SFIN-260518-0900

Call the Senate Finance Committee to order. Today is May 18th. We're in Juneau, Alaska, Senate Finance Room. It is 16 minutes after 9. With us today are Chairman Olson, Chairman Steadman, Senator Kiel, Senator Merrick, Senator Kaufman, Senator Cronk, and myself, Senator Hoffman.

We have one item on today's agenda. That is HB 28, Teacher/State Employment and Student Loan Program. We will not be hearing STR 31 this morning.

HB 28, Teacher/State Employees Student Loan Program. We have some amendments to consider by members of the Finance Committee at this time. Senator Cronk. Thank you, Mr. Chair.

I move amendment number 1. Brief— Finance Committee back to order. I do object. Please describe the amendment to the Finance Committee. All right, thank you, Mr.

Chair. What this amendment does is increase funding for residential schools and applies it to to various percentages of the base student allocation. While the percentages vary, they effectively double the amounts that each region currently receives in statute. How did we arrive at this number? In the fall of 2025, former DEED Commissioner Jerry Covey commissioned an independent study of fiscal year '24 audited stipend-related expenses of Alaska's 7 residential schools.

That study determined that the current statutory residential stipend only covered half of the actual room and board expenses. Specifically, the average cost per student in fiscal year '24 was $25,700 per student, and the stipend was only $12,900. The reason why this is structured— or structured to be tied to the BSA is because the residential school stipend has only been adjusted 3 times since its inception in 20— or 2006. The most recent adjustment was calendar year 2014.

2014. Alternatively, the BSA formula has been adjusted 9 times since 2006. The change ensures that the residential schools aren't left behind when we increase the BSA. As I've always said, you know, I want to make sure that all of our kids are taken care of, no matter if we're in brick-and-mortar, correspondence, and residential. They're all of our kids.

Mainly, a lot of these kids in our residential schools are from rural Alaska that attend, but we do have urban kids that attend some of our schools. 3 Of my daughters actually attended Mt. Edgecomb, 2 for 4 years, 1 for a semester. So I know how important and life-changing it is. And you know, Mt.

Edgecomb is generational. 5 Generations of students and families have been to that school. So what this stipend would do, or the residential stipend increase, it would cost an estimated $8,744,000 per year. And that is recognized by the fiscal note. Obviously, we are definitely in a fiscally constrained environment, but several school districts are almost at a point where they have to choose between funding their community schools or the residential programs, in which we know the residential programs will be eliminated first.

This amendment would bring that stipend up, what it actually costs to feed, house, and take care of students in residential programs. So this is why I urge your support for this. So if there's any discussion, I would love to hear it. Mr. Chair, I believe this is something that's worth considering, but because we at this stage in the budgetary process, I think it needs to be considered earlier on in the session, and I would continue to oppose it for that reason only.

Thank you, Mr. Chair. I'm going to remove—. Withdraw Amendment No. 1.

Thank you, Senator Cronk. Senator Cronk, you have amendment number 2. Thank you, Mr. Chair. I'm not going to offer amendment number 2.

Thank you. Senator Cronk, you have amendment number 3. Thank you, Mr. Chair. I move amendment number 3.

I will object for discussion. Thank you, Mr. Chair. This is a simple amendment. It accomplishes two main goals.

First, it would allow members of regional school boards to substitute teach under emergency circumstances for a time-limited duration.

And one of the reasons I brought this up is when I first retired, I was elected to our regional school board and I immediately found out that I could not sub. So we had actually had on our 7-member school board, we had 2 certified or lifelong certified teachers that could not sub in our schools. And in small rural schools, that's a big deal because sometimes, you know, people have illnesses or stuff and they're out 2, 3, 4 months. And for one of us, we could have stepped right into that role and just kept teaching versus having somebody brought in, community, you know, and it becomes— it's a continuation of good teaching. So this is the reason I brought this amendment forward.

And again, it is under emergency circumstances for a time-limited duration, which their school board would determine that. The second amendment would prevent people convicted of certain crimes from being eligible to serve on school board. This concept was brought to me by a couple of kids actually in the district that I taught at Alaska Gateway School District, and during their involvement with the Alaska Association of Student Governments I wish they were here with me, that they would speak more eloquently to this, but with their time there, they, they worked up a resolution through there that, that passed asking us to do something like this. This amendment is not designed to be punitive, but rather to provide parity for our teachers. In Alaska, there are several crimes that would prevent you from working in a school, whether as a teacher or an after-hours custodian.

However, current law allows individuals who cannot even step on school grounds to make decisions that would affect our kids' environment. Families. This amendment will close that loophole. With that, Mr. Chair, that's the amendment.

Senator Cronk, how many years were you a teacher? 25, Sir.

I would remove my objection to Amendment 3. Is there further objection to Amendment 3? I just had a question. You have a question? Senator Kaufman.

Senator Cronk, I'm just curious, is this retroactive? In other words. Mr. Chair, no. Thank you.

We might have some sudden vacancies. We might have some sudden vacancies. Senator Kaufman, thanks for that statement. Do you have a response? Senator Cronk?

No, Mr. Chair. Further objection to Amendment Number 3? Seeing none, Amendment Amendment number 3 is adopted. Amendment number 4, Senator Kaufman.

Thank you. I move amendment number 4. I'll object for discussion. Amendment number 4 is— intent is to insert a certain measure of accountability, requires school districts to make reasonable efforts not to increase energy consumption year to year. I think it's good that we're looking at energy costs.

