. 500.

And mind you, I know there has been fewer students. They certainly are with a deficit. There's a lot of things that they are dealing with. But the chaos that that brings makes it very difficult. And this is what makes me want to touch on the family engagement piece because it's personal to me.

I used to be— I used to go from district to district, rural and urban, and I would work with districts on professional development on how they can better engage not only families but also communities so that we can establish more of a sense of an education culture, if you will, where the educators and the student family are all propping up that student for higher achievement and readiness for life. And in those cases, when I went to schools where they were, especially in the springtime, feeling this sense of chaos, what I noticed is when I brought up things like Well, you need to spend more time calling your families. I would talk to them about writing postcards to the families. Always catch your— a student with doing something good. Create these relationships.

Frankly, they looked at me and with the blank stare, almost like deer in the headlights, because they were already so overwhelmed. And I think that this is part of the reason. If we're worried about truancy, well, you've got to have the relationship with those students. They've got to feel like they're doing a lot of hands-on work and the families need to be engaged. And that's hard to do in a giant classroom with a teacher who's worried about whether or not the pink slip's going to come or the principal's worried.

I think that so many of these schools can't wait to do some innovative work, but I think that right now they're just hanging on. And so anyway, I just wanted to thank you because to me smoothing makes sense. I understand and I appreciate that it is very expensive, but I would love to hear from your— I think you have someone online who would share what these best practices do with regards to smoothing, how that impacts the student experience in teaching and learning, if possible. Thank you, Co-Chair Foss. And thank you, Rep. Galvin, for bringing up what I view as one of the most important things in this bill, and that is it allows us school districts to sign their teacher contracts earlier in the spring.

And that helps with truancy, keeping those relationships going, as you pointed out, with those teachers. And so you might know that you have a declining enrollment and we're not going to increase the base student allocation, but you still don't have— can keep those contracts can know you're going to give them out to those senior teachers there, even if— and to maybe as some of your new teacher staff, you'll be able to keep them. And I think that is just really important because this— by having their number July 1st, they're not going to have to see some instability in latter part of the year. And then they know because they have 3-year averaging, they are going to know in April, you know, what their last year enrollment is. And so they have a good idea what their budget is for the next year, and they can offer those contracts to teachers.

So thank you. Representative Story, I received a note from the back saying that you had a presentation. I know that you have already done one presentation. I just wanted to make sure there wasn't another one, just time management. Okay, thank you.

Um, so also we've got Ms. Brown. I think you wanted to, um, ask her thoughts. And so, Ms. Brown, if you could address the question.

Uh, Representative, through the chair, thank you for the question, and I, I will defer a bit to the educator who's also on the line, because I think they have the closest experience versus my experience is kind of thinking that national kind of policy perspective. But it's exactly what's been touched on is the benefit of the smoothing provides that stability and continuity of service and educational experience for students. So I do think an approach that provides that stable and predictive funding really positively impacts the experience that the kids in your state will have. And I will say, from kind of a national lens on best practice, we do see a lot of states that are using this averaging approach to provide that transitional period—I like that language—to allow districts to make the tough choices of how to reduce staffing over a reasonable period of time without making dramatic cuts to their program. And we also tend to see them in states that have a lot of small and rural communities where the impacts of a handful of kids can really have an impact on what services and supports they're able to provide for students.

So providing that transitioning, that cushioning, is helpful in those settings versus trying to make transitions in the moment within a single year to represent Story's point of after when contracts have already been made, staff has been hired, staff are in place. And any changes at that point are really disruptive to students. Thank you. Representative Galvin. Thank you, Co-Chair Foster.

If it would please the Co-Chair, I would be happy to hear from a local educator as well. I think we may have one online again. It's just really understanding the student experience and how how that is reflected in this change. I see that we've got Miss Katie Parrott, but I don't think that's who we're referring to, or is it? Okay, Miss Parrott, if you're online, if you'd like to address the question.

