State Government

While Alaska school districts are seeing improvements in kindergarten to third grade students’ reading proficiency, which officials credit to the Alaska Reads Act, some districts are struggling to access state managed funds for a federal grant program aimed at supporting literacy programs, teacher development, and student learning.

Lawmakers with the House Education Committee heard from two district superintendents about the successes and challenges of the Comprehensive Literacy State Development grant program — which in 2024 awarded $50 million to Alaska schools over five years.

In 2025, roughly half of Alaska’s districts, or 27 school districts, qualified for these grant funds administered through the Alaska Department of Education and Early Development, according to the department.

The program is aimed at advancing literacy for children from birth through 12th grade students, including pre-literacy skills, reading and writing. The program focuses on districts with disadvantaged children, including those living in poverty, English language learners and students with disabilities.

While all Alaska districts are required by state law to implement the Alaska Read’s Act, the policy did not come with additional state funding, said Rep. Rebecca Himschoot, I-Sitka, co-chair of the education committee, in an interview on Monday. She said some districts are struggling to fund the kindergarten through third grade reading initiatives. “I would like to see us supporting schools so that everybody gets the support they need to implement the law the way it was written,” she said.

The program isn’t new, but it has more money and it’s funding more districts now. In 2019, nearly one third of Alaska districts were awarded $25 million over five years, according to DEED.

“The literacy grant is a really powerful tool that is going to help the districts that it’s in, a lot,” Himschoot said. “I’ve heard a lot of gratitude from superintendents about having this opportunity for those who have it, but we did hear about some bumps in the rollout of it.”

District officials’ testimony prompted Himschoot to send a list of questions to DEED about how the grant is managed.

Michael Robbins, superintendent of the Bristol Bay Borough School District, which serves approximately 135 students, said the grant has been crucial for implementing the Alaska Reads Act, particularly supporting teachers’ training professional development, which helps retention. “The grant supports training, coaching and leadership development grounded in research-based instruction, including the science of reading,” he said.

“It creates consistency across classrooms in schools, helps prevent problems before they grow, and ensure that limited resources are utilized where that matters most,” Robbins said.

But Robbins said in implementing the grant, districts need more “clear, timely and reasonable guidance around allowable use of grant funds” from DEED.

He said the district would like to use the money for professional services vendors to provide training to teachers, and funding to attend conferences. “The approval process has been particularly cumbersome as some districts have had to resubmit their application multiple times, which takes valuable time from our grant leaders and administrators, as well as delaying the implementation of important activities,” he said.

Officials with DEED did not attend the legislative hearing, but department spokesperson Bryan Zadalis said by email on Monday that the department recognizes the importance of clear guidance, which is communicated through multiple channels including webinars and office hours. “DEED also aligns state-level guidance with federal updates as they are released to ensure accuracy and compliance, which can at times require sequencing information rather than issuing it prematurely,” he said.

In addition, Robbins, who formerly served as the superintendent of the Ketchikan Gateway Borough School District, said that that district did not qualify for grant funding. “The need was there, but the resources are not,” he said. “We need to find ways for all districts and all students to have access to the same level of support and opportunity.”

Robyn Taylor is superintendent of the Petersburg School District which serves approximately 420 students, and was awarded $350,000 per year through the grant program. She testified to lawmakers and echoed the need for equity in supporting reading programs across Alaska’s school districts. She said Petersburg still continues to have challenges with implementing the Alaska Reads Act, which she called “a real tension.”

“In Petersburg alone, between FY 25 and FY 26 we eliminated one of our three elementary reading interventionist positions, positions that were directly supporting Reads Act implementation and student outcomes,” she said. She said the district was told that CLSD funds were for supplementing programs not replacing funding.

“(The) restriction makes it difficult to use this grant to maintain positions or systems that are already working but are no longer financially sustainable under current funding structures,” she said.

Taylor and Himschoot both emphasized that districts who did not qualify for funding need support with the administrative work to apply. They said some schools should have easily qualified for the funding, but didn’t in part because they lack proper documentation of their students’ need for free or reduced school meals, which is one of the federal poverty guidelines. “It’s not that they don’t have kids in need,” Himschoot said. “It’s that they haven’t been identified through the paperwork, because they don’t have the capacity in their district to go chase that down.”

Zadalis said the grant process is a competitive one. He said the primary source of education funding is through the state’s funding formula, but districts may also access state or federal funding through other grants focused on literacy efforts.

