Education officials alarmed by proposed Senate budget cuts

Legislators at work reconciling budget differences between the House and Senate are hashing out a 5 percent cut across all 53 school districts in the state as a way to slash $69 million from the budget deficit.

Several districts’ officials traveled to Juneau this week to make appeals: A 5 percent cut would turn education upside down, they told legislators.

The House voted for a budget that allowed schools status quo with last year’s funding level, in keeping with Gov. Bill Walker’s spending request. But in the Senate, legislators decided on a 5 percent cut to the base student allocation or BSA.

Another bill under consideration in the Alaska Legislature for fiscal year 2018 comes down to taking $100 million from the University of Alaska performance scholarship program to fund new 21st century innovative program grants for kindergarten through grade 12. The plan calls for phasing out the popular scholarship program over a four-year period.

Sponsored by Sen. Shelley Hughes, R-Palmer, a pair of bills eliminate the Alaska Performance Scholarship to fund competitive grant programs offered to K-12 throughout the state. In essence, it takes from higher education and gives to elementary and secondary education.

“My sense is that everyone is caught off guard,” said Miles Baker, the University of Alaska’s vice president of government relations.

Baker is in Juneau until the Alaska Legislature adjourns speaking with legislators about what cuts mean for UA system.

To give perspective, he likened this year’s proposed $22 million in cuts to the budget for eight of its smaller campuses. That’s before any possible elimination of the Alaska Performance Scholarship.

“It’s a bit like pitting K-12 and post-secondary education in a battle with each other for a pot of money,” Baker said.

Anchorage School District Superintendent Deena Bishop likens the plan to “robbing Peter to pay Paul.” The concept ignores the cooperation between schools and the university that led to developing advanced courses the districts offer students in order to prepare them to be eligible for the highly competitive scholarships, she said.

In the eleventh hour, Hughes tied Senate Bill 96 — an omnibus bill that creates a new virtual education program, among other changes — to a fiscal note in SB 103 that makes the proposal for eliminating the APS funding over four years.

Another bill would create competitive grants available to school districts to take the sting out of reduced Base Student Allocation funding.

But those bills are stuck in Senate Finance, while the Senate’s fiscal year 2018 operating budget is already before the House for reconciliation.

“They (the Senate) passed major education legislation at the end of the session, and I don’t see how we can possibly do it justice in mere days left,” said Rep. Harriet Drummond, D-Anchorage.

Drummond heads up the eight-member House Education Committee.

Impact of BSA cuts

The per student formula funding proposed by the Senate’s operating budget seeks to chop 5 percent in an effort to peel back a total of $69 million in school funding for 2018.

All 53 school districts in the state would see their budgets decrease by that amount, the highest student formula cuts ever imposed, said Sen. John Coghill, R-Fairbanks.

But Coghill noted that education is the costliest line item in the operating budget. Coghill is one of five members of the Senate Education Committee, and gave the sole “no” vote cast in Hughes’ funding plan eliminating the scholarship.

He said he felt more questions needed to be answered. Yet he supported the 5 percent BSA cuts as a place to start the discussion.

“This sets up a conversation (between the Senate and the House) on the difference between our cuts and their numbers,” Coghill said. “We felt the conversation was important, if we did a 5 percent cut, would it allow us to still maintain the education system we have?”

Given other policy calls like creating an income tax and cutting the Permanent Fund dividend placed this year’s education spending under extra scrutiny, Coghill said.

“We have to borrow money in order to make payroll. We took a lower number and said we think 5 percent is not unreasonable. The House won’t go higher than 5 percent and it might be less than that,” he said.

The Senate is taking a load of criticism for its education cuts overall, Coghill said, for both K-12 and UA.

“But everyone is being asked to make sacrifices,” he said.

Drummond said the House has taken a completely different tactic. Their operating budget left both schools and UA in status quo flat funding with last year, after 2017 cuts had already bit into “muscle and bone” in the lay-off of 99 teachers in the Anchorage School District alone, she said.

“We had districts’ superintendents and school officials for the floor hearing today (April 10) tell us $69 million loss will be absolutely devastating,” said Drummond, who served on the Anchorage School Board for a decade before taking her seat in the House in 2013. “Flat funding from the governor’s budget already had caused nearly 100 teachers to be cut from the Anchorage School District. Now, they would be looking at laying off 200 more.”

