A new analysis of Alaska’s K-12 Capital Spending shows that the state is not spending what is needed to maintain, renovate, and renew its K-12 school buildings. The study, authored by ISER research professor Bob Loeffler, reviews historical K-12 capital spending from state and local sources from Fiscal Year 2000 through Fiscal Year 2020.  It details the funding sources Alaska uses for large school maintenance, renovation, and construction projects for both municipal and rural areas. The study illustrates the decline in spending after the current budget crisis hit in 2014, and shows how Alaska’s K-12 capital spending falls short of recommended industry guidelines.

“School buildings are among a community’s most valuable physical assets, especially in Alaska,” said Loeffler. “A building’s upkeep or deterioration can be a reflection of the surrounding community and can also affect the quality of education that happens inside. All homeowners understand that regular maintenance is critical to maintaining the value of your property. The same can be said of our school properties. This analysis takes a hard look at how Alaska has been doing in this regard. In short, Alaska is not spending what is needed, especially over the last six years.”

Loeffler’s analysis shows that:

  • The industry standard for annual school property upkeep is 4% of the current replacement value. In Alaska’s case, that would be $374 million per year.
  • Between 2000 and 2014, Alaska capital spending on schools averaged about $300 million per year, or around 80% of the recommended annual investment.
  • K-12 capital spending fell dramatically after the fiscal crisis. On average, Alaska has spent around $124 million per year over the last six years, or around 33% of the recommended annual investment.
  • When it comes to municipal school districts, capital expenditures over the last six years averaged 30% of the recommended annual investment. Two-thirds of those expenditures were in just two school districts (Anchorage and North Slope). Other municipal school districts are spending very little.
  • When it comes to Rural Education Attendance Areas (REAAs), average spending between 2000-2014 was actually a bit more than the recommended annual investment. However, this larger amount was due to one-time spending required by the Kasayulie Consent Decree, which addressed a backlog in funding in rural areas. Over the last six years, funding has averaged $40 million per year, or about 45% of the recommended annual investment.
  • Options for funding are limited. For municipal school districts, investment in school facilities must come from our communities or the legislature. REAAs lack the ability to provide local funding, so school facility expenditures must come from the legislature.