Senate Education, 5/15/26, 3:30pm

Good afternoon, everyone. I call this meeting of the Senate Education Committee to order. It is 3:31 PM here on Friday, May 15th. We are in the Belz Committee Room here in the State Capitol building in what is turning out to be a beautiful sunny day in downtown Juneau. I just want to remind folks who are here in the room if they could please mute their your cell phones.

Documents for today's meetings have been distributed to members. They have been uploaded onto BASIS, and of course, there are additional documents right there by the door. Members present today are Senator Keel, Senator Yunt, and myself, Senator Lukey Gail Tobin. Please let the record reflect we do have a quorum to conduct business. I want to thank Susan from the Juneau LAO for moderating today's meeting and Mary Gwen from Senate Records for being here with us today.

On the agenda today, I am adding Senate Bill 278, Local Contributions by School Districts. We also have the first hearing for House Joint Resolution 28, Support Kids Online Safety Act, and we have the first hearing for House Bill 261. All right, on the agenda now, we are moving to adopt a committee substitute for Senate Bill 278. Version N has been distributed to committee members. There is a work draft, Order 34-LS.

1592/N, as in nanana. We have the Senate committee aide, Mike Mason, here to explain the version changes. Mr. Mason. Oh, yes, Mr. Mason. Good afternoon.

Mike Mason. I am staff to Senator Lukey Gale Tobin. Thank you for your patience. This is Senate Bill 278 explanation of changes from version A to version N. In Section 1, it amends AS 14-17-410 to align the time period of school consolidation efforts to the state hold harmless provision, which is 4 years. The school consolidation is at a 7-year timeframe and the hold harmless is at 4 years.

It aligns the two. Version N also increases the limit on the percentage increase for the required local contribution from 2% that is in the current version of the bill to 5% a year, which is in Version N. Section 3 establishes an effective date of July 1, 2026 for Section 1, and then Section 4, Version N, repeals the limit on the percentage increase for the required local contribution in 2029. So essentially a 3-year timeframe. Those are the changes from Version A to Version N for SB 278. Are there any questions from committee members?

Seeing none, I just want to make two points, is that we have heard from local municipalities that we understand that there has been some significant effects of recent increases in property valuations, which has resulted in some shifting of the resources, which is shifting some of the resources for school funding from the state to local municipalities. We recognize that that is having a deleterious impact on our local communities, and we want to address that. However, I recently learned that there is all sorts of consequences for making one change to another, and I'm going to ask Mr. Mason to speak a little bit about what we learned in conversations. Mike Mason, staff to Senator Tobin. So first of all, the 2% to the 5%, there were a lot of concerns that capping the local contribution growth at 2% compared to the previous year with significant increases in property values year over year.

The example that has been given is, I believe, a 34% increase on the Kenai Peninsula over 3 years. So if you cap that at 2%, the thought was that it would just be compounding year after year. And I believe there is some testimony earlier that property values have been going up on average about 5%, so that's why that 5% cap was chosen. One of the other things, and I believe Connor Bell might be in the room, I'm not totally sure if he's made it yet, that he could explain is there are some impacts to the deductible impact aid, which is tied to the local contribution. So when the local contribution goes down, the deductible impact aid also goes down.

It's a much smaller percentage, but that is another impact to this. So those were a couple of the big things that we heard. Thank you. Thank you for that. If there are any additional questions from committee members— Senator Keehl.

Madam Chair, a comment and then I think you still need a motion, is that correct? We do. Okay. So Madam Chair, I appreciate this committee substitute. I think this is better in a couple of ways.

But I think that sunset is important. We have a task force that is working on the formula and this will give us an opportunity to address that. If we don't sunset it, we end up in a place where the fastest-growing municipalities will pay a much lower effective rate for their local contribution than the slowest growing. We end up with a terrible disparity among municipalities that are organized. And we've done that before, and it cost a bunch of money to undo it.

So I appreciate that this is a little near-term relief while we work on a long-term fix. Thank you. Thank you, Senator Heeren. And I echo those as well. One of the things we want to do is rise the tide for all boats and not pick winners or losers within our education funding structure.

As I see no other questions from committee members, President Stevens, may I have a motion? Madam Chair, I move to adopt the committee substitute for Senate Bill 278, Work Order 34-LS1592-N as our working document. Without objection, work order 34-LS1592/n is adopted as our working document. Are there any other questions from committee members or any other comments?

Seeing none, I would like to move Senate Bill 278 from Senate Education Committee. President Stevens. Madam Chair, I move to report Senate Bill 278, work order 34-LS1592/n, from the Senate Education Committee With individual recommendations and attached fiscal notes, the Senate Education Committee gives legislative legal authority to make technical and conforming changes to the bill. Without objection, Senate Bill 278, Work Order 34-LS1592/n, as in nanana, is reported from the Senate Education Committee with individual recommendations and attached fiscal notes. We'll take a brief at ease to sign the committee report.

Brief at ease.

And we're back on the record here in Senate Education. The next item on the agenda is the first hearing for House Joint Resolution 28, calling on the United States Congress to pass the Kids Online Safety Act. The resolution is sponsored by Representative Ted Eichide. He is joined by his teammate today, Michael Busse. Hello, both of you.

If you could please identify yourselves for the record and begin your presentations when you are ready.

Thank you, Chair Tobin, members of the Education Committee. My name is Representative Ted Eischeid. I serve Northeast Anchorage, sometimes called North Muldoon, House District 22. And I'll let my excellent staffer introduce himself. Thank you, Chair Tobin.

Thank you, committee. Michael Bucy, for the record, Michael Bucy, staff to Representative Eichide.

And if I may, I'll continue with our presentation.

Is it on your screen?

Question for the—. Take a brief at ease.

And we're back on the record here at Senate Education. It is Friday, May 15th, and it is 3:40 PM. If you could please re-identify yourselves for the record and begin your presentation when you are ready. Yes, Representative Ted Eichide, House District 22, Northeast Anchorage, North Modune. Michael Bucy, staff to Representative Eichide.

Chair Tobin and members of committee, it's our honor to present House Joint Resolution 28, Support the Kids Online. Online Safety Act, uh, otherwise known as Senate Bill 1748. Uh, first of all, uh, this, um, resolution, uh, asks for a, a certain Senate bill to be passed that would put some reasonable guardrails on, um, uh, social media harm for teenagers and below. So anyone 16 and under. Uh, as this slide shows, um, we know that young people extensively use online platforms.

Madam Chair, when I taught for 25 years, I wrapped up my teaching career in 2015. And I remember it was about 2010, about then, that online platforms were becoming popular. And in those last 5 years of my career, they were very popular and heavily in use. And I think they've only increased since. So as you can see, 95% of teens and 40% of kids 8 to 12 use social media significantly.

And, you know, the Surgeon General has actually said this is of a health concern. And I'll get into that.

