Gov. Mike Dunleavy is once again threatening to veto a compromise bill legislators hammered out to boost funding for the state's public schools and make a variety of policy changes.
Dunleavy has yet to make the threat publicly. But Clayton Holland, the superintendent of the Kenai Peninsula Borough School District, said in an interview that the governor made his intentions clear in a teleconference with school district leaders from across the state.
"Really, what it ended up boiling down to is that he does plan to veto (House Bill 57)," Holland said.
It's the first time the governor has indicated whether he'll sign or veto the high-profile bill, which passed the Legislature by a combined vote of 48 to 11. Lawmakers in the bipartisan, Democrat-heavy majority caucuses have said boosting education funding is their top priority for this year's legislative session, which is now entering its final weeks.
The veto threat Dunleavy delivered to superintendents was first reported by the Alaska Landmine, a political news site.
Asked about the meeting, the governor's press office pointed to a midday statement on the governor's social media accounts, which did not say explicitly whether Dunleavy planned to veto the bill.
"We need a system that delivers results, not just more spending," part of the statement said.
House Bill 57 would boost long-term public school funding by increasing basic per-student funding by $700. In an effort to compromise with Republicans in the House and Senate's minorities and the governor, lawmakers added a variety of education policy changes to the bill. Those range from a ban on student cellphone use to incentive grants aimed at boosting reading performance and an increase in career and technical education funding.
But Dunleavy wants more, Holland said. The governor told superintendents to lobby their local legislators to pass several additional policy items.
Dunleavy told superintendents to advocate for a statewide open enrollment system, which would allow students living in one district to enroll in another. He also asked for additional changes to state laws around charter schools, and for lawmakers to fund a reading incentive grant program included in House Bill 57 without expanding corporate income taxes on out-of-state companies as lawmakers have proposed, Holland said.
School districts, community members, business leaders and local elected officials have pleaded with lawmakers for years to increase formula funding for schools by raising the base student allocation. Leaders say they've been forced to close schools, increase class sizes and slash electives and career and technical education programs as the formula has remained largely unchanged since 2017.
Though lawmakers have provided one-time funding for public schools in recent years, district leaders say a boost to the funding formula is essential to stopping a cycle of cuts that have dramatically reduced their offerings.
"It feels like all of the students, even the students that are most in need, are being held as bargaining chips," said Madeline Aguillard, the head of the Kuspuk School District, who also attended the meeting and confirmed the veto threat.
'We have nothing left to cut'
Aguillard's district, with nine schools in seven remote communities along the Kuskokwim River in Western Alaska, is already operating with bare-minimum staff and will face a 10% budget shortfall without additional funding, she said. Even the $700 increase lawmakers approved would leave her district wanting, she said.
"We have nothing left to cut," she said.
A report from KYUK and ProPublica this year found that the state had so badly underfunded rural schools, including those in Aguillard's district, that many are crumbling and pose health and safety hazards for students and staff alike.
Already, seven of the district's schools are forced to rely on offsite teachers, she said, because the district is unable to afford in-person certified teachers. One school in the district has no certified teachers in it at all, she said. In others, students must rely on online learning for core subjects.
"A group of them, it's, it's full-blown math class. A group of them, it's for electives," she said. "There's always been online programs, and supplemental (instruction), and things like that. But this isn't supplemental anymore."
Without a boost in funding, the few remaining cultural activities for the district's students, which are more than 95% Alaska Native, would be among the programs on the chopping block.
"Eventually, you get to the point where you can't cut because you literally don't have the capacity, the staff, the resources to even open the doors," she said. "It really feels like we're being strangled out."
Aguillard said she was worried the worsening offerings of the local school district would lead village residents to move their families elsewhere, forcing school closures. The Kuspuk School District's enrollment has dropped roughly 20% since 2019, according to state data.
The threat is existential for the Alaska Native communities her district serves, she said.
"It will kill the village if the school is closed. We've had that happen in Kuspuk before," she said. "We have previously closed a village school, and there are now between one and four residents in that village."
The outlook is similarly dire for the relatively urban Kenai Peninsula school district, Holland said. The local board voted Monday to close one school, and Holland said that without additional funding, local officials would likely be forced to close at least eight more.
"We have expansive cuts happening already," he said.
Districts around the state are in crisis, said Holland, who is also the president of the Alaska Superintendents Association.
"There's not a district in Alaska that is not in this situation," he said. "This isn't a superintendent problem. This isn't a school board problem. When the whole state is in the same boat, it's a bigger problem, right? It lands back in the executive office and with the legislators."
The meeting with Dunleavy and Education Commissioner Deena Bishop left Holland disappointed, frustrated and desperate, he said.
"We've asked about compromise all year, that's been our theme," he said. "And I believe the legislators did that, right? They came up with a bill that no one really got everything they wanted out of it, which I think is … a good thing."
Even a veto override may not provide relief
Lawmakers have said they're confident they have the requisite 40 votes to override a veto of House Bill 57. At least six minority Republicans, one more than would be necessary, told Alaska Public Media they'd vote to override the governor.
But that may not be enough to actually boost education funding next school year.
The Alaska Constitution allows Dunleavy to issue line-item vetoes that reduce or eliminate spending, even if it's required by state law. Holland said Dunleavy had threatened to issue a line-item veto reducing school funding if lawmakers don't pass the additional policy items he demanded.
It would take 45 of 60 legislators to override a line-item veto, and it's not clear that enough lawmakers would vote to do so.
It's thus possible lawmakers could succeed in changing the formula dictating how much school districts should get from the state, but fail to force the governor to actually fund the full amount specified by law.
If Dunleavy were to veto the funding, said Rep. Jeremy Bynum, R-Ketchikan, that would clash with his approach to the Permanent Fund dividend. Dunleavy has consistently proposed budgets with a dividend in line with the amount laid out in statute — even this year, when doing so would have required draining half the state's savings.
"That's what he has done this whole time that I'm aware that he's been putting these budgets out, is that he's trying to follow what's in statute," Bynum said. "I think it'd be a departure from that practice to go in and then veto funding out from a statutory formula."
Put another way, vetoing the school funding "would effectively be breaking the law," said Rep. Rebecca Himschoot, I-Sitka.
Even so, overriding a budget veto is difficult — not only because of the three-quarters majority required, but also because it would require lawmakers to gather in a somewhat rare special session. Line-item vetoes are typically announced in mid-to-late June, long after the May 21 deadline for the regular session to conclude.
"I think that veto would be sustained," said Rep. Andy Josephson, D-Anchorage. "I mean, I can only base it on the experience I've had."
This marks the second year in a row Dunleavy has threatened to veto a school funding bill unless lawmakers pass his preferred policies. Last year, he followed through on that threat, and the Legislature fell one vote short of overriding him.
As lawmakers debated the override last year, several cited a similar threat from Dunleavy to veto education funding even if the override succeeded.
The Senate minority leader, Sen. Mike Shower, R-Wasilla, said he was optimistic lawmakers and the governor could come to an agreement.
"The daylight between what the governor is asking for and what is left is very small," he said.
But Himschoot said she remained skeptical of key elements of the governor's request, especially his call for open enrollment. Lawmakers have previously said the system Dunleavy requested could prevent military families from enrolling in their local school after they're transferred from elsewhere.
"So many things that work or work differently somewhere else have a different impact in Alaska, and I'm not willing to take risks like that with our system," Himschoot said.
Josephson said he was frustrated with the governor's veto threat and the prospect that schools could go another year without a long-term boost in funding.
"I think at some point, supporters of our public schools need to sue," he said. "I don't know what else to tell them."
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