The Kenai Peninsula Borough School District Board of Education on Monday updated the district’s budget to reflect new money received from the State of Alaska that will be used to bring back personnel positions a previous version of that budget document eliminated as a cost-saving measure.

In the version of the Alaska budget Gov. Mike Dunleavy signed into law last month, he approved $87.4 million in funding for Alaska’s public K-12 schools on top of what those schools already receive from the state. Through that extra funding, KPBSD received about $5.8 million for the current fiscal year.

Heading into fiscal year 2024, which started on July 1, KPBSD was facing a $13.1 million deficit. Before the district knew whether it would receive any additional funding from the state, it was required to submit a balanced budget to the Kenai Peninsula Borough for approval.

To balance the document it submitted to the borough, KPBSD used about $6.2 million of its leftover COVID-19 relief funds, pulled about $820,000 in savings, and implemented about $3.6 million in budget cuts. The district received full funding — roughly $54.8 million — from the Kenai Peninsula Borough, which provided the remaining $2.2 million needed to make up the deficit.

As part of the $3.6 million in budget reductions, the board of education cut multiple personnel positions, such as pool managers and theater technicians. After those cuts prompted uproar from community members, the board members said they would work to bring the positions back.

Anticipating that the district would receive additional funding from the State of Alaska this year, KPBSD school board members in June directed the district to start the process of bringing those staff members back. Board members at the time said that, even if Dunleavy vetoed all $145 million in extra funding for K-12 schools approved by lawmakers this year, KPBSD could still pay for the positions with savings.

When he signed Alaska’s budget, Dunleavy vetoed half of the bonus funding — about $87.4 million. That left KPBSD with about $5.8 million, which KPBSD is using to bring back the $3.6 million in cuts implemented. The district also needs to make up about $1.47 million in funding it thought it was receiving from the Kenai Peninsula Borough, but which can actually only be used for in-kind services, like maintenance and utilities.

Once all funds were settled, the school district’s updated general fund revenue estimate was $140,782,417, while expenditures totaled $140,844,234. That left a new deficit of about $62,000, which board members on Monday voted to pay for from savings.

Although efforts by lawmakers succeeded in bringing in about $87.4 million in new, bonus funding for Alaska’s K-12 schools, KPBSD and other districts say a long-term financial fix to the base student allocation, or the amount of money school districts receive per student, is needed.

School Board Vice President Zen Kelly, who also chairs the board’s finance committee, said during Monday’s meeting that it was difficult to see Dunleavy veto half of the extra funding legislators approved for schools.

“I appreciate that we have been able to move forward a budget that did not contain the reductions that we had in place,” Kelly said. “I will say that the governor’s veto felt like a gut punch, you know? It’s just really, really tough.”

KPBSD Superintendent Clayton Holland on Monday also expressed relief that KPBSD will — “very tightly” — make it through the current fiscal year. However, he warned of what is to come without a permanent increase to the amount of money KPBSD receives per student. When the district faces a deficit next year, it will not have COVID-19 relief funds to help make up the difference.

“It’s very important for everyone to know just going into the year, (fiscal year) 2025, given the way things stand, that we are looking between a $12 and $13 million deficit. So we will be going through this process again, only it will be much more significant,” he said.

Board members Monday expressed their interest in better informing the general public moving forward about how the school district’s budget process works, including deep dives into specific elements of the budget document.

Monday’s board of education meeting will be available to stream on the KPBSD Board Docs page.

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