So, first of all, you know, the question is how can social media harm youth? Well, first of all, social media platforms are designed to extend engagement as long as possible. The longer a person, regardless of their age, is online, the more money they are worth worth to the platform through their advertising, so on and so forth. Um, this maximizing screen time has some effects, and the algorithms that are used that have some effects. Um, and the, uh, the items or the issues that, um, come up is increased depression, eating disorders, self-harm, uh, oftentimes vulnerability to bad actors on these social media platforms.

So, um, You know, we've seen this situation and we've been watching it happen for a good 15 years. The question is, is there any kind of reasonable response?

So that brings up our resolution, which asks Congress to pass Senate Bill 1748, the Kids Online Safety Act. This establishes several things. If you look at the whereases in the resolution, it basically details those. It establishes a duty of care for internet service platforms. And essentially, that's so that they think about kids and kind of put them first.

It would require internet service platforms to include features that protect minors and their data. Protect minors and their data. It ensures that there is the ability to opt out of algorithms, specifically marketing algorithms. It would enable minors to permanently delete their account and any associated data. Many folks have tried to delete their social media and find out the data seems to live on forever.

Um, it would also disable addictive product features. Um, and addictive product features are those design features that are intended to keep people online. Endless scrolling, um, autoplay, uh, little reinforcers. There's a number of things, um, and The final thing, just to paraphrase it, it would— COSA would require internet service platforms to default to the highest possible privacy settings for minors.

And with that, I think we are done. A very brief overview. I suspect there's some questions. And for questions, I'll probably let my excellent staffer, Michael Busey, who has been very helpful on this, take the lead, but I'm here for backup if if you need it. Well, thank you, Representative Eichardt.

Are there questions from committee members? Senator Yunt. Thank you through the chair to Representative Eichardt. It's more just a comment on the record than a question. Thank you.

This is fantastic legislation, and I really, really, really hope that this is the direction that we as a society head in. We need to do more to protect our kids. So thank you. Thank you. Thank you, Senator Yunt.

Additional questions? Senator Keehl. Thank you, Madam Chair. First question is rhetorical. I was looking at your slideshow and I zoomed in.

How did you find 9 teenagers without a single pimple? Is this AI? Okay, never mind. Forget it. I asked that.

The first real question is you talked about the bill that this resolution supports requiring that people have to be able to delete their accounts and all the associated data.

How would that ever possibly work? The— with sites like Internet Archive and Wayback Machine, and I'm sure there are a dozen I've never heard of. Well, isn't it— the risk, I guess, would be of creating a false sense of security among teenagers that don't worry, it won't last, when I think everything is forever on the internet. What am I missing?

Through the chair, Senator Keel, for the record, Michael Busey, staff to Representative Eichcheid.

I don't know how they would do it. One aspect of— I do know that is a provision in the bill, and the tone of a lot of the bill, the Senate bill, is such that it's, in my interpretation, it's a step in the right direction. It's not a— it's turning the direction of what has been a Wild West landscape of tech companies being in control of all the information, being in control of very little regulation, that this steps in the direction of regulating them by collecting information. There's provisions in the bill that require annual reporting to the FTC to clarify what do these— what does Meta know? We don't know what they know other than what the whistleblowers have shared, and it's been horrifying.

Some of the damage that they're fully aware was happening to young people, and yet they continued knowing sexual predation, body image for young women, issues, suicides, all these things that they were aware of but weren't required to report or do anything about. So how they would know— there is a provision that they can eliminate their data. I don't know how they'll do it, but there's also a task force that's part of the bill to look into best practices. That's a requirement of the bill. There's another one about age verification, best best practices.

So a step in the right direction, I guess, is my answer. And if I may add to that, uh, through the chair, uh, to Senator Kiel. So, you know, obviously way back and things like that, you can see where, you know, posts that people have done, so on and so forth. But, you know, the type of data is collected is, uh, what links have you clicked on, uh, what do you seem to like. This is a type of information that algorithms collect on you.

You know, how the social media platforms execute a clean erasure of data, well, that's on them, but that's a requirement. You know, the thing is, I'm a social media platform user. I click certain things, and I get more of that, and there's a whole database on me. This allows miners to go ahead and remove that, because privacy is important. And, you know, many of us want to break this as adults, want to break this addiction to social media.

And it's not always entirely clear how you get out of all this. And once you leave a social media platform, do they still have your data? Which means if you came back, well, you have a history. So I think it's up to the social media platforms, but that's what the law requires if this becomes law. Senator Kiel.

Thank you, Madam Chair, and I appreciate the answers and the complexity. I should start by saying I appreciate the, the efforts to curb some of the addictive design features, the, or at least the, the habit-forming design features that some of these platforms use.

There was mention of age verification, which is a concern to some folks who don't love the bill that this resolution supports. And I guess I'm a little concerned about how these platforms are going to absolutely know well enough to comply with the federal law that this customer is a child and that customer is an adult, this customer is under 17, different— different among children, without ID checks or that sort of thing, which creates its own privacy concerns. Can you talk to us about that?

Thank you. Thank you for the question, Senator Keel. Through the chair, Michael Bucy, staff to Representative Eichcheid. As far as collecting— privacy has been an issue and this bill has been amended and revisited and rewritten since it was first introduced in 2022, uh, and, um, one of the, one of the big issues was how are we going to protect privacy, uh, if, if there's going to be age verification? How are they going to know?

Uh, and so there's specific language in the, uh, in the bill, and, uh, which, uh, this is section of the Senate bill, uh, that gives that the rules of construction, in other words, Section 112 states that nothing in this title, including a determination described, shall be construed to require the affirmative collection of any personal data with respect to the age of users of a covered— that a covered platform is not already collecting in the normal course of business, which is chilling in a sense. The fact that they are collecting so much data on us that the bill specifies that there's enough data collected already that the bill makes it clear that no other information is required to be collected other than what they're already collecting to determine in sufficient— to a sufficient degree what the age level of the user is. Madam Chair. Follow-up? Uh-huh.

Can I test that with your second slide? Where it says 40% of kids 8 to 12 use social media significantly. And I think pretty much all the big social media sites forbid kids under 13 from having an account, don't they? Uh, through the chair, Senator Keele, this is a quote that I got from the Surgeon General, so I, I am— I can look into that. I'll look into where that came from.

That's a Excellent observation. Thank you. Thank you. Thank you, Senator. And through the, the chair, if I can add, just for the record, the, the section that Mr. Busey just mentioned was 112 subsection C, as in cat.

And it's pretty clear in there that social media companies are not being asked to collect additional age verification. And you, you know, as you look at this data, well, how do they know how old you are? So if you research into that a little bit deeper, a lot of people put their birth dates. They ask for your birth dates when you go on to an online account. Of course, that's not verified, but they also know based on your likes and where you go on social media platforms.

So there are profiles for age groups and the social media companies, big data, They, they have algorithms that get you pretty close, even if you don't put your birthdate on it like I don't, because I want to protect my privacy. Senator Kiel, Madam Chair, last one I have prepared. And I should say that that last question is not meant to be a gotcha. In no small part, it's an indictment of companies that say they don't let kids on, and yet somehow 40% of kids have it. Clearly some external responsibility measures are justified here.

