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Borough and school district at odds in early budget talks


The Kenai Peninsula Borough and school district are starting budget negotiations with a $10 million difference between their proposals.

The borough won’t finalize the budget for the 2022 fiscal year until this summer. But at a work session Tuesday between the borough assembly and school board, the district presented an initial request for $53 million in local contributions.

The borough set a floor of $43 million. That’s how much the borough assembly approved for the district in 2013 and is $7 million less than the district is getting in 2021.

Superintendent John O’Brien said at Tuesday night’s borough assembly meeting that it isn’t enough.

“We’re hoping to get, at the minimum, the $50 million that we received this year," he said. "And even with that, the district will need to make significant cuts to teaching staff, support staff and administrative staff.”

Borough Mayor Charlie Pierce said that’s just a floor. The borough ended up contributing $5 million more than it had proposed at the start of negotiations for FY2021, for example.

“It’s too early to get red in the face and turn the emotional switch on with this decision," he said. "Listen, I didn’t create COVID. Neither did you. We didn’t do this to ourselves.”

The borough cites decreased sales tax revenue as a reason for its low proposal. All sales tax revenue in the borough goes to fund education. It projects FY22 sales tax revenue will be down almost $4 million from FY19. 

Sales tax revenues in FY21 are projected to be even worse. But the borough agreed to fund the district at $50 million anyway, due in part to help from CARES Act funds.

“I want us to raise more sales tax," Pierce said. "Ultimately, what I want is more revenue, more sales tax, and I want a better picture for Alaska. But it’s not going to happen this year. It’s not going to happen next year. I don’t think we’ve hit bottom yet.”

O’Brien said the district will have to make serious cuts if the borough doesn’t change its tune. He says even at the maximum allowable funding, they’re planning on cutting 48 certified staff and 10 support staff.

That’s because most of the district funding comes from the state, which in turn is based on annual student counts. As a result of the pandmeic, fewer students are enrolled in the peninsula’s brick and mortar schools. 

The state is partially offsetting the difference caused by decreased enrollment. But that only helps to an extent.

KPBSD is expecting to receive under $84 million from Alaska in FY22, which is over $3 million less than last year and $8 million less than 2020. 

Assembly member Richard Derkevorkain asked O’Brien why the district was requesting more per child than other districts in Alaska. O’Brien said other districts have other funding mechanisms, like Federal Impact Aid, that help their budgets.

The district will receive $9.88 million in federal CARES money, from the Elementary and Secondary School Emergency Relief Fund. But funding is to be spent over two years and is meant specifically to help schools reopen and address damages from COVID-19.

O’Brien said he doesn’t want to use that money for the general fund, since it won’t get added to the school budget annually.

“We’re really trying to stick with the intent of what the federal government intended with the use of those," he said. "And that’s to help that little third-grade girl who, because she’s been remote learning for quite an amount of time, needs extra help, extra curriculum and an extra intervention teacher to help her catch back up.”

He says using those funds in place of general funds would be a last resort.

For the district's FY22 budget development calendar, click here.

Sabine Poux is the news director at KDLL. Originally from New York, she's lived and reported in Argentina and Vermont, where she fell in love with local news. She covers all things central peninsula but is especially interested in stories related to energy and fishing. She'd love to hear your ideas at
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