Beginning of the 2018 Legislative Session

In the first several weeks of session the Legislature has been busy with budget overviews, revenue projections, and subcommittee finance hearings overviewing individual department budgets. In a second session, all of the bills from the first session that have not passed are still in play, so the pace is fast from the beginning. Last week, the House Finance Operating Budget Subcommittees held 21 meetings to examine department budgets. Subcommittees have until February 23rd to complete their budget analyses, and to provide recommendations to the House Finance Committee in the form of a narrative report and a report listing amendments adopted by the subcommittee. The House Finance Committee will then review the budget as a whole before it goes to the floor for a vote. After that the budget bills head to the Senate for consideration.  Bills are also being heard in committee.   
With Executive Director Sarah Sledge, J and H Consultants has been meeting with members of the Senate and House Education and Finance Committees and members in leadership to discuss the Coalition for Education Equity’s recent work, priorities, and specific legislation important to CEE. CEE has requested committee time to present about their work, including the teacher retention study and the Ed Connector. The response to the hearing request was very positive and a hearing is secured in front of the Joint Education Committee on March 12. 
CEE is also working with Senator Stevens’ office to introduce a resolution that addresses the recent issues with the Federal Impact Aid Program. The resolution will request that the Alaska Congressional Delegation work on some solutions to address the audit problems in Alaska stemming from Alaska’s unique survey and land title issues. As many of you are aware, some school districts have recently lost Federal Impact Aid money because they were unable to verify land status as Native. One of the suggestions is to shift the burden from the school districts to the federal government on any lands that were originally conveyed as part of the Alaska Native Claims Settlement Act (ANCSA). The request would be that all lands conveyed under ANCSA would be presumed Native and the federal government would bear the burden of proof to prove otherwise.   
Below is a list of bills that CEE has been working on with legislators.

CEE Priority - School Funding and Pre-Kindergarten

CEE has met with many members of the House and Senate Education and Finance Committees about the importance of school funding, emphasizing that schools need to know funding allocations by early April.  CEE has noted their support for the bills listed below:

HB 339 – Increase BSA: This bill was introduced just last week.  The bill increases the Base Student Allocation by $100.00.  The House Education Committee will hear the bill on Monday and take public testimony at 8 a.m.   
SB 131 – School Funding: SB 131, introduced this year by Senator Gary Stevens, budgets for public school funding separately from the state's operating and capital budgets and requires a passage date of April 1st each year.  The idea is that early passage of the education budget will give schools plenty of time to plan their budgets.  The bill is in Senate Finance. 
HB 287 – School Funding: HB 287, introduced this year by Senator Seaton, also funds education and pupil transportation in a separate bill. Again, the idea is that early passage of the education budget will give schools plenty of time to plan their budgets.  Funding is set at the Governor’s proposed levels. HB 287 makes appropriations from the Constitutional Budget Reserve fund (CBR) and from the Statutory Budget Reserve fund (SBR) for K-12 education and student transportation. Drawing from these revenue sources requires a ¾ vote. House Bill 287 passed the House by a vote of 33-3. The provision making an appropriation out of the CBR required a three-quarters vote of House members. It failed by a vote of 20-16. It is still possible to use the CBR to early-fund public education if the bill and CBR appropriation are approved by the Senate and three-quarters of the House members vote for the provision at final passage during the concurrence vote.  HB 287 and SB 131 are complimentary bills.  HB 287 covers education funding for FY 19 and SB 131 covers education funding in future years.  It is possible the bills will be merged in the Senate. 
CSHB 213 – Public Schools Trust Fund: The Public Schools Trust Fund is a pre-statehood fund dedicated to schools and is currently worth approximately $670 million. In the 1970’s, the Legislature converted the fund from a land trust to a cash fund. Currently, statute allows only the net income to be withdrawn from the fund and not any capital gains. HB 213 would change the fund management to be more like an endowment, allowing for a higher rate of return on investments and more income to be used to fund schools each year.  According to Mike Barnhill, Deputy Commissioner for the Department of Revenue, the current statutory approach to managing the funds is outdated. Instead of focusing on principal remaining, the focus should be on maintaining inflation- adjusted principal. In current practice, management of most endowments and dividend payment on net income has changed to a percent of market value (POMV).  An appropriate POMV won’t erode the inflation-adjusted principal. The Committee Substitute (CS) introduced for HB 213 pays out a 4.75% POMV draw based on a 5-year fund value, not including the previous fiscal year. The bill moved out of House Finance last week and next will be on the House Floor. 
SB 99 - Pre-Elementary: Phases in a voluntary statewide Pre-K program over 5 years, starting with the lowest performing schools. Heard and held in Senate Education.

CEE Priority – School Construction and Maintenance

CEE has been working with several legislative offices to work out issues on the bills listed below.  Several of the issues are unique and are detailed under each bill.

CSHB 135 – School Construction: This bill allows the Commissioner of Education to extend the time frame in which a district must provide the required participating share of the projected construction cost to five years, with a three year extension for good cause.  The bill passed the House and has moved to the Senate for consideration.  The bill is currently in Senate Finance.  The bill was originally sponsored by Representative Westlake, who has since resigned.  The bill must be returned to the House to obtain a new sponsor, which is likely to be Representative Lincoln.  CEE has worked with Representatives LeDoux, Edgmon, and Lincoln, and with the offices of Senators Kelly and Hoffman to work out the procedural mechanisms that need to occur so HB 131 can be heard in Senate Finance.  The bill should be returned to the House for the sponsor change on Monday. Once this procedural change has been made the bill will be returned to Senate Finance. Several senators are ready to assist in getting the bill heard and moved out of Senate Finance.  
HB 212 - REAA Schools: Allows the REAA fund to be used for major maintenance, as well as school construction.  The Department of Education has indicated that money for major maintenance will not be available until fiscal year 2020, so the bill didn’t move through the committee process last year.  The bill has referrals to the Education and Finance Committees and is expected to move this legislative session. The bill was originally sponsored by Representative Westlake, so this bill will also need a new sponsor. CEE has worked with Representatives Edgmon and Foster to work out the procedural mechanisms to get the sponsorship changed.  Once this procedural change has been made the bill will be able to move through the committee process.  The new sponsor is likely to be Representative Foster.

CEE Priority – Teacher Retention

HB 224 - Teacher Rehire: Allows retired teachers and administrators to be rehired. Over the interim, CEE contacted the sponsor’s office to check on the progress of the bill being modified to solve the retirement and health benefit issues.  The bill has been revised to address concerns raised by the Division of Retirement and Benefits.  The NEA wants an additional two revisions to the bill to include proof of public advertising for the position and that any teacher contract is for no more than a year.  These amendments aren’t expected to derail the bill.  CEE has spoken with many members of the Education and Finance Committees, along with other education organizations, about the importance of this bill.  CEE is also looking for a sponsor to introduce and carry a Senate companion bill.  CEE is hoping to have a Senate sponsor soon.  The bill has had several hearings in the State Affairs Committee and is expected to move out of the committee next week.   
HB 83 – Defined Benefit: The bill establishes new defined benefit tiers in the Public Employees' Retirement System and the Teachers' Retirement System and provides certain employees an opportunity to choose between the defined benefit and defined contribution plans of PERS and TRS. A return to a defined benefit system may help retain teachers. The bill has three committees of referral which will slow the bill down.

The status of other education bills we're following can be found in the full report.