So the other question I wanted to raise, as you start to look at this Kids Online Safety Act, the bill that this resolution supports, it's been through several iterations. It's been through several versions. And I hope you can talk about where it stands now with regard to the actual content, because there are not only First Amendment concerns, frankly, there are political manipulation concerns, right? Who gets to decide what's harmful to children? Because I— on certain issues, someone on my side of the political aisle might reach a different conclusion than someone on Senator Young's side of the political aisle.

So can you talk to us about about what the bill says and does in the version we're talking about in this resolution? Because I think it's— that's a place where it's morphed, right? Thank you for the question, Senator Keele. Through the chair, Michael Bucy, staff to Representative Reichert. Yes, the two areas of most concern was First Amendment rights content filtering.

Or censoring. And then the other was the age verification privacy issues were two of the most contentious points. And so, and in particular, the LGBTQ community made strong objections to the earlier iteration of the bill in that, again, depending on your viewpoint, you may see gender-affirming care as a horrible social ill that needs— children need to be protected from. So what was added to the bill was, um, there's a couple of— there's a couple of factors to it that protect— that address these concerns, I would say. One, they added a section, and this is Section 102, uh, something or the other, something or other, B1, 102.B.

—There we go, and thank you—and it, uh, which states that nothing in the subsection shall be construed to require covered platform to prevent or preclude any minor from searching for any content. And also, nothing in the section shall be construed to allow a government entity to enforce any, uh, any viewpoint of users expressed by or through any speech, expression, or information. So that was added in. And after that was added in, the sponsors of the bill received a letter from a number of LGBTQ groups— GLAAD, GLSEN, Human Rights Campaign, PFLAG, etc., Trevor Project— that said that they withdrew their contention to the bill. So that was a valuable addition to the bill.

Also, the FTC would be the one that would be regulating, determining Is this duty of care being implemented appropriately or too restrictively? That would be— the whole bill makes the practices much more transparent. FTC could weigh in. Attorney generals could also weigh in with civil action suits based on how things were being enforced. But all of these things are subject to First Amendment review, judicial review would always be implemented.

And these online companies are already censoring, limiting, determining what kids see, what we all see. All this is doing is opening it up so it's open to the government, to the people being able to weigh in and observe what's happening. And may I just read a short section, one sentence? Yes. Representative Eichide, if you could please identify yourself.

Yes, this is Representative Ted Eichide, House District 22. So part of that section we just referenced, this is 102.B.2. Nothing in this section shall be construed to allow a government entity to enforce subsection A based on the viewpoint of users expressed by or through any speech, expression, or information protected by the First Amendment to the Constitution of the United States. And, you know, as we all know from the billmaking process, you draft something and it's not as good as it could be. This bill has been improved in this current Congress from the previous Congress and has tried to address those concerns.

And I very much have the same love of our First Amendment and my privacy, so I would not push anything. That's an appeal to authority. You don't have to trust my authority, but it's something I live passionately with. So thank you. Thank you.

Thank you, Representative Eishide. I don't see any additional questions. I now will move on to public testimony for HJR 28. If you would like to testify, please call one of the following numbers. From Anchorage, please call 907-563-9085.

From Juneau, please call 907-586-9085. From all other locations, please call this following toll-free number, which is 1-844-586-9085. You can also email your public testimony to [email protected]. That's [email protected]. Before I open public testimony, I just want to confirm, do you have any invited testifiers?

All right, I will now open public testimony. Is there anyone here in the room who would like to to testify? Seeing none and seeing no folks online, I will now close public testimony.

If folks are amenable, I would like to move House Joint Resolution 28 from the Senate Education Committee. President Stevens. Madam Chair, I move to report House Joint Resolution 28, work order Work Order 34-LS1271/A from the Senate Education Committee with individual recommendations and attached fiscal— zero fiscal note. Without objection, House Joint Resolution 28, Work Order 34-LS1271/A, as in Anchorage, is reported from the Senate Education Committee with individual recommendations and attached zero fiscal note. We will now take a brief to sign the committee report.

And we're back on the record here in Senate Education. It is 4:02 PM on Friday, May 15th. The final item on our agenda is the first hearing for House House Bill 261, Education Funding. Before us we have a committee substitute for House Bill 261. Version T has been distributed to committee members.

It's work order draft 34-LS1293/T, as in Tanana. Senate committee aide Mike Mason is here to explain the changes from version H.A. To version T. Good afternoon. My name is Mike Mason. I am staff to Senator Lukey Gjeltobin.

This is the changes to from version H.A. To version T. They're very simple. In Section 6, subsection B, on page 11, lines 27 through 28, a version H.A. Was deleted. This removes the ability of school districts to cap the required local contribution at a 2% increase over the previous year.

As you would note in the bill that we passed out earlier, that was— moved that from 2% to 5%. This made this unnecessary. Additionally, the clause allowing the local contribution cap to be retroactively applied to fiscal year 2026, the current fiscal year, that was removed from the bill. Thank you. Thank you, Mr. Mason.

Are there any questions? Seeing none, President Stevens. Madam Chair, I move to adopt the committee substitute for House Bill 261, Work Order 34-LS1-2023.

1293/T as our working document. Without objection, Work Order 34-LS1293/T is adopted as our working document. To present House Bill 261, we are joined by the bill sponsor, Representative Story, who also co-chairs the House Education Committee. She is joined by her teammate, Tammy Smith, who is here with us today. Representative Story, please Please start your presentation when you are ready.

Thank you, Senator Tobin, and thank you, members of the Senate Education Committee. For the record, I am Representative Andy Storey, proudly serving the Mendenhall Valley here in Juneau, Fritz Cove Road, Auke Bay, out the road clear up to Haines, Skagway, Klukwan, and Gustavus. So today I come before you just really saying something you're not surprised about, but our education funding process is broken. School communities routinely do not learn their final funding levels for the upcoming school year until late May, after critical staffing and program decisions must be made. Community, staff, and administrative time and energy are spent agonizing over what to cut and redoing budgets rather than focusing on improving student achievement.

This backward budgeting process forces districts into guesswork, creates annual instability, contributes to outward migration of teachers and families, and undermines the confidence in our public education system. This timeline forces districts to deliver a notice of possible non-retention, the pink slips, in the late spring, causing educators to be left in limbo unsure whether they have a contract for the following upcoming school year. This matters because education operates in a competitive labor market. In the middle of a national teacher shortage, Alaska's families, children, and communities cannot wait until the rest of the nation has already recruited the best teachers. If we want to compete, districts need the ability to call— offer contracts when teachers are making employment decisions, not months later.

And we want to keep our beloved teachers and have them let them know that they have a job. We can fix this. House Bill 261 before you reforms our education funding policy, the student count process, and our budget timeline. House Bill 261 allows districts starting July 1st of the current school year to use either the prior 3-year average of the verified student count or the previous year's —verified student count for their budget work. This multi-year averaging process is a common and responsible budgeting practice being used in 26 other states.

