The Permanent Fund program would help pay for K-12 public education in Alaska, under legislation lawmakers considered in the fourth special session.

“Our inability to resolve our state’s fiscal situation has placed downward pressure on K-12 funding for years,” said Rep. Ivy Sponholz, who chairs the House Ways and Means Committee. “When adjusted for inflation, our investment in K-12 education has actually dropped in the last four years.”

At the committee meeting, education officials said that the base student allocation has been unchanged for the past six years, while costs across the board have gone up, from purchasing supplies to paying for utilities.

Alaska has dropped to 49th place in the nation for student outcomes in K-12 public education, Sponholz said, adding that funds from the annual Permanent Fund earnings reserve account would create a stable and reliable education funding stream.

Under House Bill 4003, funds from the Permanent Fund would pay for a portion of the education budget. The funding would exclude some services, such as administration, the state budget for the arts and libraries.

“The purpose of this plan is to create a stable fiscal plan for the state of Alaska,” Sponholz said.

Early in the hearing, Rep. Mike Prax, a North Pole Republican, voiced objection. “This is a significant change to what we were considering,” Prax said at the start of the Oct. 28 hearing. “I don’t ever recall talking about the school funding formula in any of these plans. At this point I am opposed.”

New formula for the PFD

Under House Bill 4003, the Permanent Fund program would create a 75-25 split between funding government services and dividends for Alaskans.

The proposal follows the recommendation of a fiscal working group of lawmakers who met in July.

Sponholz estimated that the proposed PFD formula would yield a $1,248 dividend next year, which is larger than the dividend paid in 2021. The dividend would grow to a projected $1,575 payout in fiscal year 2028.

The Permanent Fund Dividend formula would be rewritten, so that 25% of funds drawn would pay for dividends to individual Alaskans and 75% would pay for state government services.

Of the 75% percent for state government services, there would be an even split between paying for public school education and essential state services.

‘Foster new approaches’ for K-12 funding

Public education for kindergarten through 12th grade would for the first time receive funding through the Permanent Fund earnings reserve account.

The House Ways and Means committee heard testimony from stakeholders about the funding plan. Nils Andreassen, executive director of the Alaska Municipal League, said the league’s membership of 165 cities and boroughs “encourages collaboration to foster new approaches” for consistent and sustainable K-12 funding.

He said that members support fully funding K-12 education, a “primary function of the state.” 

Members also support a balanced approach to fiscal policy, a “sustainable draw” through the Permanent Fund program, and a broad-based tax to “account for all the state’s responsibilities.” A tax is not addressed in the House bill under consideration.

Andreassen said that members favor a “community dividend” through the Permanent Fund. The K-12 funding proposed under the House bill “feels similar” to that, he said.

But the league has not reviewed the proposed legislation and therefore has not taken a position on it.

“Fully funding education has been a priority of members and components of this bill for instance meet a lot of the criteria our members have articulated in the last few years,” Andreassen said.

K-12 funding a ‘rollercoaster ride’

Tom Klaaymayer, president of the National Education Association (NEA) in Alaska, said that his organization represents more than 11,000 educators statewide who include classroom teachers and support professionals.

He described public school funding in Alaska as a “roller-coaster ride in the last decade.”

“It is quite refreshing to read House Bill 4003, as it attempts to replace that volatility with stability,” Klaaymayer said. “We need to do better for our students and educators.”

Klaaymayer described the high turnover of classroom teachers and principals in Alaska as costly to the state, a problem he attributed to flat education funding and an “insufficient” teacher retirement program.

There are 1,000 fewer teachers with certification in Alaska than there were a decade ago, leading to staff shortages and higher teacher-student ratios, Klaaymayer said.

House Bill 4003 represents a real opportunity for “Alaskans to come together” and make “an enduring investment” in education and Alaska’s future, he said.

“It is an innovative idea that shows we can and must do better,” Klaaymayer said.

The Legislature is expected to give the bill further review when it convenes in January.

Editor's note: This article was updated on Nov. 16, 2021.

Contact Linda F. Hersey at 907-459-7575 or at lhersey@newsminer.com. Follow her at twitter.com/FDNMpolitics.

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