SB 84 – Vocational Education & Basic Funding/Tax Credits

The House Finance Committee heard and moved SB 84 Thursday evening. They adopted a committee substitute that substantially changed the bill.

The House Finance Committee substitute:
• Removes the BSA increase
• Removes the Seward Sea Life Center as an institution allowed to receive certain corporate tax credit donations
• Adds annual intercollegiate sports tournaments as an allowable organization to receive certain corporate tax credit donations
• Adds Alaska Native cultural or heritage programs and educational support as programs allowed to receive certain corporate tax credit donations
• Incorporates HB 199, which increases the room and board reimbursement for Galena, Nenana, and Lower Kuskokwim School Districts
• Creates a pilot project for theme-based learning in the Iditarod Area School District

http://www.legis.state.ak.us/basis/get_bill.asp?bill=SB%20%2084&session=27

A quick update of what occured today (fyi, I will never post anything on the blog before my subscribers receive it):

Speaker Chenault left the dias to give a speech from the floor (link to text and video: http://www.mikechenault.com/ ).  He is very unhappy that the senate is still holding on to the capital budget, and feels that the proper legislative process isn't being followed.  Several legislators have said just today that they don't think the legislature will adjourn by Sunday evening.

I would be willing to guess that the senate is holding on to the capital budget not because it is dilly dallying around, but because it hasn't gotten things it wants from the house yet.  Once the house has possession of the capital budget, the senate loses some of its influence over the outcome, and they need to ensure that their priorities will be met before they release the capital budget to the house.

In addition, many senators feel very strongly that there needs to be some sort of additional funding for education.  SB 84 and SB 97 were both passed and sent to the house, and senators hope the house will act on either one or the other.  Just today there has been movement on SB 84, with the bill passing out of the House Finance Committee earlier this evening.

SB 97 is in House Finance, and scheduled for a hearing Friday.  However, Chairman Stoltze said the House Finance Committee may or may not meet, depending on negotiations.

The Conference Committee on the operating budget met late this afternoon.  Many items in the DEED operating budget are still not agreed upon, including the statewide mentoring program, the Pilot Pre-K Program and early learning in the intervention districts, Best Beginnings, the unallocated reduction of $2 million in federal receipts to Teaching & Learning Support, Alaska State Council on the Arts funding, the College Access Challenge Grant, and funding for the Alaska Performance Scholarship Program and the AlaskAdvantage Education Grant program.

A Quick Recap of Monday's Action

There was a lot of action Monday on education issues, in addition to release of the Capital Budget by the Senate Finance Committee.  It is the intent of the Senate Finance Committee that Section 13 of the capital budget (SB 46, http://www.legis.state.ak.us/basis/get_bill.asp?bill=SB%20%2046&session=27) be considered as a single investment in grants for school construction around the state.  The governor originally requested $20 million for major school maintenance.  The Senate Finance Committee substitute funds an additional $250 million for school construction and maintenance, and clears every single project off DEED's major maintenance list.  Also included is funding for three schools to help settle the Kasayulie Case.  Total education funding in SB 46 is $397.5 million.  Send me an email, and I'll forward you my report on all the education items in the Senate Finance Committee Substitute. 

HB 6 - Removing a Regent: passed the house by a vote of 39 yeas, 1 absent. HB 6 was transmitted to the senate.  http://www.legis.state.ak.us/basis/get_bill.asp?bill=HB%20%20%206&session=27

HB 15 - Student Athlete Traumatic Brain Injury: heard in and moved from House Judiciary Committee with a committee substitute. The Judiciary Committee substitute says that the person who clears an athlete to return to play must be certified in the evaluation and management of concussions, and must certify in writing or electronically that they are qualified. Reps. Lynn, Gruenberg, Thompson, Holmes, Pruitt, and Gatto recommend do pass. Rep. Keller made no recommendation. HB 15 is on the House Calendar for today.  http://www.legis.state.ak.us/basis/get_bill.asp?bill=HB%20%2015&session=27 

HJR 16 - Constitutional Amendment: Education Funding: was heard in and moved from the House Judiciary Committee to the House Finance Committee. No changes were made to the resolution. Reps. Lynn, Keller, Pruitt, Thompson, and Gatto recommended do pass. Reps. Gruenberg and Holmes recommended do not pass. http://www.legis.state.ak.us/basis/get_bill.asp?bill=HJR%2016&session=27