This was recommended over a decade ago in a study the Alaska Legislature commissioned on a review of our education funding process. And again, in November, we reviewed that study as part of the Education Funding Task Force. In this study, it often refers to this adjustment as a declining enrollment adjustment. In other states, that's what they call it. Part of it has been we have declining birth rates now.

We have other school choice options that families are choosing. So our schools, our neighborhood schools, are having to adjust to a declining enrollment adjustment. And I think it's important to note that in Alaska, We have about 80% of our students are in their neighborhood community school and about 20% are homeschool and correspondence. So the stability that averaging provides will help districts absorb major resource shifts, plan for enrollment and budget fluctuations, and plan their academic programs. The Alaska Association of School Administrators— School Business Finance officials, in consultation with Legislative Finance, provided some modeling on this, and we'll have a presentation from Katie Parrott, who's the president of ALASBO, shortly.

We have a short PowerPoint on this, and it— I'm going to kind of breeze through the beginning of it because it's kind of went over a little bit of what I just went over. So right away, if you want to— and sorry, Tammy, I didn't let you introduce yourself. I'm Tammy Smith, for the record, staff for Representative Storey. Thank you. So this is the timeline of our current education funding process.

And I wanted to say that in our Alaska statute 14-17600, we are keeping our our school enrollment process, how we verify our student counts. It says, and district— districts must report enrollment based on a 20-day school day period ending the 4th Friday in October. The count determines state aid. And so we are keeping that process in place because we need to have our student counts verified every year. So I'm not going to walk you through that timeline, but that is our current process, which shows that in oct— we do not finish our budget, what is it, May 20th now?

And so that's after municipal budget deadlines for school budgets. It's after when teachers are supposed to be notified whether they will be hired back in the school year. So on the next slide, this just talks a little bit about the stress that I talked to you about. The next slide is saying there is another way And this is a slide on the student count alternatives, and the source is Justin Silverstein, who is CEO of Augenblick, Palish and Associates, and they did the review for us in 2015, and he also spoke to us. He was hoping to be online today, but his schedule got changed, but he will be available at any time for questions.

So this is the different count methods. The next, um, Page is just talking about the benefits of an appropriately timed budget process, which again, the biggest one to me is it allows for teacher and staff contracts to be signed earlier, reducing turnover and making the state more competitive in hiring our teachers. And again, for our teaching staff, of course, they might have a mortgage, they have bills to pay, and what state gives notice of non-retention in, like, April, May, and then expects them to hire them back after we finish our budgeting processes? Anyway, this next slide shows you how it is calculated. It talks about the prior 3 years.

Which is the average of the student counts from October 22nd, 23rd, and 24th. That's the prior 3-year average. And then, or the previous year. And I've used this just as an example as if we were picking our student counts for July 1st of, uh, 2026. So those are the 2 choices.

And one amendment that was made in the House, um, floor was to allow for an adjustment if a district got more students in the previous year student count.

And then going on to the next one, this also was recommended in the report. We have something very unique in Alaska. It's Alaska Statute 14-17-905, and it's called Facilities constituting a school. And what we do is at 100 students and 425 students, we allow communities to decide if they want to go from 1 to 2 schools or 2 to 3. So if you are 100 students, you hit 100, you can all of a sudden have a K through 6 and then a 6 through 12.

And what happens if you fall below 100? Then all of a sudden you're you get significant funding for two schools. So you lose a significant amount of money. So this recognizes this adjustment. When small changes in school and district-level student counts happen, they may lead to large changes in funding, which leaves that district scrambling because they will have to cut something in the prior year, in that current year, in April, May, June, the last three months of the school year.

So a few other things that this bill does. It adjusts the intensive needs student count. As we know, intensive students have complex needs and they require additional staffing to meet their individual education plans. So it allows districts to use the previous year, the current year, or the current year intensive needs student count taken, um, on February 15th. It allows for the first time something that's been requested for quite a while from school districts to allow a second count in February.

When you get an intensive student, that student has complex needs, and oftentimes you are hiring a staff person for them. And so this allows the district to have that money for the staff person. It's also clear in the bill that the current district does not lose that staff person. They already have a contract with that, uh, with that district and there are plenty of needs in our special education students in that district. So there would be plenty for that staff person to do.

Then the last couple of things the bill does with the alternative school count, it corrects something. Right now our alternative schools with an average daily membership of fewer than 175 students would be counted as their own school rather than as part of the biggest school in the district. So here's a good example. In my hometown right here in Juneau, at our high school, we have— our high school is over 750 kids, and we have a special alternative school, and that's about 85 students. And those 85 students are placed inside the school size factor for the larger high school.

So that factor is 0.84, and so those alternative school students are in a school running below the 1-point factor. They're— it's actually the 0.84. And so this would give them their own school size adjustment, allowing for that school to meet their own students' more complex needs. And then again, I already spoke about this increased enrollment. It allows a district— what happened on the House floor, it allows a district to be responsive to a current situation.

So I know if we would get more Coast Guard families and they come in in October and we all of a sudden need to serve 50 more students, it would allow Deed to give that extra resources once they have verified all those student counts. And then the last thing I want to say in this part of the presentation was districts— we have a hold harmless clause now. If you lose students, 5% of your student population, and that is grandfathered, that is deleted from the statute in front of you. But we do grandfather in those districts who are currently in hold harmless status. They will just this transition to the adjusted student count.

And right now, this is our really our last year. We— DEED shows that there are not any more districts after that. So it would be— the fiscal note is $113 million for the averaging. It would— the projections show it would be about $108 million next year. DEED shows, if you look at the fiscal note, that's flat for the averaging.

But The Alaska School of Business official shows a decline. And so the last slide, I did want to say we just talked about the required local contribution. So that is removed from this bill, but they did— the House did add funding for the READS Act and for career technical education, and that was also put in this bill. Just kind of in closing, I wanted to say it's really time to fix our educational funding process so we can focus on student achievement and give some budget stability to our system. This is just one step forward.

This is not going to solve everything in education. We still need to be resolved in how much we are going to invest in our students. We will still have to have— be base student allocation conversations, one-time funding conversations, but changing our student count process can really put us on a good path to more success. So I thank you for your consideration, and we have two invited testifiers today. Thank you.

Thank you, Representative Story. Are there any questions? Seeing none, we're going to move on to your first invited testifier. I do want to note we do have on the line and And please correct me if I'm wrong, but we have Commissioner Bishop here who I believe is there to answer questions. We also have Lori Weed, the school finance manager from Deed, who I believe is also online to answer questions.

And we have Heather Heineken, the director of finance and support services from Deed, who I also believe is on the line to answer questions. Just so folks have additional questions, please know that those resources are available to us. We are also joined here in the room by Connor Bell with Legislative Finance, who is our education Finance Analyst, and I believe has also been doing some modeling as well to provide additional support on any potential questions. With that, once again, are there any questions from committee members? Seeing none, we'll move on to your first invited testifier.

