Alaska Legislature: Senate Education, 4/8/26, 3:30pm

Good afternoon everyone.

I want to welcome you to this meeting of the Senate Education Committee.

It is 3.30 p.m. here on Wednesday,

April 8th. We are meeting in the belts committee room here in the state capitol building located in beautiful downtown Juneau where the snow is quickly melting.

I just want to remind folks who are here in the room if they could please mute their cell phones.

Documents for today's meetings have been distributed to members.

They are available on basis, which is aklag.gov, and there are additional copies right there by the door.

At some point, I will encourage Mike Mason to go paperless and we will have QR codes.

All right.

Members present today are Vice Chair President Stevens,

Senator Kiel,

Senator Bjorkman, Senator Yunt,

myself,

Senator Lukey Gale Tobin. Please let the record reflect.

We do have a quorum to conduct business.

I want to thank Kyla from the Juneau LIO for moderating today's meeting and Mary Gwen from Senate Records for documenting today's meeting.

On the agenda today,

we have it packed full of excitement. We will have our first bill hearing for House Bill 28,

which establishes a student loan repayment.

Payment pilot program we will also have our first bill hearing for Senate Bill 278 related to required local contribution for public school funding We will have our first hearing for House Joint Resolution 39 urging the federal government to waive the new h-1b visas for teachers here in the state of Alaska And we will also have our second hearing for Senate Bill 204 relating to teach to substitute teaching and to the qualifications of school board members

first and have our second hearing on House Bill 176 relating to the notice of new fees and fee increases for the University of Alaska.

We will be taking public testimony on those first three bills, House Bill 28,

Senate Bill 278, and House Joint Resolution 39.

It is my intention to move Senate Bill 204 and House Bill 176 today if the committee is in agreement.

If you'd like to provide your public comments on the three bills that I have previously mentioned,

House Bill 28,

Senate Bill 278, or House Joint Resolution 39,

please call one of these free,

excuse me, one of these teleconference numbers. The first is, if you're calling from Anchorage, it's 907-563-9085.

From Juneau, the phone number is 907-586-9085. From all other locales.

Please call this toll-free number 1-844-586-9085.

You can also testify from your local legislative information office or email your written testimony to senate.education at akleg.gov.

That's senate.education at akleg.gov.

All right, on to our first item on today's agenda,

House Bill 28,

sponsored by Representative Story.

Here to present House Bill 28 is Representative Story's legislative aide,

Sherry Bowman.

As folks know,

Representative Story is currently on the floor of the House and sends her well wishes but cannot be here in person.

Ms. Bowman, if you could please identify yourself for the record and begin your testimony when you are ready.

Thank you, Chair Tobin and committee members for hearing House Bill 28.

For the record,

my name is Sherry Bowman, and I'm staff to Representative Andy Story.

She represents House District 3.

And as Chair Tobin stated,

she's currently on the floor working on the House budget.

As many of you are aware,

Alaska is facing a workforce crisis.

According to the Department of Labor,

for the past 12 consecutive years more residents have left the state than have arrived,

and Alaska's working-age population,

18 to 64,

has been declining,

and a significant number of people are not moving into the state as they once did. This out-migration has contributed to the problem of high vacancy rates in our teacher positions and state employee positions.

The teacher vacancy rate on the first day of the current school year was roughly 350.

Additionally,

285 teacher emergency certifications were issued.

Our state has had to rely on recruitment from outside the state,

which has resulted in 573 teachers in the state who are here on J-1 or H-1B visas. The shortage,

which is at an all-time high,

impacts the quality of education our children are receiving.

We also have a high turnover rate for teachers and principals at 28% and 35% respectively in 2024.

This negatively impacts student achievement as student-teacher-family relationships and learning are affected.

The state of Alaska has an average vacancy rate of 12.1%.

In some departments, it is a higher vacancy rate than others.

This vacancy rate hinders our citizens and businesses from receiving timely essential state services,

such as public assistance,

ferry transportation,

professional licensing,

retirement benefits,

timely payments,

and more.

HB 28 seeks to stabilize employment by implementing a three-year student loan repayment pilot program.

Employee-sponsored loan repayment programs have emerged as a top tool for recruiting and retaining workers by other states.

This bill would establish a student loan repayment program for people with student loan debt who have a higher education degree or technical certificate and who choose to work in our public sector.

Of the state of Alaska it incentivizes Alaskans to stay in Alaska while also encouraging those Alaskans outside of the state to seek employment here

This pilot program would provide $4,000 to an applicant's student loan servicing institution upon completion of the applicant's first year,

and then $8,000 upon completion of their second year,

and $12,000 upon completion of their third year. The program is capped at 125 participants.

According to the study in your packet,

Alaskans carry an average student loan debt of $32,000.

So this incentive would meaningfully reduce that burden for eligible employees.

The pilot would be funded through the Alaska Higher Education Investment Fund, the HIFE, which is currently managed by the Department of Revenue and supports the WAMI Medical Education Program,

the Alaska Performance Scholarship and the Alaska Education Grant. The health of the fund remains good.

I believe this $3 million pilot program spread over three years is a strategic investment that could help us keep and recruit skilled Alaskans in our workforce,

stabilize essential public services,

and help reduce long-term staffing shortages. This bill represents a smart, targeted investment in our workforce needs.

I am happy to answer any questions you may have.

We also have in person today Carrie Thomas,

the acting director,

I'm sorry, the executive director of the Alaska Commission on Post-Secondary Education to testify on employee-sponsored student loan repayment programs, and she is also available to answer any questions. I also have Bridget Weiss, the liaison for the University of Alaska's College of Education Consortium.

system, online to testify on the need for this program for retention and recruitment of teachers in the state.

Again I thank you Chair Tobin and committee members for hearing this critical piece of legislation.

Thank you. Thank you, Ms. Bowman. Are there questions from

committee

members? President Stevens.

Thank you Madam Chair. Um

There's a similarity here to the system we used to have, though it was based on if you took out a student loan and by the time you completed it, I believe you were, the longer you stayed in Alaska, you were forgiven 10% a year for up to five years.

So I believe in the end,

50% of your student loan was paid.

I believe that's correct,

but

I

think— why wouldn't

we go back to that system which seemed to be so successful?

This is based on a dollar amount instead of a percentage amount.

Um, I'm actually,

and I would like to bring Director Thomas up here just to maybe speak about the loan forgiveness program and maybe provide some background information on that.

