I call this meeting at the House Finance Committee to order.
Let the record reflect that it is 134.
On Wednesday the 4th, 2026, present today a representative Allard, representative Hannon,
and two co-chairs, a co chair,
Foster and myself co Chair, Josephson.
Also present today are our House Finance Committee staff,
Committee Assistant Helen Phillips,
Paige Tallulah-Lestufka, Secretary Brie Wiley,
and Secretary Leah Frazier.
We also have our moderator, Emily Mesh,
from the Legislative Information Office with us.
Before we start, please mute your cell phones.
In today's meeting, the Office of Management and Budget
will present an overview of the FY26 Governor's
Then the Department of Education and Early Development will present its FY27 department budget overview.
With us today from the Office of Management and Budget is Director Lacey Sanders.
Director, please come forward, put yourself on the record, and begin your presentation.
Get a brief of these, sir.
It's a briefing.
Brief these.
Brief it is.
We're back on record and been joined by co-chair Schruggie, Ms. Sanders, good afternoon.
Tell us about the governor's amendments to his FY26 budget.
Thank you.
Good afternoon, everyone, for the record.
My name is Lacey Sanders.
I am the Office of Management and Budget Director for The Governor.
As required by statute, these are due to the legislature on the 15th day.
The documents were transmitted to legislature Monday to be introduced for
the legislatures viewing yesterday.
So with that, I will start just a high level overview.
I'm going to talk through some items.
In the committee members' packets is a very large spreadsheet.
with a list of every item.
I wasn't planning on talking about every
item today, but happy to take questions
from the committee as we go through
if there are items that I don't touch on.
So with that chair, I will move forward
to slide number two and just begin the presentation
with an update to our fiscal year 2026 supplemental.
This is our physical summary and it includes
past last year and was enacted into law, which is our 26 management plan, as well as the proposed
supplemental. This includes the supplemental's that were released on December 11th in the governor's
budget that we've talked about before, and those that are introduced on February 3rd.
just because this is so detailed and I'm going to walk through higher level summaries in just a
moment. I'll just drop down to the bottom line where that we reflect the updated deficit
with the oil price as what was projected by the Department of Revenue and the total
As proposed in the governor's budget, this would be drawn from the Constitutional Budget Reserve Fund.
So moving on to slide number three, I'll start with the operating supplemental request.
As you can see at the top of the slide, we've included a line for the December 11th
supplementals that were introduced. This is a combination of two items, one for forest,
There was two letters that were transmitted
to the legislature during the interim
for fire disaster declarations,
those totaled $55 million.
We are still working with the Department
of Natural Resources on updating
and finalizing the supplemental number
for fiscal year 2026.
So that has not been included at this point.
We will continue to work with
the department of natural resources
to get the Legislature an updated number.
once that is once we've finalized that process.
Also included in that December 11th date
was the 40 million that we discussed in our last meeting
for a deposit into the disaster relief fund.
So moving down, we moved to the February 3rd
supplemental requests for the bill
that was transmitted to The Legislature.
As you can see, there's requests throughout all of the agencies.
Again, I will highlight some of
the larger items on the next slide.
The total request for
supplemental's in the February 3rd release totaled $79.1 million in unrestricted general funds,
with a grand total of $81 million for all funding sources.
Most notably, you know, that that large increase is due to the federal receipt authority that we'll talk about
for both the Rural Health Transformation Fund and for the Medicaid updated projection that was submitted.
So just summarizing at the bottom of the page right now the total
supplementals for the operating budget are a hundred and seventy four million dollars of unrestricted general funds and
992 million in total
Funds and you can see the other breakdowns across there
Director at
The top of slide three you note supplemental requests are totaling 95 million and ugf
But they're substantially more than that aren't they you've just highlighted?
Disaster and fire in that column or that row it's a better word.
Chair Josephson so in the December 11th budget those are the two primary items that
were unrestricted general funds in December budget that was released that were supplemental.
On February 3rd we introduced another bill and those
There were a few other supplemental items. I didn't cover every single item
We talked about those last week or the week before when I was before the committee
So there's two bills that have supplemental Zenum the governor's bill and then the supplemental bill that we just submitted
I'm tracking perfect represent Hannah. Thank you coach. You're just an on that same point. So
the
DOT
that maybe you've heard about is not being considered a supplemental it is it
is on a future slide under capital okay through the chair sorry and higher
education investment fund is clearly not capital but you're not showing it here
why again chair josephson the
Capitalization of the higher education fund is shown as a transfer between the CBR and
The higher Alaska higher Education investment fund. It is a supplemental it nets to zero with a positive and a negative
But it is accounted for in our in R totals
Okay
All right, so if it's okay with the committee, I'll move forward to the operating supplemental highlights
We have a question from Representative Stadt.
Yeah, thank you to the Chair and Director Sanders.
Thanks for being here.
It's the same true of the existing deficit in FY26.
We're not reflecting that on that slide as an example.
Through the chair, Chair Stapp, are you
referring to this surplus deficit here?
Yeah.
Through-the-chair, correct.
But it's.
Through it as it is accounted for.
Thank you.
Okay, Chair Josephson if it's okay, I'll continue back to slide four. Yes, please. Thank you
So starting with the Office of Administration
There is a 3.3 million dollar unrestricted general fund
request for the office of public advocacy
Historically this office has utilized a multi-year appropriation
to address their criminal case backlog, this request would provide $3.3 million for them
to continue to work on that backlog for fiscal years 2026 and 2027. So it's called what we
Under the Department of Corrections, we continue to work with the department of corrections
to bring their budget in line with what they are experiencing in costs.
As you recall last year, there were two reductions.
One was for a closure of one of the wings at the Spring Creek Correctional Center.
This was a seven and a half million dollar reduction to the
You may have been 6.8, apologies, $6.80 million reduction for related to costs that were paid
in prior years for letters of agreement that are no longer in place.
The department is still experiencing costs associated with other things within the institutions,
Their operational needs are met and so we have requested
From the committee a $20 million supplemental to to meet the fiscal year 2026 costs
In addition there is a 1.1 million dollar request for the community residential set center beds contract
This is the contractual increase that we experience there. Is a corresponding increment in the FY
2027 budget
And then lastly, there is a $2.9 million increase,
just under $3 million increased for inmate health care.
This is operational needs due to the aging population
that the department is experiencing
and ensuring that we have medical staff on site
to address the population's needs.
Under the Department of Health,
we had several items that I'm gonna talk about today.
The first one is a $272 million increase for the federal rule health transformation fund that the Department of Health received an award for recently.
As you all may recall, the legislative budget and audit committee met and
were approved in RPL, revised program legislative.
for $200 million, that $ 200 million only applies
to fiscal year 2026.
So in order to provide the Department of Health
the authority for the years that the award covers,
we're asking for a three year multi-year appropriation
for fiscal years 26, 27, and 28.
We expect that we'll have a second request
before the committee for an additional $272 million.
for 27, 28, and 29 to cover the next year of the award.
It's a five year award,
and we would continue that phased approach
moving on into the future.
Director, my understanding is that
I wouldn't object to it being multi-year,
but it better be spent by,
I think the beginning of that federal year.
In other words, you can't leave any behind.
But here you're saying you might do that.
That's how I read the multi-year.
Chair Josephson, the easiest way for me to explain this
is that we are trying to operate
within a state fiscal year appropriation need
and a federal fiscal- year award.
And so in order to have the funding available
and spent in the time that the federal government
has allowed it to be spent,
we need authority to cover this timeframe in order to ensure that it is expended in the appropriate
time. Okay, I'm just letting you know that isn't what I've heard. I trust the folks at
Department of Health Act trust you certainly.
I am just telling you that what i've
heard in five or six meetings is we must spend it all year to year. There's no carryovers allowed.
Chair Josephson that is my understanding. There is a a designated time frame
I don't have those in front of me right at the moment. We did build out kind of a
Graphic that I can provide the committee that shows the time-frame that the federal award is allowed and how it covers a state
Fiscal Year that might be a helpful visualization for the Committee and we'll make sure you get a copy. Okay
Please continue
Under the second bullet, this is a total of $21 million
for public assistance eligibility systems rising operational costs.
So the Division of Public Assistance has utilized in the past years several
multi-year appropriations to cover costs associated with catching up on the backlog,
that those multi-years are no longer available to us.
We have a shortfall, our costs associated
with the operational systems continues to increase.
And so this would provide $11.2 million of state match
and access to $1.8 million
of federal receipt authority.
Okay.
Representative Bynum has a question for the director then represent a staff. Thank you, co-chair
Josephson through the chair specifically
I hate to back up but you were mentioning you're talking about the rule of care transformation funding
There is the federal
Fiscal year and then we obviously have Alaska's fiscal year
The information you are talking, about providing is specifically based on the Federal fiscal
Year and that we have to then work within those parameters
Correct me if I'm wrong.
I believe that the first allocation of this funding is
for federal fiscal year 26.
Is that accurate?
Through the Chair Representative Bynum the award was made
on December 31 which is part of state fiscal years.
