By Former Senator Dave Donley


Did you know state funding that should be coming to Anchorage schools is being unfairly sent to other school districts by the current state school funding formula?  In 1998, I was one of a group of state senators lead by Senator Gary Wilken of Fairbanks that created the framework of the current state education funding formula commonly known as Alaska’s Public School Foundation Program which is defined in Alaska Statute 14.17, State Aid to Public Schools.  Among other factors, we tried to create a formula that fairly takes into account the cost differences between different areas of Alaska in providing public schools.  The formula has multiple factors and the second factor is this school cost differential or “District Cost Factor” (DCF) which is defined in AS 14.17.460. 


The government only calculates the cost of living index (CPI) for the Anchorage area and not for other areas of Alaska.  Additionally the CPI does not completely correlate with the actual cost of schools.  So to determine the DCF, we commissioned a professional study of the actual cost of providing public schools in the different regional school districts in Alaska.    At that time Anchorage was the least expensive area of the state to live in and provide schools.  Accordingly Anchorage was set as the “base” and each other school district was assigned a DCF variable that increased their per student funding above that of Anchorage based on their actual costs. 


The DCF was updated by a new study in 2005.  But since that 2005 study, some twelve years ago, the DCF has not been updated.  There was an attempt to update some of the cost information in 2015 by UAA Institute of Social and Economic Research (ISER).  Specifically the regional difference in the cost of hiring teachers was researched and it was found that there are several districts that could attract the same quality of teacher for less money than Anchorage.  While teacher costs is only one of many cost components it is by far the largest factor. 


With what we do know it is very likely that Anchorage is no longer the least expensive area to provide public schools. This is also very likely to result in state school funding that should be going to Anchorage schools instead now unfairly going to other school districts.  Accordingly, we need a new school cost differential study to properly update the current state education funding formula.


The Anchorage School District knows about this unfairness and has listed this issue as a 2017 legislative priority:


BSA Formula – Maintain current funding and examine the district cost factor within the BSA formula, as the cost disparities among districts may no longer exist


But inexplicitly the ASD also decided not to emphasize the DCF issue during their Juneau lobbying efforts this year.  As a delegate to this year’s State PTA Legislative Conference I requested this issue be added to the State PTA priorities and it was.


When I became a candidate for the Anchorage School Board I asked the President of the School Board how much this out of date DCF was costing the ASD.  She asked the ASD finance staff for an estimate and advised me they thought it could be as much as $26 million that each year is going to other school districts that should instead be coming to Anchorage.  Even if that estimate is off by fifty percent the amount is almost as much as the current ASD funding shortfall that is forcing the reduction of 99 teachers next year.


As a community, Anchorage needs to prioritize and insist that the state authorized and complete a new School Cost Differential study by next year.  The folks at the ISER have stated it is unlikely that you could have a well-done study completed in time for the next legislative session, unless the study were underway very quickly.


I raised this issue at a recent City Hall meeting of the Mayor, Assembly and School Board.  I emphasized the importance of getting the legislature to order a new DCF study this year so that this unfairness can be accurately quantified and corrected.  The children and taxpayers of Anchorage deserve our elected officials prioritizing this issue much more than they currently are.



Dave Donley served as a State Senator and State Representative from Anchorage for 16 years.  He was Co-chair of the Senate Finance Committee and Chair of the Education Budget Subcommittee.  He is a candidate for Anchorage School Board in the April 4 election.