Awaiting state funding, board of ed works to bring back staff positions

Alaska lawmakers this session passed a budget bill that includes $175 million in one-time funding for Alaska’s K-12 schools

The Kenai Peninsula Borough School District is starting the process of bringing back some of the staffing cuts it implemented to balance its budget for the upcoming fiscal year, citing new money it expects to receive from the State of Alaska.

The board of education on Monday directed the district to bring back personnel positions it opted earlier this year to cut, such as pool managers and theater technicians, while it waits for Gov. Mike Dunleavy to sign a version of the state’s operating budget. Alaska lawmakers this session passed a budget bill that includes $175 million in one-time funding for Alaska’s K-12 schools.

KPBSD Finance Director Liz Hayes told the board’s finance committee on Monday that the one-time increase, as approved by lawmakers, would increase funding for KPBSD by about $11.7 million.

The budget document, however, has not yet been transmitted to Gov. Mike Dunleavy, who has the power to veto some or all of the document. Board members said Monday that they’re optimistic Dunleavy will approve some one-time funding for education, but were skeptical that he’ll approve the $175 million amount as-is.

“We think we’re gonna get a healthy, one-time funding amount which, as you know, that only is for one year, but we don’t think we’re going to get the entire amount,” Hayes told members of the finance committee Monday.

Heading into the current budget cycle, the school district was facing a budget deficit of about $13.1 million. The district is required to submit a balanced budget to the Kenai Peninsula Borough for approval, and so implemented a variety of adjustments to bring the document into compliance.

Following approval by board members, KPBSD used its remaining $6.4 million in federal COVID-19 relief funds, took about $820,000 in savings and implemented roughly $3.6 million in budget cuts to make up the deficit. The district also asked for — and received — full funding from the Kenai Peninsula Borough, which made available another $2.2 million to the district.

The cuts included about $3.4 million in staffing cuts, including pool managers, theater technicians and student success liaisons, which drew swift and passionate backlash from the community.

The school district all session has lobbied the Alaska Legislature for an increase to the base student allocation, or the amount of money school districts receive from the state per student. An increase to that amount, which hasn’t changed since fiscal year 2017, would catch up districts to inflation and allow districts to better plan for future fiscal years, KPBSD has said.

Even so, board members made clear that bringing back staff positions currently on the cut list is a priority.

If Dunleavy vetoes all $175 million, Hayes said the district will have enough money to cover the salaries of the positions previously cut, but it would use all of the district’s savings money.

“We would have enough in fund balance and the committed fund balance that the board has control over, but it would pretty much wipe us out,” she said.

Finance committee member Jason Tauriainen said he supports bringing the cut positions back because the district could afford to pay for salaries even if Dunleavy vetoes all of the K-12 education money in the budget — which he thinks is “a highly unlikely scenario.”

“I personally am comfortable giving direction, with the fact that we have those emergency funds available to cover it if we had to, to recommend that these personnel action plans go out immediately,” Tauriainen said.

Finance Committee Chair Zen Kelly said he agrees that the district should issue personnel action forms to the staff it is planning to bring back with state money. Once Dunleavy signs off on funding, KPBSD can update its budget to bring positions back.

Dunleavy has 20 days to make changes to the budget document after he receives it. If the budget is transmitted to his office before June 10, that means the district would know by the end of June — also the end of fiscal year 2023 — how much money it will have to bring positions back.

“In preparing for this big waiting game of waiting for the transmittal to the governor for the governor to make his final decision, we will then have time in July to make a budget revision to account for all this, but we’re able to kind of be on the hook for this,” Kelly said.

Kelly further said, however, that the board should hold off on making plans for any money the district may have leftover once it brings back positions it cut to save money, such as the non-staff cuts made during the current budget cycle.

Looking ahead, Hayes said finance committee members should also keep in mind that, if the district maintains the status quo when it comes to funding, it will start next year’s budget process with another $13 million deficit on top of heading into contract negotiations with its two staff unions.

Monday’s board of education meetings will be available to stream on the district’s Board Docs webpage.

Reach reporter Ashlyn O’Hara at