Yet another education funding bill passes House

By SUZANNE DOWNING

May 15, 2026 – There may be a small Permanent Fund dividend this year, but there’s a large spending package now in the Alaska Senate, after the House of Representatives approved a major education funding rejiggering measure, passing House Bill 261, by a 31-9 vote that would shift more than $140 million annually back onto the state and away from local taxpayers.

The bill, sponsored by Rep. Andi Story and cosponsored by Reps. Andy Josephson, Zack Fields, Cal Schrage, Rebecca Himschoot, Ky Holland, and Maxine Dibert, changes the way Alaska calculates public school funding at a time when many school districts are grappling with declining enrollment and rising costs.

HB 261 would allow school districts to base state funding on prior-year enrollment averages rather than relying solely on current-year student counts. The change allows schools to inflate their enrollment in their reports to the state.

According to estimates from the Alaska Department of Education and Early Development, the enrollment formula change alone would add roughly $113 million in annual state funding to school districts statewide. Thus, it’s simply a work-around to get more dollars into schools, one way or another. The largest impacts would be felt in Anchorage, which would gain an estimated $31 million, followed by Mat-Su at roughly $13 million, Fairbanks North Star Borough at about $12 million, and Juneau at approximately $12 million.

In addition, HB 261 caps annual increases in the required local contribution from municipalities at 2%, limiting how much cities and boroughs are required by statute to contribute as property values rise. That provision would shift nearly $30 million in additional education costs back to the state in the first year alone, with higher costs projected in future years.

The proposal builds on last year’s permanent $700 increase to the Base Student Allocation, which became law after the Legislature overrode Gov. Mike Dunleavy’s veto. It was the largest BSA increase in Alaska history.

Anchorage Mayor Suzanne LaFrance and other officials have backed the current bill, saying school districts need more stable funding formulas to plan staffing and budgets earlier in the year.

In addition to this bill, the House and Senate plan to give an extra $158 million in one-time money to education this yes year, with the $1.4. billion in base student allocation spending.

Lawmakers are also assembling a larger education package that may include teacher loan repayment programs, reading grants, career and technical education initiatives, and transportation funding. This one, and others, could be crammed into another bill in the final days in what is sometimes referred to as a “Turducken,” a deboned chicken stuffed inside a deboned duck, stuffed inside a deboned turkey.