Dunleavy vetoes hit Mat-Su schools with $7 million cut in state funds, deeper loss than for Anchorage

Mat-Su schools will be hit by Gov. Mike Dunleavy’s veto of education funds in the state budget the governor signed last Thursday, June 12. The reduction is a loss of $7 million for Mat-Su, school district spokesperson John Notestine said in an email.

That’s more substantial than even Anchorage schools face, which will feel a $4.3 million loss of state funds following the governor’s vetoes.

“Effective immediately the Mat-Su Borough School District is implementing a temporary hiring and spending freeze. The action is in direct response to the governor’s veto impacting education funding,” Notestine said.

The school district will now have to make changes to its budget for Fiscal Year 2026. Those have to be done by June 30 to allow the budget to be effective July 1, the start of the fiscal year.

Anchorage schools are also be severely affected by the vetoes, Anchorage school superintendent Jharett Bryantt said. Anchorage faces a $4.3 million impact. The Anchorage School District has also instituted a hiring freeze.

“It remains to be seen what will happen as a result of this action from the governor, but certainly emergency school closures are on the table,” Bryantt said.

Mat-Su’s all-Republican legislative delegation appears to support the governor, however.

“Given the revenue forecasts, based on current oil prices, the governor was forced to make hard decisions. Given the circumstances Alaska faces, as is, the Governor made responsible reductions,” said Rep. Cathy Tilton, R-Wasilla.

Tilton is one of the leaders of the House Republican Minority.

Among other vetoes Dunleavy reduced a $700-per-student increase to the Base Student Allocation, or BSA, to $500 per student.

The effect of that is to cut state funding for school districts by $50 million. Overall the governor vetoed $122 million from the budget, of which $74 million was related to public education.

It could have been worse. The governor could have vetoed the entire $700 per student increase. “Even at a $500 increase to the BSA, it represents the largest single increase in a decade or more, Tilton said.

“The current House and Senate majorities (led by Democrats) have to accept our fiscal realities and understand that reductions are necessary,” she said.

State Sen. Loki Tobin, D-Anch., doesn’t buy that. “For the first time in Alaska history, the Governor failed to follow Alaska law and cuts public education base student funding,” Tobin said in a statement.

“The Governor vetoes include “a $74 million decrease in state support for public education. Significant cuts also affected the public university system and the merit-based college scholarship fund,” she said.

“This Governor has created the crisis our public schools are now facing, and I am confident he will use this manufactured crisis to continue criticizing student academic performance in our public schools. I challenge his assertion that our schools are failing as misleading and inaccurate,” Tobin said.

Among other reductions, an infant learning program lost $5.7 million in funding, and childcare subsidies were reduced by $1.8 million. Major maintenance projects at public universities were cut, and repayment funds for the WWAMI (University of Washington and University of Alaska) medical program were eliminated.

Tilton believes some of President Donald Trump may come to Alaska’s rescue through his proposals now in Congress. “An improved federal “revenue split (of oil revenues) contained in the ‘One Big Beautiful Bill’ has the potential to secure Alaska's finances for decades to come,” Tilton said.

The “One Big Beautiful Bill” is the President’s nickname for his spending and tax cut legislation that has passed the U.S. House and is now before the Senate. “However, the future of a final version of that bill is uncertain,” Tilton said.

Many of the governor’s vetoes were aimed at protecting the Alaska Industrial Development and Export Authority, or AIDEA, the state’s development finance corporation. The Legislature had made appropriations for programs drawing on cash funds help by AIDEA to support development projects, such as exploration in the Arctic National Wildlife Refuge where the state corporation holds rights to federal oil leases.

By vetoing transfers from AIDEA’s account the money is retained by the state corporation.

The governor also vetoed $26.7 million that was appropriated by the Legislature for wildfire suppression as well as $10.3 million for disaster relief.

A program of the Alaska Seafood Marketing Institute to promote Alaska seafood in domestic U.S. markets was cut in half, to $2.5 million. Alaska’s seafood industry has been hit hard by adverse global economic trend and Norwegian and Chilean farmed salmon producers are aiming to make up losses by more aggressive marketing in the U.S.

ASMI’s domestic promotions were to counter that. Tourism marketing by the Alaska Travel Industry Association was also reduced by $2.5 million. This comes amid signs that Alaska’s important visitor industry is showing signs of softening due to worries about the economy with President Donald Trump’s tariff policies as well as international visitors being delayed and detained at U.S. entry points.