SB 1 - Board of Education & Early Development Annual Report: heard in and moved from the House Finance Committee. No changes were made to the bill. Reps. Fairclough, Tammie Wilson, Gara, Joule, Neuman, Costello, Edgmon, Stoltze, and Thomas recommended do pass.
http://www.legis.state.ak.us/basis/get_bill.asp?bill=SB%20%20%201&session=27

Senate Passes SB 84 to increase the BSA by $110 for FY 12

The big news today is the senate passed SB 84 - Vocational Education & Basic Funding/Tax Credits (http://www.legis.state.ak.us/basis/get_bill.asp?bill=SB%20%2084&session=27). The Finance Committee substitute includes a one-year increase to the BSA of $110 for FY 12 and a vocational funding factor of 1 percent. The Finance Committee removed BSA increases for FY 13 and FY 14. The bill also extends the sunset period for the educational tax credits that were passed last year.

Also, Sen. French introduced a Parents as Teachers bill in the senate. That's a good indication that he is trying to give HB 49, the house version (http://www.legis.state.ak.us/basis/get_bill.asp?bill=HB%20%2049&session=27), a better chance of passing this session. If senate committees hear the senate version of the bill, the house bill's senate committee referrals may be waived when it gets to the senate.

Alaska, with a population of 710,231, is too small a population to be able to train 800 new teachers per year?

On Monday, April 4 the Senate Education Committee heard a presentation on University of Alaska teacher training programs from Deborah Lo, dean, School of Education at UAS, Mary Snyder, dean, School of Education at UAA, and Eric Madsen, dean, School of Education at UAF.  

During that presentation, Dean Snyder made a comment that I thought odd.  She said she doesn't believe they will ever be able to meet the demand for teachers in state, because of the population base.  She thought at most they might someday be able to meet 50 percent of the teacher need. 

Alaska needs about 800 new teachers trained every year, but only about 200 new teachers graduate from the University of Alaska every year.  According to the 2010 U.S. Census, the population of Alaska is 710,231.  Was Dean Snyder actually saying that Alaska does not have a big enough population base in which to find and train 800 new teachers every year?  I feel I must have misunderstood her statement, as it doesn't make any sense to me.

SB 100 - PERS Termination Costs

On Tuesday, March 29 the Senate Labor & Commerce Committee heard SB 100 - PERS Termination Costs (http://www.legis.state.ak.us/basis/get_bill.asp?bill=SB%20100&session=27).  Michael Lamb of the Fairbanks North Star Borough testified that if a PERS employer reduces their employee count by altering or suspending a program or service, then PERS can send that employer three bills:

1. The cost of a termination study,
2. A bill for the amount the termination study determines that the employer owes the system due to the position change(s), and
3. A bill for the past service costs on each of the position’s salaries until the unfunded liability is paid off.

Mr. Lamb wondered if past service liability would ever be extinguished, making the termination payments perpetual.  The bills to an employer could run from several hundred thousand dollars to millions of dollars for each termination study.  The law should be fairly and equally applied to all PERS employers, but the Div. of Retirement & Benefits says the state is exempt from termination studies and their financial impacts.  The state is the biggest PERS employer, but is not subject to termination studies.  Mr. Lamb said this disturbs other PERS employers.

Kathy Lea, acting director, Div. of Retirement & Benefits, said the State of Alaska does not have to do termination studies because state participation in PERS is mandatory, while all other participation is voluntary.  All the participation statutes refer to “changes to a participation agreement.”  That refers to the voluntary participation of municipalities and school districts; the State of Alaska has no participation agreement.  Ms. Lea said when the State of Alaska makes changes or reduces employees, while it may not have a termination study and may not have to amend an agreement, it still has to pay the liability.  No liability shifts to other employers as a result of state personnel actions.

Mr. Lamb said current requirements for termination studies

Shameless Plug for my Fantastic Father!

Solo exhibition by Jay Crondahl, Franklin Street Gallery, Baranof Hotel, Juneau, Reception: Friday, April 1, 4:30-7:00 p.m.

Lifelong Alaskan Jay Crondahl will show recent work covering an array of eclectic styles, from free-form and geometric abstracts to stylized and realistic landscapes. Crondahl has exhibited in many group shows in Juneau but this will be only his second solo exhibition.
 

Pump house, Sandy Beach, Juneau

If you're in Juneau, be sure to stop by the Baranof Hotel and check out my dad's recent work, as well as visting other First Friday venues around town.  My dad is 76 years old and has been an artist his entire life.  He is a super nice, friendly, creative guy, and I am lucky to have him as my dad!

