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After seven years with no increases to Alaska’s public education funding formula, schools across the state are facing difficult decisions as they balance increasingly tight budgets.
In Juneau, class sizes have gone up, and two of four middle school counselor positions, serving about 1,000 students, have been eliminated. The Alaska Gateway School District in the eastern Interior has installed energy-efficient windows and applied for a solar heating grant to cut heating costs. And in Fairbanks, the district is closing three elementary schools and cutting 121 positions — more than 7% of positions in the district.
No matter how much they cut, district administrators say that after seven years without a change to the school funding, they are constantly in reduction mode.
There is movement in the Legislature to add more money to the formula, but even as the state faces an unexpected revenue windfall during a time of rising oil prices, some lawmakers are hesitant to give money without strings attached.
The Base Student Allocation, or BSA, is the formula used to calculate how much money each district will receive from the state to cover the costs of running K-12 schools. Through the state’s ongoing fiscal crisis, the formula hasn’t changed since the 2017 fiscal year, remaining at $5,930. But given inflation — which has risen 8% since then — that money is worth less.
That amount in 2017 would have been equivalent to almost $6,430 in 2021 when adjusted to the Alaska Consumer Price Index — meaning that in practice, school districts are operating with significantly less money to cover costs that are constantly on the rise, driven by inflation, changing markets and automatic raises in salaries for teachers as they gain experience.
“The pressure has been building,” said Rep. Andi Story, D-Juneau, co-chair of the House Education committee, who is sponsoring a bill to increase the funding allocation.
That bill is making its way through the House, but could face pushback from lawmakers in the Republican-controlled Senate who believe that Alaska schools shouldn’t get more money without improving students’ dismal math and reading scores.
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The measure, House Bill 272, would increase the BSA to $6,153 in the 2023 fiscal year — less than a 4% increase — and then to $6,208 for the 2024 fiscal year. The bill has already advanced through the House Education committee and is currently under consideration by the House Finance committee. It would cost the state an additional $57 million in 2023 and $71 million in 2024. A separate measure would inflation-proof the BSA in subsequent years, meaning the funding amount could rise or fall annually depending on inflation.
Republicans want funding tied to outcomes
Sen. Roger Holland, R-Anchorage, chair of the Senate Education committee, said that without movement on a bill to provide targeted pre-kindergarten and reading programs, “there is not a whole lot of appetite for increasing the BSA.”
Holland said his concern stems from Alaska’s poor performance in national assessments. The state ranks in the bottom of the nation in terms of reading at fourth grade and is one of the five worst states in terms of math skills.
“A lot of people believe increasing the BSA is just throwing more money at a system that doesn’t work right now,” Holland said.
The targeted pre-kindergarten and reading programs are seen as a way to improve education performance, Holland said. Those measures would cost the state around $200 million over 10 years.
The House Education committee is still considering amendments to that bill, Story said. She added that she supports passing a reading policy this year alongside the increase to the BSA, but that the bill must first be amended “so it’s effective for all communities in Alaska,” including Native communities. The possibility of a reading bill and other education bills with hefty price tags are the reason why Story isn’t asking for a bigger increase to the BSA, she said.
“I’m keeping in mind that there are other interventions that might be more targeted,” Story said.
But some lawmakers think that any increase should be attached the expectation that schools improve their students’ performance.
“If we’re investing the money, I feel like we should have some goal in mind. Are we looking to have kids more career-ready by the time they graduate? Are we looking for certain levels of math and reading skills?” said Rep. Sara Rasmussen, R-Anchorage, during a hearing on the bill in the House Finance Committee on Tuesday. “The two conversations need to go hand-in-hand because we can put a bunch of money into it, but if we’re not reaching the educational outcomes that we’re seeking, I don’t know that that’s a benefit to the state.”
Asked if Gov. Mike Dunleavy would support increasing the BSA this year, spokesman Jeff Turner said the administration does not comment on bills before final passage in the Legislature. But Turner reiterated Dunleavy’s support for the reading policy that has the backing of the Senate Education Committee. Dunleavy has previously vetoed pre-kindergarten funding approved by the Legislature, but Turner said the governor supports the measure since it now factors in “educational outcomes.”
