It turns out it’s not a great idea to ignore letters from the feds.
This week, the U.S. Department of Education announced it would be withholding $5.6 million after Alaska ignored an August deadline to resolve issues related to its use of pandemic-era aid. Alaska is the only state with outstanding issues, and the penalty comes after state officials missed several deadlines.
The ongoing dispute is tied to novel restrictions put on COVID-19 funding that barred states from using the additional funding to undercut support for districts with high numbers of at-need students. Its technical application tripped up several states, education analysts told legislators earlier this year, but every other state has worked through the process to restore underfunded schools.
[MORE: The U.S. Department of Education’s letter to Alaska]
In Alaska’s case, Gov. Mike Dunleavy and Department of Education Commissioner Deena Bishop have insisted that Alaska has done nothing wrong and refused to meaningfully engage in restoring that money. The feds have agreed to recalculate the money owed to districts three times, but the state has refused to pay it each time.
The $5.6 million in withheld funds are in addition to the $11.9 million that was put on hold earlier this summer due to the same issues.
According to the feds, the state owes the Anchorage School District about $6.6 million, the Kenai Peninsula Borough School District more than $8 million, the Fairbanks North Star Borough School District $2.8 million and the Juneau School District about $90,000.
Legislators, worried about precisely this outcome, included the payments in this year’s budget, but Dunleavy vetoed it, claiming they still didn’t know how much was owed. Dunleavy has resisted funding schools throughout his time in office, vetoing half of a one-time increase in 2023 and a permanent increase this year.
If the Dunleavy administration was hoping for continued leeway with the issue, the letter notifying the state of the latest penalty does not provide any.
“Alaska is the only State that has not complied with these statutory, non-waivable requirements,” Adam Schott, the U.S. Department of Education’s Principal Deputy Assistant Secretary, explains, noting the state had agreed to abide by the rules when it took more than $350 million in federal relief money and that the feds have offered to work with the state for years to resolve the issues. “With less than one month remaining in the ARP Act’s fund period, the Department must now take additional steps to ensure the State’s compliance.”
According to the letter, the state is running out of options to avoid paying the affected school districts back. It has until Oct. 15 to file an administrative appeal, or else the penalty will become final. The state could also voluntarily give up the $5.6 million, but that wouldn’t necessarily let it off the hook.
“This termination does not preclude the Department from taking other appropriate enforcement actions related to (the state’s use of relief money),” his letter concludes.
It’s not the only big-ticket penalty for the state that has caught headlines. The state is also receiving the lowest amount of federal infrastructure dollars of any state this year due to a litany of technical errors and other violations in its statewide transportation plan.
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.
