U.S. Department of Education says ‘never mind’ on Covid-era school funding dispute with Alaska

When Covid relief funds were distributed to states in 2021, Alaska officials directed those funds to districts according to the state’s lawful formula.

Earlier this year, Alaska Department of Education Commissioner Deena Bishop was sent a stern letter from the U.S. Department of Education, accusing it of not distributing the funds according to the fed’s “equity” test. The federal department said it would withhold $17.4 million from the state and put it on a “high-risk grantee” list unless the state distributed the funds according to the federal equity formula that has been enacted during the Biden Administration.

Democrat lawmakers like Sen. Loki Tobin, chairwoman of he Senate Education Committee, jumped on the bandwagon and all but accused the Dunleavy Administration of racism.

“The state is on the hook for an additional $29 million while putting in jeopardy hundreds of millions of dollars in federal grants,” Tobin said in March of 2024, after the federal government sent its letter. “Despite being assured by the department and commissioner that a resolution was in the works, the state has failed its duties.”

Sen. Jesse Kiehl, another Democrat member of the Senate Education Committee told reporters, “”It doesn’t look like Alaska Department of Education watched that very closely.”

Alaska was singled out as the only state put on the federal Department of Education’s naughty list, for not meeting the novel “equity requirements” for use of the funds.

But at the time, Commissioner Bishop wrote, “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.”

Now, as news reporters have all gone off to celebrate Christmas, Hanukkah, Festivus, and Kwanzaa, the U.S. Department of Education has quietly backpedaled, issuing a new letter.

The gist of the letter is “never mind.”

Government agencies eager to hide unfavorable or embarrassing news often use the time around Thanksgiving, Christmas, and the New Year to issue certain decisions. It’s sometimes called the holiday news dump — news released when people are least paying attention.

“I write regarding the Alaska Department of Education and Early Development’s (AK DEED) compliance with the American Rescue Plan (ARP) Act fiscal year (FY) 2022 and FY 2023 maintenance of equity MOEquity) requirements under the Elementary and Secondary School Emergency Relief (ESSER) program,” wrote Adam Schott, principal deputy assistant secretary of the Department of Education, who was tasked with the federal retraction letter.

“After the U.S. Department of Education (Department) inquired about the State’s final budget, AK DEED provided the Department with data on December 5, 2024, demonstrating that Alaska’s FY 2024 and FY 2025 approved budgets included one-time funding increases to the Base Student Allocation (BSA) used in the State’s education funding formula. Based on this updated information and AK DEED’s analysis in this December 5, 2024, submission, it appears that the approved BSA increase across both fiscal years exceeds the combined FY 2022 and FY 2023 MOEquity shortfall for all four impacted LEAs,” he wrote.

In other words, the state did nothing wrong in distributing the federal funds according to the existing state formula.

“Based on the verified data and analysis described above, and to reflect the Department’s continued interest in ensuring that as much funding as possible reaches Alaska’s neediest students and LEAs, the Department is lifting the July 30, 2024, withholding actions for FY 2022 and FY 2023 and releasing the associated $17,450,118 of Alaska’s ARP ESSER award that was previously withheld due to AK DEED’s non-compliance with the MOEquity requirements.

“We now consider these matters regarding Alaska’s compliance with the MOEquity provision in FY 2022 and FY 2023 closed.”

And thus, at Christmas, the federal Department of Education has folded on the matter and no longer designates Alaska as a “high-risk grantee” for its Covid grants, and will get the more than $17.4 million that the federal government has been holding onto for two years while it punished Alaska for a ginned-up offense that appears to have been political in nature, and was made more so by Senate Democrats like Loki Tobin.