We are joined by the superintendent from the Kodiak Island Borough School District. I believe you are on the line, Dr. Mika, if you could please— Mika. Mika. Thank you, President Stevens. Dr. Mika, if you could please identify yourself for the record.

And begin your remarks when you are ready. I will ask if you could possibly keep your remarks to about 5 minutes, as we do have several other folks who are waiting for public testimony.

Thank you. Good afternoon, Chair Tobin and members of the Senate Education Committee. For the record, my name is Dr. Cindy Micka, and I serve as the superintendent of the Kodiak Island Borough School District. Thank you for the opportunity to provide invited testimony in support of House House Bill 261. I strongly support this bill because it brings greater stability, predictability, and responsiveness to Alaska's education funding system.

One of the biggest challenges districts face each year is that we are required to build budgets, issue contracts, make staffing decisions, and submit local funding requests to the boroughs long before we know our final enrollment-based funding numbers. That uncertainty creates instability not only for districts but also for employees, students, and our community. In Alaska, districts are often forced into making major decisions based on estimates and assumptions rather than actual numbers. House Bill 261 helps address that challenge by allowing districts to utilize the greater of the prior 3-year ADM average, the prior year ADM, or the current year ADM. From a superintendent's perspective, that matters tremendously. Last year, our district made the difficult decision to close one of our elementary schools and reconfigure all of our schools in order to address declining enrollment and ongoing financial pressures.

This year, our board again faced incredibly difficult decisions whether to close another elementary school or reduce approximately 35 positions totaling about $2.7 million in reductions without knowing what our enrollment's going to be next year. Ultimately, the board chose to reduce positions and attempt to keep one of our three elementary schools open in case we have student enrollment. Those are not decisions any district wants to make, and we are making them without truly knowing what our final budget will be. Instead, we are forced to build budgets based on our best estimate of what we think our ADM may be. House Bill 261 gives districts the ability to make more educated and informed decisions by utilizing a more stable and predictable average ADM model.

That— that stability matters when making decisions that impact school staffing and entire communities. It also allows districts to build more accurate budgets earlier in the process, which improves planning planning reduces disruption and helps us retain staff. In a statewide and national teacher shortage, timing matters. Educators are making employment decisions months before districts know their final funding levels. Greater predictability helps us complete— compete for and retain high-quality staff in Alaska.

This bill is also important for district districts experiencing enrollment shifts or growth during the school year. Kodiak, like many districts, can see movement in enrollment connected to military families, workforce changes, housing availability, availability, or economic shifts. Under the current system, districts can experience growth without receiving timely funding aligned to those students. House Bill 261 recognizes current year growth and allows districts to access funding connected to actual enrollment increases. Another critical component is the adjustment related to intensive needs students.

Students requiring intensive services often arrive after the October count period, or districts may identify additional needs later in the school year. These students require significant staffing and supports must immediately, not the following year. House Bill 261 provides districts flexibility by allowing use of the previous count, current count, or an additional February count for intensive needs funding. That flexibility is extremely important because intensive needs services are not optional. Districts must provide those services regardless of whether funding catches up in time.

This bill better aligns funding with the actual students we are serving. I also appreciate that House Bill 261 continues to prioritize student achievement through support for reading intervention efforts under the READS Act, as well as career and technical education opportunities for students across Alaska. Finally, I would emphasize that House Bill 261 is not simply about finance formulas. It is about creating a more stable educational environment for students and our communities. When districts can plan earlier and more accurately, we spend less time rebuilding budgets and responding to uncertainty and more time focusing on teaching, learning, and student outcomes.

Thank you again for the opportunity to testify before you today, and I respectfully urge your support of House Bill 261. Thank you. Thank you. Thank you for your testimony. Are there any questions from committee members?

Seeing none, we'll move on to your second invited testifier, who I believe has a brief presentation for us. We are joined by Katie Perrotte with the Alaska Association of School Business Officials, who is the president and senior director, uh, and I believe also, uh, works within the Anchorage School District. Okay, Miss Perrotte, can you hear us? Yes, can you hear me? You're a little bit quiet.

I think we're working on the volume, and we've gotten your presentation up on the screen, so please identify yourself when you're ready and begin your presentation when you are ready. All right, thank you very much. Good afternoon, Chair Tobin and members of the committee. My name is Katie Parrott, and I am the president of the Alaska Association of School Business Officials. We are an affiliate organization of the Association of School Business Officials International and also an associate organizational member of the Alaska Council of School Administrators.

I'm also a board member there. So I'm— instead of getting into kind of the problem statement, I know that you guys know that there are several levels of variability that exist within our system that make it really challenging when we're projecting our funding and budgeting, and that those student counts that take place within the year that we've already established a budget can have some variability that gets trued up and that can make it really difficult for just long-term financial planning and reliability. And so some districts do work with demographers to do those projections for enrollments. And even then, we— those don't— there are just factors in the system that don't always get those right. And so really HB 261, from our perspective, solves the issue, takes one element of variability out of the system by allowing prior years' known enrollment to be used to provide that funding moving forward, while also allowing for districts who are in a growth phase to use the prior year to be provided funds that they need to support students who are actually showing up in the classroom.

And so, um, we did do some modeling to take a look at kind of what was happening in the system and what some of those costs might be and how these changes would affect things going forward. And we've laid out a methodology in this presentation that kind of takes a look at that. The enrollment trends over the last 10 or 20 years were really skewed by the COVID years. There were some pretty huge fluctuations in those years that made it pretty difficult to kind of have a predictable trend to apply moving forward. I'm going to qualify this with that, but when we kind of take a look at those years, we section out the last 5 years and do a small adjustment for the outliers, for the districts that experienced really large dips districts, but then really large rebounds in that first of the 5 years, we kind of come up with a pretty set enrollment trend rate for every district.

And so essentially we just took the elements of this bill and modeled that out and, and kind of identified some of the areas where this would provide needed funding. And in doing so, our projection for that first year of implementation implementation very closely matched the fiscal note that Deed provided when we accounted for all of those changes. And I know that in taking a look at that fiscal note that there was some concern and some discussion in the other body related to those additional funds and the way that this bill works. And I want to comment on a couple of those. One, one issue of concern was really almost providing duplicative funding for students that may have left the system or gone to other districts if you provide for an averaging that adds back in some of those ADMs.

But we do already have a hold harmless provision that does some of that. And the other thing that I really want to make sure that's understood is that this formula works as a mechanism overall to provide for the needs of the system. And so one thing that's not being taken into consideration in those conversations is the reductions that have already taken place per student over the last 10 or 15 years in ways that the funding has reduced in, in ways that have actually outpaced the declining enrollment. So, and, and we can look at that in a couple of areas. One of those areas is by identifying and kind of isolating out different portions of the ADM and what that generates in terms of real dollars.