Yes, hi, I'm Katie Parrott. For the record, I am the president of the Alaska Association of School Business Officials, and we essentially serve and represent kind of the numbers people and the front office people, the business operations side of the house for all districts. So I have a tremendous amount of respect for educators. I am not one. I don't have an instructional background, but I do work very closely with districts and educators across the state to kind of get the pulse for what's happening in the classroom.

So I can talk a little bit about that and how this relates to how the mechanisms of funding work. So based on kind of the conversation and questions that have been asked, I'll start with this. When we go to set our budgets, we do submit a projection to the state about a year in advance that is used to set the budget. So we— or most school districts use those projections to establish their budget for the year, but the state also uses the enrollment projections that are submitted to establish that amount in the budget as well. But then we go to— we enter the year with our approved budgets, and we do the student count where our actual enrollment is determined.

And our funding gets trued up based on that actual enrollment, which year to year can see some fluctuations for good and for bad. So we have a lot of migration around the state, and that migration doesn't always take place aligning with the beginning of the school year or that student count period. So there are certainly movements of students and families that aren't caught in our current funding structure. So I'll kind of acknowledge that. One of the things, though, that this bill does is it uses the actuals to set the budget at the state level, but also that the districts can use in establishing their budgets moving into the school year so that we're always only kind of planning according to the information we already know about what has taken place with the students who have already been essentially certified to have been enrollments during that student count period of time.

And so while this doesn't— it doesn't have that more immediate effect of a decrease in funding that we experience right now, which does create instability in the system, it still does have a decrement, but that's averaged out over time. The option for districts districts to use the greater of that prior 3-year average versus the prior year is that districts who are growing also get credit for the growth that they're seeing in their student body. And so the other thing to remember is that in current statute is a hold harmless— an enrollment decline hold harmless provision that has a threshold of 5%. From year to year. And so districts are getting some credit right now for when they see those big fluctuations.

But the way that it's established is using a base year and then it's levered down over time. This essentially— that process, in my understanding, is removed from the bill except for a transition time to allow districts to move into this new model. But that effect will still be seen in the 3-year averaging because over time those numbers will decline, except that it does provide districts a little bit of ability to maintain their system as a whole to deal with fluctuations that happen and to better be able to absorb cost increases. So we are operating within an environment where the cost of one student in one year is not the same to provide the same amount of service to that same student in the next year. Additionally, while districts have experienced enrollment decline overall over about the last decade, it's been across the state about a 1%, 1.5%, uh, enrollment decline.

At the same time, our SPED student population in the state has risen by about 14%. So the cost of providing for the needs of students has changed over time as well. And so creating mechanisms in the system that use what we already know, that we're not doing projections to establish those amounts for budgeting, is really helpful. And it also will allow us to maintain some of those strategies that are really helpful to addressing things like chronic absenteeism, to addressing parent engagement, and those those kinds of things that I've heard spoken about in the, in the committee as a priority. I also know that there's lots of things that our representatives and senators want to see districts doing that we might not already be fully implementing.

I'm just thinking about some of the bills that have come through in terms of civics education and literacy and CPR education, mental health education, some of these other components. When you have a system that can plan multi-year implementation plans for bringing on some of those services and you're not having to hedge against large fluctuations year to year, that's good for the whole system. Additionally, another thing that, that we like to protect is those front office people that sometimes get lumped into the administration. You know, there's a lot of talk across the state and in this body about making sure that districts are prioritizing the classroom and cutting administration out wherever we can. Districts have certainly done that down to the level that I think that we're losing a little bit of capacity to interface with families in ways that we used to.

So some of the positions that would be the ones that make those calls, make those connections to families when students aren't showing up, or when a student might not be fully engaging in the education in the way that needs a little bit more coordination or almost like case management. Often that takes place in the office or by the administrator, and so those positions that might be lost in some of that shuffle of a more uncertain, I guess, fiscal scenario, it does have an impact on the way that, you know, the districts are able to connect with families. So, I think that just what I'm hearing in the room is the concern about the cost of this and how that translates to, you know, what's happening in schools and how we're able to engage families And I think that we're all struggling with the outmigration that's taken place in the state and trying to figure out how to provide a good system that we can do some long-term planning and make sure that those key programs and services are in play for when our families are moving around between, between programs. And so that's just kind of off the top of my head, a few a few thoughts I had based on the conversation. I'm happy to answer any specific questions.

