The school board approved a budget for the Kenai Peninsula Borough School District's 2004 fiscal year Monday night, but despite months of work on the document, there were no sighs of relief or celebrations.
That's because the district expects to have to bring several major revisions back to the board in coming months.
The district's chief financial officer, Melody Douglas, said the approved budget is a "fluid document," and revisions are common.
School board member Dr. Nels Anderson went even further, though, calling the approved document a "sham budget."
It's not that the district hasn't done its best to complete the budget, he said. The problem is that the district cannot predict state funding until after the Legislature finishes its budget.
Here's the situation:
The district is required by state law to present a balanced budget to the borough assembly by May 1. The assembly then has 30 days to approve the document.
About 70 percent of the district's general fund income, however, comes from the state, which is in the process of debating education funding levels for the coming year. That funding is based on student enrollment, which is dropping rapidly districtwide.
District finance officers planned conservatively. The preliminary budget eliminated all programs funded by state Learning Oppor-tunity Grants, which are granted on a year-by-year basis. It also assumed that the state would not increase funding for education. Recognizing the dropping enrollment, the district also increased the pupil-teacher ratio throughout the district, laying off 56 teachers and saving about $2.3 million.
Even with such planning, the preliminary budget for the 2003-04 school year was about $2.9 million short. Though the district hopes the state will come through with additional funding, administrators, school board representatives and members of the public have spent months discussion where additional cuts could be made.
In the meantime, the district learned that its property and liability insurance, as well as employee retirement costs, are likely to increase dramatically in the coming year as well.
To reconcile the shortfall and the expected expense increases, the district proposed a list of adjustments to force the budget to balance for the May 1 deadline. The adjustments include:
Budgeting for a $302,941 increase in insurance expenses;
Cutting math and foreign language curriculum adoption funds, saving $624,356;
Reducing central office staff, saving $257,177;
Changing the custodial staffing formula (which means cutting custodians), saving $459,064;
Eliminating co-curricular travel, saving $244,873;
Eliminating unallocated funds, saving $400,000; and
Cutting the supply budget in half, saving $1,236,724.
The adjustments, however, are not realistic, district administrators said. For example, the district simply cannot function without basic supplies, they said.
Douglas explained that some of the cuts are "place holders," meaning they reflect number crunching in the easiest places. If the district receives the funding it is hoping for from the Legislature, the supply budget and unallocated funds simply will be reinstated. If the district doesn't get any additional funds from the Legislature, the cuts probably will end up coming in more significant places, like in staff or extracurricular activities.
But because the district won't know if such cuts are absolutely necessary until the Legislature finishes the state budget, administrators didn't want to prematurely fire teachers or anger the community with extracurricular cuts.
"It's hard to play the what-if game," Douglas said. But, she added, she believes the district will get at least some of the money it needs from the state.
Some school board members aren't so sure.
"I'm not even close to convinced we're going to get any money," said school board member Al Poindexter.
He said he is concerned that the "place holder" budget gives the community a false sense of security about the state of education funding in the district.
Board member Deborah Germano agreed.
"I think we're doing a real disservice to the public by rolling the dice and thinking the Legislature is going to do something for us," she said. "If they don't, we have big problems."
Board president Joe Arness, however, said he believes the district is doing the best it can with incomplete information.
"We can talk about presenting an unrealistic picture, but I think we're taking a shot at the best guess we can," he said.
The board voted 5-2 in favor of approving the temporary budget. Poindexter and Margaret Gilman voted against approval.
"I appreciate the tremendous amount of work that's going into this," Gilman said. But, she said she could not accept a budget that essentially threatens to cut more teachers.
Poindexter said he couldn't approve the budget because it doesn't have realistic numbers.
"If we don't get more funding, we're going to come back and change everything. Different things will be cut," he said. "I think it would be a bit of an injustice to come back after school's out then eliminate extracurricular programs or other things."
Those who voted to approve the budget share many of Gilman and Poindexter's concerns.
"I still really believe we're doing a disservice to the community by adopting a budget in hopes of something happening in the Legislature," Germano said. "It's a roll of the dice, and I hope things will go the way want, but if it doesn't, June, July and August are going to be ugly months."
"It's a sham budget," Anderson said. "I don't think anybody should have the illusion that there are not going to be more cuts."
"We will be revisiting this," added Germano.
Douglas said she plans to bring a comprehensive budget revision before the board in June, after the Legislature has completed its work.
In the meantime, board members said there still is time for community members to contact their legislators in support of better funding for schools.
"All 60 legislators and the governor campaigned on making education a priority," said school board member Sammy Crawford. "I hope we remember that when we go back to the polls."
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