The school district is on a mission to make sure that the Kenai Peninsula Borough Assembly and Alaska Legislature are thinking about the Fiscal Year 2019 school budget.
At separate work sessions this week, Superintendent Sean Dusek and school board members met with the legislators and the Borough Assembly to set the groundwork for the FY19 budget in hopes of avoiding a repeat of last year, when uncertainty loomed over the finalized budget until the Alaska State Legislature adopted a budget with status quo funding for K-12 education in June, just two months before the start of the school year.
“I know what a headache it was,” said Sen. Peter Micciche (R-Soldotna), at a work session on Monday with the school board, Rep. Mike Chenault (R-Nikiski) and Rep. Paul Seaton (R-Homer). “Our goal is to have a Senate and a House budget that are very close, if not the same, on education specifically from the onset … We know how much talent we lost last year, instructors that went elsewhere because they got tired of waiting … From a Senate side, we certainly don’t want to see that happen again and we are going to do our part to avoid it.”
Seaton and Chenault echoed Micciche’s sentiments that there probably wouldn’t be any cuts, but not without trepidation.
“I’m not expecting, probably, any cuts (to education), but I’m sure they’re going to be talked about,” Chenault said. “There’s going to be talks about reductions in other departments, too. When there is deficit spending, we need to talk about the costs of government and other ways we can deliever a better service.”
Micciche added that the Legislature was wary of timing this time around.
“I would not expect an increase because that’s simply not going to happen,” Micciche said. “The districts are going to have to adjust to this level for at least another year but I think we’ll all be in the agreement of getting education out of the way. We just lost too much ground and a lot of talent because of the time it took for K-12 funding. I don’t think you’ll see that again, but I think the wrong tactic would be to come down and ask for more money again this year.”
Chenault recognized the issues associated with flat funding.
“It is a reduction, every year, whenever you don’t get an increase,” Chenault said. “You can call it inflation or insurance cost increase… but that money doesn’t go as far as it did last year.”
Last year, the state allocated about $87.1 million of funding to the district, which includes about $79.2 million from the state Foundation Funding Formula. This is combined with the Kenai Peninsula Borough’s appropriation of about $49.73 million in FY18, which was an increase of $1.5 million from FY17.
During a work session with the assembly on Tuesday, Dusek thanked the borough for their continued support of the school district but said that this year, the district would like to work even closer with the assembly throughout the budget process.
“We’ve decided to begin this process with the assembly much earlier than in the past,” Dusek said. “… As we found last year, if it wasn’t for the borough, we would’ve had to have held on to a lot more positions and not filled them and lose some great teachers. You guys came through earlier than the legislature did and we want to thank you for that.”
When determining the borough contribution to the district’s budget, the borough and state use the Base Student Allocation formula to find the district’s basic need. Basic need is determined and then met through the state’s and borough’s contributions, with the borough meeting a minimum contribution of at least $27 million. The borough, though, can fund at a rate of anywhere from the minimum contribution to the maximum allowable contribution of just over $51 million.
“(The state) expect the borough to pay a minimum contribution,” Dusek said. “…So that’s subtracted from (the state’s) basic need…We’re fortunate because you value education and in very lean years you have funded to the maximum allowable.”
At the start of this year’s planning for the FY19 budget, the district is assuming flat funding from both the state and the borough, as well as just over $9 million from investments, interest and other revenue sources.
“So, our total revenue that we project for next year, as we start this process, starts at $138 million,” Dusek said. “What would it cost us just to roll everything forward? We roll it forward and our total expenditures are a little over $139 million. So if you take projected revenues, keep everything the same for expenditures, we would just have a minimum deficit of $800,000.”
Dusek warned, though, that the deficit was likely to increase as the district faces rising heath care costs and upcoming contract negotiations.
In the past few years, to combat dwindling revenues, Dusek said the district has cut utility costs and staffing at a district and school level.
“We’ve made the cuts over the last few years,” Dusek said. “… We have been making those tough decisions.”
For this upcoming budget year, Dusek said he’d like to continue investing in the district’s manageable class sizes, interventionists in the classrooms, programmatic staffing and career and technical opportunities.
“Let’s just say we have a deficit, but you guys would like to support us but your question is, ‘What are you going to spend your money on?’ We’re going to invest in what’s working,” Dusek said.
Assembly members were mute on any talk of numbers, but recognized the importance of staying involved in the district’s budget process.
“I see real benefit in us gathering a number of times to see the preparation that goes into putting the budget together,” said Borough Mayor Charlie Pierce. “One of the things that was a concern to me was that we had a month, sometimes less than a month to approve a budget and you were expected to understand all the intricate parts and know that you’re doing justice to the process. It’s the largest part of our budget that we approve annually… We’ll direct some dollars to take care of the business at the end of the day.”
Reach Kat Sorensen at firstname.lastname@example.org.