District asks for funding changes

Posted: Thursday, October 14, 2010

The school district is proposing to potentially end a long-standing tradition of asking the borough to fund it to the "cap" in favor of a formula that would be based on local revenues instead.

The approach would be the first of its kind by a school district in the state and was floated Tuesday at a Kenai Peninsula Borough School District Board of Education and Borough Assembly joint work session held at the Borough Administration Building in Soldotna.

The district is proposing to base its local funding, which typically accounts for about one third of the total budget, on a formula that would include the prior fiscal year's sales tax revenue plus a to-be-determined number of mills of borough property tax revenue.

Additionally, District Superintendent Steve Atwater suggested that the district would make its local funding request to the assembly in December, three months earlier than it has in the past.

In January the assembly would set the minimum amount it would provide, and could then make adjustments from there if warranted.

As explained by Atwater, the KPBSD has historically built its budget on the assumption that the borough would fund it to the cap, the maximum amount allowed under state law.

Over the last two years, however, the borough assembly has been more hesitant to do so, citing a rising cap figure juxtaposed by falling local revenue.

The result was what Atwater called "hurried" and "emotional" budget discussions between the two bodies in late May and June when deadlines are near.

Atwater acknowledged that the cap also has no relation to the local economy.

"The cap isn't tied to anything here," he said.

When asked about the proposal, Borough Finance Director Craig Chapman pointed out several flaws he saw, chiefly with the timetable the district had laid out and the points at which revenue figures are actually available.

Additionally he noted that the formula could work right now, but might not work in the future.

"It works fine and dandy until there's a change," Chapman said, citing the 2008 voter-approved seasonal food-tax holiday that has cut down on borough revenues.

Assembly members gave the general idea their nod, but said they wanted to see the specifics of both the formula and time frame worked out further and asked for a follow-up work session in the near future.

Dante Petri can be reached at dante.petri@peninsulaclarion.com.

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