A week after they failed to override Gov. Mike Dunleavy’s veto of public school funding, legislators passed a scaled-back bill that tries to thread the needle between competing pressures in the Legislature.
The new measure links a permanent increase in per-student funding to policies aimed at improving learning, as well as a way to pay for some of the biggest new spending proposed by the bill. Those were two issues that legislators who voted to uphold the governor’s veto last week said were critical to winning over their support.
It passed the Senate on a 17-3 vote and the House on a 31-8 vote, giving the Legislature a combined vote total of 48-11. That’d be enough to override a veto if all legislators stick to their votes (something that didn’t happen with the 2024 education veto).
Instead of a $1,000 increase to the base student allocation, the state’s baseline per-student funding figure that flows through a formula taking into account students’ needs to determine total education funding, the bill proposes a $700 increase to the BSA. When compared to the one-time money equating to a $680 BSA increase in the current year’s budget, the funding essentially just keeps up with inflation.
Still, it’s what Senate Finance Committee co-chair Sen. Bert Stedman, a Sitka Republican who broke from the Senate Bipartisan Coalition Majority to vote in favor of the override last week, said is doable under the current budget crunch facing the state.
“One of the things that we’ve struggled with is that it was too big of a step financially, too big of a step policy-wise. This is a much smaller step, but it’s also deliverable. Financially, it’s deliverable. Policy-wise, it’s deliverable,” he said. “I think we can all agree that solving the education challenge isn’t going to be concluded this year. It’s going to be a multiple-year process, and this will be one step with several more to come.”
Stedman had been one of the harshest critics of the $1,000 proposal. While he said he supported increasing school funding – noting they likely need more than that – he worried that the greater uncertainty caused by Trump’s trade war to the state’s two main sources of revenue, oil and investments, could make such levels untenable in the future.
Before becoming this year’s primary vehicle for all things education funding, House Bill 57 started out as Anchorage Democratic Rep. Zack Fields’ bill to limit cellphone use in schools. Those measures are still in the bill – banning cellphones by default, but allowing districts to opt out of the policy – along with additional provisions setting maximum class size guidelines for schools, streamlining some of the public charter school application process and creating a task force that will be charged with examining school funding and other issues around education policy.
Gov. Dunleavy and his allies have pushed hard for changes that would open the doors to looser approval of public charter schools, extra funding on top of any increase for homeschool programs and a statewide open enrollment policy. Those ideas have failed to gain much traction with the majority of legislators, and instead will be issues studied by the commission.
The one major win for conservatives, though, is funding grants that would go to schools for each student who is reading at or above grade level or showing improvement. While some have questioned such funding mechanisms, noting that it’s likely the students who aren’t performing well that need the most help, conservatives argue it’s an important way to encourage schools to continue to improve.
Wasilla Sen. Robert Yundt, who spearheaded the negotiations for the Republican Senate Minority, said it was the most important part of the bill for him.
“This is the reading grant that rewards kids and schools for making improvements in being at or above grade level. This is what we want. It incentivizes good behavior, it incentivizes growth,” he said. “This is quite possibly the best thing today in regard to policy.”
To pay for the reading grants, Yundt tied the provisions to the successful passage of another bill that would update the state’s corporate income tax structure to apply to businesses doing online sales in the state. That provision is estimated to raise more than $65 million per year, and would be one of the first new significant revenue streams approved in years.
For some Republicans, making the grants conditional on a tax passing was a bridge too far. Republican Sens. Mike Shower and Shelley Hughes voted for the measure on Monday but switched their votes when the measure was brought back up on Wednesday due to a minor drafting error. Both said they had second thoughts in the intervening days.
What’s next
The legislation is slated to head to the governor’s office today, setting up a clock for him to sign the bill, veto it or allow it to go into law without his signature by May 17. That would give legislators an opportunity to override his veto before the session is set to end on May 21.
The governor has not publicly indicated his plans, but Department of Education Commissioner Deena Bishop was caught trying to bully school districts into supporting the governor’s policies – many of which weren’t included in the bill beyond the task force’s focuses – or risk another veto. That pressure campaign hasn’t sat well with many districts or legislators.
House Speaker Bryce Edgmon told the Alaska Beacon that he was surprised to see the letter and that it was unusual for department heads to be involved like that.
“I don’t think her letter had any material effect,” he said. “I don’t remember, at least as a legislator, ever seeing an agency head or a department official attempting to get outside entities, such as school districts in this case, to actively work to persuade the Legislature to take the position. I don’t remember that happening.”
Still, all that said, the governor’s office has been notably quiet on the bill. Previously, he had been quick to take to social media to signal his displeasure with the legislation, calling one version of the education funding bill a “joke.”
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 Bluesky.
