Rep. Andy Story pitches three-year averaging for school funding to reduce budget uncertainty

Juneau — On April 24, 2026, the Alaska House Finance Committee heard testimony on House Bill 261, sponsored by Rep. Andy Story, which would change the state's school funding timeline by allowing districts to use the greater of the prior year's average daily membership (ADM) or a three-year ADM average (with an option for an intensive-student current-year count) so districts would know funding amounts by July 1.

"This bill seeks to fix our flawed education funding process that families, students, and staff, and communities go through every year," Rep. Andy Story said in opening remarks, arguing that a July 1 funding number would give districts more stability to offer teacher contracts earlier and plan programs.

The Department of Education and Early Development's director of finance, Heather Heineken, reviewed four fiscal notes tied to the committee substitute. She said the projected cost to the Public Education Fund is $113,710,600 in fiscal year 2027 and roughly $113.55 million annually in FY2028''32 for the bill as presented; she also reported a projected state-aid decrease to Mount Edgecumbe of about $143,900 in FY2027 and a one-time $12,000 request for legal services to implement new reporting timelines and regulations for intensive students.

Invited experts were available on the call. Amanda Brown of APA Consulting, who worked on the 2015 review of Alaska's school funding program, told the committee that many states use averaging to provide budgeting stability and that membership-based funding generally avoids penalizing districts with high student mobility or chronic absenteeism.

Committee members questioned the fiscal assumptions and the policy tradeoffs. Rep. Bynum asked why DEED's fiscal projection did not model the bill's effects beyond FY2027; Heineken said the department projected forward only based on district-submitted estimates and did not attempt scenario modeling of district behavior under the new counting options.

Rep. Stepp warned members that offering multiple counting options could create financial incentives for districts to choose the count that maximizes revenue and urged the committee to require modeling or label out-year projections as indeterminate. Rep. Bynum and others also pressed on how the bill would interact with the special-education "intensive" multiplier (a 13x factor referenced during testimony), noting that special-education enrollments have risen and that those intensive-student counts can make total costs volatile.

Amanda Brown and Judy Parrott, president of the Alaska Association of School Business Officials, said the bill's averaging approach is intended to smooth funding so districts do not have to make disruptive midyear reductions after October counts; Parrott described current district practice of submitting projections to the state and then being trued up after the actual count.

Rep. Tom Shefsky asked how the state would pay for the $113 million projection; Rep. Story said legislators would decide funding sources and that one-time funds in the budget could be used as part of an implementation plan. Several members compared other states' experiences (Colorado and others were discussed), arguing the committee should better understand whether out-of-state comparisons used similar revenue and local-contribution structures before adopting a similar approach.

The committee did not take a vote. Chair Foster said the committee will reconvene on April 27 at 1:30 p.m. with public testimony first and then questions; House Bill 193 (paid parental leave) will be rescheduled. The committee adjourned at 3:45 p.m.

What's next: HB261 will return to the House Finance Committee on Monday, April 27, 2026, for public testimony and further questions and amendments.