State revenue uncertainty could limit contingent $115 million school payout, Legislative Finance director tells Anchorage committee

Lehi, director of the Alaska Legislative Finance Division, told the Anchorage School District's finance committee that the statute creating an up-to-$115,000,000 contingent appropriation for public schools only pays out if state revenue exceeds all other appropriations by the end of the fiscal-year close.

"The appropriation in question is, an amount up to a 115,000,000 if revenue is available from FY '26 that goes to school districts according to the foundation formula," Lehi said, explaining the language places the school allocation after all other spending is tallied.

Lehi said the statute splits potential excess revenue into three possible uses: an energy-relief payment to residents (an added PFD amount), the contested K-12 allocation of up to $115 million, and other statutory priorities. He warned the administration and revenue collections make the exact available amount a moving target.

A complicating factor is an earlier transfer from the higher education investment fund. "In August of last year, the executive branch transferred 130,000,000 out of that fund to satisfy that requirement," Lehi said. After audited financials showed a surplus rather than a deficit, the executive branch has discussed reducing the repayment to about $90,000,000; Lehi cautioned that accounting treatment is unresolved and could change how much excess remains for schools.

The committee asked whether the Department of Revenue or the Office of Management and Budget could provide earlier or probabilistic projections to help district planning. Lehi said the administration typically issues point estimates and is reluctant to release interim draft numbers that may change: "They're generally hesitant to share draft numbers that are going to be used for decision making when they know that things are going to shift."

Lehi said the legislature selected Aug. 31 as the administrative checkpoint because that is when fiscal-year estimates are trued up, but he acknowledged revenue can continue to shift after that date as corporate filings and appeals are processed.

Committee members asked whether public-records requests could force earlier disclosure. Lehi said that is possible but would likely yield internal point estimates rather than the ranges or confidence intervals districts say they want.

Committee members said they were concerned the public expects prompt restorations of teacher positions or program restorations if the contingent funding were to materialize. Several members urged an early-August public update to explain the mechanics and timing of the contingency and to coordinate messaging with the superintendent and supportive legislators.

The committee did not take formal action on the appropriation language but recommended coordinating a public communication to reduce misunderstandings about the timing and likelihood of additional funding.

Next step: staff and the superintendent's office said they would discuss communications strategy and aim for an early-August update to the community and at an upcoming conference/committee report to the board.