The Kenai Peninsula Borough School District’s finance head on Wednesday pushed for community members to lobby state lawmakers for more school funding.

Kenai Peninsula Borough Finance Director Elizabeth Hayes, who hosted the second of three public budget forums at Kenai Central High School on Wednesday evening, told board of education members last month that the district is looking at a $13.1 million deficit for the upcoming fiscal year, which starts on July 1, 2023, and ends on June 30, 2024.

If the district is fully funded by the Kenai Peninsula Borough, the deficit lessens — to about $10.8 million. Hayes said Wednesday that board members have directed her to use $6.4 million of leftover federal COVID-19 money to offset that amount. If the district is fully funded by the borough and opts to put federal COVID relief funds toward the deficit, KPBSD will still need to find $4.4 million.

The projected deficit, Hayes said, stems from a difference between revenues and expenditures. For fiscal year 2024, the district is projecting roughly $135 million in revenue — assuming maximum funding from the borough — and about $146 million in expenditures and transfers.

The school district gets its money from three sources: the State of Alaska, the Kenai Peninsula Borough and miscellaneous revenue streams, like interest earnings.

State funding accounts for about 65% of all school district revenue and is decreasing for the upcoming fiscal year. Although the Alaska Legislature approved a $30 bump to the amount of money school districts receive per student, the net effect of the changes to state funding for the upcoming fiscal year on KPBSD will still be negative.

The $30 increase to the base student allocation, or BSA, will give KPBSD an additional $500,000 in revenue. For the upcoming fiscal year, however, the district is losing about $2.5 million in state funding because the state’s assessed value of the Kenai Peninsula’s Borough’s taxable real and personal property went up.

That’s on top of the loss of the state’s hold harmless clause, which partially funded KPBSD for students who unenrolled during the COVID-19 pandemic. The end of the hold harmless provisions will further reduce the district’s funding by about $900,000.

It is also not guaranteed that the Kenai Peninsula Borough will fund the school district to the maximum amount. Because the state’s valuation of the borough increased, the amount of money the borough is allowed to give the school district also increased, by about $2.2 million. The maximum amount the district could receive from the borough for the upcoming fiscal year is about $54.8 million.

The difference between KPBSD’s planned revenues and expenditures must be reconciled before the school district presents its budget to the Kenai Peninsula Borough later this year.

Hayes told attendees Wednesday that the board of education’s finance committee is convening Tuesday for a meeting to do a “deep dive” into the district’s options if additional funding doesn’t come through. She said the district has already eliminated staff positions from the budget proposal that went unfilled this year and said the district is looking “at every expenditure” to see where adjustments can be made.

To those who want to help, Hayes had one word: efficacy.

She described two bills currently up for consideration by the Alaska Legislature that would increase the amount of money school districts receive per student. S.B. 52, sponsored by the Senate Education Committee, would increase the amount by $1,000 per student. A separate bill, H.B. 65, would increase the amount by $1,250.

“We have to get something passed at the state Legislature that will be veto proof from the governor,” Hayes said. “We want to be reasonable, but we need help. We are not the only district in this boat. Every district in the state needs help.”

She urged community members to reach out to their representatives in the Alaska Legislature and let them know how important school funding is.

“You can write letters — please don’t write a form letter — make it personal,” Hayes said. “Tell your story. You can also do emails. So look for their emails, look for addresses to mail to, work with your community, your friends, your family to reach out.”

KPBSD is holding one last public budget meeting Wednesday, Feb. 22 at 6 p.m. in the Seward High School library.

More information about KPBSD’s budget process can be found on the district’s finance webpage.

Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.