Representatives from the Kenai Peninsula Borough School District met with the Borough Assembly Finance Committee on Tuesday in the Betty Glick Assembly Chambers to answer questions regarding the board’s recently prepared trio of FY25 budget proposals. The Assembly’s questions mainly centered on fleshed-out explanations for each budget option, line-item budget reductions, and the ambiguous $9.7 million owed to the district by the Alaska Department of Education and Early Development.
The three budget options currently in a holding pattern represent the various education funding that may or may not be coming from the state depending on yet-to-be-taken legislative action in Juneau. The first option assumes Juneau offers no increase to the base student allocation (BSA); the second assumes a $340 increase; the third assumes a $680 increase.
When asked about the purpose of including a zero-increase option, School Board president Zen Kelly said it was, among other things, a stark reminder of the exact nature of the barrel the district is currently staring down.
“We don’t have the savings account to make it up. The budget shortfall is too great that there’s no way for us to cover that if it doesn’t come through,” said Kelly. “Right now, as it stands, this is all we can truly depend on, and this is what it looks like. So it actually tells a story to the public of what no additional funding within the BSA or one-time funding the effects that it has on our district. And I think that’s an important story to tell.”
In order to bridge its now $16 million gap, the district is emptying its spendable savings fund–about $5.8 million–but will still need help from the Borough to cover the remaining shortfall; the district is seeking full funding from the borough (hence Tuesday’s probe). The Borough is required to provide the district funding; however, the amount provided is dependent on a formula in state law that calculates minimum and maximum contributions. In this case, the Borough could give as little as $33 million or as much as $58 million.
Needless to say, the deficit puts both sides in something of a Chinese finger trap; they will need to push and pull on one another, and the solution most likely lies somewhere in between.
This is the same tug-of-war currently being hashed out in Juneau. In March, the legislature passed a bill that included a $680 increase, a bill that was promptly vetoed by Governor Mike Dunleavy, who believes the problem is not with the availability of funds but the way they’re being spent. The legislature then failed to override the veto.
The hope on the peninsula is that a more compromised approach might be taken, as it seems the most necessary.
Borough Mayor Peter Micciche shared a similar sentiment during the meeting. “Running the business of education is significantly more expensive than it was seven years ago,” he said. “There’s three kinds of people: The way they look at education, there’s kind of people that say give them all the money they ever want and everything will be better. There’s the kind that say, starve them out, and somehow they magically get better. And there’s all the reasonable people in the middle. Let’s say the thief in the night called inflation is a real thing, and we need to account for it. We haven’t.”
Mayor Micciche also bluntly prognosticated the reality of what to expect from Juneau this year and in the years to come. “We’re gonna be in this same place every year or two. So, in that team sport philosophy, folks need to think about what they can settle for and what’s manageable. Because both sides have to get something. They just how it works.”
Ultimately, the Board of Education must sort out a resolute option this month in order to present the Borough with a balanced budget by its May 1 deadline.
