Day 44: 'The BSA is the lowest it's been in the last 20 years, adjusted for inflation'
It's all about that inflation.
Good morning, Alaska!
In this edition: Education is coming into sharp relief this week with several different hearings on education and K-12 funding happening this week. While a bigger look at the status of education funding is in the works, let’s check out the House Finance Committee’s hearing on the complexities of K-12 funding and how not all levers work the same for different districts. An interesting exchange between House Education Committee co-Chair Jamie Allard and a school official. The daily schedule. And the Senate passed legislation blocking pay raises for the governor and his cabinet.
Coming soon: A deep dive into the notable education quotables of the session.
Current mood: ❄️
'The base student allocation is the lowest it's been in the last 20 years, adjusted for inflation'
The House Finance Committee had its turn to look at education funding on Tuesday with a hearing that included presentations from the Department of Education and Early Development and the Legislative Finance Division. The latter was the more meaty of the two, offering a look under the hood at the state’s base student allocation, the foundation formula that the BSA runs through to actually determine funding and the various levers the Legislature can pull to boost the money going to schools.
In the big picture, it’s all about inflation and the state’s failure to keep up with it.
Legislative Finance Division Director Alexei Painter showed off a load of different slides examining the BSA, the basic need education funding as dictated by the foundation formula, the foundation funding plus other funding, and the foundation funding plus other funding plus contributions by local government. Each were also shown in nominal dollars and through inflation-adjusted dollars.
The trend in each is the same: The nominal dollars charts steadily grow from 2005 to 2015 level off with a few bumps before making a few slight dips as one-time money expires. The inflation-adjusted charts show the same general growth from 2005 to 2015 but then the failure to keep up with inflation shows a steep downturn in buying power between 2020 and now.
“Today, the base student allocation is the lowest it’s been in the last 20 years, adjusted for inflation,” he said.
Here’s the look at just the history of the base student allocation:
The BSA in nominal dollars
And the BSA in inflation-adjusted dollars
What was particularly useful about the hearing, though, was the explanation that K-12 funding is far more complicated than just whatever figure the BSA is. Like the name says, it’s the base funding figure that gets run through the state’s foundation formula to determine just how much funding schools actually get. That takes into account things like the size of the school, its location and the needs of its students among many, many other factors. It’s complicated.
That formula has seen several changes over the last two decades that see some of the factors increase, but as Painter stressed not all changes to the foundation formula are felt the same across the board. Some adjustments, like the location adjustment for example, won’t impact Anchorage all that much because it’s set as the baseline while it could be a boon for other districts.
There’s also the matter of things like one-time funding from the state or federal government that might boost a single year’s funding. Most of which is set to expire heading into this next budget year.
And there’s also a fair bit of variation where it comes to the contribution local governments can make to their school district. The state sets both a minimum local contribution and a maximum local contribution, which is there with the intention of keeping school funding reasonably equitable across the state.
When you roll it all together, you get these charts of school funding:
All the school funding rolled together in nominal dollars
All the school funding rolled together in inflation-adjusted dollars
That last bit about local contributions to school districts is worth highlighting because it’s one of the few areas I’ve heard any interest from some of the House Republicans who’ve otherwise been opposed to an increase in K-12 funding. Why not lift the cap and let the districts that really want to fund education, fund education all they want?
Painter explained that the cap is a product of the federal funding. Basically, the state currently receives about $73 million in impact aid from the federal government in districts where the federal government has a big presence (think military bases). The state can deduct that $73 million against what it has to put in, but only as long as the state passes the disparity test and local government contributions aren’t wildly uneven.
Removing that cap would mean the state couldn’t deduct that money, Painter explained, and that it would have a big cascade of impacts on how some districts are funded.
“We would end up with a much more equalized formula. You’d would end up with districts with impact aid that wouldn’t be deducted so those districts would get a lot more money, districts that had high tax bases would be able to contribute a lot more because there’d be no cap and districts that did not have a local tax base and did not have impact aid would be no better off,” he said. “There would be a lot more unequal funding between districts if we failed that disparity tests and just got rid of that cap.”
