The Kenai Peninsula Borough School District is projected a $7.5 million budget deficit during the 2027 fiscal year, which begins in October 2026. The district’s finance director said during a KPBSD finance committee meeting on Dec. 1 that a projected decrease in student enrollment combined with a rise in the taxable value of borough property means the district will receive less funding from both the state and the borough.
The district expects to receive about $4.2 million less from the state than it received last year. Approximately $3.6 million of that is due to the state’s tax assessment — the increased value shifts some of the responsibility of funding schools to the borough.
The remaining shortfall of $633,000 in state funding is due to decreased enrollment in brick-and-mortar schools. Data from October suggests 165 students will enroll in the district’s Connections Homeschool program, with overall enrollment decreasing by 230 students. The net loss is 65 students.
Additionally, the district expects the borough to provide $3.3 million less than it did last year due to Borough Mayor Peter Micchiche’s proposal in the borough’s budget. In June, the assembly overrode Micchiche’s proposal for a 2.5% annual increase to account for inflation and instead gave the school district as much as they were legally able to.
School board president Jason Tauriainen said the borough assembly still had decisions to make regarding the budget and emphasized that these numbers are merely projections.
“This looks ominous,” Tauriainen said. “But understand this is an initial picture of what we need to look at and what we need to start advocating for to move forward so we don’t have drastic cuts to our budget. That would be painful for everybody.”
The district grappled with a $17 million deficit for FY26, and school board members were initially forced to close pools, cut programming and fire staff — decisions which were later reversed upon the district receiving increased state funding at the last minute. Still, other measures to save money, such as the board’s decision to close Nikolaevask School, remained in effect.
The $7.5 million deficit means the district is in slightly better financial shape.
“There’s part of me that’s going, ‘well, it’s only $7 million this year,’” board member Kelley Cizek said. “So that hopefully will be an easier thing to try to work with, although I know those numbers can change.”
Despite the apparent improvement from last year, KPBSD finance director Czarina Voivedich said she expects the district to have to cut costs again this year.
Voivedich said the two main accounts she had analyzed so far are the food service fund and pupil transportation service. She added she hadn’t yet looked at staffing, but said it’s “very possible we will have reduction in FY2027 again.”
Board clerk Sarah Douthit said that although addressing the challenges to the shortfall in the projected budget may not be as big of a challenge now as they were last year, she expects the changes the district will make to be just as impactful.
“We have stripped a lot of programs, a lot of educators and increased (the pupil-teacher ratio) to keep our buildings open — and it’s coming at a cost,” she said. “I think we’re on a slippery slope here where students are going to continue and parents are going to continue to see these programs lost, the PTR increasing, things like that, which is going to in turn cause more dissatisfaction with their children’s education. And that means we lose more students in our schools and our buildings.”
The meeting was recorded and is available to view at the KPBSD BoardDocs website.