Thank

Thanks,

Thank you.

Thanks, Mrs.

Bowman. If you could identify yourself.

Sorry,

Uh, sorry, Sherry Bowman again,

staff to Representative Story.

Thank you. Ms. Thomas.

Ms. Thomas,

if you could please identify yourself for the record and if you need to,

I'm sure President Stevens can restate his question,

but if you obviously heard it, if you would just like to take it away.

Thank you. Good afternoon. For the record,

Carrie Thomas,

Executive Director for the Alaska Commission on Post-Secondary Education.

Through the chair,

President Stevens,

ACPE did used to provide loan forgiveness benefits to Alaskans who returned to the state.

To the state after their education that was discontinued over 20 years ago due to the inability to fund the losses in that program. So what we experienced was

A number of students didn't return to Alaska,

and then they did not repay their debt.

So there were significant losses in that program.

It was very successful for those that did return,

work in the state and earn the forgiveness,

but the losses were so significant and without a funding source.

The Student Loan Corporation absorbed those losses and the forgiveness benefits were discontinued.

You know

Follow-up?

Follow-up?

No, thank you.

No, thank you.

Thank you, President Stevens. Senator Keehl.

Thank you, Madam Chair.

More than 30 years ago, because I couldn't get it.

I was confused by what you said about losses in the program,

non-repayment.

The loan forgiveness program,

as I remember it, was only available to those who were back in the state.

So what was the source of non-repayment for those who were in the state and qualifying? Or did you say those who didn't come back to the state and qualify for repayment weren't repaying? I got lost on who was failing to repay.

Thank you. Through the chair to Senator Kiel.

It's the latter of what you said. It's those that left the state and took the loan to pursue their higher education and then did not return to Alaska and earn the forgiveness benefit.

So those students would be obligated for the debt they incurred, but our ability to collect on individuals outside of the state of Alaska.

Alaska is not as robust as it is in-state, so there were significant losses on that loan program overall.

Follow-up, Senator Keehl.

Those loans had substantially different terms in terms of qualifying for them, credit worthiness and ability to discharge than loans you make today, if I remember correctly.

Would that be a concern if this pilot program were enacted?

Through the chair,

Through the Chair, Senator Kiel, could you clarify what the question about the concern is?

Sure. Madam Chair, if I may.

Senator Keel.

Back in the loan forgiveness program days,

you had to be an Alaskan and you qualified to get the loan.

Nowadays,

you have to have credit check and if you're not credit worthy, you have to have a cosigner.

Back in.

The loan forgiveness program days,

the amounts you could borrow relative to the expected earnings of most folks just out of college were substantially higher than they are today. That's proportionally, right,

not straight dollar amounts.

And then back in the loan forgiveness programs,

if memory serves,

the feds hadn't changed some of the bankruptcy laws to make it as difficult to discharge a student loan as they are today.

So it seems like you're a lot more secure in collecting a loan today than you were back in the old days.

And so the question,

therefore,

is do you have concerns about people not paying their loans back if we pass this bill?

The way you implied that was a big concern back in the old days.

Through the chair,

Senator Kiel, this is a loan repayment program which is different than a loan forgiveness program,

and part of the prepared remarks I have today speak to the differences of those two types of loan benefits. So maybe I can clarify that in my prepared remarks.

Senator Keel, thank you. Are there additional questions? President Stevens.

Just to carry on with that. So, and maybe I don't quite understand it, but if the goal is to keep people in Alaska, that is the goal.

It seems like 3 years may not be enough because right now teachers are staying for 3 years and leaving.

So they stay for 3 years,

they get $4,000,

$8,000,

$12,000, and they're gone anyway.

I like the idea of 5 years at 10% a year, half of it's paid back, and after 5 years, I can tell you my experience at the University of Alaska is that anybody who stayed for 5 years is probably going to stay for their entire career.

So it does seem to me like 3 years is not enough.

Thank you.

Thank you, President Stevens.

Senator Yunt.

Oh yeah, thank you through the Chair to the presenters today.

To build on President Stevens'

comments,

I too agree it should probably be a little bit longer period of time.

Looking at the fiscal note and then bouncing back to page 2 here,

so the fiscal note is essentially the same amount each year. But the amounts change from 4 to 8 to 12,

not to exceed more than $1 million in a year. And so in year 1, it really couldn't exceed more than

$500,000 because 125 folks in the program times $4,000 is only $500,000. Year 2 would be $1 million. So we might need to flush through that to average that out. And then, and then I kind of like the idea of—

and I could see why you would want to build each year, but maybe maybe lengthening it out for 5 years and then having it be a flat amount. I know a percentage sounds really good and that would work very well,

but then it kind of— it may or may not encourage folks to worry about how much they obtain in debt,

whereas like a flat amount might help

them stay more fiscally responsible through college and choose a little bit cheaper route or less of a nice apartment or whatever that may be on the way through if it was just a flat amount there coming back too. But that's my comments. Extend it out to 5 years for sure, and then play with the fiscal note here because the math isn't mathing right now. So thanks.

Thank you. Thank you, Senator Yant.

Ms. Thomas, since you're here, would you like to go over the fiscal note?

Yes, I would be happy to.

For the record,

Carrie Thomas,

Executive Director

Director at ACPE.

The fiscal note is provided with your materials and it covers, it's a total of $1,045,000 in year one and then just smaller amounts the subsequent years but generally it's just over a million dollars each year to implement this pilot.

program funded by the Higher Education Investment Fund,

Fund 1226.

So House Bill 28 creates a temporary student loan repayment pilot program that would be administered by the Alaska Commission on Post-Secondary Education to retain public school teachers and state of Alaska employees by providing escalating loan repayment assistance over three years.

The program uses the three-year structure based on the participants'

original loan balance.

If they had $24,000 or more in loans,

they would receive the $4,000, $8,000, and $12,000 per year, and under $24,000 there's a formula in the bill,

one-sixth of their loan balance year one, one-third in year two,

and half in year three.

And then the program is capped at 125 participants not to exceed $1 million per year.

That's what drives the million dollars in the fiscal note,

but to Senator Yunt's point about the math,

there is room for adjustment in that.

And if the funding is insufficient,

ACPE must reduce awards proportionally.

So to implement this, there are some administrative costs that the commission staff would incur.

We would implement this program using existing staff.