My brother and I, giving a critique, 1970

Chenault Supports Increased Funding for Education, and Legislators Continue to be Concerned with how the Current DEED Commissioner was Appointed

Two big items from Monday, March 28  are:
1. During the House Majority press conference Speaker Chenault expressed support for increased funding for education.

2. During the joint hearing of the House and Senate Education Committees to hear board confirmations, one legislator said that since the commissioner of DEED is not confirmed by the legislature, the only way the legislature has to express their displeasure with the DEED board just accepting the choice of the governor for commissioner is to vote against appointees to the Board of Education & Early Development.

A Few Tidbits from the Past Week

The Senate Finance chairmen have emphasized several times lately that they anticipate a healthy capital budget this year. Among the items they suggested may be considerd for increased funding are deferred maintenance and DEED items and energy projects in both urban and rural Alaska to decrease the cost of energy and increase dependability.

I've also got a new bill I'm following that could affect school districts. SB 100 would require employers who terminate some or all positions in PERS to pay termination costs, and the bill is retroactive. I think the intent is to make sure the PERS unfunded liability does not increase due to the actions of any one employer.

I've been in communication with Michael Lamb of the Fairbanks North Star Borough about the bill, and he wrote, "The whole district doesn’t have to withdraw to be impacted, a single position could cause an impact. If a smaller district only had one nurse, as a real example, and they had to cut that position, they’d be subject to a termination study. If they accepted some grant funds that they then hired some classroom aides, that weren’t certified TRS teachers, but simply PERS employees, when those aides went away because the grant money was gone then those salaries not being paid any longer could be subject to termination study impacts. Districts are not only TRS employers, they are also clearly PERS employers and there is no exception in the law for them. I think they simply do not understand the potential peril they are in. If a district never makes an adjustment to their employee structure then perhaps they’ll never be impacted, but if they do, they are not exempted." The bill is up for a hearing in the Senate Labor & Commerce Committee on Tuesday, March 29.

There was some discussion about education issues during the press conferences on Thursday, March 24, but it was just a recap of stuff that's happened in committee hearings. The big issue during the two press conferences, in my opinion, is the governor's proposal for cutting oil taxes. There seems to be mixed opinion on whether the governor's proposal will actually lead to any new development or not, with opinion leaning toward the side that there does not seem to be much guarantee of new development with the governor's plan. Considering the state would lose up to $2 billion in revenue annually, the governor's plan is causing concern for many people.

Also, in Senate Finance on Thursday, $380,000 in additional funding was added to Best Beginnings, so the total funding for that program is now at $980,000, which is what the program was funded at for FY11.

Senate Finance Hearing on the FY 11 Supplemental Budget

The Senate Finance Committee heard SB 76, the FY 11 Supplmental Budget on Friday, March 18.  Chairman Hoffman said the spring 2011 revenue forecast is due soon, and they anticipate more than sufficient funds as a result of higher oil prices, and so will be able to put more money into savings. The fiscal summary shows a surplus in excess of $2 billion, if oil continues at the current rate. Even if prices drop, there should still be a substantial surplus.

Sen. Stedman said for the last several years the Senate Finance Committee has been pretty aggressive about savings. It appears that the economic downturn is over, but they will continue with a robust capital budget to build out infrastructure. Before doing so, they will continue to put substantial savings aside. The transfer of $400 million to the power cost equalization fund is to set up an endowment that will allow the PCE program to run in perpetuity. The marine highway fund addition is to take federal money into Anchorage and Mat-Su. The statutory budget reserve fund is one of their primary savings accounts. After additional deposits, and with interest, the state will have $17 billion plus in savings outside the permanent fund.

Sen. Stedman said there are substantial energy needs in Fairbanks, and a gas shortage in Anchorage, so they are looking at building a large hydroelectric project, or a large gas line, or some other energy project. Then they have to figure out how to deal with the needs of western Alaska and get western Alaska off diesel, either through another hydro project, geothermal, or some other energy source. Those projects will be coming over the next several years. They are interested in moving the state off hydrocarbons and in the direction of renewable energy sources. Alaska is very fortunate because it has the ability to set aside $17 billion.

Link to SB 76: http://www.legis.state.ak.us/basis/get_bill.asp?bill=SB%20%2076&session=27