The state Department of Revenue announced that Alaska’s K-12 public schools will receive an additional $115 million in state funding this year, prompted by a boost in oil revenues driven by the U.S. war on Iran pushing global oil prices higher.

Legislators earmarked sharing the higher oil revenue with schools as part of the state budget signed by Gov. Mike Dunleavy in June.

The additional funding is a relief to school districts statewide. Many districts have faced severe budget shortfalls in recent years due to funding not keeping pace with rising costs. This year, a record 12 elementary and middle schools closed across the state.

The Wrangell school district will receive an additional $383,500 for the 2026-2027 school year, according to the state formula — $289,100 based on enrollment and $94,400 designated as “energy relief” to help districts cope with high fuel prices.

The extra money will significantly reduce what the district needs to pull out of reserves to balance its $6 million budget.

Officials with the Department of Revenue announced on Aug. 31 that the state had collected sufficient revenue to cover a special appropriation of nearly $600 million for the budget year that started July 1. 

Lawmakers designated the funding for four priorities, in sequential order: nearly $128 million to the Permanent Fund for one-time energy relief payments of $200 per eligible Alaskan along with this fall’s dividend checks; $115 million in the special one-time aid for K-12 schools; $15 million to the bulk fuel loan program that assists rural communities; and $341 million to the state’s budget reserve account.

The $115 million will be distributed to school districts according to the state’s education funding formula, which is based on student enrollment counts in October.

School board members with Fairbanks and Anchorage had called on the state in June to release estimates earlier, ahead of the school year. They asked the state to announce whether “funding is likely, unlikely or still uncertain,” to help districts plan, particularly for hiring teachers. 

But the Department of Revenue did not change its scheduled announcement date.

Lisa Parady, executive director of the Alaska Council of School Administrators, said her members were “elated” and “grateful” at the announcement. But she said it underscores Alaska schools’ needs for prior notice and consistent state funding. 

“We do have to get to the place where we have predictable, reliable funds in advance of needing to extend (staff) contracts. That’s the biggest issue,” she said on Sept. 1. 

“Because we’re in the greatest education shortage in the history of Alaska and in the nation, it allows for the recruitment and retention of quality educators and that ability to lock in those contracts sooner,” she said.

Among the state’s largest districts, Anchorage is expected to get $32 million. The Matanuska Susitna Borough School District is expecting $16.1 million, the Kenai Peninsula School District is expecting $7.6 million. All closed schools this year. 

Parady said it’s difficult to say if the additional funding earlier in the year would have prevented school closures.

Districts cited surging costs of operations, as well as declining enrollment as more families opting for homeschool programs or leaving the state. 

“Each school district is in their own unique place in terms of overall education funding in their budgets,” Parady said. “Having a long-term fiscal plan that allows for timely, reliable, and predictable revenue for schools … is the only way that school boards and our school district leaders can have the tools they need to make the best decisions as they’re managing their budgets.”

Anchorage Democrat Sen. Löki Tobin, who chairs the Senate Education Committee, expressed her reaction as “mixed.” She said, “We know that our schools are in desperate need of resources.”

Tobin also acknowledged the moral dilemma of the upswing of Alaska oil revenues and state funding driven by the U.S. war on Iran. 

“It is gut-wrenching to know the reason that Alaska has been able to receive these resources,” she said. “It is not without contemplation or thought that I have been thinking about the children that were bombed in these recent years in a place that is very far away from us but is no less important and nor no less critical for the health and well-being of all of our kids, and how those choices are driving the record increases in the price of a per barrel of oil.”

In addition to the extra funding based on actual oil revenues, lawmakers allocated roughly $144 million in one-time additional funding for K-12 schools, plus $148 million for school repairs and construction this year to address an extensive maintenance backlog. 

The Alaska Beacon is an independent, donor-funded news organization, online at Alaskabeacon.com. The Wrangell Sentinel contributed reporting for this story.