The Alaska Legislature has voted to uphold Gov. Mike Dunleavy’s veto of a bill that would have significantly increased the funding formula for Alaska’s K-12 public schools.
Dunleavy vetoed House Bill 69 last week, citing cost concerns and the lack of policy measures he endorsed. With the House and Senate meeting in joint session, the vote to override Dunleavy was 33-27, sustaining the veto. Forty of the Legislature’s 60 members were needed for an override.
In its final version, HB 69 would have increased the state’s base student allocation, core of the K-12 funding formula, by $1,000 per student. That would have resulted in $253 million more per year for public schools, if fully funded.
Last year, the Legislature voted overwhelmingly in favor of a smaller, $174 million formula increase. Dunleavy vetoed that bill as well. Lawmakers then failed by a single vote to override the governor’s decision.
Unlike in 2024, when education supporters packed the Capitol to urge an override, there was no major protest accompanying the override vote. A single pro-override sign-waver stood outside the Capitol for about 30 minutes during lunchtime, then departed amid a light drizzle.
As the joint session got underway, Sen. Lyman Hoffman, D-Bethel and co-chair of the Senate Finance Committee, spoke first.
“It is with great reluctance that I stand here today to support the governor’s veto,” he said. “As everyone is well aware we have a major budget deficit. Not only in the current year that we are in, some $150 million, but we also have a substantial amount for the coming fiscal year.”
Hoffman said that while he supports a $1,000 BSA increase, lawmakers must address raising new revenues first. The Senate is currently considering revenue measures, including changes to the state’s oil tax and corporate taxes.
Hoffman said revenue measures could make a $1,000 BSA increase affordable.
“If we truly say that education is our No. 1 priority, we should stand behind it fiscally,” he said.
Rep. Andrew Gray, D-Anchorage, spoke in support of overriding the veto to provide much-needed school funding.
“Year after year of flat funding is resulting in harm to our children. We are punishing them for the mistakes that we as a Legislature have made, and it is not fair,” he said.
Many lawmakers spoke of school districts facing severe budget deficits, staff and program cuts, and school closures.
“The consequences of underfunding are being felt deeply. A meaningful increase to the BSA would help prevent the devastating cuts our districts are now being forced to make,” said Sen. Elvi Gray-Jackson, D-Anchorage, who supported the veto override. “Funding public education is not a game.”
Other lawmakers objected to the lack of education policy reforms in the bill, as Dunleavy pressed for during a news conference announcing the veto on Thursday.
“I’m objecting to forcing people to contribute more without any discussion of performance measures,” said Rep. Mike Prax, R-North Pole, who voted to sustain the veto.
Rep. Nellie Jimmie, D-Toksook Bay, spoke in support of overriding the veto, protecting the Permanent Fund dividend, and raising new state revenue.
“This bill is expensive, and it still isn’t enough. With the frozen funding and grants running dry, the future is uncertain, but we can’t build our future on deficit spending either,” she said. “We can’t take the PFD, which is often a matter of life and death in rural Alaska. When our savings run out of money, Alaska, lights go dark. It is time to stop hoping for high oil prices or more visitors on cruise ships who will save us. We are out of options. It is time to ask without fear, how will we pay for this? And it’s time to clearly say, we need to raise new revenues, and we shouldn’t be scared of that.”
During his speech against the override, Hoffman said that the state’s Constitutional Budget Reserve — the largest remaining state savings account — was not intended to pay for recurring expenses.
Rep. Andy Josephson, D-Anchorage and co-chair of the House Finance Committee, argued against Hoffman’s statement a few minutes later.
“There’s been esteemed members of the Legislature who’ve noted that this is an affordability question, and I don’t agree with that,” he said.
The House’s version of the operating budget — including a $1,000 BSA increase — has a deficit of $67 million, Josephson said. In contrast, the CBR has a balance of $2.8 billion.