So in personal services, it would be $39,000 for one-third of a range 16 staff to implement the program,

develop.

develop the communication and application materials,

and provide the data and research to identify and target Alaskans and administer the program,

and then slightly lower amounts of $29,600 in FY28 and 29 at about one-fourth of a full-time staff member,

and that would also have a service cost in FY27 to implement regulation.

And then in FY 29 for the required evaluation of the three-year pilot program.

Thank you. Thank you, Director Thomas. Senator Keel.

Thank you, Madame Chair. I I may need some smaller words um and shorter sentences on the fiscal note. It if I understand correctly, uh you're gonna pay up to a sixth of the initial loan balance

in year one, up to a third of it in year two, and then up to half the initial loan balance in year three.

How do we keep the number of dollars flat,

million,

a million, a million, if the payout rises dramatically?

Through the chair,

Through the Chair, Senator Keel, that would be if someone had less than $24,000 in debt.

So in that scenario, the payout would be under $1 million.

The flat amount of $4,000, $6,000, $8,000, and $12,000 would be if they had over $24,000 in debt, as most Alaskans do.

And so

Follow up, Senator Keel.

And so, Senator Kempf, do you anticipate then a substantially higher number of participants in year one and a number of participants who drop dramatically over years two and year three? Is that how that keeps

Yes,

the dollars flat?

through the chair, Senator Kiel.

No, I don't, because I think that would be a disservice to the participants of the program.

I think that the language in the bill that caps the spend at $1 million a year is what is included in the fiscal note. But as Senator Ian pointed out, if we provided 125 participants $4,000 in year one,

that would be $500,000.

So I think there's a case to be made to modify the fiscal note based on that.

Yeah, thank you.

Senator Yam.

Senator Yunt.

Just thinking out loud here, we— thank you through the chair to the presenter.

So, you know, we could either A, roll it forward,

and make sure it stays in the fund to, you know, handle that $500,000 that doesn't get used in year one. Or kind of along the lines of what President Stevens has said earlier, if you want to stretch it out to five years,

if it was $1 million a year, 125 kids,

that would be $8,000 per year. But if you wanted to just keep it at the

$3 million, I think that would be $4,800 a year per kid or something, you know, and then you could just make it the same amount for the whole five years. But there's a lot of good options here. I like the idea. I think we're headed in a good direction. We just need to flush this out and either fix the fiscal note or possibly,

you know, consider extending it to five years or whatever,

but thank you.

Thank you. Thank you, Senator Jansz. And I,

Thank you.

too,

have a similar question about the fiscal note versus the language of the legislation.

So in year one, arguably,

all applicants will be receiving the $4,000, and there's a maximum of $125,000.

When we move to year two,

I'm assuming there'll be new applicants who will remain at that $4,000 and an additional...

folks who have agreed to stay in the program,

what is the mixture there?

Because there could be that $125 cap could stay the same with the same group of folks and no new entries could come in.

Or you could have some headroom where you have some new folks because there's attrition in the original 125.

So can you help walk us through what the anticipation is, the expectation,

or how would you

provide an ability for some of these new applicants if there is that headroom to apply into the program.

And again,

for the record,

Sherry Bowman,

staff to Representative Andy Story,

and I think that is a, you know, very good question and something that I'll have to talk to Representative Story about,

but I would be happy to provide an answer for that at the next meeting.

Thank you.

Thank you. Thank you, Ms. Bowman. I think that'd be very helpful.

Senator Yeung.

Thank you through the Chair to the presenters. This will be the last time. Just feeling this out. Up to $1 million a year, up to 200 kids,

and no more than 20% in a year so that it extends to the five years that we talked about,

never exceeds $1 million.

If there's less than 200 kids in year one in the program,

say there's, you know, 125 again,

it would go up to $8,000 apiece,

right?

Again,

not to exceed 20% so that we know that we're going to get to retain them for the five years.

You know, we could create some— a good fiscal note around something like that.

Now, this is for that pilot program for those kids in that class that would continue for five years.

We would have to consider backfilling on,

you know, for the next class and the next class until we get to where we're retaining the teachers that we need, and then we look at not having to do this. I think it's something we'd want to look at doing for a couple years in a row so that you didn't just say,

sorry,

the class of 2027 graduates hit the jackpot, but, you know, the next classes didn't. So it, yeah,

I got some ideas I'll put on paper.

So thanks.

Thank you. Thank you, Senator.

It sounds like there's some suggestions for some potential amendments,

Ms.

Bowman, and it'd be helpful to reach out to committee members.

President Stevens.

Just a quick question.

So I understand that, you know, it looks like mostly we're talking about young people become teachers and while they're working there.

They're given this additional assistance.

But of course that's more than just a four-year college degree.

To become a teacher you need to get a certification and that takes another to get a master's degree that could be two years.

To get a doctorate as you were doing could take another for

Forever.

God knows how many years you

Forever.

know. So we're dealing with the whole range not just a bachelor's degree.

Forever.

We're teaching dealing with a master's degree or doctorate as well.

Those people would be able to apply for this.

This funding as well. Is that true?

It's my understanding that they would be able to,

yes.

And Ms.

And Ms. Bowman, if you could identify yourself.

Again,

Again, for the record,

Sherri Bowman, staff to Representative Story.

Thank you.

Thank you.

Thank you.

Senator Keel.

Thank you, Madam Chair.

One more question for the bill's sponsor.

Can you talk to us about how you envision choosing among,

I expect, more than the minimum number,

rather the cap number of applicants?

How would you, how does the sponsor envision the commission or the program prioritizing what I suspect will be a lot of folks who want in?

Again,

the program will be administered by the Alaska Commission on Post-Secondary Education, and so I would like to let Director Thomas answer that question for you. Thank you.

Thank

Dr.

Thank you.

Thomas.

Director Thomas.

Thank you, Carrie Thomas,

Executive Director for the Alaska Commission on Post-Secondary Education,

Senator Kiel through the chair.

We don't have that identified at this time. It would have to be spelled out in regulation.

There are a number of different options.

You could prioritize certain hard to fill jobs.

You could allocate different

Portions of the money for state employees versus teachers or that information on prioritization and award could be amended into the legislation.

So at this time there are ideas,

but that has not been finalized how the money or the prioritization and award would occur.

It could also just be simple first come first serve.

Thank you, Madam Chair.

I'd be interested in hearing the sponsor's priorities.