Costs, but we just want to be sure we don't accidentally enable costs to escalate. So this provides that, that little bit of extra effort around the review of energy costs that are being reimbursed. It is understood that with our aging infrastructure and the condition of the schools, we can't be expected to meet high efficiency standards, but we just want some sort of process in there in case energy usage spikes or goes up notably, we want to have some sort of process and statute that requires that review. Thank you, Senator Cronk. I will remove my objection to the adoption of Amendment 4.

Mr. Questioner, Senator Keele. Thank you. Just for a question, Mr. Chairman, when the amendment talks about the amount of energy— are we talking about dollars, are we talking about gallons and kilowatt hours? Senator Kaufman.

Thank you. In my opinion, that would be either. There could be fuel substitutions, there could be, you know, changes in what's used. The idea is that just to be sure that there's not a relative spike or notable increase as a result of to this legislation. Mr. Chairman, I'm wanting to make sure that we don't inadvertently include the current spike in the price of fuel oil as though it were something the District could control.

I assume that's not your intent. The idea that it would be in context, that the review, that it's just keeping an eye contextually of the energy costs and of course sudden price spike, that's within the context of it, that wouldn't be notable. Thank you, Mr. Chairman. No objection. Senator Kiel.

Further discussion on Amendment Number 4? Is there any additional objection to the adoption of Amendment Number 4? Seeing no objection, that amendment is adopted. Senator Kaufman. I move Amendment Number 5.

And I will object. Discussion. The intent of Amendment 5 is to put a sunset date on this program so that should legislators have success in increasing the BSA or providing other funding streams, that we don't accidentally leave a program in that, that's not being considered along with all the other education funding. And so this amendment sets a July 1, 2032 sunset date. And just requires coming back to the program in 5 years, checking in, seeing how it's doing, and then taking legislative action to continue if it appears to be a good program within the context of the other streams of funding going to schools.

Senator Keel. Thank you, Mr. Chairman.

There's— I want to make— I think there's a lot of value in making sure we don't start something and not reexamine it. Of course, we do have a task force going on now. There's another change in how we fund schools in this bill in the required local contribution. And I would think that we would want to subject that to the same review at the same time as this energy funding. Does the amendment apply to both, or just the one?

The intent of this was that it applies specifically to the energy component. And my response and my objection is that I think it should stay in place knowing we have the report coming and the report obviously is going to be addressing not only the energy relief portion of this bill, but the 5% provision. And I would rather have— there may be delays in that study. I would rather have this program continue until such action is taken by the legislature on the report. Further discussion on Amendment No.

5? Senator Kaufman, closing comments. Well, I believe as we are making these changes that it is a good thing to put in review dates. And I can appreciate the comments that there is a larger component to that, what are we doing, when do we review it. I think sunset dates in general are a tool that we might use a little bit more to be sure that we don't accidentally leave things behind that maybe no longer fit within the bigger picture.

And with that, I'll withdraw this amendment. Thank you, Senator Kaufman. And if I could, Mr. Chairman, I just want to comment on 4. I misspoke to some degree. It's consumption, not cost.

So, but the cost is certainly what's important, but by whatever metric of consumption. Thank you, Senator Kaufman.

I would invite Senator Tobin to the table if she has any additional closing comments on this piece of legislation that can have dramatic effect on how schools are Particularly on the classrooms. We'll have Senator Tobin. Thank you, thank you, Mr. Chairman. For the record, Lukey Tobin, Senator for District I. I just want to thank the committee for this work. I recognize that it takes all of us and our perspectives and our viewpoints to really create good public policy, and in this particular minibus bill, I think we have created some very good public policy.

Not only are we ensuring that we have evidence-based education reforms, which we heard just spoken to from Senator Cronk. But we also are ensuring that our communities are receiving relief, that we're going to be helping our districts that are experiencing increased energy costs and volatility of the energy market, as well as guaranteeing that we get good quality data and evidence so that we can continue to make good decisions for our local school system. I do want to note that I recently read a pretty incredible report that talked about about the impact of local contributions on the outcomes for students. And it showcased that when you have a deeply invested community in their education system, you actually see improved education outcomes. I listened to the minutes of the Constitutional Convention last night about education funding, and our constitutional delegation said that the responsibility for our public education system is shared, shared between our local communities and the state.

And I'm just very proud of the work that we've done together. Thank you, Senator. I would like to call up Representative Storey if she has any comments since it is her piece of legislation that we are dealing with today.

Thank you very much, Senator, and all the House Finance Committee members. I think you've done really good work on this bill. I am I'm so pleased that we will have more dollars to focus on student achievement and the kids in the classroom. I really appreciate the support for the teacher repayment, student loan repayment program. I think that's going to help us keep teachers in the classroom and that improves student learning.

So thank you for your work on this. Thank you, Representative Story. I'm sorry, I never put myself on the record. I'm Rep. Andy Story, District 3 here in Southeast Alaska. Thank you for those comments.

Will the committee— Senator Steadman. Thank you, Mr. Chairman. I move that the Senate Finance Committee substitute for House Bill 28, Version W, as amended— that's right, move bill as amended from committee with attached fiscal notes and individual recommendations. Additionally, legislative legal is granted the authority to make technical and conforming changes. Is there objection?

Seeing no objection, that bill passes to the committee— to the next committee of referral, which will be the Rules Committee. This concludes this morning's meeting. Our next meeting is scheduled for 1:30 this afternoon. Is there anything else to come before the committee at this time? Seeing none, we are adjourned.