The assembly unanimously approved $1,758,500 in borough funding for the 2026-2027 school district budget, a 23% increase from this year.

The contribution matches the amount requested by the school district in its budget to the assembly. That falls between the state-mandated minimum of $956,810 and the maximum of $1,905,988 determined by the Alaska Department of Education.

The increased borough funding helps trim the school district’s gap between revenues and expenses, reducing the need to draw down as much of its savings to balance the spending plan.

But even with the additional borough money, the district’s 2026-2027 budget withdraws $563,000 from operating reserves to balance almost $6.1 million in spending with $5.595 million in state, borough and other revenue.

The borough’s contribution draws from multiple revenue streams: $800,000 from sales tax; $458,500 from property tax; and $500,000 from Secure Rural Schools federal pass-through funds.

Borough Manager Mason Villarma emphasized that the package provides stability for the school district without placing an immediate burden on taxpayers.

“We can afford this without any tax increases for the community,” Villarma told the assembly, which approved the funding at its May 12 meeting. The assembly at the meeting set the property tax mill rate at the same level it’s been for five years.

While the allocation represents a significant commitment for the borough, Villarma explained that the municipality’s healthy reserves made the decision manageable.

He cautioned that granting any additional funding would jeopardize upcoming borough initiatives.

“Anything more I’d have to start kind of cutting projects and then start cutting operations from there,” Villarma said, pointing to funding for the McKinnon Street project, operations at Parks and Recreation, and roof repairs at the Nolan Center.

The $1.758 million is an increase from the borough’s $1.425 million for the current school year and $1.312 million the year before that.

The assembly discussion also highlighted broader anxieties regarding the state of education funding across Alaska.

“Education in Alaska, it’s a poor story right now across the board,” Villarma said. “We’re not competitive with the Lower 48 in the product that we’re turning out ... because it’s not funded well.”

He pointed to recent school closures and layoffs in Ketchikan as a stark warning of the economic reality facing districts.

State funding will provide an estimated 64% of the Wrangell district’s revenues for the 2026-2027 school year, with the borough’s contribution covering 31%.

Alaska public school advocates have been pushing for an increase in state aid, with an uncertain outcome before the Legislature’s May 20 adjournment deadline.

The drawdown on the Wrangell district’s savings to cover the budget gap will leave an estimated $439,000 in the operating reserves account at the end of the next school year, according to the budget.

In addition to its operating reserves, the district maintains a maintenance work reserves account, which is expected to end the current fiscal year in June 30, with $896,000, according to a May 14 email from Kristy Andrew, the district’s business manager.

Assembly members spent a small portion of the May 12 meeting addressing past friction regarding a proposed memorandum of understanding drafted by City Hall aimed at structuring a more disciplined fiscal relationship with the school district.

Though the agreement faced some pushback from school officials who felt it needed more clarity — the school board has not adopted any of the policies proposed by City Hall — assembly members expressed a desire to see its core principles adopted.

“I agree with the intent on this,” Vice Mayor David Powell said, emphasizing the need for better communication. “When something happens in the school and they know about it, it would be very nice for us not to know three months down the line.”

To address these communication gaps without delaying school funding, the assembly discussed approving the allocation under the condition that the “spirit” of the agreement would be honored moving forward.

“I would recommend that in doing that you just say approval ... contingent on the spirit of the MOU being followed and implemented in FY2027,” Villarma suggested.

He said the borough is not trying to establish unreasonable expectations of the school district, but wants timely updates on capital needs to plan future budgets effectively. “We want to know when capital projects are needed early and often.”

Borough officials expressed optimism about the district’s trajectory, citing new leadership and strong performance from maintenance staff on joint borough-school projects.

“I support Superintendent (Joshua) Garrett getting some new vision for the school district because it’s needed,” Villarma said. “Those types of things are already moving forward to happen, which is awesome.”