Tuesday, the Kenai Peninsula Borough Assembly unanimously approved the school district's budget request. But the education budget is anything but simple, and it gets more difficult every year.
Before voting without comment on spending about $30 million on the public schools, assembly members got a new angle on the budget problems from Borough Finance Director Jeff Sinz.
Although the assembly supports more funding for area schools, all parties worry about where the process will lead over the next several years.
"This year the school district budgetary situation is the tightest I've ever seen," Sinz said. "I felt it was essential the borough assembly understand the process."
State law caps how much money boroughs can spend on education, but some school-related functions fall into gray areas under current law. The peninsula borough has spent as much money as it is allowed on schools and, starting with the 1997-98 school year, has pitched in targeted financial assistance beyond the cap twice. Next year it will do so again.
"I think there are concerns about providing more funding outside the cap," said assembly President Bill Popp.
"We just stepped up to the plate with $700,000 for technology. Now we're looking at extracurricular activities."
Sinz said he wanted to clarify what the school district administrators mean when they talk about school funding cuts.
Meeting in committee to discuss the budget, he gave assembly members a memorandum analyzing the proposed school district budget for the 2000-01 school year.
"There are people who misunderstand the school budget presentation," he said. "The assembly doesn't necessarily understand."
Sinz cited the district's efforts to trim $2.75 million to balance next year's books. The actual decrease from the current year's operating budget is $500,000.
"The need to cut $2.75 million in existing programs is instead being driven by the school district's decision to add a similar amount in funding for new programs," he wrote to the assembly.
When the school budget committee plans for the next year's expenditures, it takes as its starting point not the current year's budget but an extrapolated version including contracted salary increases, school needs and programs prioritized by the school board, he said.
"They build a hypothetical budget," he said. "What inevitably happens is the proposed budget is higher than the available revenue."
That approach, he wrote, " ... may have overstated the extent of the problem, at least as it will impact fiscal year 2001."
The school budget total for 2000-01 is $86 million, of which $73.1 million is in the general fund. The difference comes from funds dedicated to specific purposes like lunches and transportation.
The state pays most of the general fund revenue, but the borough contributes a growing share. For next year, the borough will spend about $5 million for school building repairs and debt service in addition to the $30 million designated by law as the "local funding."
The Tuesday vote was on the borough's "intent" to appropriate that money. The final vote on the borough budget is scheduled for June 6.
Sinz made sure that assembly members understood that the district opted to rearrange funding among its programs. In some cases it chose to pursue new projects, such as the growing Connections cyber school, at the expense of older ones.
"It does involve a value judgment process," he said. "Tradeoffs have been made."
He stressed that his remarks are not intended to criticize the school district or the way it budgets its money.
"It is not to suggest the budget be any different, only that it be interpreted correctly," Sinz said. "I think they are on the right track. I think they are doing a great job."
Patrick Hickey, the assistant superintendent who handles the district's finances, described Sinz's comments as helpful.
Hickey met with assembly members and answered questions about new programs and spending cuts. He praised the borough's long-term support for education on the peninsula and the positive working relationship between the borough and its schools.
"I think now the borough assembly has a much clearer picture thanks to Mr. Sinz's memo," he said.
School and borough officials already are meeting to discuss ways to improve the district's efficiencies and prepare for even more severe cutbacks predicted for the next several years.
"We don't think it's going to get any better next year," Hickey said. "Let's move on."
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