Gov. Mike Dunleavy unveiled what he’s calling an “education omnibus bill” on Friday. The bill, introduced in both chambers as House Bill 76 and Senate Bill 82, would make several changes to the way the state funds education and make policy changes that Dunleavy says will improve student performance.
School districts have been asking state lawmakers to boost education funding for years. The base student allocation, the basic amount provided per student in the state’s education funding formula, has increased $30, or half a percent, since 2017.
Boosting the BSA was a key campaign issue for members of the House and Senate’s predominantly Democratic bipartisan majority caucuses this fall, and lawmakers in both bodies are planning fast action on bills that would boost the base student allocation significantly and apply an inflation adjustment.
Unlike those bills, Dunleavy’s package would not boost the BSA.
Dunleavy has repeatedly called for any funding increases to be targeted and tied to reforms. He did so again at a news conference announcing the bill on Friday, citing Alaska students’ poor performance on the recently released National Assessment of Educational Progress, also known as the Nation’s Report Card.
“I think we have a moral imperative to have a conversation that's just not about money,” Dunleavy said.
Instead, Dunleavy proposes several targeted categories of education spending. The bill would:
- Change the way correspondence students are counted in the funding formula, effectively increasing state education spending by $43.4 million, according to estimates from the governor’s office.
- Increase funding for career and technical education by $31.2 million.
- Increase student transportation funding by 20%, a $14.5 million increase.
- Increase per-student stipends for students at residential schools, like Mount Edgecumbe High School in Sitka and others across the state, by 50%, at a cost of $4 million.
- Provide school districts a $450 incentive for each student who “performs at grade-level or demonstrates a measure of increased proficiency” in reading and language arts, estimated to cost $21.9 million.
- Starting in 2026, provide teachers with annual retention bonuses of $5,000 to $15,000 for three years, a policy estimated last year to cost $59 million annually (Dunleavy did not provide an updated figure in briefing documents.)
Altogether, the bill would increase state spending on education by $117 million in the 2025-2026 school year, and $181 million the following year, when the retention bonuses come into effect, Dunleavy said.
To keep up the same level of funding that school districts received this school year, state spending would have to increase by roughly $175 million, since lawmakers included one-time funding in last year’s budget.
The bill would also make a few key policy changes. It would:
- Extend a moratorium on school bond debt reimbursement until 2030.
- Require school districts to create new policies banning student cell phone use during school hours.
- Allow the state school board — along with the University of Alaska and local municipalities and other political subdivisions of the state — to authorize new charter schools.
- Create a statewide open enrollment system, allowing students to attend any school in the state regardless of where they live, “subject to capacity and enrollment policies,” according to a briefing document.
Republican leaders in the state House and Senate applauded the proposal.
“The Alaska House Republicans are pleased that the governor introduced legislation that doesn’t just address funding but is also policy-based,” House Minority Leader Mia Costello, R-Anchorage, said in a statement. “We look forward to doing what’s best for Alaska’s students.”
Dunleavy’s bill is unlikely to pass as-is. Both the House and Senate Republican caucuses, who tend to align with the governor, are in the minority this session.
However, Dunleavy can veto legislation, and the multiparty coalitions who control the House and Senate are far short of the two-thirds majority needed to override a veto. That means negotiations and compromises will likely be needed to push a bill over the finish line.
Rep. Rebecca Himschoot, I-Sitka, introduced a bill with the House’s take on the education funding debate early in the legislative session. It would boost state education spending by nearly three times as much as Dunleavy’s bill — $325.3 million in its first year, with larger increases in future years.
Parents, teachers, administrators and business leaders have given hours of testimony to House and Senate education committees in recent days saying they’re struggling to maintain even basic school programs. A large majority have cited funding as the key issue holding them back.
Himschoot, who co-chairs the House Education Committee, said in an interview Friday that she’s sympathetic to targeting funding on high-priority needs — but “that's the icing on the cake, and right now, we don't have a cake,” she said.
“When you have 15 years of basically flat funding in the face of 40% inflation, to go targeted and strategic doesn't provide the oxygen the schools need to catch their breath right now,” she said.
Two of the proposals — the teacher bonuses and a scaled-back version of the charter school provision — failed to gain support in the Legislature last year. Dunleavy ultimately vetoed an omnibus bill that would have boosted education funding because it didn’t include the charter school and teacher bonus proposals.
Whether lawmakers will include them in this year’s education bill is an open question.
Sen. Löki Tobin, D-Anchorage and the chair of the Senate Education Committee, said in an interview Friday that she continued to view the bonus proposal with skepticism. Tobin cited an opinion from the Legislature’s attorneys saying the bonus proposal could run afoul of the Alaska Constitution’s equal protection clause and state law on collective bargaining.
Senate President Gary Stevens, R-Kodiak, was a vocal opponent of Dunleavy’s charter school proposal last year and said after the governor’s State of the State address on Tuesday that allowing the state board to approve new charter schools remained a “non-starter.”
“Removing an elected school board’s local control and giving it to an unelected state board to establish charter schools is a no-go. This level of local control and parental involvement is what makes our charter schools thrive,” Stevens said in a statement on Friday.
Dunleavy continued to tout the performance of the state’s charter schools on Friday, which ranked No.1 in an observational study published in 2023 by the Program on Education Policy and Governance at Harvard University evaluating charter schools in 35 states and Washington, D.C. While the study stopped short of drawing a causal link, it suggested that state-authorized schools outperformed those authorized by districts, leading to last year’s proposal.
Dunleavy said expanding the list of possible authorizers to include the state’s university system and municipal governments was an effort to assuage lawmakers’ concerns.
“There was talk last year with some of the legislators saying, ‘We don't necessarily trust the Department of Education, so would you give some thought to other authorizers?’” he said.
The study, though, suggested schools authorized by municipal governments and universities performed worse than state- or district-authorized charter schools. Dunleavy said he thought Alaska’s university system could buck the larger trend.
House Speaker Bryce Edgmon, I-Dillingham, who voted against the bonus and charter school provisions last year, called the bill “a very ambitious package” and “a positive first step.” He said each element of the bill would get careful consideration and said lawmakers would likely be able to find common ground with the governor.
“We are going to have a meeting of the minds, I feel, on some of the policy items,” Edgmon said in an interview. “Some of the other items, we may set aside and deal with it separately, or perhaps later on, but I think there's a willingness to also get schools badly needed funding.”