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Schools get limit, but ...

Borough mayor asks for property tax increase

Posted: Thursday, April 20, 2006


  Monica Frost laughs at children chanting behind her as she pickets for school funding during a rally in front of the Kenai Peninsula Borough building Tuesday night. ┐We don┐t want to lose teachers,┐ Frost, who is a parent of a student at Redoubt Elementary School, said. ┐We want to make sure that funding is there so our kids can get the best education they can and to keep class sizes at least where they are now.┐ Photo by M. Scott Moon

Monica Frost laughs at children chanting behind her as she pickets for school funding during a rally in front of the Kenai Peninsula Borough building Tuesday night. We dont want to lose teachers, Frost, who is a parent of a student at Redoubt Elementary School, said. We want to make sure that funding is there so our kids can get the best education they can and to keep class sizes at least where they are now.

Photo by M. Scott Moon

Mayor John Williams’ administration rolled out its proposed fiscal year 2007 budget Tuesday night that will fund education to the cap, but seeks to raise the property tax mill rate by two-tenths of a percent.

The decision to provide to the Kenai Peninsula Borough School District as much local funding as is allowed by law was not an easy one, and neither was having to increase taxes, Williams said, speaking via telephone from Washington, D.C., where he is meeting with the Alaska delegation. He’s expected back Monday.

“The quality of our schools and the government services we offer are vital to the future growth and quality of life in our borough,” Williams said. The new budget would provide for those things while “maintaining a lean, cost-effective and responsible level of government spending.”

The mayor said he was calling for an increase in the property tax reluctantly.

“But it is the only responsible way to fund full funding for education,” he said. “And even with this modest mill rate increase, the FY2007 budget still relies on a $980,872 draw on our available fund balance.”

A .2-mill tax increase would cost the taxpayers $20 per year for each $100,000 in assessed property value.

While the mayor asked for a mill rate increase from 6.5 mills to 6.7 mills in FY 2007, the budget document itself projects further possible increases in 2008 to 7 mills and in 2009 to 7.5 mills. The mayor has said the increase to 6.7 mills would be rolled back if the Legislature restores sufficient aid to municipalities.

When he took office in December, Williams faced the success of last fall’s Proposition 5 that rolled back a 1-percent increase in the sales tax (which helps fund schools), and a fund balance he said was “in freefall.” Those issues were leaving the borough facing possible insolvency by 2009, he said.

“Since then, my administration has taken immediate and direct action to halt this downward spiral and to stabilize our spending and revenues, and our fund balance, in the short term,” he said, adding that challenges remain.

The new budget proposes reducing spending by an additional $1.9 million below the current year budget, while still funding schools to the cap, he said, even as health care, retirement and insurance costs continue to escalate.

Schools officials and parents applauded the decision to fund schools to the legal limit, continuing a practice of borough government since the cap on local contributions to schools was created.

“I’d like to thank the borough administration for bringing forward a budget that includes funding at the cap,” said Melody Douglas, chief financial officer for the school district. “This was after, I know, much discussion and many meetings.”

The assembly introduced the budget measure, Ordinance 2006-19, which will appropriate funding to schools and all other borough functions, and set it for public hearings in May.

The assembly also ad-dressed and voted 6-3 to pass Resolution 2006-025, which specifically set the level of local funding for operating schools at $36.76 million, a $1.7 million increase over FY2006.

That represents funding “within the cap.” State law also allows local funding “outside the cap” for capital projects and debt service. Thus, the total proposed spending for schools is a little more than $40.1 million.

Not everyone was ready to approve the resolution Tuesday. Assembly member Gary Superman, of Nikiski, argued for waiting until the May 2 meeting.

“We just were handed the budget today. I have not had an opportunity to scrutinize everything that’s in here,” he said. “I would dearly love to fund the district to the limit this year. I’ve always supported it in the past but I honestly don’t know where we are going to come up with ($1.7 million),” he said.

Grace Merkes, of Sterling, and Paul Fischer, of Kasilof, also opposed the resolution.

“Every year we raise the amount of money we fund to the cap and it never seems to be enough,” Merkes said. “This increase is going to force us to raise our mill rate I’m sorry, but I can’t do that this year.”

Fischer wanted to postpone action on the resolution, arguing it would put the borough in a better tactical position when appealing to Juneau for state funding.

Others on the assembly, however, argued it is better to go to Juneau armed with the knowledge that local taxpayers had stepped up and done their part, when demanding that state lawmakers to do the right thing, too.

Assembly member Margaret Gilman, of Kenai, said she had heard from no one who wanted to cut borough spending on schools, and while taxpayers may have to pay more, the group that was bearing the impact of rising costs and falling revenues were the students whose classroom opportunities are shrinking as educational costs rise, she said.

“If you look at every single school in our district and every single assembly district that is represented here, there isn’t one that hasn’t been touched by the cuts to the schools,” she said.

Part of the decline in schools funding is driven by a decline in enrollment. But the combined effect of that, the unfair cost-differential and rapidly rising operational costs is expected to require pink-slipping 63 teachers at the end of the school year unless further aid comes from the state, Douglas said. And that’s with the borough funding to the cap, she said.

Just prior to the meeting, a group of about 20 parents and elementary school students stood along North Binkley Street carrying signs, among them Sheilah-Margaret Pothast, whose children attend Redoubt Elementary.

“We wanted to let them know that we support it,” she said.

Pothast said she understood the financial dilemma facing the borough and appreciated the need to balance the budget.

“We all do. I hope that we don’t cut education anymore, because our classrooms are already losing teachers, and have been over the past couple of years, and from my own experience in our own family, I’ve seen the difference between having 24 students in a kindergarten and 20.”

The resolution effectively establishes a floor for local cap spending. The amount can be changed prior to adoption of the borough’s budget, but only upward. Public hearings on the budget ordinance are set for May 2, when the assembly meets in Seward, and May 16 in Soldotna.


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