Dunleavy’s budget includes $300M for schools, but it won’t cover surging costs, experts say
12 Alaska schools closed this year as districts deal with soaring health insurance, energy, and maintenance costs.
Alaska’s public schools have been falling into disrepair for years, observers say. Although the fiscal year 2027 budget that Gov. Mike Dunleavy signed on June 24 includes $300 million for K-12 schools, the funding will not cover the surging costs they’re facing, likely resulting in the closing of schools and programs.
In May, as part of its $12.8 billion budget package, the Alaska Legislature approved $144 million in one-time additional operational funding for public schools, including $29 million to offset increased energy costs, and almost $159 million in funding for infrastructure, such as school repairs and construction.
In June, Dunleavy used his line-item veto authority to strike almost $90 million from the three bills before signing them, but left intact the $300 million for Alaska’s K-12 schools, the Alaska Daily News reported.
“While the state realized additional revenue, those same price pressures placed a real burden on school districts, particularly in rural Alaska. This budget makes targeted, responsible use of a temporary revenue increase to stabilize school facilities and address energy costs,” Dunleavy said, according to the Alaska Beacon.
The governor’s cuts included $490,000 to be allocated to the Alaska Educator Retention and Recruitment Center, a job board for teachers, and $3.7 million for Head Start grants.
Twelve elementary and middle schools closed across the state this year, Corinne Smith of the Alaska Beacon reported in June, and dozens of teachers were let go due to budget shortfalls.
This fall will begin DéQiese Lyons’ third year teaching elementary school in Anchorage. He told the Alaska Independent that he’s already been notified that next year, because there won’t be enough teachers for the number of students in the school, classes will be taught in combination: For example, second grade and third grade will be taught together in the same classroom.
“I don’t know the specific reason. I just know that, from my perspective, it seems that it is a, for lack of a better word, reaction to the things that are going on budgetwise,” Lyons said.
Lyons said his class size last session was relatively small, between 20 and 25 students, but he expects the class to grow in size this fall, saying, “There’s too many students and not enough teachers.”
In April, the Anchorage School Board announced cuts to music programs and the elimination of the position of assistant director of fine arts.
“This is a great example of what’s going to be lost,” said Kelly Lessens, a school board member, standing in front of a display of artwork made by Anchorage School District students, according to KTUU. “I was here the other day as folks from our fine arts department were taking down a prior installation and putting these up. They said these will be the last pieces to go up until our budget situation changes.”
“Our children experience the consequences of educator shortage every single day, and we are committed to continuing to work against educator shortage,” Lisa Parady, executive director of the Alaska Council for School Administrators, told KTOO in Juneau.
Along with high fuel and utility costs, school budget deficits can also be attributed to higher health insurance costs for staff, which are up 112% this year in the Ketchikan Gateway Borough School District, for example, and account for 20% of the school budget in Anchorage.
In addition to school closures, higher education programs have also been cancelled in the state due to funding shortfalls.
In September 2025, the University of Alaska Fairbanks announced that the federal government had cancelled $8.8 million in funding for programs earmarked for Alaska Native and Native Hawaiian students. According to the Alaska Beacon, the programs included American Sign Language, information technology technician training, and private pilot ground school, part of training students to receive pilot’s licenses.
The recent program closures have hit UAF campuses in Fairbanks, Dillingham, Bethel, Nome, and Kotzebue, a hard blow given that about 21% of UAF students identify as Native American/Alaska Native.