If we're contemplating putting them in, it'd be good to know what she...

what her top of the list is. Thank you.

Thank you. Thank you, Senator Kael. And I agree with you, as we know that there are some teaching positions like special education that are extremely difficult to fill across the state.

And this might be an excellent place to think about how we prioritize filling those difficult to fill positions.

President Stevens.

I'm sorry, one last question. I know you need to get on, but there's no advantage here to the University of Alaska students,

right?

I mean...

These could go anywhere in the country,

and of course we are responsible for the University of Alaska as well, and we'd like to see university utilized to full extent. Is there any advantage given to those who apply for an in-state degree?

Ms.

Ms. Bowman?

Bowman.

Through the chair, Sherry Bowman,

staff to Representative Story.

I'm sorry,

could you just repeat that?

Well,

I guess the question is, is there an advantage to going to the University of Alaska as compared to the University of Miami or whatever?

Does it make any difference?

Through the chair again,

Sherry Bowman, staff representative story.

I don't believe it makes a difference.

I think it's just the whole idea is just to get our workforce,

you know.

retain teachers,

retain state employees,

and whether they come from out of state or are Alaskans or are attending any of our institutions in state,

I think it's just,

I think once we figure out how the applicants are going to be chosen,

then we can, you know, figure that out.

But I don't think, I mean, the program is open to anyone.

Thank you.

Does that answer your question?

Yes.

Yes.

Thank you. Director Thomas.

Thank you, Chair Tobin.

Kerry Thomas,

Executive Director,

ACPE.

Not to contradict Ms. Bowman, but in the bill,

it does say that a person with outstanding student loans used to pay for a degree or certificate program located outside the state or at the University of Alaska.

My opinion is that a number of amendments occurred in the committee substitute,

and that was one of them,

and so it does provide an advantage to University of Alaska students and does not provide that same opportunity to Alaskans that completed their programs at other Alaska institutions. So that's...

I'm sorry, could you explain that again?

Yes, currently it says in the legislation or in this bill,

a person may receive a grant under the program each year for a maximum of three years. A person with outstanding student loans used to pay for a degree or certificate program located outside the state or at the University of Alaska, and then it goes on to describe how the $24,000 benefit would be dispersed.

First over three years.

So this specifically states you would need to have completed your degree or certificate program outside the state or at the University of Alaska.

Thank you. So Dr.

Thomas,

so I make sure that we in the public are clear,

if you received your teaching degree,

let's say at APU or at a different university that is not affiliated with the University of Alaska Anchorage, you would be unable to receive this grant.

Chair Tobin, that is correct under this version of the bill.

Thank you. Thank you, Dr.

Thomas.

We are now going to move on to invited testifiers.

We are joined by Director Thomas.

Yes.

Carrie Thomas is the executive director of the Alaska Commission on Post-Secondary Education. She's here to provide remarks on this legislation for transparency.

I do sit on the Alaska Commission on Post-Secondary Education as the representative from the Alaska Senate.

Ms. Thomas.

Oh, thank you for the record.

Carrie Thomas,

Executive Director at the Alaska Commission on Post-Secondary Education.

I'm here to provide information to the Senate Education Committee, not to advocate for this legislation,

just to provide some background on what student loan repayment is,

why it's a better option than student loan forgiveness,

and how other states are moving in the direction of adopting student loan.

student loan repayment programs in place of student loan forgiveness.

I'll try to be brief. I know you have a busy agenda.

Student loan repayment is an employer or government-sponsored benefit.

It's also an agreement where the employer or the state or federal government pays down an employee's student loans for fulfilling a set of terms,

which are typically tied to the amount of time the employee works in a job or for the organization,

the organization providing the student loan repayment funding.

determining determines the service requirement,

frequency and loan repayment amount.

Any employer,

private or public sector can offer loan repayment to their employees.

Loan repayment is vastly different than loan forgiveness.

Loan forgiveness is when the state or federal government provides the loan to the individual to attend a certain program of study and the recipient agrees to work in a specific job after graduation in order to earn the loan forgiveness.

In Alaska,

the WHAMI program is a well-known loan forgiveness option.

Some of the benefits of loan repayment compared to loan forgiveness are loan repayment guarantees a return on the state's investment.

Loan repayment, our public funds are going to degree holders who are able to contribute to the state's economic and social well-being immediately.

The cost of administering loan repayment programs is significantly lower than loan forgiveness,

as I mentioned based on some of the questions.

from Senator Keel earlier.

With loan repayment, there is no costly loan servicing. There's no collections or litigation activities for those that don't fulfill the service requirements or pay back their loans.

So the cost of those programs is significantly less to the state.

One of the documents you should have received is got ACPE's logo and it has a list of other states loan repayment programs.

So as of May 2025,

this was a current list of just some of the options out there.

Many states have shifted to offering student loan repayment in place of loan forgiveness programs to attract and retain talent in workforce shortage areas. Texas,

Mississippi.

and Pennsylvania, among others,

have shifted their existing programs from a forgiveness model to a repayment model.

And there are many other examples of these programs being implemented across the country currently.

And that concludes my remarks.

Thank you. Thank you, Director Thomas.

I do have one question to you is I may be misremembering, but the 30 year previous program, did that have a prioritization for placement? I vaguely remember that within that loan forgiveness program,

if you were working at a title school or in rural Alaska,

you received different forgiveness amount.

For the record, Carrie Thomas,

Executive Director,

ACPE.

Senator Tobin, just a clarifying question on that. Are you referring to the teacher education loan program or the general loan forgiveness program that was spoken of earlier?

The teacher education loan program.

Okay, thank you.

I will need to go back and look at that question and then provide that answer to you.

Thank you. Thank you, Ms.

Thomas.

Seeing no other additional questions,

we'll move on to your next invited testifier. We are joined via online by Bridget Weiss, who is joining us as the University of Alaska College of Education Consortium liaison.

Ms.

Weiss, if you can hear us, if you could please identify yourself at the record and begin your remarks.

Good afternoon,

Chair Tobin and members of the Senate Ed Committee.

I apologize for not being able to be there in person today,

but I'm very excited to do just a quick testimony on House Bill 28. Can you hear me okay?

We can.

We can.

Okay, perfect.

For the record,

this is Dr.

Bridget Weiss, liaison for the Alaska College of Education Consortium with the University of Alaska.

