The Kenai Peninsula Borough School District is now facing a nearly $1 million deficit for the next school year.

While the legislature restored a $66 million equivalent to Gov. Bill Walker’s approved base student allocation increase eliminated in the eleventh hour by the Conference Committee, the Kenai Peninsula Borough Assembly chose not to fund the entire maximum allowable contribution, escalating the school district’s projected deficit from $200,000.

Assistant Superintendent Dave Jones told the Board of Education there is still opportunity to counter the shortfall. The assembly could still decide to fund to the cap, or Borough Mayor Mike Navarre said he may redirect funds, as much as $1 million already allocated for the school district, from the borough’s deferred maintenance fund for general use.

Navarre said the money has not been approved yet, but that he and the assembly would discuss and consider setting it aside for the school district to use for maintaining services over time.

“This is all un-trodden ground because this hasn’t happened before,” Jones said. “Once the designation has changed … from that point in time it cannot be moved back.”

While the redirected funds may not amount to much in comparison to this year’s $140,000,000 board-approved operating budget, it will help the school district reduce services slowly instead of all at once.

With further, maybe even more dramatic cuts to education expected from the legislature in coming years, it is pertinent the school district not immediately drop down to its reserves, Jones said.

There are further factors that could increase expenditures.

Superintendent Sean Dusek said student enrollment is projected to decrease next year and that would mean less money from the state and borough.

Additionally, collective bargaining with the Kenai Peninsula Education and Kenai Peninsula Education Support associations has not concluded and may result in even more fund balance use.

Advisory arbitration between the negotiating teams were held June 1-2, but Oregon-based arbitrator Gary Axon will not likely issue his report until August, and said he could not comment on the meetings beforehand.

The school district’s unassigned fund balance currently hovers around $8 million. Per board policy, a reserve of 3 percent, nearly $4 million, of the annual budget must be consistently available in the fund balance account.

The budget included a $4 million reduction next year in services from the current school year, and includes the elimination of nearly 12 full time certified teaching positions.

Originally, administrators had proposed the board cut 25 full time teaching positions, but added 13.5 back in at the last minute because the BSA increase had made it through most of the legislative session intact.

The board did not take any action at Monday’s meeting regarding the budget.

Reach Kelly Sullivan at kelly.sullivan@peninsulaclarion.com.