High Gasoline Prices Fuel K-12 Windfall

By Sean Cavanagh — June 07, 2005 1 min read

The following offers highlights of the recent legislative sessions. Precollegiate enrollment figures are based on fall 2004 data reported by state officials for public elementary and secondary schools. The figures for precollegiate education spending do not include federal flow-through funds, unless noted.


While most of the nation curses higher oil and gasoline prices, Alaskans reap the benefits, with new money flowing into the coffers of the petroleum-rich state.

Yet even as that new tax revenue helped legislators increase overall aid to schools, lawmakers angered many teachers and labor groups by approving a controversial change in Alaska’s retirement system for state employees and K-12 instructors.

Gov. Frank H. Murkowski

8 Democrats
12 Republicans

14 Democrats
26 Republicans


The Republican-dominated legislature ended a special session in May after increasing school funding by 5 percent over the current fiscal year, to $849 million for fiscal 2006. The per-pupil portion of that school spending, increased by roughly $70 million, from $4,576 to $4,919—or 7.5 percent.

Much of the session’s most heated debate centered around the vote to change the state retirement system from a defined-benefit plan to a defined-contribution plan, for all public employees and teachers who begin work after July of next year.

Gov. Frank H. Murkowski, a Republican, and lawmakers who backed the switch argued that it would allow future employees potentially greater benefits by letting them put money into the new, stock-market-based system. They also say the change will help reduce costs to the state, which now has $5.7 billion worth of unfunded liability in its retirement systems. (“States Facing Fiscal Strain of Pensions,” May 18, 2005.)

Opponents of the plan include the Alaska affiliate of the National Education Association, which says the change will result in less financial stability and higher costs for future K-12 instructors.