Dunleavy vetoes more than $87 million in education funding

Gov. Mike Dunleavy on Monday vetoed more than $87 million in one-time funding approved by the Alaska Legislature for public K-12 schools that educators said was critical for contending with rising costs amid years of flat education spending by the state.

The Legislature last month passed a budget that included a one-time $175 million increase to public education funding. In a news release announcing the veto, Dunleavy did not provide an explanation for cutting half that amount. Since the beginning of the legislative session, the governor had signaled his support for increasing education funding but declined to say what size increase he would support.

“The governor’s decision recognizes that schools need to address inflationary pressures while still preserving general fund dollars,” the governor’s spokesperson Shannon Mason said in an email. “A long-term stable fiscal plan is needed to protect core state services like education and public safety. Gov. Dunleavy looks forward to working with lawmakers on a fiscal plan.”

In an unusual move, Dunleavy announced the vetoes through a news release, without taking questions from reporters. Mason said the governor was unavailable for an interview Monday.

Sen. Löki Tobin, an Anchorage Democrat who chairs the Senate Education Committee, said she was “very disappointed” by the governor’s decision, adding that Alaska schools “showcased throughout the session that they are in desperate need of stable and predictable funding.”

The $175 million would have translated to a $680 increase in the Base Student Allocation — the formula used to calculate school funding. Even that amount was far below the $860 increase some educators said was needed as the bare minimum needed to keep up with inflation.

“I know that even $680 wasn’t enough, and seeing that it’s going to be substantially less than that — I have significant fears that we’re going to see educators who have been doing so much with so little start to do less, because they’re unable to just continue to make ends meet,” said Tobin.

Senate Majority Leader Cathy Giessel, an Anchorage Republican, said the veto to education funding will “have a huge impact” on several school districts that were relying on the funding to sustain key programs and services.

“We know we’ve short-funded education for more than a decade, and it needed to be caught up with inflation,” she said.

Alaska has a high bar for overcoming a governor’s veto: Lawmakers can reinstate the funding only through a three-quarters vote in both the House and Senate, a number they are unlikely to reach before the beginning of the fiscal year on July 1.

Lawmakers can call a special session to vote on overriding the governor’s veto — but that is an unlikely scenario. When they return to Juneau for their regular legislative session in January, legislators will have up to five days to consider overriding the governor’s veto, and despite the high bar, some said that could happen.

“It seems to me that even some members of the House majority might be interested in overriding — particularly that education funding — but that remains to be seen,” said Giessel.

House Speaker Cathy Tilton, a Wasilla Republican, said last week she supported the veto of some of the education funding.

“I feel like the $680 is a little high, and I could see that being reduced. I don’t have a specific number in mind, but I do feel like it’s a little bit high,” said Tilton. “We really didn’t have the conversation on the BSA itself… There’s a lot of pieces outside of just the BSA, and so I would like to look at what it looks like overall.”

But several members of Tilton’s caucus, including members of the governor’s party, supported the $175 million one-time boost to education funding.

“I feel like the increase in funding was supported by a pretty large majority in both bodies, and so it’s disappointing,” said Rep. Justin Ruffridge, a Soldotna Republican who co-chairs the House Education Committee. “I think that it’s going to be a tough thing for many districts to determine what to do now.”

In the Kenai Peninsula Borough School District, administrators had said earlier in the year that without an increase of at least $680 to the Base Student Allocation, they would have to consider cutting teacher positions and closing swimming pools and theaters — including the pool where Olympic champion Lydia Jacoby had trained.

“It doesn’t leave them with a lot of options, except for cutting services or increasing class sizes,” said Ruffridge. “It’s good for a governor to take a hard look at things, but that was a surprising area to see the largest cut come from.”

The veto could translate to a reduction of more than $20 million in state funding for the Anchorage School District. Superintendent Jharrett Bryantt said in a statement that he is “extremely disappointed” in the governor’s decision, and that the district faces a structural deficit of around $90 million for the 2025 fiscal year “if additional, recurring investments in education are not made.”

Tom Klaameyer, president of NEA-Alaska, the state’s largest educator union, said he is worried about the impacts the cuts will have on students and communities.

“I can say with certainty that educators are frustrated by this. I’ve got to think parents, and maybe even some legislators are, too. I hope there’s the will to get the votes for a veto override,” he said.

In districts where contract negotiations with teachers’ unions have stalled, including the Mat-Su, Klaameyer said the governor’s veto could translate to lower pay for teachers amid intense challenges in recruiting and retention across the state.

“Those negotiations were stalled, waiting for the funding question to be answered. What could have been a tool in those districts to be able to find solutions, to be able to negotiate contracts that will attract and retain educators — I wonder if that tool has been removed,” said Klaameyer.

While many lawmakers acknowledged during the legislative session that ended last month the importance of increasing education funding, several conservative Republicans in the House blocked a permanent funding boost, saying the state should reconsider how it allocates funds to schools. Several Republicans said they favored a retooled formula that would allocate more funding to home-schooled students.

“We have a diverse caucus, so everybody has their own idea of where they feel comfortable with that,” Tilton said.

Dunleavy also vetoed numerous other budget items, including more than $35 million in university capital projects across the campuses in Anchorage, Fairbanks in Juneau. Additionally, the vetoes include $1 million for rural public radio funding, $2.5 million for tourism marketing, $3.5 million in Head Start funding, and more than $10 million for maintenance of K-12 school buildings.

The governor appeared to target lawmakers individually with vetoes of infrastructure projects in the districts of Republican House members who voted against the budget.

Dunleavy vetoed more than $5 million out of a $34 million capital project package added to the budget by the Senate during the final day of budget negotiations. That package had been added to the budget in an effort to woo Republican holdouts to vote for the deal — and it succeeded. Some Republicans House members openly said at the time that their colleagues had been “bought” with individual priority projects of up to $5 million each.

The governor vetoed only projects in the districts of House members who had voted against that final deal, including road improvements and other infrastructure developments in the districts of Republican Reps. Ruffridge, Jamie Allard, Ben Carpenter, Julie Coulombe, Mike Prax, Dan Saddler, Laddie Shaw and Sarah Vance. Other capital projects in the districts of Republicans who voted in favor of the deal remained in the budget.

Spokespeople for the governor did not immediately respond when asked about the governor’s reasoning for those vetoes.

Dunleavy has not held a news conference in nearly two months, since April 27, when he spoke in Juneau about the need for a long-term fiscal plan to address the state’s structural deficit. At that news conference, Dunleavy committed to introducing a sales tax proposal — which he has yet to unveil.

The governor’s office has declined or ignored multiple interview requests in recent weeks, including most recently on Wednesday.

One item Dunleavy did not veto is the $1,300 per-Alaskan Permanent Fund dividend. That dividend amount — supported by the Senate majority and grudgingly accepted by House majority members who were gunning for a larger dividend — was calculated using what is referred to as the “25-75 formula,” meaning one-quarter of the Permanent Fund earnings go to the dividend and the remainder goes to fund state services. The governor’s tacit acceptance of that formula marks a departure for him, as he had previously said he would support a “50-50″ calculation that would reserve half the Permanent Fund earnings for the dividend.

Samuels reported from Anchorage and Maguire reported from Juneau.