Though the governor vetoed half of the legislatively approved increase in state funding for public schools, it will still be enough to erase the deficit in the budget adopted by the Wrangell School Board last week.
The budget for the 2023-2024 school year shows a $121,717 deficit, which is covered by drawing on savings, but the district will revise its spending plan in the fall to include the additional state aid and after it has enrollment numbers.
The district expects to receive a one-time increase of about $212,500 in state funding for next year, even after the veto, which the governor issued a few hours before the school board meeting on June 19.
Total revenues for the coming school year are anticipated at $5.09 million, while the expenses are expected to total $5.21 million.
Kristy Andrew, the district’s business manager, said increases in insurance and other areas drove up operating costs.
“Health insurance premiums did see an increase of about 5.5%,” Andrew said. “We did see insurance increases in the areas of property liability and cyber that are around a $20,000 increase over 2023.”
Had the governor not cut the legislative appropriation in half, the district would have seen a gain of about $425,000 in state funding. State aid, based on enrollment, covers more than 60% of the district’s operating budget.
Andrew said the district did not rely on any additional state funding when it built the budget. The increase will be included in a later budget revision.
“Around mid-year, the state updates our foundation revenue based on our actual enrollment,” Andrew said. “So it is common practice to update the budget throughout the year as new information becomes available.”
Schools Superintendent Bill Burr said there was a concern that Gov. Mike Dunleavy would veto some or all of the one-time education funding for the state fiscal year that starts July 1, so the Wrangell district budget was based on current funding.
It had been more than six years since the state last increased its funding to public schools, despite more than 20% inflation over that period.
“Unfortunately, this meant not being able to really even break even with the cuts to funding over the years, and the subsequent losses to education in Wrangell,” Burr said. “The last of the (federal pandemic relief) money is our only saving grace at the moment because we tightened our belt the last two years.”
The district recognizes that the “severe underfunding” for education at the state level will necessitate finding money somewhere else to cover basic student needs. However, the borough contribution to the schools is at the maximum amount allowed under state law.
In addition to basic operating costs, Burr said the state-mandated Reads Act, signed into law by Dunleavy last year, requires all elementary school students to read at their grade level by the end of the third grade and creates additional expense for districts.
“We have serious requirements under the … the Reads Act and little funding to offset the cost,” Burr said. “We will have to tighten our already limited activities travel (which was over budget this past year) and that removes opportunities for Wrangell students.”
Even though the $212,500 one-time boost in state funding will help, “personally, I am very frustrated by it,” Burr said. “Especially since there was no real response to why it was cut except vague statements about stable financial status for the state. We feel that the Legislature came to a middle ground with bipartisan support which in the end was not a perfect solution, but it was a start.”
Legislators were unable to agree on a permanent increase to the school funding formula before adjourning in mid-May. The one-time increase, costing $175 million statewide, was a compromise.
Burr said the veto came with little explanation at a time when school staff needs to work on things like funding support for the Read Act, teacher recruitment and retention.
“Educational funding is a state-required constitutional duty, but we are in a continuous loop asking for the same items every year,” Burr said. “The Legislature has said that superintendents only lobby for more money. It is because we have to, not because we want to. We have no other option.”
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