On Tuesday, the Senate passed an education package that would create a grant program for the state to pay for school districts' annual energy costs, starting next year. Last year, districts spent a total of $89 million on heating, fuel and electric costs.
Under the bill, the state could begin paying out 100 percent of districts' annual energy funding starting in 2028.
The education package would also create a pilot program for providing school loan forgiveness for public school teachers and shift millions in education costs from local communities to the state.
The Legislature has also passed measures providing Alaska's public schools with additional one-time funding for this year, as districts across the state continue to grapple with significant deficits. The operating budget guarantees $29 million for energy relief payments to K-12 schools for the current fiscal year, about a third of what school districts paid for energy over the past three years. An additional $115 million is contingent on oil prices saying above initial projections for the rest of the fiscal year.
The Senate passed the education package 17-3 on Tuesday, and the House concurred with the changes 34-6 on Wednesday.
The bill creates a framework for the state to reimburse 100 percent of school districts' energy costs based on a three-year average. That money is still subject to appropriation, which means that the Legislature would have to approve the spending each year.
The Anchorage School District alone spent just over $17 million on energy costs last year, but the bill would be particularly beneficial for rural school districts, which spent disproportionately high amounts from their budgets on energy costs.
Madeline Aguillard, superintendent of Kuspuk School District in Western Alaska, said when her district paid for heating oil for the year, costs were double historic rates.
"Even at our historic rate, our fixed costs are just ginormous," Aguillard said.
Proponents of the bill say targeted state energy funding will save schools from diverting operating funds that would otherwise go to teachers and other classroom needs.
Juneau Democratic Rep. Andi Story, who sponsored the underlying bill first introduced in the House, said the bill would allow for "more dollars to focus on student achievement and the kids in the classroom."
Anchorage Democratic Sen. Löki Tobin, who led the process of crafting the so-called "mini school bus" education package, said she believes the bill represents "an exciting piece of transformational policy for our communities."
Lawmakers this session have opted to prioritize funding for specific purposes for schools, instead of again trying to pass a permanent increase in the amount Alaska spends per student.
Last year's push to increase the per student funding formula culminated in a budget veto override in August, when the Legislature garnered exactly the 45 votes needed to undo the governor's red pen on nearly $50 million in education funding. Leadership from both chambers have said throughout the session that the Legislature lacked the political will to gather the support for a per student funding formula increase again this year.
Sitka Republican Sen. Bert Stedman, co-chair of the finance committee, said though the price of annual energy relief is expensive, the cost is worth leveling out funding disparities among districts.
The teacher loan repayment program aims to incentivize teachers to work in Alaska. It would allow certain public school teachers — those who teach special education, English as a second language and science, technology, engineering and math — to apply for up to $15,000 in student loan repayment. That's estimated to cost the state about $1 million per year.
The bill also includes a cap on required local contributions to school districts, limiting annual increases to 4% from the previous year. This change is meant to reverse what has been a gradual transfer of K-12 school costs from state coffers to local taxpayers.
Under the existing funding formula, the amount that many boroughs are expected to contribute to school districts is a function of local property value. As growth in property value has outpaced increases to the state's school funding formula, boroughs and cities have faced pressure to raise local taxation to keep up with education costs.
This 4 percent cap would essentially untether local contribution rates from property values. This would shift millions of dollars in the funding burden for schools from municipalities to the state.
Sen. Jesse Bjorkman, a Nikiski Republican, proposed the successful amendment that lowered the cap on the annual growth of local contributions from 5 percent to 4 percent on Tuesday night.
The 5 percent cap originally in the bill was estimated to cost the state over $9 million in the upcoming fiscal year. Legislative finance staff have not yet released an updated cost estimate for the 4 percent cap.
The bill would also:
- Require the state Department of Education and Early Development to present a report to the Legislature on the district's reimbursement of energy costs, and require that school districts make "reasonable" efforts not to increase energy use.
- Allow students who leave correspondence schools to keep materials provided or purchased through the program, in alignment with policies for brick-and-mortar schools.
- Allow the regional resource centers to rehire retired teachers without jeopardizing their retirement accounts.
- Allow for schools to reopen four years after closure, instead of seven, in an attempt to account for a potential influx in workers and state investment from a future natural gas pipeline project.
- Allow regional school board members to work as substitute teachers in emergencies.
- Bar those convicted of a felony of "moral turpitude" from serving on a school board.
With the regular legislative session adjourning by midnight Wednesday, other proposed methods of increasing education funding have stalled.
That includes a proposal that would have altered how education funding is calculated by basing school funding on previous years' enrollment, rather than current attendance. That proposal, sponsored by Story, would have added over $113 million in annual state expenditures on public schools. It was included in an education funding bill that passed the House 31-9 in the penultimate week of the session, but it never left the Senate Finance Committee.
The education funding package that has passed the Legislature now heads to Gov. Mike Dunleavy's desk, where he will decide to either sign the bill into law, veto it or let it become law without his signature.
Jeff Turne, spokesperson for Dunleavy, did not respond to a question about the governor's intentions for the bill.
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