[{"_1":2,"_87":-5,"_88":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6359019,"mediaKeyId","2209375-c82af0215a6195f367f0e4909e45c217","parentId",2209375,"title","Legislative finance lays out Alaska school funding formula, major revenue sources and policy levers","audioSeconds",3148,"startMs",238000,"endMs",3386000,"viewUrl","/Search/View?dp=1&key=2209375-c82af0215a6195f367f0e4909e45c217&start=238&end=3386","thumbnailUrl","https://assets.pipeline.soar.com/2209375-c82af0215a6195f367f0e4909e45c217/thumbnail_238000.jpg","articleUrl","/articles/6359019/Alaska/Legislative-finance-lays-out-Alaska-school-funding-formula-major-revenue-sources-and-policy-levers","mediaUrl","https://secure.pipeline.soar.com/6359019-dd5d84e65db4a5d821691cbf2abaf5c4/orig.mp4?Expires=1775388665&Signature=CoacNtxukZI5LPCcDDGBEQ8pcXxL2hKEdm8m80NlB47L-G9HONeFRrgvc0sdi1oX1p4J0LV~Q5-6gCLaId4U1ZG~bZHhO-AtWrULlsO9lSTS5zXuON1N1yGsvm75rRrgbhQTKMNHOJ0zOxzw2tDr0jkShUlzDKTWP5ovfLyt7yMqDXWUQ4~m~W2Dd~7ts-qJ9fO5KX7SJMJaQPWpQiweiyRLI-hb1VPfclXHdKG0hd-6pNsLne9njYJ74OhWg-s92t66SDuUH0wkl8WYKmUKjq74CPpGirUe8l3xX~BLJd7KdV79r6BiaP83BjWj9SwKq9fyiMCZyVq7saSHefgX2g__&Key-Pair-Id=KUT5TJCACFTXG","author","Alaska State Legislature","date","2025-01-27T00:00:00Z","article","Juneau — Legislative Finance Division staff told the Senate Education Committee on Jan. 27 that Alaska’s school districts rely primarily on state funding and that detailed technical factors in the state’s foundation formula, plus some outside-the-formula appropriations, determine how money flows to each district.

The presentation, given by Alexi Painter and Connor Bell of the Legislative Finance Division, laid out the current composition of school district revenue and walked the committee through how the foundation formula translates student counts into district aid. Painter said “school districts’ largest source of revenues [is] from the state of Alaska, nearly $1,400,000,000, accounting for 62% of their total revenue.” He and Bell also described transportation, local, federal and other revenue streams and identified policy levers available to the legislature.

Why it matters: the formula and related statutory provisions determine how limited state dollars are distributed among urban districts, small rural districts and regional education attendance areas (REAAs) that lack local taxing authority. Small changes in multipliers or outside-the-formula appropriations can shift large sums between districts.

Painter and Bell showed a breakdown for FY25 in which the state portion of the foundation formula was described as about $1,170,000,000; required local contributions as roughly $314,000,000; and a pupil-transportation formula estimated at $77,900,000. Painter also said recent outside-the-formula appropriations totaled about $174,700,000 in the current year. Bell estimated federal E‑rate support to districts at roughly $100,000,000 but said he did not have an exact figure on hand.

Bell summarized how the formula converts the October student count into an ‘‘adjusted average daily membership’’ (AADM) that is multiplied by the base student allocation (BSA) — reported in the presentation as $5,960 — and then apportioned among payers (state, required local contribution and deductible federal impact aid). He described the major multipliers that inflate the raw student count for funding purposes: a school-size factor (to compensate small schools), a district cost factor (area-cost differentials; Anchorage = 1.0 baseline, Yukon Flats example at about 2.116), a flat special‑needs block grant (1.20 multiplier), a career-and-technical education factor (1.015) and a separate intensive special-education factor the presenters said is currently 13 times the BSA for each qualifying student.

Bell and Painter also noted several statutory and administrative features that affect funding year to year: hold-harmless provisions that phase in ADM drops of 5% or more over three years; a correspondence-student multiplier of 0.9; indirect state supports such as PERS/TERS payments above local caps and school debt reimbursement that do not always appear in district budgets but reduce districts’ net costs; and capitalization of the REAA fund (used for rural construction and major maintenance) that is statutorily linked to prior-year school debt reimbursement.

