JUNEAU, Alaska (KTUU) – While school districts await word on how much money they might see added to annual per-student funding, Gov. Mike Dunleavy, R-Alaska, indicated this week that part of the reason he’s putting forth a new education bill, after vetoing the previous one Thursday, is sinking oil prices.
However, in response to a question about current economic conditions in general — including tariffs and the state of the national and international economies as a whole — Dunleavy said he is focusing on Alaska.
“The problem with the bill that we just vetoed was from a fiscal perspective,” he said. “Again, the fiscals have deteriorated since December, dramatically. We’re in the $60s in terms of oil revenue – 63 or 64 bucks a barrel. And that’ll change; that may go up, it’s going to go down.
“I know that people would like to think that maybe I’m behind the whole tariff thing with the federal government,” he later said, “but my focus is on the state of Alaska. My focus is on what’s happening in the state of Alaska, and so, this is an education bill, and the policies are very familiar to what we’ve talked about and what we’ve been talking about during the press conference.”
House Bill 69, which arrived on Dunleavy’s desk with a $1,000 Base Student Allocation (BSA) increase provision contained within it, was formally vetoed Thursday morning. The governor’s new bill instead includes a $560 increase to the BSA.
While the governor stopped short of blaming tariffs or the national/international economies as part of the issue, oil and gas analyst Larry Persily emphasized that they are all intertwined, particularly when it comes to what money might be available for Alaska lawmakers to utilize in the overall budget, including education.
“As far as local school districts, though, they get their funds generally from three sources: the state, which, as we know is squeezed by the lower oil prices; the federal government, and we know there, the Trump Administration is cutting Department of Educations programs; and from local tax sources such as property tax and sales tax for those cities that have a sales tax,” Persily explained. “So, local school districts are being squeezed on three sides.”
Dunleavy later stated that “the tariffs and trade issues have upended the world as we know it,” but did not elaborate on his thoughts on their potential effects on the state budget.
If the economy is weaker, Persily indicated that that also weakens Alaska’s position in general, including putting more pressure on local governments to come up with the money that the state can’t.
“In terms of lower oil prices, obviously, that cuts into state revenues,” he said, “which means, there are fewer dollars from the state checking account to pay for schools, Permanent Fund dividend, road repairs and everything else. So, in a period of low prices, or lower prices, which is what we’re in today, it is harder to squeeze money out of the budget for schools, for example, because it’s gotta come from somewhere else. There’s a finite amount of money in there.”
You can view the governor’s full press conference by heading over to the Gavel Alaska website.
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