DEED presents $1.79 billion FY27 budget; members press on vacancies, ADM decline and H-1B teacher fee
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Summary
Commissioner Dina Bishop and DEED staff presented the governor's FY27 proposed $1.79 billion budget on Feb. 4. The presentation highlighted full statutory funding of the K-12 foundation program, a new $771,000 residential program, a 37-position vacancy count (18.5% vacancy rate), declining average daily membership, and concerns about proposed H-1B supplemental fees that could affect recruitment of foreign-certified teachers.
Commissioner Dina Bishop and DEED staff presented the Department of Education & Early Development's proposed FY27 budget to the House Finance Committee on Feb. 4, detailing a governor's package of about $1,790,000,000 that fully funds the K'12 foundation program at approximately $1,270,000,000 and statutorily funds pupil transportation at $72,800,000.
Deputy Commissioner Karen Morrison and Administrative Services Director Dawn Hannish outlined division-level funding and a slate of program-level changes. The budget adds $771,000 to support a new residential school program in the Lake and Peninsula School District and proposes other targeted increases, including higher authority for Alaska Performance Scholarship awards and related Higher Education Investment Fund increments.
Hannish told the committee the department had 37 vacancies as of December 2025, an 18.5% vacancy rate, and that DEED was actively recruiting for 14 of those positions while 23 position-control numbers remain unfunded. Members asked for immediate written follow-up detailing the funded PCNs, the fiscal value of the 14 recruitable positions and the overall fiscal value held by the 37 PCNs.
Lawmakers and the commissioner spent significant time on teacher recruitment and visa-related concerns. Representative Galvin and others raised a recent federal proposal that could impose supplemental fees of up to $100,000 on certain H-1B applications, which members said could jeopardize teacher pipelines for rural districts that hire internationally. Bishop said she had sent a formal letter to the U.S. Secretary of State requesting an exemption from the supplemental H-1B fee for teachers and said the department is advocating for a waiver; she also provided counts the committee requested: about 280 educators on H-1B visas and roughly 180 on J-1 visas, representing about 7% of certificated teachers in Alaska.
DEED staff explained the department is monitoring ADM (average daily membership) trends and conceded a slight statewide enrollment decline for FY27 projections. Heather Heineken, DEED's director of finance and support services, said the department is not yet formally tracking how ADM declines affect fixed facility and transportation costs and agreed to pull a report for the committee. Members suggested considering additional ADM counting periods to better capture enrollment fluctuations.
On impact aid and federal coordination, Commissioner Bishop said DEED provides technical assistance and has an impact-aid expert; she pledged to raise coordination with superintendents at a Feb. 16 meeting and to explore what additional state-level support districts might need for applications and appeals. On Mount Edgecumbe, Bishop said the school saw about a 25% reduction in students since the start of the year (from a projected ~400 to just over 300), tied to program and operational changes; DEED will present additional exit-interview findings and a superintendent-led update.
Next steps: DEED agreed to provide requested follow-up documentation (vacancy funding detail, ADM regional breakdowns, and requested program-level figures) and to continue coordinating with districts on Impact Aid and visa advocacy.