Taylor said Petersburg students are making gains in reading proficiency, and the district is committed to continuing improvements beyond the grant cycle. “What we are asking for is greater flexibility, clearer and earlier guidance,” she said. “And increased trust in districts to make decisions that reflect local context and student needs.”

School districts awarded CLSD grants in 2025

• Alaska Gateway School District
• Aleutians East Borough School District
• Anchorage School District
• Bering Strait School District
• Bristol Bay Borough School District / Chugach School District
• Copper River School District
• Cordova City School District
• Dillingham City School District
• Galena City School District
• Iditarod Area School District
• Kake City School District
• Kashunamiut School District
• Kenai Peninsula Borough School District
• Kodiak Island Borough School District
• Kuspuk School District
• Lake and Peninsula Borough School District
• Lower Yukon School District
• Mount Edgecumbe High School
• North Slope Borough School District
• Northwest Arctic Borough School District
• Petersburg Borough School District
• Pribilof School District
• Southeast Island School District
• Yakutat School District
• Yukon Flats School District
• Yukon–Koyukuk School District

After years of delays, the build contract to replace the Alaska Marine Highway System’s ferry Tustumena is out to bid. The state’s project notice calls for the new mainliner ferry to be completed by the beginning of 2029 with an estimated price tag of more than $300 million.

The new ferry will be a more efficient, diesel-electric vessel with capacity for 250 passengers and 58 cars at a time.

“It is really delightful, even just to talk about. You can probably hear the smile on my face,” Louise Stutes said.

State Representative Stutes, a Republican from Kodiak, is a longtime advocate of the Alaska ferry system. Especially the more than 60-year-old Tustumena, which regularly sails from Homer to Kodiak Island communities.

She commended Craig Tornga, the head of the state ferry system, for getting the Tustumena replacement project to this point.

“And there are several shipyards that are interested in it as opposed to the first time it went out where no shipyards were interested,” she said.

Gov. Mike Dunleavy first announced the project in 2021. The initial build contract went out to bid in 2022 – and no bids came in.

“So, they kind of had to reassess it, redesign a few things and we’re good to go,” Stutes said.

Tornga went back to the drawing board on the ferry’s design and overhauled the contract over the last several years. Tornga has previously said that one of the hurdles that delayed the project so long was a requirement that 70% of the money spent on the Tustumena replacement has to go to American companies.

Bidding closes May 28 according to the state’s public notice for the project.

Gov. Mike Dunleavy introduced a series of bills on Friday and Monday that he says would stabilize the state’s finances. The most prominent pieces of Dunleavy’s plan are a statewide sales tax and a new formula for Permanent Fund dividends.

“I want to stop our fights over the PFD and the Permanent Fund, and I want to minimize arguments over how much we’re going to spend each year and how we’re going to control the growth of government,” Dunleavy said in his State of the State speech on Thursday, before the bills were unveiled.

The governor did not take questions on the plan on Monday. His press office declined requests to interview members of his administration and did not respond to questions sent by email Monday afternoon.

Debates over the state budget have routinely dominated legislative sessions in Juneau in recent years. Alaska has not followed a formula in state law specifying the amount of the dividend since 2015, after a crash in oil prices sharply reduced the amount of money flowing into state coffers.

The new dividend formula would split the state’s annual Permanent Fund drawdown 50-50 between state services and dividends. If the 50-50 formula were in effect this year, next year’s PFD would cost the state roughly $2 billion and provide each eligible Alaskan with about $3,200.

The new formula would be amended into the state Constitution. The amendment would also combine the Permanent Fund’s two accounts, responding to calls from Permanent Fund managers who say the current structure creates unnecessary risk, and constitutionally cap the state’s annual draw from the fund at 5% of its value.

A constitutional amendment requires a two-thirds majority in both the House and Senate. If lawmakers approve, voters would be asked to ratify it.

Dunleavy also proposes a variety of tax changes, most of them temporary. As a whole, they’d raise more than $900 million in annual revenue from mid-2027 through mid-2032 as the measures begin to phase out.

“Alaska has prosperous years ahead,” the governor wrote in a letter sent alongside the tax bill. “Starting in (mid-2032), Alaska is projected to see higher revenue due to expected increases in pipeline throughput and the Alaska LNG Project.”