And when you look at what was generated over a period of time by the 0.2 factor for special services, which includes our SPED students, ELL, gifted, and vocational. So over 10 years, the, the reduction in the amount that was generated by that factor was almost $800,000 in, in a decrease in real dollars. And, um, but that's within the consideration, even though that primary population, uh, grew by a factor of 14% over the same period. And so that reduction in funding has really real consequences for providing for the needs of students. Additionally, we do receive the funding per student at a 13 multiplier for intensive needs.

However, when the BSA remains flat, that dollar amount per student also remains flat, and the needs of those students have, and kind of the trends in our recruitment and retention issues, has led to some of those hard-to-fill positions being exactly those positions that serve those students. And so while the funding to provide for the needs of those students remain flat with the BSA, the requirements of competitive wages and benefits to be able to actually recruit and retain the professionals that would serve those students has gone up dramatically. Last but certainly not least, when we're talking about context, I think it's really important to note that the alternative school students who may be making use of those programs, they tend to be students who do have unique additional needs that often require support services or an atypical education model that has a cost to it in order to ensure their success success. However, the current formula for students who are in small alternative schools in smaller communities, they generate less revenue to be able to provide for the support for those students' needs on average in ways that are, are really kind of shocking. So for example, when you take a look and isolate what's generated on average for a non-correspondent student in all of the districts across across the state.

For those districts that have alternative schools that are smaller, that don't get a school size adjustment factor, they— those students receive somewhere between 0.67 and 0.85 of the students who are in the other schools in that system. And so they're actually receiving, it looks like, less than a correspondence student. And so being able to make those adjustments adjustments in the formula that would add back in some resource for those students to better meet their actual needs is really recommended. We also took a look and saw that there is a decline that tends to— in terms of the additional funding that's required over the period of years after the first year, there does tend to be a decline that kind of follows that smoothing of a declining enrollment trend in the out years. And so there's that initial investment that assists with reestablishing a baseline, essentially, that in our estimation better matches what districts really need to be able to provide for the needs of their students.

And what we're seeing is there's some measures and mechanisms within the formula that we have actually disproportionately lost revenue per student due to steeply rising costs and flat funding. So we really strongly support this bill. There were some amendments that were made by the House that were, in our estimation, really great ones that added or addressed some of the technical aspects of the bill that we would like to see and provided for some of those more specific targeted resources, which makes sense to us because another element that's working within the system is there has been unfunded mandates, essentially, that have been passed down to districts that haven't been kind of equated for anywhere in the system either. And so when we're taking a look at this and what this essentially does and costs over time, It really does provide smoothing that will create a great deal of predictability for districts and for the state, because the state is now establishing a budget on actual known enrollment rather than our projections. So that takes one element out, and it also kind of adds back in some resources that we've lost over time due to how the formula has or has not worked to keep up with the cost of meeting the needs for the student population that are presenting in our schools.

So in the interest of time, I'm going to stop there, and I'm happy to answer questions or to go into elements of the modeling in more detail. Well, thank you very much, Ms. Parrott— uh, Parrott. I really appreciate that. I do want to go back to that previous slide if we can, as we can walk through the fiscal notes now with the folks who are online from the Department of Education and Early Development, because this is a different projection than what they have in OMB component 141.

I believe we are joined by Heather Heineken. Ms. Heineken, if you are here to walk us through the fiscal notes, or Ms. Weed, if you are— if one of you could to unmute yourselves and identify yourself for the record and walk us through the fiscal notes.

Uh, good afternoon, Chair Tobin, uh, and Senate Education Committee members. For the record, my name is Heather Heineken and I serve as the Director of Finance and Support Services for the Department of Ed and Early Development. Um, so I have the fiscal notes for HB 261, however, with the committee substitute, they are going to be changed. They will actually likely go down a little bit. And the component number that actually has the financial data in it is component 2804, the Public Education Fund.

And so, when we created these, the bill sponsor relied on the department to create the fiscal modeling. And unfortunately, we don't have the capacity or software necessary to really do true modeling. And so we're basing it on current data that we have within the department. So the fiscal note prepared for House Bill 261 reflects the projected cost to the public education fund of $154 million. $50,000 In fiscal year '27, $166,285 in fiscal year '28, $179,619 in FY '29, $194,031 in 2030, $209,572,000 in 2031, and $226,000 $26,251,000 in 2032.

And I'll refer to the control number just for reference. It's control code LX0XI. And so, with that— with that fiscal note, there is also a supplemental necessary for FY '26 of $10,459,000. However, with the committee substitute, that supplemental would be removed. A couple of things that, that are outlined in this fiscal note.

It's based on the district— calculates the basic need to a district based on the greater of the previous year's ADM, the prior 3-year average ADM, or the current year ADM. It removes hold harmless provisions tied to school size factors with transition language for districts that are currently eligible for whole harmless to continue. It includes language to count alternative programs under 175 as eligible for a separate school size adjustment. It provides options for intensive student funding counts, including the greater of prior year count, current year October count, or later current year February count. And it establishes this Fiscal note establishes a cap of 2% of the annual growth for required local contribution based on $2.65 mils of full and true property value and is, again, retroactive to July 1st, creating the need for the supplemental funding.

So the next fiscal note is the Foundation Program, OMB component number 0141. And this is a zero-dollar fiscal note for the Foundation Program because it's a component— the funding mechanism is a general fund transfer to the Public Education Fund, which reflects the funding needs for this bill. And then there is a fiscal note for School Finance and Facilities, OMB component number 2737. .37, And this supplemental, um, for school finance and facilities will require a one-time increment of $18 million for legal services to establish new regulations. These regulations will cover the approval of a package regarding the alternative programs to prevent inappropriate use of school site funding mechanism following the removal of the minimum ADM requirement.

Regulations and reporting requirements established for CTE budgeting and reporting language, and it'll create reporting processes and timelines for the alternative intensive student count date. And then the final fiscal note is Monarch High School, which is OMB component number 1060, which is a division of the Department of Education and Early Development. Uh, this is a technical note, um, because it's budgeted as interagency receipts, and this fiscal note adjusts their receipt authority to align with the estimated allocation from the Public Education Fund. So, uh, for 2027, that would be $37,900, and $115,400 in the fiscal years '28 through '32. And I'm happy to answer any questions.

Thank you, Ms. Heiniken. Are there any questions? Senator Keehl. Thank you, Madam Chair. Director, you talked about regulations to prevent misuse of the small school element of the bill, removing the minimum ADM for that.

My sense of that provision is that it's a very pro-charter school type provision. What are the abuse cases that you are have you concerned?

Uh, thank you for the question. Through the chair to Senator Keel, I would like to ask actually Commissioner Bishop to speak to that. She's got more direct involvement in the alternative programs, if possible.

Dr. Bishop, if you are online, if you could please unmute yourself, and if you need Senator Keel to restate the question, I'm sure he would be happy to.

