The Kenai Peninsula Borough School District is facing a potential revenue loss of nearly $8 million, if current proposed budget cuts stand.
The school district isn’t panicking just yet, but they are seriously reevaluating their budget for fiscal year 2016.
“Fortunately right now we have general fund balance. We want stability. We built into our budget stability and reserves so in the event something happens, we can take care of things,” says Pegge Erkeneff, communications specialist for the school district.
She says the school board was planning on approving the budget today, but those numbers don’t include the most recent cuts. Since late last week, she says everyone’s been crunching numbers.
“And then again we also know in Juneau, everything is fluid,” Erkeneff said. “So, we’ve been working all evening and all day on this holiday day for us to calculate what these numbers mean and what it means for contracts that haven’t been issued as well as what it looks like for open positions; we have several open positions right now we’re hiring for.”
Erkeneff says the district had planned for reductions in some areas, but not in others.
There are a few ways the school district gets funding. The first is through the Foundation Formula, which includes the Base Student Allocation, or a dollar amount the district receives per student enrolled.
“The Senate Finance committee proposed a 4.1 percent reduction to the Foundation Formula overall,” Erkeneff said.
That’s not tied specifically to the BSA but from the formula in general.
“And the actual amount that relates to for the Kenai Peninsula Borough School District is $4,238,432 and that’s for this upcoming year’s budget,” Erkeneff said. “So, we’ve already been in the budgeting process. We’ve been working on this since last fall. So, this is a reduction of $4.2 million that was unanticipated.”
She says the amount the borough can contribute is tied to what the state contributes, which means almost another million dollars in unexpected lost revenue potentially.
“That 4.1% reduction to the Foundation Formula also correlates to a reduction in what the Borough’s maximum allowable contribution is to the school district and that amount is $977,000,” Erkeneff said.
So that’s a total of more than $5 million of unanticipated cuts. However, there is another nearly $3 million in cuts the district was prepared for.
“Often times, the legislature will give one-time funding so it’s outside of the Formula, which has happened every year,” Erkeneff said. “So, when Governor Walker proposed the operating budget reductions, that included already – and we’ve known about this one for a couple months – that we were going to potentially have a reduction of what the state could give the school district of $2,262,989.”
That corresponds to a $520,000 reduction in the borough’s matching contribution as well.
Erkeneff says the district has looked at what $8 million adds up to in physical form.
“So when we just look at the big picture, so over 80% of our budget, of the 2015-2016 budget, is related to staff salary and benefits. So, an $8 million reduction if we translated that straight into positions would be approximately 100 positions in the district,” Erkeneff said. “Now, I’m not saying-and I don’t want to panic-that we are cutting 100 positions. That’s not what we’re looking at. But that is what $8 million translates into.”
She says a special worksession is planned for today to reexamine the budget and see what can be done to compensate should the cuts remain this deep.