Basic facts about adequate funding

January 2006

The following information is provided as a resource to inform Alaskans about the revenue available to the State of Alaska to meet the Constitutional mandate of funding K-12 education.

Over the past two fiscal years, through the work of parents, teachers, support staff, NEA-Alaska and a groundswell of support for public education, we have achieved historic increases in the K-12 education budget.  These two years of increase come on the heels of 20 years of flat funding that did not keep pace with inflation in Alaska.  Here are the facts:

• The State currently has about 132,000 children in Alaska's K-12 public schools.
   
• The Base Student Allocation (BSA) is now at $4,919 per student, which costs $832 million annually.
   
• The inflation rate is calculated at 3% annually, which means $25 million for FY '07.
   
• Every $1 increase to the BSA costs approximately $208,000.  In rough terms $1 million produces a $5 increase to the BSA.
   
• Governor Murkowski has proposed an increase of $90 million, making the BSA $5,352.
   
• Senator Wilken introduced SSSB 1 to implement the Governor's proposal for FY '07. The $90 million increase would cover the $40 million cost of the employer's contribution rate increase to TRS/PERS.  That leaves $25 million to provide for the inflation and only $25 million in new dollars for school districts. 
   
• The FY ‘06 budget is based on $38.60 per barrel of Alaska North Slope Oil.
   
• $1 on the price per barrel of ANS Crude yields approximately $60 million in revenue for the General Fund.
   
• ANS Crude is conservatively projected to average more than $46 per barrel in FY '06.
   
• The unanticipated revenue if oil averages $59.49 per barrel in FY '06 (average so far in FY '06 through 6 months). This leaves a surplus of over $1.2 billion.
   
• The Education Funding Gap created by inflation from 1983 – 2002 is estimated at $675 million.
   
• To fund at least 1/8 of the gap would require $145 million, $55 million above the Governor's FY '07 proposal or a BSA of $5,611 (an increase of $692).

How much SHOULD we invest in schools this year?

Contact your legislators.

An overview of adequate funding for K-12 schools.