I'm here to testify in support of House Bill 28 from the educator recruitment and retention perspective.

You will recall I was in front of you just a few weeks ago sharing the many initiatives that our University of Alaska Schools of Education are implementing to reduce the teacher gap.

app in Alaska.

I wish I could say that we,

the University of Alaska,

held all the solutions and had some sort of magic dust,

but the problem is more complex than that and to make true headway it will take diverse strategies from multiple stakeholders.

House Bill 28 is a perfect example of such a strategy.

This loan repayment program would be a significant complement to the Alaska Intern Scholarship the University of Alaska awards each year.

We facilitate a scholarship to cover years three and four of teacher candidates'

tuition and fees.

Our graduates who are fortunate to receive this scholarship will still begin their career with at least two years of debt while battling a retirement system absent of defined benefits.

No future social security wages,

and the uncertainty of an inadequate K-12 education funding model,

and an often unfriendly public press on education.

Believe me when I say that I wholeheartedly believe that education is an incredibly fulfilling career and can manifest a very high quality of life. I spend a large portion of my time on recruitment efforts and know that every little bit counts.

This year, while awarding $1.3 million to our UA education students,

we still had at least 30 applicants who we were not able to award.

Again,

even the students we did award have debt from their first two years.

House Bill 28 would be an incredible complement to attract and retain educators in a real way.

Thank you so much for your support of education in general,

and I see House Bill 28 being one more specific strategy for recruitment and retention efforts.

Specifically, also a big thank you to Representative Story for sponsoring this bill and her long-term advocacy for educators and students in our state.

Thank you. Thank you, Dr.

Weiss.

Seeing no additional comments and no other invited testifiers will now open public testimony on House Bill 28.

Is there anyone here in the room who wishes to testify?

Seeing no one here in the room, we will move online.

We have John Smits. I apologize,

John,

if I pronounce your last name wrong.

If you could please identify yourself for the record and begin your public testimony,

you have three minutes.

Good afternoon,

Chair Tobin and members of the committee.

For the record,

my name is John Schmidt.

I'm a lifelong Alaskan and retired teacher who taught elementary and high school in Anchorage for 29 years.

I'm here today to support HB 28 and the return of student loan forgiveness for educators.

After growing up in Alaska,

I left the state to attend college in Oregon to become a teacher.

When I graduated, I seriously considered staying in Oregon.

Like many young graduates, I was looking at student loan debt, cost of living,

and where I could realistically begin my career.

At that time, Alaska offered student loan forgiveness for teachers who returned to the state.

That incentive played a major role in my decision to come home.

It made Alaska financially possible and helped tip the scales towards returning.

I came back to Alaska to teach and what started as an incentive became a career.

The loan forgiveness program helped bring me back and strong pay and a retirement pension kept me here.

I spent 29 years teaching Alaska students.

Today Alaska is facing a significant teacher shortage.

Districts across the state are struggling to fill classrooms.

Many are hiring out of state,

using emergency certificates,

or increasing class sizes.

We are competing with other states for a limited pool of educators and financial incentives matter,

especially for new graduates deciding where to begin their careers.

Student loan forgiveness is not a handout.

It is a targeted recruitment tool that helps bring teachers to Alaska at the moment they are making career decisions.

It worked for me and I know it worked for others.

Even though it may seem like a small incentive,

it can make the difference between a teacher choosing Alaska or choosing another state.

I was disappointed to see this program go away.

Bringing it back through HB 28 would give Alaska another important tool to recruit teachers,

especially Alaskans who leave the state for college and would like to come home.

I encourage you to support HB 28.

This is a practical,

proven way to strengthen Alaska's educator workforce and help ensure every classroom has a qualified teacher.

Thank you for your time and consideration.

Thank you. Thank you, John.

We'll now move on to another individual here in Juneau. We are joined by Dr. Lisa Parady with the Alaska Council of School Administrators.

Dr.

Parady, if you could identify yourself for the record and begin your remarks,

you have three minutes.

Madam Chair and members of the committee,

can you hear me okay?

We can.

We can.

Great.

Madam Chair,

members of the committee,

thank you for the opportunity to testify this morning.

I guess it's this afternoon.

For the record,

my name is Dr.

Lisa Perry.

I'm executive director of the Alaska Council of School Administrators, and I just want to add to the testimony you've already heard,

certainly from Dr.

Weiss.

and the director of ACPE.

I also want to thank Representative Story for bringing this important piece of legislation.

As you know, Alaska is facing a sustained educator shortage.

You've heard these statistics, but they're important here.

345 first-day vacancies for the 25-26 school year.

Districts are filling those positions with

573 international teachers on visas,

285 teachers on emergency certifications,

and really any means possible.

These are necessary to fill positions,

but they are not stable long-term solutions.

So this bill is a three-year pilot program with built-in reporting and accountability,

emphasizing that it will not be an ongoing program unless it is successful.

successful.

It also encourages Alaskans to stay home and we have a much better chance of retaining them long term.

The biggest challenge for us is not just recruitment,

it is retention.

ICER data released in December of 2025 shows that in 2024 Alaska had 28% teacher turnover and 35% principal turnover.

Many educators leave Alaska within the first

first few years. I think Senator Stevens spoke to that.

Key factors include high cost of living,

housing challenges,

and significant student loan debt.

For early career teachers,

especially student loans,

can directly influence whether they stay or leave the profession or the state entirely.

So this bill, House Attorney 8, targets this issue directly by reducing student loan burden tied to continued service.

This is a practical target investment in workforce stability.

The bill aligns with Alaska Council School Administrators'

joint position statements,

which many,

many education leaders across the state work on.

It does so by strengthening educator recruitment and retention,

investing in long-term workforce solutions,

supporting policies that reduce barriers to stay in the profession.

It also aligns with the governor's TRR playbook recommendation.

The TRR action plan recommendation 1.3 financial opportunities says that we define financial opportunities as incentives that school districts can use to augment teacher salaries,

such as signing bonuses,

retention bonuses,

incentive to attract teachers to shortage.

subject matter areas or to work in high need or hard to staff schools,

extra duty bonuses,

and loan repayment support and scholarships.

So this ties directly to recommendations that came from hundreds and hundreds of teachers and education leaders.

The pilot allows the state

Dr.

Parady,

if you could please

wrap up your comments.

You bet.

It does allow for us to track these outcomes and decide if it is working.

I hope that you will consider supporting this bill.

