As we prepare for the second session of the 33rd legislature, we will discuss K-12 funding and the BSA again. However, it is important to understand how schools are funded in Alaska and what the legislature’s role is. The responsibility for establishing a school system is granted to the legislature by Article VII, Section 1 of the Alaska Constitution. Thus, the Legislature is responsible for appropriating funding for schools through its annual budget process. The current public school funding formula is defined in Alaska Statute 14.17, State Aid to Public Schools.
While the State plays a crucial role in funding schools, school districts are managed on the local level and receive local funding. Of the 53 school districts in Alaska, 34 are within organized areas that receive a portion of their funding from their municipal governments. State statute establishes the minimum and maximum amounts that local governments can pay for education. The rest of the state is divided into 19 Regional Educational Attendance Areas (REAAs) that do not have associated municipal governments. The REAAs do not have a source of local tax receipts, and all funding for these districts comes from the state and federal governments.
Generally, Alaska’s school funding is not a straightforward amount of money per student. Rather the amount a school receives in state funding is based on its average daily membership (ADM) which is adjusted by six factors: school size, district cost, special needs, vocational and technical education, intensive services, and correspondence students. After all factors are included, the adjusted ADM is multiplied by the base student allocation (BSA) which yields the school district’s basic need. Thus, while the BSA is an important factor in K-12 funding, the six adjustment factors of the foundation formula contribute much to school funding. It is at this point that local and federal governments contributions are included, and the remainder is provided by the State of Alaska.
It’s important to note that the school size factor reduces the per-student multiplier for larger schools, which can provide services at a lower per-student cost due to economies of scale. While the intention was to benefit small rural schools this has instead led to incentivizing large school districts to operate many school buildings at a lower capacity rather than fewer schools at a higher capacity.
