Econ 919 — District faces deficit
School districts statewide are feeling the effects of stagnant education funding. For the Kenai Peninsula Borough School District, that’s adding up to a $13.1 million budget deficit.
At a Board of Education on Jan. 9, Vice President Zen Kelly announced the deficit and said the district will need to make up that money before April, when the board signs off on a budget for the next fiscal year.
The deficit is the result of expected costs exceeding funding, as the district gets less money from the state.
“We need the community’s support, and we will be reaching out to the assembly and talking to you all about ways that you can help us fill those gaps and do what we are charged to do, which is educate children on the peninsula,” Kelly said at the meeting.
Each Alaskan school district gets around $5,500 for each enrolled student, called the base student allocation. That is multiplied by the number of students, then multiplied by other factors, like the sizes of schools and relative costs in each community.
The final number from that formula is the total money the district is eligible for. The responsibility for those contributions gets divided between the state and the borough.
“It’s a mix of local funding and state funding, and depending on our taxable value in the borough, the state denotes the portion that the state will give, and what they expect the borough to give us,” Kelly said.
The state recently determined that the Kenai Peninsula Borough is getting more revenue in taxes than last year, and so the proportion of funding the borough should contribute to the district is higher.
This year, the assembly contributed slightly less than the maximum amount they could have — they could have contributed up to $53.5 million, and gave $52.5. Next year, they can contribute up to $54.5 million.
Kelly is pushing the school board to request the full amount possible from the borough, and said the district will also use remaining COVID-19 relief funds to make up the gap. Those funds are one time, and come from the federal government.
“We are gonna be coming to the assembly and borough administration with an ask for full support and maximum funding,” Kelly said.
The board’s chances are looking good. At a forum on Jan. 24, candidates in the special election race for Kenai Peninsula Borough mayor all said they support providing that maximum funding.
On the state side of things, mayoral candidate and former state Senate President Peter Micciche said education is not adequately funded in the state — and that it will be up to the Legislature to make changes.
“We have challenges in this state that they don’t have anywhere else in this country, and in order to deal with them, at the very least, you have to keep up with inflation,” Micciche said at the forum. “We have to have real discussions about what it’s going to cost to adequately fund education.”
The base student allocation hasn’t gone up since 2017. In Juneau this week, students, educators and parents marched on the state capitol to demand an increased allocation.
The state approved a $30 increase to the allocation last year, which will go into effect in fiscal year 2024. But educators like Juneau Superintendent Bridget Weiss say that’s just not enough to keep up with inflation.
“We are meeting increased needs with fewer resources every single day,” Weiss said at the rally. “When does the Legislature get held accountable for putting us in this impossible situation by not fully funding one of the very most vital aspects of our Alaskan communities?”
Kelly said that’s true for the Kenai district, as well, and it’s going to take a lot more than a $30 increase to fix it.
“What we need from the Legislature is some stability in our funding source so that we know we can definitely achieve the results we’re looking to achieve,” he said.
Liz Hayes, the district’s finance director, said in a presentation to the school board she expects the Legislature will do something to support school district funding next year but doesn’t know what form that will take.
She said she’s following a bill that would inflation-proof the student allocation, which would mean a more than $5 million revenue increase for the district.
KTOO’s Katie Anastas contributed reporting.