Getting caught between a rock and a hard place is manageable — at least you can rent a backhoe and move the rock. Getting politically caught between more money for public schools and even more money for the Alaska Permanent Fund dividend will be the hardest place for some legislators this year.
The vote will come down to which is more important for Alaska: A long-needed, substantial increase in state funding for public schools, or the governor’s proposed supersized Happy Meal of a nearly $4,000 permanent fund dividend?
But putting the dividend first and school funding second is exactly what Gov. Mike Dunleavy proposes in his budget. He would spend almost $2.5 billion for this fall’s dividends — a record amount that would make any candidate proud — and popular.
That same budget includes less than half that amount for state funding of public schools. Dunleavy says he is open to considering an increase but has shown no interest or inclination in naming a number. That’s like a student telling the teacher, yes, I am interested in turning in the homework assignment, but I’d rather not say when.
The annual fight over the size of the dividend has consumed state politics the past half-dozen years. What makes it more crucial this year is that the state funding formula for public schools has not changed over those same half-dozen years, and there is a growing consensus across Alaska that a sizable increase in state money for classrooms is needed to avoid school closures and classroom cutbacks.
That’s the hard place for legislators. The state checking account cannot afford both the governor’s record-setting PFD and more money for schools.
“We can’t have everything,” Ketchikan Rep. Dan Ortiz told a meeting of Southeast community leaders last week, precisely summing up Alaska’s fiscal dilemma in four astute words.
Money to pay for both the governor’s dividend — which would cost almost $400 million more than last year’s check — and the $250 million school funding boost sought by advocates would exceed the fiscally responsible limit set in state law for annual withdrawals of permanent fund earnings.
Overdrawing the state’s long-term savings account means coming up even shorter with revenues to pay for public services in the years ahead. It’s selfish and it’s shortsighted. It’s like overfishing a salmon run because you want extra money this year, regardless that it ruins the run for future years.
That’s something every Alaskan should understand.
Lawmakers know the end-of-session budget battle will come down to compromises on the amount of the dividend and an increase in school funding. “That’s where everybody is going to have to show their cards,” Ortiz said.
It will be an important decision, said Sitka Sen. Bert Stedman, co-chair of the Senate Finance Committee. “We’re going to have to make a choice. Do we want to teach our kids to cash checks? Or do we want to teach them to read and write and do arithmetic? And that’ll be the fundamentals of the debate, because something has to give.”
What gives is rising costs at school districts statewide. Districts are paying more for insurance and to heat school buildings, for wages and student services, and they are doing it without any help from the state beyond a 6-year-old funding formula.
Alaskans should demand of their elected officials that they answer school funding needs first, and then figure out how much of a dividend Alaska can afford. Not the other way around.
Larry Persily is a longtime Alaska journalist, with breaks for federal, state and municipal service in oil and gas, taxes and fiscal policy work.