Researchers tell House Education Committee Alaska’s per-pupil spending falls below national average after cost adjustments

Alaska’s apparent advantage in raw per-pupil education spending largely disappears when the state’s higher costs are taken into account, University of Alaska researchers told the Alaska House Education Committee on Feb. 26.

Dana DeFeo, director of the Alaska Center for Education Policy Research at the University of Alaska Anchorage, said, “after we adjust for elastic geographic costs, our per pupil spending is 15% below the national average.” The presentation and follow-up answers framed that gap, the sources of K-12 revenue in Alaska, and how spending has tracked inflation.

The researchers presented several headline findings. Using 2022 federal data as a baseline, the U.S. Census Bureau reported a 2022 national average per-pupil spending of $15,633; Alaska’s raw 2022 per-pupil figure in the Census-based comparison was in the low $20,000s, putting Alaska among the top 10 states in raw dollars. DeFeo and Matthew Berman, professor of economics at the Institute of Social and Economic Research (ISER), said those raw ranks fall after two adjustments: (1) applying Alaska school district geographic cost differentials (the state’s foundation formula district cost factors, which are measured relative to Anchorage), and (2) adjusting Anchorage’s price level to a national cost-of-living index (the Council for Community and Economic Research index used by the researchers).

DeFeo highlighted changes in funding sources between 2017 and 2023: the state’s share of per-pupil spending declined from about 64% in 2017 to roughly 55% in preliminary 2023 data, while federal and local shares rose to about 22% and 23%, respectively. She noted that some federal increases in recent years reflect COVID-relief funds that are phasing out, and cautioned the phase-out will increase pressure on state and local budgets.

On how Alaska’s spending has tracked inflation, DeFeo reported that between 2017 and 2022 Alaska’s per-pupil expenditures rose by about 12.8% while the U.S. Consumer Price Index rose 18.6% over the same period. She added that in 2022–23 the national inflation rate was about 4.1% while Alaska’s reported per-pupil increase was roughly 0.7%.

The committee asked whether particular spending lines—such as student travel for extracurricular activities—are captured in the figures. Berman responded that expenditures paid by school districts are included; expenditures paid by parents or private fundraising are not. DeFeo also noted that the Census-based numbers used in their interstate comparison include all district spending categories reported to the federal survey, not just foundation formula dollars.

Committee members asked about the foundation formula’s district cost factors. DeFeo noted those cost differentials are currently the ones the state uses in the foundation formula; the presenters said the differentials are dated. “Those numbers are not up to date and probably could be updated,” Matthew Berman said, adding that the differentials were originally calculated from data collected in 2004 and published about 2005 and that fuel and electricity cost increases since then likely would not have reduced the rural‑area cost differentials.

On compensation, DeFeo said salaries make up a smaller share of Alaska’s per-pupil spending than the national average (about 46% in Alaska versus 54% nationally), but when adjusted for Anchorage’s higher costs Alaska’s average teacher pay compares less favorably: in raw dollars Alaska’s 2022 average teacher salary was roughly 11% above the national average, but after adjusting for Alaska prices the average was about 25% below the national average.

DeFeo concluded by stressing that the presentation showed relative funding levels and cost pressures rather than a causal link between spending and student outcomes. “How much Alaska ought to be spending on education is a question of inputs and the outputs we want to see,” she said, and recommended further evidence‑based analysis to link spending patterns and outcomes.

Committee members asked for underlying data and for breakdowns that were not in the presentation (for example, administrative versus instructional expenditures). Berman and DeFeo said they could provide additional breakdowns and asked members to submit written requests through the committee office.

The presentation occupied the bulk of the committee’s meeting; members thanked the presenters and moved on to scheduling and subcommittee business before adjourning.

Ending: The presentation materials were provided to committee members and are on file with the committee; the researchers offered to provide additional data by written request to the chair’s office.