While all existing educators and support staff in the Kenai Peninsula Borough School District kept their jobs this year, it is unlikely to happen next year.
To renew its current employment contracts the Kenai Peninsula Borough Board of Education approved cuts to existing programs and services, about $1.8 million in total. It also raised the pupil-teacher ratio, which is a pattern that is likely to continue, said Assistant Superintendent Dave Jones.
“I think it’s pretty clear,” Jones said. “Eighty percent of our budget is in salaries and benefits. We will be looking at staffing reductions. You will be seeing more students in classrooms and less teachers.”
An early draft of the district’s proposed budget projected it would cost the school district $167 million to move into the 2016 school year with the programs and services that are in place currently.
The district’s current budget has been reduced to $165.6 million.
Travel funding, utility budgets and curriculum supply costs were also cut, in addition to consolidating pool staffing positions district-wide.
In addition, adjustments were made to the staffing formula. The adjustment eliminated the equivalent of three positions district wide, but instead of cutting teachers, the school district cut classes, Jones said. For example a school may offer six language arts classes per day instead of seven, which increased class sizes.
As the state narrows the funding it will allocate to education, the school district estimates between $4.2 million and $6.1 million in deficit spending.
Jones presented the best and worse case deficit spending scenarios to the Board of Education Monday. The Kenai Peninsula Borough Assembly approved a resolution promising at least $46 million to the school district at Tuesday’s meeting.
If the borough gives the school district the pending maximum allowable “we will still be deficit spending but we will be in better shape,” Jones said. The amount that the borough approved for the school district for the upcoming fiscal year can be raised from its current amount but it cannot be lowered.
If the borough funds to the cap, the school district will use $1.6 million of its unassigned general fund balance in fiscal year 2016, Jones said. It is also possible the maximum allowable will be greater than the current $48.97 million projection, he said. Unassigned fund balance is the equivalent of savings.
The school board passed its budget on April 6, with the expectation the state will not be allocating one-time funding that would have equated to $2.262 million for the school district.
On April 2, the Senate Finance Committee made an amendment to the state’s 2016 operating budget that would reduce the foundation formula, which determines how much the state will distribute to school districts. The cuts were originally up to 4.1 percent from the formula, but have since been reduced to 1.1 percent. It will still equate to a $1.15 million loss for the school district, Jones said.
“Everyone agrees the Governor’s one-time funding won’t be renewed,” Jones said. “There is still some hope that $1.15 million will be renewed.”
The school district still needs to plan ahead for the 2017 and 2018 fiscal years, Jones said.
If the school district goes into the 2016 fiscal year with the worst-case scenario deficit of $6.1 million, going into the 2017 fiscal year the “we would have used all our reserves and would be in the hole $772,460,” Jones said.
“We would have a problem, because they don’t let school districts go in the hole,” Jones said. “Our fund balance would be negative.”
The school district will not get to that point, Jones said. Major cuts to programs and services will have to be made, he said.
A portion of the deficit spending is $2.6 million that was originally set aside for health care costs.
Board member Tim Navarre said there is still a chance some of that will still be available at the end of the 2015 fiscal year and still accessible in the 2016 fiscal year, though it is unlikely.
“I think with the assembly you have to make that clear, that they don’t miss that,” Navarre said. “That’s the real trigger that we’re funding part of this deficit on a line item that we are saying is allocate funding. Really, it’s gone after this year.”
Reach Kelly Sullivan at firstname.lastname@example.org.