Deep Frying Funnel Cakes
You need to change out the milk for buttermilk OR the baking powder for baking soda. Either of which will improve will improve the ability of the batter to form air pockets, thus becoming more buoyant, once in contact with the oil, thereby causing the cake to rise to the surface. 

You would probably also get better results by removing the baskets altogether and using a spider to scoop the finished funnel cakes out of the oil. This should stop the problem of the batter clinging to the submerged baskets.