Anchorage School District to receive $37 million from state education funding increase

Anchorage School District will receive approximately $37 million from a $144 million statewide education funding increase passed by the Alaska Legislature, a municipal lobbyist told the Anchorage Assembly Legislative Committee on Wednesday.

The funding divides between energy relief payments and operating funds. The Legislature also capped year-over-year increases to the required local contribution at 4 percent.

Anchorage School District has faced multi-million-dollar budget shortfalls in recent years tied to flat state Base Student Allocation funding, inflation, and rising energy and personnel costs. In November 2023, ASD projected a $68 million deficit for the 2024-25 school year.

The 4 percent cap limits how much the required local contribution can increase annually, even as property values rise. The state formula for required local contributions does not align well with Anchorage's local tax cap formula, creating fiscal pressure on other municipal revenues. Had the cap been in effect last year, it would have cut the required local contribution increase roughly in half.

The operating and capital budgets had not been transmitted to the governor as of the meeting, leaving the funding subject to potential line-item vetoes. The governor has 20 days to issue vetoes once the budgets are transmitted.

The Legislature also secured $15 million in the capital budget for the Port of Alaska, with an additional $10 million contingent on oil prices staying above $80 per barrel through the first half of fiscal year 2026. The Community Assistance Program received approximately $50 million statewide. The program provides fairly unrestricted funding to municipalities for a broad range of uses.