HB 245 In-Depth Review - State would cover an additional $200 million in school funding

I sent out an analysis of prefiled bills on Friday, and would like to review HB 245 a little more in depth.  Here is what I sent out yesterday:

·         HB 245 – School Funding: Repeal Required Local Contributionhttp://www.legis.state.ak.us/basis/get_bill.asp?session=28&bill=HB245

o   HB 245 repeals required local contributions for “basic need” funding for school districts, and specifies that basic need will come from the state and federal governments. 

o   It allows local governments to continue to contribute from local funding sources, if they so wish. 

o   HB 245 does not change the statutory formula for calculating basic need. 

Later in the day, Alaska Democrats sent out a press release saying that HB 245 would reduce education funding http://alaskademocrats.org/news/994-republican-assault-on-education-continues-with-new-legislation

That made me question whether I had misinterpreted HB 245, because my interpretation was that basic need would be funded at the same level.  I read the bill again and called the sponsor, Rep. Tammie Wilson, who confirmed that my reading of the bill was correct.  HB 245... 

...does NOT cut education funding.  It cuts the required local contribution for basic need, but the calculation of basic need is not changed.  What it effectively does is increase state funding for basic need.

Under HB 245, basic need funding does not change, but the state picks up the share currently paid for by municipalities under the required local contribution.  For FY 13, the total required local contributions from all municipalities were $216,206,095. 

The effect of HB 245 would be to decrease municipal expenses by $216,206,095 (FY13 figures), a significant freeing up of municipal funds.  It would have meant a decrease in expenses of $94.5 million for the Municipality of Anchorage in FY13.  HB 245 could potentially free up enough municipal funds so that those municipalities not funding to the cap could do so, thereby increasing funds for some school districts.  However, it won’t help REAAs or municipal school districts whose municipalities are already funding to the cap,. 

In speaking with Rep. Tammie Wilson, she said that the impetus for her sponsorship of HB 245 is the recent push from the Ketchikan Gateway Borough for a lawsuit against the state challenging required local contributions for basic need. 

Ketchikan’s supporting report has detailed information on how much required local contributions for basic need have impacted municipalities, and includes suggested legislation for ending required local contributions.  Pages 29/30 of Ketchikan's report are a chart showing the breakdown of how much each municipality’s required local contribution was for FY13 ( http://www.alaskaeducationupdate.com/sites/default/files/Ketchikan%2C%20required%20local%20funding%20unconstitutional_0.pdf ) . 

Rep. Tammie Wilson’s two main points regarding HB 245 are that:

1.   The state is responsible for basic need

2.   They need to determine just what basic need is, and that will be one of the goals of the House Sustainable Education Task Force in 2014

However, Rep. Tammie Wilson said her top priority for the task force is to develop a state education plan.  She said it will not be possible to determine what basic need is unless they develop a state education plan first.  She said the state education plan will include defining education, what the state is responsible for, and how to fund it.  She doesn’t know if the plan will be developed by the task force, by DEED, or by a third party. 

Rep. Tammie Wilson doesn’t anticipate spending the total amount of money appropriated to the task force ($250,000).  So far the task force has spent less than ten percent of the total, at $20,666.59.  Spreadsheet showing all the expenditures of the task force for 2013: http://www.alaskaeducationupdate.com/2013-expenses-house-sustainable-education-task-force

The next hearing of the House Sustainable Education Task Force will be on Saturday, January 18, from 10:00 a.m. – 2:00 p.m.  Rep. Tammie Wilson and Rep. Lynn Gattis will be chairing the meeting from Juneau, and the Anchorage Chamber of Commerce has volunteered to host the Anchorage location.  The task force will hear from boarding schools at this hearing. 

Thanks, Shana Crondahl

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