The Kenai Peninsula Borough School District could be in the red for next school year. The current projected deficit is a little more than $2 million.
The district school board approved a budget in April that totaled about $149 million. That includes the adjustment officials made for increased salaries and benefits after finalizing contracts with employees. At that point, the projected revenue and expenditures were about $4.2 million off even after an additional infusion of money from the state level. So the administration planned to pad the budget a bit with some money from savings.
During a presentation to the Kenai Peninsula Borough Assembly Tuesday night, Superintendent Dr. Steve Atwater said the majority of those dollars will be used to offset health care costs.
“Costs keep going up, up, up. You know the drill. We’re not able to affect the cost of health care with the number of people we have in our system,” Atwater said.
He mentioned he’s still hopeful a measure at the state level will eventually pass that would bring all Alaska school district employees under the same health care umbrella. Atwater said a larger pool could lead to lower costs.
Another issue at the state level is what’s called the Base Student Allocation. It’s the amount that the state spends on each student and Atwater said that hasn’t increased in four years. Instead, the state offers one-time pots of money. This year the district received a little more than $3 million. But Atwater said there’s a catch.
“$1.4 million of the money that we’ll get next year is dedicated to security and safety expenses. In the past, this money we’ve gotten in one-time funding has been able to be used for operations,” he said.
Atwater said this situation puts a spotlight on the issues involved with crafting a budget for the school district. The school board approves it first without a true sense of what money will be coming from the state or borough level. He said the district commits to contracts with teachers in good faith that money will be there, but this year it just fell short.
“It makes it very difficult for us in terms of how to go forward. How do we avoid this predicament? One way is to eliminate staffing ahead of time and then bring them back after the fact,” he said.
Atwater said he’d rather see what he called a “modest” increase in funding from the state each year. He also would like to have a clearer picture from the borough, but said he knows that might be easier said than done. District officials are looking for ways to cost cuts in the meantime. For example, they won’t be replacing two assistant principal positions at Skyview and Redoubt/K-Beach elementary. And officials expect to save money once the schools in Homer are converted over to natural gas.
The school board also could approve a budget revision at its meeting next month that will use an additional $1 million from savings to help put the district back in the black.