Gov. Mike Dunleavy vetoed more than $122 million from Alaska’s budget plan before signing it into law on June 12, with his vetoes falling heaviest on education.

Dunleavy eliminated more than $50 million from the state’s per-student education funding formula and tens of millions intended for major school maintenance projects.

The school funding veto will cost the Wrangell district more than $100,000 for the 2025-2026 school year.

Senate President Gary Stevens and Speaker of the House Bryce Edgmon said lawmakers are not likely to consider a veto override vote until January at the earliest, a schedule that will leave school districts with months of uncertainty.

“Statewide, districts will instantly need … to cut from their budgets. It remains to be seen what will happen as a result of this action from the governor, but certainly, emergency school closures are on the table for districts,” said Jharrett Bryantt, superintendent of the Anchorage School District, during a special school board meeting the evening after Dunleavy announced his vetoes.

It is the first time in Alaska history that a governor has failed to fully fund the education formula in state law.

The governor announced his decision without comment and did not hold a news conference, as is traditional.

In a prerecorded video released earlier on June 12, the governor said his vetoes were the result of depressed oil prices.

“The price of oil has gone down. Therefore, our revenue is going down. Basically, we don’t have enough money to pay for all of our obligations. So as a result of that, you’re going to see some reductions in this year’s budget. It’s not an easy thing to do. It’s certainly not a fun thing to do, but it’s necessary,” he said.

The governor’s vetoes appeared to be driven by a revenue forecast that wasn’t made available to lawmakers when they crafted their draft budget.

Legislators typically rely on a spring forecast published by the Alaska Department of Revenue, and based on that forecast the budget submitted by legislators to the governor had a surplus of about $56.5 million.

But that estimated surplus was based upon the spring forecast, and on June 12 the Department of Revenue released a new estimate saying that projected oil revenue is down by $222 million from the spring forecast.

Legislators typically expect to make budget adjustments in the following year because oil prices can change radically. Dunleavy appears to have based his decisions on the new revenue forecast, using lower oil prices.

Less than an hour before Dunleavy announced his vetoes, Israel began bombing Iran, an act that sent oil prices higher. By that point, Dunleavy had signed the budget bills, making them official.

The governor’s veto came less than a month after lawmakers voted to override a different Dunleavy veto and to increase the base student allocation in state law — the education funding formula’s main component — by $700 per student.

Last year’s state budget provided a one-time boost in the base formula of $680 per student. Dunleavy’s veto cuts the increase to $500 for the 2025-2026 school year, meaning an actual reduction in state aid to school districts from last year.

Sitka Rep. Rebecca Himschoot, co-chair of the House Education Committee, said that reduction is “nothing short of catastrophic for districts who’ve already submitted budgets. I think this could trigger, possibly, some school closures in rural Alaska, and I think also there could be some school closures in urban Alaska. What choice do they have?”

Rep. Jeremy Bynum, who represents Ketchikan and Wrangell and is a member of the House Finance Committee, said Dunleavy had previously threatened to veto some of the funding, and so his action wasn’t a complete surprise.

He added that the cut was larger than he was expecting.

“It’s definitely going to put some real strain on a lot of our school districts across the state, and specifically it’ll put some strain on the schools in my district,” he said.

In addition to the school funding veto, the governor eliminated lawmakers’ attempt to divert tens of millions of dollars from transportation projects to school maintenance projects.

Last year, the governor proposed incentive grants for public school teachers. This year, lawmakers approved $554,000 for a different incentive grant program, but Dunleavy vetoed that idea.

Anchorage Rep. Andy Josephson, co-chair of the House Finance Committee, said he was “disappointed” by the education vetoes overall.

“He claims to be a champion of education, but at some point — prove it. Just prove it,” Josephson said of the governor. “I just think it’s shameful and very hurtful.”

The Senate president said he’s also concerned by other vetoes, including a $5 million appropriation for the Alaska Seafood Marketing Institute, which helps Alaska fishers sell their catch internationally.

The governor eliminated $75,000 for a safe gun storage media campaign, $1.9 million in grants for child care centers, and $37 million intended to fill the state’s disaster relief and wildfire-fighting funds.

“I just was a little surprised to see it removed from the budget here up front, because it will be something that ultimately we will have to fund,” Bynum said of the vetoes to the disaster relief and wildfire funds.

In the state’s mental health budget bill, the governor cut $2.7 million intended to support infant learning programs and $100,000 for dementia education and prevention, as well as $3 million for programs that support disabled Alaskans.

The leaders of both House and Senate said that while they believe lawmakers may override some or all of the governor’s budget decisions, they don’t expect a vote on those overrides until January, when legislators reconvene the regular session in Juneau.

It takes 45 of the Legislature’s 60 members to override a budget veto, and several legislators are unavailable at different points of the summer.

“Unfortunately, it’s very difficult to get the Legislature all together in one place during the interim, so it’s more likely than not that we are going to have to wait until January to do that,” said Edgmon, the House speaker.

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