Why it matters: That last point is really important to keep in mind here. While there’s an overall push to increase education funding broadly, it appears that some House Republicans are interested in a more targeted approach. The more targeted the approach, it seems, the more unequal the impacts may be felt. Changes to the local contributions would not only have the impact of pushing the decision to levy higher property taxes to local governments but it would also open the door for greater disparities between wealthier local governments and everyone else.
Stay tuned.
“We’re all done here”
I heard some rumblings about Education Committee co-Chair Rep. Jamie Allard getting in a bit of a dust-up with a school executive this week. Fellow Alaska Current reporter and Allard expert got the deets:
Daily schedule
The floor sessions
Senate is in at 11 a.m. with only citations on the calendar
House is in at 11 a.m. with HB51, use of designated refrigerants; and HJR 5 support of Alaska fisheries and the southeast troll fishery.
The committee hearings (minus the finance subcommittees)
House education meets at 8 a.m. with a hearing on “Uncovering the Myths of School Choice” by Bob Griffin of the conservative Alaska Policy Forum
Senate Finance is in at 9 a.m. to get an update on Alaska’s Municipalities in the post-covid world from AML’s Nils Andreassen
House Judiciary meets at 1 p.m. to hear HB66, the governor’s bill to increase penalties for drug-related homicides; and HB28, limiting access to marijuana conviction records
House Resources is in at 1 p.m. to continue its hearings on HB49, the governor’s carbon offset bill
House Finance is in at 1:30 to get overviews of the Department of Military and Veterans’ Affairs along with the Alaska Court System
Senate Judiciary meets at 1:30 to hear SB80, the revisor’s bill
Senate Labor and Commerce meets at 1:30 to hear SB70, owner and contractor controlled insurance; as well as a presentation on workforce challenges
House Labor and Commerce meets at 3:15 to hear HB73, DCCED licensing investigations; HB75, owner and contractor controlled insurance
Senate Education meets at 3:30 to hear SB43, health and personal safety education
Senate Resources meets at 3:30 to hear SB67, PFAS use in firefighting
House Ways and Means is at 6 p.m.
Senate rejects pay increases for governor, cabinet
The State Senate on Monday passed legislation to reject pay raises for Gov. Mike Dunleavy, Lt. Gov. Nancy Dahlstrom and state commissioners.
The State Officers Compensation Commission recommended earlier this year pay raises for the state’s executive branch that ranged from $15,000 to $31,000 annually, which will go into effect unless the Legislature specifically rejects the raises by passing a bill. Last week, Senate President Gary Stevens, R-Kodiak, said the Legislature would probably disapprove of the raises because the commission’s justification was lacking.
The commission’s report didn’t suggest any similar pay raises for legislators. Last year, it had actually proposed what would have been, in total, a pay cut for legislators (a bump in base pay with a considerable cut to per diem expenses). Legislators rejected the proposal, arguing it would make it so only the independently wealthy could serve in the Legislature.
Sen. Bert Stedman, the co-chair of the Senate Finance Committee that sponsored the bill, urged legislators on Monday to reject the pay raises because it wasn’t a complete plan.
“In the Jan. 24 report, which is about a page and a half long, the Alaska State Officers Compensation Commission did not provide a comprehensive plan for compensation for both the executive leadership branch and the legislative branch,” he said. “I think we need to attract smart, dedicated and motivated leaders to the state of Alaska to move our state forward in an expedited fashion. This report, as presented, did not do that.”
Stedman said the Legislature is focused on addressing the state’s recruitment and retention problems this year, and that should extend to public service.
“I recommend to all my colleagues here and in the other body to reject this report. We need a comprehensive and holistic conversation about compensation,” he said. “We need to attract the dedicated, the motivated and the brightest Alaskans to public service.”
Under the commission’s report, the governor’s annual salary would increase to $176,000 from $145,000, the lieutenant governor’s annual salary would increase to $140,000 from $125,000, and commissioners would go to about $168,000 from $141,160.
The Republican-led Dunleavy-friendly House Majority has not yet weighed in on the proposed pay raises, but the bipartisan Minority Coalition has already staked out its opposition to the pay raises. Its members argue that the pay raises should not be on the table as long as school funding remains stagnant.