The Kenai Peninsula Borough School District is refining a tentative budget based on a worst case scenario: no increase in funding from the state. This week, the Board of Education took another look at that budget, then turned to the Borough Assembly in hopes of receiving a full possible contribution from the borough.
The KPBSD school board’s finance committee met last week and created three budget scenarios: one with no state funding increase and lots of cuts, one that includes a $340 increase to per-student funding, called the Base Student Allocation or BSA, and one that accounts for a $680 BSA increase. That third scenario was vetoed by Gov. Mike Dunleavy last month.
On Monday afternoon, the full board met to discuss those scenarios, and acknowledged that with no information about a legislative boost, they’ll have to work with the first scenario for the time being. But members emphasized that they hope that’s temporary.
“We’re hopeful that this isn’t the budget that’s gonna last,” said Board Vice President Jason Tauriainen. “This is not what we want to have happen, or what we’re expecting to have happen. We’re hopeful that the legislature is going to understand the situation that the districts are in in the state.”
That worst-case budget scenario includes a one-person reduction in the peer-to-teacher ratio across the board except in small elementary schools, and cuts to pool and theater staff, extracurricular travel, curriculum upgrades, transportation, support staff, elementary school counselors, the health care budget; just about every area of the district.
District administrators said with a worse-case scenario established, they can at least start moving ahead on hiring for next year, which has been delayed by fluctuating budget information.
The board also discussed the possibility of dipping into its emergency fund: that’s an option, but risky, because the district is required to make a plan to pay back the funds. Board President Zen Kelly cautioned against that option.
“I would highly recommend that we wait to do that. Wait until we get to a scenario where that becomes necessary,” Kelly said. “I’ll be very protective of that fund balance. I think one, the way the policy is written, it has to be paid back. We have to have a plan in order to reimburse that fund balance…and I just don’t believe we’re at that point right now. I believe the legislature will give us the money.”
That first budget scenario relies on a full possible contribution from the borough. The contribution number is based on assessed property tax value in the borough, and the assembly can provide different amounts of funding within a range. On Tuesday afternoon, school board and district representatives joined the borough assembly for a joint session to ask for the maximum amount, about $58 million.
During the joint session, the assembly asked questions about longer-term budget solutions, like moving the management of pools and theaters to the borough, and potentially consolidating schools. Superintendent Holland also answered questions about the $9 and a half million that federal education officials say the state owes to the Kenai school district. The money stems from the way the state reduced its funding of districts when it received COVID-19 relief funds.
But Holland said the latest word from the state is that officials are negotiating with the feds and don’t believe they distributed money inequitably.
“They are maintaining that they spent it in the appropriate manner, and that the federal government doesn’t have the right to come in and say where it should have been spent,” he said.
Holland said the state told him it’s unlikely any money would come in time to help with the current budget shortfall.
The assembly didn’t make any decision about funding today, but many members said they were sympathetic to the district’s situation.
“I know I will vote for fully funding you guys,” Hibbert said.
The district has until May 1 to get a budget to the borough. The full school board will vote on a budget in a special April 15 meeting.
