School district: More money needed

Posted: Thursday, June 09, 2005

While state funding will help keep the Kenai Peninsula Borough School District afloat, district officials will be kicking to keep their heads above water.

Though state education will get an additional $70 million, compliments of the Legislature, $38 million of that will go toward retirement costs while $24 million will be used to cover fuel and other cost increases. This year's operating budget increases per student spending from $4,576 to $4,919. The school board was hoping for a per student allocation of $4,995. Board president Sammy Crawford said, though this year's allocation is not the increase they were hoping for, the board will make it work.

Superintendent Donna Peterson said she is grateful for the funds allocated from the Legislature, but more is needed.

"Our delegation was eloquent at stating our case, but the inequity problem has not been fixed," Peterson said.

In order to find how to better fund various school districts around the state, House Finance Co-Chair Mike Chenault, R-Nikiski, who also is a member of the Budget and Audit Committee, is putting together a legislative task force to investigate the issue.

Chenault said the task force will review area cost differential numbers and could conceivably include other representatives from each region of the state. The group will be compiled exclusively of lawmakers.

"I want to have this put together by the middle or end of July," he said. "The only way we can get this together is to agree on the numbers. We'll look at fuel costs, a flaw from the ISER report."

The University of Alaska's Institute of Social and Economic Research report, released Jan. 31, says the state must cover the cost of fuel costs for school districts rather than using a formula that would apply to all school districts. It also states that the state should pay teachers more in rural schools to lessen turnover.

The ISER study was done to provide a geographic cost of education index that the state could use to help equalize the purchasing power of education dollars it allocates to school districts across Alaska.

The Alaska Legislature commissioned a different study of equitable school funding with Senate Bill 36 that created the foundation funding formula in 1997. The bill addressed the cost of educating children in different regions of Alaska and created a funding mechanism called the area cost differential. While the intent of SB 36 was to review the effects and make adjustments to it every two years, none have been made since its inception.

"My heartache is that SB 36 was supposed to come back and look at the formula in two years, and it became seven years," Chenault said. "This business about different studies, we can do our own and blow them out of the water. Let's do our own and get it together. We need to be reading off the same music."

Chenault's goal for the task force is to finally come to an agreement on the numbers.

"There are (people) who come from districts like I do who can argue how much of a shortage there is. Nobody can justify that it costs the same to operate the schools for the same cost of operating them in Anchorage. We have schools you can't drive to," Chenault said. "If the price of fuel goes up a dollar and the district uses 100,000 gallons of fuel, then that's $100,000 we will fund. It's real simple," Chenault said.

The ISER study, as well as past cost differential studies, found the Kenai Peninsula to be underfunded, especially in energy costs. Kenai Peninsula school board member Marty Anderson said the area cost differential study has shown four times in 20 years that the district is asked to do more with less.

Chief Financial Officer Melody Douglas said the district has been forced to make budget cuts in recent years due to the inadequate funding. This year's allocation will help lower class size. Douglas said that, though the district will be operating in the black, it will still need to pull an unknown amount of money from the fund balance.

Borough funding before the $4,919 per student allocation from the state is just more than $35 million. Douglas said that, with the state adjustment, the school district will request a borough adjustment, as well, which could be around $160,000 more.

Even with the adjustments creeping upwards, Douglas said the school district may have to dip into the fund balance, the money left over in last year's budget.

"You want to be careful and prudent in using the fund balance. Generally, it should be used for a one-time only, nonrecurring expenditure," Douglas said. "Those funds may be used for a future software purchase for the district, and must be allocated by the school board."

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