Committee extends school bond debt reimbursement moratorium and debates a regulatory fix

Liz Harpold, staff to Senator Olson, reintroduced Senate Bill 184 to the Senate Finance Committee as a proposal to extend the moratorium on school bond debt reimbursement for an additional two years.

The bill would continue the existing moratorium that has been in place for a decade, the committee was told. Senator Kiel offered an amendment that he said addressed a recently circulated draft regulation from the Department of Education that, if adopted, could redefine school-district operating fund calculations and thereby shift money away from noninstructional expenditures such as student nutrition and pupil transportation.

Kiel described the amendment as an effort to "maintain the rules that we have now" by codifying the regulatory definition of the operating fund in statute so the department would not be able to "completely rewrite how we've done school finance and school funding since 1998." He said the draft regulation could eliminate funding streams that districts and legislators have provided for noninstructional services; the transcript cites examples including roughly $400,000 for student nutrition in one district and $13,000,000 for pupil transportation in Anchorage as areas that could be affected.

Kiel said he would offer the amendment but later withdrew it, saying he needed to gather details and answer additional questions from committee members before proceeding. Other senators on the committee urged that the policy concern be referred to the appropriate education policy committee for further vetting.

Senator Stedman and Senator Kauffman urged keeping the bill narrowly focused on maintenance and capital reimbursement rather than broader programmatic funding policy. The chairman accepted Senator Stedman’s motion to report SB184 from committee with attached fiscal note and individual recommendations; the motion carried with no objection recorded in the transcript and the committee signed the report.

The hearing record shows the committee took testimony previously and reviewed fiscal notes; no amendments were adopted at this hearing and the sponsor withdrew the offered amendment so the underlying bill was reported out with committee recommendations for further consideration.