Alaska’s adjusted school spending trails national average, UAA researchers say

Funding for K-12 education is expected to be a top issue in the upcoming legislative session

Alaska spends less on K-12 education than the national average when adjustments for Alaska’s rural and urban communities are made. That was the thesis of a presentation given by Dr. Dayna DeFeo, the director of the Center for Alaska Education Policy Research, during a public forum on school spending hosted by the University of Alaska Anchorage’s Institute of Social and Economic Research on Friday.

The seminar came as Alaska’s state lawmakers prepare to head to Juneau, where funding for K-12 education is expected to be a top issue.

DeFeo, along with ISER researcher Dr. Matthew Berman, published last year an updated version of a 2019 analysis of how much money Alaska spends on K-12 education, which the study concluded was less than the national average. Further, the analysis showed that, even though Alaska spent more on education in 2019 than in 2017, it still spent less than other states when compared to the national average.

DeFeo last Thursday structured her presentation around how much Alaska pays for education, how Alaska’s spending compares to the national average and what drives Alaska’s costs.

When comparing raw numbers, DeFeo said, it appears that Alaska, at $18,394 per student, spends about 39% more than the national average, which is $13,187 per student. Those numbers were as of 2019, which she said is the last year for which reliable data are available. Data from the two following years are skewed because of the COVID-19 pandemic.

“Data from (2020) and even 2021 aren’t really indicative of the fiscal situation that we have for normal operations,” she said.

In both 2017 and 2019, Alaska ranked sixth in the nation for per student spending. Where Alaska spent 46% more than the national average in 2017, though, it spent less — 39% — in 2019. That, DeFeo said, is because Alaska’s economy grew at a slower rate than the U.S. economy during that time.

“Other states, especially states that had spent less money on education historically invested relatively more dollars in education, which is why our percent in relation to that national average went down though we spent more dollars — other states were spending more,” she said.

Looking just at the raw dollar amounts, though, doesn’t tell the full story, DeFeo said.

That’s because it costs more to educate students in Alaska than it does in other parts of the country. Even within Alaska, it costs more to educate students in some regions than it does in others. For those reasons, the dollar amounts being considered must be adjusted such that it accounts for both the higher cost of living in Alaska’s urban areas, like Anchorage, and the even higher cost of living in Alaska’s rural areas.

Adjusting Alaska’s 2019 per-student spending for the cost of living in Anchorage reduces the percentage by which Alaska leads the national average by half — from 46% to 22%.

“That (Anchorage) adjustment alone — it’s explained more than half of the difference between Alaska spending and the national average,” she said.

To figure out how much costs differ between Anchorage and other regions in the state, DeFeo said she and Berman used the Alaska Foundation Funding Formula’s geographic cost differential and weighted it by districts’ average daily membership. In the Kenai Peninsula Borough, for example, things cost between 1 and 1.2 times as much as they do in Anchorage. On the North Slope, though, things cost 1.5 times as much.

There are two adjustments that DeFeo and Berman made to compare the amount spent educating a student in Alaska to the national average.

Adjusting the amount spent in all of Alaska’s communities to Anchorage drops education spending from $18,394 per student to $15,920 per student. Further adjusting the cost of living in Anchorage to that of the United States as a whole drops the amount spent per student again, to $12,281. That number ends up being lower than the national average of $13,187 per student.

Further, DeFeo said the raw dollars Alaska spends on education per student are comparable to the cost of private K-12 school tuition in Anchorage. Private schools get roughly the same amount of money per student, she noted, but are not expected to provide some of the services public K-12 schools are, such as transportation and intensive special education.

“Those are very costly things that the district spends money on,” DeFeo said. “So even with those considerations in mind, private school tuition costs are still comparable to our per-pupil spending.”

In looking at what drives the high cost of K-12 education in Alaska, DeFeo said evidence suggests that it is the logistical costs of operating schools, such as the cost of running small schools, providing health care and the cost of energy and geography.

Of the 443 traditional schools that operate in Alaska, roughly one in five — 20.8% — enroll fewer than 50 students. About 13% of schools in Alaska have fewer than 25 students. Small schools are more costly to operate because of the high cost of living in the community, because the schools don’t benefit from economies of scale, because of smaller class sizes and because of high turnover among teachers and principals.

Still, DeFeo said three major court cases — Hootch v. Alaska State-Operated School System, Willie and Sophie Kasayulie et al., v. State of Alaska, and Moore et al., v. State of Alaska — make clear that Alaska must make education available to students.

“Alaska has a legal responsibility (and) it has an ethical responsibility to provide education to all students,” she said.

Additionally, Alaska has the highest health care costs in the United States, DeFeo said, which impacts the state’s private, as well as public, sectors. In 2017, the cost of benefit packages in Alaska was the fourth highest nationwide and cost more than 11% more than the national average after adjustment.

“We have this fixed budget scenario and these high health care costs are putting downward pressure on wages, which is making it harder for Alaska district to offer teachers a nationally competitive salary,” she said. “So, this is an issue that’s churning in a lot of our discussions in the state lately.”

The next factor driving the high cost of education in Alaska, DeFeo said, is energy, the cost of which is variable. It’s expensive, she said, to ship and store fuel in small communities and to heat school buildings in colder communities. Electricity costs can be three to five times higher in remote areas, where schools don’t benefit from Alaska’s Power Cost Equalization program.

“No matter how many students are in the building, the buildings need to be lit (and) they need to be heated,” DeFeo said.

Ultimately, DeFeo said the factors that make education more expensive to provide in Alaska are separate from education policy, but still end up affecting the way Alaska provides education. Alaska is investing less in education than other states and is also failing to produce its own teachers. Because of that, Alaska is competing with the rest of the country when it comes to finding and retaining school staff.

“Other states are investing more in public education,” DeFeo said. “They’re doing it more and faster than we are and I think that’s going to be a big deal for Alaska. Teachers who live and work in our communities — they might not know these exact figures that I talked about today, but they’re working within the conditions and the resources that public education spending is covering.”

Also presenting as part of ISER’s “Public education funding in Alaska” seminar was Lawrence O. Picus, a professor and associate dean with the University of Southern California Rossier School of Education. Both presentations will be available to stream through ISER.

Reach reporter Ashlyn O’Hara at

Chart via ISER.

Chart via ISER.