School districts and elected officials across Alaska were reeling in the hours after Gov. Mike Dunleavy vetoed tens of millions of dollars in education funding from the state budget, weeks after lawmakers had overridden his previous veto of a permanent increase to the school funding formula.

Lawmakers approved last month a roughly $180 million permanent increase to the $1.2 billion education budget, ending a seven-year spell with no significant school funding increases.

But Dunleavy’s veto of more than $50 million in funds for schools means that districts are faced with a difficult decision: Make last-minute cuts to their spending plans, or count on legislative leaders’ promise to override the governor’s veto when the Legislature reconvenes in January.

“It’s an emergency,” said Madeline Aguillard, superintendent of Kuspuk School District in Aniak. “It’s criminal what’s happening to these schools in rural Alaska and what our students and our families are being provided with for an education.”

In a bipartisan vote, 46 out of 60 lawmakers last month were in favor of overriding Dunleavy’s veto of a permanent increase to the Base Student Allocation. Dismayed by lawmakers’ unwillingness to adopt his education policy priorities, Dunleavy then said he would cut some education funding directly from the budget — a move no governor had previously made.

Announcing his veto on Thursday, Dunleavy attributed it to declining oil prices that would reduce state revenues.

“Basically, we don’t have enough money to pay for all of our obligations,” Dunleavy said in a Thursday video message.

Dunleavy also vetoed more than $27 million meant for major maintenance projects across the state, including $4 million for a Soldotna High School exterior repair, $2.5 million for a King Tech High School roof replacement in Anchorage, $4 million for the St. Paul school HVAC system, $8 million for North Pole High School mechanical and electrical upgrades, and $3.5 million for health and safety improvements at Anchorage’s Service High School.

Local leaders in the state’s most populated areas said that these funding cuts mean that local taxpayers will bear the cost of these needed repairs.

“Every single time the governor’s made these vetoes, it falls on the back of local taxpayers,” said Fairbanks North Star Borough Mayor Grier Hopkins in a joint press conference Friday with the mayors of Anchorage and the Kenai Peninsula Borough.

Anchorage Mayor Suzanne LaFrance said the governor’s veto could exacerbate outmigration of families with young children from Anchorage.

“People who are looking to move to our community are forced to wonder if their kids will have access to a good education,” said LaFrance.

‘January doesn’t help’
Dunleavy has vetoed education bills for the last three consecutive years, and has made a regular habit of vetoing funding for maintenance projects, including for school infrastructure.

But this veto — more than any of the previous ones — provoked confusion and concern even among his political allies.

“The veto is problematic even for those of us who are on a very conservative side of the aisle here on managing local education and local education costs,” said Kenai Peninsula Borough Mayor Peter Micciche.

Micciche — who led a Republican majority as Senate president between 2021 and 2023 — noted that education spending during Dunleavy’s tenure as governor has remained virtually unchanged, while other departments — such as public safety and corrections — have seen increases meant to keep up with inflation.

“You can’t operate on dollars from a decade ago forever. None of the other departments have,” said Micciche. “We can’t single out one department and expect our state to be successful.”

Local officials said that a January vote on overriding the governor’s budget veto would not be soon enough. Instead, Micciche asked lawmakers to convene a special session this summer to give districts certainty ahead of the school year.

“January doesn’t help,” Micciche said. “We can’t take a leap of faith on what programs would look like if you were able and capable of passing a $200 (BSA) increase in January.”

Senate President Gary Stevens, a Kodiak Republican, has said that he would not call a special session because one of the members of his majority coalition — Anchorage Democratic Sen. Forrest Dunbar — is deployed with the National Guard and unable to attend a special session if it were convened this summer. Stevens and House Speaker Bryce Edgmon, a Dillingham independent, say all votes would be needed to clear a 45-vote threshold required to override a governor’s budget veto.

Micciche said he has “no faith” that lawmakers would succeed in overriding the governor’s veto in January.

“I think getting to 45 is going to be really tough. You get the attacks from the right on some of these folks,” said Micciche, referring to concerted efforts by conservative advocacy groups and lobbyists to persuade Republican lawmakers to side with the governor, even when it has meant voting against bills they had previously supported.

Lawmakers should have preemptively scheduled a special session to override the governor immediately after the veto, said Micciche.

“Gather your votes and get down there, and if you don’t pass it, you don’t pass it. But we know who stands and where they stand,” he said.

School districts are required to submit their annual budgets to the state by July 15. School administrators said that will lead to difficult choices in less than a month.

The Kuspuk School District will receive $254,000 less than previously expected because of Dunleavy’s budget veto. But Aguillard, the superintendent, was already contending with a shortfall of more than $2 million.

“Our entire district will be dysfunctional. We will not be able to operate,” she said.

Aguillard said the district is considering whether to furlough its teachers and reduce hours for classified staff, including cooks, bus drivers and instructional aides. She said all student activities could be eliminated. The district could also close all of its kitchens for student meals and instead rely on pre-packaged food, she said.

“It’s not meeting the basic needs of our communities,” she said about current funding levels.

In Akiachak, a remote Yup’ik village on the Kuskokwim River, sits the head office of Yupiit School District. Superintendent Scott Ballard said, “This year, we survived. Next year, we’re going to be millions of dollars in the red.”

He said the district would be looking at making deep cuts across the board that still ensure teachers are retained. Food service costs for students have been rising for the district — those are areas where cuts could be made, along with building repairs and maintenance.

