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Proposed state budget includes addition $100 million for schools

Posted: March 29, 2014 - 9:42pm  |  Updated: March 30, 2014 - 1:30am

JUNEAU, Alaska — The Senate Finance Committee on Friday included an additional $75 million for school districts in its version of the state operating budget for next year.

That would be on top of the $25 million in additional school aid already proposed in the budget bill. That extra money in the past has been provided to help districts address needs such as energy costs.

A total of $100 million would be included for the following fiscal year, distributed according to the average daily membership for each district.

Committee co-chair Sen. Pete Kelly, R-Fairbanks, said the members wanted to make sure there was a placeholder in the budget for education “because we said we’re going to take care of education this year as best we can.” It also would serve as something of a bridge, giving lawmakers more time to evaluate the state’s overall approach to education.

The committee advanced the spending package Friday.

The funding issue is far from settled with about three weeks remaining before the scheduled end of the legislative session. The House version of the budget passed earlier this month had $25 million for additional school aid. But the House Finance Committee also has before it a broad-ranging education bill from Gov. Sean Parnell that proposed an increase in funding through a formula known as the base student allocation.

While minority House Democrats unsuccessfully proposed that $101 million be added to the operating budget on the House side outside the base student allocation for district aid, they say they would prefer seeing money added to the base student allocation, the level of which currently stands at $5,680. While they welcome additional money to help districts avoid cuts, they would rather see a statutory increase rather than one-time appropriations.

Rep. David Guttenberg, D-Fairbanks, said funding through the base student allocation allows districts to plan better. Rep. Les Gara, D-Anchorage, said he would like to see more funding. He called the Senate proposal a “great first move, but we’ve been pushing all year, and we’re going to keep pushing until we get to a point where we can avoid layoffs and start hiring teachers back.”

Parnell proposed an increase in the base student allocation of about $200 over three years, at a total cost of about $50 million, according to the bill’s fiscal note. Democrats have called for an increase of about $400 for next year, with subsequent adjustments for inflation. Supporters say a $400-per-student increase would cost about $100 million.

During the Senate Finance Committee hearing, Kelly said increasing one-time appropriations was how the committee chose to begin the education-funding process. He noted that the Senate was waiting for Parnell’s bill to come over from the House and that a lot was still left to be determined before the end of the session. The regular session is scheduled to end April 20, but because that’s Easter, legislative leaders have said they would like to wrap up their work sooner.

The Senate Finance Committee-sponsored education-funding amendment includes language indicating that the intent of the appropriation is to allow public schools to maintain operations at a level “sufficient to educate children” while providing time for affected parties to work with the Legislature to identify “innovative approaches and possible consolidation of services that will, over time, lower costs while maintaining a quality education system.”

“It is also the intent of the legislature that this increased funding will serve as a bridge to develop a plan and identify solutions to implement these changes in an effort to recalibrate individual district budget spending levels to the 2014 fiscal year spending level,” the amendment reads.

Other changes to the bill included a $3.4 million reduction in state agency travel; adjustments for tentatively agreed-upon bargaining contracts for several different unions; and the restoration of an additional $370,000 for a program that helps pay the student loans of health care professionals or provides incentive payments if they serve in high-need areas of the state. A Senate subcommittee had cut $1.2 million from the program, known as SHARP, but the committee previously added back $615,500. Sen. Donny Olson, D-Golovin, said the subcommittee hadn’t fully understood the strength of the SHARP program. Kelly said he’s glad the committee was able to respond to public testimony in support of the program. Lawmakers have yet to decide how to address the state’s unfunded pension liability. The state has been on a payment schedule that calls for escalating payments expected to top $1 billion a year before declining.

Parnell has proposed shifting $3 billion from a state savings account toward addressing the obligation for the public employees’ and teachers’ retirement systems, which he said will result in annual payments of $500 million and ease pressure on the state budget.

Kelly said it is possible the teachers’ retirement portion of the obligation could be addressed as part of the education bill. He said he wasn’t sure about how to address the public employees’ obligation

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