A budget finalized Monday by the Kenai Peninsula Borough School District describes deep cuts to classrooms, activities, programs and district office to meet a steep deficit driven by declining state funding.

The budget adopted for the coming year by the district’s board of education, on a 8-1 margin with member Penny Vadla opposed, had no significant changes from the draft document advanced by the board’s finance committee on June 26. The district has been working on the budget for months, but didn’t learn what funding it would receive from the state and borough until late last month.

An increase in the staffing ratio at each of the district’s schools alone accounts for a reduction of nearly $2.4 million in teacher salaries and benefits. There are cuts to distance education, elementary school counselors, programmatic staffing, theater technicians, Quest teachers and the Kenai Peninsula Middle College. Student support liaisons are eliminated. Pool managers and library aides will see their days reduced. Funding for pools at Susan B. English School and Ninilchik School is cut. Stipends for all sports and activities from football to Battle of the Books are slashed in half. Bus routes will be cut. Nikolaevsk School has been closed.

The budget describes revenue of around $143 million and expenditures of around $142 million, leaving only $1 million in contingency for ongoing negotiations with the unions representing district teachers and support staff and other changes and challenges in the coming year.

Multiple members of the board said they were frustrated by the state’s failure to fund education and the systems that left the district without a clear answer on revenue until months after they were first required to advance a budget in April.

Gov. Mike Dunleavy, in vetoing education bills and refusing to support funding, has repeatedly pointed to Alaska’s educational performance as inadequate. On Monday, the board heard how Soldotna High School students are far outpacing nationwide averages on advanced placement tests; took testimony from Seward High School graduate and Olympic gold medalist Lydia Jacoby; and cited information from Dunleavy’s own commissioner of education and early development that showed a marked increase in literacy rates.

The budget for the coming year, Board President Zen Kelly said, has $9 million less in it than the district’s budget from last year. That drop means fewer staff and fewer teachers doing the same task of educating children across the Kenai Peninsula. The remaining staff will be called on to work harder.

It was a somber meeting of the board Monday as the group heard testimony on behalf of pools in Seldovia and Ninilchik Pools — both of which lose their funding under the new budget — as well as calls for more teachers at Seward High School and to preserve activity stipends. Discussions about reversing some cuts failed to manifest into successful amendments.

To restore funding to the pools in Ninilchik or Seldovia, Kelly said, would cost $200,000 — “that’s two staff members, two teachers, somewhere in the district.”

Kelly said that as the district is increasingly unable to fund everything that is important to everyone, communities will need to find their own support for their priorities. The board is calling on communities to step in and fund pools, and as funding for sports and activities is cut, he said some of that weight will also fall to fundraising.

“You can’t fundraise for a science teacher.”

Even now, with the fiscal year already begun, millions of dollars of funding remain in flux. Member Kelley Cizek said “we really don’t know what the funding is yet.”

Dunleavy’s veto of education funding in the state’s budget pulls $3 million from the district’s general fund — and he is attempting to force and undermine a veto effort next month. U.S. President Donald Trump has withheld roughly $3 million in federal funding that would have been directed to grant positions within KPBSD. The State Department of Early Education and Development is currently working to revise policies around local contributions to school districts that could have devastating effects on grants, donations and fundraising. Negotiations with KPBSD teachers and support staff could have significant impacts on expenses.

The district will have to pivot, Kelly said, and make further changes to its budget in the coming months as remaining questions are answered. The district will begin early talks about its budget for next year at its next meeting in August, where it will begin discussing possible school closures.

A full recording of the board meeting will be available at the KPBSD BoardDocs website.

Reach reporter Jake Dye at jacob.dye@peninsulaclarion.com.

Superintendent Clayton Holland speaks during a meeting of the Kenai Peninsula Borough School District Board of Education in Soldotna, Alaska, on Monday, July 7, 2025. (Jake Dye/Peninsula Clarion)

President Zen Kelly speaks during a meeting of the Kenai Peninsula Borough School District Board of Education in Soldotna, Alaska, on Monday, July 7, 2025. (Jake Dye/Peninsula Clarion)