2026 and I think I
think what if it's okay with the
committee I'd like to make sure I get
you that diagram of how we laid out the
state fiscal years to apply within the
federal years that the funding is
available because I
think it'll help demonstrate for you
that we are trying to ensure that
we have
the authority to spend the money in the
state physical years
that covered the federal fiscal year's
that were talking about.
I'll be patiently waiting thank you.
Yeah, thank you, Dr. Justin, through the chair, two director.
Hopefully you can answer this question, but you might have to defer to the health folks.
The eligibility assistance systems rising operational costs.
So we have dumped two massive capital appropriations into upgrading the software once a couple
of years ago for about 57 million and five years before that for 30 million.
from under this. So my question is, is this driven by Aries? Is this
driven EIS? And kind of where are we at on our modular system that's
supposed to avoid this type of thing through the chair?
Director. Through the Chair or to the
Chair Representative Josephson, if I could bring
Director Pam Hallarana, she has a better explanation than I'm going to be able
Yes, for the record, Pam Halloran, Assistant Commissioner, Department of Health,
through the chair, Representative Stapp, a lot in that question.
So what we have, we're very grateful to have received numerous capital appropriations for
systems modernization for The Division of Public Assistance. This appropriation is an operating
appropriation. Those were capital. So, what were, were at a place where those operating
or there's capital preparations are shifting over to M&L,
maintenance and operation.
So licensing and maintenance,
and so there is shifting of it operating.
This is, and then you asked about what systems,
this is covering a number of systems
and I have that information here.
It's covering
Aries, which is the Alaska Resource for Integrated Eligibility Systems.
It's covering eye links,
which are our document management workflow system.
It is covering IAVS,
which our income and eligibility verification system, and it's
covering current,
which's our workflow systems.
It stands for comprehensive resource eligibility and verification tracking system
So, yes, there is a plan to have a fully integrated system.
We're almost there, we have, it's a system that's called the Alaska Connect Portal, and
that is online.
Now we're working on integrating all of the systems so that our staff cannot have to toggle
between systems and be at one place.
There's good path, they've done good work.
Well, follow-up, Representative Stapp.
Yeah, thank you.
Joseph, to the chair to Deputy Assistant Director.
Thanks for being here.
Yeah.
So again, obviously, I know the fundamental difference
between the capital appropriations
and the operating the purpose of the capitol appropriations
was to avoid.
these type of increases in the operating appropriation, right?
So you mentioned the different types of system.
The objective was if we spend $50 million plus,
we can create a singular battle system
that avoids this type thing.
And I know that we're getting there.
So my hope would be that in future,
do you see repeated requests for supplemental appropriations
We finished the software upgrade through the chair.
Assistant Commissioner.
Through the Chair, I have represented a step.
What I can tell you is one of our largest system costs
is the mainframe.
And we are anticipating getting off the
main frame and reducing that cost near the end of FY28.
I realize that's just one
of many costs we might need to defer to the Division
of Public Assistance for their entire,
they have an entire.
Plan that's all mapped out and so perhaps we can get back to you with that full plan. Thank you
Okay, thank you
Sorry represent Galvin
Thank you, co-chair Joseph center the chair. I too would love to ask you questions if I may
regarding where we are
particularly with the public assistance pieces I was with
representative we just heard from one these discussions took place and
And I remember very distinctly asking what will it take?
We have been presented nicely with a, we need 57 million for this.
We did let go a couple of years ago of 100 workers, and we needed to hire back now, I think it was 40.
They asked for different wages for the 40, there were many discussions about this because the bottom line.
like you, we wanted to help make sure that we are a good
pass through for the federal funds that are coming our way
to mostly it's around feeding Alaskans but there's other
things that you do and I'm grateful. And so I guess what I
wanted just say is it might be worth having
a presentation at some point, co-chair,
if you would allow us to understand
where the 57 million went,
what happened with hiring and training,
the people who we thought were going to be hired and trained,
and I think the goals were fewer hours of wait time
for Alaskans who were trying to reestablish the benefits
that some of them were accidentally kicked off of.
There's all these different things,
and the bottom line is all of us are representing people
either trying to get to these services.
or they want to be part of a state that is not getting fined 11 million dollars or 18 million
or whatever it is because we're still trying to catch up with our systems.
And so I'm back to the question of what will it take and could we possibly have a bit of,
at some point, this isn't the time because were going over some really big pieces right now,
but it's such an important part
delivering these services that I ask for us to have us set aside of a few
minutes at some point because it can feel a little bit like insanity when
you're kind of going through the same questions and and somehow we're
It's like Groundhog's Day and and we're not there on groundhog stay that was yesterday or the day before
So I would like us if we could please at some point to go through this piece
And I also wanted to ask if there's a way for this could be paid for through the Rural Health
Transformation funds because it sounds like some of these pieces are brand new
To the state. I don't know if they're considered innovative or considered within the parameters
But if so, I wouldn't want to miss that opportunity either
Thank you.
I think the best opportunities are probably not today,
although your points are well made,
but when the Department of Health does its budget overview
before us, before we take up the budget
in Committee's substitute one, it's typically called.
Thank, thank you, but thank.
But, and the Rural Health Transformation Fund piece,
we can ask.
DC, Richie, whether they're the fund availability.
I'm, my hunches know, but I don't know.
Thank you.
Okay, director.
Thank You.
So again, just for the record, since I have two female voices, this is Lacey Sanders again.
So under the third bullet under The Department of Health, we have a $5.9 million increase
4.3 million is federal receipt authority, and 1.5 million
is state match for the public assistance virtual context center contract.
This is a contract that the division of public
assistance has to help work through the eligibility process.
This was not funded last year,
and we are bringing it back again for
the committee to consider this year.
Okay, so I want the Committee to take note of that piece in particular.
The legislature, writ large, did not fund this request.
I think the department is managing to sort of start it up anyway, which I applaud.
But they've asked for this again.
And sometimes, as we've seen in previous budgets, they don't do that.
So I just ask you to take notice of this piece.
Please continue.
And the final bullet on this slide
has to do with the Medicaid projections.
So each December 15th, the Department of Health
provides a Medicaid projection based on numbers
through the beginning of December.
This represents that number at the
beginning December
The Department of Health will complete another update for the legislature here shortly in the mid-February
And so again, we'll we have an updated number
But this at least fills that placeholder for Medicaid as what we now for a number
Representative Hannah
Thank you to your Josephson because you asked us to pay attention to that element
I guess I want to go back to this virtual contact center, which shows a substantial federal grant, I presume, or federal match to it, but it's in a supplemental.
And if we, so I'm looking to find out if this is just for the remainder of FY26 and whether it already cost us $5.9 million to stand up, even though we didn't fund it last year,
You know, sometimes the supplementals are we spent seven and we need three more is 5.9.
The totality of what this virtual contact center is costing us.
Director.
Through the chair, Representative Hannon, that's a great question.
The number that came before the committee last year was upwards of $8 million.
The department worked very hard to identify that some of this cost could be Medicaid eligible.
So that, that is what brought the cost down to 5.9 million.
The importance of ensuring that we are getting benefits out timely to Alaskans necessitated
the need to continue the contract.
And this is the, the remainder amount that would be needed for the entire year.
Fiscal year?
Fiscal, yes.
Please continue.
Thank you.
Right, so moving forward to slide five. We've got the capital supplemental requests again
Noting at the top here the December 11th
Budget that the governor introduced included the 70.1 million dollars for the state
statewide transportation improvement plan or step
So that is reflected on that first line and then we have the sum
summary of the agency requests by department for the February third introduction of
the supplementals.
Those supplemental's totaled $57.3 million in all funds.
There are no general funds associated
with these capital projects.
And the total capital supplemental bill totals $70.2
million dollars in general fund and 128.1,
excuse me, $28.10 million
in All Funds.
And on the next slide, I've highlighted some
of the larger items for the committee.
light a few of them under the Department of Commerce, Community and Economic Development.
We have two awards for the Alaska Energy Authority related to bulk fuel upgrades.
One is for federal receipt authority under the high energy cost grant that they're receiving.
The second is $25 million of what we call statutory designated program receipts.
This is money that would receive from an outside organization such as the Denali Commission
Native Tribal Health Consortium. They are providing the $25 million to the state
to continue the work on the bulk fuel upgrades. Additionally, we have a continuation of the
Alaska Oil and Gas Conservation Commission's capital project. You may recall this one from
last year. This is Phase 2. There's $1.2 million of AOGCC's receipt authority to
In the Department of Natural Resources, we have another item that is statutory designated
program receipts at $6 million to protect coastal Alaska native communities.
This is work that the department of natural resource will be doing on behalf of the Alaska
It is work that provides mapping and evaluation of our coastlines and impacts from flooding
and other events.
Within the Department of Transportation and Public Facilities, we have continued to experience
when it comes to emergency weather or catastrophic events.
So for example, the Juneau Winter Storm that we had,
most recently, as well as Typhoon Holong,
the department continues to respond to those events
and assist the communities beyond what the work
that the Department of Military and Veteran Affairs does
through Homeland Security isn't.
hold on security emergency management.
