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School district plans to draw on savings to offset Dunleavy education vetoes

Riley Board

The Kenai Peninsula Borough School District plans to draw on its savings account to avoid cutting any positions, following a veto of one-time state funding by Gov. Mike Dunleavy.

The district — like Alaska public school districts — has been trapped in a legislative back-and-forth over how much state funding they will receive for the budget year that started Saturday, July 1.

Earlier this spring, the Kenai Peninsula school district made cuts to its teaching staff, pools, theaters and athletic departments because of a projected $13 million deficit. The cuts were unpopular, but the district said it hoped a bump in state funding would allow it to reverse some of those cuts.

Then, the Alaska Legislature passed a budget with a major one-time funding stimulus for schools.

Zen Kelly, a Board of Education member and chair of the board’s finance committee, said the funding boost would have brought $11.7 million into the district. The board of education and administration planned for that influx of money, and offered contracts to all of the previously cut positions.

“We were waiting on the governor to make his decision on vetoes, and so as the clock was ticking for us, we felt okay enough to issue basically contracts to the staffing portion of the budget reductions before the one-time money was finalized,” Kelly said.

But on June 19, Dunleavy vetoed half of that money. Now, the district will only get an extra $5.8 million from the state. The board is now planning to draw on its fund balance, or savings account, in order to reinstate all of those positions and other reductions.

Kelly said the district is planning to draw about $60 thousand from savings to balance the budget. Some of the gap will also be made up by extra funding from the Kenai Peninsula Borough. The board of education will review and vote on the revised budget at its July 10 meetings.

Kelly emphasized, however, that KPBSD will still face a $13 million deficit in the next fiscal year if the legislature doesn’t increase the state’s formula for per-student school funding, called the Base Student Allocation.

“We want to retain the talent that we have invested in,” he said. “And if we don’t get a permanent increase to the Base Student Allocation, it ties our hands, and doesn’t let us commit to the qualified people that we have invested in before it’s too late.”

And the fund balance only includes $2.4 million in unallocated funds, so it can’t pick up the slack forever.

Riley Board is a Report For America participant and senior reporter at KDLL covering rural communities on the central Kenai Peninsula.