Assembly sets base funding for school district at $49.7M

Public education supporters gather for a barbecue in the parking lot behind the George A. Navarre Borough Administration Building before the Kenai Peninsula Borough Assembly’s meeting on Tuesday, May 1, 2018 in Soldotna, Alaska. Teachers, parents and school district administrators turned out in force to ask the assembly to increase funding to the Kenai Peninsula Borough School District on Tuesday. The assembly agreed to at least provide as much funding as it did in fiscal year 2018, but with a deficit in the borough budget, the source of the funding is still unclear. (Photo by Elizabeth Earl/Peninsula Clarion)

The Kenai Peninsula Borough School District will get at least as much funding from the borough in fiscal year 2019 as it did this year.

 

The Kenai Peninsula Borough Assembly agreed to set the minimum local contribution for the school district at $49.7 million for the upcoming fiscal year at its Tuesday meeting, the same amount it budgeted in fiscal year 2018. The assembly could still increase the amount in the final budget, but it now cannot go below that amount as the members debate and amend line items for the next month.

Borough Mayor Charlie Pierce originally set the minimum funding for the school district at approximately $46.7 million, $3 million less than the borough contributed to the school district in fiscal year 2018. Assembly member Kelly Cooper amended the ordinance to boost the amount to $49.7 million.

Every year, the assembly has 30 days after the school district formally requests its funding to approve the base local contribution. That deadline fell Tuesday night this year. Approving the funding before the school year ends allows the school district to move forward with hiring teachers for the coming school year.

“We have deadlines for the (teacher) contracts, we don’t want to wait until the last day for the school period,” she said.

The budget was a battleground throughout the meeting, with education funding at the center of it. The borough’s general fund contribution to education — which includes school debt reimbursement, the local contribution amount, in-kind maintenance contribution and funding for Kenai Peninsula College — regularly consumes about two-thirds of the general fund spending. Last year, the assembly approved a budget increase for education with no new revenue to support it, pushing the borough into an approximately $4 million spending gap and drawing out of the fund balance.

To patch that gap without raising any taxes, Piece proposed cutting some spending in the borough government and withdrawing about $4.5 million out of the borough’s land trust fund to cover the rest and to increase funding for the school district. However, the assembly shot down the plan to use the land trust fund in a 6-3 vote Tuesday night.

In case the assembly chose not to use the land trust, Pierce proposed the $46.7 million for the school district so the borough wouldn’t have to spend out of its fund balance again. To protect its credit rating and emergency funds, among other functions, the borough keeps a $15 million fund balance minimum, which the assembly will brush against if it chooses to rely on the fund balance to level out the budget again.

“I think that part of the intent behind the $3 million below was so that we could have a discussion, the administration and the assembly, in the way of funding and where the money comes from,” he said. “Where the money comes from is very important to me, to the administration. … I would hope that the assembly, members that voted against (the land trust transfer) and the administration can work out a plan to fund education and take care of the general fund obligations that we have as well and not do it in the way of creating more deficit spending.”

Cooper said she disagreed with using the land trust fund because it is a temporary patch that does not fix the problem in the future. She and assembly member Hal Smalley sponsored an ordinance that would ask voters to raise the sales tax rate in the borough from 3 percent to 3.5 percent, bringing in about $5 million annually after the first year, which would go on the ballot this fall.

However, in case it doesn’t pass, she said she plans to amend the ordinance to include a .6 mill rate increase that would then be removed if the sales tax passes in the fall. The assembly can raise the mill rate without voter approval. To allow for extra time, the assembly postponed the sales tax ordinance to the May 15 meeting.

Dozens of people packed the assembly chairs Tuesday night to ask the assembly for more education funding, many of them teachers or parents. Cooper told the audience that they need to help the assembly sell the sales tax increase proposal to the public, as the sales tax is specifically dedicated to school funding.

“You trust me to do my job sitting in this seat and make the tough decisions,” she said. “My tough decision is being made with the one-year mill rate and the sales tax that’s coming at the meeting. And I trust you to help me get there. And everyone that I have spoken to since we started dealing with this deficit and accusing us of kicking it down the road … every single one of you, I can count on you to do that.”

The land trust debate may not be over, though. Assembly member Paul Fischer gave notice of reconsideration, which allows the assembly to consider taking the land trust appropriation up again at the May 15 meeting. Pierce said he hopes the members do, as the assembly’s plan for fixing the budget deficit isn’t clear.

“I’m concerned as to where you’re going to come up with this $3 million again this year,” he said. “If you come up with the $3 million, you’re still going to lay off some teachers. My plan doesn’t lay off any teachers … the real problem I have is there’s no guarantee in October. I want to work with you on a strong plan we can sell in October.”

Some assembly members said they wished the land trust plan had passed but had to support increasing the base funding for the school district because cutting it would require the district to freeze hiring immediately and possibly lay teachers off. Assembly member Kenn Carpenter said he understood the plight the school district was in but they should consider that if the assembly increases school funding without balancing the budget, then borough employees will be the ones to lose jobs.

Assembly President Wayne Ogle said he thought the land trust plan was a good one but that the assembly needed to provide the certainty to the school district of flat funding.

“We cannot have the uncertainty of not having a $3 million flat funding,” he said. “… I think we need to look at where the fund source is. I think there’s always a chance to revisit how we get that money. We would have had certainty if we had passed the other ordinance, but I think we need to provide that tonight.”

Kenai Peninsula Borough School District Superintendent Sean Dusek told the assembly that even with the $49.7 million, the school district will still have to eliminate 11.5 full-time teaching positions across the district. He thanked the assembly for approving the flat funding but would still advocate for increased funding in the future.

“We want to work together and we want to move forward together because we’re all in it together,” he said.

Reach Elizabeth Earl at eearl@peninsulaclarion.com.

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