Governor's budget includes no increase in school funding

Gov. Mike Dunleavy said education is among his top priorities in the coming fiscal year but did not include an increase to the state’s per-student funding formula, known as the base student allocation, in his proposed budget.

The budget includes about $1.11 billion to fund the formula that distributes money to school districts statewide, down almost 3% from this year due to declining enrollment.

Dunleavy has proposed spending almost twice as much on next year’s Permanent Fund dividend.

Lawmakers this past spring approved a one-time appropriation to help school districts— $175 million, about a 14% boost — but the governor vetoed half of the money. The funding formula has not changed in more than seven years, much to the frustration of school officials across the state.

State funding covers more than 60% of the Wrangell School District’s general fund operating budget.

Although his proposed budget does not include any increase in the funding formula, the governor said last week it does not rule out an increase as the legislative process plays out after lawmakers reconvene in Juneau in January.

“I want the public to understand that, as a former educator, I understand that schools cost money, education costs money, there’s no doubt about it,” Dunleavy said Dec. 14, when released his budget. “The question has always been whether we put money in the BSA (funding formula),” or add more money to other educational programs.

He said that could include increasing funding for charter schools and homeschooling.

The governor also said he supports using state money to pay one-time retention bonuses to teachers.

State Senate President Gary Stevens said it was a “shame” there is no increase to the base student allocation. “I know that our districts … are really badly in need of some additional funding,” the Kodiak lawmaker said.

“It’s really a matter of our working with the governor because if we put more money into the BSA and he vetoes it again, then we’re worse off than when we started,” he said. “That’s my job as the Senate president, to work with the governor and work with the House and to try to find a way to make some progress here.”

Ketchikan Rep. Dan Ortiz, a former public school teacher, said in a Dec. 14 phone interview with the Ketchikan Daily News that he was disappointed to see the governor ignore the needs of school districts.

“That's just a bad sign,” Ortiz said. “We’re hearing every day from around the state about the severe needs that districts have, and we've been hearing it for the last year. And so that's frustrating.”

Earlier this year, the Association of Alaska School Boards formally endorsed a resolution asking the state to increase the funding formula by 27%, slightly higher than the rate of inflation since the last increase. The one-year funding boost after Dunleavy’s veto amounted to less than 6% for the 2023-2024 school year.

A statement from the association said the decision not to include any increase in the per-student funding in the proposed budget comes as schools are saddled with high inflation and have an urgent need for resources.

“Despite the persistent efforts of educators, parents, families and advocates across the state, the budget announcement falls far short of addressing the critical needs of our public education system,” it said.

Senate Finance Committee Co-Chair Bert Stedman said not to get “too excited” about a budget that is a starting point: “Don’t panic in the streets over education funding — yet.”

The Sitka senator added, “The BSA is going to change. … It's going to increase — just a matter of how much.”

In a separate budget item, the governor’s proposed spending plan includes enough money to cover only the top two projects of 95 school district requests on the statewide major maintenance list assembled by the state Department of Education. Wrangell’s request for $6.5 million in state funding for roofs, heating and ventilation systems, windows, insulation and other repairs to all three schools is No. 16 on the statewide list.

The Alaska Beacon, Ketchikan Daily News and Sitka Sentinel contributed to this report.


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