Some of these costs are not eligible to be reimbursed by FEMA.
And so they scrubbed their capital budget and came up with re-appropriations of $5.1 million
to direct that money towards a capital project, allowing them to continue to respond
to the current year events that they have responded to already as well as any that are
And lastly, we have a request for, again,
S statutory designated program receipts
in the University of Alaska.
This is $8 million from a donation
to the university of Alaskas Museum
of the North Planetarium.
Representative Hannah.
Thank you, co-chair Josephson.
The DOT expenditure, Ms. Sanders,
reminds me that this week I read a headline,
And basically it was that we, some of our disaster grants from the state application of the feds where we thought we were going to get 100% reimbursed.
They're now saying 75% reimbursement.
Are any of, is any that reflected in our supplementals of we're going need more money in the DOT or
the disaster relief funds because we are not going get a 100 percent reimbursement from
the Feds?
Through the chair, Representative Hannon, not at this time, my understanding is that the Department of Military and Veteran Affairs is appealing that to try and get a 90-10 breakdown.
And I don't believe that they have heard a response back yet.
Thank you.
Remind me procedurally because you have restrictions of you had to submit supplementals by day 15.
that kind of thing that whenever it comes in,
you're allowed to submit and say we need,
because we're not going, is that correct?
We have a statutory deadline, the legislature has been very gracious over the years to allow the administration to continue to bring forward supplemental requests as they are identified. So, as I mentioned earlier, one of those items that I off the top of my head is just not included in here is the fire, a fun deposit.
if we receive additional information or feedback from the federal government regarding the disaster
and whether we need to inject more funding into that, we'll bring that for the committee as well.
Thank you.
Director, are we see that you've introduced a bill that excludes supplemental items
that were put in the operating budget? Is that right?
The bill that was introduced only reflects the supplementals that were released on February 3rd.
If we had incorporated them into the bill, we would have had a duplication of items there.
Sure, um, We've had,
we've have a debate, the state has had to debate about the urgency of the transportation match.
And you mentioned fire and I'm recalling obviously that fire seasons can start in the spring
Are there other items here given that this could become one big budget? Sorry for the term
That the governor doesn't get to sign or veto until June is there anything else that's pressing
On this list that has about 80 operating items
through the chair, or to the Chair,
Representative Josephson.
Not, not, all of these items can be addressed
by the June 30th date effective.
I mean, that's the timeframe that we have.
That's why this wasn't submitted
as a fast track supplemental.
Okay, questions, Representative Hannon.
Thank you, Chair Josephsen.
I wanna go to one of the specific items
in the spreadsheets, item number 60.
Which is a small supplemental of a million dollars for statehood defense.
When we last left that item in the spring, my recollection is that we had $5 million still in that fund.
And so I am curious why we need another million supplemental for ongoing.
a legislation for ongoing when it spans multiple years and that the previous appropriation had multiple year spending authority
Director through the chair representative Hannah. It's my understanding from my last conversation
with
WAG Mills
That that was expected to be gone here shortly within this fiscal year
And that there would be additional needs that needed to get covered in both fiscal your 2026 and fiscal years 2027
We can follow up with you if you'd like on the balances of those appropriations.
Yes, we would like that balance.
Yeah.
That's that.
And I guess we have, through the chair,
we've struggled to get sort of an accounting,
not just how many cases are we working on?
Where's our contractual obligations?
Because to some degree, it has seemed like we're laying out.
out of money and we want to sort of get our heads around how many pieces of
litigation do we currently have and how long are we going to be in litigation
over them. Representative Hannon, I chair that subcommittee. We make these
inquiries every year. I'd be happy to help you with that as well. So we'll find
there'll be two ways to get there. All right anything more that you would like
Thank you chair josephson, I
Those were the pieces that I wanted to cover again. I've got I know I have a very large crew behind me
All of us are available to answer questions as you work through these we can assist your staff and making sure you guys have the
Information that you need to make decisions
I am also available if there are specific questions that want to be directed towards me
And I think the only other thing that I'll note is, you know, I do expect to bring those additional supplemental items before it as we move through the process.
I believe the next timeline is amendments are due on February 18th.
So there may be supplementals included in that release as well as.
We work through.
The process co-chair shruggy.
First off, thank you for the timeline
on when we can expect the next update.
That was going to be one of my questions,
but you covered it, so that's wonderful.
Following up on Rob Josephson's questions
about just the first batch being in the operating budget,
now we have a new bill.
I assume your preference is to have
a supplemental move forward that contains
all of those items.
Just, is that a fair assumption,
or do you have her preference on how we move
forward?
Through the chair co-chair shruggi, I don't have a preference and I see that more as the legislature's
Legislatures prerogative to determine how they're going to move forward with bills
Thank you
All right, thank you. Thank You
directed
We will
Set aside
the presentation which accompanies
the Governor's own House Bill 289.
And we're gonna move to a deed now.
We'll take a brief at ease while they set up.
Brief at Ease.
We're back on record in house finance the Aladdin was room at 214 and Wednesday February 4th
We'll now hear from the Department of Education early development on its 2027 budget overview
With us today
From the department of education early developments Karen Morrison deputy commissioner and Don Hanish
Director of administrative services also in line is commission
Dean of friendship
And I will check to make
Yep, there she is
With our presenters, I'd like to come forward to put yourselves on the record and begin your presentation.
Good afternoon co-chairs and committee members for the records.
My name is Karen Morrison and I serve as a deputy commissioner for
the Department of Education.
Good morning.
My name is Don Hanish, and I serve as the administrative services director for the Department of Education.
Welcome.
Please begin.
Is commissioner Bishop online?
She was going to start us out.
Commissioner, um, would you like to make some introductory remarks?
Thank you, Chair Josephson.
I appreciate and it's an honor to be here with you today,
although on audio.
My name for the record is Dina Bishop,
the Commissioner of Education for The Department
of education and early development.
You're in good hands.
I wanna let you know with the team there,
I regret that I am not down there.
Our travel budget was reduced a bit,
and so we are spreading our work across 12 months.
of travel, but I will be present in June or next week if there's any follow-up, please
let me know.
To start the presentation today, Pete always grounds for itself in the mission, vision,
and purpose for our work, and my preference and focus is truly on the vision.
improving the character and quality of the world around us and for students to
do that so what we want students the know and be able to do when they leave
us is paramount for the department. I just to begin the presentation with a
background and the backdrop of a statutory duty of
On slide three, you'll see that the statutory duty of the department is outlined in chapter
three public schools, the establishment of a school system, as well as chapter seven
administration of public school. Statues really outline the state school board,
the staffing, and the commissioner, but the duties of department are a general supervision
State Board of Education in 2018 had operated in setting priority for our state and the five shared priorities are there before you most recently and our board meeting they reaffirmed these focusing the work to continue this work that was generated throughout Alaska to set smart goals by 2028.
There is a report to the legislature being presented next month, so you will get an update on this as well as other work.
At this time, I'll turn it back to The Room and please know that as needed,
I can certainly answer any questions and I'm happy to do so.
Thank you, sir.
Thank You, Commissioner.
We'll give it to your staff now.
We will take off from slide 4 or 5, 5 is what they want.
Please proceed.
On our agenda today, we're going to walk through a brief organizational overview, then walk
through the department's financial summary, division level funding, average daily membership
trends, and the major fiscal year 2027 budget changes.
This slide we've provided some acronyms.
If you see something that's missing, please don't hesitate to let us know.
So the Department of Education and Early Development, the department is overseen by the Alaska State Board of
Education, and led by Commissioner Dina Bishop. There are five separate divisions, four of which are overseen, by Deputy Commissioner Karen Morrison.
In addition,
D. provides administrative support services to three independent commissions and boards.
This slide has a picture, oh, go ahead, slide eight.
Okay. Here is a picture of how services and supports are organized within each division.
Slide nine. This slide is
a continuation of the department's organization and is specific to the commission and boarded
The Governor's Fiscal Year 2027 proposed budget for the Department of Education and Early Development totals approximately 1.79 billion dollars.
The proposed Budget fully funds the K-12 Foundation Program at approximately $1.27 billion consistent with statutory requirements.
In addition, the pupil transportation program is statutorily fully funded at $72.8 million.
The budget includes $467,000 in funding from dividend donations to the dividend raffle fund
distributed to districts per the statutory formula formula it also adds
$771, 000 to support a new residential school program in the lake and peninsula school district
Expanding access to statewide residential learning
The department has 10 permanent part-time positions,
280 permanent full- time positions and 16 non-permanent positions.
Okay, slide table state 10, a question from Representative Hannon.
Thank you, co-chair Josephson.
Ms. Hannish, can you tell me what your vacancy rate is of the department?
Yes, through the chair Don Hanish to the representative as of December 2025
deed has 37 vacancies which puts the department's vacancy rate at 18.5 percent
deed is actively recruiting for
14 of those positions the remaining vacancies are due to fiscal restraints
Follow-up represent Hanan, can you translate what that means to me fiscal restraint are they
Because of hiring freezes you can't advertise for them or are they
unfunded
through the chair
They're unfunted
Follow-up follow-ups, and I want to tie back to
You described a new residential school program
Can you tell me?
