Perspective: Impact of FY2018 Supplemental Budget Education Funding Reduction

When Governor Dunleavy announced he would be submitting a supplemental budget with a $20 million reduction to education funding for fiscal year 2018, there was a fair amount of angst expressed by the education industry and its supporters. The Alaska Policy Forum reviewed the fiscal year 2018 education budget to determine the real impact on K-12 education.

The reduction is part of a supplemental budget request that seeks reductions in multiple areas.[1] As a result of the proposed $20 million reduction, the education industry has outlined various harms to programs across the state.[2] Just how much of the total K-12 funding is this $20 million and what impact will this have on education in the state?

During the 2018 legislative session, an additional $20 million was provided outside the normal funding mechanism which is the Foundation Formula. Under the Foundation Formula $1,211,887,231[3] was provided to the 53 Alaska school districts. The supplemental $20 million outside the Foundation Formula represents 1.6% of the total funding provided by the formula.

In addition, there are several other buckets of education money which the state provides including the $78,184,622[4] for student transportation. In total, the state provides $1,414,545,412 to fund K-12 education for 129,620[5] students. This amount represents only the state’s education funding and does not include the retirement (PERS/TRS) funds provided by the state for employee pensions. Some school districts also receive local funding.

The addition of local funding sources can make comparison complicated but, fortunately, the state Department of Education & Early Development compiles general fund expenditures from the budgets of all state school districts. For fiscal year 2018 this list shows a grand total of $2,106.590,007[6] for general fund expenditures.

So what percentage of this grand total is the $20 million reduction? Less than one percent. School districts are predicting doom and gloom while facing a reduction of less than one percent in their FY2018 funding.

The regular and predictable warnings have been issued: “We will have to cut teachers in the classroom.” Rather than meet the challenge in a good faith effort and work together to reduce expenditures, some districts have responded that they used this one-time money to hire new teachers and other personnel. Good management dictates that one-time funding should only be used for nonrecurring items / projects, so now the school districts have put themselves into a bind.

Here is a listing by school district which compares the $20 million funding to the total state projected FY19 funding (not including PERS/TRS, federal funding, other funding):

The Department of Education and Early Development
FY2019 Projected State Program Allocations
based on Legislative Appropriations

School District Projected FY19 Totals Portion of $20M Funding
ALASKA GATEWAY $9,608,755 $117,311
ALEUTIAN REGION $1,252,097 $16,946
ALEUTIANS EAST $5,408,504 $74,796
ANCHORAGE $397,342,197 $5,772,609
ANNETTE ISLANDS $3,131,912 $68,611
BERING STRAIT $33,806,224 $557,468
BRISTOL BAY $1,347,433 $26,860
CHATHAM $3,854,099 $50,688
CHUGACH $3,721,081 $45,747
COPPER RIVER $7,109,744 $88,430
CORDOVA $5,344,077 $66,742
CRAIG $4,567,815 $65,632
DELTA/GREELY $11,382,538 $133,595
DENALI $7,848,933 $108,388
DILLINGHAM $7,859,077 $95,372
FAIRBANKS $141,126,734 $2,016,261
GALENA $28,338,904 $322,539
HAINES $3,386,515 $44,272
HOONAH $2,369,754 $33,898
HYDABURG $1,902,916 $25,326
IDITAROD $6,591,014 $88,989
JUNEAU $49,070,166 $671,008
KAKE $2,177,501 $32,047
KASHUNAMIUT $4,228,363 $79,650
KENAI $92,178,069 $1,405,152
KETCHIKAN $29,724,989 $387,274
KLAWOCK $2,197,617 $36,177
KODIAK $33,435,639 $399,023
KUSPUK $6,204,028 $113,797
LAKE AND PENINSULA $10,294,336 $127,035
LOWER KUSKOKWIM $71,182,299 $1,056,175
LOWER YUKON $31,044,083 $563,553
MAT-SU $207,754,834 $2,619,784
NENANA $10,308,572 $115,245
NOME $9,150,662 $122,937
NORTH SLOPE $20,180,536 $456,526
NORTHWEST ARCTIC $41,937,776 $547,548
PELICAN $549,382 $7,606
PETERSBURG $6,805,847 $95,225
PRIBILOF $1,025,271 $21,571
SAINT MARY’S $3,516,301 $46,261
SITKA $15,886,983 $212,318
SKAGWAY $886,108 $21,627
SOUTHEAST $6,191,059 $77,127
SOUTHWEST $10,644,718 $178,283
TANANA $1,071,581 $14,303
UNALASKA $5,452,763 $80,644
VALDEZ $7,424,456 $116,492
WRANGELL $4,308,596 $58,143
YAKUTAT $998,565 $15,333
YUKON FLATS $6,561,681 $101,865
YUKON/KOYUKUK $15,502,692 $215,425
YUPIIT $6,632,452 $128,114
Mt. EDGECUMBE $3,364,705 $56,252
Sub Totals $1,434,545,412 $20,000,000

This $20 million reduction should be manageable for school districts. For example, the Anchorage School District would have received $5,772,609 of the total $20 million which would be a 1.5% reduction in state funding. Likewise, the Northwest Arctic Borough School District would have received $547,548 of the funding which would be a 1.3% reduction in state funding. If a family’s budget were reduced by 1.5%, that family would reduce its spending by not eating out, reducing unnecessary purchases, canceling HBO and other nonessential spending.

When Alaska has 24 school districts that spend more than $25,000 per student[7] for K-12 education and is dead last in 4th grade reading proficiency in the national NAEP tests, something is seriously broken. And it isn’t a lack of funding. Maybe it is too much funding which doesn’t go to the classrooms.