Sitka Sound Science Center education coordinator Kari Paustian (r.) leads a classroom session in one of Sitka’s elementary schools. Sitka’s school board worries that under a broad interpretation of a new regulation proposed by DEED, programs like this could be considered “in-kind services,” and counted against a community’s local contribution to schools. (SSSC photo)
Earlier this month, the state Department of Education and Early Development (DEED) issued a proposed change in regulations that would count local appropriations and in-kind services against the overall amount municipalities are allowed to contribute to their schools.
Note: The comment period on DEED’s proposed rule change is open through July 23. To make a comment, email eed.stateboard@alaska.gov. The state Board of Education will consider the rule change at its meeting on October 9, 2025. Learn how to participate.
Most cities already contribute a lot of money to schools for instruction: In Sitka, for example, it’s around $8-million, to the state’s $12-million. Sitka has a significant property tax base, and routinely pays as much as it’s allowed for schools. This is called “funding to the cap,” and it’s often heard in the news.
But Sitka also contributes a lot of other money for non-instructional expenses, like transportation and student activities, the swimming pool, and provides other in-kind support like building maintenance and ballfields. Add it all up, and the total lands between $2- and $4 million a year – and it’s never been counted against the cap.
Now, DEED proposes counting all local contributions, including in-kind, against the cap. The intent of the new regulation is to ensure that Alaska remains eligible for over $80 million in federal funding known as “Impact Aid.” To be eligible for this aid, the Department has to pass a so-called “disparity test,” and demonstrate that funding is equitable across the state.
Alaska has failed the disparity test a couple of times in recent years, and DEED believes changing the definition of “local contribution” will help the state pass. Others believe it will devastate school districts. Lon Garrison is the former president of the Sitka School Board, and now the director of the Association of Alaska School Boards in Juneau. As the public comment period on the new regulation is now open, KCAW’s Robert Woolsey asked Garrison to shed light on the issue.
Garrison: “The State of Alaska is now the only state in the union that receives funding from the federal government through the Department of Education to account for federal lands that are non taxable, that would reduce the opportunity for any kind of a local tax base to contribute to education. And so as we know, Alaska has a lot of federal lands. What the federal disparity test does is if a state receives those federal funds and uses it as a portion of what they put forward as funding for all schools, in other words, it’s used within Alaska’s foundation formula to help fund education. Then the state has to go through a disparity test that looks at whether or not there’s a great difference in terms of, you know, those districts that are are receiving the most money per student, and then what is the least amount.”
KCAW: “Does the disparity test factor in the non-instructional contributions that communities like Sitka and Juneau are giving? You know, in Sitka’s case, to support the performing arts center and to support the Blatchley pool, and maintenance — is all that factored into the disparity test?”
Garrison: “This is the exact question at the heart of the issue. I believe that in the past, what had happened was that most of the funds that were considered in this test were centered around funds that directly supported instructional operations and helped schools do their primary goal, which was instruction. And so when you read what the Department wants to go to, which is that any contribution by a local entity to the operations of the school would be considered within that calculation of local contribution.”
KCAW: Is the federal government applying pressure to the state to modify the way they do the disparity test? Or is it all coming from within the Department of Education here in Alaska?
Garrison: “No, our understanding, and the conversations that I’ve had with, for instance, Senator Tobin, Chair of the Senate Education Committee, and Senator Kiehl, and others, is that, no, the pressure is not coming from the US Department of Education. I think what has happened in the past is the state has said, ‘You know, we have some unusual and exceptional things that we want to pull out of that local contribution piece. Because, for instance, you know, many districts don’t have busing. REAA’s (Regional Education Attendance Areas) don’t have busing, even small, single-site school districts often have maybe limited busing, you know, like Galena City School District. So it really didn’t make sense that some of those things were included in that local contribution calculation. So that’s my understanding. There may have been other things that the state had asked for an exemption or a waiver on to the disparity test.”
KCAW: “Rep. Himschoot was at the latest Sitka School Board meeting, and she understands that this is kind of a very byzantine problem. I mean, it’s not easy for the public to understand school funding on a good day, But when it’s under threat like this, it’s even more complicated. And she said she thought this the simplest way for the state to avoid the complications of failing the federal disparity test was just to raise the BSA (Base Student Allocation), to have the tide flood rather than ebb, and bring all the boats up together. I take it that’s your position as well?”
Garrison: “Exactly. I and I think if we go back and look at the performance of the disparity test over the last decade, you will see that when the BSA was a greater proportion of, you know, it was more significant in terms of meeting the needed expenses of a district. You often didn’t see local communities having to contribute more to make certain that they were able to have the educational experience for their students. And I think back when I was on the Sitka School Board, what we could do, and that we weren’t having to ask the City and Borough for every little thing. You know, there seemed to be a relatively good balance. It was a challenge at times, but these are some of the most important things that make communities a place where people want to stay, people want to come to, where you want to raise your kids like you and I did there in Sitka, and the educational opportunity you know that they got because of the quality of education and because it was more adequately funded. So we feel like there is a strong indication that by more adequately funding education across the board, that disparity begins to go away.”
KCAW: “One thing Rep. Himschoot said at the Sitka School Board meeting was that there’s almost certainly nobody who doesn’t want equity in education across the state. This is not a haves versus the have nots. There are communities that, as you say, have a more robust contribution to their schools, but that doesn’t mean that those communities don’t want the best for the smaller, more remote communities in Alaska. So it seems like there’s a solution to this problem that’s a win for everyone. It’s just a matter of, how do you get there.”
Garrison: “I think one of our frustrations is that the issue has been around. We really have not come together as stakeholders in this issue, and the state hasn’t led anything to say, ‘Let’s come together and try to figure this out. What can we do? How can we work with the US, Department of Education? What makes sense?’ And that just doesn’t seem to be the attitude that they’re approaching the solution. And instead, it’s just kind of that top-down administrative approach. This would be one of the times where we should definitely be working together on this, and it doesn’t seem inclusive in that way.”