Would you reprise the paragraph that you just read describing that?
And I'm wanting to understand if those were new positions at deed that are there to support that school.
Or if they're not reflected in the employee counts.
Director.
The budget adds $71,000 to
support a new residential school program in The Lake Impenance Law School District.
Follow-up. Thank you, Mr. Chair
Are there positions at deed associated with that money? Are they okay? It's more a sense
Sure, there's none. Okay
One for follow-ups feel free
Was that a specific line item add in last year's budget to deed for that support?
It said it's a new element to me. I did not remember hearing about it in the past
The seven hundred seventy one thousand dollars is a new element for fiscal year 27
Okay, thank you. Okay representative valor
Thank you
And through the chair chair is the commissioner bishops on the line
Yes, so her I'd just like to make a quick comment
And then I will ask you a question if that's okay.
Commissioner Bishop, thank you so much for being online.
I commend you for it and for acknowledging that we're in a financial crisis.
So I appreciate you still being here.
That's what every commissioner should be able to do.
They can't be here fiscally to show up online for us.
Through the chair, I was going to direct, okay,
thank-you.
Can you say again, because I didn't write it down as fast as I should have,
the amount of vacancies that you have.
Because you're still receiving funds even though their vacant positions correct and the amount that you were receiving for those
Director through the chair. We have 37 vacancies 14 of which we are actively recruiting for
Can I do a quick follow-up? Yes, sorry. I'm
Thank you. So if it's valid. Thank. You so you have you're recruiting for 14
I did my math 23
Why aren't we recruiting? For all of them and why wouldn't you just return them back to us and then come to
Us if you needed a position. That's a lot of slush funds
Through the chair we'd be happy to follow up with that information for you, okay?
Can may I you may represent a valor. Thanks you
What is the total again for the 14 positions you're recruiting for and what is a total for
the 37?
Basically, how much money you are receiving for those positions?
Do you know?
Director.
Through the chair, I'd be happy to get that information over to you right away.
And I'm going to just make a quick comment.
Please represent Valor, go ahead.
You're sitting in front of the finance committee.
And you guys are very well prepared on a lot of things.
Again, we're the finance committee saying you're going to get it back to us makes me believe that you just don't want it on public record
So next time you guys come back in front of us. I really want those numbers all the time in the future in
Front of US so the public can hear what's going on. Thank you. Thanks. Yeah, I think this director this
ASD is quite new to the system
So she'll she will get that force on round two represent Hanan.
Thank You coach your Josephson
I asked you some questions earlier about those same positions, and I believe you said that the 23 positions that you're not recruited for are currently not funded in your budget, is that correct?
Through the chair, that is correct.
Okay, so only 14 of them are current funded and they're operating budget and although they have PCNs for 23, they are not recruiting for them and there's no money in the budget.
Director through the chair. That is correct. Okay. I
Still want to see that explanation writing. Thank you
So think of this as homework and please route it through. The chair
Representative more
Thank You chair josephson, I think I do believe commissioner bishops on the line right is she not able to answer these questions for us
a commissioner thank you through the chair to representative more if there's an
additional question I can answer it but it is absolutely correct that while the
PCNs or precision control numbers have remained within the deed budget you will
funding. And when the decrements of funding don't match being able to have the positions,
as the decisions became vacant, they literally are just position control numbers.
There isn't work behind them. The work has been reassigned. However, we are actively
recruiting for 14 positions that do have funding, that we do
you do receive position controls, you create position control numbers to be able to hire
an employee and FTE. But once your funds are no longer there, they unless it is specifically
eliminated with legislation, the PCN remains. Director, I think that your job just got easier
Thank you, Co-Chair Justice, and through the chair, my question is, firstly, around
the 14 PCNs, if you would outline for us what those positions are doing to meet the five
shared strategic priorities, that would be helpful for
you have in mind, what direction you
have mind to go in order to meet the overall goal,
which of course is student success.
That would be helpful to me.
I believe likely it's a lot around the reading,
but I want to make sure to have a better sense of that.
Secondly, if I may, follow up please.
Follow up, President Galvin.
Thank you.
There has been a lotta discussion, and this is.
There's no slide for this question, but there's been a lot of discussion from the federal
side around what's going on with all of the teachers, particularly in rural Alaska, who
are needing the H-1 visa, and they issue around the $100,000 per person who is coming in from
another country.
are from the Philippines, for example.
There are quite a few schools who are living in that world.
And I know that part of what you're doing
is to help with recruitment retention.
And this is not in a slide, so I wanted to ask it
if you have a sense of, what we're going to do.
If it's $100,000 a teacher, I'm worried,
is there any sense what's going on?
With the administration on the federal side if you've heard if your part of that internal
Discussion, I perhaps the commissioner is better aware if we've gotten a waiver and what that's going to look like because if
We don't get somewhere in that discussion
We really are going see a desk spiral downward into in terms of our teacher
recruitment and retention
Let's see rather than just leaving that question hanging out there
Commissioner, or your deputy, do you have a response as to the H1D issue?
I've read that as well, yes, what is your response to how we make that affordable?
Go ahead.
Thank you, sorry, through Chair Josephson to Representative Galvin.
You are correct in the recent presidential proclamation.
A federal fee of up to $100,000 for certain H1B visa applications was requested.
I did send a formal letter to the U.S. Secretary of State requesting an exemption from the supplemental
already hired and certainly fully certified teachers from entering Alaska, that letter
was twofold, to allow those that were already in the pipeline to move forward, as well as
allowing for a broader exemption pathway in recognition of Alaska's persistent role
in remote staffing shortages as you shared.
To put this into context, please know that 7% of all Alaska-certificated teachers presently
are on J1 and H1 visas. Presently, there are 280 educators teaching in the field for H-1
B visas and 180 educators on j1 visa. There are other types that next going Canada gives
us that primarily they are the H 1 B and J 1. Again, we have not heard movement, but we
and are working towards this end.
I do believe there may be a direction at the federal government
to direct these more to the medical and technology fields
and not other social service fields.
We will report on that when we have additional news.
Thank you for that interest because it is critical.
Thank You.
Follow up if I may.
I'm aware this is targeted, I think that it went into effect as of September of 2020 will the last summer.
And so that would mean.
That it's already in effect and and I guess in the short run
What are we going to do about that? I I pretty very much appreciate that we have a letter of advocacy in
Have you heard anything about the timing of that and in? The mean time?
Do you have the suggestion for districts or you know ways that We can support them from the state side?
Commissioner
Through the chair to member Galvin
We have not been assessed, even the teachers since it's been in effect, have
not then assessed the the teacher's nor the district's the $100,000 at this time.
And so we continue to advocate for a waiver, if you will, but we have
not heard a final recommendation for that.
And we can follow up once we do get additional reporting.
Thank you if I may follow-up just a comment.
Thank You I appreciate if we could be kept informed of any consultation that is happening
in ways where we may weigh in if that would be helpful I'd appreciate it we I'm sure we
would all sign on to a resolution or anything that
would help in that advocacy effort 7% of our teachers 280 that's roughly around 30 million
So, anything that we can do to help you in this effort of advocacy, I would appreciate
hearing about it.
Representative Bynum?
Thank you.
Coach, your justice in and through the chair.
This is probably an open-fielded question, so anyone can probably take it, and I'd like
Since Representative Galvin had brought up the topic of teachers,
it gets me to really thinking about the vacancies that we have,
is the department engaging with and or advocating to the University of Alaska,
Anchorage about their teaching credential program.
We talk about importing teachers from out of state and out
of the country to fill a need and the universities.
This is not about university.
about your advocacy to them.
They were here earlier in the week,
but is the department advocating to the university system
to say we need to fix our education
at the University level to create teachers in this state
from our largest community to help out with this problem?
Is this something you guys are actually looking at
and actually advocating for and doing something about?
I should we stay with the commissioner commissioner
Thanks, thank you through the chair to representative Bynum that's a good question and interestingly enough that was one of the goals in the
state board of education priorities to really have 90% of all educators coming out of the
university system. Having been a former regent myself, the numbers just don't add up to the
interest in education broadly through the University of Alaska. Hence, we've utilized other alternatives.
resources to add to the avenues to become a teacher.
And presently, we are very excited to share and the health education and
Senate Ed will have requested some additional information on this.
But we have begun with district partners and other hiring sponsors apprenticeship
programs so that people in
rural areas and other areas that aren't in court and necessarily in the core can build
their talent pool with people that do have ties to their community. And so the apprentice model
is presently where paraprofessionals who do not have a degree.
can work through the apprenticeship model,
a federally approved apprenticeships model
to work and earn and grow,
and be certificated after that pathway.
In addition, we are working with the military,
with a program of educators who are rather talented people
who leave the Military with their education
to have a past.
to certification, and that is in addition to working with the universities, of course.
The board did provide the University of Alaska, if you recall, they lost their accreditation
at one time.