“We won’t be able to hire a literacy coach for our schools next year, and that’s one of the things that’s been really helping our students,” he said.

Last year, the Legislature approved an additional $175 million in education funding on top of the roughly $1.2 billion included in the state’s annual education budget. That was equivalent to a $680 BSA boost, but only for one year.

After Dunleavy’s veto, school districts are set to receive $50 million less from the state this year when compared with last year.

Sitka independent Rep. Rebecca Himschoot, a former teacher, said school districts were counting on receiving at least the same funding as last year.

“To go backwards from last year’s number has never been done,” she said in a Friday interview.

In the Mat-Su, where Dunleavy lives and previously served as school board president, school administrators are implementing a hiring and spending freeze, effective immediately.

John Notestine, a spokesperson for Mat-Su schools, said Dunleavy’s veto “leaves significantly less funding than the previous year, at a time when we are also facing rising costs in contracts, utilities, and operations.”

Dunleavy’s veto represents a cut of more than $7 million for the district.

“Unfortunately, all options for reductions are on the table — including staffing, class sizes, pupil transportation, program eliminations, and student activities,” Notestine said by email. “This level of funding makes it harder to deliver the high-quality learning experiences our students deserve.”

On the Kenai Peninsula, Superintendent Clayton Holland said that Dunleavy’s veto represents a roughly $3 million drop in funding.

Holland said the district had already reduced close to 100 staff members, assuming it would receive status quo funding this year. He said more staff cuts would be considered, along with reductions in services to balance the budget.

“How do we do it?” he asked rhetorically. “It’s going to be brutal. It’s going to be ugly.”

Even as lawmakers and local officials were discussing the timing and likelihood of a veto override, some education advocates were already considering taking the issue of school funding — long a source of tension between lawmakers and the governor — to court.

Among those advocating for legal action in the wake of Dunleavy’s veto was Anchorage Superintendent Jharrett Bryantt.

Caroline Storm, executive director of the Coalition for Education Equity, on Friday said the nonprofit is preparing a lawsuit against the state, arguing that it has failed to fund schools at adequate levels, as required by the Alaska Constitution.

The Coalition for Education Equity has successfully led lawsuits against the state in the past. The nonprofit helped secure a landmark $146 million settlement in 2011, after alleging funding inequalities for rural public schools.

Sen. Bill Wielechowski, an Anchorage Democrat, said that the time may be ripe for the governor to be challenged over his efforts to limit public school funding, and that such an effort could come from lawmakers themselves.

“I think the Legislature should seriously contemplate filing a lawsuit over this,” said Wielechowski. But, he added, “if we can override (the veto) and save having to go ahead and litigate this, that’s the best outcome.”

Wielechowski said that there are several hurdles that have previously halted legal action over adequate education funding. For one, adequacy means different things in different parts of the state. While the Anchorage School District is considering how many elementary schools to close while preserving language immersion programs and sports programs, rural school districts are asking for enough money to keep their buildings warm and their students fed.

Another reason that a lawsuit has yet to materialize is cost and time, said Wielechowski. Litigation over adequacy of the state’s education budget could cost upward of $1 million in legal fees, and take two years or more. By then, Dunleavy would no longer be governor.

“It’s going to be an expensive case, and it’s going to be a time-consuming case, and that’s the big reason, I think you haven’t seen the lawsuit so far,” he said.

Storm estimated that a lawsuit would cost around $1.2 million, if it went to trial. She declined to name potential backers of the legal action, but said that Dunleavy’s veto decision “will solidify some commitments for funding.”

She said legal action is “not a guarantee.” But a lawsuit may be necessary because Dunleavy took the unprecedented step of side-stepping lawmakers’ newly approved formula increase, she added.

“He is not funding to statute. And that’s reprehensible, really,” she said. “This feels like the governor just strangled public education out of spite.”

‘Politics is a team sport’
Lawmakers have spoken increasingly openly in recent months about their frustration with Dunleavy, who they say is not available for negotiation sessions or is unclear about his policy priorities.

Dunleavy has “a shocking lack of interest in governing this state,” Wielechowski said on Friday. “I don’t know how you deal with that. I don’t know what motivates him. Nobody does.”

Dunleavy declined an interview request for this story. He has not agreed to an interview request from the Daily News since 2022.

Micciche, meanwhile, urged lawmakers to take another shot at working with Dunleavy.

“Politics is a team sport, and this team has not functioned well,” he said. “There’s been a little poking on the legislative side. There’s been an unrealistic philosophy on the administration’s side.”

Dunleavy has previously said he vetoed education funding because lawmakers had declined to consider policy priorities he said would help address Alaska’s bottom-of-the-nation test scores in reading and math. Those priorities have included temporary teacher bonus payments; open enrollment policies; increasing the number of charter schools in the state; and increasing spending on publicly-funded home-schooling programs.

But with this veto, Dunleavy instead pointed to the declining price of oil and ensuing decline in expected state revenue as the reason for his budget cuts.

Lawmakers who supported Dunleavy’s veto shared his concern over declining state revenue, but Sen. Shelley Hughes, a Palmer Republican, said that Dunleavy would not have vetoed the funding if lawmakers had approved his policy demands — regardless of the price of oil.

“If the districts and the (National Education Association) had supported, instead of fought, the student outcome-focused policy reforms, I am quite sure they would be receiving the $50 million trimmed to target the proven strategies they opposed,” said Hughes.