Committee members pressed for specifics. Painter said there has been a moratorium on state school-debt reimbursement since 2015 that is scheduled to sunset on July 1, 2025; when the reimbursement resumes it is expected to return at a lower rate (Painter described a likely 40–50% reimbursement rate versus earlier rates of 60–70%). Painter and Bell also discussed the federal ‘‘disparity test’’ and local‑contribution caps: Alaska’s system uses a local cap (most districts pay a minimum of 2.65 mills; the maximum optional local contribution cited was 23% of basic need under the current structure) that enables deductible federal impact aid — Painter cited an $81,000,000 deduction figure used in their analysis — and thereby affects the state share.

The presenters emphasized that the legislature has several funding levers besides changing the BSA: (1) one‑time outside-the-formula appropriations; (2) revising formula multipliers or the district cost-factor study; (3) altering the state payment toward employer retirement (TERS/PERS) above local caps; (4) changing the required local contribution or its cap. Each option redistributes funding differently and carries equity trade-offs for urban versus REAA districts, they said.

Painter and Bell noted some historical context: the current foundation formula dates to a 1998 design and has seen partial updates over time (notably phased-in district cost-factor changes around FY09–FY13). Bell said the statute requires the Department of Education to provide updated cost differentials every two years but that the department’s most recent submission was not adopted, and the legislature has not commissioned a new statewide cost study since the mid-2010s.

Committee members asked for follow-up information; Painter and Bell offered to provide more detailed district-level breakdowns (including federal impact-aid and exact E‑rate figures) and to return for additional briefing. The committee chair said staff may be invited back as the committee considers a bill or package to address public education funding.

The presentation materials shown to the committee and the staff comments highlight policy choices that would change who pays (state vs. local) and how dollars are allocated (BSA vs. multipliers vs. outside-the-formula appropriations). That analysis will inform any bill language the Senate Education Committee develops in the coming weeks.

","mediaType","Video","parentTitle","Senate Education Committee - January 27, 2025","oneSentenceSummary","Legislative Finance Division staff told the Senate Education Committee that Alaska’s school districts rely primarily on state funding and that detailed formula multipliers and outside-the-formula appropriations determine how money is distributed.","taxTitle","Education, Standing Committees, Senate, Committees, Legislative, Alaska","taxId",16224,"location","Alaska","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":80,"_47":81,"_49":82,"_51":83,"_53":84,"_55":56,"_57":58,"_59":85,"_61":62,"_63":64,"_65":86,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6359015,"Kenai Peninsula superintendent warns of deep budget shortfall; hiring freeze and school closures possible",0,3353000,"/Search/View?dp=1&key=2209375-c82af0215a6195f367f0e4909e45c217&start=3353&end=3353","https://assets.pipeline.soar.com/2209375-c82af0215a6195f367f0e4909e45c217/thumbnail_3353000.jpg","/articles/6359015/Alaska/Kenai-Peninsula-superintendent-warns-of-deep-budget-shortfall-hiring-freeze-and-school-closures-possible","https://secure.pipeline.soar.com/6359015-6377c12e65190c8eaae8b5428abdc9dd/orig.mp4?Expires=1775388665&Signature=LC1U4Azd9ApYiXGW-w9LGV30DFiCOwCfBMIe4BG9igl2a4rClfMeMu9oy~SGFyyfwGuhbWZDAzAK8wHgNxnO9gm~egFJHxNj0kYqLQZxnAdJmgzEY83N2yIXgpOgxWm9FFGgwJBNcL1q9zhDfT3AxwlraxbYXSlX-5hFaDm9ien87A2a226x3G9SwZ4EYfAFHX~XoAlGKx6LWY71UeEUSReb5awcogcBmmdrJyfxNI718xtWzo1RXEDMGC8CVpd--H4Amc5G2q8O-YeQgagJ4h53grXwAtTBb7mmXIo9-UKsacyq~TDaf5cfEyZxLQ-eLHXXPLD55kiI6hZnFlwgmQ__&Key-Pair-Id=KUT5TJCACFTXG","Juneau — Clayton Holland, superintendent of the Kenai Peninsula Borough School District, told the Alaska Senate Education Committee on Jan. 27 that his district is projecting a severe shortfall that will force staffing and program reductions if the state does not provide earlier or larger funding.

