Alaska Gov. Mike Dunleavy vetoes school funding boost

JUNEAU, Alaska — Alaska Gov. Mike Dunleavy on Thursday vetoed a $1,000 increase to the Base Student Allocation, the state's per-student funding formula.

The Alaska Legislature narrowly passed House Bill 69 on Friday despite the fact that Dunleavy had threatened to veto the bill. Legislators stripped policy provisions from the measure that were intended to appeal to Dunleavy.

Dunleavy said he vetoed the bill because "the revenue situation has deteriorated a lot since we submitted the bill and worked up a budget" and because "there's no policy" in the bill.

Dunleavy said he would introduce an alternate bill this week with a smaller increase to the Base Student Allocation along with his policy priorities. That bill would include a $560 increase to the Base Student Allocation, along with $35 million in other targeted investments, according to Dunleavy aide Jordan Shilling.

The bill, which had yet to be formally introduced as of Thursday, includes provisions to allow students to enroll in school districts other than the ones in which they reside; ease the process of forming new charter schools and make it harder for local school districts to revoke existing charters; increase funding for homeschooling programs by hundreds of dollars per correspondence student; pay districts $450 per elementary school student who performs well on reading assessments; and require schools to adopt cellphone use policies.

School administrators across Alaska have said a substantial school funding boost is needed after almost a decade of virtually flat funding. School districts report that hundreds of jobs could be cut without a $1,000 increase to the $5,960 BSA.

An education funding boost of that size would cost the state over $250 million per year. Many in the Legislature have said that is unaffordable with the state facing a $680 million deficit over two fiscal years based on status quo spending.

Supporters of the $1,000 BSA boost have pledged to try to override Dunleavy's veto.

Support from 40 of 60 lawmakers, or two-thirds of the Legislature, would be required to override Dunleavy's veto. Thirty-two legislators voted for the stripped-down education bill on Friday. Multiple legislators have said that they likely don't have the votes required to override a veto.

The vetoed bill is now set to head back to the Legislature. The Alaska Constitution states that the Legislature "shall meet immediately in joint session" to consider vetoed bills.

The veto came just as lawmakers were leaving Juneau for the Easter holiday. Senate President Gary Stevens said a joint session was planned for Wednesday, once all lawmakers were back in the Capitol.

"Unlikely we will get to 40 but one never knows until you try," Stevens, a Kodiak Republican, said in a text message.

"If it is not successful, we will roll up our sleeves and get to work, because we know that our schools are in crisis," said Sen. Löki Tobin, who chairs the Senate Education Committee.

During his Thursday morning press conference, Dunleavy offered a highlight reel of his recent comments on education: He cited a study of charter schools — which has drawn criticism from school officials, lawmakers and researchers — that found Alaska's system outperformed other states; he denigrated the National Education Association; and he said funding alone would not improve students' outcomes, even as he insisted that he was, in fact, in favor of a nominal funding increase.

The funding increase he proposed Thursday would, in effect, serve as a reduction in real funding to most school districts compared to funding approved by lawmakers last year, after accounting for inflation, according to data from the Bureau of Labor Statistics.

This is the third year in a row that Dunleavy has vetoed major education funding legislation in some form. In 2023, Dunleavy vetoed half of a one-time $680 BSA increase. In 2024, Dunleavy vetoed a bill that would have permanently increased the BSA by $680, but allowed the BSA to be boosted by that amount on a one-time basis.

"While we agree that additional funding for education is necessary, the fiscal reality dictates that the amount put forward match this reality. The amount put forward in this bill does not," Dunleavy wrote in a letter explaining the veto.

While Dunleavy said that a funding increase would not constitute a sufficient policy shift to improve Alaska students' lagging outcomes, Tobin said that funding alone would allow districts to adopt policies that would benefit students.

"Funding school is a policy choice. Funding schools reduces class sizes, retains quality educators and ensures that there's programming outside of the essentials that kids love," said Tobin, an Anchorage Democrat.

Tobin said Dunleavy's proposed open enrollment policy indicated "his office doesn't seem to realize that top-down approaches with a diverse and complex education system that we have here in the state don't work" because some schools have unique application and enrollment requirements.

Tobin said the policy would primarily benefit students from the Matanuska-Susitna Borough seeking to enroll in Anchorage School District programs — an example that Dunleavy offered when he spoke in favor of the policy during his press conference.

Fairbanks Republican Rep. Will Stapp called the policies proposed by Dunleavy "very reasonable."

Stapp voted in favor of overriding Dunleavy's veto of an education bill last year, but said he would not vote in favor of overriding Dunleavy's veto of the BSA-boosting bill. Instead, he said the Legislature should pass Dunleavy's newly proposed legislation with minimal changes, if any.

"I don't see anything in here that's super controversial," said Stapp, a member of the Republican minority. "I don't know why we wouldn't just pass this."

Dunleavy's bill could have an unequal fiscal impact on school districts. The handful of school districts that run large, statewide correspondence programs would stand to gain more than those that lack such programs. And districts with a greater share of students who can read at grade level could, in the short-term, get a financial advantage over districts with a higher proportion of students who underperform in reading.

Dunleavy has presided over a massive increase in publicly funded homeschooling programs during his tenure. As a state Senate member, he had pushed for laws governing those programs to be vastly relaxed, allowing parents to use public funds for more purposes, including to cover the cost of private school tuition. During Dunleavy's time as governor, the share of Alaska public school students enrolled in correspondence programs — rather than traditional brick-and-mortar programs — has gone from around 10% to close to 20%.

As lawmakers have sought to address education funding amid an ever-shrinking revenue forecast, the governor has faced criticism in recent days — including from members of his own party — over his prolonged absences from Juneau and disengagement from the legislative process.

Dunleavy said Thursday that his administration is "prepared to continue to work with the Legislature and stakeholders to agree to a bill as soon as possible."

"I'm a phone call away, even if I'm in Taiwan trying to get an LNG line," he said.

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