Thank you. Through the chair, thank you, Senator Tobin. My name is Dina Bishop. For the record, I'm the Commissioner of Education for the Department of Education and Early Development. And is to Senator Keel's question, and I, I don't want to present any information that there would be a deliberate misuse of state statute or regulation by a school district.

However, when provisions are open without guardrails, there could be access to programming that grows unnecessarily. So for instance, I was contacted this year to be able to, within one school site of a really a district of all their elementary schools, could they turn them into "Can I have, you know, a charter school or a neighborhood school and a correspondence school together and then count them as two different schools?" And I said, "Well, you can certainly, you know, do that flexibility, but you're under one roof, and so you're using the same custodian, the same office staff." But, you know, like, tell me how you would want to do this. And so that, that's just an example from this year of really trying to maximize the formula. I can share a story. And the Anchor School District, when I went there years ago, we just had some schools that were all tiny under the alternative school program, and they were considered schools with different school numbers, but their origin were really programs.

And one had started back in the '70s and was, at that time, it was a different It was started as a school for pregnant students. And, you know, here we were in 2016 when I went there, and there were 12 students enrolled, and it was a school, but it had to be rolled in under the largest school. As well as there were 2 other very small programs, one a little over 100, one about 60. And what we were able to do was actually, rather than have them be utilized at that time as 3 separate schools that weren't really getting the funding. We combined them into one, and actually we were able to put more money towards student services.

And so really thinking about the provisions and the reasons why we have alternative schools, and then what would be the resources we would need. And so it's not really about misuse or mis— Trust, it is really about how is the best way to use public education money so that we can service students and put more funds into student services in the organization. And I do foresee lots of different programs that we have now for students who do absolutely, like Representative Story shared, need some type of different alternative program. Right now it is operated as a program that could turn into separate schools. And we could see multiple grow, and then they would be under a division, and you're thinking, well, are they in the same school?

Are they using the same resources? So that just gives a few examples that are true that actually I personally dealt with this year working with the school district, as well as myself really trying to save money in the Anchor School District. Now, if I was still there, I would— immediately disperse those 3 programs back into separate schools if I were to be able to receive funding.

Thank you. Thank you, Dr. Bishop. I do want to note for the record that we were joined by Senator Bjorkman at 4:40 PM, and we have had the presence of the other co-chair of House Education, Representative Himshew, since we adjourned and started this meeting— since we gavelled into this meeting. Additional questions from committee members?

Representative Story. May I make a comment, Senator Tobin? I'll try and be brief. Yes, I appreciate Deed looking at the fiscal notes and also Katie Parrott with the LASBO, and I wanted to point out that what you see on the screen, Ms. Parrott, is the averaging is what she is doing, the $113,000. And so what I did, and thanks to Deed, they broke up the components to me to get to the $150,000.

$154 Million that was referenced for this year. And that's the $113 million, the $10 million for the required local contribution, the $10 million for CTE, and the $22 million for reading grants. So it gets to the $158 million on this page. At least that was what I was trying to piece together when I was looking at the numbers here in the current fiscal notes. So please be aware that there are other components that we've added in the bill.

Thank you. Thank you. Thank you, Representative Story. Seeing no other questions from committee members, I am now going to move on to invited testimony— or excuse me, to public testimony for House Bill 261. For folks who would like to testify, here are the following numbers.

From Anchorage, if you would call 907-563-9085. From Juneau, please call 907-586-9085. From all other locales please call this toll-free number, which is 1-844-586-9085. You can also email your public testimony to [email protected]. That's [email protected].

I will now open public testimony. Is there anyone here in the room who would like to testify? Come on up. If you could please identify yourself for the record and begin your remarks. I will be limiting public testimony to 2 minutes.

Mr. Garrison, when you are ready.

Thank you. For the record, my name is Lon Garrison. I'm the Executive Director of the Association of Alaska School Boards. Chair Tobin and members of the Senate Education Committee, ASB supports the central objectives of Committee Substitute House Bill 261 because the bill addresses addresses a longstanding challenge in Alaska's education system, the lack of predictability in school funding timelines. School boards are often required to adopt budgets that make staffing decisions and issue contracts months before they have confidence in revenue projections.

The result has been repeated budget revisions, uncertainty for educators, delayed hiring, and the instability for students and communities. The core framework of HB 261 allowing districts to use prior enrollment data establishes more stable and predictable funding estimates. It provides districts with greater ability to plan responsibly and retain educators and focus on student achievement rather than the annual budget disruption. The stability is important. It enables boards to make earlier decisions and improve recruitment and increasingly in an increasingly competitive labor market and reduce uncertainty for teachers who otherwise may not know whether they have a position for the subsequent year.

We particularly appreciate the continued efforts to improve the responsiveness to intensive needs student populations, smooth the funding cliffs for small districts, and provide additional consideration for alternative schools serving students who often require more individualized supports. At the same time, ASB believes it's important to recognize what this bill does not do. HB 261 does not address the root causes of declining enrollment, nor does it replace the need for adequate, sustainable, and predictable investment in public education. Structural improvements to funding delivery are valuable, but they are not substitutes for addressing our long-term adequacy of public education. Overall, HB 261 aligns well with the ASB's legislative priorities supporting predictable, sustainable education funding and investments in educators, policies that strengthen local governance in the service of student achievement.

So it reflects ASB's longstanding beliefs and support stable, equitable funding for systems and local decision-making. Thank you. Thank you. Thank you, Mr. Garrison. I'm sure Mary Gwen would appreciate we would appreciate if you would give her your comments.

And that goes for anyone else who is chiming in for testimony. If you have written comments, please email them to [email protected], and that way we can ensure that your entirety of your comments are accurately reflected on the public record. Seeing no one else who is interested in providing public testimony here in the room, we'll now move online. We are joined by the President of NEA from Fairbanks, Laura— If you could please identify yourself for the record and begin your testimony. You have 2 minutes.

Good afternoon, Madam Chair and members of the committee. My name is Laura Cappell. I'm president of NEA Alaska. Thousands of NEA Alaska members work near— in nearly every community in the state, urban and rural, and we care deeply about issues of equity and fairness. I'm here today to support and and, uh, to testify in support of HB 261, adjusting ADM counting practices that will best and most accurately support students in our district.

I urge you to support the stability measures integrated into HB 261 with the original SB 278 amendment as well. We were disappointed to see the removal of the 2% cap to slow the growth of the required local contribution. A 2% cap provides the most meaningful relief for our municipal governments and property owners. I want to talk about why the proposal to slow the shift of the state's constitutional burden—. Miss Cappell, unfortunately you're testifying under House Bill 261, which has been amended, and Senate Bill 278 is no longer in this committee.

So if you could please keep your remarks to House Bill 261, we'd really appreciate it.

Um, I— well, so you're saying that Senate Bill 278, even as it's been moved to substitute, isn't in 261 anymore? Or— because I would like to speak about the, uh, about the basic values in Senate Bill 278, even though it has been changed. Uh, Ms. Kelly, if you'd like to do so, I believe there will be public testimony in Senate Finance where that bill is now residing, and that would be the time to talk on the policies in Senate Bill 278.

