RFP: Alaska Education Funding Formula

ALASKA MUNICIPAL LEAGUE
REQUEST FOR PROPOSALS
Alaska Education Funding Formula: State, Local, and Federal Fiscal Responsibility
RFP Issue Date: September 25, 2026
Proposals Due: October 23, 2026
Anticipated Contract Period: November through February
Anticipated Budget: $50,000–$75,000; proposals up to $100,000 may be considered
Issued By: Alaska Municipal League

PURPOSE
The Alaska Municipal League (AML) seeks proposals from qualified consultants or consultant teams to evaluate the allocation of fiscal responsibility within Alaska’s public education funding system, with particular emphasis on the Required Local Contribution (RLC), federal Impact Aid, additional local contributions, and the resulting State share of education funding.

This study is intended to examine the fairness and sustainability of the existing allocation of responsibility among the State of Alaska, municipalities, school districts, and the federal government.
The study is not intended to determine an independently calculated level of adequate education funding or to comprehensively evaluate every component of Alaska’s school funding formula. Rather, it should examine how the existing formula distributes responsibility for funding Basic Need and how that structure affects municipalities and their residents.

AML is particularly interested in understanding whether the current system appropriately measures actual local fiscal capacity and whether increases in assessed valuation or federal funding may reduce State responsibility even where the affected municipality must increase taxes, redirect existing resources, reduce other services, or otherwise make significant fiscal tradeoffs.
The resulting work should provide an objective analytical foundation for discussion of Alaska’s State-local fiscal relationship and identify options for improving the fairness, transparency, and sustainability of education funding.

OVERARCHING STUDY QUESTION
The study should address the following overarching question:
How does Alaska’s public education funding structure allocate fiscal responsibility among the State, local governments, and the federal government, and is that allocation fair, transparent, and sustainable given differences in actual municipal fiscal capacity, tax effort, community circumstances, and the intended purposes of federal Impact Aid?

The study should examine, rather than presume, the following hypothesis:
Alaska’s education funding formula may treat increases in assessed valuation or federal revenues as evidence of increased local fiscal capacity even where that capacity is not readily realizable, requires increased taxation, falls unevenly within the community, or comes at the expense of other essential municipal services. At the same time, the formula may reduce State responsibility in response to those resources without necessarily reducing the underlying fiscal burden facing the community or improving educational outcomes.

The study should also distinguish between:
1. the State’s role in supporting Basic Need or foundational education funding; and
2. the legitimate role of local governments in choosing to provide additional or enhanced educational opportunities beyond Basic Need.
The analysis should consider whether the current formula maintains a meaningful distinction between those two responsibilities.

KEY QUESTIONS TO BE ANSWERED
At a minimum, the final study should enable AML and policymakers to answer the following:
1. How has the State/local/federal share of Alaska’s formula-defined Basic Need changed over time?
2. Has local required effort grown faster or slower than Basic Need, the BSA, inflation, municipal revenues, and other relevant measures?
3. Does taxable property valuation provide an accurate measure of the practical fiscal capacity of Alaska municipalities?
4. When taxable valuation increases, does the municipality actually receive additional revenue sufficient to meet the resulting education obligation, or must it make an affirmative decision to increase or restructure taxation?
5. How does existing local tax effort affect the practical ability of communities to absorb increases in RLC?
6. What are the fiscal consequences of RLC increases for other municipal services and investments?
7. How are the costs of increased local education funding distributed among taxpayers and residents within different types of communities?
8. What role does Impact Aid play in financing Alaska’s public education system?
9. How much State Aid is displaced through the recognition of eligible Impact Aid?
10. To what extent do affected districts retain the fiscal benefit of Impact Aid relative to a circumstance in which the federal funding had not been received?
11. Does current treatment of Impact Aid advance or undermine the federal purpose for which the funding is provided?
12. What federal equalization requirements constrain Alaska’s treatment of Impact Aid?
13. How much do municipalities voluntarily contribute above their required contribution?
14. What does the pattern of additional local contribution tell us about local priorities, ability to pay, and differences in fiscal capacity?
15. Does the present structure maintain an appropriate distinction between State responsibility for foundational educational funding and local discretion to fund enhancements?
16. Are there materially different education funding responsibilities between residents of organized municipalities and communities served by REAAs?
17. What alternative State-local funding structures would improve fairness, predictability, transparency, or sustainability?
18. How would those alternatives redistribute costs among the State, municipalities, districts, and taxpayers?

DELIVERABLES
The selected consultant will provide the following.
A. Project Work Plan
Within [10] business days of contract execution, a finalized work plan identifying:
• methodology;
• data requirements;
• proposed case studies;
• interview or engagement plan;
• analytical framework;
• milestones; and
• schedule.

See attached document for full RFP.