Alaska emerges victorious in a contentious dispute with the U.S. Department of Education over COVID-19 relief funds, as federal officials retract their stance and release $17.4 million in withheld funds.
At a Glance
- Alaska was labeled a “high-risk grantee” by the U.S. Department of Education over alleged mishandling of COVID-19 relief funds
- The state received $359 million in federal COVID funding, with $30 million earmarked for high-need schools
- Federal officials claimed Alaska violated the “maintenance of equity” provision, withholding $17.5 million in grants
- Alaska disputed the claims, arguing it followed its usual funding formula based on enrollment
- The U.S. Department of Education ultimately retracted its stance, acknowledging Alaska’s compliance and releasing the withheld funds
Federal Allegations and Alaska’s Defense
The U.S. Department of Education initially labeled Alaska as a “high-risk grantee,” alleging the state failed to distribute COVID-19 relief funds fairly to school districts. This designation put Alaska at the center of a heated debate over the management of federal educational funding during the pandemic. The federal government claimed that Alaska owed specific amounts to four school districts: Anchorage, Kenai Peninsula Borough, Fairbanks North Star Borough, and Juneau.
Alaska’s Education Commissioner Deena Bishop strongly refuted these allegations. “This equalized funding approach did not change during the COVID-19 pandemic. Alaska did not reduce per-pupil spending on education in any of our school districts in order to take advantage of federal funds,” Bishop said. The state maintained that it had followed its usual funding formula, which is based on enrollment rather than reducing per-pupil spending.
The U.S. Department of Education told state education officials that a one-time funding boost this year had resolved a dispute over how COVID-19 aid was disbursed to Alaska schools. https://t.co/xskpQl0Aoi
— Anchorage Daily News (@adndotcom) December 21, 2024
The Maintenance of Equity Provision
At the heart of the dispute was the “maintenance of equity” provision in the American Rescue Plan Act. This provision aims to prevent states from reducing funding for low-income students during the pandemic. Federal officials claimed Alaska was the only state that had not met or presented a sufficient plan for meeting these requirements.
“Alaska is the only State that has not complied with these statutory, non-waivable requirements for FY 2022 and one of just two States to have not met the corresponding FY 2023 requirements,” Adam Schott of the U.S. Department of Education said.
As a result of the alleged non-compliance, the U.S. Department of Education withheld $17.5 million in federal grant funds from Alaska. This action put significant pressure on the state’s education system and sparked a heated debate about federal oversight and state autonomy in education funding.
Alaska’s Appeal and Resolution
Alaska’s appeal process was lengthy and contentious, with the state vehemently questioning the federal government’s conclusions. Governor Mike Dunleavy took a strong stance against the federal allegations, characterizing them as meritless and a waste of resources. The Alaska Legislature had included $11.89 million in the budget to comply with federal requirements, but Governor Dunleavy vetoed it, further complicating the situation.
“Alaska distributed the ARP Act funding according to the federal guidelines. The challenge of the program is not about how much the State of Alaska spends on education, but how it disperses its own money. I stand behind our bi-partisan legislatively approved education funding formula, and will continue to do so in the best interest of our students,” Commissioner Bishop stated.
In a surprising turn of events, the U.S. Department of Education ultimately retracted its stance. The federal department acknowledged Alaska’s compliance with funding requirements and released the withheld $17.4 million. This decision marked a significant victory for Alaska in its dispute with federal education authorities.
Implications and Future Outlook
The resolution of this dispute has far-reaching implications for Alaska’s educational landscape and sets a precedent in state-federal interactions over education funding. The U.S. Department of Education no longer considers Alaska a “high-risk grantee” for COVID grants, restoring the state’s standing and potentially improving its competitiveness for future grants.
“Alaska’s appropriations complied with the plain language and clear intent of Congress when it passed ARPA and its MOEquity provision; state funding for education was not cut for low-income or any other students during fiscal years 2019-2023 in order to take advantage of new federal funding; instead, Alaska continued to apply its equalized funding formula as required by ARPA,” Commissioner Bishop explained, underscoring the state’s vindication.
