Alaska is asking the U.S. Department of Education to waive a federal requirement placed on federal COVID relief funds after the feds alleged the state failed to pay $29 million to four urban school districts. At the center of the dispute: a hold—harmless provision designed to protect school districts with students from low-income families and high-poverty areas from significant drops in funding.
The state’s Education Committee held hearings last week after DOE sent a letter on March 27 to the Department of Education and Early Development (DEED) stating it was not in compliance with the conditions of receiving the funding. The federal government claims Alaska accepted federal grants in 2021 and 2022, but some school districts received less state funding, putting the state at odds with the national maintenance of equity (MOEquity) provision.
If DEED’s waiver is denied, and Gov. Mike Dunleavy does not request that the legislature consider paying funds to comply with the American Rescue Plan Act’s policy by April 26, the state will risk having up to $425 million in federal grants withheld, and remain a “high-risk” funding recipient.
Austin Reid, Federal Affairs Advisor for the National Conference of State Legislatures, explained at the hearing how the federal government’s guidance to states didn’t make “matters in compliance any easier” for state legislatures, but some lawmakers did not accept his explanation.
“It doesn’t look like [the] Alaska Department of Education watched that very closely,” said state Sen. Jesse Keihl of Juneau, a member of the chamber’s Education Committee.
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After paying out hundreds of millions of dollars in COVID relief funds to states, the federal government issued several updates to how it should be used. One of those requirements is called the “The Maintenance of Equity” requirement, and it was designed to direct funding toward historically underserved groups of students.
The state’s commissioner of Education, Deena Bishop explained that a dispute arose because the federal government had given specific instructions on how the funds should be used. However, the Director of Alaska’s Legislative Finance Division, Alexei Painter, pointed out that the federal maintenance of equity provision was meant to ensure that states did not “reduce State funding because the federal funds were available.”
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Discussing schools and inflation, Painter explained in a House Finance Committee meeting in May 2023 that “it may appear the state had increased the [spending] budget substantially, [but] inflation and population had increased far more than the [spending] budget, according to the meeting’s minutes.
During an emergency Education Committee meeting in Juneau last week, the state’s Education Chair, Democratic state Sen. Loki Tobin, responded to information in a presentation that appeared to show that Alaska’s schools had seen increased funding in recent years. “That was a 30-dollar BSA increase and not a significant increase,” Sen. Tobin said as she inquired about what information was included in the slide.
The slight boost in Alaska’s per-student funding, called a “Base Student Allocation,” is how the state pays schools on a per-student basis. It is the only one that has applied to per-student funding since 2017. Tobin went on the clarify that some states had given schools more money than the federal government required to ensure they could avoid noncompliance issues.
“There’s nothing to fix this problem in the governor’s asks” in the sets of budget amendments submitted before and after the governor’s deadline on the 30th day of the legislative session, said state Sen. Jesse Keihl, Education Committee member, when responding to DOE’s assertion that the State of Alaska hadn’t presented a timely solution.
Bishop stated that Alaska “did not seek to take advantage of federal funds to reduce state education spending” in a March 22 letter to DOE that alludes to constitutional litigation and accuses them of enforcing policy that harms rural schools.
Alaska remains the only state that has not met the federal requirements for equitable distribution of the relief funds, according to DOE.
