Juneau lawmaker’s bill seeking to stabilize education funding passes House, faces Senate hurdles during last week of session

HB 261 by Rep. Andi Story allows districts to budget on enrollment from past years rather than current year; change projected to boost funding to schools by more than $140M a year

Reps. Rebecca Himschoot, I-Sitka, Andi Story, D-Juneau, and Julie Coulombe, R-Anchorage, discuss House Bill 261 during a floor session Tuesday, May 12, 2026, at the Alaska State Capitol. (Mark Sabbatini / Juneau Independent)

By Mark Sabbatini

Juneau Independent

A bill by a Juneau legislator seeking to give school districts a more reliable way of knowing how much money is available in their budgets for the coming year — and in a way that provides most of them more funding — passed the Alaska House by a 31-9 vote Tuesday.

However, the head of the Senate Education Committee said there may be too many lingering questions for the bill to pass the Senate by the scheduled end of the session May 20, although some of its provisions could be included in other education legislation nearing final passage.

House Bill 261 by Andi Story, a Democrat who co-chairs the House Education Committee, allows districts to use enrollment from past years rather than the current year when drafting budgets. Most state funding to schools is based on a per-student formula.

Official enrollment tallies for a school year occur in October, but state certification of those counts doesn’t always occur by the time districts are drafting future year budgets during the winter and spring ahead of the fiscal year that starts July 1. Supporters of HB 261 said that creates uncertainty about how much per-student funding will be available.

The bill allows districts to either use the previous year’s enrollment or an average of the previous three years. Story, during floor debate, said 26 other states use similar funding methods and it was recommended for Alaska in an oft-cited 2015 study.

"We are having a decline in students and part of what I feel is so hurting parents' confidence in our system is our broken timeline process, our backwards funding process," she said. "We actually are pitting families against each other within our schools about what programs are we going to not have or have. And that's really hurting our student achievement."

Both supporters and opponents of the bill noted a typical problem for districts is employees account for most of the costs and thus an anticipated shortage of funds usually means layoffs — even if it’s not certain the shortages will occur and thus result in an attempt to hire back staff.

"So if your fuel costs doubled, your insurance costs doubled, you had a fire in a building and you have to look to where you can cut it's personnel," said Rep. Sara Hannan, D-Juneau, who voted in favor of the bill.

Because most school districts are seeing enrollment declines using tallies from past years means those districts will get more money.

The Juneau School District, for instance, would see its per-student funding increase by about 34% to nearly $46 million — a major boost for a proposed $82 million operating budget that gets most of its remaining funds from the city. However, a handful of school districts, including Sitka’s Mt. Edgecumbe High School, would see declines in state funding.

Legislators opposing the bill cited a fiscal analysis estimating the change sought by Story will cost the state $113 million a year — and there may be significant costs from other provisions — and asserted it doesn’t address fundamental flaws in the state’s per-student formula and the causes of declining student enrollment.

"Why are we trying to put a band-aid on a situation when we could be addressing the root cause?" said Rep. Rebecca Schwanke, R-Glennallen. "Parents are walking away from our brick-and-mortar public schools because they are not happy with what's happening."

Schwanke said an increasing ratio of students are attending charter and correspondence schools. Story, responding to that concern, noted that while the percentage of correspondence students has increased since 2012 and now stands at about 20%, those schools are also suffering setbacks.

"I think it's important to note that this was the first year that our correspondence students took a decline," she said.

A major change to the bill occurred Monday when an amendment potentially making the state responsible for tens of millions in additional funding to districts was adopted by a 24-16 bipartisan vote — with Story among those in opposition.

The amendment by Rep. Justin Ruffridge, R-Soldotna, sets a lower threshold for what municipalities have to provide to their school districts as part of the state’s funding formula, which bases the municipalities’ share on their assessed property values. Ruffridge’s amendment sets a fixed increase of 2% annually, which means areas with rapidly rising property values will benefit since the state will have to provide districts additional funds to meet mandated minimums.

The change is projected to cost about $30 million during the coming year and increase by more than $10 million during subsequent years to about $95 million by fiscal 2032, according to a fiscal analysis of the provision when it was part of a different bill considered earlier this session.

HB 261 is being held for reconsideration until Wednesday’s floor session, thus delaying by a day its ability to be considered by the Senate.

Its chances of passage there during the final week of the session are questionable, said Sen. Löki Tobin, D-Anchorage, chair of the Senate Education Committee. She noted it’s a complex bill some members aren’t familiar with and there’s lots of other high-priority matters — including separate education funding legislation — lawmakers are trying to tackle.

"It might just be too much for us to take that large of a bite," she said. "However, I do believe that components of HB 261 will end up in a final package."

A likely candidate for that package is what lawmakers are calling a "mini-bus" education bill that adds more than $80 million of one-time funding and implements various policy changes. The bill that originated in the House was heavily modified by the Senate last month and is now in the Senate Finance Committee, the last major referral before a floor vote. If it passes the Senate then the House would need to concur with the changes in order to send it to Gov. Mike Dunleavy.

• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.