It’s been a constant chorus for years: Alaska’s schools are underfunded and struggling to do the very basics of educating the state’s kids.
Just this year, Sen. Cathy Giessel, R-Anchorage, read a letter from a second-grader about classrooms where there isn’t enough room for kids to sit on the rug together. In Ketchikan, Superintendent Michael Robbins told lawmakers interventions for kids identified as falling behind — an initiative he spearheaded after taking the helm of a district facing a leadership crisis just a few years ago — aren’t happening. There’s just no money.
The Anchorage School District passed a budget last month to lay off hundreds of staff and slash everything from gifted programs to sports if the basic input into the state’s public school funding formula, the base student allocation, doesn’t rise significantly.
Lawmakers from both parties appear to agree: school funding should be increased. But by how much — and whether the bill that passes will survive a veto from Gov. Dunleavy — is unclear.
Leaders in the state House said early this session they planned to get a school funding bill out the door sometime in March. (School district budgets for the next fiscal year, starting July 1, are typically due to local governments in the early spring.)
But that deadline has come and gone. So, this week, teachers across the state got notices telling them they may not have jobs this coming year — 160 on the Kenai Peninsula alone, Superintendent Clayton Holland said.
Some 185 teachers in Anchorage would be displaced without a funding boost, in addition to nearly 170 already-unfilled teacher jobs, said Lon Garrison, the head of the Association of Alaska School Boards. In Fairbanks, over 100 staff are likely to lose their jobs if funding remains at current levels, he said, and 25 to 35 jobs are at risk in Ketchikan.
We’ve seen this before. Several times. Many of the teachers will, in fact, have jobs next year. But many others will seek greener pastures elsewhere.
Just ask Rick Dormer, the Ketchikan High School principal who’s interviewing for jobs in Oregon after more than a decade leading schools in Southeast Alaska.
He says he doesn’t want to leave, but it’s getting harder to justify staying in Alaska when other states pay higher salaries and offer better retirement and benefits packages. Teachers and school staff have left the state in droves: this year, over 600 certified teacher positions were vacant on the first day of school, according to an advocacy group.
Meanwhile, Alaska’s test scores remain near the bottom of national rankings with little sign of improvement.
That’s no coincidence, said Lisa Parady, the executive director of the Alaska Council of School Administrators, in testimony before the House and Senate Education Committees:
“When I hear ‘Education is failing,’ I say, ‘No, education is starving,’” she said.
Why funding is in question
How much will schools ultimately get this year? That’s still up in the air, though a final decision is nearing.
Senate Education Committee Chair Löki Tobin, D-Anchorage, revised and moved forward the leading education funding bill on Wednesday with a $1,000 boost to basic per-student funding. That’s the same amount approved by the House last month.
“We recognize that we need to have a substantial increase to school funding to help stave off so many of the devastating impacts that our districts have been communicating to us,” she told reporters on Tuesday.
After clearing the Education Committee, the funding boost bill, House Bill 69, now heads to the Senate Finance Committee, responsible for balancing the state budget.
Whether the $1,000 figure will survive the Finance Committee is unclear.
The state’s finances continue to look worse than they have in decades, according to the Senate’s top budgeter, Sen. Lyman Hoffman, D-Bethel, who has been a legislator since 1987. According to estimates following a worse-than-expected revenue forecast, due largely to faltering oil prices, Alaska lawmakers have to find $677 million just to maintain what is essentially the status quo.
Turmoil in the financial markets is likely to add to the pain.
Crude oil dropped 7% on Friday to its lowest level since 2021 as the world reckoned with the fallout of President Donald Trump’s decision to impose double-digit tariffs on countries around the world. The stock market, which plays an increasingly important role in Alaska’s state’s budget, is also in freefall, with the S&P 500 down 17.4% from a February record high. Nearly 11% of that loss has come in the two days since Trump’s tariff announcement.
The Alaska Permanent Fund, which provides more than half of the state’s general-purpose revenue with an annual transfer of 5% its market value, lost about 1% of its value from Wednesday to Thursday, spokesperson Paulyn Swanson said, a substantially smaller loss than the market as a whole. Figures for Friday were not immediately available, she said.
