The education funding debate at the Alaska State Capitol shifted again Wednesday with a major rewrite of a bill backed by the mostly Democratic House majority before it was sent the floor. It now raises per-pupil funding by $1,000 a year — rather than $1,249 next year and a total of $2,550 over three years — and adds numerous policy provisions.
The funding increase remains the largest among the three main proposals being offered by policymakers in the House, Senate and governor’s office. The state is facing a sizeable budget deficit and legislative leaders are saying an increase in education funding may be tied to a decrease in money allocated for Permanent Fund dividends.
House Bill 69 is tentatively scheduled to be debated on the House floor next week after the House Rules Committee — normally a gatekeeper for controlling which bills advance to the floor — held a rare meeting where legislation was discussed and amended at length.
Rep. Rebecca Himschoot, a Sitka independent who is the primary sponsor of HB 69, said the increase originally sought in her bill was to make up for the erosive effects of inflation since 2011, since per-pupil funding has changed relatively little since then.
“In good faith compromise we brought the number down to $1,000,” she told the committee.
That amount, an increase from the one-time $680 hike in the statutory $5,960 Base Student Allocation in effect this year, would prevent the worst of the cutbacks being proposed that include closing schools, layoffs and program cuts, according to statewide school district officials. The Juneau School District is drafting its budget for next year on a presumed $400 BSA increase.
Other changes to HB 69 include partial concessions to some goals sought by Republican Gov. Mike Dunleavy such as making it easier for charter schools to operate, and establishing a task force to study a task force to investigate accountability measures and ways to reduce regulations on districts. It also would require districts to implement limits on students’ cellphone use — a broadly supported goal this session — and allow open “lottery-based enrollment and sibling priority” within districts.
Also included in the bill sent to the floor is an amendment by minority caucus member Mia Costello, an Anchorage Republican, expanding provisions of the Alaska Reads Act for K-3 students to include those in grades 4-6, at a cost of about $22 million. Rejected by the committee were three other minority caucus amendments shrinking the BSA increase to $300, boosting funding for correspondence school students and adopting a wide range of specific policy provisions sought by Dunleavy.
The 19-member House minority caucus issued a statement after the meeting declaring the current bill comes after “closed-door negotiations that eventually excluded House Republicans and the public,” and “while the bill now includes minor policy changes, no funding source has been identified to cover the additional costs.”
That sets the stage for a showdown involving the proposals from three major powerbrokers at the Capitol:
• The “liberal” HB 69 that would raise the BSA to $6,960 for the fiscal year beginning July 1, along with the modest policy reforms. The total cost of the estimated BSA increase is about $250 million next year, compared to the $325 million in the original bill. The revised version also removes BSA increases the following two years and automatic inflation adjustments.
• A “moderate” funding presumption by the bipartisan Senate majority that raises the BSA by the same $680 in effect this year, at a total cost of about $175 million, that also considers some policy reforms.
• A “conservative” education package proposed by Dunleavy that contains no BSA increase, instead directing about $180 million to a range of targeted spending areas including teacher retention bonuses and student transportation. Critics say the bill would direct 40% of the additional funding to homeschool programs, which serve about 17% of Alaska’s students.
All three proposals would result in a state deficit of more than $500 billion if the budget also includes a PFD of about $1,419 based on the “75-25” formula used the past two years that directs the larger share of Permanent Fund earnings to state spending. Dunleavy is continuing to propose a so-called “statutory” PFD of about $3,800 that would result in a deficit well in excess of $1.5 billion in a roughly $14 billion budget, although most legislators say there is no realistic chance of it passing.
The state does have about $3 billion in the Constitutional Budget Reserve to cover shortfalls, but it takes a three-fourths vote of the Legislature to tap the fund. Legislative leaders in the majority — who would have to make concessions to the minority to get such a vote — are stating they don’t want to tap the fund because forecasts show the state will keep incurring sizeable deficits in future years that would deplete reserves quickly unless fundamental budget changes occur.
Among the financial proposals now being considered are increasing taxes on oil companies and imposing them on online businesses based outside Alaska, although Dunleavy and many Republican legislators in the minority caucuses are stating they do not support tax increases.
• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com or (907) 957-2306.
