School district hosts public budget discussions

The Kenai Peninsula Borough School District wants the public to put pressure on the Legislature and the borough assembly to provide additional funding in the upcoming fiscal year.

The school district is working through its fiscal year 2018 budget and looking at another shortfall and use of its fund balance to make ends meet. In a series of public meetings across the peninsula this week and next week, administrators are trying to gather public input on the FY18 general fund budget and to send a message asking people to tell local and state legislators to put more money into education.

Of the $137.3 million preliminary proposed budget, about 64 percent comes from the state, 35 percent from the borough and about 1 percent from other sources, such as investment income and rent. Most of the state’s portion is based on enrollment through the Base Student Allocation, which currently provides $5,930 per student, and the rest comes in pension liability payments and the Quality Schools program payments. Of the borough’s $48.2 million contribution, about $37.5 million is a cash allocation, and about $10.6 million is in-kind services like building maintenance.

The $137.3 million projection is if neither the state nor borough’s contributions change, said district Assistant Superintendent Dave Jones at a Feb. 15 meeting at Soldotna High School’s library.

“Unfortunately for us, the status quo, we’re in a $3,452,000 deficit situation,” he said. “That shouldn’t surprise a lot of people, because for the last four or five years, we’ve been running deficit budgets, we’ve been using that fund balance … and when you have a deficit in the previous year, it carries over to the next year.”

With the state in a deep fiscal crunch, the Legislature is looking at reducing the amount of the base student allocation as well as reducing pension liability payments to help bridge the yawning $3 billion fiscal gap. One of the options they’re considering is to reduce the base student allocation by a percentage, possibly between 1 percent and 5 percent, Jones said.

A 1 percent cut would translate to a more than $1 million reduction for the school district, and 5 percent would be more than $5.2 million, Jones said. No decisions have been made yet, but the difference would ricochet into the borough’s funding. The borough is allowed to contribute up to a certain amount of the school district’s funding, called the cap. For the past two years, the assembly has voted to fund the school district under the cap, which currently sits at $51.2 million. If the state reduces the base student allocation amount by 1 percent, the cap will drop slightly, to $51 million. If it reduces it by 5 percent, the cap will drop to $50 million, according to the school district’s financial projections.

The borough administration is currently in the early stages of its own budget processes, with service areas and departments preparing their budgets before a preliminary budget goes to the assembly around April or May. The school district has to finish its budget by then to send it to the assembly. The Legislature, which plays a critical role in determining education funding, does not finish its session until April 16, and may extend into additional 30-day special sessions as it did in 2016.

“The borough is also watching Juneau to see what happens,” Jones said.

The Kenai Peninsula Borough School District’s Board of Education has been steadily reducing the budget of the past several years, bringing it down by about $8.5 million since FY 2015, Jones said. At this point, all the easy cuts have been made — now, the board is considering other measures, including increasing pupil-teacher ratios, reducing staffing levels and cutting custodial work.

The biggest cost to the district is personnel, with the average full-time teacher costing the district about $100,000 between salary and benefits, Jones said. The board is looking at cutting approximately $2.4 million in administrative expenses, which may include items like five full-time unallocated teaching positions for class size adjustment, who are teachers in case a school has more students than expected.

“What we’ve decided is that if we need to cut money, (the unallocated teacher positions) that aren’t what I call faces,” Jones said. “Those aren’t real, live people, so at this point in time I’d rather cut five of those that limits our ability in the fall and may affect us in the fall, but that’s a half million dollars by reducing those five unallocated that we won’t have to say, ‘Okay, real teachers or real support staff in the classroom, we’re going to reduce you.’”

Site councils and school staff have weighed in as well. Some of the suggestions are more long-range, such as asking the borough to take over administration of the school district’s pools and theaters or converting to a four-day school week, and some are more immediate, such as asking the teachers and students to do some of the cleaning. The district administrators are considering them, but it may not entirely bridge the gap, said Superintendent Sean Dusek at the meeting. He said the school district administrators were working on conversations with legislators about the budget and encouraged the public to do so as well.

“We’ve seen reductions now over the last four or five years, and we are getting to the point where now it’s going to become programs,” he said. “… There’s never a bad time to talk with our local leaders.”

Though the state doesn’t have any more funding to give, Jones laid out a case for the borough to fund to the cap this year to those who attended the meeting. The borough’s property tax value has increased in the past year, and with a 4.5 mill property tax, there are approximately $4 million more in funds this year than last year, Jones said. That would be enough to cover the school district’s deficit spending with some left over, he said.

Kenai Peninsula Borough Mayor Mike Navarre last year expressed concern about funding the school district to the cap, given that the borough may have to take on additional fiscal responsibility from the state as the state reduces its support for pensions and other public services. After some debate, the assembly decided not to increase the allocation to the cap.

The Board of Education will see an updated district budget at its meeting March 6.

Reach Elizabeth Earl at