The Kenai Peninsula Borough School District projects a nearly $4.73 million deficit for the 2017 fiscal year if all current services and programs are rolled forward. The shortfall is equivalent to roughly 54 full-time teaching positions.

Assistant Superintendent of Instruction Dave Jones presented the preliminary numbers in a worksession Tuesday to the Board of Education.

Jones called the early estimate a “flat funding projection,” meaning it is the best-case scenario if both the state and the Kenai Peninsula Borough Assembly provide the same level of funding as was done for the current 2016 fiscal year.

Next year’s projected budget includes a $2 million increase in health care and roughly $1.4 million increase in salaries and benefits for certified and support staff schedule movements, and nearly $2.1 million in scheduled fund balance use from the current fiscal year’s deficit, Jones said.

Board member Tim Navarre said he wanted the deficit projections to accurately reflect what money is available and what is likely to be used next year. He said in previous years the school district has ended up spending less than the best-case scenario deficit projections.

If the state reduces the base student allocation — the formula used to determine how much funding each district receives — by 5 percent, and therefore reduces the maximum allowable local contribution from the borough, that would mean a more than $11 million total deficit for the school district, and a $17 million deficit if the state reduces the funding amount by 10 percent, Jones said.

“The percentages were chosen because the (school) district has heard these amounts as potential percentage reductions from the Legislature,” said school district spokesperson Pegge Erkeneff.

During the worksession potential areas for finding additional revenue were discussed. Jones said there were options, but they come with complications. Some money could be taken from the equipment fund, roughly $900,000, and placed in the general fund, but that would change the fund status. At a previous meeting he presented a potential increase in student meal costs that could add $128,000 to the fund balance.

Jones said because salaries and benefits make up about 82 percent of the annual budget, some cuts will most likely be made in those areas.

“To be clear, we do not recommend to reduce the deficit purely by raising the PTR (pupil-teacher ratio),” said Superintendent Sean Dusek.

Dusek told the board that administrators will start coming to them with recommendations for where to make cuts and asked them to understand that it is not an easy decision but necessary. He said final decisions may come down to choosing between district-wide program specialists.

A recommended draft budget will be presented to the board most likely in January, Dusek said.

Board member Sunni Hilts suggested it should be made clear to the public that the board does “not want to do this.” Hilts added that she felt the school district may be too focused on “data and financial and funding issues.”

While the budget is an important topic, and spending time on it is important, it is also important to maintain a vision for the future of the school district and make ensure existing services and programs are still progressing, Hilts said.

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