The sales tax, proposed Monday in Senate Bill 227, would be set at 4% from April through September and 2% for the remainder of the year. As written, the sales tax would expire in 2034. That would provide the majority of the revenue from the tax package, between $735 million and $815 million each year.

“All who benefit from Alaska’s public services — residents, workers and visitors — will share in supporting those services,” Dunleavy wrote.

The bill would also seek to extract additional revenue from the North Slope’s oil and gas industry by raising the minimum tax companies must pay on each barrel of oil for as many as five years. The tax would end sooner if North Slope oil production increases to 650,000 barrels a day, roughly 40% more than current volumes.

It also includes elements of a bill the governor vetoed last year that seek to bring in more revenue via corporate income taxes from out-of-state companies that sell to Alaskans. It would eliminate the state’s corporate income tax in 2031.

A separate piece of the plan, laid out in House Bill 274 and Senate Bill 222, would require legislators to periodically vote on whether to continue various government programs, known as a “sunset review.”

Another element of Dunleavy’s plan would set a stricter limit for the growth of government spending in state law, reducing the allowable increase in state spending from 5% to 1% . A sunset review and a spending limit have been priorities for some of Dunleavy’s Republican allies in the state House and Senate.

The tax bill would not take effect unless the constitutional amendment, spending limit and sunset review bill each pass.

Anchorage Democratic Sen. Bill Wielechowski expressed reservations about the plan on Monday. He said he’d rather the state lean more heavily on the oil industry and Outside tech billionaires to raise revenue.

But Wielechowski said Dunleavy’s proposal will get “serious consideration” in the Senate.

“I’m glad the governor put something out. I think it’s the basis for discussion,” he said. “It’s hard to pass any of these major bills without the governor actively engaged, and this shows that he’s actively engaged.”

The new statewide sales tax would mean big changes for local governments, many of which already collect a sales tax.

The head of the Alaska Municipal League, Nils Andreassen, said on a video call Monday that Alaska’s local governments broadly support a plan to stabilize the state’s budget. But a statewide sales tax could have a variety of “unintended consequences,” especially for communities that already have a local sales tax, he said.

“The addition of a state-level (tax) is definitely a burden that some communities will feel more than others,” he said. “There will be calls from those residents to lower not the state’s rate, but the local (rate), which will diminish revenues at the local level.”

Dunleavy’s plan would also do away with so-called “tax caps” that limit sales taxes in some communities and set a statewide list of sales tax exemptions, Andreassen said. For example, it would likely override a local ballot measure in Juneau exempting most groceries and utilities from sales taxes.

Medical care, rent, groceries purchased with federal SNAP or WIC benefits, jet fuel, insurance premiums and business purchases would be among items exempt from sales tax under Dunleavy’s proposal.

It’s too soon to say if the governor’s plans will pass the Senate this year, Wielechowski said. Leaders in the House said earlier this month they’re not optimistic Dunleavy’s plans will pass this year, his last as governor.

Editor’s note: This story has been updated with additional information about the revenue the tax package would raise.

Former Alaska Revenue Commissioner Adam Crum deviated from state policy and failed to perform the necessary due diligence before committing millions in state savings to a private equity fund, according to an outside review ordered by Gov. Mike Dunleavy after Crum’s decision came to light last summer.

In its report, the D.C.-based law firm WilmerHale said its investigation had raised “significant concerns” about whether Crum met his fiduciary duties under state law. Investigators also found Crum engaged outside lawyers to represent the state in the investment without obtaining the approval of the attorney general “in apparent contravention” of state law, according to the report.

“Mr. Crum’s process for selecting the DigitalBridge fund and the two other private funds in which he intended to invest did not involve rigorous due diligence, and Mr. Crum did not follow Department of Revenue protocols designed to assist him in meeting his fiduciary duties in connection with the investment,” the report states.

The state ultimately invested some $50 million from its primary rainy-day fund, the Constitutional Budget Reserve, with the private equity firm DigitalBridge. The investigation found that Crum intended to invest $75 million with the firm.

The investment came to light shortly after Crum left office to run for governor. The state ultimately sold the investment to an Israeli insurance company and lost roughly $859,000, according to a letter sent to the state House and Senate’s finance committees. A portion of the $50 million sent to DigitalBridge that was not invested yielded $325,000 in interest, offsetting a portion the loss, according to the letter.

“Clearly, this was an unsuitable investment for the (Constitutional Budget Reserve). No question about it,” said Sitka Republican Sen. Bert Stedman. “The ex-commissioner broke his fiduciary duty to execute it.”