“That’s 2.4%. So I can’t go to my constituents and say, this is just unaffordable. Because it’s not. It’s just a question of will, that’s all,” Josephson said, arguing that savings can be used to pay for education.
The deficit in the House’s draft budget may be larger than Josephson stated, because it contains a cut whose constitutionality has been questioned, and it does not include deficits in the capital budget or the supplemental budget, two separate documents.
After more than an hour of speeches, members of the House and Senate voted 33-27 to sustain the governor’s veto of House Bill 69.
The override vote was almost identical to the votes on the original bill, which passed the House and Senate by a combined vote of 32-25.
Reps. Elexie Moore, R-Wasilla; Will Stapp, R-Fairbanks; and Mike Prax, R-North Pole, were absent from the original House vote and acted to sustain the veto. Sen. Donny Olson, D-Golovin, voted against the original bill but in favor of the override.
Afterward, he walked past reporters and did not answer questions about why he changed his vote.
The tally fell along caucus lines for members of the House, with members of the House’s multipartisan majority — two Republicans, five independents and 14 Democrats — voting to override and all 19 members of the House’s all-Republican minority voting to sustain.
Among members of the Senate, Sens. Lyman Hoffman, D-Bethel, and Bert Stedman, R-Sitka, voted to sustain the veto alongside all six members of the Senate’s minority caucus. The remaining 12 members of the Senate’s bipartisan majority voted to override.
After the vote, the bill’s sponsor, Rep. Rebecca Himschoot, I-Sitka, spoke with reporters and expressed her disappointment with the Legislature’s failure to override the governor’s veto for the second year in a row.
“Previously, when we had the funds, we lacked the political will,” she said. “I believe that there is great political will at this point to try to do something about how we’re funding our schools, or failing to fund our schools, and we lack the funds. So I think this outcome was somewhat predictable, but that doesn’t make it any less disappointing.”
In a statement on social media, Dunleavy thanked lawmakers for voting to sustain his veto.
“Their action shows a clear understanding of our fiscal situation and the fact that the bill had zero policy to create a better educational outcome for our students,” he wrote.
He added that legislators now have “a clear path” to consider an alternative bill he proposed on Friday.
The governor’s bill includes a smaller funding increase and policy provisions he prefers.
“We’ve got 30 days to get the job done. Let’s finish it. We can do this,” said Senate Minority Leader Mike Shower, R-Wasilla.
Members of the House minority also offered comments in support of the governor’s alternative.
“We still have a lot of airstrip left,” said Rep. Bill Elam, R-Nikiski and a vote to sustain the veto. “We haven’t completely landed all of this. We can continue. We have some opportunities.”
But Sen. Bill Wielechowski, D-Anchorage and the Senate majority’s lead negotiator with the governor, said that at least some of the governor’s ideas are nonstarters.
Speaking to reporters, he offered an example: a section of the bill that would allow first-come, first-served open enrollment at public schools. That doesn’t make sense, Wielechowski said, because it could keep local students from enrolling at the school closest to them.
More broadly and significantly, Wielechowski said there appears to be a fundamental disagreement in multiple sections of the bill about the amount of control the executive branch should have over local schools.
“I don’t know how we can get over that,” he said.
Last week, Speaker of the House Bryce Edgmon, I-Dillingham, told reporters that in his view, it’s significant that school districts are not requesting the kinds of policy changes that the governor is seeking.
“There are some things in there that we can coalesce around, but we still have a ways to go and be able to reconcile policy differences,” he said.
If the failed override does mean no permanent funding increase this year, a one-year funding bonus remains possible. The House’s draft operating budget includes a one-time, $253 million funding bonus equivalent to the vetoed formula.
That would be $79 million more than last year’s budget, which contained a $174 million one-time bonus, but the House’s proposed amount is subject to approval by the Senate and Dunleavy, who has line-item veto power. Senate budget leaders have said they plan to pass a budget without a deficit.
In a news conference last week, the governor said that if lawmakers present a deficit-free budget with one-time funding, he’d be willing to discuss the issue.
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