Alaska Republican Gov. Mike Dunleavy praised the performance of the state’s public charter school program during a news conference for the release of his proposed budget, highlighting its top ranking in a recent study, but refused to back any permanent increase to K-12 funding.
The governor described the proposal as a status quo budget that doesn’t propose significant cuts to state services but leaves many of the state’s major financial issues unresolved. It notably pays out a “full” dividend according to the long-ignored formula in state statute — a $3,429 payout totaling about $2.3 billion — and comes in with a nearly $1 billion deficit that he proposes paying with a politically tricky draw on the state’s Constitutional Budget Reserve rather than new revenues.
The Legislature, led by the bipartisan Senate Majority, rejected a similar budget proposal during this year’s legislative session, ultimately passing a budget with a smaller dividend and a modest surplus.
Education funding has been a significant issue in the Legislature, which is set to return to session in mid-January. After hearing an outcry over years of flat funding, the Legislature approved a $174 million one-time increase to K-12 funding and nearly passed legislation that would have made it permanent. Dunleavy resisted the call for funding and ultimately vetoed the funding by half.
At his news conference Thursday, the governor acknowledged that this proposal is just the start of the process and that he and the Legislature have more opportunities to make changes. He said that just because there isn’t a permanent increase now “doesn’t mean there won’t be.”
However, when asked about recent headlines warning of massive deficits in the Anchorage School District, the governor suggested that the first part of the process was to investigate whether the district was actually telling the truth about its financial situation. In this year’s session, the administration claimed districts were better funded than they stated, a point that several districts disputed.
The few education-related investments in the budget direct funding toward home school and charter school programs — a long-time priority for the governor — and a proposal to address teacher recruitment and retention by simply paying them large cash bonuses at the end of the school year. It would pay between $5,000 and $15,000 for each year completed.
While the program has found little traction in the Legislature, with many legislators suggesting it would be better to let districts decide how to spend the money, Dunleavy said it was an attempt to test the claims of whether additional money would resolve problems around hiring teachers.
“Is money — and how much — a real factor for classroom teachers to come here and stay here? That’s what we want to find out,” he said. “I’m just hoping the teacher unions and others support the concept of trying to find that out.”
The proposal to flat-fund education didn’t land well with the Alaska Association of School Administrators, which released a statement criticizing the move and warned that underfunding education will have long-term negative impacts on the state.
“Public education is the cornerstone of our society, shaping our children’s future and ensuring our communities’ prosperity,” the statement said. “The lack of increased funding continues to jeopardize the ability of schools to provide a well-rounded and equitable education for all students. It undermines the tireless work of educators who are already stretched incredibly thin, striving to meet the diverse needs of their students with limited resources. Most importantly, it jeopardizes our ability to provide opportunities for positive student outcomes.”
In the big picture
Asked about the long-term state of the state’s finances and the fact that his administration’s own projections show the state would run out of savings within two years, the governor pivoted to beefing up resource extraction industries like oil and gas production, mining and logging. He deflected on questions about raising revenue through more direct means — such as a 2% sales tax teased by his administration earlier this year but never offered — and suggested there won’t be much momentum this year.
“We’re now in an election year,” he said. “I don’t know how much momentum will occur this year.”
For their part, legislators were chilly on the concept of spending down savings.
“As we start digging into this year’s operating budget, our focus will continue to be a balanced budget without having to dip into our significantly low reserves,” said Sen. Bert Stedman, the Sitka Republican who oversees the budget, in a prepared statement. “It’s our job to allocate resources wisely while addressing the needs of our communities. As always, this will be a deep and long process to make sound budget decisions that benefit everyone we serve.”
Instead, the governor focused almost entirely on promoting resource development in Alaska. He argued that the state should be drilling, mining and logging as much as possible, claiming that resource extraction alone is the path to a healthy and viable state. Dunleavy has been closely aligned with mining interests during his time in office, personally petitioning former President Trump to approve the controversial Pebble Mine (Trump eventually declined).
“I’d market dilithium crystals if we could find them here in Alaska,” he said, referencing Star Trek.
When another reporter pointed out that oil developments — even ones that are already approved and moving ahead — take years, even decades, to start putting money into state coffers, Dunleavy argued that’s why everyone in the state “should be saying ‘yes’ to as many projects as possible.”
Matt Acuña Buxton is a long-time political reporter who has written for the Fairbanks Daily News-Miner and The Midnight Sun political blog. He also authors the daily politics newsletter, The Alaska Memo, and can frequently be found live-tweeting public meetings on Twitter.