Shortly after the legislative session began in Juneau this month, Stedman introduced a bill that would bar the state from doing business with DigitalBridge.

The report, which cost the state an additional $350,000, found no evidence of criminal wrongdoing or self-dealing. And it said Crum had the authority as revenue commissioner to commit money to the private equity fund. But that’s only if he had done the requisite due diligence, and the report says there’s reason to believe he didn’t.

In a phone interview, Crum said he tried his best to keep everything above board. The private equity investment was an effort to simultaneously boost the returns of the savings account and spur investment in Alaska, and he kept in touch with the Department of Law and the governor’s office about the investment, he said.

“I actually had multiple communications with (the Department of) Law, even with Treasury staff, trying to actually figure out what — I would send emails and ask the questions that say, have we met all of the legal duties in order to actually fulfill this?” Crum said.

But according to the investigation, he chose not to inform the governor’s budget office, the legislative auditor, or members of the Legislature as state policy requires. He wrote on a checklist outlining the policy for so-called “non-routine investments” — created after a state investment misadventure in 2015 — that “Treasury must not abdicate its statutory authority.”

Crum also failed to inquire with the Department of Law whether the investment met his fiduciary obligations under state law, according to the investigation.

Crum casts the issues the investigation raises as “procedural.” Details, he said, were not his mandate as revenue commissioner.

“It’s not about being technically proficient on all that stuff. It’s knowing the overall concepts,” he said. “Making sure that you actually are the expert on the actual delivery of that thing — no, that is not the case. That’s why you have staff. Otherwise, why do you have staff?”

The report included four recommendations aimed at avoiding similar issues in the future. As it was released, Gov. Mike Dunleavy issued an administrative order implementing many of the recommendations by placing additional checks on the revenue commissioner’s authority to invest in unconventional assets.

In the order, Dunleavy said the changes were intended to “enhance the transparency of investment decisions.”

With the second regular session of the 34th Alaska Legislature under way, it’s a good time to check in with members of Juneau’s delegation.

Morning Host Mike Lane recently sat down with Representative Andi Story to learn what’s on her agenda for this session.

The following transcript has been lightly edited for clarity.

Mike Lane: The second regular session of the 34th Alaska legislature has just begun. What are your top priorities for this session?

Rep. Story: My top priorities for this session have to do with keeping our young people here, cost of living, housing is really important. And of course, education and ferries, ferries, ferries.

Mike Lane: Speaking of education, you pre-filed a bill on education funding, House Bill 261. Can you give us a brief explanation of what the bill would do if passed?

Rep. Story: Well, if you’ve been living in Juneau for a long time, you know that our education funding is backwards, that we do not get our numbers to our school districts till, like, June after the session is over. And so they are not being able to give contracts to their teaching staff, to staff at all. And so they’re living in limbo, and they leave us or we can’t maintain them. And so this bill has us do our funding a year early, where they get the number. It takes the average of the last three years student count or your last prior year student count, so whichever is greater, so we will give more stability to school districts. So that’s just critically important. And this came about because I’m on the task force for education funding. We’ve been reviewing. If you are an independent school district, you have your own taxing authority. They usually take the current year and the prior two years. But we cannot raise our own revenue. We are dependent upon what the state does and our municipalities. It allows us to focus on student achievement and not redoing budgets, and not put our community in chaos because we have to predict all this out. We don’t know our number, so I want to give confidence to our school funding budget process. 

Mike Lane: So what is your plan for getting this bill passed?

Rep. Story: I co-chair education. I’m starting to talk to people about it. I have an advantage that I’m on the task force, and so people have read that report, they’re, they’re aware of that, but just have a lot of talking to do. But people have been living this roller coaster of instability for funding for school districts, so it’s not going to be a surprise for them that we’re trying to stabilize this.

Mike Lane: What other bills have you sponsored or co-sponsored that you think could get traction or succeed this session?

Rep. Story: Well, I’m really hoping my bill, which is in house rules, on housing investments, where [Alaska Industrial Development Economic Association]will be allowed to do workforce housing, give developers loans for workforce housing of five dwelling units or more. This has been critical. We have to move on housing. There are a few things that [Alaska Housing Finance Corporation] does, but this is something AIDEA  could do that would really help developers. 

Mike Lane: How can Alaskans inside and outside of Juneau get a hold of you?

