The Wrangell School District would receive an additional $425,000 in one-year state money under a budget headed toward approval in the Alaska House, falling short of a permanent increase in the education funding formula sought by school districts statewide.
Under the House budget, state funding for K-12 public education would increase by about 14% for the 2023-2024 school year.
The state’s foundation funding, based on enrollment, covers about 60% of the Wrangell district’s total general fund budget.
The Republican-led House majority structured the budget last week to draw the $175 million in one-time help for districts across Alaska from a state savings account, which will require consent of Democrats to achieve the three-quarters supermajority vote needed to tap the restricted account.
A House vote on the budget bill could come as soon as Wednesday.
The Democratic-led House minority has expressed frustration that the increase in funding for K-12 education is less than school supporters and districts requested, and that it is a one-year boost and not a change in the formula in law.
The minority also objected to drawing from savings for education while at the same time Republicans pushed ahead with a large Permanent Fund dividend covered entirely by general fund dollars.
“We are holding our kids hostage. We are singling out children,” Rep. Jennie Armstrong, D-Anchorage, said during budget debate last week.
Even with drawing on savings to pay for the one-time bump in school funding, the House spending plan shows a deficit of almost $600 million for the fiscal year that starts July 1.
Without cuts to public services, a smaller PFD or new taxes, the Legislature eventually would need to approve an even larger draw from the Constitutional Budget Reserve Fund, which the state has relied on for much of the past 30 years to cover spending as revenue-generating oil production has declined.
The savings account is expected to hold about $2 billion before any drawdowns to cover gaps in next year’s budget.
The budget will go next to the bipartisan-led state Senate, where leadership has not been as supportive of the large PFD — $2,700 — as the House, and also appears less willing to cover state spending by drawing down savings.
After Senate changes, the budget would head to a House-Senate conference committee to resolve differences.
Senate leadership has been working toward a budget without a draw on savings, possibly a $1,300 dividend — in line with the average of the past decade — and with stronger support than the House for a larger and permanent increase in state aid to schools.
Ketchikan Rep. Dan Ortiz, a minority member of the House Finance Committee and sponsor of legislation for a permanent increase in the state’s per-student K-12 funding formula, said school funding is “still very much in play” as lawmakers work toward their mid-May adjournment deadline.
Under the representative’s bill, the increase in state funding would be almost double the House budget number, more in line with a proposal working its way through the Senate. The higher formula would produce about $600,000 a year for Wrangell schools, depending on enrollment numbers.
“We’ve heard resoundingly from around the state” that schools need more help in covering rising costs, Ortiz said in an interview last weekend. The representative also represents Wrangell.
The state’s funding formula has inched up just one-half of 1% since 2017.
Much of the political debate over the budget in the House has focused on school funding and the dividend, with education advocates lamenting that the Republican-led majority was putting the PFD ahead of schools and structuring the budget to use savings for the one-time boost to school districts.
During budget debate in the House last week, Anchorage Democratic Rep. Zack Fields said it should be the other way around, with the larger PFD relying on a withdrawal from savings, not school funding.
As drafted by the House, the budget would spend $1.76 billion on dividends and $1.35 billion on K-12 education.
The House minority opposed the majority’s amendment to pay for the one-time school funding increase from the savings account. After the minority lost the vote, most of its members left the Capitol for almost four hours on April 5 and could not be found. They later returned to the building, though their walk-out did not change the outcome of the budget bill.
Rep. DeLena Johnson, a Palmer Republican who co-chairs the House Finance Committee, triggered the school funding debate in the House when she introduced a budget amendment for the one-time funding. She announced to House members that perhaps a longer-term solution could be achieved next year, but a change in the funding formula in state law “is unlikely to occur” this year.
Ortiz said he isn’t willing to accept that outcome. “I would say that remains to be seen,” he said.
The House voted 39-1 to approve the $175 million one-time increase in state aid last week, but then spilt over the provision that used savings to pay for the boost — only the 23-member Republican-led majority coalition voting in support.
Linking state spending to winning minority support for a draw on savings is a longstanding tactic in the Alaska Legislature. In past years, when the House was led by a predominantly Democratic majority, it was common for the budget to rely on the three-quarters supermajority vote to fully fund the budget.
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