Okay, um, thank you. I do have a few, few people in the lineup here. I just want to also note we are due to adjourn in 9 minutes, so we will not get to the next bill, which is House Bill 193. That is the Paid Parental Leave Bill. We'll have to reschedule that.

We'll let folks folks know where we go with that.

We do have a presentation from Department of Labor, the recap, fiscal notes, and I just hate to get going and then not let folks ask questions. So in the lineup here, we have got Representative Bynum, Stapp, and Allard. Representative Bynum. Thank you, Coach. Here, Foster.

I appreciate that. I got lots of different questions that are carryovers from the last time we had heard this to now. Sorry, I just make a quick comment. I heard reference to utilities and how we deal with that. What we do with schools is maybe conceptually what you would want to think what we do to utility level, but it is absolutely different.

And the reason why is because when you lose customers, you can't just immediately go ask ask for more money. So you have to be able to absorb those losses with several ways. You either reduce your staff, you reduce your capital investment, or you pull from savings. It takes 3 to— or it takes a year and a half to 3 years to get rate cases through. But ultimately what you end up having to do is raise rates.

So you pull more money from your customers. When that happens, you don't get to do it through any kind kind of averaging, use averaging to predict where you might go. So it is a bit different.

I did want to also comment, I heard the word truancy. I believe that when we look at truancy, we're really talking about chronic absenteeism. Alaska experiences tremendous high level of absenteeism, chronic absenteeism, over 43%. It's been that way for years. Long term, it goes back to a third of our students are chronically absent.

It's the biggest barrier to improving reading, graduation, and overall performance in our schools. I'll be excited for the day that we actually start to talk about that, and we haven't done that in this committee, and I really haven't heard any substantial legislation moving forward to solve that particular issue.

This bill is supposed to address uncertainty. I would argue that what we're doing here is we're saying we want to use a 3-year average, but then we're also saying we want to use an ADM count if it's bigger and we'll use that instead. Well, we already do that, and we provide true-ups at the end of the year to address that. So I'm not exactly sure what we're trying to accomplish other than when we have declining enrollment situations, which we do have, that we're trying to soften the blow on the reductions. But it really isn't about class size, because when we have reducing students, our class sizes are going down.

It maybe will put a bigger strain on our funding, but if you want to fix funding, just put the $450 BSA increase in instead of putting this this in because that's all we're doing. So, but the biggest volatility we see, which we're really not addressing here, is dealing with the SPED component, the 13 multiplier in the, in the formula. And that really is a big issue. It has an exponential impact. And so I was just curious to understand from the sponsor of the bill, when we talk about the SPED component that we aren't addressing that when it can account for a third of foundation formula funding going to a school.

It's a big part of the foundation formula coming in. We're really not addressing it other than to say you can use a previous year's count if it's higher. If you drop a bunch of students, you keep the money when that funding is actually supposed to be directed toward the intensive need. And so I'm just hoping to get a better understanding of of what we are trying to do with the overall funding model, but trying to address this very important part of that. We heard from one of the testifiers, a 14% increase.

So 14% of those being identified, which means a 13% multiplier on top of that. That is exponential growth in cost. So how is this bill actually going to solve the SPED problem and the uncertainty that we have with funding for schools. Representative Story. Thank you.

Through the chair, so I think always when we are increasing with the special education students and as Rep. Galvin noticed, we are increasing having more special education students identified. In this bill, what we are talking about is our intensive students. As you know, they are 13 times the cost. And, you know, just they typically always need to have another staff person with them. And so we have given the current year as an option because if the— if that student is there, they are going to need to hire some staffing for them.