Rep. Story: 907-465-3744, of course. I’m on the website, but calling is really good. And I very frequently do Zoom meetings, you know, phone calls. And I do that with Alaska residents too. Juneau residents who do not want to drive and try and find parking downtown, they just call and we set up a meeting. So please call, please email. That is probably the number one thing we have to do is bring the community, the state in on our policies, and get their voices heard. And so I like to hear what people really want me to be working on

Mike Lane: To wrap up: As one of Juneau’s representatives, what do you see as your ultimate duties and responsibilities to the people of Juneau and all of Alaska?

Rep. Story: Really, to meet our constitutional obligations because it is so important — the people of the state. We have a lot of resources in the state. The biggest resource we have is each of us, is the people. So we want to try and bring that voice up to the the capitol that it’s important our human resources and how are we making sure we have quality of life here.

Gov. Mike Dunleavy reviewed his seven years in office and outlined his agenda for his final year during his annual State of the State address on Thursday.

“I believe the people in this room can accomplish big things, whether it’s in public education, public safety or stabilizing our fiscal situation,” Dunleavy said. “We’ve got the time to do it. We’ve got the smarts to do it. We just have to have the desire to do it.”

Dunleavy spent much of his 79-minute speech presenting a long list of accomplishments from his first seven years in office.

He highlighted the state’s recovery from an economic downturn after emerging from a recession in early 2018. Dunleavy said his administration had enabled six consecutive years of job growth.

“I know there’s a feeling that things can be better, and of course, they can,” he said. “But our economy has been getting stronger and stronger every year under my administration, and diversifying as well.”

Dunleavy also called out a significant drop in crime across Alaska. The number of crimes reported to police dropped by more than 40% between 2018 and 2024, according to the state Department of Public Safety, and violent crime fell nearly 20% over that period.

He also previewed a new “quality of life” initiative that would seek to reduce crime in Anchorage. He said he was working with Anchorage Mayor Suzanne LaFrance on the effort.

Dunleavy said the first phase is already underway, focused on retail theft, illegal camping, disorderly behavior and drug use. He says later phases will focus on drug smuggling and violent crime.

The governor also used the speech to highlight progress on the Alaska LNG project, which would bring natural gas from the North Slope to Southcentral Alaska. He applauded an announcement from project developer Glenfarne saying it had secured nonbinding commitments from ExxonMobil and Hilcorp to provide gas for the pipeline, a nonbinding commitment to purchase gas by Southcentral utility Enstar and the planned Donlin Gold mine, and a variety of other deals with other companies to provide materials and support for the project.

Glenfarne CEO Brendan Duval said the series of announcements indicated the project was “progressing from planning to building,” though the company stopped short of saying it had made a final investment decision.

Dunleavy said the progress on the gas line was only one piece of good news from his tenure.

“Today, we are on the cusp of realizing a decades-old dream of delivering abundant, affordable energy that will benefit all Alaskans,” he said. “Today, unlike seven years ago, oil production is increasing, reading scores are improving, and the Permanent Fund has reached record highs thanks to steady and strong leadership.”

Dunleavy also said he would work to expand the supply of housing across the state in his final year in office.

Senate President Gary Stevens, a Kodiak Republican leading a bipartisan caucus that has often found itself at odds with Dunleavy, said many of the accomplishments the governor touted were in fact items lawmakers had worked on, too.

“I noted down a whole lot of them, all things that we were involved in, and we appreciate the governor’s leadership on those things, but (those are) things that we have worked hard on,” he said.

Dunleavy also pitched a forthcoming fiscal plan that he said would stabilize the state’s turbulent budget, though he stopped short of outlining what the plan would include. He outlined the goal of his plan — to reduce volatility in the state budget in order to make the state a more attractive place for investment — but stopped short of providing specifics.

On Friday, he introduced two measures in that vein: a cap on government spending and a constitutional amendment that would combine the Permanent Fund into a single account and set up a new formula for dividends. On Wednesday, he said his plan would also include a “temporary, seasonal sales tax concept.”

But lawmakers in the bipartisan, Democrat-heavy House and Senate majorities said they were not optimistic the governor’s plans would pass this year. Even if they did, Sitka Republican Sen. Bert Stedman said he did not expect them to provide immediate relief.

“Even if we move forward with a fiscal plan, it’s going to take a couple years to engage it and get the revenue collected,” he said. “So this year, I would tell the people around the state to expect something very similar to last year.”