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House passes education spending bill after marathon session

By Rhonda McBride 5:35 AM April 8, 2014

Lawmakers started at 5 p.m. Monday and voted just before midnight: That’s how long it took to pass House Bill 278, the governor’s omnibus education bill.

The vote was 29-11, largely along party lines.

In his State of the State speech, Gov. Sean Parnell said he wanted 2014 to be remembered as the “education session.” But was Monday’s marathon, seven-hour House floor debate what he had in mind?

HB 278 was a stuffed suitcase to begin with; loaded with a number of education reforms such as money for charter schools, vocational and technical programs

Then the House Finance Committee added more features to HB 278, including a $300 increase in the base student allocation (BSA) to be spread out over three years. The BSA is one of the components the state uses to decide how much to spend per student

Democrats attempted to boost the BSA to $400 for next year to avoid what they claim will be drastic layoffs of teachers and support staff.

“You have to ask yourself, ‘Am I going to be able to raise my child in this state that I love?’” said Rep. Les Gara, an Anchorage Democrat. “Not only are we going to lose students who can be our next workers, our next businessmen, our next entrepreneurs, we’re going to lose the parents too.”

Rep. Steve Thompson, a Fairbanks Republican, cautioned lawmakers about the need to strike a balance between spending and saving.

“We’re struggling to try to get control of our budget. That savings is going to run out, and then there’s going to be a reckoning,” Thompson said. “What do we do then? It’s going to hurt schools because we won’t have any more money.”

The amendment to raise the BSA beyond what was in the bill was defeated.

There was one controversial amendment that passed. It stripped a provision to pay down the state’s debt to the teachers’ retirement system by making payments over a longer time frame. Supporters dubbed it the “pay as you go” plan.

The governor had asked the House to drop the provision because he wants to address both the teacher and public employee retirement systems at the same time by using $3 billion in budget reserves to reduce the debt, while at the same time lowering the annual payments.

“The pay-as-you-go system impacts the amount of liability on the state’s balance sheet and increases or extends the liability out to 2073,” said Rep. Cathy Munoz, a Juneau Republican.

She said the governor’s plan only has a 25-year payoff. Munoz also noted that a financial consultant said the “pay as you go” plan might wind up costing the state an extra $15 billion.

Rep. Tammie Wilson, a Fairbanks Republican, compared it to a house payment. She said most people would love to pay off their mortgages sooner, but the question is: Can they afford the bigger payment?

Wilson said she doesn’t think the state can afford the governor’s plan.

“How are you going to make these payments when you’re not even making the annual payment this year?”  she asked. Wilson said revenue shortfalls will require the state to use reserves to pay off the debt.

Another amendment, which passed, added another $30 million in one-time funding to schools. It was a substitute for a provision that would have changed the way students are counted to favor larger schools.

The Senate also has an education spending plan that doesn’t include increases to the BSA, but would add $75 million to the education budget.  One of the next steps in the process is for the Senate and House to meet in committee to reconcile their budgets.

A grassroots group of parents, Great Alaskan Schools, had representatives watching in the House gallery Monday. They’ve held rallies in Anchorage, Juneau and the Mat-Su, pushing for the $400 BSA increase.

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