AFY20 Budget - Possible Reductions Including School Consolidation

Background Information:

On January 14, 2019, the School Board held the first work session on the FY20 Preliminary Budget. Administration presented a budget based on State funding passed by the 30th Alaska legislature in June of 2018. That included flat funding of the BSA at $5,930 per AADM and One-Time funding of $30 million dollars of which KPBSD would receive $2.1 million dollars. Kenai Peninsula Borough funding was initially estimated to be flat funding at $49,738,432. Under that revenue scenario, KPBSD would have been able to maintain all current schools and programs at current staffing levels. No reductions would have been needed. In fact, $216,827 would have been available for consideration of additional staffing or programs.

On February 13, 2019, Governor Dunleavey introduced legislation that effectively reduced the BSA to $4,880, and eliminated the $30 million dollars of One-Time funding. If Governor Dunleavey’s proposed legislation were to pass, it would result in a loss of State funding for KPBSD in the amount of $20,957,907. It would also mean that the Borough would not be able to fund KPBSD at the current level, resulting in a decrease of $1,496,896 in funding from the Borough.

This would mean a combined loss of revenue to KPBSD in the amount of $22,454,803!

A corresponding reduction of $22,454,803 in expenditures from the KPBSD budget, and the resultant effects is difficult to put in perspective. Especially considering that KPBSD has already reduced $8,457,924 in expenditures during the previous five fiscal years from FY15 to FY19. In addition to the expenditure reductions, KPBSD has spent $9,159,188 in fund balance to protect from further expenditure reductions. That usage has reduced the remaining available fund balance, and the Board’s ability to protect classrooms from further reductions.

Governor Dunleavey’s proposed revenue reductions have forced the School Board and Administration to create a list of expenditure reductions to match the proposed loss of revenue. Extensive reductions including school closures and consolidation are necessary to meet Governor Dunleavey’s proposed reductions.

The School Board and Administration urge parents and community members to contact their legislators and the Governor to let them know such reductions are not acceptable, and a new fiscal plan with multiple revenue streams is needed so these devastating cuts to K-12 education will not occur.