“The Alaska Permanent Fund Corporation has a diversified portfolio designed to mitigate market volatility,” she said via email. “It holds investments across various asset classes, including bonds and real estate, that provide steady income streams that are less affected by market fluctuations.”
Because the transfer is based on a five-year average of the fund’s value, a sustained downturn could put downward pressure on state revenue for years to come.
Federal funding, the largest source of overall state revenue, is also under threat as Trump and Elon Musk’s Department of Government Efficiency seek to slash government spending. A forthcoming congressional tax and spending cut package put forward by Republicans at Trump’s request also casts a long shadow over the state’s financial future.
Budgeters consider lower funding boost amid financial pressure
The state’s bad and worsening financial picture has pushed Hoffman, who chairs the Senate Finance Committee as it considers the annual operating budget, to repeatedly call for a smaller increase in school funding this year. Scenarios he’s requested from nonpartisan budget analysts have assumed a $680 increase in the base student allocation.
This week, he sent a memo to Senate budgeters urging them to strenuously avoid any budget increases so that the state can afford a $680 increase. The memo was first reported by the budget-focused Alaska Political Report.
A $680 increase in the base student allocation would essentially keep school funding flat from where it ultimately landed last year, when lawmakers decided to provide $175 million in one-time funding for school districts.
Tobin, the Education Committee chair, argues that despite the grim financial picture, a $1000 increase is badly needed.
“$80 million more to help keep some of the programs that we all deeply love in our public school systems, to retain nurses, to keep after-school programs, to keep sports,” she said Thursday, “is a very prudent and reasonable investment in the future of our kids.”
But it’s unclear how many senators share her view.
“My caucus is split on the issue,” Senate President Gary Stevens, R-Kodiak, said Tuesday. “I wish I could say that … we've consolidated around a particular number, but we have not done that.”
Tobin said passing Senate-proposed corporate and oil tax increases — which face long odds in the House and even longer odds at the governor’s desk — would help ease the financial pressure.
Another wild card: Gov. Dunleavy's veto threat
Complicating the future of school funding even further is a veto threat from Gov. Mike Dunleavy. Though members of the House and Senate’s Democrat-heavy bipartisan majority caucuses prefer a no-strings-attached increase, Dunleavy has said repeatedly he’ll veto any school funding bill that does not include specific policy items that he says will boost student performance.
He applauded the bill that passed the House, calling the various policy changes attached to it — among them, a ban on cellphones in schools, a new open enrollment policy and a literacy-focused incentive program — “positive movement.” But, simultaneously, he called for additional “improvements, both in cost and policy.”
Dunleavy and his spokespeople have been silent on the specific funding level the governor would support, leaving lawmakers to speculate.
“Just reading the tea leaves, I think there's probably a good chance the governor would veto $1,000 and if he does that, then where are we?” Stevens said. “Would he veto $680? I'm not sure of that.”
Meanwhile, if you ask Dunleavy, the bill is moving the wrong direction when it comes to the policy changes included within it.
Dunleavy took particular issue with a provision within the new bill that would require homeschooled students in correspondence programs — about one in five Alaska students — to take a standardized test or alternative assessment, like a portfolio review, in order to access cash payments for curriculum, classes and other educational services known as allotments.
“While there was initially positive movement on HB 69, the Senate Education Committee’s version falls short of the education reforms Alaskan families deserve and puts inequitable constraints on correspondence school students,” Dunleavy said on social media. “This current [bill version] does not pass muster.”
Tobin, the Education Committee chair who added the provision, said the testing provision is a “proactive” effort to help the state achieve the requirements of the federal Every Student Succeeds Act and a landmark 2005 consent decree.
Though the governor’s office worked closely with lawmakers on the version of the bill that passed the House, closed-door negotiations between Dunleavy and lawmakers appear to have stalled.
That’s no accident, Tobin said.
“The best way to get public input is through a very public and transparent committee hearing process. At this point, the community has a right to have input in the legislation,” Tobin said. “It should not be superseded by the elites in this building.”
But what that means for the future of the education bill is anybody’s guess.
