The Juneau School District is facing a $9.5 million deficit in its operating fund as it begins work on next year’s budget, City Manager Katie Koester told the Assembly on Monday night. District leaders will have to address the deficit by the end of June.
The city consistently contributes as much money as it can to the school district’s operating fund. But at an Assembly meeting Monday night, Mayor Beth Weldon said that their options for helping with the deficit are limited.
“We have to look as an Assembly at how we can help them,” Weldon said. “But unfortunately, because we fund to the cap, our hands are pretty well tied. If you have creative ideas, I’m sure they want to hear it.”
Nearly $2 million of the deficit carried over from the last fiscal year, and $7.5 million comes from the current year.
The district has temporarily hired Lisa Pearce, a school finance consultant who previously worked as the Fairbanks North Star Borough School District’s chief financial officer, for budget development. She’s taken over for Cassee Olin, the district’s director of administrative services who resigned last month.
According to a report the district provided to city leaders on Friday, staff salaries and health benefits were “significantly under budgeted” this year. That makes up more than $5 million of this year’s deficit.
Employer contributions to staff retirement plans were also under budgeted, according to the report. Lower-than-expected enrollment has also contributed to the deficit because state funding is based on the number of students in a district.
In an interview after the meeting, Koester said the Assembly could consider moving some expenses from the district’s budget to the city’s.
“That doesn’t mean that the Assembly will, and that doesn’t mean that the school district will want to have those conversations, but I think that’s the kind of creative thinking the mayor was talking about,” Koester said.
Questions about state funding will also loom over this year’s budget process. Gov. Mike Dunleavy’s proposed state budget does not include a permanent increase to per-student funding, nor does it extend the one-time education funding passed last year.
District leaders were set to discuss the updated budget during a Jan. 9 school board meeting.
KTOO’s Clarise Larson contributed reporting.
