Sitka School Superintendent Deidre Jenson says the district is forming a strategy for responding to the Alaska Board of Education’s setting a 30-day comment period on a regulation change that would include the value of in-kind services in the amount a local government must include in a local funding cap.
The "cap" refers to the maximum funding a municipality may contribute to schools from local taxes, in addition to the amount allocated by the state. The cap is a percentage of the taxable property value in the community.
Like several communities in Alaska, Sitka provides funding for schools to the cap but also funds several items considered to be non-instructional or community assets. This includes contributions for the Blatchley pool, Performing Arts Center utilities and student activities.
“We’re working to figure out what we want to give for testimony because it does impact us greatly,” Jenson said Friday. “We’re in conversations about what our messaging is going to be.”
After two hours of testimony at its quarterly meeting Wednesday, the state education board decided to allow a 30-day public comment period, instead of passing an emergency regulation, to implement the new rules for the current year. That would reduce the amount of local funding for schools.
Jenson said the district plans to comment on the regulation, which would change the section related to “permissible local contribution appropriations and in-kind services.” The change would define appropriations to include the documented fair market value of in-kind services.
Sitka voters in recent years approved a ballot question to add an extra tax on marijuana sales to fund participation in school sports and other activities, and a seasonal sales tax for school building maintenance..
Jenson said she and others are figuring out how the new regulation would affect Sitka, on top of the cutbacks the school district has already made for the next fiscal year.
“It could have huge impacts,” Jenson said. “And we’ve already made major cuts.”
Rep. Rebecca Himschoot said if the proposed state Department of Education regulation to count in-kind services toward the local contribution cap go through, it could be “catastrophic” for Sitka. Also, she said, it is not certain that it would solve the the problem it is meant to address, which is inequitable funding for education among school district.
Himschoot, co-chair of the House Education Committee, said after the state board proposed implementing the new rules for the current fiscal year as an emergency regulation, superintendents, school board members, district staffs, employees, parents and notably the Anchorage school district attorney spent two hours testifying against it.
“It was unanimous,” Himschoot said, of both the vote public testimony at the quarterly state school board meeting. “The Anchorage attorney said if it went through as an emergency, they would file a motion.”
The proposed rules could include in-kind services as part of the local contribution. The Assembly has approved contributing to the maximum allowed but also funds a number of non-instructional services.
The state board defends its proposal as its response to the complaint by the federal department of education that the state has failed the "disparity test," which is aimed at ensuring per-student spending does not vary greatly among school districts.
The state school board set the 30-day comment period, and will schedule a special meeting in July.
Himschoot said the main problem in Alaska is not equity but inadequate funding from the state, which has prompted a number of districts to fill in the funding gaps.
“If the state would grow the pie, there would be more flexibility in how it's sliced,” she said. “If the pie is bigger overall, the slices become less important, and how it’s sliced is less important.”
She noted that Sitka funds to the cap every year as a community choice, and made efforts to increase access for all students to activities.
“That’s been a commitment that the community has made; and Sitka is looking to provide more opportunities for students, and to do it in a way that’s equitable,” Himschoot said. She mentioned the activities fund created from the marijuana tax, to increase student access to activities.
“That’s a commitment we’ve made as a community that would be impacted by this new rule,” the representative said. “We found a way to go above and beyond for our kids and we’re being told we can’t.”
Himschoot said she plans to provide a comment to the board, working with her co-chair of the House Education Committee. She’s also working with local leaders, since Sitka is one of five communities that could be “gravely impacted” by this regulation.
“I want to make sure we get input and that we protect the will of citizens to support their schools the way they want to,” she said.
Sitka's Sen. Bert Stedman, who is co-chair of Senate Appropriations, said if the regulation passes, it will affect not only Sitka, but Juneau and Anchorage and a few other smaller communities. He said the regulation would affect both the local and state budgets.
“If we fail the disparity test, which the state is claiming we do, then that roughly $80 million can’t be used to offset the state contribution in K-12,” he said. “So the state would have to come in and pick up that $80 million or cut the Base Student Allocation by $80 million. So it’s a big issue. We’ll have to wait and see what they actually do.“
Mayor Steven Eisenbeisz said he became aware of the potential regulation change earlier this year. He said plans to meet with the Sitka School Board on Wednesday to assess potential impacts to the district, and how to respond.
"It definitely would limit our ability to help our district," Eisenbeisz said.
A story from the Alaska Beacon explained last week that the new rule is being driven in part by the state’s choice to use $81 million in federal “impact aid” for schools as a replacement for state funding. Impact aid is distributed to states to compensate for federal land that is non taxable and doesn’t contribute to local property taxes, which typically benefit local schools.
The Beacon reported that Alaska is the only state in the country to use that federal money as a replacement for state money, rather than an additive. As a result, the state must pass what’s called a “disparity test” — it looks at how much is spent per student at each of the state’s school districts, then removes the bottom 5% and top 5%. The difference between the remaining schools can be no more than 25%.
