Residents could pick up tab for sports, music

Activities funding may be up to voters

Posted: Friday, December 19, 2003

Kenai Peninsula Borough voters could see mail-in ballots by the end of March asking approval for a tax plan that would raise enough money to fund school district cocurricular activities starting next year.

Resolution 2003-130S will get further discussion at the Jan. 6 meeting. If passed, the mail-in election would be set for March 30.

The borough wants to fund cocurricular activities such as choir, band and sports programs outside the so-called "cap," the amount set by state law limiting the local government contribution to education funding.

The proposed ballot proposition comes in response to a request by the Kenai Peninsula Borough School District Board of Education, which on Nov. 17 voted to ask the borough to fund cocurricular activities with a $1.4 million appropriation in the current fiscal year (FY 2004) and by a similar amount in fiscal year 2005. At the same time, the board asked the borough to seek voter approval of a mill-rate increase to provide future cocurricular funding.

A legal opinion by borough attorney Colette Thompson suggests providing such direct funding may be legally defensible, but she also indicated it was a gray area. Adopting the authority to fund cocurricular activities outside the cap which the proposition would do would strengthen the borough's legal ability to directly fund those activities as a separate power, she said.

Assembly President Pete Spr-ague said in a memo to the assembly that voters would have the opportunity to affect development of next year's school district budget.

Typically, school budgets are drawn up in a kind of informational vacuum, because much of what will be available from the state for education funding isn't known until the end of the legislative session in mid-May.

Sprague said the March vote would "give the assembly clear direction on whether or not to provide funding this year for cocurricular activities."

That, in turn, would give school district budget writers firm knowledge that cocurricular activity money was available.

Voters would be asked to approve the exercise of powers necessary for the borough to directly fund cocurricular activities in addition to supplying the normal operating funds currently permitted by law. The borough anticipates such funding would not exceed the revenue provided by a half-mill property tax levy. However, it would ultimately be up to the assembly to set that tax rate each year. It cannot be set by proposition. A half-mill tax would provide an estimated $2.13 million per year based on the current taxable property within the borough. A half-mill tax would cost the owner of a $100,000 home $50 per year.

In August, the Kenai Peninsula Borough School District formed a task force to look at ways to fund cocurricular activities. That task had a decided urgency. School district budgets have been tightening steadily for almost two decades. A declining student population has compounded that in recent years. State funding is distributed on a per-student basis.

In addition, the school district has been complaining to the Legislature for years that the state's funding mechanism, the foundation formula, which determines that per-student allocation, has ignored realities within the borough school district.

Currently, that formula sees the borough school district as largely urban in nature, like that of Anchorage, and provides funding accordingly. School and borough officials, however, point out that the Kenai Peninsula Borough School District has several remote rural schools. If the formula reflected that fact, the district would see approximately $2 million a year in additional revenue.

Joe Arness, of Kenai, a former member of the school board who sat on the task force, said cocurricular activities are in jeopardy as costs rise and budget cuts lead to overcrowded classrooms.

"It seemed like a good idea to look at alternatives for funding those activities," he said.

A tax would raise enough to fund cocurricular activities, and perhaps even restore programs in the lower grades that have been cut in the past due to budget belt-tightening, he said. As proposed, the tax revenue would be funneled into a special revenue fund administered by the district.

Other alternatives for funding the programs were considered, Arness said. But asking the state for specific funds for cocurricular activities isn't likely to succeed in the current fiscal climate, he said, and outsourcing the costs of programs that is, relying on private funding, such as how American Legion gaming proceeds now fund baseball in Homer wouldn't provide the year-to-year funding guarantee a voter-approved tax levy would.

Melody Douglas, chief financial officer for the district, noted recent cost increases that are having an impact on district budgets, including a new collective bargaining agreement reached last year and increased health care costs.

She said that while enrollment has increased in the home-schooling Connections program operated by the district, it has decreased in "brick and mortar" schools. The district is in the process of calculating what the variance in revenue caused by that shift will be, she said. But the writing is on the wall.

"We are still in the situation of basically looking at consolidating schools, adjusting our staffing formulas, or cutting cocurricular, which is the topic of the day," she said. "I believe that this is the year that that would be on the chopping block."

Some 70 percent of students are involved in cocurricular activities, Douglas said. Rising costs and declining revenues leave her "extremely fearful" that cutting those activities might lead to further erosion of enrollment.

Assembly member Ron Long, of Seward, said cocurricular activities should be seen as a function of economic development. That is, industries and people looking for a good place to settle will look at the quality of local schools as they reach their decisions. The existence of good cocurricular activity programs would be a factor in those decisions, he said.

Long said he wanted to get away from having to make "sports-versus-textbooks" decisions.

Assembly member Milli Martin, of Diamond Ridge, said the proposed funding mechanism would help, but if the state doesn't step up soon to provide more education funding generally, she asked what steps the borough could take next. She said the pressure must be put on state lawmakers to fix the foundation formula.

Martin said it seemed that whenever local sources of funding are applied to educational activities, the state cuts back on state funding. She likened it to being "in an abusive situation" and that there was a danger that raising taxes to fund cocurricular activities would just be "enabling behavior" that would free the state to cut back even more.

"On the other hand, I can't say 'no' to the kids," she said.

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