They are building it back up and they continue to grow, but sadly, the number of the need
in the Alaska and the turnover rate, natural turnover rates, especially, wouldn't, I just
don't think there's enough interested folks in one avenue.
sometimes in rural Alaska is really due to the interest and ability of people to remain
in local communities. So we're attacked that major concern on quite a bit of different fronts.
That's an excellent question. Thank you. I'll follow up. Representative Biden,
thank you, a co-chair justice and through the chair.
Thank, you for that.
that program and those ideas and not just hearing about them,
but actually seeing them be successful.
So from your answer you are indicating that you're saying
that there's a demonstrated lack of interest and I would
like to follow up on that specific comment is the department
solutions for how to make a correction there and specifically inform the
legislature on activities or actions that we can directly take to help change
that course. What I'm trying to actually ask is as the department that has the
oversight on this if we're seeing a very problematic issue with recruitment in a
I expect that the department should be trying to find a direct solution on making sure
that we have an interest to folks coming into that career field.
And I'm very interested to hear from the Department the very specific recommendations that you
are going to be bringing forward to the legislature to ask us to take action.
My expectation is that your department's doing that.
Is that something you'd be committed to bringing forward
in providing to the committee?
We're likely to make this the last on this
just because we have ways to go.
Commissioner, on the issue of recruitment
and your providing information
to House Finance Committee.
Through the chair to representative Biden. Absolutely. We do have multiple avenues that we are presently working on from high school programs all the way up
And I don't want to share that this is an Alaskan problem. This is really a national issue with shortage of teachers nationwide. So we compete with not only with other states in this same
Career field, but also with other career fields. So yes, we will bring those forward and happy to share
Many of the actions and local districts as well as state level as, well
Thank you and one thing I would say of revs and Biden is the Board of Regents always has a line item
Where that is unfunded where they want typically like two and a half million dollars additional money on?
In support of their teacher recruitment of retention effort
So that's another avenue to scratch that itch, so to speak.
All right, slide 11.
Again, Don Hanish, Administrative Services Director for the Department of Education and Early Development.
This slide provides a visual overview of how funding is distributed within the department.
The Expenditures pie chart on the left illustrates how a significant portion of funding, which is just over
1 billion six hundred seventy six million dollars and
Or ninety three point six three percent is distributed through grants to support public education across dalasco
The pie chart on the right shows how funding is allocated across the department's divisions the K through 12 portion represents
ADM driven formula funding, which is
over 77 percent of the
department total budget
The next slides will provide additional details and the specific components within each division
Okay, let's go to slide 12
We start with the executive administration section within deed which includes the state board of education the commissioner and deputy commissioner the office of
Education advocacy the legislative liaison and for additional board and support staff positions
the Executive administration
component of deed
received funding from the UGF and IA, which is interagency receipts.
Each division pays internally for the services of the commissioner's office provided department
wide.
The governor's proposed budget for fiscal year 2027 is $1,886,000.
The reduction in unrestricted general funds reflects legislative actions taken in prior years, including the elimination of travel funding for the commissioner's office and the state board of education.
In addition, positions were transferred from the executive administration section to the student and school achievement component to realign the tribal native languages program.
Associated, general funds were transferred with the positions to support this realignment.
These changes reflect budget-structured adjustments rather than reductions to program services.
Okay, slide 13.
This slide summarizes the operating budget and position history for the division of finance and support services
Which administers the majority of the K through 12 formula funding?
Most of funding shown here are pass through funding distributed to school districts not department operations
total funding
is at $1.52 billion in fiscal year 2025 actuals
and it has declined to $0.48 billion
in the fiscal years 2027 budget proposal.
The reduction reflects a lower UGF
and technical and structural adjustments
rather than changes to statutory formulas.
Director, I'd like to interrupt you for a moment,
and I don't often, just because of our respective schedules,
get to talk to the commissioner.
And so I've, a commissioner, if you're still with us,
I have a question for you.
Are you with this?
Yes, sir.
So, the Anchor School District,
where I attended school in the 60s, 70s and 80s I guess,
has indicated, and they,
They seem commissioner very credible.
These are very smart people who tell the truth.
And what they report is that classes will grow
to as many as 38 at the secondary level.
Middle school sports will end.
There is the shuttering of programs, slashing of positions.
And that the reserves are spent down
There was no other where no their place to go the municipality of Anchorage's response is to tax as much as it can within the law
Does the department?
find
ASD as an example credible does it find its?
panic button if you will a credible
Explanation of events and and does that take a position on how to how, to help?
Thank you, Chair. That's a great question. And my position as a commissioner is not
to pass judgment on any one district, but what I would like to really engage in is a
look at the audited financials over time.
Alaska, Juno District presently isn't finding the massive deficit as some other districts
are finding it smaller and then there was either a report of a district operating in
the black and members that are on the committee have those districts in their school districts.
Why is it, in one district, one is seen and they're using alternative modes to, like you said, tax?
I think it takes a deeper look of trend analysis and then the expenses that are incurred.
I can share one thing that I do know about rural Alaska when I looked at certain line
items is that the majority of funds in rural
Alaska as compared to larger and although you did ask about Anchorage is the cost for
energy and utilities per pupil in
rural after there's a tremendous amount that doesn't go to the classroom because of just
the costs of doing business.
So I think what would be prudent is a study of a random selection of districts and to see where
those costs are and where are the drivers that are affecting some districts, and not others.
Because this is the age-old question and it's a good one.
But Commissioner, historically, we haven't had separate funding for energy and utilities.
So that our districts no longer would be fully obligated to pay for those items
Chair Josephson my position here isn't to
You know legislate any kind of
Recommendation at this time. I can't share with you and provide this body evidence of where expenses are being made
and where the costs are that the districts are experiencing,
we can confirm those numbers in so far as those audit,
nearly audit.
I would suggest what it may take as a deeper dive to look at
more than just those reported to really look
at a trend line to find those out.
And I, to your question on specific energy.
The data is there to demonstrate that growth in some places, whereas other places did have a more stable cost structure.
All right, I mean, my concern is that what you've said sounds reasonable.
You want a surgical answer, but meanwhile, tick-tock, children aging, inflation not adjusted, and here we go.
Represent of Galvin.
Thank you, co-chair foster. I appreciate the question and I very much appreciate hearing the commissioner, especially as she's referring to
various school districts and what their needs are and if I may I would like to share with this group for the record
That while we have in Anchorage
Just I think just over 40,000 students
Matt Sue has around 19 and it also has a deficit of around 22 million
I, right now, with 7.9,000 students is at an $8 million deficit, and I apologize for
calling you, Co-Chair Foster, I know your co-chair, Josephson.
Juneau is with, you know, 4,000 students, so it's a different scale, and they're looking at a deficit of $5 million.
The only district that I know of, I have done some research around this,
so I want to share it with the body.
In my work in the subcommittee for finance,
I really wanted to have a better perspective around the entire state.
There are very few who are not.
with the deficit, one of them is Fairbanks, congratulations.
But what I hear from Fair Banks is that they have made some really,
really tough cuts and they've added.
some really, really tough class sizes.
So they made those decisions last year
and they are not with a big deficit,
but every other district is with,
it's all to scale, right?
And so I appreciate hearing both utilities and insurance
and I'm gonna add to that healthcare,
add for some, it different problems around transportation
or maybe it is fixing their major maintenance
because they don't have enough money
And so they scoop it out of the BSA.
They scooped out what we're hearing is the primary foundation formula,
which we know in rural Alaska, they just are making do.
And it's not from what I've heard from school districts and
I have spoken to more than 20 superintendents, it is rough.
And to your point, Coach, your justice said, yes, we are living with people in Anchorage calling us and saying, wait, my 5th grader can't get into any athletics next year.
My high schooler, who loves hockey more than anything, can be doing hockey at their own highschool.
That is really unusual for us to deal with, and I'm going to add.
It's a different environment in rural Alaska, sometimes even tougher.
So I think it's important that we consider all of this because as we're thinking about being proud that
we are fully funding.
our statutory obligation, which we are doing.
I appreciate that.
I think we also need to include in this conversation,
your point of, is it enough?
We're dealing with all these phone calls, why?
We clearly haven't kept up with what I'm gonna just call
inflationary cost of educating kids.
And so I would hope that with this
conversation continues.
I know that in the subcommittee,
we're gonna be continuing it as much as we can,
the state department is doing, I know their best job of working on a very skinny budget
and supporting all 54 districts, so I appreciate you being here to give us, you know, what you're
doing and helping us appreciate how we can help you.
So thank you, Reverend Towiszewski.
Thank you Co-Chair Josephson and through the chair and just to address some of the comments
the cost of utilities and especially in the rural communities and how high electric and
heat and all of that is really digging deep into the funding. I've recommended it before
bringing the school districts into that power cost equalization plan and really
because I think that would certainly help those school district because they're not in that.
they as a school they they pay the full and in high cost of utilities in in the in
the villages in rural areas and honestly I believe the prices that the that
the folks that bring in those utilities that bringing in that fuel set it based
on what that school district is willing to pay.
and everybody else pays that also.
And so I think that's something that really needs
to be looked into as far as deficits and surpluses
in the school district budgets, I
think there needs to a real and deep audit
of these school districts.