We have given a true up because that has been a problem in our state in that an intensive kid moves moves to another district and they do not have the resources to serve that and they have to scramble to find out those resources and make some cuts somewhere if their budget is on a really fine line. And then the one that you are, I think, maybe the most concerned about is how we are trying to give certainty by letting them take the previous year intensive number because you have that kid in your system and we are letting the district start with counting that student. You are afraid that student has moved from the system and is in another district and we are double funding them is what I hear your concern to be. And I think that it is certainly important and worth it to have that intensive count number from the previous year because most intensive kids do not move around a lot. Actually, in the Augenblick study of 2015, they recommend that we actually have— do a study about that movement.

So it was interesting to see that, how they felt that we should do a study on our special education kids in general.

[Speaker:MICHELLE] Because we have so many special ed kids, if we ended up having extra staff because an intensive kid did not show up and was in another district and they're having them, we will have— that district will be putting that position to good use. They will be serving kids. And when we do this averaging, the good part about it is if there is extra staff there. It is serving our kids and making the situation better for them. And we are providing a system of instruction that is one that, um, it can do more educational planning and provide— and providing for that.

So yes, there's some dollars in there, but those dollars are not— are being spent on really good things.

Representative Bynum. Yeah, when I look at that, when you say dollars in there, from our fiscal note, it's $113 million, so it's not insignificant. And so, yeah, that, that particular component is very volatile, and I think it has a major impact on our schools. Something else that kind of concerns me, or something that I'm hearing about during this process, is that we keep talking about teachers and pink slips and whether or not we're bringing them back back or not. Again, if you wanted to talk about the utility world, because that was mentioned, I don't hire my employees based on a 1-year contract unless if I intend on not having them back.

And we do that through contract labor. But I actually go hire employees and I plan my model to have those employees. And so maybe that's something that we really should be looking at is how do we stop doing that. When we hire teachers and we bring them on as employees, we should probably have them as employees. Employees in this cycle of pink-slipping everybody because we are getting under a funding crunch.

It's the only place we do it. We don't do it in state government. We don't do it in municipal governments. We don't do it in business out there in the real world unless if it's truly an ad hoc employee that we intend on getting rid of. So I think that's definitely something else that we probably should be talking about to create stability instead of this averaging business.

I will be bringing some more questions forward, but not today. And I really am interested in that modeling component because I think that would tell us a bigger story about where this would go and how it would be beneficial or not to solve the problem. And if I could just say very quickly, the last two people prior to Representative Hannan I had were Representative Stapp and Allard. My intent was to call it a day. But we will come back to Representative Hannan at this— for your opportunity to give— ask the question at this session.

So the last 3 questions, and then we're going to go ahead and adjourn for the day. And we'll have more opportunities to ask questions on our Monday afternoon meeting when we take the bill up again. So with that, Representative Story, did you have a comment with regard to Representative Bynum's questions and comments? Thank you, Co-Chair Foster. I think to me, when we look at school boards and what they are asked to do, they are a group that is asked to provide a budget for— I would argue one of the most important things communities do is their public education.

They are asked to do a budget before they know what their budget is. They have to budget and they are not going to know the way we currently do our system. System. They, by doing this, by allowing it on the current year student count and them not knowing till later, and the municipalities have to have the budget, we have to make cuts. To me, we just set up a really unstable position, and that this district, this budgeting will really help with that.

But I wanted to say I really am available for questions and more dialogue, not here, because I really want to, you know, go through those concerns, and I really appreciate you guys for bringing them forward. So I'm open to that. Thank you. Good job, Foster. I do apologize, I forgot one thing, and maybe I don't need an answer right now, but we were talking about the modeling and that other states are doing this, and one of the things I would hope the committee could get an answer on is, are other states actually funding their schools like we do with a split model where we've got city borough funding mechanisms with them paying portions portions and other school districts like REAAs that are not part of that.

And I just want to know, when we start talking about other states are doing it, it only applies if they're actually funding their schools like we do. And so I would hope to get that additional information. I don't need the answer now. Thank you. Okay, um, so I've got 3 questions.

Representative Staff, Allard, and Hannan. Representative Staff. Yeah, thank you, Chair Foster. Through the chair, I'll be quick because I know we're pressed for time here. I was actually going to hope to go to Ms. Brown.

