The school funding bill, House Bill 69, advanced from the Senate Finance Committee on Thursday morning, the last major step before it will arrive on the Senate floor, but it’ll be far from the final word on the much-needed lifeline for districts.
The legislation outlines a $1,000 increase to the state’s baseline per-student funding formula, equating to a roughly $78.5 million increase from the current year’s budget. However, where legislators will find the funding for the spending is increasingly uncertain as oil prices and investment markets – the two main sources of state revenue – cratered amid the Trump administration’s trade war with the rest of the world.
The state’s budget was projected to run a deficit before school funding or the fallout of the trade war were factored into the budget. The stock market crash led to a multibillion-dollar loss for the Alaska Permanent Fund, and oil prices have plummeted below the state’s spring forecast. Some legislators have pushed for higher taxes on the oil industry by closing tax loopholes and reducing other credits, but face an uphill battle on that front.
It’s unclear where the funding will come from, but the fight over education funding is likely to focus heavily in the final budget negotiations in the Legislature. Some have also explored the possibility of tapping into the state’s limited savings or further reducing the dividend.
And that’s not to mention the mercurial whims of Republican Gov. Mike Dunleavy, who just last year vetoed legislators’ attempts to permanently increase public school funding. Dunleavy and his allies have argued that instead of a broad increase in funding that would flow out to all students based on their needs and regional costs, funding should be aimed at favored programs such as homeschools, charters, and career and technical education.
Those demands have gained very little traction with the coalition majorities that control the House and Senate, whose members have argued that an increase to the base student allocation is the fairest and most dependable way to provide help to schools. While they’ve made some minor concessions in the governor’s direction, a move in the Senate Education Committee to require regular assessments of homeschool students – a vast majority of whom opt out of testing altogether, leaving the state with a blind spot about how the programs are actually working – drew the governor’s derision.
In a surprise move today, the Senate Finance Committee also removed all policy measures that the House and Senate Education Committee had added to the bill. That includes a cellphone ban policy, revisions to public charter school appeals, some targeted funding at reading programs, and the requirement for public homeschool students to participate in tests or other assessments of their academic achievement.
Sen. Lyman Hoffman, D-Bethel, said the point of stripping the bill down was to focus on the funding and determine what level of support there is for school funding.
“What we’re dealing with here is the base student allocation, and we’re trying to see what level of funding there is not only in the Senate, but in the House and on the third floor,” he said, referring to the governor’s offices on the third floor of the capitol building. “It’s about finance.”
Sen. James Kaufman, an Anchorage Republican aligned with the governor, said he was worried that the lack of governor-approved policy changes to the bill would set it up for another round of failure.
“I’m afraid we’re going down the path to failure,” he said, referencing the Legislature’s failed override of the governor’s veto of Senate Bill 140, which failed by a single vote last year.
It should be noted that Senate Bill 140 contained many of the priorities that Dunleavy Republicans now claim are essential for their support for this year’s education bill, such as a large and largely unneeded increase for just homeschool students. However, the window for such an increase seems to have closed now that multipartisan coalitions hold the majority because they favor a broad increase that would flow out to all students, including homeschool students.
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.