Because we hear a lot of information
and we see a lotta information come out and it's not always,
the actual circumstances. And just for example, we talked about Fairbanks having a surplus
all of a sudden. Well, they found $11.4 million in a couch cushion somewhere, and all the sudden
they have a surplus. Where did that money come from? Where is it? Why did they not know they had that
real, real audits. We don't want smoke and mirrors.
We want talking points.
We do not want emotion.
We ought honest, true facts to be able to make these decisions.
And until we have that, I think we are going to continue to
spin our wheels and we're going continue
to beat around the bush on the subject.
So I'm all for great educations for kids.
I think all of us are. I don't think you find anyone that would say otherwise. This is an important
issue and kids deserve a good education, but they deserve honest and accurate information at the
same time. So thank you for the work that you do. Really appreciate it. Let's go to slide 14.
For the record, my name is Don Hanish, administrative services director, and we have been joined here by our Finance and Support Services Division Director, Heather Heineken, to cover the next few slides.
Yes, Heideken.
Good afternoon for the records. My name's Heather heinecken. I'm the Director of Finance & Support services for The Department of Education.
the total state aid and one-time funding dating back to 2006.
And you can see the years that the one time funding was added
and reflected in the separate color here.
In the preliminary 2026 column and 2027 column,
that does reflect the new BSA, statutory BCA of $6,660.
We are seeing a little bit of a decrease for 2027, and that's specifically due to a decline in projected
ADM or average daily membership. Okay, slide 15.
And slide fifteen is
is similar information again the
the
projected state aid for 2027 dating back to factual numbers of all the way back
to 2026 and the line there demonstrates the fluctuation in the ADM from year to
year and just a slight decline over the years and as we continue to see a decline
in student enrollment.
Thank you, co-chair justice and through the chair just really quick I was curious on why you weren't including in the state aid slide on 15
Why you were not including the one-time funding components in that slide?
Through the Chair
Thank You for that question
The numbers are reflective. That's just a total accumulation of the stayed aid so that the numbers should be
both
the one-time as well as the original state aid.
Okay, last comment was from Ms. Heineken for the record.
Thank you, co-chair Josephson,
through the chair for a follow-up.
Represented by him.
I must be off a little bit because I'm looking at,
for example, on FY, I am sorry, 2025,
we show 1.16 on that number from slide 15.
And if you look at slide 14, it's 1,16.
And then we have the one time funding of 100 and 73.
And so I don't see that those are cumulative, just state aid only and the ADM.
That's what I was trying to point out.
Through the chair for the record, Heather Heineken, you are correct.
I apologize for that error.
That does just show the state aide and I'm happy to.
Change out slide to reflect both the combination of of the funding thank you through the chair
I just was I was curious on why it wasn't included if there was an intentionality with that or if it's just that wasn
Included. Thank you to the Chair of this set there. No intention there slide 16
All right for the record Heather Heineken slide
16 is our
statewide average daily membership and this includes a breakout of brick and mortar students compared to
correspondent students and
As you can see, it's about a one in five student ratio for our number of students in
Correspondents to brick-and-mortar
Students we are seeing a decline for the first time in recent years a slight decline
for correspondence and
Continue to decline for brick and mortar students in our projected ADM for FY 27
Representative Bynum. Thank you
Coach air justice and and through the chair when we're looking at these numbers. We're
Looking at the overall spend that we have and we see that there's
year over year or at least over the last few most recent years we are seeing a decline in the actual dollars that
We are spending because that's based on the ADm
You know, contrary to what you might hear in some of the media out there is that there's
massive hundreds of millions of dollars of additional spending that we've had year over
year.
And when I look at this, that isn't the case.
That isn t the truth.
Part of that though is because we are reflecting an ADM decline, is the department actually
transportation resources because I know that if I have one school in my
community and I'm losing students in that community the square footage doesn't
change because i'm loosing students the fixed costs don't change
because losing student so I just I am wondering if the department is actually
closely tracking and able to report.
on the actual burden that is being put on school districts
when we see the declining enrollment
based on a facilities and transportation perspective.
Ms. Anakin.
Thank you through the chair.
This is Heather Hennigan, to a representative of mine.
We are not officially tracking that.
That is an ongoing conversation
that we do have within the department
because those dollars are the same dollars
that have to cover.
the ADM dollars are what generate the operations and maintenance of all the
facilities and those costs don't decline with the decline of students I agree so
we could would be happy to pull a report together and officially look at
that information through the chair yes follow-up thank you what I'd really
like to see is is not not only those numbers but a recommendation from the
can address that. I mean, we obviously have lots of different ideas, but it would be nice to know
that the department recognizes that this is a problem and that there is clear recommendation
from the Department on what we can do to help alleviate the problems this
is causing in our school districts. Thank you.
Thank you and through the chair. So I guess my question would be when we're doing the ADM. How come?
We're not looking at establishing doing in the adm three to four times per year
Get a better accurate accuracy of enrollment, I don't know who wants to answer that
Maybe the commissioner maybe dr. Bishop would I'm just curious on that because if you have an accurate adM
It's what I do know is this what? I've been told it that potentially when you
the dividend that comes in in October.
Can you quickly answer though when we do the ADM?
Is it October?
Yeah.
Do you know what day?
Through the chair to Representative Allard,
it's a 20-day count, so it starts the last day
as the fourth Friday of October,
and then it is 20 school days backwards.
So what I would follow up represent that.
Thank you, I appreciate that chair.
So, what was told is that people from all over the state
of Alaska come in to spend their dividend within Anchorage
because they need supplies for the winter.
The winter's coming, they needed to be handled.
But they bring the kids with them.
Maybe the kid's come out,
they come at a school,
they're doing their doctor's appointments,
all sorts of things to get caught up.
It's reasonable.
But by doing that, the ADM is lower
than probably it is throughout the rest of the year.
Tell me if you're looking. Do we need legislation or are you guys looking at doing an ADM count two to three times more
Throughout the year to see where these kids go to different school districts to what they move
Thank you, chair, whoever has the strongest opinion
Heart-filled
Yes through the chair to representative allard. That's a great question. It's something that we've talked about quite a bit in the department and
Having been from coming from a district that oasis count is pretty labor-intensive for the districts
however, that's a policy decision that
That the department would certainly love to have a conversation about but not necessarily put forward something specific
And the last response was from deputy commissioner Karen Morrison. Sorry
Okay
Through the chair, could I just this is Heather Heineck in
to represent a valor, just to clarify if students,
as long as a student is enrolled, it's not an attendance.
They just have to be enrolled in the school.
They could have an excused absence.
They can have doctor's appointments.
They may miss school for those days, as
long they're enrolled during that period.
There's truancy issues and all sorts of other things,
but that's a different conversation.
So that doesn't affect the ADM.
agree with W.D. Commissioner Morrison that that it's certainly a conversation and I I believe it was actually
introduced last year in
HB 50
One of the house bills one of The bills put forward to do a second count just for that reason because students do move around
In the districts and to a comment to allow for
That can I just go a quick comment
A quick comment.
Thank you.
And Chair, the reason I brought that up was because when a student moves to a different
school district,
the school District at left will continue to get that money until the following year when
they realize the child isn't there technically on their budget books anymore.
So it could benefit some communities where parents are in Anchorage.
They decide to either move out to Wasilla or they move to TOC.
Okay, all right. Thank you chair. Representative Moore. Yes, thank you
Coach Herr Josephson through the chair
I'm wondering what or maybe you guys have looked into it or not. What are the the
drivers for the declining ADM statewide?
Deputy commissioner you want to try that?
Through the Chair to represent more that's a great question. I think a lot of it has to do with
some families choosing to homeschool.
It also has to do with a lower number of families staying in Alaska.
But we haven't done a deep dive as far as what the variables are.
But those are a couple of the trends that we're seeing is parents are choosing to put their kids into correspondence programs.
It's also my understanding that there are two additional private schools this year.
And so parents may be choosing have their children enrolled there.
That's a very high level and not as detail as probably would like but we can certainly provide more information on that
Okay, follow-up. Thank you, and then
Do we have any information? On which regions or districts or experience the steepest declines?
Deputy Commissioner Morrison through the chair for the record. This is Karen Morrison to representative more. We
Probably have that information, but I do not have it right in front of me, so we'll follow up great.
Representative Jimmy, okay, all right, let's go to slide 17
For the record Don Hanish administrative services director for the Department of Education and early development
Our next slide features the Division of Administrative Services this division provides critical
internal services to the department
including grants, administration, procurement, IT, human resources, and fiscal services.
This division also manages the department's facilities leases.
The governor's proposed budget provides $6,204,000 in funding for this division in fiscal year 27.
of $1.5 million in interagency spending authority,
not actual funds.
Okay, slide 18.
The fiscal year 2027 governor's budget puts IEE at $207 million
in funding, reflecting increased funding in UGF,
DGF and federal funding.
Currently the division has 74 permanent full-time positions.
To strengthen tribal engagement and implementation of the Alaska Reads Act,
two positions were transferred to the student and school achievement component,
aligning policy with district support.
