The Alaska Senate Education Committee held an emergency hearing this week on the U.S. Department of Education’s decision to label Alaska a “high-risk grantee,” potentially endangering hundreds of millions of dollars in federal school funding, but got few answers.
With the Alaska Department of Education in the process of filing an appeal with the feds, officials skipped the meeting, leaving legislators to talk with Austin Reid, the National Conference of State Legislature’s expert on federal education funding. Reid stressed that he doesn’t have any unique insight into Alaska’s situation but has followed the process as other states have worked through it.
He told legislators that the issue at the heart of the problem is a “new and novel policy” contained in the federal pandemic funding. Congressional budgeters were concerned that states would use the pandemic and the influx of federal funding as an excuse to cut school funding, so they required states to equitably maintain school funding to their school districts with high concentrations of students from lower-income families.
The U.S. Department of Education is accusing the state of failing to follow that provision, which is called maintenance of equity. In a letter last week, the feds said Alaska had shortchanged four districts by $29 million and warned that failing to pay them back could result in other grants being withheld from the state.
He said that even though the cuts to state education funding feared by Congress largely didn’t come to pass, with most increasing funding, many still found themselves running afoul of the rules. That’s because the grants’ maintenance of equity was solely based on the economic status of students rather than the more complex funding formulas that take into account other factors, such as the needs of the students and the cost of living.
The two don’t always neatly align, he said, and that can create problems like the ones Alaska is now facing. Officials with the Alaska Department of Education have argued that they’ve done nothing wrong and were simply following the state’s funding formula, but Reid said that the federal law doesn’t contain much flexibility.
He said other states have already paid back a combined $267 million in order to comply with the maintenance of equity provisions.
Reid said the U.S. Department of Education has given states some flexibility in how they address the problems. He said, though, that letters like the one the state received last week, demanding the state come up with a plan to repay $29 million to four school districts, usually come after those negotiations have been exhausted.
“I would guess that’s why these final numbers have been provided and why they’re asking for these supplemental appropriations,” he said, explaining the two areas where the feds have offered states flexibility. “That’s been the dynamic in other states. When those two options that I’m aware of are exhausted, it’s when we move into the department asking for supplemental appropriations.”
Department of Education Commissioner Deena Bishop has made clear that the state will continue to fight against having to make the supplemental payments, telling school districts not to count on the money. That comes after Gov. Mike Dunleavy vetoed legislation that contained an increase to the state’s baseline school funding.
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It’s not immediately clear what direction things might head in, but legislators explored some potential solutions at the meeting.
In basic terms, legislators have three options:
- Wait for the governor to request the $29 million
- Put the $29 million into the budget unilaterally
- Hope that the governor’s appeal with the feds works out
Senate Education Committee chair Sen. Löki Tobin said there was another option, noting that some other states have responded by simply passing a blanket increase in education funding to all schools.
“There are many options that are on the table for us to come into compliance,” she said. “It is not simply giving certain school districts resources. We could give every school district resources if we chose to do so.”
The Senate Education Committee has scheduled a second hearing next Friday on the issue, which Sen. Tobin said she hopes the state will participate in.
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.