The House advocated for an income tax to help cover the nearly $3 billion deficit gap and other measures such as the recently passed oil tax legislation, HB 111.

That bill, now before the Senate, would add $130 million to state coffers by 2019 and increase incrementally each year after. The House also supports smaller Permanent Fund dividends.

Republican leaders Sens. Pete Kelly and Peter Micciche led discussions in the Senate that favor cuts and leaning on Permanent Fund earnings with no income tax.

Bishop had already factored in the 99 teachers laid off from Anchorage schools in last year’s budget cuts. High school and middle school classrooms saw an increase in student-teacher ratios, while the district sought to limit that impact on elementary schools.

If the state reduces the BSA by 5 percent, it represents a loss of $26.9 million, according to an impact statement from the ASD to the Legislature. The loss would come from $21.9 million in state funds, and a loss of $5 million in matching municipal funds.

The state can soften the blow if legislators resist tinkering with the BSA. A straight-across funding cut would save the district the $5 million in matching municipal money.

ASD uses a formulua of 10 teachers per each $1 million. A loss in $1 million revenue means, in general terms, a loss of 10 teachers, said ASD spokeswoman Heidi Embley. There are currently 48,000 students enrolled in the district’s 130 schools and programs. It employs about 6,000 full time teachers and staff.

Yet, balancing an academic budget is not so simple as handing out pink slips to teachers.

“Programs are based on student needs. We would have to do an assessment and also speak to community desires,” Bishop said. “It’s not just me in this office deciding to cut this or that program. It isn’t as easy as looking at a program here or there and totally removing it. Teachers are the ones in our technology cuts, teachers are the ones in our abandoned orchestra, teachers are the ones on the soccer field.”

Getting into a virtual classroom is a good concept and broadband access is essential for rural communities, Bishop said.

“But if thinking of that as a way to cut back, the quality isn’t probably what we are looking at. If we try to innovate to save a buck, it probably won’t hit the mark. We can’t trade teachers for innovations,” she said.

As for the performance scholarships, districts that worked hard on curriculum changes in order to help students meet eligibility requirements certainly do not want to see it go away.

“It ensures a quality education for students entering the Alaska University,” and to help them stay and contribute to an educated Alaska workforce, Bishop said. “It wasn’t a handout.”

UA cuts

The Senate’s fiscal year 2018 budget proposes an across-the-board 7 percent cut from the Alaska University system, or $22 million.

If the performance scholarships also go away, another $11 million per year will be lost from the Alaska Performance scholars’ tuition.

An additional $5.3 million in needs-based Alaska Advantage Grants also goes away. Through SB 103, both would be eliminated over four years. This year’s high school graduates would be the last to qualify, said UA’s Miles Baker.

“University officials have told legislators this would be devastating,” Baker said, “on top of the 14 percent cuts over the past three years.”

Last year’s legislative appropriation of $325 million would be trimmed to $303 million under the Senate’s budget. The total UA system’s annual budget is about $900 million. Revenue comes from tuition, student fees, federal money and grants, which forms slightly less than two-thirds while the State of Alaska kicks in the rest.

Putting the lost revenue in perspective, Baker points out $22 million is twice the amount it takes to support the entire UA athletics program.

Previous annual cuts caused UA to suspend or reduce 50 academic programs.

“We have 900 fewer employees today than three years ago,” Baker said. “Another 7 percent cut would represent a 20 percent reduction from four years ago. Fewer programs. Major enrollment challenges. We’re concerned about how to increase enrollment, how to increase marketing. We’re down to ‘what should we do?’”

Currently, the UA system serves about 24,000 degree-seeking students or a total enrollment of 30,000 when accounting for all who take courses.

Given the work ahead reconciling the budget and the outstanding issues of using Permanent Fund earnings to help fill the deficit, the April 16 deadline of a 90-day session will be missed.

State law allows the Legislature another 31 days continuance before a special session must be called. That puts a new deadline on May 17.

“Either way, the governor isn’t letting us out of here until we have a budget,” Drummond said.


Naomi Klouda is a correspondent for the Journal. She can be reached at [email protected].

04/12/2017 - 12:52pm