This year’s school budget scare in Alaska has prompted Wrangell to plan early.
Superintendent Bill Burr said that this year’s budget is looking at a $600,000 deficit in its reserve, even though the district has been saving over the years.
Normally, the state of Alaska allows the school district to have a 10% cap in savings, in case something big happens where the money is needed. That changed during COVID though and the reserve is at 23%. But Burr said it won’t last and they’re figuring out ways to be fiscally conservative.
He said, “On June 30, it was 23% but we anticipate we’ll be spending a good portion of that extra reserve just in breaking even this year.”
He said that by next year on June 30, the state will enforce reverting back to the 10% savings cap.
Burr said, “If just to break even we’re using $600,000 this year, if we were looking at that same type of loss in our budget in the following year that would wipe out most of our reserve.”
Burr said that the majority will go to personnel, like paying salaries, paychecks and other personnel expenses.
School district figures out ways to save money
One way the school district has tried saving money is by paying some staff members through grants.
Burr said, “Rather than cutting staff, which is a primary way of saving money because personnel is by far the highest line item, we’ve actually been able to add a couple of certified positions.”
Burr said that two full-time positions in the school district are supported by grants or by the educational program they’re in. And, they have another instructor that is federally funded by Title 1, a program that serves disadvantage students.
Burr said they’ve also been concentrating on their expenditures by not overpaying for any programs. He said they’ve been doing it over the past few years.
“Prices go up every year and we know that’s occurring,” he said. “But as we look at what we are paying for when we can find some savings, we can apply that and that has allowed us to be solvent.”
He said one challenge he comes across is the cost it takes to ship school kits to Alaska.
“One of the items that we had was we were ordering science kits,” Burr said. “If we were in the lower 48 shipping is free, but because we’re in Alaska, they were charging a substantial increased amount.”
The total price to Wrangell would have cost $400 as compared to $150 for schools in the lower 48. Because of that, Wrangell’s school district had to find a different solution and not order those particular science kits.
“The sooner we know that the better…”
Burr said that two major factors in the school district’s budget are the local contribution from the municipal government and the state’s per-student payment or what’s the Base Student Allocation. That’s often not known until the summer when the governor approves the budget.
He said the school district starts their budget process in December and January and they present it to the public in February. The decision by the borough doesn’t come until mid May, where they vote on their contribution. He said joint workshops with the borough are important in case they significantly cut the local contribution.
“The sooner we know that the better because we really have to look at a lot of items that are in that amount,” Burr said. “We’ve worked very hard the last number of years to keep our reserve healthy.”
By state law, the borough can only contribute so much money to the school district every year, following a state formula. This year it was $1.3 million. But Burr said the school district’s needs are higher than that maximum contribution.
Borough hopes to plan early with school district
Borough Manager Mason Villarma said he hopes the borough and the school district begin planning for next year’s budget before the end of 2024.
“We’re going to talk about our appropriation early,” he said. “That way they have the ability to address union negotiations accordingly because they’ll start that in October.”
He said the borough will reach out to the school district to initiate the conversation.
