Kenai Peninsula Borough School District staff and board members painted a bleak picture of the district’s financial future Monday. The district faces a $17 million budget deficit and says painful cuts are in store without changes to how the state pays for K-12 education.
Superintendent Clayton Holland says the deficit is exacerbated by uncertainty around how much money the district will get from the state.
“These are drastic times,” he said. “I mean, what we’re looking at for reductions is serious. And we have no idea, once again, where we are with a future budget from our state.”
The district is $17 million short of what it needs to operate the district next year at the same level of service it did this year. It’s faced budget deficits before – $13 million for each of the last two years. But unlike previous years, the district can’t make up the difference with its savings account or leftover COVID-19 pandemic relief money.
Holland says the worst is yet to come.
“This makes last year look easy,” he said. “And last year was terrible.”
For the district, this situation was the inevitable conclusion to last year’s legislative session. Peninsula educators joined districts around the state in aggressively lobbying for financial relief. They wanted an increase to the base amount of money districts get per student. That amount has stayed mostly flat for seven years. And districts say that means they have to do more with less.
Holland says the threat is existential.
“How long can Alaska go on like this, is my question to you,” he said.
Closing school pools and theaters, increasing class sizes and even lowering school thermostats are some of the ways the district is considering cutting costs. The proposals have galvanized students, parents and employees around the district.
It looked like lawmakers had answered the district’s call last session. They passed a bipartisan education package that included an $800 bump to that base amount of money per student. The same bill would have created a statewide charter school coordinator and funded state-mandated reading intervention programs.
But then it was vetoed. Gov. Mike Dunleavy said it lacked his own education priorities and sent the Legislature back to the drawing board. Lawmakers came one vote short of overturning the veto.
School board president Zen Kelly says the district cannot afford to wait as long as last year for state money to come through.
“I’m also hopeful that the legislature comes out the gate with something, because time is not our friend on this,” he said. “We need to make these decisions sooner than later.”
Like last year, Kelly says the district will probably put together three different budgets around different funding scenarios. The district’s finance department is prepping for budget town halls scheduled around the peninsula next month. And they’re reviving software that gamifies the budget process by letting users toggle cuts until they make up the deficit.
Board member Virginia Morgan played around with a beta version of the software Monday. After applying every cut possible, she still came up almost $90,000 short.
“This is just – it’s maddening that we are still in this situation,” she said. “Seventeen million is a crazy number for us to have to cut.”
The 34th Alaska Legislature doesn’t gavel in until next week. But school board members like Homer’s Tim Daugharty are already readying for advocacy in Juneau.
“We’re going to be positive with our legislators and the interactions we have there,” he said. “But we have to fight for the biggest resource that we have left in our state, and that’s the kids that are there.”
The district’s circuit of budget town halls kicks off Feb. 11 in Homer. Monday’s meetings and budget documents are available on the district’s BoardDocs website.
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