Holland said the Kenai Peninsula Borough School District (KPBSD) — which he described as “the size of West Virginia,” with 42 schools, about 8,500 students and roughly 1,200 employees — is projecting “almost $17,000,000” in deficit for the coming year and that the district’s unrestricted fund balance has fallen “to less than $300,000.” He said the district has placed a hiring freeze on new and temporary positions and was considering “massive cuts” to programs, staff and potentially school closures; he scheduled a district work session on Feb. 4 to consider options.

Why it matters: a multi-million-dollar shortfall in a large district threatens classroom services, special education staffing and extracurricular programs; public testimony that followed the superintendent’s remarks described parallel staffing shortfalls in Anchorage and Seward.

Holland said escalating fixed costs — transportation, insurance, utilities and contract increases — have eroded the district’s fiscal cushion. He said transportation costs previously required transfers from the general fund (KPBSD had moved funds in recent years to cover a gap) and that fuel and contractor price increases continue to pressure the budget. He said insurance costs had increased about 22% year over year for the district.

Holland described a range of program and personnel cuts under consideration if additional revenue is not provided: raising pupil–teacher ratios (the district’s projection included an increase that could eliminate about 85.5 teachers), eliminating extracurriculars (including sports), reducing district-office staffing and cutting signature programs (Holland specifically mentioned his district’s middle-college program). He said those actions still might not close the district’s projected shortfall.

Holland also told the committee his district was already dealing with a staffing freeze in special education — he said special-education grant balances had been run down to the point that the district imposed a hiring freeze for temporary and new hires in paraprofessional and other positions. He said that decision had forced reductions in on-site supports and that administrators were considering school consolidations where necessary.

Public testimony that followed reinforced staffing and program pressures across the state. David Kingsland — a longtime Alaska educator who worked in multiple districts and previously served on bond-review panels — told the committee that districts need earlier and predictable funding to plan staffing and avoid late-year layoffs. “I would recommend…that districts can get some early funding, or at least to know that number,” Kingsland testified.

Several Anchorage witnesses described similar and larger structural budget difficulties in Alaska’s largest district. Ben Spies, an Anchorage parent, said families are leaving the state in part because of school concerns and urged the legislature to increase education funding. Kelly Lesson, treasurer of the Anchorage School Board, said Anchorage School District (ASD) faces a structural FY26 shortfall she described as approximately $111,000,000 and that one proposal under consideration would spend down retained one‑time funds to roughly 5% of reserves — a use that Lesson said would yield about $47,000,000 but leave ASD with “less than a week’s worth of operating funds,” well under the district policy target of an 8% fund balance.

Andy Holliman, Anchorage School Board president, told the committee that long-term flat appropriations combined with inflation have quietly eroded program capacity across districts and that the accumulated effect over a decade is now visible in lost programs, higher class sizes and eroded staff morale.

A classroom-level witness, Joshua Garrard, a paraprofessional at Seward Middle School, said staffing shortages had forced him to teach multiple classes and that a newly imposed hiring freeze eliminated substitutes and other positions that had helped keep special-education services functioning. Garrard told the committee, “There is a void left by the lack of staffing, and we are out of compliance.”

The committee chair opened the record for continued public testimony; members asked further questions of the superintendent and invited additional district-level briefings in upcoming hearings. Holland said local boards and administrators are considering contract negotiations and staff raises that the district currently cannot afford.

","Kenai Peninsula Borough School District Superintendent Clayton Holland told the Senate Education Committee the district faces a large budget gap, an active hiring freeze for some positions and possible school closures; public testimony from Anchorage and Seward speakers described parallel staffing and program pressures statewide.","actionData","errors"]

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Legislative finance lays out Alaska school funding formula, major revenue sources and policy levers

Kenai Peninsula superintendent warns of deep budget shortfall; hiring freeze and school closures possible