Alaska Governor’s Budget Keeps K-12 Funding While Draining Half State Savings
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There’s a particular kind of exhaustion that comes from watching education funding decisions get made far above your head, in rooms where your child’s needs are just line items on a spreadsheet. You’ve probably noticed that promises about school funding seem to come with asterisks, exceptions, and fine print that only become clear once it’s too late. That wariness is well-earned, because the latest budget proposal from Alaska demonstrates just how precarious education funding remains when states face tough fiscal choices.
TL;DR
Alaska Governor Mike Dunleavy proposed his FY27 budget which fully funds K-12 education at approximately $1.5 billion, including last year's $700 per-student formula increase.
The overall budget requires drawing $1.5 billion from state savings - roughly half of Alaska's remaining Constitutional Budget Reserve - raising sustainability concerns.
Key legislators from both parties have expressed skepticism, with Senate Finance co-chair Bert Stedman warning that following the governor's fiscal approach would leave Alaska "completely broke."
The budget process begins when lawmakers return to Juneau on January 20, where significant changes to the governor's proposal are expected.
What Alaska’s Budget Proposes for Schools
Governor Mike Dunleavy has unveiled his proposed budget for fiscal year 2027, and for parents watching closely, the education numbers tell a complicated story. The budget fully funds Alaska’s K-12 education formula, including the $700 per-student increase that lawmakers approved last year over Dunleavy’s veto. In total, the state would direct approximately $1.5 billion toward K-12 education.
However, the overall budget requires drawing $1.5 billion from the Constitutional Budget Reserve – Alaska’s main savings account – which currently holds around $3 billion. This means the state would spend roughly half its remaining savings in a single year to balance the books.
The governor also proposed a Permanent Fund dividend of approximately $3,600 per Alaskan resident, which would represent the largest payout in state history. However, legislators from both parties have already signaled this amount is unlikely to survive the budget process.
The reaction from key legislators has been swift and skeptical. Senator Bert Stedman, a Republican who co-chairs the Senate Finance Committee, offered perhaps the most direct assessment of the governor’s plan. He warned that following Dunleavy’s approach would leave Alaska “completely broke” after this year.
Stedman pointed to last year’s failed attempt to address the deficit through modest revenue enhancements, which Dunleavy vetoed. With the governor in his final year in office, Stedman expressed doubt that a sustainable fiscal plan could emerge in time.
The stakes for education become clearer when examining individual districts. Representative Andy Josephson, who co-chairs the House Finance Committee, noted that Anchorage’s school district alone needs $75 million just to maintain current service levels. For parents whose children depend on adequate classroom resources and support services, understanding educational advocacy becomes increasingly important when state budgets face this kind of pressure.
Author Quote"
If we would have followed his plan, after this year, we’d be completely broke – Sen. Bert Stedman, Republican co-chair of Senate Finance Committee
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The Gap Between Full Funding and Real Needs
While the budget technically “fully funds” the education formula, this framing deserves scrutiny. Full formula funding means the state will distribute money according to its established calculations – but those calculations don’t automatically align with what schools actually need to serve students effectively.
Alaska’s unique geography creates educational challenges that most states don’t face. Districts spread across thousands of square miles serve students in remote communities where transportation and recruitment costs far exceed suburban norms. When funding stays flat against rising costs, “full funding” can still mean cuts to programs that help students build essential skills.
The tension between formula funding and actual educational needs is why parents who understand how to advocate effectively for their children often achieve better outcomes than those who assume the system will automatically provide what their child requires.
Key Takeaways:
1
Education formula fully funded: Alaska's FY27 budget proposal maintains full K-12 funding at approximately $1.5 billion, including last year's $700 per-student increase that legislators approved over the governor's veto.
2
Half of state savings at stake: The budget requires drawing $1.5 billion from the Constitutional Budget Reserve, consuming roughly half of Alaska's remaining $3 billion in savings to balance the books.
3
Legislators predict major changes: Key lawmakers from both parties have signaled the governor's proposed $3,600 Permanent Fund dividend is unlikely to survive the legislative process, with one finance committee chair warning the current approach would leave Alaska "completely broke."
What This Means for Alaska Families
Lawmakers return to Juneau on January 20 to begin the budget process in earnest. The governor’s proposal serves as a starting point, but the final budget will likely look quite different by the time it reaches his desk for signature.
For Alaska parents, the coming months represent both uncertainty and opportunity. The education funding debate will unfold in public, with school board meetings, legislative hearings, and community forums where parent voices can influence outcomes. Understanding the broader context – including how state budget decisions cascade down to individual classrooms – positions families to advocate more effectively.
Whether the state draws from savings, adjusts the dividend, or finds new revenue sources, the choices made in Juneau will shape what resources Alaska teachers have to help every child develop their capabilities and reach their potential.
Author Quote"
The Municipality of Anchorage’s school district needs $75 million to maintain the status quo in funding of K-12 – Rep. Andy Josephson, Democratic co-chair of House Finance Committee
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When state leaders talk about “fully funding” education, parents know to look past the headlines to the fine print. Budget decisions made in distant capitals shape what resources your child’s teachers actually have to work with – and formulas don’t automatically equal adequacy. The good news is that understanding how these systems work gives you real power to advocate for what your child needs. If you’re ready to become a more effective advocate for your child’s education, the Learning Success All Access Program offers a free trial that includes a personalized Action Plan mapping out exactly how to support your specific child’s development – and you keep that plan even if you decide it’s not the right fit.