Widespread impacts
However, school superintendents from across the state said that the funding increase does not constitute throwing money at the problem. Instead, they said it is ensuring that districts have the bare minimum they need to cover fixed costs that are non-negotiable.
“We could choose not to heat our schools, but that would be difficult for our students,” said Alaska Gateway School District Superintendent Scott MacManus during a hearing on the bill. The eastern Interior district, headquartered in Tok, serves 400 students. More than half are Alaska Native and all qualify for free or reduced-cost lunch.
The district’s fixed costs — such as health insurance, building maintenance, electricity and fuel — have gone up 19% since 2017, he said, pushing administrators to constantly seek ways to save money, including by transporting students in the state’s first electric school bus to save on pricy gas. But the benefits of these improvements are “eroding as funding remains flat,” MacManus said.
The cost hikes affect both rural and urban schools across the state.
In Anchorage, the district has been using coronavirus relief funds to cover budget shortfalls, but those are expected to run out next year. Without more money from the state, the district will not have enough to cover costs, Chief Financial Officer Jim Anderson told the school board in a meeting earlier this month.
“Just like we don’t want our families to live paycheck-to-paycheck, a school district of this size with about 44,000 students and 6,000 employees should not live paycheck-to-paycheck,” said Anchorage Superintendent Deena Bishop.
In Fairbanks, coronavirus relief funds have also been used as a short-term solution, said Andy DeGraw, chief operations officer for the Fairbanks North Star Borough School District. But those funds couldn’t fully solve a $19 million budget gap. That has led the school board to decide to close three elementary schools and eliminate positions including teachers, aides and counselors.
DeGraw called those decisions “extremely difficult.”
“We’re pulling many arrows from the quiver to tackle the deficits that we face, but we’re running out of arrows to play very quickly. Those arrows now are becoming classrooms, staff reductions, teacher reductions,” DeGraw said.
In raw dollars, Alaska’s per-student spending is one of the highest among all states, according to Dayna DeFeo, a professor of education policy at the University of Alaska. The state spent more than $17,800 per student as of 2017, compared to the national average of $12,200. But when taking into account Alaska’s geography and the higher cost of delivering public education in rural communities, Alaska was spending 7% less than the national average per student in 2019, DeFeo said.
Alaska’s relatively high education costs stem from a large number of schools with fewer than 25 students, and high costs for unavoidable expenses like energy and health care, among other factors, DeFeo said.
In Kodiak, contractual salary increases for teachers alone cost the school district around $1.5 million per year. Without an increase in the formula funding from the state, that automatic increase in teacher salaries translates to cuts in other district expenses, according to Kodiak Superintendent Larry LeDoux.
“Year after year, you keep eroding your financial base,” LeDoux said. “Then when you have to add new programs you don’t have the money to do it, because you’re always in a reduction mode.”
‘Very dangerous money’
The Legislature has tried to make up for a stagnant BSA with one-time payments on top of the formula. In 2019 and 2020, the Legislature gave districts $20 million and $30 million respectively.
And in a preliminary budget unveiled by the House Finance committee last week, lawmakers proposed giving schools one-time funding of $50 million if the bill to increase the BSA fails to pass.
LeDoux called that “very dangerous money,” because even if districts can use it to prop up their programs in a single year, they are not guaranteed that funding in subsequent years, making it difficult to plan ahead.
In Juneau, cost increases have included a projected tripling of property insurance rates between the 2021 and 2023 fiscal years, according to Superintendent Bridget Weiss.
“Literally no cost is going down,” she said. “The hit has to come in the resources that we provide for students in the classroom.”
That has meant going from two middle school counselors to one for 500 students and cutting teacher positions, even at a time when the pandemic has made the need for counselors all the more acute, and students need extra help from teachers to catch up on material lost during school closures.
With rising costs, Weiss said that class size is “the only lever” left to control costs. Between 2017 and 2021, the number of students per teacher went from 22 to 25 in middle schools and 24.5 to 26 in high schools.
“We have really good work to do to increase some of our achievement scores, but to embrace the notion that, ‘prove it first, and then we’ll give you resources,’ is really an upside-down way to think,” said Weiss. “Nobody’s asking anyone to throw money at us. We are asking for public education to be supported in a viable way.”