Dunleavy vetoes millions intended to solve Alaska’s dispute with feds over education funding equity

Alaska Gov. Mike Dunleavy vetoed the funds state legislators set aside to settle a dispute between Alaska’s education officials and their federal counterparts over whether the state spent pandemic relief equitably.

State legislators included $11.89 million in the operating budget for the upcoming fiscal year to allow the state to comply with the federal government’s grant requirements and recover its good standing under federal guidelines.

Dunleavy vetoed that money because it is unclear whether or not it will be needed, according to the reason for the cut included in his office’s veto summary: “Need for funding indeterminate at this time as underlying funding request remains unresolved.” His office declined to elaborate on Monday.

The “underlying funding request” is a notice from the U.S. Department of Education that the state did not follow federal guidance for spending hundreds of millions of dollars in federal grants. The state’s failure to come into compliance has already triggered consequences: The state must receive a federal OK before it can spend nearly $1 million in grants and is considered a “high risk grantee” by the federal government, which could affect the state’s eligibility for future grant money.

Sen. Löki Tobin, chair of the Senate Education Committee, said the veto shows a misunderstanding of the situation.

“It is unfortunate that we have a governor who, I think, doesn’t seem to recognize that negotiations have culminated,” she said, adding that the final decision was that the state must pay a total of $11.89 million to certain school districts.

Tobin said there seems to be a belief among state officials that the negotiations can be reopened, but said her conversations with federal officials contradict that.

“I know that this is not true, and I know that the consequences Alaska has already experienced for noncompliance are most likely to continue and be ratcheted up in their severity,” she said.

She said she is concerned the consequences could trickle down to individual districts that use the state’s education department as a pass-through for individual grants — or that the state may have to pay back some of its federal pandemic relief funding. Education officials, including the commissioner, have said that this will not happen as recently as the last Board of Education and Early Development meeting in Kotzebue.

In May, state officials offered to pay one school district $300,000 rather than settle up the $11.89 million, but a spokesperson for the governor’s office said the department has not yet received a response.

Many states have struggled to meet the federal requirements for the grants, but only Alaska has not yet complied.

Originally published by the Alaska Beacon, an independent, nonpartisan news organization that covers Alaska state government.