(Sage Smiley / KSTK)
Wrangell students head back to school in less than a month. And while school officials say they’ll make the district’s dwindling budget work this year, they’re grappling with the potential longer-term effects of the governor’s statewide cuts to education funding.
While students might be thinking about new clothes for school and adults might be signing kids up for extracurricular activities, Wrangell’s school Superintendent Bill Burr is thinking about money.
“Even before the school starts, we have to look at: where do we make cuts?” Burr says. The amount of money the district receives from the state, based on its student population, hasn’t substantially increased in the past decade, even as inflation has skyrocketed.
“Can we make cuts this year?” he asks. “Can we roll things back this year that might help us next year? And when we’re only looking at removing programs or deducting things, or cutting back in staff, none of that is positive to education.”
Alaska’s legislature passed a budget this spring with a one-time increase to the funding – $680 per student. It was supposed to help offset inflation costs. Governor Mike Dunleavy’s veto cut it in half.
“The impact is pretty significant,” Burr says. It’s not that the district was counting on the money – Burr says Wrangell’s school district chose to budget without planning on a funding increase from the state.
“We were not going to count on anything that wasn’t already in hand,” Burr says, “So when we built the budget, we anticipated a zero increase, knowing that we desperately needed funding that was there, but trying to figure out how it was going to work.”
The $5 million budget approved by Wrangell’s school board earlier this spring had a $120,000 deficit, to be paid from the district’s savings. The remaining half of the one-time funding will help fill that hole, but won’t entirely cover the shortfall.
The district is facing huge financial roadblocks in the coming years. One is the requirements of the state’s Alaska Reads Act – aimed at boosting literacy in early education.
For Wrangell, it means adding a teacher more dedicated to literacy. The state approved a $30 increase to its per-student payment to offset the increased teaching demands of the Alaska Reads Act. Burr says it won’t even come close.
“Not all those costs are seen either,” Burr explains. “If students are screening at a level below where they should be, that requires additional support, additional time, additional staffing, additional tutoring, as well as additional summer time education, none of which is currently budgeted. We don’t know where we’re going to be.”
Initially, the district plans to try and make it work by combining federal Title One money and some local funding for a hybrid position that will cover literacy and other support programs, “so we’re working hard on seeing if we could survive without a significant increase,” Burr says. But that’s only for the short term.
The district has been paying for two school principals out of a pandemic relief grant. That money runs out next year, and without an increase to the base student allocation or BSA, the per-student funding formula, there’s not many other places to find that funding – around $250,000.
“If we would have gotten a full BSA addition this year, we would have been able to offset that and know that we are on good financial footing,” Burr says. “We don’t have that.”
Staffing, more broadly, is by far the biggest cost for Wrangell’s school district. And Burr says it’s pared down the budget enough that staff is one of the only places left to cut.
“Prices go up,” Burr says, “Salaries and negotiations are on the list this year. And we can’t continue just asking for more when our community also is trying to make things happen.”
He says it’s terrible to watch opportunities for students in Wrangell dwindle. All the factors come together – the state’s funding has remained near-stagnant even as inflation and costs rise, on top of other challenges like a shrinking Alaska Marine Highway System, which has all but eliminated a cheap option for student travel to extracurricular activities.
Vetoes could also affect the schools’ physical condition. The governor also slashed funding for the Department of Education and Early Development’s capital improvement project grant program, leaving funding for just five projects throughout the state.
It’s a program the school district and borough government planned to apply to this year, for much-needed exterior and system repairs to the three public school buildings in the borough. The cut means the maintenance grants will be much more competitive.
“We know that we have a lot of critical infrastructure to address,” explains Wrangell’s borough Finance Director Mason Villarma. Wrangell voters approved a $3.5 million bond last October in the hopes of leveraging additional state money – $6.5 million from the state’s DEED CIP Major Maintenance grant program, for a project total of $10 million, “which would really help in addressing the exterior and mechanical components of the high school, middle school and potentially elementary school as well,” Villarma continues.
“It’s super important,” he says. “It’s right on the hill in our community. So we want it to look good and we want kids and families to move here because we have top-notch educational facilities both physically and otherwise.”
The cut in funding for the program this year doesn’t mean all hope is lost. Villarma says the school district will have two cycles to apply to the state major maintenance grant.
“If we miss the second round, we’ll simply spend $3.5 million,” Villarma says. “We can’t hold the bonds for more than three years without having the project substantially complete. These bonds were for a purpose approved by the voters. And so we have to fulfill that purpose, meaning construction needs to be about 80% within three years of bond issuance.”
Basically, if Wrangell’s grant applications aren’t successful, they still have to do the project, just on a much smaller scale.
“We will have to narrow the scope of the project,” Villarma says. “It will continue to be the high school, middle school, elementary school, but we might just work on one building to try to maximize the resources we’re putting into work.”
The struggle funding the major school maintenance project is part of a broader borough issue. Villarma says the way the borough is funding the schools isn’t sustainable. The City and Borough isn’t immune from the tough financial landscape of today.
“The fact is, we’ve gotten to a point where we have so much critical infrastructure needs that are very material, we have to figure out how to efficiently spend our existing resources,” Villarma says.
Currently, Villarma explains, the borough funds the school district through 20% of its sales taxes, plus additional funding from the federal government called Secure Rural Schools (SRS). With SRS funding diminishing – the borough received $1.1 million last fiscal year, and $300,000 less this year. Villarma says that gap could be the difference between long-term sustainability and funding crisis.
Plus, Villarma explains, SRS funds aren’t only for schools.
“Secure Rural Schools is used for roads, too,” Villarma says. “A lot of communities like to use that for major maintenance and roads. And we haven’t been able to do that for, as you can see, for quite some time. So it’d be great to maximize efficiency for the school district and the borough, [and] retain some of the SRS funding for, a half a million million dollar road project each year.”
Villarma says that will probably require some sort of change.
“There’s been ideas tossed around to save [money] between the borough and the school, whether it’s insurance plans or consolidating facilities of some sort, or maybe the borough consolidates facilities,” Villarma says. “Whatever it is, it needs to be material enough for us to save enough money to contribute to the school sustainably.”
So both on the per-student funding front and maintenance front, Superintendent Burr says the district is struggling.
“The vetoes on both sides are affecting us dramatically,” Burr says, “Not as much this year. But it will all come due next year. Having a $250,000 gap from funding from this year without an increase in enrollment is going to be very difficult.”
Burr says he anticipates next year being another fight to secure funding for students and schools.
“The governor has shown over the last five years that education is definitely on the list for vetoes,” Burr says, “So even next year, if we do get [additional funding] approved, and we do get everything that we wanted, the odds of another veto coming are pretty high.”
“So,” he continues, “We don’t know what it will look like. But we’re going to have to do the same thing we did this year. And that is to base [our budget] on current funding, and hope that the state will support education.”
Both Burr and Villarma say it’s probably going to prompt some difficult conversations between the borough and school district – they’ll meet at the end of August to discuss pressing needs at the schools and throughout the broader borough.
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