Alaska Gov. Dunleavy vetoes $51 million in school funding from budget

Sean Maguire, Anchorage Daily News on Jun 12, 2025

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Alaska Gov. Mike Dunleavy on Thursday signed the budget for the next fiscal year, and announced that he had vetoed $51 million in school funding.

The Legislature in May voted to override Dunleavy’s veto of a bipartisan education measure that included a roughly $180 million annual increase in school funding.

Dunleavy’s veto reduces that by over a quarter for Alaska’s 53 school districts.

In his veto message, Dunleavy stated that the “veto (was) necessary to reduce general fund expenditures due to declining revenue.”

Dunleavy also vetoed $26.8 million set aside for fire suppression funding, leaving $47 million available, and vetoed $10 million for the disaster relief fund, citing declining revenue.

Lawmakers this year grappled with a dire fiscal outlook due to diminished oil revenue. They passed a pared-down operating budget and a slim spending plan for construction and maintenance projects.

The Legislature also approved a $1,000 Permanent Fund dividend. When adjusted for inflation, this year’s PFD is set to be the smallest received by Alaskans since the program began in 1982.

Education funding and policy were again major topics of debate this legislative session.

After almost a decade of virtually flat state funding, 46 legislators voted on May 20 to override Dunleavy’s veto of House Bill 57— a comprehensive education package that included a major boost to the Base Student Allocation, the state’s per-student funding formula.

Dunleavy signaled last month that he was prepared to use his veto pen to reduce the school funding boost due to the state’s fiscal situation.

After already making deep budget cuts, superintendents across Alaska had urged Dunleavy to keep the funding boost approved by the Legislature intact.

Overriding a budget veto has a higher threshold than overriding vetoes of other legislation, requiring support from three-quarters of the Legislature — 45 out of 60 lawmakers.

Legislative leaders have said that it is unlikely they will hold a special session this year to consider overriding Dunleavy’s school funding veto. That means school districts will likely need to wait until January to see whether they receive all of the education funding mandated under the new law.

Another uncertainty for school districts: Senate Bill 113

The Legislature approved the measure in May, but it has not been transmitted yet to the governor’s office.

SB 113 would apply corporate income tax on some out-of-state businesses. It is expected to raise between$25 million and $65 million per year to the state treasury.

Lawmakers intended for that revenue to be used to fund reading incentive grants and career and technical education. But Dunleavy has said he was opposed to that plan.

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