Um, okay, thank you. Thank you. Thank you for your testimony. We'll now move on to HUNA, where we're joined by Superintendent Susan Nezda. Miss Nezda, if you could please identify yourself for the record and begin your testimony when you are ready.

Okay, can you hear me okay? We can.

Okay, so, Chair Toman and members of the committee, thank you for the opportunity to speak with you today. For the record, my name is Susan Medda and I'm the superintendent for Hoonah City School District. I'm here today to testify in support of HB 261. This bill includes many items I support, such as stability and funding, CTE funding provisions, reading incentive funds, and intensive needs support. Each of these items is important for their own reasons.

Stable, predictable funding in any form is vital to our budgetary process. When we are able to predict funding for 3 to 5 years, we are able to provide stability for our families and for our staff. This leads to retention and recruitment improvement and is a much better foundation for our students. CTE funding is becoming more and more important for us in Hoonah. We are doing everything we can to reopen our woodshop shop and our auto shop, as these have been identified as future employment pathways our students want and need.

We are also structuring our school year to include intensive weeks that are CTE-focused and just completed a pilot week of this design where 13 students and a teacher gained emergency trauma technician certification, which gives them an employment pathway and a way to keep themselves and our city safe, especially given our, our remote location. We were able to complete our pilot by leveraging community partners and grant funds, but cannot sustain these programs without state support. I want to support the reading incentives in this bill as well. This would somewhat soften the unfunded mandate of the Alaska Reads Act. This work is making a difference, but has created funding pressures on the school.

I also want to speak to the intent needs 2 times per year count options. This allows better support for services needed for these vulnerable students. As you've heard before, students who arrive to us or are identified need immediate support. We immediately have to provide equipment, provide staffing, um, to make sure that their needs are met. If we have to wait a full year for this funding, it creates more of a burden on our overall budget.

I appreciate your time today and thank you for the opportunity to speak. Thank you. Thank you for your testimony. We'll now move to Thorn Bay, where we are joined by the superintendent from Southeast Island School District, Mr. Rob Morrison.

Mr. Morrison, if you could please identify yourself for the record and begin your remarks. You have 2 minutes.

We will come back We also will move on to Anchorage where we are joined by Joseph Turnbull. Mr. Turnbull, if you could please identify yourself for the record and begin your remarks. You have 2 minutes.

We will move on to Chugiak where we are joined by the president of the Anchorage Education Association, Kristi Stitz, who also seems to have dropped off. We will now move to Anchorage where we have the policy director for the Municipality of Anchorage, Nolan Clouda. Mr. Clouda, if you could please identify yourself for the record. Also not there. All right, we'll move to Soldotna where we are joined by the teachers on the Kenai Peninsula, teacher Derek Ratliff.

Mr. Ratliff, if you could please identify yourself for the record and begin your testimony. You have 2 minutes. Derek Ratliff. Good afternoon, Madam Chair and members of the committee. My name is Derek Ratliff.

I am a classroom teacher here on the Kenai Peninsula. I am here to urge your support for the stability and fairness measures integrated in House Bill 261. Every single day, my fellow educators and families of students talk about the same thing— the increase in the cost of living in this area, from the grocery store to the heating bills thanks to the gas pumps, um, increasing it every day. Everything in Kenai costs more. But while Kenai families are feeling the squeeze in their personal budgets, our schools are being dismantled by a broken state funding formula.

We aren't just talking about abstract figures or spreadsheets anymore. This month, our school board was forced to pass a budget that fundamentally rips apart the fabric of our communities.

It could only fund to the floor due to these increasing costs for them as well. Because of our multi-million dollar deficit, this school year will be the last for Sterling Elementary, Seward Middle, Tustumene Elementary, and River City Academy. We are shutting down neighborhood hubs, forcing elementary kids into overlong hours over long-hour bus rides and eliminating essential special education and therapy services into our rural communities. On top of that, we are stripping away our school libraries, defunding community pools, and slashing extracurricular activities. The tragedy is that— the tragedy is that on paper, the state says Kenai is thriving because of borough property values went up.

But our local mayor and assembly members have pointed out a spike in property assessment doesn't mean a single dollar into our schools— doesn't bring a single dollar into our schools. Instead, it triggers an automatic clawback into the state formula. The state is using our rising paper wealth as a 100% discount, Mr. Ratliff, on our constitutional obligation to fund education. Mr. Ratliff, if you could wrap up your comments. You've hit your 2-minute mark.

Okay, um, yeah, so I, I mean, basically we, we just need to defund it as, as the property values, um, aren't putting money into our schools.

Thank you. Thank you for your testimony. Thank you for your time. We will now move on to Haynes, where we are joined by the superintendent of the Haynesboro School District, Lily Boron. Miss Boron, if you could please identify yourself for the record and begin your testimony when you are ready.

You have 2 minutes. Good afternoon, Chair Tobin and members of the Senate Education Committee. For the record, my name is Lily Boron and I'm superintendent of the Haynesboro School District. I'm calling today in strong support of House Bill 261. I greatly appreciate the time and the effort that went into developing this bill to provide school districts with much-needed stability and predictability.

For a small district like Haines, our limited fund balance cannot absorb unexpected costs resulting from major enrollment changes or inflationary increases in heating fuel, insurance, transportation, and more. HB 261 helps districts make more accurate enrollment projections, reduces uncertainty in the budgeting process, and supports earlier decisions regarding teacher contracts and student programming. Right now, uncertainty about enrollment and funding delays staffing decisions, causing districts like ours to lose qualified employees to other opportunities. And by the time actual enrollment numbers are finalized in the fall, it is often too late to hire the qualified staff, students. We want to be fully prepared for students on day one.

Not months after the school year has already begun. Additionally, the increase to the CTE funding factor will help Haines students— help support Haines students and contribute to building a highly skilled workforce of graduates. Support for reading will help sustain the gains we have made in early literacy by allowing us to continue training our teachers in the science of reading. The stability offered by HB 261 matters for students, students, families, and communities across Alaska, especially in rural districts where staffing and recruitment challenges are already significant. I respectfully urge your support.

Thank you for your time. Thank you. Thank you for your testimony. I don't see anyone else online who is available to testify.

With that, I'm going to close public testimony. I'm going to hold HB 261 until tomorrow at 11:00 AM where we will meet again to discuss the legislation. If folks are considering amendments to this legislation, please work with the bill sponsor and my office so that we can work on that committee substitute.

I'm going to try to do this as best as I can. We are going to recess until 11:00 AM tomorrow to continue this hearing. So that we can ensure that we are able to meet together and have that time. Brief at ease. Brief at ease.

Wait, is that— And we're back on the record here in Senate Education. We are recessing till 11:00 AM tomorrow. That means tomorrow's Senate Education Committee previously noticed for 1:00 PM is canceled. With that, and there's no other business before us today, I will adjourn us at 5:01 PM.