Few things are certain about the Kenai Peninsula Borough School District’s budget, but what is clear is that the board of education will approve one for the upcoming fiscal year during its Monday meeting.
Though the board is required to pass a balanced budget, one in which revenues and expenditures meet, the sources of that revenue — the state and the Kenai Peninsula Borough — have yet to clarify absolute funding levels, leaving the school district to approve a budget that will change dramatically when funding sources are solidified.
The budget currently contains a $4.5 million shortfall, or lack of revenue to make up for projected spending.
The district addressed this by pulling more than $2.1 million of health care fund balance and the rest from unassigned fund balance, a type of district savings. In addition, the administration identified about $1.3 million in cuts, including an increase to the student teacher ratio.
That increase in the number of students in each teacher’s classroom resulted in a cut of about 10 teachers across the district, cuts that the board of education already voted to instate — though those cuts could be reversed, said district spokesperson Pegge Erkeneff.
“(The) board can change anything at this point,” Erkeneff wrote in an email. “Thus those reductions and changes are not set in stone, even though they have already been identified and included in the budget as it will be presented.”
Previously, both Erkeneff and assistant superintendent Dave Jones had referred to those cuts as permanent.
It is unlikely that the student teacher ratio would be reduced and those teaching positions will be reinstated as staffing and scheduling has already been determined for the next year, Erkeneff said.
At the state level, funding for schools could be much higher than district administration had anticipated at the outset of the budgetary process — though their budget projection included $1.741 million in “one-time” funding from the state, which it has received for the last three years.
The current budget was built on the assumption that no changes would be made to the Base Student Allocation, or the per-student amount of money given to the district by the state each year.
Instead, Gov. Sean Parnell’s proposed budget included an increase of $85 per student and the House passed a measure Monday that would increase it by $185 for the upcoming fiscal year and $58 for the following two years — resulting in a final base student allocation of $5,981 in 2016. That bill is currently in the Senate Finance Committee.
Also embedded in the bill was an addition $30 million in one-time funding, which Dave Jones, assistant superintendent, said he hoped was in addition to the 25 million in one-time funding that was already included in a state appropriations bill.
“As far as we know, (the $25 million) is still there, but it’s conference-able which means that they could change it when they come together in conference committee to settle this stuff,” Jones said.
With the increase to the student allowance and additional one-time funding, the school district’s budget shortfall could then be completely covered by the Kenai Peninsula Borough.
Currently, the budget is built to include about $43.5 million from the borough but the district could be given an additional $2.5 million by the borough before the funding cap is reached. But the borough, which gives about 68 percent of all borough taxes collected to the district, has yet to decide how much money it will provide.
“There is room between the cap and what they’re currently funding us, yes,” Jones said. “They could (fund higher). Would they? That’s a question for them.”
Borough Mayor Mike Navarre said it was difficult to commit to the district’s budget request early, as the state’s level of funding had not yet been determined.
“The state budget, in both the House and the Senate so far, have increased the amount that they’re putting into education, so it may require something less than what they originally asked us for in terms of our local contribution,” Navarre said.
The borough’s budget will not come out until June, but will introduced to the Borough Assembly at its first meeting in May, Navarre said.
“We’re in the final stages of putting our budget together, but the number for the school district will be one of the last things that we put in because we’re going to wait to see what the legislature does,” he said.
If the state ultimately approves the higher base student allocation and one-time funding, and the borough chose to fund the school district at a high enough level to cover the rest of the projected shortfall — Jones said the board could then talk about cuts that could be reduced.
That discussion will take place at 4 p.m. Monday in the borough building in Soldotna during the board’s budgetary work session, Jones said.
Those work sessions are open to the public, but are not broadcast online as is typical of the board of education meetings.
“The fortunate thing is, if (the state and borough cover the shortfall) we’re not going to have to look at further cuts,” Jones said. “Our recommendation will be that we pass the budget as it exists here and that we use that unassigned fund balance but when the Senate and House pass and come to the end of the session, then we use that additional revenue to reduce the unassigned fund balance spend.”
Reach Rashah McChesney at firstname.lastname@example.org