What to do when the benefits are hypothetical and the costs are real?

Dear friends and neighbors,

We are less than a week away from the end of the 34th Legislative Session. Earlier this month, my legislation to reduce administrative burden on physician assistants passed with overwhelming bipartisan support and an endorsement from the Alaska State Medical Association. The top priority of the Alaska Children’s Caucus is up for consideration by the Senate today, and I am keeping my fingers crossed that my bill to protect consumers from the unintended consequences of hyperscale data centers continues to make its way to the finish line.

I am also happy to report that many of my budget priorities were included in the Senate’s version of the Fiscal Year 2027 operating and capital budgets, including:

• $110 million in one-time funds for public schools

• $29 million in energy relief for public schools hit hard by the volatility of energy costs

• $5.7 million to provide interventions for children 0-3 who experience developmental delays

• $15 million for the Anchorage Port, with an additional $10 million if the price per barrel of oil stays above $80 through the end of the year

• Full funding for Homeless Assistance Grants that keep people housed across Alaska

• $100 million in deferred maintenance for our public schools

The House and Senate Budget Committees are currently working to find common ground on a handful of other outstanding budget discrepancies. This year’s budgets take a very proactive approach in addressing long-standing deferred maintenance projects throughout our public school systems and the University of Alaska.

Outside of the budget discussion, lawmakers continue to vet several top priorities of the Alaska State Senate. These include

• Omnibus crime bill, including HB 101 - Age of Consent

• Governor’s gas pipeline property tax relief

• Governor’s sales tax

• Authorizing legislation for the Rural Health Transformation Program

• Minibus school reform legislation

Diving into how local communities support public education

At the start of this year, the Alaska Senate Majority identified adequate school funding and real education reforms as our top priorities. As the Chair of the Senate Education Committee and a PhD student of culturally sustaining education pedagogy, I take seriously my job to fight for evidence-based education policies that give every child in our state access to locally designed, place-based, high-quality public education.

After introducing an education “minibus” bill at the start of the year, my team has been hard at work to draft policies that have strong support from both parties, are rooted in data and evidence-based research, and will lead to improved academic outcomes.

House Bill 28, sponsored by Representative Andi Story, is now the Education Minibus bill and includes

• a pilot program to attract high-quality teachers for hard-to-fill positions

• a funding increase for pupil transportation to address rising fuel costs,

• a formula for one-time energy relief funds for school districts,

• permission for regional education centers to hire retired teachers; and,

• authorization for the Legislative Budget and Audit Committee to hire school finance experts to review the public school funding formula and suggest changes.

One proposal not included in HB 28 is a limit on the required local contributions from municipalities to support public education.

This proposal (originally drafted as Senate Bill 278) does not expand education funding; instead, it shifts the financial burden from thriving municipalities onto the State of Alaska. While this increases the state’s contribution to public education, total education funding remains unchanged, and the distribution of these state funds is far from equitable among districts.

SB 278 has the potential to drastically alter Alaska’s education funding landscape, favoring rapidly growing municipalities while undermining the 19 Regional Educational Attendance Areas (REAA) and smaller municipalities that lack economic growth.

It is very true that a decade of stagnant base student funding has forced municipalities and boroughs to shoulder more of the costs of providing for public education. While change is needed, any modifications to our school funding formula must be approached with careful consideration of both the intended and potential unintended consequences.

One unforeseen impact of SB 278 is the strain it places on our state’s budget, which may lead to reduced funding for vital areas beyond education. As the share of education costs covered by the state rises, essential services such as major school maintenance, support for the Anchorage Port, and public safety could face financial challenges. There is also a risk that efforts to increase the Base Student Allocation—the key to equitably boosting overall school funding—may lose momentum.

Without additional state revenue, SB 278 could create significant pressure to cut back on essential state services that many Alaskans rely on. While some municipalities might receive a slightly larger share of the budget, it’s important to recognize that every school district in Alaska will feel the impact and may struggle to meet its needs.

The proposed change in SB 278 represents a crucial transformation in Alaska’s school funding formula. A previous similar change was ultimately abandoned after a decade because it exacerbated funding disparities amongst municipal districts.

It is essential to carefully evaluate and study such a significant adjustment. Unfortunately, the legislative process was insufficiently thorough this time. SB 278 only received one hearing in the Senate Education Committee, which revealed a lack of support needed for it to pass. House Minority Caucus lawmakers, however, opted to bypass the committee process, pushing the proposal forward in another bill, House Bill 261 (more on House Bill 261 below).

While the Municipality of Anchorage may experience short-term benefits from SB 278, many other municipalities will not see a reduction in their required local school contributions. Additionally, rural districts will receive no increase in funding from the state. It is important to note that the Anchorage School District is not guaranteed an increase in local funding unless the Anchorage Assembly chooses to allocate additional local dollars.

The more I examine the local contribution issue, the more I am convinced that the benefits of SB 278 are merely hypothetical, while the costs are undeniably real.

Transferring costs from a select few rapidly growing municipalities to the State, without concurrently increasing base education funding, is fundamentally unfair to every school district in Alaska.

That said, I recognize the pressing concerns of several municipalities that must be addressed. I am committed to collaborating across party lines and with my leadership to determine the most equitable way to alleviate the burden on municipalities while also ensuring robust financial support for all districts, particularly those disproportionately affected by soaring heating fuel and electricity costs.

The Task Force on Education Funding will continue examining our school funding formula. I expect that the recommended formula changes will include substantial revisions to the financial contributions required from local municipalities, as well as proposals to increase state revenue for schools.

House Bill 261

Introduced in January, House Bill 261, sponsored by House Education Committee Co-Chair Representative Andi Story, includes a proposed education plan based on recommendations from a 2015 research report by school finance experts.

HB 261 adopts an approach used by many other states for counting students in school districts. Instead of relying on a one-time student count, HB 261 allows districts to average student population counts over 3 years or to use the current school-year count if the student population is 5% higher than the 3-year average. This change will enable districts to predict their total school funding better and effectively plan their annual budgets.

Currently, HB 261 is under reconsideration in the Alaska State House. If it is passed, it will move to the Alaska State Senate, where I have scheduled the bill for a hearing in the Senate Education Committee as soon as this Friday.

Physician Assistant Bill Passes the Legislature

On May 8th, Senate Bill 89 passed the Alaska State Legislature.

This bill modernizes the regulations for Physician Assistants (PAs) and received strong bipartisan support in both the Alaska State Senate and House. SB 89 represents an Alaskan approach to updating statutes by allowing PAs to practice to the full extent of their licensure without unnecessary bureaucratic obstacles.

We would like to express our deep gratitude to all the advocates, including the Alaska Academy of PAs, the Alaska State Medical Association, and everyone else who contributed to the development of this bill over the years. Effective policy requires collaboration and a focus on common ground, and SB 89 is a great example of that.