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Borough Holds Off on School District Funding Increase

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Kenai Peninsula Borough School District
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Kenai Peninsula Borough School District officials are breathing a sigh of relief over the reinstatement of public education funding in the state budget. However, they will have to hold their breath throughout the year to see if an increase in local funding will come.

The budget bill sent to the governor May 31 reinstates a $50 increase in per-student funding that had been cut in last-minute legislative wrangling. The school district had already sent its budget to the borough and hired back employees for next year. The cut would have meant about an $890,000 hit to the district.

Superintendent Sean Dusek says the district is still keeping a close eye on Juneau.

“The governor is waiting to sign. I’m not quite sure what that signals but, hopefully, we will know sooner rather than later on the budget,” Dusek said in a school board meeting June 6.

And after the June 7 borough assembly meeting, the district will also have to wait and see on its funding from the local level.

The assembly passed its fiscal year 2017 budget, including the same level of school district funding as the previous year, just over $48 million. Local funding for schools is set by state formula. Municipalities have a minimum and maximum amount they can contribute, based on a percentage of what the state spends. So with state funding increasing, the borough could increase its funding, as well. But the assembly chose not to do so.

Mayor Mike Navarre, in proposing the flat funding, pointed out that education funding is 67 percent of the borough’s budget. Tough fiscal times are impacting the borough, too, he says, making it important to balance supporting the district with budgeting responsibly for the borough.

“They have adequate funds to fully fund their operating budget for this year,” Navarre said. “In addition to that they have significant fund balance, a portion of which, last year, we increased, in one fell swoop, the school district budget by about 10 percent. And that was, in part, to help them maintain their fund balance so that they could manage their way down as we saw the impacts of the state budget.

Assembly President Blaine Gilman, at the May 17 assembly meeting, advocated for funding to the cap.

“The school district does not have the ability to raise money,” Gilman said. “The borough does. What’s happening in the state Legislature, I think probably going to be further cuts in school funding. And that will reduce the amount that the borough can pay under the cap to the school district. And then the school district will have to spend their fund balance.”

The school district reduced its budget by $3 million this year. Assistant Superintendent Dave Jones says that full funding would help lessen the immediate impact of cuts.

“That maximum allowable funding for the school district will enable us to make a long-term plan to reduce on a gentle slope as opposed to a cliff and give them a better education,” Jones said.

Navarre advised the assembly that it can choose to contribute more to the school district at any point in the year.

“It allows us to see, at the end of the year, what actually is happening with the school district’s budgets and fund balances,” Navarre said. “We’re not closing off any options by not funding to the cap at this point in time. We’ve got a whole year to do it.”

Assembly member Kelly Cooper, of Homer, proposed raising school district funding to the cap at the May 17th assembly meeting, but that motion failed. Local funding will remain flat — at least for now.

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