Our members do appreciate your consideration.

Thanks.

Thank you. Thank you for your testimony.

I see no other folks online to provide their testimony. Anyone in the room?

I will now close public testimony for House Bill 28.

We are going to hold House Bill 28 until a future meeting. Please work with my office and the bill sponsor on any amendments or changes that you might like to consider for the bill.

With that, any final comments, Ms.

Bowman?

No,

but thank you for listening to our bill.

Thank you so much.

Thank you. Thank you very much.

We'll now take a brief at ease as we will move to our next item on the agenda,

which is the first hearing of Senate Bill 278,

Local Contributions by School District. Brief at ease.

And we're back on the record here in Senate Education. It is Wednesday,

April 8th at 4:19 PM. We are joined by Senator Bjorkman here, who is here to introduce to us Senate Bill 278,

sponsored by the Senate Education Committee.

Senator Bjorkman, if you would please introduce yourself and begin your presentation as you are ready.

Thank you, Chair Tobin and members of the esteemed Senate Education Committee.

For the record,

my name is Senator Jesse Bjorkman,

and I represent the northern and central portions of the Kenai Peninsula.

The bill before you seeks to solve a problem that we have in a discrepancy between the headlines that our institution,

the legislature,

produces surrounding education funding and the results.

that we have recently delivered.

Last year, as you are all aware,

the legislature successfully passed and overturned a veto regarding House Bill 57.

which increased the base student allocation number by $700, but only effectuated an increase in funding of $20 to that increase in the formula.

However,

after that bill ran through the process and the formulas and the actual cash got to the district's balance sheet around the state,

it meant that many of those school districts received...

Less money, less net dollars than they had received in state aid the year before.

So the bill before you seeks to solve that problem by reducing the rate by which costs can be shifted from the state to local government.

So in years past, as this formula has been written, Madam Chair,

you know.

We certainly didn't start this fire.

It was already burning when we started working,

but we have to deal with the situation before us here and ask ourselves the question,

does the BSA formula deliver the results that we expect to provide financial resources for a constitutional mandate that says the state?

should maintain a system of public education.

The BSA formula itself sets up the state of Alaska as the payer of last resort.

After required local contributions are made,

after impact aid is deducted, and after quality schools grants are added.

added.

We'll talk about that later on in the presentation.

In the long term, your work through the Education Funding Task Force, as well as Senator Kiel's work and many others there,

are wrestling with these questions about what should we do with the formula.

And that's more of a long-term project,

but districts need help right now.

In fact, they needed it yesterday.

They need it last year,

as we have seen,

just bouncing back to some of these headlines.

We saw the Anchorage School District make some very hard choices and choose to close more schools.

The Kenai Peninsula Borough this week on Monday chose to close four schools.

I met about two weeks ago with a group of students from the River City Academy,

a charter school,

very successful, lots of great results,

but maybe undersubscribed for the great opportunities that they provide their students,

and they said, please help us. We don't want to lose our educational opportunities,

but the district facing an ultimatum from borough government basically said, school district,

school board,

you will close schools or else.

We will not fund you as much money as we might if you do.

And so the district chose to close that program.

They chose to close Testamina Elementary School.

They chose to close Sterling Elementary School.

And they chose to close sewer middle school in your district,

Senator Stevens.

And those are big generational impacts.

Those are hard decisions that are going to last for a very long time because of how people will now shape their lives around those decisions.

And without an elementary school for miles in Sterling, without an elementary school for miles in Casiloff.

Those communities will be changed for quite a long time.

So what can we do? Well,

the proposed solution here is to reduce the rate of cost shifting that happens as full value determinations are made and required local contributions are made.

That's what the bill does.

It simply limits.

The growth of the required local contribution to 2% per year.

That doesn't say that it can't change ever.

It just says that the cap on that growth of required local contribution is 2%. That doesn't artificially limit what the max contribution can be,

but it's just limiting that required.

As we look at how do we arrive at this required local contribution, many of these slides I have reappropriated from the executive director of the Alaska Municipal League who gave a most excellent presentation to the Community and Regional Affairs Committee here in this very room on the 26th of March. If you would like to go and watch that presentation,

he is likely more of an astute expert on.

this matter than I am,

but I know that you all as members are very familiar with much of this topic.

What I wanted to raise for the committee and the public's awareness is that the full value determination that results in local education funding through the required local contribution is not, it's not the same as the tax base that is used by municipalities to actually raise revenue that they would then.

give to a school district for the purpose of funding their schools.

That full value determination is quite a bit higher because how the state assessor comes up with and calculates a municipality who has a property tax base's ability to pay.

And so this then creates a conundrum for local governments of how it is that they pay for their required under the mandatory Borrow Act of 1965 2.65 mils. So what happens? How do we arrive at a full value determination?

Well, the state assessor goes out and looks at, hey, what?

What can local governments tax?

What could they if they wanted to?

Well,

they're looking at real property,

buildings,

raw land.

They're looking at personal property,

even in municipalities who don't tax personal property.

The assessor includes the value of that personal property that a municipality could tax as a way to say, hey,

if you're a local municipality, you could raise this money. You could have more government take from your people for the purposes of funding your schools. So your required local contribution will increase also.

It penalizes local governments for any optional exemptions that they choose.

Currently, there's a mandatory exemption for disabled veterans and senior citizens of, I think it's $150,000 per year if memory serves.

However, many local municipalities have amounts that are exempted from property taxes that are significantly higher than that. They are penalized.

for those exemptions and given less money by the state because of those optional exemptions and how the full value determination comes out okay so when describing that full value determination the state assessor says hey what do you actually assess for and then adds in optional exemptions for

senior citizens,

for disabled veterans,

for volunteer firefighters,

for other optional things that are not tax.

Also, again,

adds back in that personal property tax and applies an additional, I don't know if you would, to borrow a phrase from George Bush I, voodoo economics, because this is very much in the ether about how they come up with some of this.

assess criteria to say,

hey, we know that you have this assessment, but we actually think your full value determination is X amount higher.

And so that's done in the worksheet that you see here.

So the full value determination is meant to standardize property values across the state.

However,

Those values are quite a bit above what local governments actually tax.

I wanted to show you this slide as a way of understanding and maybe informing a little bit more about what is going on about assessed values and why people get excited about them. Folks across Anchorage got the green cards in the mail and they were upset.

