Like many school districts across Alaska, spikes in energy costs have Unalaska City schools looking at a major budget deficit. In combination with flatlined state funding, enrollment drops and increased teacher salaries, the island’s deficit is predicted to take the shape of around a-half-million dollars.
Superintendent Jim Wilson presented a budget update to the Unalaska school board on Oct. 19 that includes a $535,000 anticipated deficit. This is the biggest deficit he’s seen in his 10 years as the high school principal, and likely one of the largest deficits the district has ever seen, he said.
“Can we sustain a $500,000 deficit? No, we can’t,” Wilson said. “There will need to be some adjustments made to the budget. In most districts, as you lose a significant percentage of your student population, we start to look at everything across the board, from supplies, to staffing, to travel, and try to figure out areas where you can find efficiencies, to be able to have a balanced budget.”
Unalaska City School District officials were anticipating some added costs from salary and wage increases following teacher negotiations, which took place last spring. Those costs are estimated to total about $135,000 and would reflect this year’s 3% raise to teacher salaries, according to Wilson. But the majority of the deficit comes from skyrocketing energy costs, which total around $400,000 and affect nearly all sectors of the budget, from shipping of supplies to student athlete travel, he said.
The original budget, approved this spring, had a roughly $230,000 deficit. With additional, one-time funding from the state, that would have been nearly balanced. But surging expenses for fuel, along with utilities, shipping and travel costs, have now pushed the district back into the red at more than double the original deficit, according to Wilson.
The state has made a small increase in the amount it gives school districts per student. That base student allocation (BSA) fluctuates for each district based on a formula that accounts for schools’ unique costs. But, until recently when state legislators approved an education reform bill, the starting amount for the BSA of just under $6,000 had remained flat since 2017.
That doesn’t completely solve the rural district’s deficit problems, though. And as enrollment continues dropping on the island, as it is seen doing across Alaska, state funding will also follow suit.
The district was already expecting a hit to its state funds due to a drop in enrollment this year — another statewide issue plaguing rural and urban school districts. Officials estimated about 345 students for the school year. That’s a drastic drop from just a few years ago, when Unalaska schools saw a record high enrollment of more than 420 students. The island’s official enrollment count ends Oct. 28, but as of Friday, the student population was at 341.
Still, there is enough money in the school’s fund balance to cover the current deficit, and the district has filled some of its funding gap with federal COVID money, Wilson said.
“The reality is that most COVID funds and a lot of those grants that were one-time funding through the state, they’re gone now this year,” he said. “And so we’re going to have to look at that and try to figure out how to have a sustainable budget.”
Wilson said the budget committee will have to make some serious and long-term decisions about where to make cuts when they meet next year.
Results from the state audit will be returned soon. Those will give a clearer picture of how big the deficit actually is, Wilson said. An official budget revision is expected to be presented at the board’s November meeting.