The Legislature's $82 million increase to state education funding could add about $7 million to the Kenai Peninsula Borough School District's cash-strapped 2004-05 budget.
The Legislature on Tuesday -- the final day of its session -- approved an increase to the state education funding formula that adds about $400 to the per-student base, upping it from $4,169 to $4,576.
The state budget still has to be approved by Gov. Frank Murkowski, who has 20 days from Tuesday (not including Sundays) to sign or veto it. Though he has expressed disappointment that the Legislature did not find a solution to the state's fiscal gap, Murkowski has said he will support the education funding package.
Melody Douglas, the KPBSD chief financial officer, said the district will move forward based on that statement.
"The governor has indicated that he has supported this funding," she said. "He actually stated in his press conference that he will sign the bill. I expect that he is a man of his word and will do so."
Douglas said the increase should mean about $5.7 million in additional state funds for the district and another $1.3 million from local funding, provided the borough continues funding the school district at the maximum amount allowed by law.
That's based on budget figures already approved by the school board for the coming year, though Douglas warned some changes still might be necessary.
"That revenue number is based on our enrollment projection, which the board approved earlier this year," Douglas said. "But it looks like they may not meet that projection. Some areas of the district are coming up and other areas are not."
Fewer students means less in the per-pupil funding formula for the district. Nonetheless, Douglas said the additional money will help the district deal with some of the extreme cuts it was forced to make to pass a balanced budget earlier this spring by the state's deadline.
One of the most high-profile cuts was the $1.3 million cocurricular activities program, which includes sports, as well as a number of other academic-based activities for the district's 9,000 students.
Cocurricular programs will be among nearly a dozen possible "add-backs" the school board is expected to consider at its next meeting June 7.
"The administration will be making recommendations on implementing increased funding," Douglas said.
Though the board has spent work sessions during the last several meeting days discussing its priorities for add-backs should additional money come through, just what board members will choose to do with the $7 million remains to be seen.
Many have said cocurricular programs are one of the highest priorities for the coming year, but other concerns on the table include the pupil-teacher ratio and associated class sizes, the Quest program for talented and gifted students, supply budgets that have taken hits for nearly a decade and the rapidly growing employer contribution rates for the Public Employees' Retirement System and Teachers' Retirement System.
Regardless of what the board opts to do with the money, the district likely will have to consider similar cuts again next year. Based on preliminary revenue and expenditure estimates Douglas presented to the board in April, even with a continuation of this year's funding increase, the district can expect another $6 million deficit for the 2005-06 budget cycle. At this rate, without significant changes to either the district's enrollment or business practices or the state's funding formula, the deficit could be as high as $18 million by 2010.
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