Many of these folks were livid because their assessed values had gone up so much.

Well, as we see in the graph at the top of the page there,

we see spikes in assessed values that come after recessions, that come after periods of our economy going in the wrong direction here in Alaska. But after those spikes happen,

or I'm sorry,

after those recessions happen.

Growth of assessed values is quite slow.

It's very slow.

And I think that informs a little bit of what you see in the fiscal note as far as estimated cost.

The methodology used to come up with the fiscal note uses a look back of only five years and assumes that same darn near exponential growth in assessed values for the next five years.

Well, if we look at this history from 1968, we know that

That the average increase of assessed values is about 5% over time.

And so that might be a bit of a better informational anode to use in making a determination about what the actual cost might be. And it's avoided cost.

It's, you know, as you look at the formula and how the formula is supposed to work.

We have to think about do we expect it to work or do we expect to take advantage of bugs in the formula that shift cost onto local taxpayers,

which is essentially a state mandated property tax,

what we're really talking about here.

So again,

to reiterate folks that don't have exemptions or don't qualify for exemptions, non-residents.

commercial properties when they're assessed at really their full and true value according to marking conditions,

which may not be the case because we are a non-disclosure state as Senator from Juneau knows well.

So those values don't always match up, not to mention our state assessed values are not keeping pace with inflation,

which speaks to that issue as well.

So what is happening?

Well,

As we look at this sheet here,

we see how that full value determination changes.

And yes,

it is very small, but if you look at the printout or bring your binoculars, you can see that.

Year over year from this two-year delta that the state has saved over $27 million by shifting that cost onto local government.

Different documents from legislative finance would show you different results.

And this is one of the things I'm interested in,

in learning more about this topic.

My district,

the Kenai Peninsula Borough School District reports to me that last year, due to the change...

in the full value determination and the required local contribution that's derived from it, they received $3.6 million less due to the change in the required local contribution,

which doesn't necessarily jibe with what I've seen from other folks.

So I'm interested to learn more about why those numbers don't match and what we can or should do about it.

So, as we look at then what is happening again with our formula, we need to ask the question,

why is the state the payer of last resort? Why are they the last payer?

Why is our current formula designed to shift cost to local governments that have a tax base?

I want to point out and stop and remind folks what the bill does.

is it does not redistribute money in the formula.

It simply caps the amount of money that is shifted from an expectation to fund education.

From the state being responsible for X amount of dollars to local governments.

This bill does not mean that REAAs or rural school districts get less money.

One of the documents that I had prepared, although it was a late in arriving,

but it will be posted on basis later and you all will have it,

is projections from the legislative finance division,

and maybe Connor Bell can speak to it in a minute,

that clearly show.

How districts will be impacted when we restrict this cost shift to 2% per year.

Districts don't lose money because of this shift.

They only stop the cost shift from the state aid to local governments if we take up this policy. And I think it's important to remember that.

CUSBIC, UConn.

Lake and Penn.

Those districts, they only can stand to gain from this policy as the BSA is increased,

as we do other things.

What this bill does is it restricts the BSA erosion that happens due to cost shifting that occurs in the formula from rising required local contribution.

It's very important that I think we understand what the bill does and what it doesn't

do.

Because of how this formula works, if you look at the bottom line,

basic need minus required local contribution,

that means dollar for dollar,

every dollar that the required local contribution increases,

every dollar that increases, that means state aid decreases.

So when the required local contribution, when that change overtakes the amount of money that is increased from the BSA,

that means districts can get less money when assessed values and that full value determination spike and go up. That's what we've seen in the last two years.

That's kind of explained here and laid out in this slide.

Again,

thank you and credit to Executive Director Nils Andreasen for providing me this information.

But as we have seen districts from around the state that have a significant property tax base,

they have experienced this phenomenon because assessed values are shooting up so high.

And so it's been felt in my district and many other districts.

And I think that's a good place to stop.

We could certainly say more,

but I think that is enough.

Thank you. Thank you, Senator Bjorkman. Are there questions?

Senator Yunt. I do just want to do a quick time check. We are at 4:35. We do have one more bill that we need to hear. So I'm going to ask folks if they could keep their questions somewhat tight just so that we are able to get to the final bill that we have a presentation for today. Senator Yunt.

Thank you. Through the chair, and to Senator Bjorkman.

I just,

more comment than anything,

I just want to say thanks for bringing this forward.

The districts that are being punished the worst right now are the ones who are doing the best in their community. And what I mean by that is if you create a good local economy and an environment where people want to live,

then you're going to see inflation in your real estate.

And we have seen that for many years in my community. And so for the folks at home that maybe don't quite understand exactly how this works is my community is receiving over

$3 million less this year than it did last year.

We increased the BSA last year. We didn't actually increase spending.

In fact,

decreasing by over 25 million dollars you know about an eighth of that is of which is in my community so

obviously this is being brought to a head right now because the BSA has not been inflation proofed in a long time really but it is districts like yours and mine that are being punished the worst and I'm not out to do anything that would hurt rural Alaska

And I'm glad that this legislation doesn't. You know, this legislation would not punish rural Alaska, it would just protect really the big five is what it would do. So thank you for bringing it forward. Um there's obviously still some more work to do, but again I I commend you, thank you.

Thank you. Thank you Senator Young, Senator Kiel.

Thank you Madam Chair, I

So I'm trying to think this through and apply a little lens of history.

And I guess I'll start with a fundamental principle,

which is that there's only one fair tax,

the tax somebody else pays.

And maybe a better way to state that principle is that all taxes are imperfect.

All systems have flaws.

Anyway, draw a line. Someone's on the wrong side of it.

You have to do something.

So I'm thinking back in history to a time when some areas of the state had growing economies,

pretty healthy,

and some areas of the state had actively shrinking economies.

And the example I can come up with, of course, was after the pulp mills closed in Central and Southern Southeast Alaska.

You can't beat economics. The global software timber industry just changed the economics.

Shortly thereafter,

the legislature did something not the same, but similar in its intent to this bill.

And it was a change required local effort at that time was four mils.

And working from a base year,

I want to say 99,

but don't quote me on that,

working from a base year of full and true value.

The legislature limited the growth in required local effort to applying that four mills to half the growth in full and true value from the base year.

And within a, I don't know if it was a decade or decade and a half,

I can't remember,

there ended up being a pretty significant dichotomy or difference in what...

municipalities were paying.

