Schools play big role in economy

Posted: Wednesday, February 25, 2004

The primary responsibility of schools may be education, but like it or not, they also are businesses.

According to Jack Brown, the Kenai Peninsula Borough's business development manager, schools play a major role in the identity of a community and in that community's economy.

"School systems are reflections of the economy," Brown said. "The better off the school systems are, the better economies are."

For example, he said, the Kenai Peninsula Borough School District is the single largest employer in the Kenai Peninsula Borough.

"They are about 7 percent of the work force," he said. "They're very significant in terms of the economy, in that regard."

The hundreds of positions with the school district are good jobs, too, said Jeanne Camp, an economic analyst for the borough.

"While they're not all professionals, most of them are better than average jobs, as far as wage per hour or per month," she said.

That means when the school district falls on hard times as it has in recent years the economy can suffer, as well.

But schools can play an even larger role in the area economy, Brown said.

"One of the determining factors any business looks at when deciding where to locate is quality schools," he said.

"We field a lot of questions here regarding schools from the perspective of businesses locating here."

That is good news for the economy, he said.

"I tell them we have great schools, and we do," Brown said.

Melody Douglas, the district's chief financial officer, also noted that many individual families research schools to decide where to live, and families moving to the area mean more real estate, housing and consumer goods sold locally. It also means more visitors to the area, she said.

While the economy may depend, in part, on the quality of area schools, the schools themselves also depend on the economy.

School district budgets are funded by state and local governments, meaning the tax base in the area directly impacts the resources the district has to work with.

In Alaska, where oil revenue has been steadily declining, the government is working to control state spending, and that may mean less money for education.

Furthermore, Brown said, the state's formula for funding education may be flawed. In part, state funding depends on the area cost differential a formula that determines funding levels based on the cost of doing business in different geographical areas.

Brown said he believes the formula which deems the peninsula almost as urban as Anchorage shortchanges the district.

Camp explained that the district is the second largest, geographically, in Alaska, and one of the largest in the nation. In addition, she said, the district employs almost three times as many teachers as the average district in the state or country.

"We're a large school district in a large area," she said.

"That means we have more financial needs," Brown added. "The challenges that we've faced for years and that's becoming more critical now is that the state needs to adjust the state formula to accommodate our geographical challenges."

Another issue for the school district is that the money the government gives to schools comes on a per-student basis. When the economy suffers, families may choose to leave the area, decreasing school enrollment and budgets.

That may be one of the reasons the Kenai Peninsula Borough School District has had some budget problems in the past several years. Enrollment has been declining steadily since the mid-1990s and the trend is expected to continue.

"It's a cyclical thing that happens in communities that have grown, and we have grown," Brown said. "We're continuing to grow in terms of the overall population, but we're getting an older population."

That's both good and bad for the area, he said.

At present, the older population means fewer children going to area schools. But, he repeated, it's a cycle.

"That means new industries in health care, and that will create more jobs," he said.

And, Camp added, because older populations tend to have more money, the aging population may mean more service industry jobs for the area as well, bringing more young families with children to the area.

Overall, Brown said he is optimistic about the future for the peninsula economy and schools.

"We have some challenges, obviously. But from my perspective, we have great teachers and great students. We have great schools," he said.

And, he added, there have been positive announcements for the economy as a whole in the past month, especially in the oil and gas industry.

Whatever happens in the future, though, education and economics can't be considered separate issues. They will rise and fall together, he said.

"They're dependent on each other," Brown said.

"A healthy economy is dependent on healthy schools and the other way around."

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