As I have mentioned in previous newsletters, the Governor’s omnibus education bill (HB278) aims to change many aspects of the education system such as increasing school choice and increasing the Base Student Allocation (BSA). After months of discussion and presentations provided by various entities related to all aspects of the education system, today the House Finance Committee adopted its committee substitute (CS) for the bill. The House Finance Committee’s plan dedicates approximately 28 percent of the state’s savings accounts to education over the 10 years spanning FY15 – FY24.
For your convenience, we have provided a list of the key elements that the CS incorporates:
· Funding Increases
Adds $100 to the Governor’s proposed three-year BSA increase in the first year, and forward funds the increase. The new total represents $185 for Fiscal Year 2015, and $58 for FY16-17. The table found here shows the amounts that each school district will receive from the foundation formula changes made by the House Finance Committees version of HB278.
BSA today: $5,680 + $185 (2014-15 school year) FY15: $5,865 + $243 (2015-16 school year) FY16: $5,923 + $301 (2016-17 school year) FY17 total: $5,981 (2017-18 school year) *an overall increase of $224 million over the next three years
· Formula Fairness
Increases the fairness of the education funding formula by counting students in a more equitable manner, where schools with larger student populations are currently counting each student as less than one for funding purposes. The Finance CS eliminates inequity by removing the top two tiers, allowing urban districts to receive increased funding per pupil under the formula.
In the bill, the House Finance Committee included a plan for the Teachers’ Retirement System to make it more predictable, stable and affordable. The plan would deposit $1.4 billion into the Teachers’ Retirement System Trust Fund and $100 million into a new Teachers’ Retirement System Reserve Fund. Annual payments starting at nearly $157 million would become part of the education formula and the state will fund the annual payment. By comparison, the Governor’s plan would have deposited $1.1 billion into the Trust Fund and required an annual payment of $343 million.
· Reforms and Accountability
The Committee Substitute includes an adjustment to how charter schools are funded, offering municipalities the option to give a property tax exemption to property owners who lease or rent space, or a portion of their space, to charter schools, and making charter schools equal in terms of formula funding. The bill also changes the charter schools formula to explicitly state that districts cannot take a portion of a charter student’s formula funding for administrative costs; Increased accountability will result from language directing the Alaska Board of Education to track how districts spend BSA funds and suggest efficiencies, the first time the Board has been tasked to do so in statute; making districts provide charter schools with a report listing all of the indirect costs and services performed by the district; changing teacher tenure to five years across the board to retain the best qualified teachers for our students; and, asking the Alaska Dept. of Administration to provide an analysis of bringing education employees under the state salary and benefits system.
I would like to share this very informative presentation on education funding that was presented by David Teal, Director of Legislative Finance on Monday, March 24 to the House Finance Committee. The Legislative Finance Division is the department that assists the Legislature with its budgetary responsibilities and David does a great job explaining the difference between education funding and the BSA. To watch the presentation, click on the link below. http://www.360north.org/gavel-archives/?event_id=2147483647_2014031329