Ms. Brown, can you remind me again what your background is and what organization you're with? Ms. Brown?

Sure. Sorry, just to clarify, the question was just what my background is? Yeah, and what organization you're with, ma'am. Sure. Representative through the chair, happy to answer.

My— let me give you the background of the company and then my myself. So the company, Augenblick-Palacio Associates, or APA Consulting, is a firm that was founded about 40— a little over 40 years ago to do school finance work across the country. So we have worked in all 50 states and helped states design funding formulas, review them, and revise them along the way. So my background is I have a doctorate in education. I've been with APA for 20 years now doing that work across the country, and particularly recent years I've been helping support state commissions like yourself and legislative groups on these topics.

So recently I've worked in Vermont and Montana and Wyoming, working Colorado and Nevada, where we've been supporting their long-term implementation— ah, sorry, Friday afternoon— implementation of funding models and changes and refining them. Cool, thank you, folks. Mr. Kocher. Yeah, thank you, Chair. Thanks, Ms. Brown.

So the reason I ask is I'm curious, are you familiar with them? California did a pretty exhaustive study on these models not too long ago for their Legislative Analysis Office, and they looked at switching to enrollment-based funding as opposed to maintaining their current attendance-based funding. Are you familiar with the work that the California Nonpartisan Institute did for their legislature when they looked at this? Ms. Brown? Representative, through the chair, great question.

I'm familiar with how California currently funds, but I have not read that report, so I will go look for that. Yeah, Mr. Co-chair. So the reason I asked is because I, I kind of look at this process as twofold. I think we should look to provide as much stable and reliable kind of projecting for school districts, but also, you know, California, when they switch switched from their enrollment-based funding to actually an attendance-based model, they found— and they did this in the '90s— a dramatic increase in their chronic— in their attendance and decrease in their chronic absenteeism.

So when they looked at shifting their model back to enrollment-based funding, they were unanimously opposed to doing so because it was their belief that would dramatically adversely affect attendance because you would remove any type of financial incentive from encouraging districts to actually monitor and encourage attendance because that is what their funding model is tied to. So my question, Ms. Brown, do you know of any other studies that were done similar to that that do comparisons outside the one I have in front of me, which is this policy brief from Erica Svensson and Chris Dunskom that kind of compare and contrast these models. Through the Chair. Ms. Brown.

Representative, through the Chair, not off of the top of my head, but I can follow up on that. Okay, thank you. Okay, next up, Representative Allard. Thank you. And I just wanted to kind of put a couple things on the record to make sure we have accurate information.

So the Anchorage School District had 500 positions they said cut, but that's not actually true. They had 270 displaced individuals. So whether it was a teacher or they moved those individuals into different roles, whether it was a teaching role or some admin role, and that was 270 positions. So they weren't actually pink-slipped, which means they were laid off or fired. We had 80 direct layoffs, which are 56 teachers and 24 of them were staff members.

There was also 150 other persons that they say were cut, which is inaccurate. Those were just vacant, unfilled positions. So you are looking at 56 individuals that were— or 80 direct layoffs. And the other thing is it is a little bit concerning is that I don't see this bill actually actually doing provides any motivation to the school districts to have the better attendance. I did like what the example that Representative Stapp had brought up in regards to California and Texas does the same thing, and there, there is actually an incentive for them to do it, financial incentive for them to have their kids in their classes.

The other thing I would mention is that ASD has $79 million in their savings account. They are $80 million in debt. I would say instead of building a playground, maybe they should spend that $70 million in a better way. Thank you, co-chair. Last question, Representative Hannan.

Thank you. And I thank you, co-chair Foster. And I actually was just going to talk about the bill. Didn't have a lot of questions. I want to go back to when Representative Story first presented the bill and first talked to us about it, um, and I talked to her about it before it came before the committee, it was that in the work of the Education Task Force that the study that was done in 2015 brought to light recommendations that were there.