The student- and-school achievement
component also includes nine federally funded non-permanent positions supporting the five-year
CLSD grant. Mental health trust funding continues to support deed's positive behavior.
interventions and support initiatives prioritizing rural and remote districts
Okay
Representative Galvin. Thank you co-chair of Joseph sentence for the chair
I am and if you could help by refreshing my memory
I I believe that the redact had the pre-k grants going up three million per year
But the for some reason the second year you didn't have enough
schools that met the requirements, and so we didn't gain another 3 million that year.
But is this reflecting, because now I think we're in our fourth year perhaps.
Are we reflecting 3,000,00 each year, or at least from last year to this year?
I just want to make sure that's on the record, thank you.
through the chair to Representative Galvin.
I'd actually like to ask Heather Heineken.
I just wanna make sure that I'm,
for the record, this is Karen Morrison.
I don't wanna be sure we're really clear
because there's multiple funding for pre-K.
There is funding through
the foundation formula, which is K-12 funding.
So that's Director Heinesken's wheelhouse.
And then there is also pre K grants,
which, is through The Division of Innovation and Excellence.
Did you hear the question? So miss Heineken
Heather Heinken through the chair to representative Galvin
for the ADM the the point five ADm for school districts. We are going into our fourth year and
each year the statute limits the amount of funding to up to three million dollars and
So this year
I'm sorry, we're going into the third year, the year's blend.
The last year we funded two point, I am going to say $2.7 million.
And then we added this year where we've been able to add $3 million, so
$5. 7 million dollars.
Follow-up follow-in representative Galvin. Thank you. So as I understand it the first year Anchorage applied for those grants
And they were the only ones I think who were able to
receive them second year
There were not enough
To add additional so second so that's three mill my understanding is that we build three mil each year and
if we have enough
applicants who qualify second year there were not enough applicants to add is my
understanding now we're in the third year so my my thinking and please maybe
my math is off but I thought we were gonna go an additional three million an
additional 3 million this year on those grants that that's the way that the
Through the chair to Representative Galvin, this is Heather Heineken, it is up to 3 million.
So, we didn't have 3,000,00 last year and get to add another 3.0 million this year for 6 million,
it was what was needed up 2, so I'm 2.5 million dollars.
This year we were able to add 3 million so it only went up to 5.5 or 5 point 7 million dollars
Okay
Okay, I will take this off line because I'm still missing a year
And so I'd like to make sure we march through that and maybe with our ledge finance helping us
Thank you very much. Your co-chair represent by them. Thank You co chair Josephson through the chair
We've had lots of conversations about federal impact aid and how that's potentially going
to have an impact on the state finances.
I've heard a lot of conversation around this topic.
Has there been any discussion within deed to potentially take on responsibility of making
and trying to leverage impact date as much as possible.
And basically take that over from the districts themselves
as far as the application process.
Deputy commissioner.
Through the chair to representative Bynum,
I'd actually like to ask commissioner Bishop
if she will address this question.
Commissioner, there was just a question, yes.
About impact data and taking over duties from districts.
Thank you through the chair to
Representative bium
We can certainly as the state provision support this but impact date is really related to local governments and local areas of
untaxable areas and so the local districts
have an account of those families who reside within their boroughs or on other tribal land
or military land. And so it would be difficult for the department at the state level to know
where these people are. It really is a best fit for a local government. However, in so much
funding left on the table, if you will, but certainly just from speaking as a superintendent
with that experience, you are most familiar with your families and your community than
the state government would be.
Follow up.
Is there anybody in the department that's actually coordinating and helping the school districts then do that process?
I understand that the schools districts themselves do see that at the ground level.
However, the state is the direct beneficiary of this program or this
program when school district's apply.
So I absolutely want to make sure that we're getting the most benefit out of that program.
The question, I guess, is the follow-up,
is does the department actually have somebody
that's coordinating and helping?
And if not,
is that something that you'd consider doing?
Commissioner Bishop.
Thank you.
Thank You.
Through the chair to Representative Bynum.
I do know that we do provide technical assistance.
We do have an expert on the impact aid,
but that person does serve the functions of the state.
What I will do, I have a bi-weekly meeting with superintendents, and I
will address that with them at the next one on the 16th of February to see what
that would look like and what types of supports they would need at
the local level. You are correct. The local
level does receive those funds, but the state does through the funding formula.
Receive a deduct, if you will, on local tax
thank you. One other I'm related unrelated related related. Please proceed. Thank you
Coach Anderson. Specifically on the topic of federal impact aid as I'd mentioned earlier that
we we do have an issue of of denial from the federal government. We have
an appeal that's going on. I know that the timing of when we might get an answer on that is
as we move forward have provisions been put in place and or are going to be put
inplace to uh prevent us from being in this uh position of uncertainty as
we go into the future commissioner thank you chair josephson uh to
representative binance to speak to the first item uh i will be meeting and
These courts are discussions, if you will, with the federal government IAP later this
month.
So we should get some more information.
As you know, the, you may know the Federal Government shutdowns have impacted a lot of
our data, as you suggested, they're become a little bit more sporadic.
But I will follow up on that once we have that meeting finalized.
to certainly house education and house senate regarding the local contribution issue.
I know Ketchikan had some interest in that in the past about local contributions.
We did have a provision to discuss and our goal was actually to define more so what local
That was not a popular regulation.
And so our recommendation to the State School Board
was to go back out to districts
and go to where we started.
And we've started our discussion two years ago
with the finance officers of each district
to get their input about those definitions,
such as in kind.
Districts have to treat those differently according to their local boroughs and their
local burrows definitions.
So we continue to work on that.
There is, I did read through some legislation that does ask for no cap on a local contribution
which would of course impact the ability of usage of that program in our state funding
formula.
if we didn't make the 25 percent disparity only having the most resource and least resource districts
being within 25% of each other we would risk being able to use impact aid as a deduct for
local communities on their basic needs and those local community that do apply for it and receive
Thank you chair josus and commissioner my question is also on impact aid, but it's a little more speculative
It's my understanding that federal impact eight is only available to districts who are first-class burrows or cities running their own schools
Is there is the law restricted from allowing rea's?
Could the state apply for federal and cactade for re a school districts on behalf of those?
districts
Thank you, Chair Josephson.
I would like to defer to Heather Heineken in the room, but my understanding is there
are some REA districts that do receive in lieu of tax money.
Ms. Heinken.
But it may be alternative programs.
Thank You.
Could I defer it to the table in The Room, the experts in
The room?
You can.
Ms Heintken?
Through the Chair for the record, Heather Heineken, to Representative Hannon.
REAs are eligible for impact aid dollars.
It's, most of theirs are the Indian lands that they qualify for,
but they certainly apply for
impact eight dollars, there are several that are currently receiving those funds.
Follow-up?
Follow up.
Does the Department of Education
assist REA's in applying for their federal impact aid and
PILT monies
Through the chair Heather Heineken to representative Hammond
They're treated just the same as municipal districts. They apply on their own in the department does have a
One staff member that is able to support the process
If you represent Biden, want to ask a quick question on slide 18, you may thank you single question. I promise
I promised co-chair Josephson. And I won't have any further
In-depth questions, unless something pops up unexpectedly
But when we look at on this slide
Through the chair
When we looked on the slide
The second half of the title says education excellence
And when we read down into the description of the mission,
we say academic assessment and accountability.
Now, I've heard from members of
the administration and many folks in the public
that criticize this legislature when
we appropriate money in
the tune of $1.3 billion for
Foundation formula and other items for school districts.
that we employ a department that helps us execute the laws
that are in statute.
And when I look under the statute, 1407 020,
that is the duties of the department.
And specifically under 16, it says
that the Department will monitor student performance.
And under the department may intervene in school districts to improve the instructional
practices as described in statute.
And then there are many other items in there where we talk about that we as a legislature
through our statute have given you the Department the responsibility of having this direct oversight
of assessment and accountability and you have the ability to intervene.
With that being said, it looks like that that particular component is in this budget for the department.
Specifically, is there deficiency in the budget to allow you, the Department,
to do that specific part, which is academic assessment and
accountability to our school districts?
Because I'm hearing differently from members of the administration and the public.
So I just want to clear yes, this is our responsibility and
Yes, we have the resources necessary to do that or no
We do not have to resources necessarily do. That so that we as a finance committee can correct that
That's a commissioner question commissioner Bishop
Thank you through chair to
Representative Bynum you have wonderful questions, and you're speaking my language my
Doctor, it is actually an accountability and assessment.
So yes, insofar as the department is responsible for running the federal accountability
and academic program, we approve the state testing,
we approval that.
I would say that just speaking as since 1990, I've been in the State during education work
as a teacher in all different jobs.
The leverage for accountability, sometimes those carrots and the sticks aren't necessarily,
I get, utilized.
Within the, the first time I've seen really strong accountability since NCAA, where,
or NCLB rather, basketball is on my mind, so not since NClB were actually was part
have direct work into schools that weren't succeeding, I would say presently the strongest
accountability is in the REEDs Act where we can intervene in districts and really have
law around districts communicating with their parents, being in certain different programs
are established, given that we really defer to local boards for much of the policy in
their boards.
