Legislators warn residential schools face funding shortfall; DEED says it is engaging superintendents
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Summary
Representative Swanke told the subcommittee residential school stipends have not risen since FY2015 and that two residential schools are operating about 20% below costs; Commissioner Bishop acknowledged the concern, said the temporary increase had sunset and promised more information at a Feb. 13 deep dive.
Representative Swanke raised sharp concerns Feb. 4 over the fiscal sustainability of residential schools, telling the House Finance Education Subcommittee that "the per pupil stipend for residential schools operated around the state has not increased since FY '15" and that some residential schools are "funded about 20% below their actual operating cost." Swanke said the funding gap threatens continued operation and asked what DEED is doing to support those districts.
Commissioner Dina Bishop responded that she has spoken with residential school superintendents who are worried and confirmed a temporary provision that previously increased funding had sunset, contributing to the reverse in funding levels last year. Bishop said DEED is engaged in discussions with residential superintendents and that the department would provide additional information to the committee; the chair scheduled a dedicated session on residential schools for Feb. 13.
Context and implications: DEED’s FY2027 proposal includes a $771,000 line to support a new residential program in Lake and Peninsula School District, and the department cited other strategic investments (trauma‑engaged schools, broadband equity) aimed at serving rural and residential populations. Legislators emphasized that per‑pupil stipends and residential reimbursements have long‑term cost implications and requested a specific briefing with superintendents and the residential school coalition.
What happens next: The committee agreed to a Feb. 13 deeper dive into Mount Edgecumbe and residential school funding mechanics. DEED committed to return with details on how stipend levels have changed, what temporary provisions expired and options for addressing cost gaps.
Ending: Committee members framed the issue as a potentially urgent budget decision for the subcommittee to address before finalizing FY2027 appropriations.