And one of them was by the fact that we do current year ADM for the next year's budget, but our timelines for layoff notification of pink-slipping teachers conflict with that because we may not have passed the budget until May, but notification of a tenured teacher had to happen in April, and an untenured teacher has all the way to the last day on contract to be notified that you won't be retained next year. But you may not have your budget in hand depending on you know, some districts in Alaska are done in mid-May. Juneau happens to be one of the districts that gets out later. So it was— I think when Representative Story is talking about the bill, the goal was the predictability of you weren't going to go through that cycle of not knowing the next year whether your untenured teachers were going to be dismissed on the last day because you knew what the next year's funding was. The look back at attendance was going to give you that predictability and stability for the following year so that you knew if you could keep your staff or not.

I think one of the other important things to remember is we used to have— when I was first hired at the Juneau School District, every school district had at least one truancy officer, and they called them truancy officers, but they were sort of social workers who were doing outreach and Ours was focused at the high school because that's where, you know, trying to get your graduation levels up. But the truancy officer could always clearly articulate that a kid didn't become a poor attender at 15 or 16. They probably in elementary school, their pattern of non-attendance, and she always expressed, and it was a woman, for the 10 years that she worked at the district while I was there, that she wished she had had the ability to interact more in depth than just contacting that family and saying, bring Billy to school, bring Billy to school. And if we truly want to take on truancy or non-attendance, we need targeted employees focused on doing that. It can't be the person who is already supervising playground duty.

And I always want to say Play is critical to learning. It is a fundamental structure of how little brains are formed. And goodness knows, those of you who have small children at home know you gotta keep them moving or their learning is really distracted. And especially for small brains who are doing things like focused reading or learning math, about 20 minutes is all they should be focused. And then they need to be up and jumping around and skipping and singing and then back.

And so playgrounds are critical to learning structures and important investments for schools to have. And although this bill has clearly some dissenting opinions about whether it's the best method forward, I want to just affirm that Representative Story is looking at old data that we've had for recommendations around for us for a decade and trying to find some solutions to things that we keep saying are problems. Problems like attendance, like not knowing in a timeframe that makes predictability for the next school year and your hiring policies possible. So of course the devil is always in the details and our job here is to make sure that the dollars and cents make sense. But we have also got to affirm that we in a declining demographic because it is not just poor performing schools.

Since 1964, the population in the United States has been on decline with youth. And we've known that. All of us— I'm at the end of the baby boom, but we did not have as many children as the generation before, and that's why we have declining enrollments as a fundamental root problem. So I applaud those of you who are adding to our birth rate. And— You're welcome.

The two members here with young children still have the room to add add more and catch up with Frank or Garrett Nelson who is leading the curve in the House. So, you know, I just don't want us to derail that this is a goal to try and set some problems— try and correct some of the things that we have articulated for at least a decade, our problems with our funding mechanism and how it really pans out in schools. Thank you. Okay. Thank you very much.

Closing. Representative Story, do you have any comments? I just thank you very much for your questions today. And just a reminder that we are really trying— this is an economic issue. Education is an economic issue, and we can provide stability.

Families see that. They read the headlines, and they know when we can provide more certainty, it's going to bode well for our state. So thank you very much. Great. Thank you.

In terms of the plan going forward with this bill, We do have it coming back up on Monday at 1:30 PM. That's April 27th. We do have public testimony, and so I'm thinking we can deal with questions, I'm thinking, after public testimony so we don't have folks waiting. So we'll do public testimony first, then we'll come back to questions, and then we'll go from there. And so that is this bill.

And then in terms of the other bill that was not heard today, that's HB 193, the paid parental leave bill. We will reschedule that and let folks know what the plan is for that one. In terms of what else is happening, our next meeting is Monday at 9:00 a.m., and at that meeting we're going to be hearing from the governor's administ— OMB director, and that to review the amendments by OMB. And so that will be before us on Monday morning. And let's see here, and then we'll have an afternoon meeting, but that will be announced at that morning meeting.

So— oh, I'm sorry, we do have the SB 214, the capital budget, on Monday morning. So the OMB presentation regarding amendments and the capital budget, SB 214. So if there's nothing else to come for the committee, thank you all very much for being here, and we'll be in adjourned at 3:45 PM.