So the fastest growing economies in the state were at 2.68 mils, was singular.

And those economies that had struggled to rebound from terrible setbacks were at effective rates of,

I think, 3.8 or 3.9 mils, rank catch can.

Were

we punishing them?

Was that what we're doing, punishing them for global economic setbacks?

We certainly had changed who had to pay how much in terms of local tax dollars.

Can you talk about the...

side effects of an approach like this and how we might mitigate what I think was perceived when we just flattened everybody at 2.65 what was perceived as an unfair rate around the state

Thank you for the question,

Senator Keel. Through the chair,

for the record,

this is Senator Bjorkman.

As we look at the formula now,

this formula contemplates responsibility for education funding between the state of Alaska and local municipalities.

It does not excuse local municipalities from their ability to pay.

We still have a required local contribution of 2.65 mills or an equivalent of the full and true value.

That still exists.

So there's no doing away with that. It ensures that the state...

does not shift in a fast manner the cost for education in local school districts the way that it has as assessed values and their inputs into the full value determination drive up the full value determination as well as the required local contribution. So

to

I'm not, I'm confused about the idea that somehow this would punish communities who are seeing contractions in their economy because the

bill doesn't contemplate requiring to tax more.

Under that instance,

I think that the biggest concern and biggest driver of school district budgets in that instance would be and still would remain under this legislation declining enrollment as being the number one cost driver in what the change would be seen in the balance sheet of those districts.

All this bill does is limit, in times of high escalation of assessed values and full of the value determination,

how much costs the state can shift to local governments because the state has all the reason and motivation in the world as the controller through the state assessor of a full value determination to shift that cost and make someone else pay.

pay for the state's constitutionally mandated responsibility.

So I need some help understanding why it might be the thought process behind why this might punish or harm communities that have contracting economies.

Senator Keel.

Thank you, Madam Chair. It's the effect over time where you end up with a differential effective tax rate.

And so you have a higher effective tax rate, effective millage on a place with a contracting or a very slow-growing economy and a lower effective millage rate to require local effort on a place where the economy has been growing quickly.

One of the difficulties in a system like this,

one of the imperfections in the formula we have now, is that we don't differentiate.

residential value from commercial value.

We don't differentiate homes with kids in them from homes that are being used as speculative real estate investments or Airbnbs or what have you.

The formula is just not that fine-grained. And so when we look then at

what we tax and where we apply the tax,

that uniform application to full and true value

is another interesting thing.

One of the benefits of using this state determined full and true value, and Madam Chair,

I've shifted from answering that, from clarifying the question to my next question,

Madam

but I

Chair,

Madam

Chair, could I

respond?

I'm going to love this last piece. We do want to get to our invited testifiers before you do run out of time.

So Senator Hill, if you want to wrap in your question or your response and then Senator Bjorkman.

I do because the question is using this full and true value determination prevented me back when I was on the local assembly from manipulating what we tax and how we tax it in ways that would wring more money out of.

out of the state than someone else might be able to.

And I just wanted to be clear, does the bill propose changing that or does the bill leave that system in place and only change the effective mileage rate over time?

Thank you for that question.

Through the chair to Senator Keel,

as we consider what the current formula does and how the full value determination works right now.

It does exactly what you purport your concern to be with this legislation.

The current system absolutely does that because of how the state assessor assesses property,

especially personal property,

in municipalities who don't even tax it.

The current,

if that is a concern,

the current system is most definitely.

broken in that way,

I would contend.

The bill is quite a long bill because of one of the really interesting things that drafting often does is they include a lot of lead-in to sometimes sections,

but really the changes in the bill are on the last page, page six.

It's like a third of a page bill, but it's a six page bill because we like to read.

It's important.

And all it does is it says, it adds on line seven and eight that the required local contribution.

The existing statute is 45% of the district's basic need or the amount of the district's required local contribution for the preceding fiscal year by more than 2%. That's all the bill does.

It's a very simple, I think elegant change that says we are going to stop the cost shifting at 2% per year from the state meeting there.

constitutional mandate to maintain a system of public education to the local government that has a tax base.

It does not change how the full value determination is calculated.

That's—

It changes nothing else. It only slows the cost shifting.

Thank you.

Thank you. President Stevens.

The foundation formula is so complex.

I don't think there are many people that understand it. I certainly don't. And there have been few people over the years that have been able to explain it to me.

I think the foundation formula is sort of like a, I think of it as a tar baby.

And once you touch it, you're sucked into this briar patch.

I think the foundation formula needs to be.

All of it needs to be looked at.

This is a part of it, but there's lots of things in it that I, and this is a multi-year process.

I mean, I appreciate you're attempting to deal with this one issue,

but there are bigger issues are not maybe not bigger, but as important issues that need to be addressed in foundation formula.

I think piecemealing it is difficult to do. So I remember when I was first in the legislature in 2000 and

And two,

I believe we were rewriting part of the formula and it got so confusing.

In fact, at one point they left out area cost differential,

which really does impact so many districts in our state.

So anyway, my only advice is this is a very big thing to do.

I wish you the best of luck,

but let's not look at it as a piecemeal. Let's look at the entire foundation formula.

Thank you. Thank you, President Stevens.

And I do want to move on to your invited testifiers as they are here online.

I do have a quick question, though, for Mr.

Bell,

who is here with us, and I forgot to mention that he's here as well.

Connor Bell with Legislative Finance Division,

our fiscal analyst.

Mr.

Bell,

in the legislation on that page,

the last page that Senator Bierken mentioned,

it says that the intent is to cap it at 2% from the previous fiscal year.

Can you tell us how local contribution is calculated?

From my understanding, it's not necessarily on the previous fiscal year,

it's on a lag,

and I'm not sure what that lag is.

Uh...

Chair Tobin, for the record,

Connor Bell,

fiscal analyst with Legislative Finance Division.

The required local contribution is based on a lag.

I believe it's the calendar year 2023 property values are applied to the FY26 required local contribution. That could be off by a year.

It could be

calendar year '24 to '26. There's also an alternative cap that 4 districts hit. That is North Slope, Skagway, Valdez, and Bristol Bay.

Thanks. And that is 45% of the prior year basic need. So this bill would

cap the increase in required local contribution from year to year at 2%.

So whether it's the increase in mill rate or the increase in basic need from prior years, the total increase in required local contribution cannot be more than 2% from the preceding year.