And so while we have the systems and the academic assessments, the carrots and sticks
Supportive around ensuring that growth. I would I was saying more so with the read that though and we're moving in that direction in
that regard
Okay, we'll sorry. We're gonna move to slide 19
All right
coach your justice, and I will
At some point I wouldn't like to have on the record from the department specifically what
Items we can do to empower them
Because I know for certain that there are school districts when we say we just going to let the school district do
What the School Districts are going?
To do and we don't have direct reporting back to us
There is this disconnect between the 1.3 to 1 point 4 billion dollars
We're putting into this system and wanting to see specific results and I can specifically say
that in my school district, as many have seen in the news,
that there's been very grave concern about how monies are being appropriated
and how those are what the oversight is.
And I don't believe that, there has been much of a report back to this body
about deficiencies that might be happening in those districts.
And then what we can do to help support the department
to make sure that we correct those problems.
I'm going to voice them a little frustrated that this is such an important topic and such
a big part of our budget that making sure the department has those resources necessary
to hold our districts accountable if they're saying that it's up to the districts that
we're able to have proper oversight of the Department.
So I appreciate the opportunity to say that.
further, and I would say it's going to be hard to get the administration to spend more
than it is proposing to spent.
It can be done.
We've offered appropriations that don't get vetoed, so itís possible.
But as a baseline, itís challenging.
Letís go to slide 19.
Our next slide is an overview of the Division of Libraries, Archives, and Museums.
This proposed budget will see a reduction in the division's IA, which is actually just
a reduction in spending authority, much like the
Division Administrative Services.
The division currently has 48 full-time positions and one non-permanent position.
Slide 20 we are looking at Mount Edgecombe high schools fiscal year 2027 governor's proposed budget
Which is at sixteen million eight hundred ninety one thousand dollars with slight?
Increases to ugf and general funds. I mean excuse me uGf. And federal funds
While other funding sources remain static
The number of positions in the fiscal year 2027 governor's budget remain the same as in
the Fiscal Year 2026 management plan, which is 10 per minute part-time positions, 44
per-minute full- time position, and three non-permanent positions.
Okay.
A question from the co-chair, co chair Foster in slide 20.
Yes.
Thank you, Mr. Co-Chair.
finance presentation that we're receiving mostly about the budget but I just
thought it would be worthwhile at least bringing up because I've had so many
people reach out to me about it and that is some of the turnover that
we are seeing at Mount Edge come and you may not be able to address it if
there is anything you could offer that would great otherwise I want to throw
it out there so that maybe the commissioner or somebody could update us
at some point.
So are you asking for an update at a later time or now?
Would love some kind of a response now,
but if not, later is fine.
Thank you.
Good to go.
I'll refer that to the commissioner.
All right, commissioner,
update on Mount Edge comes woes, if it has woes.
Thank-you, yes.
Thank You Chair Josephson to co-chair Foster.
Yes, I do want to share that next week I'll be in town with Mount Edgecombe Superintendent
to present some of the changes that have occurred at Mount Edgcombe.
Some of those changes have been financial in so far as a contracted go out to a new
one of the principals and we had a change in the superintendent.
And with these changes, the continuity of some programs changed and altered.
We are addressing those, all things from student activities, student health care,
and the education program.
We're happy to share and The Superintendent himself will be there.
We are more in line with pre-pandemic staffing levels.
We did reduce from last year to this year for teaching positions and three administrative positions.
So those are on the school side, but we can also discuss the nano corporation dorm and kitchen site as well.
And we will share that presentation with you, as well.
Representative Galvin.
Thank you.
Coach, your justice.
And I also have a question with regard to this particular school.
The only school really where the state is responsible for this
particular type of a school, very unusual.
And it's important to note that I read in the headlines, and I'm hoping
I am wrong, that they've lost.
quite a few of their enrollment, so they're now down to perhaps as few as half the amount
of students they used to have, or there's been some issue around losing enrollment.
And with that in mind, I'm concerned that since they do operate using students through
Will there be a whole that the state will be expected to fill with the expected
holes that certainly will there in UGF or because of the lower enrollment?
And any numbers you can give us around enrollment pieces, I think are important for
this discussion around our budget, please.
Thank you.
Okay, thank you, to Representative Galvin, rather, through the chair.
There has been, not a 50% reduction, there has
been from the beginning of the year, about a 25%
reduction which is higher than in private.
for previous years. There has been just so you know we will present the information on exit interviews.
Some students needed higher care medically. Some many students were you
know disappointed in the new program. It has not been
Some students didn't make the basketball team,
so they went back to their homes to play basketball there.
It really has been a myriad of different issues.
We do exit exams with each.
But again, as Representative Allard mentioned,
and we previously talked about the student count period.
During the student count period, they did start with about 400, I believe, the count
period.
They were projected to start at 400.
The count hearing had 385, and now we are about over, a little over 300.
But we can continue with doing some recruitment efforts.
The student government is highly interested in this, in their leading some of those actions
Mount Edgum and the interest in Mount Edge can given the negative public publicly about it
Thank you. All right, let's go to slide 21
For the record Don Hanish
For their professional teachers practices commission the governor's proposed proposed budget
Would see an increase in both ugf and dg f totaling just over three hundred thousand dollars
permanent full-time position.
OK, slide 22.
The Alaska State Council on the Arts
receives updated general fund authority
based on license plate revenue projections of $80,000
and increased federal funding for the arts, health,
and well-being program.
This portion of the governor's proposed budget
reauthorized existing receipt authority
for license plate revenues,
aligns the authority with updated revenue projections,
and ensures ASCA can expend revenue that is collected.
The proposed budgets would see a slight increase
in the council's UGF and federal funding,
which is attributed to the national endowment.
ASCS continues to have five permanent full-time positions
Non-permanent position. All right slide 23
The Alaska Commission on Post-Secondary Education
The budget includes a 3.29 million dollar increase from the higher education investment fund to support Alaska Performance Scholarship
and
the Alaska performance scholarship step-up awards for the
2027 28 academic year
This reflects record increases in eligibility and usage following the enactment of house bill 148 in
2024 in accordance with AS 14 43 9 15 c a
corresponding one point six million dollar increment
For the Alaska education grant is also funded to maintain the statutory two-thirds APS and one-third AEG funding structure
Both increments utilize the full 7% have funding cap
Although the governor's budget proposes an increase in DGF of just over five million dollars the commissions
the the commission
continues to have
49 full-time permanent positions and two non-permanent positions
All right, and finally slide 24 and just the second portion of that slide, please of course
For the record Don hannish
So as one of our highlights we want to bring your attention again to the
new residential school program Bristol Bay Regional Career and Technical Education consortium
The trauma-engaged schools, positive behavior interventions and supports, coaching, funded
at $150,000, increased federal authority to support arts, health, and well-being programs,
and an increase for the Alaska Performance Scholarship Awards and the Alaskan Education
Grants.
I have a 3.45 and I intend to make that meeting.
Did you have any comment or question?
Yes.
Russin Galvin.
Thank you, Co-chair Justice N in the interest of time.
I'm going to quickly ask if there was thought around the bill that passed through the House,
through Senate, and got signed by the governor around
National Board certification teachers. I know that was in your plan with regard to recruitment retention as part of how to keep our
best of the best here in Alaska and
for whatever reason there's not funding in the governor's budget for it and it's a law that has passed and
So my question is if the commissioner has thoughts around I'd know
that you're not
You have 37 positions, 18 of which are unfilled,
that you're trying to fill at 14.
Is there any way we can find a way to follow the law
and in this budget to make sure
that these national board certified teachers
who were expecting some form of a stipend to get that?
Commissioner briefly, what is your
Administration's policy on funding this statute.
Thank you, Chair Josephson, to Representative Galvin.
To be clear, the bill did pass,
not last session but the session
or not lasted for the year before,
and it did have just in having the 30 days passed.
So I don't believe the governor did specifically sign off.
It was a path in due to not taking action.
But within the specifics of the statute, it talks about pending appropriation.
So without a funded appropriation to the budget process, the department hasn't implemented
those incentive payments.
We would be happy to do so if through the legislature, this does come to fruition with
funding for this particular incentive for national board certification.
Just want to know if you have a recommendation for how we in the legislature might be able
to pull those funds together without your, I think we would need your support to do it.
And so if, you would like to take this offline and we can talk about that,
I just want make sure that we come true to the law that passed.
And we can take that offline, uh, coach. Okay. I appreciate that. Um, I want to thank our,
Team today your team really commissioner Bishop deputy commissioner Morrison director hannish and miss Heineken.
I forgot your title.
I'm sure you have one
And that concludes our business for today our next house finance committee meeting is scheduled for tomorrow take note
that tomorrow, February 5th, we're meeting at 9 a.m.
And at that meeting, the Department of Revenue
will be here to introduce House Bill 284,
the Governor's Tax Compact Bill,
followed by invited testimony
from the Alaska Municipal League.
With that,
we will adjourn today's meeting
at 3.41.
Thank you.