Oil Prices Affecting Public School Funding in Alaska


The Alaska Senate Finance Committee has finished their version of the state operating budget which does not include the advance education funding proposed by Governor Bill Walker and which cuts $47.5 million in school funding for the coming school year.

The cuts come in addition to cuts proposed for the state education department. The House version of the budget, however, included the proposal to advance-fund public education for the 2017 fiscal budget at 90%, according to Becky Bohrer for the Associated Press.

Another assumption in the Senate Committee’s proposal is that $32 million in the form of one-time funding for public education will be cut. During its last session, the Legislature approved $32 million in one-time funds for next year and approximately $20 million for 2017. Pending in a separate, supplemental budget is a move the governor had previously proposed – cutting the one-time funds.

“It’s heartbreaking how it will affect kids. Our state is better than this,” said Alyse Galvin of the organization Great Alaska Schools.

Committee co-chair Pete Kelly (R-Fairbanks) said because education is such a large part of the budget, it has to suffer cuts just like every other public department.

“We’ve never been in fiscal times like this, and nothing can be beyond scrutiny,” Kelly said during the finance committee’s hearing Thursday afternoon. 

The cuts to education are part of the finance committee’s overall budget package, which eliminates $470 million, or 10.5%, in unrestricted general fund spending by state agencies. In total, the budget for the state is $4 billion which is approximately $100 million below the House-approved budget and $220 million below Walker’s budget proposal. Nathaniel Herz and Tegan Hanlon, writing for the Alaska Dispatch News, report that the general consensus is members from both chambers will have to meet to sort out and negotiate the two budgets. The House version did not alter the per pupil funding.

Galvin added that Great Alaska Schools had worked fervently for an increase in the per pupil funding during the last legislative session. Even though the group did not get all that it asked for, lawmakers did add money inside and outside the funding formula for three years. The group wants the Legislature to keep its promises and to understand that if the state is interested in expanding its economy, it has to expand its own workforce, which starts in Alaska schools.

KTUU-TV’s Adam Pinsker reports that the Senate’s proposed $50 million reduction of per student funding, according to Senate Finance documents, which equates to a $200 reduction per student in state funding to each school district. Last year, the Legislature approved HBK278, raising the Base Student Allocation (BSA) by $150 per student for this year.

The worldwide drop in the price of oil has had a tremendous effect on Alaska, since it is a state where 88 cents of every dollar spent by the state government comes from oil production, writes Kyle Hopkins for the Los Angeles Times. Crude oil in Alaska hit a four-year low of $60.80 a barrel last week. This kind of crash means serious threats to jobs in the state, public services, and some of the necessary infrastructure projects needed to exploit the state’s immense natural resources.

“This isn’t the hand we thought we would be dealt, quite honestly,” said Walker, an independent who defeated Republican Sean Parnell in November. “Nobody anticipated this.”
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