OPINION: Action on education falls short of Alaska's needs

Most Alaska school districts face significant financial challenges that undermine their ability to provide children with an adequate, much less quality, education. Policy debates over how schools are run or held accountable have impeded efforts to address rising costs, leaving the state funding system effectively stagnant since 2017. Without addressing inflation Alaska’s schools will never be able to meet the accountability or quality desired by families. The governor acknowledges these issues but stops far short of acting or providing leadership toward a meaningful solution.

The impacts of inflation on day-to-day life are often difficult to see. Academic measures like the consumer price index (CPI) provide a convenient shorthand for discussion but lack meaningful context of real-world impacts. These measures combine price changes across various goods to provide a general reference. Alaska’s CPI only reflects costs in Anchorage and the Mat-Su. Depending on the way you spend your money and where you live in the state, 13.4% CPI inflation between 2020 and 2022 might have had a dramatically different impact on your quality of life.

For example, if you heat your home with electric heat in a community on hydropower, you likely didn’t see much of a change in your bills, but if you are on heating oil in Bethel, you saw a near 41% increase per gallon from winter 2022 to 2023. Additionally, some of these price impacts can be delayed in time — if you haven’t purchased a new or used vehicle in the last three years you haven’t experienced the recent 20% increase in car prices. People experiencing these costs likely have had to make sacrifices in other areas of their lives that others haven’t.

The state’s education funding formula has remained effectively stagnant since 2017, yet the CPI has seen 17% inflation. This equates to a BSA increase of more than $1,000 being necessary to offset inflation, far greater than the $300 proposed by the House Rules Committee last week. Additionally, state law prohibits municipal governments from contributing more money to compensate districts for rising cost, leaving districts with few options to address these costs.

The governor and his predecessors have long included funding for the impacts of inflation across state government in their annual budget recommendations to the Alaska Legislature. This year is no exception. His budget proposal includes budget adjustments in every agency and almost every program. These adjustments address similar unavoidable issues to those facing the state’s school districts: the rising costs of health care, utilities, increased licensing fees on IT contracts, and the rising cost of child care for foster parents, among many others.

Only two significant programs did not include some form of adjustment for inflationary cost pressures — K-12 aid to school districts and the Medicaid program. The governor’s inflation budget adjustments total over $70 million in state Unrestricted General Fund (UGF) spending. Ignoring the two programs without inflation adjustments, this makes up just over 3% of his total budget ask to the Legislature.

Perhaps the most interesting adjustment for inflationary cost pressure in the governor’s budget is for Mt. Edgecumbe High School. MEHS is a state-run residential school in Sitka and is considered its own district for the purpose of funding through the state’s K-12 formula. In the FY25 MEHS budget, the governor included an increase of $530,000 outside the formula, a (much-needed) 11% increase over fiscal year 2024. Why? To address inflationary pressures on utilities, commodities, health insurance, and salaries. His own budget specifically calls out flat funding from the K-12 formula as unable to keep pace with these cost pressures.

The governor takes a few different strategies for dealing with inflation throughout his budget. For example, he transfers money from other programs to address the rising cost of caring for foster children. He defunds positions in the Fairbanks and Anchorage Dept. of Juvenile Justice homes to cover inflationary costs at the Bethel, Mat-Su and Kenai homes. In other areas, the governor is simply seeking to draw on the state’s savings reserves to cover these costs. He’s effectively reprioritizing when he can and running a deficit when there is no other source.

Districts could attempt to follow this lead, redirecting funding between schools and drawing down savings. However, after almost a decade of flat funding, there are no available funds. Local school boards are unlikely to approve spending plans that mimic the governor’s proposal, which would eliminate state savings in a span of two years. This leaves the only remaining option: defunding positions and reducing services.

The governor and the House Rules committee have made proposals to add funding to the system of education in the state, most notably bonuses that would be paid out directly to teachers, particularly those in rural Alaska. These proposals deserve due consideration, as do any attempts to solve the problems in teacher compensation recently highlighted in an article in the Department of Labor’s Trends magazine. However, it is hard to imagine that any amount of cash bonus will reverse these trends if the local district can’t afford to pay for the teachers’ health insurance, heat the building, or fix the leaky roof over their classroom or teacher housing.

The governor’s frequent refrain of ‘follow the law or change the law’ is an admirable position. In a well-run system of government, the executive should be judged on its discipline to follow the systems of laws governing it and on its courage to propose change when those laws no longer serve the public good. In his budget request to the Legislature, the governor acknowledges that those laws no longer ensure the function of our state’s schools. Yet he has made no effort to address that issue through amendment of statute or through the law of appropriations.

Without action by the Legislature this year, our districts, school boards and superintendents will face increasingly difficult choices to balance the needs of serving our children against financial realities.

Lisa Parady is the executive director of the Alaska Council of School Administrators. She resided in Utqiagvik for almost seven years before moving with her family to Juneau.

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